ROCKVILLE, Md., July 29, 2015 /PRNewswire/ -- Choice Hotels International, Inc. (NYSE: CHH) today reported the following highlights for the second quarter 2015:
http://photos.prnewswire.com/prnvar/20131015/NE98133LOGO-l
-- Revenues for the three months ended June 30, 2015 totaled $232.2
million, an increase of 17 percent from the same period of 2014.
-- Domestic hotel executed franchise agreements totaled 139 for the three
months ended June 30, 2015, an increase of 11 percent from the same
period of 2014.
-- New domestic hotel franchise agreements executed in the second quarter
of 2015 for the Comfort family of brands increased 67 percent over the
same period of the prior year with nearly 60 percent of agreements
representing new construction hotels.
-- Executed 5 new domestic franchise agreements during the three months
ended June 30, 2015 for the Cambria hotels & suites brand expanding to
new markets including Philadelphia, PA and Memphis, TN.
-- Domestic relicensing and contract renewal transactions totaled 85 for
the three months ended June 30, 2015, an increase of 13 percent from the
same period of 2014.
-- The company's new construction domestic pipeline of hotels under
construction or approved for development increased 30 percent from June
30, 2014, and the total pipeline increased 22 percent. The increase in
the new construction hotel pipeline was led by the company's Comfort
family of brands which increased 44 percent over the same period of the
prior year.
-- Franchising revenues for the three months ended June 30, 2015, totaled
$98.6 million, an increase of 5 percent from the same period of 2014.
-- Domestic royalty fees for the three months ended June 30, 2015, totaled
$75.8 million, an increase of 6 percent from the same period of 2014.
-- Domestic system-wide revenue per available room ("RevPAR") increased 6.7
percent in the second quarter of 2015, as occupancy and average daily
rates increased 170 basis points and 3.8 percent, respectively from the
same period of 2014.
-- Domestic units increased 0.3 percent from June 30, 2014.
-- Earnings before interest, taxes, depreciation and amortization
("EBITDA") from franchising activities for the three months ended June
30, 2015, totaled $69.8 million, an increase of 5 percent from the same
period of 2014.
-- Diluted earnings per share ("EPS") from continuing operations for the
three months ended June 30, 2015, totaled $0.62, an increase of 3
percent from the same period of 2014.
-- On July 21, 2015, the company completed the refinancing of its existing
$350 senior secured credit facility with a new five year, $450 million
senior unsecured revolving credit facility.
"We are pleased with our second quarter operating results that were highlighted by strong domestic RevPAR performance and franchise sales results," said Stephen P. Joyce, president and chief executive officer, Choice Hotels. "Once again our RevPAR performance continued to outpace the gains reported by Smith Travel Research in the chain scale segments in which we compete and as reflected in our franchise sales results our programs to accelerate the growth of the Cambria hotels and suites and Comfort brands have been well received by developers and franchisees. We continue to be optimistic that these programs will drive the continued improvement and expansion of these brands."
Discontinued Operations
During 2014, the company entered into and completed a plan to sell its three owned hotels operated under the MainStay Suites brand. The company determined that the sale of these hotels met the definition of a discontinued operation since the operations and cash flows of these components have been eliminated from the on-going operations of the company and the company does not have significant continuing involvement in the operations of the hotels after the transaction. As a result, the company's consolidated statement of income for the three and six months ended June 30, 2014, reflects these three company-owned hotels as discontinued operations.
Summarized financial information related to these discontinued operations is presented in Exhibit 9 of this press release.
Outlook
The company's consolidated 2015 outlook reflects the following assumptions:
-- All figures assume no repurchases of common stock under the company's
share repurchase program; and
-- The effective tax rate for continuing operations is expected to be
approximately 32% for both the third quarter and full-year 2015,
respectively.
Franchising
-- EBITDA from franchising activities for full-year 2015 are expected to
range between $254 million and $257 million;
-- Net domestic unit growth for 2015 is expected to be approximately 1%;
-- RevPAR is expected to increase approximately 6.5% for the third quarter
and range between 6.5% and 7.5% for full-year 2015; and
-- The effective royalty rate is expected to increase 2 basis points for
full-year 2015 as compared to full-year 2014.
SkyTouch
-- Net reductions in EBITDA relating to our investment in the SkyTouch
division for full-year 2015 are expected to range between $15 million
and $20 million.
Consolidated Outlook
The company's third quarter 2015 diluted EPS is expected to be $0.72. The company expects full-year 2015 diluted EPS to range between $2.18 and $2.22 and full year 2015 EBITDA to range between $237 million and $241 million.
Conference Call
Choice will conduct a conference call on Wednesday, July 29, 2015 at 9:00 a.m. EDT to discuss the company's second quarter 2015 results. The dial-in number to listen to the call is 1-855-638-5678, and the access code is 72461415. International callers should dial 1-920-663-6286 and enter the access code 72461415. The conference call also will be webcast simultaneously via the company's website, www.choicehotels.com. Interested investors and other parties wishing to access the call via the webcast should go to the website and click on the Investor Info link. The Investor page will feature a conference call microphone icon to access the call.
The call will be recorded and available for replay beginning at 1:00 p.m. EDT on Wednesday, July 29, 2015 through Wednesday, August 5, 2015 by calling 1-855-859-2056 and entering access code 72461415. The international dial-in number for the replay is 1-404-537-3406 and the access code is 72461415. In addition, the call will be archived for approximately one-year and available on www.choicehotels.com via the Investor Info link.
About Choice Hotels
Choice Hotels International, Inc.(®) (NYSE: CHH) is one of the world's largest lodging companies. With more than 6,300 hotels franchised in more than 35 countries and territories, we represent more than 500,000 rooms around the globe. As of June 30, 2015, 613 hotels were in our development pipeline. Our company's Ascend Hotel Collection(®), Cambria® hotels & suites, Comfort Inn(®), Comfort Suites(®), Sleep Inn(®), Quality(®), Clarion(®), MainStay Suites(®), Suburban Extended Stay Hotel(®), Econo Lodge(®) and Rodeway Inn(®) brands provide a spectrum of lodging choices to meet guests' needs. With more than 23 million members and counting, check out our Choice Privileges® rewards program to see how you can reap the benefits of being a member of the Choice Hotels(®) family. Visit us at www.choicehotels.com for more information.
SkyTouch Technology(®) is a business division of Choice Hotels that develops and markets cloud-based technology products, including inventory management, pricing and connectivity to third party channels, to hoteliers not under franchise agreements with the company.
Additional corporate information can be found on the Choice Hotels International, Inc. web site, which may be accessed at www.choicehotels.com.
Forward-Looking Statements
Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Generally, our use of words such as "expect," "estimate," "believe," "anticipate," "should," "will," "forecast," "plan," "project," "assume" or similar words of futurity identify such forward-looking statements. These forward-looking statements are based on management's current beliefs, assumptions and expectations regarding future events, which in turn are based on information currently available to management. Such statements may relate to projections of the company's revenue, earnings and other financial and operational measures, company debt levels, ability to repay outstanding indebtedness, payment of dividends, repurchases of common stock and future operations, among other matters. We caution you not to place undue reliance on any such forward-looking statements. Forward-looking statements do not guarantee future performance and involve known and unknown risks, uncertainties and other factors.
Several factors could cause actual results, performance or achievements of the company to differ materially from those expressed in or contemplated by the forward-looking statements. Such risks include, but are not limited to, changes to general, domestic and foreign economic conditions; foreign currency fluctuations; operating risks common in the lodging and franchising industries; changes to the desirability of our brands as viewed by hotel operators and customers; changes to the terms or termination of our contracts with franchisees; our ability to keep pace with improvements in technology utilized for marketing and reservations systems and other operating systems; or ability to grow our franchise system; exposure to risks related to development activities; fluctuations in the supply and demand for hotels rooms; our ability to realize anticipated benefits from acquired businesses; the level of acceptance of alternative growth strategies we may implement; operating risks associated with our international operations; the outcome of litigation; and our ability to manage our indebtedness. These and other risk factors are discussed in detail in the company's filings with the Securities and Exchange Commission including our annual reports on Form 10-K and our quarterly reports filed on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Statement Concerning Non-GAAP Financial Measurements Presented in this Press Release
EBITDA, franchising revenues, franchising SG&A, EBITDA from franchising activities and franchising margins are non-GAAP financial measurements. These measures should not be considered as an alternative to any measure of performance or liquidity as promulgated under or authorized by generally accepted accounting principles in the United States ("GAAP"), such as operating income, total revenues and operating margins. The company's calculation of these measurements may be different from the calculations used by other companies and therefore comparability may be limited. The company has included an exhibit accompanying this release that reconciles EBITDA, franchising revenues, franchising SG&A and franchising margins to the most comparable GAAP financial measures. We discuss management's reasons for reporting these non-GAAP measures below.
