For Immediate Release Contact: | ||
Debi Ethridge Vice President, Finance & Investor Relations dethridge@lodgian.com | Jerry Daly or Carol McCune Daly Gray Public Relations (Media) jerry@dalygray.com | |
(404) 365-2719 | (703) 435-6293 |
Lodgian Reports Third Quarter 2005 Results
ATLANTA, Ga., November 3, 2005—Lodgian, Inc. (AMEX: LGN), one of the nation’s largest independent owners and operators of full-service hotels, today reported results for the third quarter ended September 30, 2005.
3Q | 3Q | % | ||||||||||
2005* | 2004* | Change | ||||||||||
Rooms revenue — Continuing Operations | $ | 65.9 | $ | 62.7 | 5.1 | % | ||||||
Total revenue — Continuing Operations | $ | 85.3 | $ | 82.1 | 3.9 | % | ||||||
Income (loss) from continuing operations | $ | 5.0 | ($5.7 | ) | n/m | |||||||
Income from discontinued operations | $ | 4.7 | $ | 2.0 | 135.0 | % | ||||||
Net income (loss) attributable to common stock | $ | 9.7 | ($3.7 | ) | n/m | |||||||
Earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations (a non-GAAP measure) | $ | 18.7 | $ | 14.0 | 33.6 | % | ||||||
Adjusted EBITDA from 73 continuing operations hotels which excludes two hotels closed for hurricane repairs (a non-GAAP measure) | $ | 15.1 | $ | 15.7 | -3.8 | % |
*Dollars in millions
Continuing Operations includes two hotels in Florida that remained closed throughout the 2005 third quarter due to damage from the hurricanes that hit the southeastern United States in the fall 2004. These two hotels have been excluded from Adjusted EBITDA above. Continuing Operations also includes the operations of two hotels in Kansas that the company intends to sell or surrender to the bond trustee as discussed below.
Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization (“EBITDA”), excluding the effects of certain charges, such as post-emergence Chapter 11 expenses included in corporate and other on the company’s consolidated statement of operations, impairment losses, casualty losses for damage caused to properties by hurricanes, and charges related to the surrender of two wholly owned Kansas hotels to the bond trustee and the disposition or surrender of one minority-owned hotel to the lender. Adjusted EBITDA, as shown above, also excludes the two hotels in Florida that are closed for repairs in connection with hurricane damage from the 2004 hurricane season.
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Revenues rose 3.9 percent in the 2005 third quarter, compared to the same period a year earlier, despite $5.3 million in revenue displacement. The displaced revenue is composed of $1.7 million at seven hotels under renovation during the 2005 third quarter and $3.6 million representing 2005 third quarter revenues included in the business interruption insurance claim submissions for the two hurricane-damaged closed hotels in Florida, the Crowne Plaza West Palm Beach and the Holiday Inn Melbourne. The seven hotels under renovation had a total of 14,500 displaced room nights during the 2005 third quarter.
Income from continuing operations was $5.0 million for the 2005 third quarter as compared to a loss of $(5.7) million in the previous year. The 2005 third quarter results include $0.6 million of impairment charges related primarily to the write-down of one hotel. These results are also impacted by $1.0 million of expenses incurred at the two hotels closed for hurricane repair and charges related to severance costs and hiring of the new CEO, offset by the recording of $6.1 million in business interruption insurance proceeds in the 2005 third quarter relating to claims for these two hotels.
Net income attributable to common shares was $9.7 million, or $0.40 basic income per share, in the 2005 third quarter, compared to a net loss of $(3.7) million, or $(0.15) basic income per share, in the 2004 third quarter.
EBITDA from continuing operations rose to $18.7 million, up from $14.0 million in the same period a year earlier. Adjusted EBITDA for the 73 continuing operations hotels open during the 2005 third quarter was $15.1 million, compared to $15.7 million in the 2004 third quarter, with the decrease resulting from charges related to severance costs and the hiring of the new CEO.
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During the 2005 third quarter, the two closed Florida hotels had combined Adjusted EBITDA of $4.2 million, including $6.1 million in business interruption insurance proceeds recorded in the 2005 third quarter related to the September 2004 through July 2005 period, compared to Adjusted EBITDA of $0.5 million in the 2004 third quarter. During the first nine months of 2005, the two closed hotels had Adjusted EBITDA of $4.5 million compared to $2.6 million for the first nine months of 2004.
