ROCKVILLE, Md., May 4, 2016 /PRNewswire/ -- Choice Hotels International, Inc. (NYSE: CHH) today reported the following highlights for the first quarter 2016:
http://photos.prnewswire.com/prnvar/20140807/134515
-- Revenues for the three months ended March 31, 2016 totaled $207.1
million, an increase of 18 percent from the same period of 2015.
-- Franchising revenues for the three months ended March 31, 2016 totaled
$78.7 million, an increase of 4 percent from the same period of 2015.
-- Franchising margins for the three months ended March 31, 2016 were 61.6
percent, an increase of 10 basis points from the same period of 2015.
-- Earnings before interest, taxes, depreciation and amortization
("EBITDA") from franchising activities for the three months ended March
31, 2016 totaled $50.3 million compared to $49.0 million for the same
period in 2015. EBITDA from franchising activities for the current
period were impacted by approximately $2 million in the aggregate or
$0.02 per share, net of tax, compared to our expectations for the
quarter as a result of lower than expected increases in domestic
system-wide revenue per available room ("RevPAR") and higher than
anticipated corporate development and litigation settlement costs.
-- Domestic RevPAR increased 1.2 percent in the first quarter of 2016.
Domestic RevPAR performance for the first quarter of 2016 was in line
with the total industry results for the primary chain scale segments in
which the company competes. Compared to its focused competitive set, the
company's Comfort family of brands achieved a RevPAR index gain
estimated at 170 basis points for the three months ended March 31, 2016
compared to the same period in 2015.
-- Effective income tax rate for the three months ended March 31, 2016 was
35.5 percent compared to 30.4 percent for the same period of 2015.
Excluding discrete items, the effective income tax rates for the three
months ended March 31, 2016 and 2015 were 33.5 percent and 31.8 percent,
respectively.
-- Equity in net loss of affiliates for the three months ended March 31,
2016 totaled $2.2 million, an increase of $1.2 million from the same
period of 2015. Equity losses from affiliates primarily reflect losses
during the ramp up period of recently opened or under renovation Cambria
properties in major urban markets.
-- Net income and diluted earnings per share ("EPS") for the three months
ended March 31, 2016 totaled $19.6 million and $0.35 per share,
respectively, compared to $21.6 million and $0.37 per share in the prior
year period. Compared to our previously published outlook for earnings
per share for the first quarter of 2016 the impact of the discrete tax
rate items and hotel equity investment performance was a reduction of
approximately $0.02 per share. We anticipate the earnings per share
impact of these two items will be mitigated during the balance of 2016
on account of the impact of certain other discrete tax items and
performance improvement attributable to seasonality in the specific
Cambria property markets.
-- Domestic royalty fees for the three months ended March 31, 2016 totaled
$60.5 million, an increase of 5 percent from the same period of 2015.
-- Domestic and international units as of March 31, 2016 increased 1.1
percent and 2.3 percent, respectively, from March 31, 2015. Excluding
the impact of our Comfort rejuvenation strategy, our domestic units
under franchise at March 31, 2016 increased 4.6 percent from the prior
year.
-- Effective domestic royalty rate for the three months ended March 31,
2016 was 4.38 percent, an increase of 7 basis points from the same
period of 2015.
-- Domestic relicensing and contract renewal transactions totaled 107 for
the three months ended March 31, 2016, an increase of 7 percent from the
same period of 2015.
-- The company's domestic pipeline of hotels awaiting conversion, under
construction or approved for development as of March 31, 2016 increased
12 percent from March 31, 2015. The new construction domestic pipeline
for the company's Comfort family of brands as of March 31, 2016
increased 29 percent from March 31, 2015.
"We are excited about the consumer response to the program enhancements we made to our award-winning Choice Privileges program in the first quarter," said Stephen P. Joyce, president and chief executive officer, Choice Hotels. "As a result of our strong family of brands and our enhancements to the program we now have more than 26 million members and expect to add a record 4 million new members this year. We believe that improving the value of the benefits provided to our guests as well as the strength of our distribution systems will result in continued RevPAR growth for the remainder of the year. We are also optimistic that developers will continue to respond to our brands and that our franchise development results will exceed 2015 levels."
Use of Cash Flows
Dividends
During the three months ended March 31, 2016, the company paid cash dividends totaling approximately $12 million. Based on the current quarterly dividend rate of $0.205 per common share, the company expects to pay dividends of approximately $46 million during 2016.
Share Repurchases
The company repurchased 0.1 million shares of common stock under its share repurchase program during the first quarter of 2016, at a total cost of approximately $3.6 million. The company currently has authorization to purchase up to 1.6 million additional shares under this program.
Hotel Development & Financing
Pursuant to its program to encourage acceleration of the growth of our upscale select-service Cambria hotels & suites brand, the company's net advances in support of the Cambria brand totaled $40 million during the three months ended March 31, 2016. These advances are primarily in the form of joint venture investments, forgivable key money loans, senior and mezzanine lending and site acquisitions. At March 31, 2016, the company had approximately $167 million reflected in its consolidated balance sheet pursuant to these financial support activities. With respect to lending and joint venture investments, the company generally expects to recycle these loans and investments within a five year period.
Outlook
The company's consolidated 2016 outlook reflects the following assumptions:
Hotel Franchising
-- EBITDA from franchising activities for full-year 2016 are expected to
range between $270 million and $274 million;
-- Net domestic unit growth for 2016 is expected to be between 2% and 3%;
-- RevPAR is expected to increase between 3% and 4% for second quarter and
range between 3.75% and 4.50% for full-year 2016; and
-- The effective royalty rate is expected to increase between 6 and 8 basis
points for full-year 2016 as compared to full-year 2015.
Non-Hotel Franchising Activities
-- Net reductions in full-year 2016 EBITDA relating to our non-hotel
franchising operations, which primarily relate to SkyTouch and vacation
rental activities are expected to range between approximately $16
million and $19 million.