Earnings Before Interest, Taxes, Depreciation and Amortization: EBITDA reflects income from continuing operations excluding the impact of interest expense, interest income, provision for income taxes, depreciation and amortization, other (gains) and losses and equity in net income of unconsolidated affiliates. We consider EBITDA to be an indicator of operating performance because we use it to measure our ability to service debt, fund capital expenditures, and expand our business. We also use EBITDA, as do analysts, lenders, investors and others, to evaluate companies because it excludes certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company's capital structure, debt levels and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provision for income taxes can vary considerably among companies. EBITDA also excludes depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies.
Franchising Revenues, Operating Income, EBITDA, SG&A and Margins: The company reports franchising revenues, operating income, EBITDA, SG&A and margins which exclude marketing and reservation revenues, the SkyTouch Technology operations and revenue generated from the ownership of an office building that is leased to a third-party. Marketing and reservation activities are excluded since the company is required by its franchise agreements to use the fees collected for marketing and reservation activities; as such, no income or loss to the company is generated. Cumulative marketing and reservation system fees not expended are recorded as a liability in the company's financial statements and are carried over to the next year and expended in accordance with the franchise agreements. Cumulative marketing and reservation expenditures in excess of fees collected for marketing and reservation activities are deferred and recorded as an asset in the company's financial statements and recovered in future periods. SkyTouch Technology is a division of the company that develops and markets cloud-based technology products, including inventory management, pricing and connectivity to third party channels, to hoteliers not under franchise agreements with the company. The operations for SkyTouch Technology are excluded since they do not reflect the company's core franchising business but are an adjacent, complimentary line of business. These non-GAAP measures are a commonly used measure of performance in our industry and facilitate comparisons between the company and its competitors.
© 2015 Choice Hotels International, Inc. All rights reserved.
Choice Hotels International, Inc.
Exhibit 1
Consolidated Statements of Income
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
Variance Variance
2015 2014 $ % 2015 2014 $ %
---- ---- --- --- ---- ---- --- ---
(In thousands, except per share amounts)
REVENUES:
Royalty fees $81,183 $77,670 $3,513 5% $143,614 $136,210 $7,404 5%
Initial franchise and relicensing fees 5,816 4,722 1,094 23% 11,533 8,462 3,071 36%
Procurement services 8,589 8,020 569 7% 13,396 12,798 598 5%
Marketing and reservation 133,122 103,766 29,356 28% 231,835 193,372 38,463 20%
Other 3,446 3,486 (40) (1%) 7,023 6,558 465 7%
----- ----- --- --- ----- ----- --- ---
Total revenues 232,156 197,664 34,492 17% 407,401 357,400 50,001 14%
OPERATING EXPENSES:
Selling, general and administrative 33,122 31,413 1,709 5% 65,560 58,093 7,467 13%
Depreciation and amortization 2,995 2,332 663 28% 5,685 4,610 1,075 23%
Marketing and reservation 133,122 103,766 29,356 28% 231,835 193,372 38,463 20%
------- ------- ------ --- ------- ------- ------ ---
Total operating expenses 169,239 137,511 31,728 23% 303,080 256,075 47,005 18%
Operating income 62,917 60,153 2,764 5% 104,321 101,325 2,996 3%
OTHER INCOME AND EXPENSES, NET:
Interest expense 11,057 10,710 347 3% 21,236 20,881 355 2%
Interest income (277) (347) 70 (20%) (623) (850) 227 (27%)
Other (gains) and losses (1,173) (474) (699) 147% (1,641) (533) (1,108) 208%
Equity in net loss of affiliates 431 30 401 1337% 1,436 65 1,371 2109%
Total other income and expenses, net 10,038 9,919 119 1% 20,408 19,563 845 4%
------ ----- --- --- ------ ------ --- ---
Income from continuing operations before income taxes 52,879 50,234 2,645 5% 83,913 81,762 2,151 3%
Income taxes 17,066 14,955 2,111 14% 26,506 25,014 1,492 6%
------ ------ ----- --- ------ ------ ----- ---
Income from continuing operations, net of income taxes 35,813 35,279 534 2% 57,407 56,748 659 1%
Income from discontinued operations, net of income taxes - 121 (121) (100%) - 1,762 (1,762) (100%)
--- --- ---- ----- --- ----- ------ -----
Net income $35,813 $35,400 $413 1% $57,407 $58,510 $(1,103) (2%)
======= ======= ==== === ======= ======= ======= ===
Basic earnings per share
Continuing operations $0.62 $0.61 $0.01 2% $1.00 $0.97 $0.03 3%
Discontinued operations - - - NM - 0.03 (0.03) (100%)
$0.62 $0.61 $0.01 2% $1.00 $1.00 $0.00 0%
===== ===== ===== === ===== ===== ===== ===
Diluted earnings per share
Continuing operations $0.62 $0.60 $0.02 3% $0.99 $0.96 $0.03 3%
Discontinued operations - - - NM - 0.03 (0.03) (100%)
$0.62 $0.60 $0.02 3% $0.99 $0.99 $0.00 0%
===== ===== ===== === ===== ===== ===== ===
Choice Hotels International, Inc. Exhibit 2
Consolidated Balance Sheets
(In thousands, except per share amounts) June 30, December 31,
2015 2014
---- ----
(Unaudited)
ASSETS
Cash and cash equivalents $230,650 $214,879
Accounts receivable, net 118,989 91,681
Other current assets 47,938 44,854
------ ------
Total current assets 397,577 351,414
Fixed assets and intangibles, net 155,456 152,034
Notes receivable, net of allowances 51,228 40,441
Investments, employee benefit plans, at fair value 18,274 17,539
Other assets 80,058 85,842
------ ------
Total assets $702,593 $647,270
-------- --------
LIABILITIES AND SHAREHOLDERS' DEFICIT
Accounts payable and accrued expenses $128,744 $120,654
Deferred revenue 70,402 66,382
Current portion of long-term debt 1,124 12,349
Other current liabilities 1,416 713
----- ---
Total current liabilities 201,686 200,098
Long-term debt 800,035 782,082
Deferred compensation & retirement plan obligations 24,237 23,987
Other liabilities 62,102 69,904
------ ------
Total liabilities 1,088,060 1,076,071
-------------
Common stock, $0.01 par value 576 573
Additional paid-in-capital 134,144 127,661
Accumulated other comprehensive loss (7,812) (6,971)
Treasury stock, at cost (979,211) (982,463)
Retained earnings 466,836 432,399
------- -------
Total shareholders' deficit (385,467) (428,801)
-------------
Total liabilities and shareholders'
deficit $702,593 $647,270
-------- --------
Choice Hotels International, Inc. Exhibit 3
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands) Six Months Ended June 30,
-------------------------
2015 2014
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $57,407 $58,510
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 5,685 4,610
Gain on sale of assets (1,595) (2,849)
Provision for bad debts, net 1,197 1,383
Non-cash stock compensation and other charges 5,399 4,711
Non-cash interest and other (income) loss 1,340 719
Deferred income taxes (2,095) (9,273)
Equity (earnings) losses from unconsolidated joint ventures, net of distributions received 2,781 611
Changes in assets and liabilities:
Receivables (28,856) (39,518)
Advances to/from marketing and reservation activities, net 3,724 31,522
Forgivable notes receivable, net (19,186) (6,692)
Accounts payable 16,990 8,316
Accrued expenses (6,969) (5,247)
Income taxes payable/receivable 2,450 15,198