Rohling Named CEO, Elected to Board
Edward Rohling, who joined Lodgian as president in mid-July, was elected chief executive officer and a member of the board of directors on September 8, 2005. W. Thomas Parrington stepped down from his position as chief executive officer and resigned from the board, under the company’s transition plan. “Tom did an incredible job in directing this company’s financial restructuring and turnaround,” Rohling said. “The company is well positioned with a renovated portfolio of hotels in excellent physical shape and highly competitive in their markets. My job will be to leverage all that hard work and investment to maximize the financial results of our hotels.”
Hurricane Damage Update
Results for the 2005 third quarter were affected by Hurricane Katrina in August, which damaged two of the company’s New Orleans hotels. The two hotels impacted were the Radisson New Orleans Airport in Kenner, La. and the Quality Hotel and Conference Center in Metairie, La. The Kenner hotel is classified in continuing operations, while the Metairie hotel is held for sale and is classified in discontinued operations. The Radisson New Orleans Airport experienced moderate wind and water damage but has remained open. The Quality Hotel experienced more
significant damage and was closed for a period of time. Currently, both hotels are open and are
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benefiting in terms of occupancy from relief workers and clean-up and construction personnel
that have come into the region to assist with the rebuilding efforts. The company expects to incur repair costs and capital expenditures of $6.3 million to repair the damages at the two properties. The insurance deductible is $0.7 million for Kenner and $0.5 million for Metairie, and hurricane repair costs will be recognized as incurred.
“We were extremely fortunate that we did not sustain greater damage in New Orleans, given the severity of the storm,” Rohling said. “Repairs at the Metairie property are nearly complete, and the property is expected to be fully operational by the end of November.
“Two of our hotels in Florida that were damaged by hurricanes in 2004 remain closed. We did not incur any substantial damage in October 2005 from Hurricanes Rita or Wilma. However, we do anticipate a minor slowing of the reopening of the Crowne Plaza West Palm Beach caused by potential scheduling problems for required inspections due to the disruption in the area from Hurricane Wilma. We now anticipate that the hotel will reopen early in the 2006 first quarter. The Holiday Inn Melbourne is scheduled to reopen as a Crowne Plaza in the 2006 first quarter. All of the affected properties in Florida and New Orleans are covered by insurance, including business interruption insurance. For continuing operations in the 2005 third quarter, we incurred approximately $0.2 million in hurricane repair charges. For discontinued operations in the 2005 third quarter, we incurred $0.1 million of hurricane repair charges.”
Renovation Program Update
The company invested $21.3 million in the 2005 third quarter as part of its program to upgrade and improve its portfolio, including $9.4 million for capital expenditures to repair hurricane damage. “Since 2002, when we began our renovation program, we have completed renovations on 34 hotels, including six hotels in 2005, with an additional seven currently
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undergoing major renovations,” Rohling said. “As a result, we continued to have significant displacement in the third quarter, resulting in displaced room revenue of $1.3 million and displaced total revenue of $1.7 million for the period, excluding the hurricane damaged hotels. We expect the impact of displacement will diminish over the remainder of the year.
“Today, our core renovation program is nearly complete, and our most valuable properties are in excellent physical condition. Our goal as we move forward is to take maximum advantage of these upgrades. We believe that as these newly refurbished properties ramp up, they will continue to show significant improvement in their operating results. As an owner-operator of our hotels, we can concentrate on maximizing the flowthrough of these incremental revenues.”
Impact of Displaced Revenues
The company has submitted business interruption insurance claims for the two closed Florida hotels for the period from September 2004 through September 2005. Through September 30, 2005, the company recorded $7.8 million of business interruption insurance proceeds, of which $5.2 million was received and $2.6 million was accrued as the company
expects to receive these amounts in the 2005 fourth quarter. Additional recoveries for business interruption insurance claims will be reported in the quarter in which the proceeds are received or the claims are settled with the insurance carriers.