Other Items
-- The effective tax rate for continuing operations is expected to be
approximately 32% and 33.5% for the second quarter and full-year 2016,
respectively. Effective tax rates assume the adoption of Accounting
Standards Update No 2016-09 "Compensation-Stock Compensation (Topic
718): Improvements to Employee Share-Based Payment Accounting" ("ASU No.
2016-09") during 2016 which requires that excess tax benefits and tax
deficiencies related to stock compensation be recognized as income tax
expense or benefit through the company's income statement; and
-- Diluted EPS estimates are based on the current number of shares
outstanding and thus do not factor in any changes that may occur due to
new equity grants or any further repurchases of common stock under the
company's share repurchase program.
Consolidated Outlook
The company's second quarter 2016 diluted EPS is expected to be at least $0.66. The company expects full-year 2016 diluted EPS to range between $2.30 and $2.35 and full year 2016 EBITDA to range between $252 million and $256 million. The EPS and consolidated EBITDA estimates assume that we incur net reductions in EBITDA related to non-hotel franchising activities at the midpoint of the range for these investments.
Conference Call
Choice will conduct a conference call on Wednesday, May 4, 2016 at 10:00 a.m. EDT to discuss the company's first quarter 2016 results. The dial-in number to listen to the call is 1-855-638-5678, and the access code is 85804726. International callers should dial 1-920-663-6286 and enter the access code 85804726. 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, May 4, 2016 through Wednesday, May 11, 2016 by calling 1-855-859-2056 and entering access code 85804726. The international dial-in number for the replay is 1-404-537-3406 and the access code is 85804726. In addition, the call will be archived 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 6,400 hotels franchised in more than 40 countries and territories, we represent more than 500,000 rooms around the globe. As of March 31, 2016, 685 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 26 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.
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; our 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, Franchising EBITDA, Franchising SG&A and Margins: The company reports franchising revenues, EBITDA, SG&A and margins which exclude marketing and reservation revenues, the SkyTouch Technology division, recently acquired operations that provide SaaS technology solutions to vacation rental management companies 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 and our vacation rental technology solutions provider are excluded since they do not reflect the company's core franchising business but are adjacent, complimentary lines 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.
© 2016 Choice Hotels International, Inc. All rights reserved.
Choice Hotels International, Inc. Exhibit 1
Consolidated Statements of Income
(Unaudited)
Three Months Ended March 31,
----------------------------
Variance
2016 2015 $ %
---- ---- --- ---
(In thousands, except per share amounts)
REVENUES:
Royalty fees $64,859 $62,431 $2,428 4%
Initial franchise and relicensing fees 5,156 5,717 (561) (10%)
Procurement services 5,796 4,807 989 21%
Marketing and reservation 126,361 98,713 27,648 28%
Other 4,946 3,577 1,369 38%
----- ----- ----- ---
Total revenues 207,118 175,245 31,873 18%
OPERATING EXPENSES:
Selling, general and administrative 35,119 32,438 2,681 8%
Depreciation and amortization 2,765 2,690 75 3%
Marketing and reservation 126,361 98,713 27,648 28%
------- ------ ------ ---
Total operating expenses 164,245 133,841 30,404 23%
Operating income 42,873 41,404 1,469 4%
OTHER INCOME AND EXPENSES, NET:
Interest expense 11,092 10,179 913 9%
Interest income (839) (346) (493) 142%
Other (gains) and losses 62 (468) 530 (113%)
Equity in net loss of affiliates 2,180 1,005 1,175 117%
Total other income and expenses, net 12,495 10,370 2,125 20%
------ ------ ----- ---
Income before income taxes 30,378 31,034 (656) (2%)
Income taxes 10,780 9,440 1,340 14%
------ ----- ----- ---
Net income $19,598 $21,594 $(1,996) (9%)
======= ======= ======= ===
Basic earnings per share $0.35 $0.38 $(0.03) (8%)
===== ===== ====== ===
Diluted earnings per share $0.35 $0.37 $(0.02) (5%)
===== ===== ====== ===
Choice Hotels International, Inc. Exhibit 2
Consolidated Balance Sheets
(In thousands, except per share amounts) March 31 December 31,
2016 2015
---- ----
(Unaudited)
ASSETS
Cash and cash equivalents $194,072 $193,441
Accounts receivable, net 102,786 89,352
Other current assets 41,258 28,160
------ ------
Total current assets 338,116 310,953
Fixed assets and intangibles, net 180,352 179,433
Notes receivable, net of allowances 92,477 82,572
Investments in unconsolidated entities 66,685 67,037
Investments, employee benefit plans, at fair value 17,802 17,674
Other assets 91,831 59,341
------ ------
Total assets $787,263 $717,010
-------- --------
LIABILITIES AND SHAREHOLDERS' DEFICIT
Accounts payable $60,619 $64,431
Accrued expenses and other current liabilities 46,616 70,807
Deferred revenue 112,076 71,587
Current portion of long-term debt 1,016 1,191
----- -----
Total current liabilities 220,327 208,016
Long-term debt 892,447 812,945
Deferred compensation & retirement plan obligations 22,415 22,859
Other liabilities 37,939 69,089