Deferred revenue 4,041 6,231
Other assets (5,152) (1,102)
Other liabilities 769 (1,298)
--- ------
NET CASH PROVIDED BY OPERATING ACTIVITIES 37,930 65,832
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in property and equipment (14,554) (7,314)
Proceeds from sales of assets 6,283 12,216
Contributions to equity method investments (2,446) (6,946)
Distributions from equity method investments 270 -
Purchases of investments, employee benefit plans (1,736) (1,220)
Proceeds from sales of investments, employee benefit plans 1,087 641
Issuance of mezzanine and other notes receivable (1,500) (2,223)
Collections of mezzanine and other notes receivable 3,567 9,743
Other items, net (261) (296)
---- ----
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (9,290) 4,601
------ -----
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings pursuant to revolving credit facility 13,000 -
Principal payments on long-term debt (6,169) (4,112)
Proceeds from the issuance of long-term debt - 26
Purchase of treasury stock (6,244) (4,544)
Dividends paid (22,940) (21,957)
Excess tax benefits from stock-based compensation 4,613 1,319
Proceeds from exercise of stock options 5,696 1,547
----- -----
NET CASH USED BY FINANCING ACTIVITIES (12,044) (27,721)
------- -------
Net change in cash and cash equivalents 16,596 42,712
Effect of foreign exchange rate changes on cash and cash equivalents (825) 1,035
Cash and cash equivalents at beginning of period 214,879 167,795
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $230,650 $211,542
======== ========
CHOICE HOTELS INTERNATIONAL, INC. Exhibit 4
SUPPLEMENTAL OPERATING INFORMATION
DOMESTIC HOTEL SYSTEM
(UNAUDITED)
For the Six Months Ended June 30, 2015 For the Six Months Ended June 30, 2014 Change
-------------------------------------- -------------------------------------- ------
Average Daily Average Daily Average Daily
Rate Occupancy RevPAR Rate Occupancy RevPAR Rate Occupancy RevPAR
---- --------- ------ ---- --------- ------ ---- --------- ------
Comfort Inn $87.35 63.5% $55.48 $83.68 61.3% $51.31 4.4% 220 bps 8.1%
Comfort Suites 93.06 68.2% 63.43 89.35 65.7% 58.68 4.2% 250 bps 8.1%
Sleep 79.60 64.0% 50.93 75.94 61.3% 46.57 4.8% 270 bps 9.4%
Quality 73.16 57.5% 42.05 70.37 54.8% 38.57 4.0% 270 bps 9.0%
Clarion 78.25 56.3% 44.07 75.01 53.0% 39.75 4.3% 330 bps 10.9%
Econo Lodge 57.47 52.4% 30.13 55.75 49.7% 27.72 3.1% 270 bps 8.7%
Rodeway 57.22 55.8% 31.90 54.19 53.2% 28.85 5.6% 260 bps 10.6%
MainStay 76.24 68.5% 52.23 73.80 70.6% 52.11 3.3% (210) bps 0.2%
Suburban 47.25 76.5% 36.15 44.53 72.6% 32.34 6.1% 390 bps 11.8%
Ascend Hotel Collection 122.78 59.8% 73.45 117.13 59.2% 69.30 4.8% 60 bps 6.0%
------ ---- ----- ------ ---- ----- --- --- --- ---
Total $78.08 60.4% $47.15 $75.26 58.0% $43.63 3.7% 240 bps 8.1%
====== ==== ====== ====== ==== ====== === === === ===
For the Three Months Ended June 30, 2015 For the Three Months Ended June 30, 2014 Change
---------------------------------------- ---------------------------------------- ------
Average Daily Average Daily Average Daily
Rate Occupancy RevPAR Rate Occupancy RevPAR Rate Occupancy RevPAR
---- --------- ------ ---- --------- ------ ---- --------- ------
Comfort Inn $90.92 69.5% $63.16 $87.16 67.6% $58.94 4.3% 190 bps 7.2%
Comfort Suites 95.59 71.8% 68.64 91.46 70.4% 64.36 4.5% 140 bps 6.7%
Sleep 82.23 68.3% 56.11 78.40 66.9% 52.42 4.9% 140 bps 7.0%
Quality 75.52 62.0% 46.83 72.61 59.8% 43.38 4.0% 220 bps 8.0%
Clarion 80.54 60.8% 48.95 78.36 57.0% 44.68 2.8% 380 bps 9.6%
Econo Lodge 59.86 56.6% 33.87 58.12 54.9% 31.90 3.0% 170 bps 6.2%
Rodeway 59.92 58.4% 35.01 56.56 56.7% 32.05 5.9% 170 bps 9.2%
MainStay 78.53 70.4% 55.32 76.33 76.3% 58.25 2.9% (590) bps (5.0%)
Suburban 47.96 78.9% 37.86 45.72 75.0% 34.27 4.9% 390 bps 10.5%
Ascend Hotel Collection 129.04 59.2% 76.41 122.07 60.1% 73.32 5.7% (90) bps 4.2%
------ ---- ----- ------ ---- ----- --- --- --- ---
Total $80.89 64.7% $52.36 $77.92 63.0% $49.08 3.8% 170 bps 6.7%
====== ==== ====== ====== ==== ====== === === === ===
For the Quarter Ended For the Six Months Ended
--------------------- ------------------------
6/30/2015 6/30/2014 6/30/2015 6/30/2014
System-wide effective royalty rate 4.28% 4.28% 4.29% 4.30%
CHOICE HOTELS INTERNATIONAL, INC. Exhibit 5
SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA
(UNAUDITED)
June 30, 2015 June 30, 2014 Variance
------------- ------------- --------
Hotels Rooms Hotels Rooms Hotels Rooms % %
------ ----- ------ ----- ------ ----- --- ---
Comfort Inn 1,215 93,904 1,281 99,679 (66) (5,775) (5.2%) (5.8%)
Comfort Suites 575 44,447 590 45,664 (15) (1,217) (2.5%) (2.7%)
Sleep 377 27,207 375 27,159 2 48 0.5% 0.2%
Quality 1,311 105,761 1,251 102,859 60 2,902 4.8% 2.8%
Clarion 175 24,587 185 26,501 (10) (1,914) (5.4%) (7.2%)
Econo Lodge 853 52,835 840 51,678 13 1,157 1.5% 2.2%
Rodeway 481 26,544 460 25,366 21 1,178 4.6% 4.6%
MainStay 47 3,629 42 3,304 5 325 11.9% 9.8%
Suburban 62 6,959 64 7,164 (2) (205) (3.1%) (2.9%)
Ascend Hotel Collection 110 9,408 104 9,076 6 332 5.8% 3.7%
Cambria hotel & suites 24 2,917 20 2,404 4 513 20.0% 21.3%
--- ----- --- ----- --- --- ---- ----
Domestic Franchises 5,230 398,198 5,212 400,854 18 (2,656) 0.3% (0.7%)
International Franchises 1,146 106,763 1,160 105,669 (14) 1,094 (1.2%) 1.0%
----- ------- ----- ------- --- ----- ----- ---
Total Franchises 6,376 504,961 6,372 506,523 4 (1,562) 0.1% (0.3%)
===== ======= ===== ======= === ====== === =====
Exhibit 6
CHOICE HOTELS INTERNATIONAL, INC.
SUPPLEMENTAL INFORMATION BY BRAND
DEVELOPMENT RESULTS -- DOMESTIC NEW HOTEL CONTRACTS
(UNAUDITED)
For the Six Months Ended June 30, 2015 For the Six Months Ended June 30, 2014 % Change
-------------------------------------- -------------------------------------- --------
New New New
Construction Conversion Total Construction Conversion Total Construction Conversion Total
------------ ---------- ----- ------------ ---------- ----- ------------ ---------- -----
Comfort Inn 13 20 33 10 8 18 30% 150% 83%
Comfort Suites 13 2 15 7 - 7 86% NM 114%
Sleep 9 - 9 14 1 15 (36%) (100%) (40%)
Quality 3 75 78 3 48 51 0% 56% 53%
Clarion - 6 6 - 11 11 NM (45%) (45%)
Econo Lodge - 28 28 - 27 27 NM 4% 4%
Rodeway - 35 35 1 31 32 (100%) 13% 9%
MainStay 6 - 6 5 1 6 20% (100%) 0%
Suburban 1 3 4 1 3 4 0% 0% 0%
Ascend Hotel Collection 1 16 17 6 6 12 (83%) 167% 42%
Cambria hotel & suites 7 - 7 1 - 1 600% NM 600%
--- --- --- --- --- --- --- --- ---
Total Domestic System 53 185 238 48 136 184 10% 36% 29%
=== === === === === === === === ===
For the Three Months Ended June 30, 2015 For the Three Months Ended June 30,
2014 % Change
---------------------------------------- ------------------------------------ --------
New New New
Construction Conversion Total Construction Conversion Total Construction Conversion Total
------------ ---------- ----- ------------ ---------- ----- ------------ ---------- -----
Comfort Inn 9 13 22 7 5 12 29% 160% 83%
Comfort Suites 8 - 8 6 - 6 33% NM 33%
Sleep 4 - 4 10 1 11 (60%) (100%) (64%)
Quality 1 46 47 2 38 40 (50%) 21% 18%
Clarion - 3 3 - 9 9 NM (67%) (67%)
Econo Lodge - 19 19 - 21 21 NM (10%) (10%)
Rodeway - 21 21 - 16 16 NM 31% 31%
MainStay 2 - 2 1 1 2 100% (100%) 0%
Suburban 1 1 2 - 2 2 NM (50%) 0%
Ascend Hotel Collection - 6 6 3 3 6 (100%) 100% 0%
Cambria hotel & suites 5 - 5 - - - NM NM NM
--- --- --- --- --- --- --- --- ---
Total Domestic System 30 109 139 29 96 125 3% 14% 11%
=== === === === === === === === ===
Exhibit 7
CHOICE HOTELS INTERNATIONAL, INC.