The company recognizes expenses related to hurricane-damage repairs as these expenses are incurred. To date since the storms occurred in 2004 and 2005, for continuing operations the company has incurred $2.2 million in hurricane clean-up and repair costs, written off damaged assets with a net book value of $3.8 million, and recorded $3.4 million as an insurance receivable
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to cover a portion of these repairs and asset replacements, net of insurance deductibles, which resulted in a net casualty loss of $2.6 million.
Operating Results
RevPAR for the 2005 third quarter increased 7.8 percent over the 2004 third quarter for the company’s continuing operations hotels that were open in both quarters, including those under renovation. A 7.9 percent increase in average daily room rate (ADR) led the RevPAR improvement, with occupancy remaining flat. “Despite the seven hotels under renovation, we still saw a RevPAR increase close to that of the industry average,” Rohling said. “Our renovated properties continue to do extremely well as they ramp up, as evidenced by 21 of our hotels that completed major renovations in 2003 and 2004 that have shown RevPAR gains of 15.5 percent, driven by 70.9 percent occupancy, an improvement of 10.3 percent.
For the company’s stabilized hotels, where there was neither a major renovation nor hurricane repair in either period, RevPAR improved 8.2 percent.
“We have implemented several initiatives to improve productivity throughout the hotels and home office. While we are in the early stages of this initiative, we have indications of broad support throughout the company,” Rohling stated.
Disposition Program
Lodgian sold four hotels in the 2005 third quarter as part of its previously announced portfolio improvement program to dispose of primarily older assets in smaller markets and reduce debt and interest costs. The company used $15.7 million of the net proceeds from these sales to pay down mortgage debt.
Since Lodgian announced its disposition program, the company has sold 20 hotels, two parcels of land and an office building, raised $95.1 million in total sales proceeds and paid down
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a total of $71.7 million in debt. “We currently are marketing three hotels and one land parcel for sale, including one hotel which was added to the held for sale list in October 2005,” Rohling added.
Outlook
The company reaffirmed its 2005 guidance, with the exception of Adjusted EBITDA. The company’s 2005 guidance is based on 73 consolidated hotels, which includes the 75 hotels classified in continuing operations at September 30, 2005 adjusted for the following:
a) | excluding the two Florida hotels that sustained heavy hurricane damage in 2004 that will remain closed throughout 2005; |
b) | excluding one hotel added to the held for sale list in October 2005 (Holiday Inn McKnight Pittsburgh, PA); and |
c) | including the Holiday Inn Jekyll Island, GA hotel that will be reclassified into continuing operations in the 2005 fourth quarter as management does not believe it will be able to sell this hotel within one year. |
Previously, the company provided 2005 guidance on continuing operations, less the two hotels closed for hurricane repairs, of a net loss of $(3.5) million to $(6.5) million and Adjusted EBITDA of $56 million to $58 million on total revenue of $312 million to $322 million. Due to the bankruptcy filing of Delta Airlines and Northwest Airlines, the addition of one hotel to the held for sale list and its corresponding classification into discontinued operations, the reclassification of the Jekyll Island hotel into continuing operations, the accrual of the previous chief operating officer’s full severance, and the costs we expect to incur to replace our current chief financial officer, the company is reducing its 2005 guidance on Adjusted EBITDA to $54 million to $56 million.
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RevPAR is expected to increase 6 to 7 percent, net of renovation displacement, unchanged from the previous guidance. These estimates reflect the absorption of significant revenue displacement from renovations in the first, second and third quarters and expected declining amounts of revenue displacement in the fourth quarter. Lodgian’s guidance assumes no acquisitions and that no additional hotels will be transferred to or from discontinued operations during the remainder of 2005.
“With the substantial progress that we have made on our renovation and restoration program, our portfolio will be up to full strength in strong and improving markets,” Rohling
pointed out. “Those properties that have completed renovation projects and are fully ramped up are reporting significant increases in RevPAR. We believe we are in the early stages of this cycle and that there is substantial upside ahead for the next few years.”
Non-GAAP Financial Measures
The historical non-GAAP financial measures included in this press release are reconciled to the comparable GAAP measures in the schedules attached to this press release.