------ ------
Total liabilities 1,173,128 1,112,909
Total shareholders' deficit (385,865) (395,899)
Total liabilities and shareholders'
deficit $787,263 $717,010
-------- --------
Choice Hotels International, Inc. Exhibit 3
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands) Three Months Ended March 31,
----------------------------
2016 2015
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $19,598 $21,594
Adjustments to reconcile net income to net cash used
by operating activities:
Depreciation and amortization 2,765 2,690
(Gain) loss on sale of assets 9 (292)
Provision for bad debts, net 655 823
Non-cash stock compensation and other charges 3,354 2,509
Non-cash interest and other (income) loss 667 506
Deferred income taxes 6,198 (233)
Equity (earnings) losses from unconsolidated joint ventures, net of distributions received 2,471 1,205
Changes in assets and liabilities:
Receivables (14,473) (11,624)
Advances to/from marketing and reservation activities, net (39,804) 4,626
Forgivable notes receivable, net (6,464) (13,371)
Accounts payable (3,980) (1,152)
Accrued expenses and other current liabilities (24,521) (24,052)
Income taxes payable/receivable (1,798) 2,773
Deferred revenue 40,458 7,552
Other assets (7,238) (9,826)
Other liabilities (842) 437
---- ---
NET CASH USED BY OPERATING ACTIVITIES (22,945) (15,835)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in property and equipment (5,306) (6,804)
Acquisitions of real estate (25,389) -
Proceeds from sales of assets 1,700 1,592
Contributions to equity method investments (4,293) (1,921)
Distributions from equity method investments 67 -
Purchases of investments, employee benefit plans (896) (1,089)
Proceeds from sales of investments, employee benefit plans 363 925
Issuance of mezzanine and other notes receivable (7,487) -
Collections of mezzanine and other notes receivable 109 105
Other items, net (136) (77)
---- ---
NET CASH USED BY INVESTING ACTIVITIES (41,268) (7,269)
------- ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings pursuant to revolving credit facilities 79,267 20,700
Principal payments on long-term debt (318) (3,082)
Purchase of treasury stock (8,857) (6,227)
Dividends paid (11,612) (11,710)
Excess tax benefits from stock-based compensation 1,575 4,473
Proceeds from exercise of stock options 4,137 5,619
----- -----
NET CASH PROVIDED BY FINANCING ACTIVITIES 64,192 9,773
------ -----
Net change in cash and cash equivalents (21) (13,331)
Effect of foreign exchange rate changes on cash and cash equivalents 652 (1,004)
Cash and cash equivalents at beginning of period 193,441 214,879
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $194,072 $200,544
======== ========
Exhibit 4
CHOICE HOTELS INTERNATIONAL, INC.
SUPPLEMENTAL OPERATING INFORMATION
DOMESTIC HOTEL SYSTEM
(UNAUDITED)
For the Three Months Ended March 31, 2016 For the Three Months Ended March 31, 2015 Change
----------------------------------------- ----------------------------------------- ------
Average Daily Average Daily Average Daily
Rate Occupancy RevPAR Rate Occupancy RevPAR Rate Occupancy RevPAR
---- --------- ------ ---- --------- ------ ---- --------- ------
Comfort Inn $85.39 57.7% $49.27 $82.90 57.4% $47.55 3.0% 30 bps 3.6%
Comfort Suites 92.40 64.1% 59.26 90.12 64.4% 58.02 2.5% (30) bps 2.1%
Sleep 77.71 58.7% 45.61 76.44 59.5% 45.48 1.7% (80) bps 0.3%
Quality 72.23 52.2% 37.72 70.18 52.6% 36.93 2.9% (40) bps 2.1%
Clarion 75.90 50.1% 38.06 75.30 51.5% 38.74 0.8% (140) bps (1.8%)
Econo Lodge 55.99 47.3% 26.46 54.41 47.9% 26.06 2.9% (60) bps 1.5%
Rodeway 57.77 51.0% 29.47 53.85 52.7% 28.40 7.3% (170) bps 3.8%
MainStay 72.91 57.9% 42.23 73.58 66.4% 48.85 (0.9%) (850) bps (13.6%)
Suburban 48.28 73.0% 35.26 46.48 74.1% 34.42 3.9% (110) bps 2.4%
Ascend Hotel Collection 115.55 53.7% 62.01 113.19 60.8% 68.79 2.1% (710) bps (9.9%)
------ ---- ----- ------ ---- ----- --- ---- --- -----
Total $76.47 55.0% $42.05 $74.59 55.7% $41.57 2.5% (70) bps 1.2%
====== ==== ====== ====== ==== ====== === === === ===
For the Quarter Ended
---------------------
March 31, 2016 March 31, 2015
-------------- --------------
System-wide effective royalty rate 4.38% 4.31%
Exhibit 5
CHOICE HOTELS INTERNATIONAL, INC.
SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA
(UNAUDITED)
March 31, 2016 March 31, 2015 Variance
-------------- -------------- --------
Hotels Rooms Hotels Rooms Hotels Rooms % %
------ ----- ------ ----- ------ ----- --- ---
Comfort Inn 1,143 88,294 1,234 95,281 (91) (6,987) (7.4%) (7.3%)
Comfort Suites 566 43,669 576 44,519 (10) (850) (1.7%) (1.9%)
Sleep 379 27,139 368 26,533 11 606 3.0% 2.3%
Quality 1,394 111,124 1,292 104,654 102 6,470 7.9% 6.2%
Clarion 172 23,893 180 25,380 (8) (1,487) (4.4%) (5.9%)
Econo Lodge 853 52,784 853 52,602 - 182 0.0% 0.3%
Rodeway 519 28,931 475 26,158 44 2,773 9.3% 10.6%
MainStay 54 4,019 46 3,571 8 448 17.4% 12.5%
Suburban 59 6,634 63 7,048 (4) (414) (6.3%) (5.9%)
Ascend Hotel Collection 112 9,378 110 9,405 2 (27) 1.8% (0.3%)
Cambria hotel & suites 25 3,113 22 2,642 3 471 13.6% 17.8%
--- ----- --- ----- --- --- ---- ----
Domestic Franchises 5,276 398,978 5,219 397,793 57 1,185 1.1% 0.3%
International Franchises 1,169 110,984 1,143 105,498 26 5,486 2.3% 5.2%
----- ------- ----- ------- --- ----- --- ---
Total Franchises 6,445 509,962 6,362 503,291 83 6,671 1.3% 1.3%
===== ======= ===== ======= === ===== === ===
Exhibit 6
CHOICE HOTELS INTERNATIONAL, INC.