DOMESTIC PIPELINE OF HOTELS UNDER CONSTRUCTION, AWAITING CONVERSION OR APPROVED FOR DEVELOPMENT
(UNAUDITED)
A hotel in the domestic pipeline does not always result in an open and operating hotel due to various factors.
Variance
--------
June 30, 2015 June 30, 2014
Units Units Conversion New Construction Total
----- ----- ---------- ---------------- -----
Conversion New Construction Total Conversion New Construction Total Units % Units % Units %
---------- ---------------- ----- ---------- ---------------- ----- ----- --- ----- --- ----- ---
Comfort Inn 38 64 102 38 50 88 - 0% 14 28% 14 16%
Comfort Suites 3 76 79 1 47 48 2 200% 29 62% 31 65%
Sleep Inn 1 65 66 2 56 58 (1) (50%) 9 16% 8 14%
Quality 54 5 59 41 6 47 13 32% (1) (17%) 12 26%
Clarion 11 2 13 12 2 14 (1) (8%) - 0% (1) (7%)
Econo Lodge 24 4 28 33 2 35 (9) (27%) 2 100% (7) (20%)
Rodeway 34 3 37 31 2 33 3 10% 1 50% 4 12%
MainStay 1 47 48 2 35 37 (1) (50%) 12 34% 11 30%
Suburban 6 12 18 7 14 21 (1) (14%) (2) (14%) (3) (14%)
Ascend Hotel Collection 25 18 43 9 15 24 16 178% 3 20% 19 79%
Cambria hotel & suites - 25 25 - 18 18 - NM 7 39% 7 39%
--- --- --- --- --- --- --- --- --- --- --- ---
197 321 518 176 247 423 21 12% 74 30% 95 22%
=== === === === === === === === === === === ===
CHOICE HOTELS INTERNATIONAL, INC. Exhibit 8
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION
(UNAUDITED)
CALCULATION OF FRANCHISING REVENUES AND FRANCHISING MARGINS
(dollar amounts in thousands) Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
2015 2014 2015 2014
---- ---- ---- ----
Franchising Revenues:
Total Revenues $232,156 $197,664 $407,401 $357,400
Adjustments:
Marketing and reservation revenues (133,122) (103,766) (231,835) (193,372)
SkyTouch & Other (411) (68) (1,014) (121)
Franchising Revenues $98,623 $93,830 $174,552 $163,907
Franchising Margins:
Operating Margin:
Total Revenues $232,156 $197,664 $407,401 $357,400
Operating Income $62,917 $60,153 $104,321 $101,325
Operating Margin 27.1% 30.4% 25.6% 28.4%
Franchising Margin:
Franchising Revenues $98,623 $93,830 $174,552 $163,907
Operating Income $62,917 $60,153 $104,321 $101,325
Non-franchising activities operating loss 4,375 4,360 9,576 7,866
$67,292 $64,513 $113,897 $109,191
------- ------- -------- --------
Franchising Margins 68.2% 68.8% 65.3% 66.6%
CALCULATION OF FRANCHISING SELLING, GENERAL AND ADMINISTRATION EXPENSES
(dollar amounts in thousands) Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
2015 2014 2015 2014
---- ---- ---- ----
Total Selling, General and Administrative Expenses $33,122 $31,413 $65,560 $58,093
SkyTouch & other (4,314) (4,200) (9,709) (7,536)
Franchising Selling, General and Administration Expenses $28,808 $27,213 $55,851 $50,557
CALCULATION OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA")
(dollar amounts in thousands)
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
2015 2014 2015 2014
---- ---- ---- ----
Income from continuing operations, net of income taxes $35,813 $35,279 $57,407 $56,748
Income taxes 17,066 14,955 26,506 25,014
Interest expense 11,057 10,710 21,236 20,881
Interest income (277) (347) (623) (850)
Other (gains) and losses (1,173) (474) (1,641) (533)
Equity in net loss of affiliates 431 30 1,436 65
Depreciation and amortization 2,995 2,332 5,685 4,610
EBITDA $65,912 $62,485 $110,006 $105,935
======= ======= ======== ========
Franchising $69,815 $66,617 $118,701 $113,350
SkyTouch & other (3,903) (4,132) (8,695) (7,415)
$65,912 $62,485 $110,006 $105,935
======= ======= ======== ========
Exhibit 9
CHOICE HOTELS INTERNATIONAL, INC.
DISCONTINUED OPERATIONS
(UNAUDITED)
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
(In thousands) 2015 2014 2015 2014
---- ---- ---- ----
REVENUES:
Hotel operations $ - $111 $ - $801
------ ---- ------ ----
Total revenues - 111 - 801
OPERATING EXPENSES:
Hotel operations - 170 - 832
--- --- --- ---
Total operating expenses - 170 - 832
Operating income (loss) - (59) - (31)
Gain on disposal of discontinued operations - 252 - 2,833
--- --- --- -----
Income from discontinued operations before income taxes - 193 - 2,802
Income tax - 72 - 1,040
Income from discontinued operations $ - $121 $ - $1,762
====== ==== ====== ======
Logo - http://photos.prnewswire.com/prnh/20131015/NE98133LOGO-l
SOURCE Choice Hotels International, Inc.
SOURCE: Choice Hotels International, Inc.
PR Newswire
ROCKVILLE, Md., July 29, 2015
ROCKVILLE, Md., July 29, 2015 /PRNewswire/ -- Choice Hotels International, Inc. (NYSE: CHH) today reported the following highlights for the second quarter 2015:
"We are pleased with our second quarter operating results that were highlighted by strong domestic RevPAR performance and franchise sales results," said Stephen P. Joyce, president and chief executive officer, Choice Hotels. "Once again our RevPAR performance continued to outpace the gains reported by Smith Travel Research in the chain scale segments in which we compete and as reflected in our franchise sales results our programs to accelerate the growth of the Cambria hotels and suites and Comfort brands have been well received by developers and franchisees. We continue to be optimistic that these programs will drive the continued improvement and expansion of these brands."
Discontinued Operations
During 2014, the company entered into and completed a plan to sell its three owned hotels operated under the MainStay Suites brand. The company determined that the sale of these hotels met the definition of a discontinued operation since the operations and cash flows of these components have been eliminated from the on-going operations of the company and the company does not have significant continuing involvement in the operations of the hotels after the transaction. As a result, the company's consolidated statement of income for the three and six months ended June 30, 2014, reflects these three company-owned hotels as discontinued operations.
Summarized financial information related to these discontinued operations is presented in Exhibit 9 of this press release.
Outlook
The company's consolidated 2015 outlook reflects the following assumptions:
Franchising
SkyTouch
Consolidated Outlook
The company's third quarter 2015 diluted EPS is expected to be $0.72. The company expects full-year 2015 diluted EPS to range between $2.18 and $2.22 and full year 2015 EBITDA to range between $237 million and $241 million.
Conference Call
Choice will conduct a conference call on Wednesday, July 29, 2015 at 9:00 a.m. EDT to discuss the company's second quarter 2015 results. The dial-in number to listen to the call is 1-855-638-5678, and the access code is 72461415. International callers should dial 1-920-663-6286 and enter the access code 72461415. The conference call also will be webcast simultaneously via the company's website, www.choicehotels.com. Interested investors and other parties wishing to access the call via the webcast should go to the website and click on the Investor Info link. The Investor page will feature a conference call microphone icon to access the call.
The call will be recorded and available for replay beginning at 1:00 p.m. EDT on Wednesday, July 29, 2015 through Wednesday, August 5, 2015 by calling 1-855-859-2056 and entering access code 72461415. The international dial-in number for the replay is 1-404-537-3406 and the access code is 72461415. In addition, the call will be archived for approximately one-year and available on www.choicehotels.com via the Investor Info link.
About Choice Hotels
Choice Hotels International, Inc.® (NYSE: CHH) is one of the world's largest lodging companies. With more than 6,300 hotels franchised in more than 35 countries and territories, we represent more than 500,000 rooms around the globe. As of June 30, 2015, 613 hotels were in our development pipeline. Our company's Ascend Hotel Collection®, Cambria® hotels & suites, Comfort Inn®, Comfort Suites®, Sleep Inn®, Quality®, Clarion®, MainStay Suites®, Suburban Extended Stay Hotel®, Econo Lodge® and Rodeway Inn® brands provide a spectrum of lodging choices to meet guests' needs. With more than 23 million members and counting, check out our Choice Privileges® rewards program to see how you can reap the benefits of being a member of the Choice Hotels® family. Visit us at www.choicehotels.com for more information.
SkyTouch Technology® is a business division of Choice Hotels that develops and markets cloud-based technology products, including inventory management, pricing and connectivity to third party channels, to hoteliers not under franchise agreements with the company.
Additional corporate information can be found on the Choice Hotels International, Inc. web site, which may be accessed at www.choicehotels.com.