EBITDA, Adjusted EBITDA and Displacement
EBITDA and Adjusted EBITDA are non-GAAP measures and should not be used as a substitute for measures such as net income (loss), cash flows from operating activities, or other measures computed in accordance with GAAP. The company uses EBITDA and Adjusted EBITDA to measure its performance and to assist in the assessment of hotel property values. EBITDA is also a widely used industry measure which Lodgian believes provides pertinent information to investors and is an additional indicator of the company’s operating performance.
The company defines Adjusted EBITDA as EBITDA excluding the effects of certain charges such as post-emergence Chapter 11 expenses included in corporate and other on the
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company’s consolidated statement of operations, impairment losses, casualty losses for damage caused to Lodgian’s properties by the hurricanes that struck the southeastern United States in the 2004 third quarter and the 2005 third quarter, and one-time charges related to the surrender of two wholly owned hotels to the bond trustee and the disposition or surrender of one minority interest hotel to the lender.
Displacement refers to lost revenue and profit due to rooms out of order resulting from renovation or hurricane repairs. Revenue is considered “displaced” only when a hotel has sold all available rooms and denies additional reservations due to rooms out of order. The company
feels this method is conservative, as it does not include estimated other or “soft” displacement associated with a renovation; for example, guests who depart earlier than planned due to the
disruption caused by the renovation work, local customers or frequent guests who may choose an alternative hotel during the renovation, or local groups that may not solicit the hotel to house their groups during renovations.
About Lodgian
Lodgian is one of the largest independent owners and operators of full-service hotels in the United States. The company currently manages a portfolio of 78 hotels with 14,120 rooms located in 29 states and Canada. Of the company’s 78-hotel portfolio, 49 are InterContinental Hotels Group brands (Crowne Plaza, Holiday Inn, Holiday Inn Select and Holiday Inn Express) 16 are Marriott brands (Courtyard by Marriott, Fairfield Inn, SpringHill Suites and Residence Inn), and 11 are affiliated with four other nationally recognized hospitality franchises such as Hilton and Carlson (Radisson and Park Inn). Two hotels are independent, unbranded properties. For more information about Lodgian, visit the company’s Web site:www.lodgian.com.
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Forward-Looking Statements
This press release includes forward-looking statements related to Lodgian’s operations that are based on management’s current expectations, estimates and projections. These statements are not guarantees of future performance and actual results could differ materially. The words “guidance,” “may,” “should,” “expect,” “believe,” “anticipate,” “project,” “estimate,” “plan,” and similar expressions are intended to identify forward-looking statements. Certain factors are not within the company’s control and readers are cautioned not to put undue reliance on forward-looking statements. These statements involve risks and uncertainties including, but not limited to, the company’s ability to generate sufficient working capital from operations and other risks detailed from time to time in the company’s SEC reports. The company undertakes no obligations to update events to reflect changed assumptions, the occurrence of unanticipated events or changes to future results over time.