SUPPLEMENTAL INFORMATION BY BRAND
DEVELOPMENT RESULTS -- DOMESTIC NEW HOTEL CONTRACTS
(UNAUDITED)
For the Three Months Ended March 31, 2016 For the Three Months Ended March 31,
2015 % Change
----------------------------------------- ------------------------------------- --------
New New New
Construction Conversion Total Construction Conversion Total Construction Conversion Total
------------ ---------- ----- ------------ ---------- ----- ------------ ---------- -----
Comfort Inn 6 4 10 4 7 11 50% (43%) (9%)
Comfort Suites 2 - 2 5 2 7 (60%) (100%) (71%)
Sleep 2 - 2 5 - 5 (60%) NM (60%)
Quality - 23 23 2 29 31 (100%) (21%) (26%)
Clarion 1 3 4 - 3 3 NM 0% 33%
Econo Lodge - 14 14 - 9 9 NM 56% 56%
Rodeway - 10 10 - 14 14 NM (29%) (29%)
MainStay 1 - 1 4 - 4 (75%) NM (75%)
Suburban - - - - 2 2 NM (100%) (100%)
Ascend Hotel Collection 1 1 2 1 10 11 0% (90%) (82%)
Cambria hotel & suites 2 - 2 2 - 2 0% NM 0%
--- --- --- --- --- --- --- --- ---
Total Domestic System 15 55 70 23 76 99 (35%) (28%) (29%)
=== === === === === === ==== ==== ====
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
--------
March 31, 2016 March 31, 2015
Units Units Conversion New Construction Total
----- ----- ---------- ---------------- -----
Conversion New Total Conversion New Total Units % Units % Units %
Construction Construction
------------ ------------
Comfort Inn 35 84 119 33 62 95 2 6% 22 35% 24 25%
Comfort Suites 3 92 95 3 74 77 - 0% 18 24% 18 23%
Sleep Inn - 76 76 2 73 75 (2) (100%) 3 4% 1 1%
Quality 47 5 52 54 6 60 (7) (13%) (1) (17%) (8) (13%)
Clarion 7 3 10 10 2 12 (3) (30%) 1 50% (2) (17%)
Econo Lodge 26 4 30 28 4 32 (2) (7%) - 0% (2) (6%)
Rodeway 40 2 42 34 3 37 6 18% (1) (33%) 5 14%
MainStay - 55 55 1 47 48 (1) (100%) 8 17% 7 15%
Suburban 4 8 12 6 12 18 (2) (33%) (4) (33%) (6) (33%)
Ascend Hotel Collection 27 20 47 22 20 42 5 23% - 0% 5 12%
Cambria hotel & suites 5 39 44 - 23 23 5 NM 16 70% 21 91%
--- --- --- --- --- --- --- --- --- --- --- ---
194 388 582 193 326 519 1 1% 62 19% 63 12%
=== === === === === === === === === === === ===
Exhibit 8
CHOICE HOTELS INTERNATIONAL, INC.
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION
(UNAUDITED)
CALCULATION OF FRANCHISING REVENUES AND FRANCHISING MARGINS
(dollar amounts in thousands) Three Months Ended March 31,
----------------------------
2016 2015
---- ----
Franchising Revenues:
Total Revenues $207,118 $175,245
Adjustments:
Marketing and reservation revenues (126,361) (98,713)
Non-franchising activities (2,029) (603)
Franchising Revenues $78,728 $75,929
Franchising Margins:
Operating Margin:
Total Revenues $207,118 $175,245
Operating Income 42,873 41,404
Operating Margin 20.7% 23.6%
Franchising Margin:
Franchising Revenues $78,728 $75,929
Operating Income $42,873 $41,404
Non-franchising activities operating loss 5,656 5,301
$48,529 $46,705
------- -------
Franchising Margins 61.6% 61.5%
CALCULATION OF FRANCHISING SELLING, GENERAL AND ADMINISTRATION EXPENSES
(dollar amounts in thousands) Three Months Ended March 31,
----------------------------
2016 2015
---- ----
Total Selling, General and Administrative
Expenses $35,119 $32,438
Non-franchising activities (6,670) (5,495)
Franchising Selling, General and Administration
Expenses $28,449 $26,943
===============================================
CALCULATION OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA")
(dollar amounts in thousands)
Three Months Ended March 31,
----------------------------
2016 2015
---- ----
Net income $19,598 $21,594
Income taxes 10,780 9,440
Interest expense 11,092 10,179
Interest income (839) (346)
Other (gains) and losses 62 (468)
Equity in net loss of affiliates 2,180 1,005
Depreciation and amortization 2,765 2,690
EBITDA $45,638 $44,094
======= =======
Franchising $50,279 $48,986
Non-franchising activities (4,641) (4,892)
$45,638 $44,094
======= =======
Logo - http://photos.prnewswire.com/prnh/20140807/134515
SOURCE Choice Hotels International, Inc.
SOURCE: Choice Hotels International, Inc.
PR Newswire
ROCKVILLE, Md., May 4, 2016
ROCKVILLE, Md., May 4, 2016 /PRNewswire/ -- Choice Hotels International, Inc. (NYSE: CHH) today reported the following highlights for the first quarter 2016:
"We are excited about the consumer response to the program enhancements we made to our award-winning Choice Privileges program in the first quarter," said Stephen P. Joyce, president and chief executive officer, Choice Hotels. "As a result of our strong family of brands and our enhancements to the program we now have more than 26 million members and expect to add a record 4 million new members this year. We believe that improving the value of the benefits provided to our guests as well as the strength of our distribution systems will result in continued RevPAR growth for the remainder of the year. We are also optimistic that developers will continue to respond to our brands and that our franchise development results will exceed 2015 levels."
Use of Cash Flows
Dividends
During the three months ended March 31, 2016, the company paid cash dividends totaling approximately $12 million. Based on the current quarterly dividend rate of $0.205 per common share, the company expects to pay dividends of approximately $46 million during 2016.