Forward-Looking Statements
Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Generally, our use of words such as "expect," "estimate," "believe," "anticipate," "should," "will," "forecast," "plan," "project," "assume" or similar words of futurity identify such forward-looking statements. These forward-looking statements are based on management's current beliefs, assumptions and expectations regarding future events, which in turn are based on information currently available to management. Such statements may relate to projections of the company's revenue, earnings and other financial and operational measures, company debt levels, ability to repay outstanding indebtedness, payment of dividends, repurchases of common stock and future operations, among other matters. We caution you not to place undue reliance on any such forward-looking statements. Forward-looking statements do not guarantee future performance and involve known and unknown risks, uncertainties and other factors.
Several factors could cause actual results, performance or achievements of the company to differ materially from those expressed in or contemplated by the forward-looking statements. Such risks include, but are not limited to, changes to general, domestic and foreign economic conditions; foreign currency fluctuations; operating risks common in the lodging and franchising industries; changes to the desirability of our brands as viewed by hotel operators and customers; changes to the terms or termination of our contracts with franchisees; our ability to keep pace with improvements in technology utilized for marketing and reservations systems and other operating systems; or ability to grow our franchise system; exposure to risks related to development activities; fluctuations in the supply and demand for hotels rooms; our ability to realize anticipated benefits from acquired businesses; the level of acceptance of alternative growth strategies we may implement; operating risks associated with our international operations; the outcome of litigation; and our ability to manage our indebtedness. These and other risk factors are discussed in detail in the company's filings with the Securities and Exchange Commission including our annual reports on Form 10-K and our quarterly reports filed on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Statement Concerning Non-GAAP Financial Measurements Presented in this Press Release
EBITDA, franchising revenues, franchising SG&A, EBITDA from franchising activities and franchising margins are non-GAAP financial measurements. These measures should not be considered as an alternative to any measure of performance or liquidity as promulgated under or authorized by generally accepted accounting principles in the United States ("GAAP"), such as operating income, total revenues and operating margins. The company's calculation of these measurements may be different from the calculations used by other companies and therefore comparability may be limited. The company has included an exhibit accompanying this release that reconciles EBITDA, franchising revenues, franchising SG&A and franchising margins to the most comparable GAAP financial measures. We discuss management's reasons for reporting these non-GAAP measures below.
Earnings Before Interest, Taxes, Depreciation and Amortization: EBITDA reflects income from continuing operations excluding the impact of interest expense, interest income, provision for income taxes, depreciation and amortization, other (gains) and losses and equity in net income of unconsolidated affiliates. We consider EBITDA to be an indicator of operating performance because we use it to measure our ability to service debt, fund capital expenditures, and expand our business. We also use EBITDA, as do analysts, lenders, investors and others, to evaluate companies because it excludes certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company's capital structure, debt levels and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provision for income taxes can vary considerably among companies. EBITDA also excludes depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies.
Franchising Revenues, Operating Income, EBITDA, SG&A and Margins: The company reports franchising revenues, operating income, EBITDA, SG&A and margins which exclude marketing and reservation revenues, the SkyTouch Technology operations and revenue generated from the ownership of an office building that is leased to a third-party. Marketing and reservation activities are excluded since the company is required by its franchise agreements to use the fees collected for marketing and reservation activities; as such, no income or loss to the company is generated. Cumulative marketing and reservation system fees not expended are recorded as a liability in the company's financial statements and are carried over to the next year and expended in accordance with the franchise agreements. Cumulative marketing and reservation expenditures in excess of fees collected for marketing and reservation activities are deferred and recorded as an asset in the company's financial statements and recovered in future periods. SkyTouch Technology is a division of the company that develops and markets cloud-based technology products, including inventory management, pricing and connectivity to third party channels, to hoteliers not under franchise agreements with the company. The operations for SkyTouch Technology are excluded since they do not reflect the company's core franchising business but are an adjacent, complimentary line of business. These non-GAAP measures are a commonly used measure of performance in our industry and facilitate comparisons between the company and its competitors.
© 2015 Choice Hotels International, Inc. All rights reserved.
|
Choice Hotels International, Inc. |
Exhibit 1 |
|||||||||||||||
|
Consolidated Statements of Income |
||||||||||||||||
|
(Unaudited) |
||||||||||||||||
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
|
Variance |
Variance |
|||||||||||||||
|
2015 |
2014 |
$ |
% |
2015 |
2014 |
$ |
% |
|||||||||
|
(In thousands, except per share amounts) |
||||||||||||||||
|
REVENUES: |
||||||||||||||||
|
Royalty fees |
$ 81,183 |
$ 77,670 |
$ 3,513 |
5% |
$ 143,614 |
$ 136,210 |
$ 7,404 |
5% |
||||||||
|
Initial franchise and relicensing fees |
5,816 |
4,722 |
1,094 |
23% |
11,533 |
8,462 |
3,071 |
36% |
||||||||
|
Procurement services |
8,589 |
8,020 |
569 |
7% |
13,396 |
12,798 |
598 |
5% |
||||||||
|
Marketing and reservation |
133,122 |
103,766 |
29,356 |
28% |
231,835 |
193,372 |
38,463 |
20% |
||||||||
|
Other |
3,446 |
3,486 |
(40) |
(1%) |
7,023 |
6,558 |
465 |
7% |
||||||||
|
Total revenues |
232,156 |
197,664 |
34,492 |
17% |
407,401 |
357,400 |
50,001 |
14% |
||||||||
|
OPERATING EXPENSES: |