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1
LODGIAN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2005 | September 30, 2004 | |||||||
(Unaudited in thousands, except share data) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 9,737 | $ | 36,234 | ||||
Cash, restricted | 14,627 | 9,840 | ||||||
Accounts receivable (net of allowances: 2005 - $1,374; 2004 - $684) | 11,070 | 7,967 | ||||||
Insurance receivable | 6,005 | 3,280 | ||||||
Inventories | 6,777 | 6,293 | ||||||
Prepaid expenses and other current assets | 19,788 | 17,232 | ||||||
Assets held for sale | 6,516 | 30,528 | ||||||
Total current assets | 74,520 | 111,374 | ||||||
Property and equipment, net | 603,469 | 569,371 | ||||||
Deposits for capital expenditures | 21,340 | 34,787 | ||||||
Other assets | 6,595 | 7,775 | ||||||
$ | 705,924 | $ | 723,307 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 12,637 | $ | 10,957 | ||||
Other accrued liabilities | 34,438 | 31,475 | ||||||
Advance deposits | 2,137 | 1,638 | ||||||
Insurance advances | 17,834 | 2,000 | ||||||
Current portion of long-term liabilities | 20,633 | 25,290 | ||||||
Liabilities related to assets held for sale | 912 | 30,541 | ||||||
Total current liabilities | 88,591 | 101,901 | ||||||
Long-term liabilities | 381,513 | 393,143 | ||||||
Total liabilities | 470,104 | 495,044 | ||||||
Minority interests | 2,731 | 1,629 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Common stock, $.01 par value, 60,000,000 shares authorized; | ||||||||
24,683,405 and 24,579,255 issued at September 30, 2005 and | ||||||||
December 31, 2004, respectively | 246 | 246 | ||||||
Additional paid-in capital | 308,980 | 306,943 | ||||||
Unearned stock compensation | (701 | ) | (315 | ) | ||||
Accumulated deficit | (77,442 | ) | (81,941 | ) | ||||
Accumulated other comprehensive income | 2,232 | 1,777 | ||||||
Treasury stock, at cost, 21,633 and 7,211 shares at | ||||||||
September 30, 2005 and December 31, 2004, respectively | (226 | ) | (76 | ) | ||||
Total stockholders’ equity | 233,089 | 226,634 | ||||||
$ | 705,924 | $ | 723,307 | |||||
2
LODGIAN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, 2005 | September 30, 2004 | September 30, 2005 | September 30, 2004 | |||||||||||||
(Unaudited in thousands, except per share data) | ||||||||||||||||
Revenues: | ||||||||||||||||
Rooms | $ | 65,946 | $ | 62,660 | $ | 184,904 | $ | 181,232 | ||||||||
Food and beverage | 16,706 | 16,656 | 50,424 | 52,050 | ||||||||||||
Other | 2,598 | 2,752 | 7,761 | 8,212 | ||||||||||||
85,250 | 82,068 | 243,089 | 241,494 | |||||||||||||
Operating expenses: | ||||||||||||||||
Direct: | ||||||||||||||||
Rooms | 17,959 | 17,895 | 51,086 | 49,709 | ||||||||||||
Food and beverage | 12,034 | 12,328 | 36,078 | 36,097 | ||||||||||||
Other | 2,030 | 2,052 | 6,059 | 6,020 | ||||||||||||
32,023 | 32,275 | 93,223 | 91,826 | |||||||||||||
53,227 | 49,793 | 149,866 | 149,668 | |||||||||||||
Other operating expenses: | ||||||||||||||||
Other hotel operating costs | 26,736 | 24,457 | 75,327 | 70,570 | ||||||||||||
Property and other taxes, insurance, and leases | 5,900 | 5,416 | 17,399 | 16,163 | ||||||||||||
Corporate and other | 6,039 | 4,412 | 16,567 | 13,437 | ||||||||||||
Casualty losses | 190 | 2,019 | 322 | 2,019 | ||||||||||||