Share Repurchases
The company repurchased 0.1 million shares of common stock under its share repurchase program during the first quarter of 2016, at a total cost of approximately $3.6 million. The company currently has authorization to purchase up to 1.6 million additional shares under this program.
Hotel Development & Financing
Pursuant to its program to encourage acceleration of the growth of our upscale select-service Cambria hotels & suites brand, the company's net advances in support of the Cambria brand totaled $40 million during the three months ended March 31, 2016. These advances are primarily in the form of joint venture investments, forgivable key money loans, senior and mezzanine lending and site acquisitions. At March 31, 2016, the company had approximately $167 million reflected in its consolidated balance sheet pursuant to these financial support activities. With respect to lending and joint venture investments, the company generally expects to recycle these loans and investments within a five year period.
Outlook
The company's consolidated 2016 outlook reflects the following assumptions:
Hotel Franchising
Non-Hotel Franchising Activities
Other Items
Consolidated Outlook
The company's second quarter 2016 diluted EPS is expected to be at least $0.66. The company expects full-year 2016 diluted EPS to range between $2.30 and $2.35 and full year 2016 EBITDA to range between $252 million and $256 million. The EPS and consolidated EBITDA estimates assume that we incur net reductions in EBITDA related to non-hotel franchising activities at the midpoint of the range for these investments.
Conference Call
Choice will conduct a conference call on Wednesday, May 4, 2016 at 10:00 a.m. EDT to discuss the company's first quarter 2016 results. The dial-in number to listen to the call is 1-855-638-5678, and the access code is 85804726. International callers should dial 1-920-663-6286 and enter the access code 85804726. 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, May 4, 2016 through Wednesday, May 11, 2016 by calling 1-855-859-2056 and entering access code 85804726. The international dial-in number for the replay is 1-404-537-3406 and the access code is 85804726. In addition, the call will be archived 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 6,400 hotels franchised in more than 40 countries and territories, we represent more than 500,000 rooms around the globe. As of March 31, 2016, 685 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 26 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.
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; our 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, Franchising EBITDA, Franchising SG&A and Margins: The company reports franchising revenues, EBITDA, SG&A and margins which exclude marketing and reservation revenues, the SkyTouch Technology division, recently acquired operations that provide SaaS technology solutions to vacation rental management companies 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 and our vacation rental technology solutions provider are excluded since they do not reflect the company's core franchising business but are adjacent, complimentary lines 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.
© 2016 Choice Hotels International, Inc. All rights reserved.
|
Choice Hotels International, Inc. |
Exhibit 1 |
|||||||
|
Consolidated Statements of Income |
||||||||
|
(Unaudited) |
||||||||
|
Three Months Ended March 31, |
||||||||
|
Variance |
||||||||
|
2016 |
2015 |
$ |
% |
|||||
|
(In thousands, except per share amounts) |
||||||||
|
REVENUES: |
||||||||
|
Royalty fees |
$ 64,859 |
$ 62,431 |
$ 2,428 |
4% |
||||
|
Initial franchise and relicensing fees |
5,156 |
5,717 |
(561) |
(10%) |
||||
|
Procurement services |
5,796 |
4,807 |
989 |
21% |
||||
|
Marketing and reservation |
126,361 |
98,713 |
27,648 |
28% |
||||
|
Other |
4,946 |
3,577 |
1,369 |
38% |
||||
|
Total revenues |
207,118 |
175,245 |
31,873 |
18% |
||||
|
OPERATING EXPENSES: |
||||||||
|
Selling, general and administrative |
35,119 |
32,438 |
2,681 |
8% |
||||
|
Depreciation and amortization |
2,765 |
2,690 |
75 |
3% |
||||
|
Marketing and reservation |
126,361 |
98,713 |
27,648 |
28% |
||||
|
Total operating expenses |
164,245 |
133,841 |
30,404 |
23% |
||||
|
Operating income |
42,873 |
41,404 |
1,469 |
4% |
||||
|
OTHER INCOME AND EXPENSES, NET: |
||||||||
|
Interest expense |
11,092 |
10,179 |
913 |
9% |
||||
|
Interest income |
(839) |
(346) |
(493) |