||||||||||||||||
|
Selling, general and administrative |
33,122 |
31,413 |
1,709 |
5% |
65,560 |
58,093 |
7,467 |
13% |
||||||||
|
Depreciation and amortization |
2,995 |
2,332 |
663 |
28% |
5,685 |
4,610 |
1,075 |
23% |
||||||||
|
Marketing and reservation |
133,122 |
103,766 |
29,356 |
28% |
231,835 |
193,372 |
38,463 |
20% |
||||||||
|
Total operating expenses |
169,239 |
137,511 |
31,728 |
23% |
303,080 |
256,075 |
47,005 |
18% |
||||||||
|
Operating income |
62,917 |
60,153 |
2,764 |
5% |
104,321 |
101,325 |
2,996 |
3% |
||||||||
|
OTHER INCOME AND EXPENSES, NET: |
||||||||||||||||
|
Interest expense |
11,057 |
10,710 |
347 |
3% |
21,236 |
20,881 |
355 |
2% |
||||||||
|
Interest income |
(277) |
(347) |
70 |
(20%) |
(623) |
(850) |
227 |
(27%) |
||||||||
|
Other (gains) and losses |
(1,173) |
(474) |
(699) |
147% |
(1,641) |
(533) |
(1,108) |
208% |
||||||||
|
Equity in net loss of affiliates |
431 |
30 |
401 |
1337% |
1,436 |
65 |
1,371 |
2109% |
||||||||
|
Total other income and expenses, net |
10,038 |
9,919 |
119 |
1% |
20,408 |
19,563 |
845 |
4% |
||||||||
|
Income from continuing operations before income taxes |
52,879 |
50,234 |
2,645 |
5% |
83,913 |
81,762 |
2,151 |
3% |
||||||||
|
Income taxes |
17,066 |
14,955 |
2,111 |
14% |
26,506 |
25,014 |
1,492 |
6% |
||||||||
|
Income from continuing operations, net of income taxes |
35,813 |
35,279 |
534 |
2% |
57,407 |
56,748 |
659 |
1% |
||||||||
|
Income from discontinued operations, net of income taxes |
- |
121 |
(121) |
(100%) |
- |
1,762 |
(1,762) |
(100%) |
||||||||
|
Net income |
$ 35,813 |
$ 35,400 |
$ 413 |
1% |
$ 57,407 |
$ 58,510 |
$ (1,103) |
(2%) |
||||||||
|
Basic earnings per share |
||||||||||||||||
|
Continuing operations |
$ 0.62 |
$ 0.61 |
$ 0.01 |
2% |
$ 1.00 |
$ 0.97 |
$ 0.03 |
3% |
||||||||
|
Discontinued operations |
- |
- |
- |
NM |
- |
0.03 |
(0.03) |
(100%) |
||||||||
|
$ 0.62 |
$ 0.61 |
$ 0.01 |
2% |
$ 1.00 |
$ 1.00 |
$ 0.00 |
0% |
|||||||||
|
Diluted earnings per share |
||||||||||||||||
|
Continuing operations |
$ 0.62 |
$ 0.60 |
$ 0.02 |
3% |
$ 0.99 |
$ 0.96 |
$ 0.03 |
3% |
||||||||
|
Discontinued operations |
- |
- |
- |
NM |
- |
0.03 |
(0.03) |
(100%) |
||||||||
|
$ 0.62 |
$ 0.60 |
$ 0.02 |
3% |
$ 0.99 |
$ 0.99 |
$ 0.00 |
0% |
|||||||||
|
Choice Hotels International, Inc. |
Exhibit 2 |
||||||
|
Consolidated Balance Sheets |
|||||||
|
(In thousands, except per share amounts) |
June 30, |
December 31, |
|||||
|
2015 |
2014 |
||||||
|
(Unaudited) |
|||||||
|
ASSETS |
|||||||
|
Cash and cash equivalents |
$ 230,650 |
$ 214,879 |
|||||
|
Accounts receivable, net |
118,989 |
91,681 |
|||||
|
Other current assets |
47,938 |
44,854 |
|||||
|
Total current assets |
397,577 |
351,414 |
|||||
|
Fixed assets and intangibles, net |
155,456 |
152,034 |
|||||
|
Notes receivable, net of allowances |
51,228 |
40,441 |
|||||
|
Investments, employee benefit plans, at fair value |
18,274 |
17,539 |
|||||
|
Other assets |
80,058 |
85,842 |
|||||
|
Total assets |
$ 702,593 |
$ 647,270 |
|||||
|
LIABILITIES AND SHAREHOLDERS' DEFICIT |
|||||||
|
Accounts payable and accrued expenses |
$ 128,744 |
$ 120,654 |
|||||
|
Deferred revenue |
70,402 |
66,382 |
|||||
|
Current portion of long-term debt |
1,124 |
12,349 |
|||||
|
Other current liabilities |
1,416 |
713 |
|||||
|
Total current liabilities |
201,686 |
200,098 |
|||||
|
Long-term debt |
800,035 |
782,082 |
|||||
|
Deferred compensation & retirement plan obligations |
24,237 |
23,987 |
|||||
|
Other liabilities |
62,102 |
69,904 |
|||||
|
Total liabilities |
1,088,060 |
1,076,071 |
|||||
|
Common stock, $0.01 par value |
576 |
573 |
|||||
|
Additional paid-in-capital |
134,144 |
127,661 |
|||||
|
Accumulated other comprehensive loss |
(7,812) |
(6,971) |
|||||
|
Treasury stock, at cost |
(979,211) |
(982,463) |
|||||
|
Retained earnings |
466,836 |
432,399 |
|||||
|
Total shareholders' deficit |
(385,467) |
(428,801) |
|||||
|
Total liabilities and shareholders' deficit |
$ 702,593 |
$ 647,270 |
|||||
|
Choice Hotels International, Inc. |
Exhibit 3 |
||
|
Consolidated Statements of Cash Flows |
|||
|
(Unaudited) |
|||
|
(In thousands) |
Six Months Ended June 30, |
||
|
2015 |
2014 |
||
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|||
|
Net income |
$ 57,407 |
$ 58,510 |
|
|
Adjustments to reconcile net income to net cash provided |
|||
|
by operating activities: |
|||
|
Depreciation and amortization |
5,685 |
4,610 |
|
|
Gain on sale of assets |
(1,595) |
(2,849) |
|
|
Provision for bad debts, net |
1,197 |
1,383 |
|
|
Non-cash stock compensation and other charges |
5,399 |
4,711 |
|
|
Non-cash interest and other (income) loss |
1,340 |
719 |
|
|
Deferred income taxes |
(2,095) |
(9,273) |
|
|
Equity (earnings) losses from unconsolidated joint ventures, net of distributions received |
2,781 |
611 |
|
|
Changes in assets and liabilities: |
|||
|
Receivables |
(28,856) |
(39,518) |
|
|
Advances to/from marketing and reservation activities, net |
3,724 |
31,522 |
|
|
Forgivable notes receivable, net |
(19,186) |
(6,692) |
|
|
Accounts payable |
16,990 |
8,316 |
|
|
Accrued expenses |
(6,969) |
(5,247) |
|
|
Income taxes payable/receivable |
2,450 |
15,198 |
|
|
Deferred revenue |
4,041 |
6,231 |
|
|
Other assets |
(5,152) |
(1,102) |
|
|
Other liabilities |
769 |
(1,298) |
|
|
NET CASH PROVIDED BY OPERATING ACTIVITIES |
37,930 |
65,832 |
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|||
|
Investment in property and equipment |
(14,554) |
(7,314) |
|
|
Proceeds from sales of assets |
6,283 |
12,216 |
|
|
Contributions to equity method investments |
(2,446) |
(6,946) |
|
|
Distributions from equity method investments |
270 |
- |
|
|
Purchases of investments, employee benefit plans |
(1,736) |
(1,220) |
|
|
Proceeds from sales of investments, employee benefit plans |
1,087 |
641 |
|
|
Issuance of mezzanine and other notes receivable |
(1,500) |
(2,223) |
|
|
Collections of mezzanine and other notes receivable |
3,567 |
9,743 |
|
|
Other items, net |
(261) |
(296) |
|
|
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES |
(9,290) |
4,601 |
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|||
|
Net borrowings pursuant to revolving credit facility |
13,000 |
- |
|
|
Principal payments on long-term debt |
(6,169) |
(4,112) |
|
|
Proceeds from the issuance of long-term debt |
- |
26 |
|
|
Purchase of treasury stock |
(6,244) |
(4,544) |
|
|
Dividends paid |
(22,940) |
(21,957) |
|
|
Excess tax benefits from stock-based compensation |
4,613 |
1,319 |
|
|
Proceeds from exercise of stock options |
5,696 |
1,547 |
|
|
NET CASH USED BY FINANCING ACTIVITIES |
(12,044) |
(27,721) |
|
|
Net change in cash and cash equivalents |
16,596 |
42,712 |
|
|
Effect of foreign exchange rate changes on cash and cash equivalents |
(825) |
1,035 |
|
|
Cash and cash equivalents at beginning of period |