Depreciation and amortization | 7,173 | 6,955 | 20,698 | 20,422 | ||||||||||||
Impairment of long-lived assets | 611 | — | 3,220 | — | ||||||||||||
Other operating expenses | 46,649 | 43,259 | 133,533 | 122,611 | ||||||||||||
6,578 | 6,534 | 16,333 | 27,057 | |||||||||||||
Other income (expenses): | ||||||||||||||||
Business interruption insurance proceeds | 6,094 | — | 7,823 | — | ||||||||||||
Interest income and other | 348 | 212 | 573 | 321 | ||||||||||||
Interest expense and other financing costs: | ||||||||||||||||
Preferred stock dividend | — | (866 | ) | — | (9,383 | ) | ||||||||||
Interest expense | (6,855 | ) | (7,264 | ) | (20,749 | ) | (34,795 | ) | ||||||||
Loss on preferred stock redemption | — | (4,471 | ) | — | (6,063 | ) | ||||||||||
Income (loss) before income taxes and minority interests | 6,165 | (5,855 | ) | 3,980 | (22,863 | ) | ||||||||||
Provision for income taxes — continuing operations | (13 | ) | (337 | ) | (148 | ) | (488 | ) | ||||||||
Minority interests | (1,127 | ) | 503 | (1,102 | ) | 285 | ||||||||||
Income (loss) from continuing operations | 5,025 | (5,689 | ) | 2,730 | (23,066 | ) | ||||||||||
Discontinued operations: | ||||||||||||||||
(Loss) income from discontinued operations before income taxes | 4,684 | 1,952 | 1,769 | 4,996 | ||||||||||||
Income tax benefit | — | — | — | — | ||||||||||||
(Loss) income from discontinued operations | 4,684 | 1,952 | 1,769 | 4,996 | ||||||||||||
Net income (loss) attributable to common stock | $ | 9,709 | ($3,737 | ) | $ | 4,499 | ($18,070 | ) | ||||||||
Net earnings per share attributable to common stock: | ||||||||||||||||
Basic | $ | 0.40 | ($0.15 | ) | $ | 0.18 | ($1.77 | ) | ||||||||
3
Three months ended | Nine Months Ended | |||||||||||||||
September 30, 2005 | September 30, 2004 | September 30, 2005 | September 30, 2004 | |||||||||||||
(Unaudited in thousands, except per share data) | ||||||||||||||||
Basic earnings per share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Income (loss) from continuing operations | $ | 5,025 | ($5,689 | ) | $ | 2,730 | ($23,066 | ) | ||||||||
Income from discontinued operations | 4,684 | 1,952 | 1,769 | 4,996 | ||||||||||||
Net income (loss) attributable to common stock | $ | 9,709 | ($3,737 | ) | $ | 4,499 | ($18,070 | ) | ||||||||
Denominator: | ||||||||||||||||
Denominator for basic earnings per share -weighted average shares | 24,573 | 24,571 | 24,573 | 10,205 | ||||||||||||
Basic income (loss) per common share: | ||||||||||||||||
Income (loss) from continuing operations | $ | 0.20 | ($0.23 | ) | $ | 0.11 | ($2.26 | ) | ||||||||
Income from discontinued operations | 0.19 | 0.08 | 0.07 | 0.49 | ||||||||||||
Net income (loss) attributable to common stock | $ | 0.40 | ($0.15 | ) | $ | 0.18 | ($1.77 | ) | ||||||||
4
LODGIAN, INC. AND SUBSIDIARIES
Reconciliation of EBITDA and Adjusted EBITDA (non-GAAP measures) with
Loss from Continuing Operations (a GAAP measure)
(unaudited, $ in thousands) | Three months ended | Nine months ended | ||||||||||||||
September 30, 2005 | September 30, 2004 | September 30, 2005 | September 30, 2004 | |||||||||||||
Continuing operations: | ||||||||||||||||
Income (loss) from continuing operations | $ | 5,025 | ($5,689 | ) | $ | 2,730 | ($23,066 | ) | ||||||||
Depreciation and amortization | 7,173 | 6,955 | 20,698 | 20,422 | ||||||||||||
Interest income | (347 | ) | (175 | ) | (771 | ) | (303 | ) | ||||||||
Interest expense | 6,855 | 7,264 | 20,750 | 34,795 | ||||||||||||
Preferred stock dividends | — | 866 | — | 9,383 | ||||||||||||