142% |
||||
|
Other (gains) and losses |
62 |
(468) |
530 |
(113%) |
||||
|
Equity in net loss of affiliates |
2,180 |
1,005 |
1,175 |
117% |
||||
|
Total other income and expenses, net |
12,495 |
10,370 |
2,125 |
20% |
||||
|
Income before income taxes |
30,378 |
31,034 |
(656) |
(2%) |
||||
|
Income taxes |
10,780 |
9,440 |
1,340 |
14% |
||||
|
Net income |
$ 19,598 |
$ 21,594 |
$ (1,996) |
(9%) |
||||
|
Basic earnings per share |
$ 0.35 |
$ 0.38 |
$ (0.03) |
(8%) |
||||
|
Diluted earnings per share |
$ 0.35 |
$ 0.37 |
$ (0.02) |
(5%) |
||||
|
Choice Hotels International, Inc. |
Exhibit 2 |
||||||
|
Consolidated Balance Sheets |
|||||||
|
(In thousands, except per share amounts) |
March 31 |
December 31, |
|||||
|
2016 |
2015 |
||||||
|
(Unaudited) |
|||||||
|
ASSETS |
|||||||
|
Cash and cash equivalents |
$ 194,072 |
$ 193,441 |
|||||
|
Accounts receivable, net |
102,786 |
89,352 |
|||||
|
Other current assets |
41,258 |
28,160 |
|||||
|
Total current assets |
338,116 |
310,953 |
|||||
|
Fixed assets and intangibles, net |
180,352 |
179,433 |
|||||
|
Notes receivable, net of allowances |
92,477 |
82,572 |
|||||
|
Investments in unconsolidated entities |
66,685 |
67,037 |
|||||
|
Investments, employee benefit plans, at fair value |
17,802 |
17,674 |
|||||
|
Other assets |
91,831 |
59,341 |
|||||
|
Total assets |
$ 787,263 |
$ 717,010 |
|||||
|
LIABILITIES AND SHAREHOLDERS' DEFICIT |
|||||||
|
Accounts payable |
$ 60,619 |
$ 64,431 |
|||||
|
Accrued expenses and other current liabilities |
46,616 |
70,807 |
|||||
|
Deferred revenue |
112,076 |
71,587 |
|||||
|
Current portion of long-term debt |
1,016 |
1,191 |
|||||
|
Total current liabilities |
220,327 |
208,016 |
|||||
|
Long-term debt |
892,447 |
812,945 |
|||||
|
Deferred compensation & retirement plan obligations |
22,415 |
22,859 |
|||||
|
Other liabilities |
37,939 |
69,089 |
|||||
|
Total liabilities |
1,173,128 |
1,112,909 |
|||||
|
Total shareholders' deficit |
(385,865) |
(395,899) |
|||||
|
Total liabilities and shareholders' deficit |
$ 787,263 |
$ 717,010 |
|||||
|
Choice Hotels International, Inc. |
Exhibit 3 |
||
|
Consolidated Statements of Cash Flows |
|||
|
(Unaudited) |
|||
|
(In thousands) |
Three Months Ended March 31, |
||
|
2016 |
2015 |
||
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|||
|
Net income |
$ 19,598 |
$ 21,594 |
|
|
Adjustments to reconcile net income to net cash used |
|||
|
by operating activities: |
|||
|
Depreciation and amortization |
2,765 |
2,690 |
|
|
(Gain) loss on sale of assets |
9 |
(292) |
|
|
Provision for bad debts, net |
655 |
823 |
|
|
Non-cash stock compensation and other charges |
3,354 |
2,509 |
|
|
Non-cash interest and other (income) loss |
667 |
506 |
|
|
Deferred income taxes |
6,198 |
(233) |
|
|
Equity (earnings) losses from unconsolidated joint ventures, net of distributions received |
2,471 |
1,205 |
|
|
Changes in assets and liabilities: |
|||
|
Receivables |
(14,473) |
(11,624) |
|
|
Advances to/from marketing and reservation activities, net |
(39,804) |
4,626 |
|
|
Forgivable notes receivable, net |
(6,464) |
(13,371) |
|
|
Accounts payable |
(3,980) |
(1,152) |
|
|
Accrued expenses and other current liabilities |
(24,521) |
(24,052) |
|
|
Income taxes payable/receivable |
(1,798) |
2,773 |
|
|
Deferred revenue |
40,458 |
7,552 |
|
|
Other assets |
(7,238) |
(9,826) |
|
|
Other liabilities |
(842) |
437 |
|
|
NET CASH USED BY OPERATING ACTIVITIES |
(22,945) |
(15,835) |
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|||
|
Investment in property and equipment |
(5,306) |
(6,804) |
|
|
Acquisitions of real estate |
(25,389) |
- |
|
|
Proceeds from sales of assets |
1,700 |
1,592 |
|
|
Contributions to equity method investments |
(4,293) |
(1,921) |
|
|
Distributions from equity method investments |
67 |
- |
|
|
Purchases of investments, employee benefit plans |
(896) |
(1,089) |
|
|
Proceeds from sales of investments, employee benefit plans |
363 |
925 |
|
|
Issuance of mezzanine and other notes receivable |
(7,487) |
- |
|
|
Collections of mezzanine and other notes receivable |
109 |
105 |
|
|
Other items, net |
(136) |
(77) |
|
|
NET CASH USED BY INVESTING ACTIVITIES |
(41,268) |
(7,269) |
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|||
|
Net borrowings pursuant to revolving credit facilities |
79,267 |
20,700 |
|
|
Principal payments on long-term debt |
(318) |
(3,082) |
|
|
Purchase of treasury stock |
(8,857) |
(6,227) |
|
|
Dividends paid |
(11,612) |
(11,710) |
|
|