214,879 |
167,795 |
|
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$230,650 |
$211,542 |
|
|
CHOICE HOTELS INTERNATIONAL, INC. |
Exhibit 4 |
||||||||||||||||||||
|
SUPPLEMENTAL OPERATING INFORMATION |
|||||||||||||||||||||
|
DOMESTIC HOTEL SYSTEM |
|||||||||||||||||||||
|
(UNAUDITED) |
|||||||||||||||||||||
|
For the Six Months Ended June 30, 2015 |
For the Six Months Ended June 30, 2014 |
Change |
|||||||||||||||||||
|
Average Daily |
Average Daily |
Average Daily |
|||||||||||||||||||
|
Rate |
Occupancy |
RevPAR |
Rate |
Occupancy |
RevPAR |
Rate |
Occupancy |
RevPAR |
|||||||||||||
|
Comfort Inn |
$ 87.35 |
63.5% |
$ 55.48 |
$ 83.68 |
61.3% |
$ 51.31 |
4.4% |
220 |
bps |
8.1% |
|||||||||||
|
Comfort Suites |
93.06 |
68.2% |
63.43 |
89.35 |
65.7% |
58.68 |
4.2% |
250 |
bps |
8.1% |
|||||||||||
|
Sleep |
79.60 |
64.0% |
50.93 |
75.94 |
61.3% |
46.57 |
4.8% |
270 |
bps |
9.4% |
|||||||||||
|
Quality |
73.16 |
57.5% |
42.05 |
70.37 |
54.8% |
38.57 |
4.0% |
270 |
bps |
9.0% |
|||||||||||
|
Clarion |
78.25 |
56.3% |
44.07 |
75.01 |
53.0% |
39.75 |
4.3% |
330 |
bps |
10.9% |
|||||||||||
|
Econo Lodge |
57.47 |
52.4% |
30.13 |
55.75 |
49.7% |
27.72 |
3.1% |
270 |
bps |
8.7% |
|||||||||||
|
Rodeway |
57.22 |
55.8% |
31.90 |
54.19 |
53.2% |
28.85 |
5.6% |
260 |
bps |
10.6% |
|||||||||||
|
MainStay |
76.24 |
68.5% |
52.23 |
73.80 |
70.6% |
52.11 |
3.3% |
(210) |
bps |
0.2% |
|||||||||||
|
Suburban |
47.25 |
76.5% |
36.15 |
44.53 |
72.6% |
32.34 |
6.1% |
390 |
bps |
11.8% |
|||||||||||
|
Ascend Hotel Collection |
122.78 |
59.8% |
73.45 |
117.13 |
59.2% |
69.30 |
4.8% |
60 |
bps |
6.0% |
|||||||||||
|
Total |
$ 78.08 |
60.4% |
$ 47.15 |
$ 75.26 |
58.0% |
$ 43.63 |
3.7% |
240 |
bps |
8.1% |
|||||||||||
|
For the Three Months Ended June 30, 2015 |
For the Three Months Ended June 30, 2014 |
Change |
|||||||||||||||||||
|
Average Daily |
Average Daily |
Average Daily |
|||||||||||||||||||
|
Rate |
Occupancy |
RevPAR |
Rate |
Occupancy |
RevPAR |
Rate |
Occupancy |
RevPAR |
|||||||||||||
|
Comfort Inn |
$ 90.92 |
69.5% |
$ 63.16 |
$ 87.16 |
67.6% |
$ 58.94 |
4.3% |
190 |
bps |
7.2% |
|||||||||||
|
Comfort Suites |
95.59 |
71.8% |
68.64 |
91.46 |
70.4% |
64.36 |
4.5% |
140 |
bps |
6.7% |
|||||||||||
|
Sleep |
82.23 |
68.3% |
56.11 |
78.40 |
66.9% |
52.42 |
4.9% |
140 |
bps |
7.0% |
|||||||||||
|
Quality |
75.52 |
62.0% |
46.83 |
72.61 |
59.8% |
43.38 |
4.0% |
220 |
bps |
8.0% |
|||||||||||
|
Clarion |
80.54 |
60.8% |
48.95 |
78.36 |
57.0% |
44.68 |
2.8% |
380 |
bps |
9.6% |
|||||||||||
|
Econo Lodge |
59.86 |
56.6% |
33.87 |
58.12 |
54.9% |
31.90 |
3.0% |
170 |
bps |
6.2% |
|||||||||||
|
Rodeway |
59.92 |
58.4% |
35.01 |
56.56 |
56.7% |
32.05 |
5.9% |
170 |
bps |
9.2% |
|||||||||||
|
MainStay |
78.53 |
70.4% |
55.32 |
76.33 |
76.3% |
58.25 |
2.9% |
(590) |
bps |
(5.0%) |
|||||||||||
|
Suburban |
47.96 |
78.9% |
37.86 |
45.72 |
75.0% |
34.27 |
4.9% |
390 |
bps |
10.5% |
|||||||||||
|
Ascend Hotel Collection |
129.04 |
59.2% |
76.41 |
122.07 |
60.1% |
73.32 |
5.7% |
(90) |
bps |
4.2% |
|||||||||||
|
Total |
$ 80.89 |
64.7% |
$ 52.36 |
$ 77.92 |
63.0% |
$ 49.08 |
3.8% |
170 |
bps |
6.7% |
|||||||||||
|
For the Quarter Ended |
For the Six Months Ended |
||||||||||||||||||||
|
6/30/2015 |
6/30/2014 |
6/30/2015 |
6/30/2014 |
||||||||||||||||||
|
System-wide effective royalty rate |
4.28% |
4.28% |
4.29% |
4.30% |
|||||||||||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
Exhibit 5 |
||||||||||||||||
|
SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA |
|||||||||||||||||
|
(UNAUDITED) |
|||||||||||||||||
|
June 30, 2015 |
June 30, 2014 |
Variance |
|||||||||||||||
|
Hotels |
Rooms |
Hotels |
Rooms |
Hotels |
Rooms |
% |
% |
||||||||||
|
Comfort Inn |
1,215 |
93,904 |
1,281 |
99,679 |
(66) |
(5,775) |
(5.2%) |
(5.8%) |
|||||||||
|
Comfort Suites |
575 |
44,447 |
590 |
45,664 |
(15) |
(1,217) |
(2.5%) |
(2.7%) |
|||||||||
|
Sleep |
377 |
27,207 |
375 |
27,159 |
2 |
48 |
0.5% |
0.2% |
|||||||||
|
Quality |
1,311 |
105,761 |
1,251 |
102,859 |
60 |
2,902 |
4.8% |
2.8% |
|||||||||
|
Clarion |
175 |
24,587 |
185 |
26,501 |
(10) |
(1,914) |
(5.4%) |
(7.2%) |
|||||||||
|
Econo Lodge |
853 |
52,835 |
840 |
51,678 |
13 |
1,157 |
1.5% |
2.2% |
|||||||||
|
Rodeway |
481 |
26,544 |
460 |
25,366 |
21 |
1,178 |
4.6% |
4.6% |
|||||||||
|
MainStay |
47 |
3,629 |
42 |
3,304 |
5 |
325 |
11.9% |
9.8% |
|||||||||
|
Suburban |
62 |
6,959 |
64 |
7,164 |
(2) |
(205) |
(3.1%) |
(2.9%) |
|||||||||
|
Ascend Hotel Collection |
110 |
9,408 |
104 |
9,076 |
6 |
332 |
5.8% |
3.7% |
|||||||||
|
Cambria hotel & suites |
24 |
2,917 |
20 |
2,404 |
4 |
513 |
20.0% |
21.3% |
|||||||||
|
Domestic Franchises |
5,230 |
398,198 |
5,212 |
400,854 |
18 |
(2,656) |
0.3% |
(0.7%) |
|||||||||
|
International Franchises |
1,146 |
106,763 |
1,160 |
105,669 |
(14) |
1,094 |
(1.2%) |
1.0% |
|||||||||
|
Total Franchises |
6,376 |
504,961 |
6,372 |
506,523 |
4 |
(1,562) |
0.1% |
(0.3%) |
|||||||||
|
Exhibit 6 |
|||||||||||||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
|||||||||||||||||||
|
SUPPLEMENTAL INFORMATION BY BRAND |
|||||||||||||||||||
|
DEVELOPMENT RESULTS -- DOMESTIC NEW HOTEL CONTRACTS |
|||||||||||||||||||
|
(UNAUDITED) |
|||||||||||||||||||
|
For the Six Months Ended June 30, 2015 |
For the Six Months Ended June 30, 2014 |
% Change |
|||||||||||||||||
|
New |
New |
New |
|||||||||||||||||
|
Construction |
Conversion |
Total |
Construction |
Conversion |
Total |
Construction |
Conversion |
Total |
|||||||||||
|
Comfort Inn |
13 |
20 |
33 |
10 |
8 |
18 |
30% |
150% |
83% |
||||||||||
|
Comfort Suites |
13 |
2 |
15 |
7 |
- |
7 |
86% |
NM |
114% |
||||||||||
|
Sleep |
9 |
- |
9 |
14 |
1 |
15 |
(36%) |
(100%) |
(40%) |
||||||||||
|
Quality |
3 |
75 |
78 |
3 |
48 |
51 |
0% |
56% |
53% |
||||||||||
|
Clarion |
- |
6 |
6 |
- |
11 |
11 |
NM |
(45%) |
(45%) |
||||||||||
|
Econo Lodge |
- |
28 |
28 |
- |
27 |
27 |
NM |
4% |
4% |
||||||||||
|
Rodeway |
- |
35 |
35 |
1 |
31 |
32 |
(100%) |
13% |
9% |
||||||||||
|
MainStay |
6 |
- |
6 |
5 |
1 |
6 |
20% |
(100%) |
0% |
||||||||||
|
Suburban |
1 |
3 |
4 |
1 |
3 |
4 |
0% |
0% |
0% |
||||||||||
|
Ascend Hotel Collection |
1 |
16 |
17 |
6 |
6 |
12 |
(83%) |
167% |
42% |
||||||||||
|
Cambria hotel & suites |
7 |
- |
7 |
1 |
- |
1 |
600% |
NM |
600% |
||||||||||
|
Total Domestic System |
53 |
185 |
238 |
48 |
136 |
184 |
10% |
36% |
29% |
||||||||||
|
For the Three Months Ended June 30, 2015 |
For the Three Months Ended June 30, 2014 |
% Change |
|||||||||||||||||
|
New |
New |
New |
|||||||||||||||||
|
Construction |
Conversion |
Total |
Construction |
Conversion |
Total |
Construction |
Conversion |
Total |
|||||||||||
|
Comfort Inn |
9 |
13 |
22 |
7 |
5 |
12 |
29% |
160% |
83% |
||||||||||
|
Comfort Suites |
8 |
- |
8 |
6 |
- |
6 |
33% |
NM |
33% |
||||||||||
|
Sleep |
4 |
- |
4 |
10 |
1 |
11 |