Loss on preferred stock redemption | — | 4,471 | — | 6,063 | ||||||||||||
Provision (benefit for income taxes — continuing operations) | 13 | 337 | 148 | 488 | ||||||||||||
EBITDA | $ | 18,719 | $ | 14,029 | $ | 43,555 | $ | 47,782 | ||||||||
Adjustments to EBITDA: | ||||||||||||||||
Post-emergence Chapter 11 expenses, included in corporate | ||||||||||||||||
and other on consolidated statement of operations | $ | 13 | $ | 67 | $ | 175 | $ | 397 | ||||||||
Impairment loss | 611 | — | 3,220 | — | ||||||||||||
Casualty losses- hurricane damage | 190 | 2,019 | 322 | 2,019 | ||||||||||||
Write-off of investment in subsidiary for non-consolidated hotel | — | — | 170 | — | ||||||||||||
Write-off (recover) of receivable for non-consolidated hotel | (200 | ) | — | 746 | — | |||||||||||
Guaranty payments on Kansas properties | — | — | 500 | — | ||||||||||||
Adjusted EBITDA | $ | 19,333 | $ | 16,115 | $ | 48,688 | $ | 50,198 | ||||||||
West Palm Beach and Melbourne: | ||||||||||||||||
Income (loss) from continuing operations | $ | 4,008 | ($1,809 | ) | $ | 3,600 | ($987 | ) | ||||||||
Depreciation and amortization | 193 | 181 | 547 | 793 | ||||||||||||
Interest income | (2 | ) | (5 | ) | (5 | ) | (10 | ) | ||||||||
Interest expense | 8 | 331 | 211 | 1,034 | ||||||||||||
Preferred stock dividends | — | — | — | — | ||||||||||||
Loss on preferred stock redemption | — | — | — | — | ||||||||||||
Provision (benefit for income taxes — continuing operations) | — | — | — | — | ||||||||||||
EBITDA | $ | 4,207 | ($1,302 | ) | $ | 4,353 | $ | 830 | ||||||||
Adjustments to EBITDA: | ||||||||||||||||
Post-emergence Chapter 11 expenses, included in corporate | ||||||||||||||||
and other on consolidated statement of operations | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Impairment loss | — | — | 1 | — | ||||||||||||
Casualty losses- 2004 hurricane damage | 9 | 1,762 | 109 | 1,762 | ||||||||||||
Write-off of investment in subsidiary for non-consolidated hotel | — | — | — | — | ||||||||||||
Write-off of receivable for non-consolidated hotel | — | — | — | — | ||||||||||||
Guaranty payments on Kansas properties | — | — | — | — | ||||||||||||
Adjusted EBITDA | $ | 4,216 | $ | 460 | $ | 4,463 | $ | 2,592 | ||||||||
Continuing operations excluding West Palm Beach and Melbourne: | ||||||||||||||||
Income (loss) from continuing operations | $ | 1,017 | ($3,880 | ) | ($870 | ) | ($22,079 | ) | ||||||||
Depreciation and amortization | 6,980 | 6,774 | 20,151 | 19,629 | ||||||||||||
Interest income | (345 | ) | (170 | ) | (766 | ) | (293 | ) | ||||||||
Interest expense | 6,847 | 6,933 | 20,539 | 33,761 | ||||||||||||
Preferred stock dividends | — | 866 | — | 9,383 | ||||||||||||
Loss on preferred stock redemption | — | 4,471 | — | 6,063 | ||||||||||||
Provision (benefit for income taxes — continuing operations) | 13 | 337 | 148 | 488 | ||||||||||||
EBITDA | $ | 14,512 | $ | 15,331 | $ | 39,202 | $ | 46,952 | ||||||||
Adjustments to EBITDA: | ||||||||||||||||
Post-emergence Chapter 11 expenses, included in corporate | ||||||||||||||||
and other on consolidated statement of operations | $ | 13 | $ | 67 | $ | 175 | $ | 397 | ||||||||
Impairment loss | 611 | — | 3,219 | — | ||||||||||||
Casualty losses- 2004 hurricane damage | 181 | 257 | 213 | 257 | ||||||||||||
Write-off of investment in subsidiary for non-consolidated hotel | — | — | 170 | — | ||||||||||||
Write-off of receivable for non-consolidated hotel | (200 | ) | — | 746 | — | |||||||||||