Excess tax benefits from stock-based compensation |
1,575 |
4,473 |
|
|
Proceeds from exercise of stock options |
4,137 |
5,619 |
|
|
NET CASH PROVIDED BY FINANCING ACTIVITIES |
64,192 |
9,773 |
|
|
Net change in cash and cash equivalents |
(21) |
(13,331) |
|
|
Effect of foreign exchange rate changes on cash and cash equivalents |
652 |
(1,004) |
|
|
Cash and cash equivalents at beginning of period |
193,441 |
214,879 |
|
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ 194,072 |
$ 200,544 |
|
|
Exhibit 4 |
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|
CHOICE HOTELS INTERNATIONAL, INC. |
|||||||||||||||||||
|
SUPPLEMENTAL OPERATING INFORMATION |
|||||||||||||||||||
|
DOMESTIC HOTEL SYSTEM |
|||||||||||||||||||
|
(UNAUDITED) |
|||||||||||||||||||
|
For the Three Months Ended March 31, 2016 |
For the Three Months Ended March 31, 2015 |
Change |
|||||||||||||||||
|
Average Daily |
Average Daily |
Average Daily |
|||||||||||||||||
|
Rate |
Occupancy |
RevPAR |
Rate |
Occupancy |
RevPAR |
Rate |
Occupancy |
RevPAR |
|||||||||||
|
Comfort Inn |
$ 85.39 |
57.7% |
$ 49.27 |
$ 82.90 |
57.4% |
$ 47.55 |
3.0% |
30 |
bps |
3.6% |
|||||||||
|
Comfort Suites |
92.40 |
64.1% |
59.26 |
90.12 |
64.4% |
58.02 |
2.5% |
(30) |
bps |
2.1% |
|||||||||
|
Sleep |
77.71 |
58.7% |
45.61 |
76.44 |
59.5% |
45.48 |
1.7% |
(80) |
bps |
0.3% |
|||||||||
|
Quality |
72.23 |
52.2% |
37.72 |
70.18 |
52.6% |
36.93 |
2.9% |
(40) |
bps |
2.1% |
|||||||||
|
Clarion |
75.90 |
50.1% |
38.06 |
75.30 |
51.5% |
38.74 |
0.8% |
(140) |
bps |
(1.8%) |
|||||||||
|
Econo Lodge |
55.99 |
47.3% |
26.46 |
54.41 |
47.9% |
26.06 |
2.9% |
(60) |
bps |
1.5% |
|||||||||
|
Rodeway |
57.77 |
51.0% |
29.47 |
53.85 |
52.7% |
28.40 |
7.3% |
(170) |
bps |
3.8% |
|||||||||
|
MainStay |
72.91 |
57.9% |
42.23 |
73.58 |
66.4% |
48.85 |
(0.9%) |
(850) |
bps |
(13.6%) |
|||||||||
|
Suburban |
48.28 |
73.0% |
35.26 |
46.48 |
74.1% |
34.42 |
3.9% |
(110) |
bps |
2.4% |
|||||||||
|
Ascend Hotel Collection |
115.55 |
53.7% |
62.01 |
113.19 |
60.8% |
68.79 |
2.1% |
(710) |
bps |
(9.9%) |
|||||||||
|
Total |
$ 76.47 |
55.0% |
$ 42.05 |
$ 74.59 |
55.7% |
$ 41.57 |
2.5% |
(70) |
bps |
1.2% |
|||||||||
|
For the Quarter Ended |
|||||||||||||||||||
|
March 31, 2016 |
March 31, 2015 |
||||||||||||||||||
|
System-wide effective royalty rate |
4.38% |
4.31% |
|||||||||||||||||
|
Exhibit 5 |
||||||||||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
||||||||||||||||
|
SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA |
||||||||||||||||
|
(UNAUDITED) |
||||||||||||||||
|
March 31, 2016 |
March 31, 2015 |
Variance |
||||||||||||||
|
Hotels |
Rooms |
Hotels |
Rooms |
Hotels |
Rooms |
% |
% |
|||||||||
|
Comfort Inn |
1,143 |
88,294 |
1,234 |
95,281 |
(91) |
(6,987) |
(7.4%) |
(7.3%) |
||||||||
|
Comfort Suites |
566 |
43,669 |
576 |
44,519 |
(10) |
(850) |
(1.7%) |
(1.9%) |
||||||||
|
Sleep |
379 |
27,139 |
368 |
26,533 |
11 |
606 |
3.0% |
2.3% |
||||||||
|
Quality |
1,394 |
111,124 |
1,292 |
104,654 |
102 |
6,470 |
7.9% |
6.2% |
||||||||
|
Clarion |
172 |
23,893 |
180 |
25,380 |
(8) |
(1,487) |
(4.4%) |
(5.9%) |
||||||||
|
Econo Lodge |
853 |
52,784 |
853 |
52,602 |
- |
182 |
0.0% |
0.3% |
||||||||
|
Rodeway |
519 |
28,931 |
475 |
26,158 |
44 |
2,773 |
9.3% |
10.6% |
||||||||
|
MainStay |
54 |
4,019 |
46 |
3,571 |
8 |
448 |
17.4% |
12.5% |
||||||||
|
Suburban |
59 |
6,634 |
63 |
7,048 |
(4) |
(414) |
(6.3%) |
(5.9%) |
||||||||
|
Ascend Hotel Collection |
112 |
9,378 |
110 |
9,405 |
2 |
(27) |
1.8% |
(0.3%) |
||||||||
|
Cambria hotel & suites |
25 |
3,113 |
22 |
2,642 |
3 |
471 |
13.6% |
17.8% |
||||||||
|
Domestic Franchises |
5,276 |
398,978 |
5,219 |
397,793 |
57 |
1,185 |
1.1% |
0.3% |
||||||||
|
International Franchises |
1,169 |
110,984 |
1,143 |
105,498 |
26 |
5,486 |
2.3% |
5.2% |
||||||||
|
Total Franchises |
6,445 |
509,962 |
6,362 |
503,291 |
83 |
6,671 |
1.3% |
1.3% |
||||||||
|
Exhibit 6 |
||||||||||||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
||||||||||||||||||
|
SUPPLEMENTAL INFORMATION BY BRAND |
||||||||||||||||||
|
DEVELOPMENT RESULTS -- DOMESTIC NEW HOTEL CONTRACTS |
||||||||||||||||||
|
(UNAUDITED) |
||||||||||||||||||
|
For the Three Months Ended March 31, 2016 |
For the Three Months Ended March 31, 2015 |
% Change |
||||||||||||||||
|
New |
New |
New |
||||||||||||||||
|
Construction |
Conversion |
Total |
Construction |
Conversion |
Total |
Construction |
Conversion |
Total |
||||||||||
|
Comfort Inn |
6 |
4 |
10 |
4 |
7 |
11 |
50% |
(43%) |
(9%) |
|||||||||
|