(60%) |
(100%) |
(64%) |
||||||||||
|
Quality |
1 |
46 |
47 |
2 |
38 |
40 |
(50%) |
21% |
18% |
||||||||||
|
Clarion |
- |
3 |
3 |
- |
9 |
9 |
NM |
(67%) |
(67%) |
||||||||||
|
Econo Lodge |
- |
19 |
19 |
- |
21 |
21 |
NM |
(10%) |
(10%) |
||||||||||
|
Rodeway |
- |
21 |
21 |
- |
16 |
16 |
NM |
31% |
31% |
||||||||||
|
MainStay |
2 |
- |
2 |
1 |
1 |
2 |
100% |
(100%) |
0% |
||||||||||
|
Suburban |
1 |
1 |
2 |
- |
2 |
2 |
NM |
(50%) |
0% |
||||||||||
|
Ascend Hotel Collection |
- |
6 |
6 |
3 |
3 |
6 |
(100%) |
100% |
0% |
||||||||||
|
Cambria hotel & suites |
5 |
- |
5 |
- |
- |
- |
NM |
NM |
NM |
||||||||||
|
Total Domestic System |
30 |
109 |
139 |
29 |
96 |
125 |
3% |
14% |
11% |
||||||||||
|
Exhibit 7 |
||||||||||||||||||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
||||||||||||||||||||||||
|
DOMESTIC PIPELINE OF HOTELS UNDER CONSTRUCTION, AWAITING CONVERSION OR APPROVED FOR DEVELOPMENT |
||||||||||||||||||||||||
|
(UNAUDITED) |
||||||||||||||||||||||||
|
A hotel in the domestic pipeline does not always result in an open and operating hotel due to various factors. |
||||||||||||||||||||||||
|
Variance |
||||||||||||||||||||||||
|
June 30, 2015 |
June 30, 2014 |
|||||||||||||||||||||||
|
Units |
Units |
Conversion |
New Construction |
Total |
||||||||||||||||||||
|
Conversion |
New Construction |
Total |
Conversion |
New Construction |
Total |
Units |
% |
Units |
% |
Units |
% |
|||||||||||||
|
Comfort Inn |
38 |
64 |
102 |
38 |
50 |
88 |
- |
0% |
14 |
28% |
14 |
16% |
||||||||||||
|
Comfort Suites |
3 |
76 |
79 |
1 |
47 |
48 |
2 |
200% |
29 |
62% |
31 |
65% |
||||||||||||
|
Sleep Inn |
1 |
65 |
66 |
2 |
56 |
58 |
(1) |
(50%) |
9 |
16% |
8 |
14% |
||||||||||||
|
Quality |
54 |
5 |
59 |
41 |
6 |
47 |
13 |
32% |
(1) |
(17%) |
12 |
26% |
||||||||||||
|
Clarion |
11 |
2 |
13 |
12 |
2 |
14 |
(1) |
(8%) |
- |
0% |
(1) |
(7%) |
||||||||||||
|
Econo Lodge |
24 |
4 |
28 |
33 |
2 |
35 |
(9) |
(27%) |
2 |
100% |
(7) |
(20%) |
||||||||||||
|
Rodeway |
34 |
3 |
37 |
31 |
2 |
33 |
3 |
10% |
1 |
50% |
4 |
12% |
||||||||||||
|
MainStay |
1 |
47 |
48 |
2 |
35 |
37 |
(1) |
(50%) |
12 |
34% |
11 |
30% |
||||||||||||
|
Suburban |
6 |
12 |
18 |
7 |
14 |
21 |
(1) |
(14%) |
(2) |
(14%) |
(3) |
(14%) |
||||||||||||
|
Ascend Hotel Collection |
25 |
18 |
43 |
9 |
15 |
24 |
16 |
178% |
3 |
20% |
19 |
79% |
||||||||||||
|
Cambria hotel & suites |
- |
25 |
25 |
- |
18 |
18 |
- |
NM |
7 |
39% |
7 |
39% |
||||||||||||
|
197 |
321 |
518 |
176 |
247 |
423 |
21 |
12% |
74 |
30% |
95 |
22% |
|||||||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
Exhibit 8 |
|||||||||
|
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION |
||||||||||
|
(UNAUDITED) |
||||||||||
|
CALCULATION OF FRANCHISING REVENUES AND FRANCHISING MARGINS |
||||||||||
|
(dollar amounts in thousands) |
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||
|
2015 |
2014 |
2015 |
2014 |
|||||||
|
Franchising Revenues: |
||||||||||
|
Total Revenues |
$ 232,156 |
$ 197,664 |
$ 407,401 |
$ 357,400 |
||||||
|
Adjustments: |
||||||||||
|
Marketing and reservation revenues |
(133,122) |
(103,766) |
(231,835) |
(193,372) |
||||||
|
SkyTouch & Other |
(411) |
(68) |
(1,014) |
(121) |
||||||
|
Franchising Revenues |
$ 98,623 |
$ 93,830 |
$ 174,552 |
$ 163,907 |
||||||
|
Franchising Margins: |
||||||||||
|
Operating Margin: |
||||||||||
|
Total Revenues |
$ 232,156 |
$ 197,664 |
$ 407,401 |
$ 357,400 |
||||||
|
Operating Income |
$ 62,917 |
$ 60,153 |
$ 104,321 |
$ 101,325 |
||||||
|
Operating Margin |
27.1% |
30.4% |
25.6% |
28.4% |
||||||
|
Franchising Margin: |
||||||||||
|
Franchising Revenues |
$ 98,623 |
$ 93,830 |
$ 174,552 |
$ 163,907 |
||||||
|
Operating Income |
$ 62,917 |
$ 60,153 |
$ 104,321 |
$ 101,325 |
||||||
|
Non-franchising activities operating loss |
4,375 |
4,360 |
9,576 |
7,866 |
||||||
|
$ 67,292 |
$ 64,513 |
$ 113,897 |
$ 109,191 |
|||||||
|
Franchising Margins |
68.2% |
68.8% |
65.3% |
66.6% |
||||||
|
CALCULATION OF FRANCHISING SELLING, GENERAL AND ADMINISTRATION EXPENSES |
||||||||||
|
(dollar amounts in thousands) |
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||
|
2015 |
2014 |
2015 |
2014 |
|||||||
|
Total Selling, General and Administrative Expenses |
$ 33,122 |
$ 31,413 |
$ 65,560 |
$ 58,093 |
||||||
|
SkyTouch & other |
(4,314) |
(4,200) |
(9,709) |
(7,536) |
||||||
|
Franchising Selling, General and Administration Expenses |
$ 28,808 |
$ 27,213 |
$ 55,851 |
$ 50,557 |
||||||
|
CALCULATION OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA") |
||||||||||
|
(dollar amounts in thousands) |
||||||||||
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||
|
2015 |
2014 |
2015 |
2014 |
|||||||
|
Income from continuing operations, net of income taxes |
$ 35,813 |
$ 35,279 |
$ 57,407 |
$ 56,748 |
||||||
|
Income taxes |
17,066 |
14,955 |
26,506 |
25,014 |
||||||
|
Interest expense |
11,057 |
10,710 |
21,236 |
20,881 |
||||||
|
Interest income |
(277) |
(347) |
(623) |
(850) |
||||||
|
Other (gains) and losses |
(1,173) |
(474) |
(1,641) |
(533) |
||||||
|
Equity in net loss of affiliates |
431 |
30 |
1,436 |
65 |
||||||
|
Depreciation and amortization |
2,995 |
2,332 |
5,685 |
4,610 |
||||||
|
EBITDA |
$ 65,912 |
$ 62,485 |
$ 110,006 |
$ 105,935 |
||||||
|
Franchising |
$ 69,815 |
$ 66,617 |
$ 118,701 |
$ 113,350 |
||||||
|
SkyTouch & other |
(3,903) |
(4,132) |
(8,695) |
(7,415) |
||||||
|
$ 65,912 |
$ 62,485 |
$ 110,006 |
$ 105,935 |
|||||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
Exhibit 9 |
||||||||
|
DISCONTINUED OPERATIONS |
|||||||||
|
(UNAUDITED) |
|||||||||
|
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||
|
(In thousands) |
2015 |
2014 |
2015 |
2014 |
|||||
|
REVENUES: |
|||||||||
|
Hotel operations |
$ - |
$ 111 |
$ - |
$ 801 |
|||||
|
Total revenues |
- |
111 |
- |
801 |
|||||
|
OPERATING EXPENSES: |
|||||||||
|
Hotel operations |
- |
170 |
- |
832 |
|||||
|
Total operating expenses |
- |
170 |
- |
832 |
|||||
|
Operating income (loss) |
- |
(59) |
- |
(31) |
|||||
|
Gain on disposal of discontinued operations |
- |
252 |
- |
2,833 |
|||||
|
Income from discontinued operations before income taxes |
- |
193 |
- |
2,802 |
|||||
|
Income tax |
- |
72 |
- |
1,040 |
|||||
|
Income from discontinued operations |
$ - |
$ 121 |
$ - |
$ 1,762 |
|||||
Logo - http://photos.prnewswire.com/prnh/20131015/NE98133LOGO-l
SOURCE Choice Hotels International, Inc.
CONTACT: David White, Senior Vice President, Chief Financial Officer & Treasurer, (301) 592-5117; Scott Carman, Director, Public Relations, (301) 592-6361
Web Site: http://www.choicehotels.com
We redesigned the new CH.com with the latest technology. This makes it way faster and easier for you to use.
Sadly, the browser you are currently using does not support our new technology. Please download one of the awesome browsers below and you'll be on your way.