Comfort Suites |
2 |
- |
2 |
5 |
2 |
7 |
(60%) |
(100%) |
(71%) |
|||||||||
|
Sleep |
2 |
- |
2 |
5 |
- |
5 |
(60%) |
NM |
(60%) |
|||||||||
|
Quality |
- |
23 |
23 |
2 |
29 |
31 |
(100%) |
(21%) |
(26%) |
|||||||||
|
Clarion |
1 |
3 |
4 |
- |
3 |
3 |
NM |
0% |
33% |
|||||||||
|
Econo Lodge |
- |
14 |
14 |
- |
9 |
9 |
NM |
56% |
56% |
|||||||||
|
Rodeway |
- |
10 |
10 |
- |
14 |
14 |
NM |
(29%) |
(29%) |
|||||||||
|
MainStay |
1 |
- |
1 |
4 |
- |
4 |
(75%) |
NM |
(75%) |
|||||||||
|
Suburban |
- |
- |
- |
- |
2 |
2 |
NM |
(100%) |
(100%) |
|||||||||
|
Ascend Hotel Collection |
1 |
1 |
2 |
1 |
10 |
11 |
0% |
(90%) |
(82%) |
|||||||||
|
Cambria hotel & suites |
2 |
- |
2 |
2 |
- |
2 |
0% |
NM |
0% |
|||||||||
|
Total Domestic System |
15 |
55 |
70 |
23 |
76 |
99 |
(35%) |
(28%) |
(29%) |
|||||||||
|
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 |
||||||||||||||||||||||||
|
March 31, 2016 |
March 31, 2015 |
|||||||||||||||||||||||
|
Units |
Units |
Conversion |
New Construction |
Total |
||||||||||||||||||||
|
Conversion |
New |
Total |
Conversion |
New |
Total |
Units |
% |
Units |
% |
Units |
% |
|||||||||||||
|
Comfort Inn |
35 |
84 |
119 |
33 |
62 |
95 |
2 |
6% |
22 |
35% |
24 |
25% |
||||||||||||
|
Comfort Suites |
3 |
92 |
95 |
3 |
74 |
77 |
- |
0% |
18 |
24% |
18 |
23% |
||||||||||||
|
Sleep Inn |
- |
76 |
76 |
2 |
73 |
75 |
(2) |
(100%) |
3 |
4% |
1 |
1% |
||||||||||||
|
Quality |
47 |
5 |
52 |
54 |
6 |
60 |
(7) |
(13%) |
(1) |
(17%) |
(8) |
(13%) |
||||||||||||
|
Clarion |
7 |
3 |
10 |
10 |
2 |
12 |
(3) |
(30%) |
1 |
50% |
(2) |
(17%) |
||||||||||||
|
Econo Lodge |
26 |
4 |
30 |
28 |
4 |
32 |
(2) |
(7%) |
- |
0% |
(2) |
(6%) |
||||||||||||
|
Rodeway |
40 |
2 |
42 |
34 |
3 |
37 |
6 |
18% |
(1) |
(33%) |
5 |
14% |
||||||||||||
|
MainStay |
- |
55 |
55 |
1 |
47 |
48 |
(1) |
(100%) |
8 |
17% |
7 |
15% |
||||||||||||
|
Suburban |
4 |
8 |
12 |
6 |
12 |
18 |
(2) |
(33%) |
(4) |
(33%) |
(6) |
(33%) |
||||||||||||
|
Ascend Hotel Collection |
27 |
20 |
47 |
22 |
20 |
42 |
5 |
23% |
- |
0% |
5 |
12% |
||||||||||||
|
Cambria hotel & suites |
5 |
39 |
44 |
- |
23 |
23 |
5 |
NM |
16 |
70% |
21 |
91% |
||||||||||||
|
194 |
388 |
582 |
193 |
326 |
519 |
1 |
1% |
62 |
19% |
63 |
12% |
|||||||||||||
|
Exhibit 8 |
|||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
|||||
|
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION |
|||||
|
(UNAUDITED) |
|||||
|
CALCULATION OF FRANCHISING REVENUES AND FRANCHISING MARGINS |
|||||
|
(dollar amounts in thousands) |
Three Months Ended March 31, |
||||
|
2016 |
2015 |
||||
|
Franchising Revenues: |
|||||
|
Total Revenues |
$ 207,118 |
$ 175,245 |
|||
|
Adjustments: |
|||||
|
Marketing and reservation revenues |
(126,361) |
(98,713) |
|||
|
Non-franchising activities |
(2,029) |
(603) |
|||
|
Franchising Revenues |
$ 78,728 |
$ 75,929 |
|||
|
Franchising Margins: |
|||||
|
Operating Margin: |
|||||
|
Total Revenues |
$ 207,118 |
$ 175,245 |
|||
|
Operating Income |
42,873 |
41,404 |
|||
|
Operating Margin |
20.7% |
23.6% |
|||
|
Franchising Margin: |
|||||
|
Franchising Revenues |
$ 78,728 |
$ 75,929 |
|||
|
Operating Income |
$ 42,873 |
$ 41,404 |
|||
|
Non-franchising activities operating loss |
5,656 |
5,301 |
|||
|
$ 48,529 |
$ 46,705 |
||||
|
Franchising Margins |
61.6% |
61.5% |
|||
|
CALCULATION OF FRANCHISING SELLING, GENERAL AND ADMINISTRATION EXPENSES |
|||||
|
(dollar amounts in thousands) |
Three Months Ended March 31, |
||||
|
2016 |
2015 |
||||
|
Total Selling, General and Administrative Expenses |
$ 35,119 |
$ 32,438 |
|||
|
Non-franchising activities |
(6,670) |
(5,495) |
|||
|
Franchising Selling, General and Administration Expenses |
$ 28,449 |
$ 26,943 |
|||
|
CALCULATION OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA") |
|||||
|
(dollar amounts in thousands) |
|||||
|
Three Months Ended March 31, |
|||||
|
2016 |
2015 |
||||
|
Net income |
$ 19,598 |
$ 21,594 |
|||
|
Income taxes |
10,780 |
9,440 |
|||
|
Interest expense |
11,092 |
10,179 |
|||
|
Interest income |
(839) |
(346) |
|||
|
Other (gains) and losses |
62 |
(468) |
|||
|
Equity in net loss of affiliates |
2,180 |
1,005 |
|||
|
Depreciation and amortization |
2,765 |
2,690 |
|||
|
EBITDA |
$ 45,638 |
$ 44,094 |
|||
|
Franchising |
$ 50,279 |
$ 48,986 |
|||
|
Non-franchising activities |
(4,641) |
(4,892) |
|||
|
$ 45,638 |
$ 44,094 |
||||
Logo - http://photos.prnewswire.com/prnh/20140807/134515
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
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