Guaranty payments on Kansas properties | — | — | 500 | — | ||||||||||||
Adjusted EBITDA | $ | 15,117 | $ | 15,655 | $ | 44,225 | $ | 47,606 | ||||||||
Lodgian 3rd Quarter 2005 | ||||||||||||||||||||||||
Supplemental Operating Information | ||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||
Hotels | Rooms | September 30, 2005 | September 30, 2004 | Change | % Change | |||||||||||||||||||
75 | 13,477 | All Continuing Operations | ||||||||||||||||||||||
Occupancy | 66.0 | % | 65.7 | % | 0.5 | % | ||||||||||||||||||
ADR | $ | 83.82 | $ | 77.90 | $ | 5.92 | 7.6 | % | ||||||||||||||||
RevPAR | $ | 55.29 | $ | 51.19 | $ | 4.10 | 8.0 | % | ||||||||||||||||
Continuing Operations less two | ||||||||||||||||||||||||
hotels closed due to hurricane | ||||||||||||||||||||||||
73 | 12,963 | damage | ||||||||||||||||||||||
Occupancy | 66.0 | % | 66.0 | % | 0.0 | % | ||||||||||||||||||
ADR | $ | 83.83 | $ | 77.71 | $ | 6.12 | 7.9 | % | ||||||||||||||||
RevPAR | $ | 55.29 | $ | 51.28 | $ | 4.01 | 7.8 | % | ||||||||||||||||
RevPAR Index | 96.9 | % | 97.4 | % | (0.5 | %) | ||||||||||||||||||
Continuing Operations less two | ||||||||||||||||||||||||
hotels closed due to hurricane | ||||||||||||||||||||||||
damage and hotels under renovation | ||||||||||||||||||||||||
in the first, second & third | ||||||||||||||||||||||||
50 | 9,193 | quarters 2004 and 2005 | ||||||||||||||||||||||
Occupancy | 66.7 | % | 66.3 | % | 0.6 | % | ||||||||||||||||||
ADR | $ | 80.96 | $ | 75.33 | $ | 5.63 | 7.5 | % | ||||||||||||||||
RevPAR | $ | 54.00 | $ | 49.91 | $ | 4.09 | 8.2 | % | ||||||||||||||||
RevPAR Index | 99.5 | % | 97.8 | % | 1.7 | % | ||||||||||||||||||
Hotels completing major | ||||||||||||||||||||||||
21 | 3,013 | renovations in 2003 and 2004 | ||||||||||||||||||||||
Occupancy | 70.9 | % | 64.3 | % | 10.3 | % | ||||||||||||||||||
ADR | $ | 86.73 | $ | 82.72 | $ | 4.01 | 4.8 | % | ||||||||||||||||
RevPAR | $ | 61.45 | $ | 53.22 | $ | 8.23 | 15.5 | % | ||||||||||||||||
RevPAR Index | 105.1 | % | 97.9 | % | 7.4 | % | ||||||||||||||||||
16 | 1,845 | Marriott Hotels | ||||||||||||||||||||||
Occupancy | 73.2 | % | 68.6 | % | 6.7 | % | ||||||||||||||||||
ADR | $ | 89.51 | $ | 85.19 | $ | 4.32 | 5.1 | % | ||||||||||||||||
RevPAR | $ | 65.54 | $ | 58.48 | $ | 7.06 | 12.1 | % | ||||||||||||||||
RevPAR Index | 115.0 | % | 109.7 | % | 4.8 | % | ||||||||||||||||||
4 | 777 | Hilton Hotels | ||||||||||||||||||||||
Occupancy | 73.0 | % | 69.5 | % | 5.0 | % | ||||||||||||||||||
ADR | $ | 97.28 | $ | 92.82 | $ | 4.46 | 4.8 | % | ||||||||||||||||
RevPAR | $ | 71.03 | $ | 64.54 | $ | 6.49 | 10.1 | % | ||||||||||||||||
RevPAR Index | 95.0 | % | 90.0 | % | 5.6 | % | ||||||||||||||||||
IHG Hotels less two hotels closed | ||||||||||||||||||||||||
45 | 8,829 | due to hurricane damage | ||||||||||||||||||||||
Occupancy | 66.5 | % | 68.7 | % | (3.2 | %) | ||||||||||||||||||
ADR | $ | 83.45 | $ | 76.82 | $ | 6.63 | 8.6 | % | ||||||||||||||||
RevPAR | $ | 55.46 | $ | 52.74 | $ | 2.72 | 5.2 | % | ||||||||||||||||
RevPAR Index | 94.3 | % | 97.1 | % | (2.9 | %) | ||||||||||||||||||
8 | 1,512 | Other Brands and Independent Hotels | ||||||||||||||||||||||
Occupancy | 50.6 | % | 45.6 | % | 11.0 | % | ||||||||||||||||||
ADR | $ | 66.73 | $ | 60.77 | $ | 5.96 | 9.8 | % | ||||||||||||||||
RevPAR | $ | 33.74 | $ | 27.73 | $ | 6.01 | 21.7 | % | ||||||||||||||||
RevPAR Index | 87.8 | % | 81.1 | % | 8.3 | % |
Lodgian 3rd Quarter 2005 | ||||||||||||||||||||||||
Supplemental Operating Information | ||||||||||||||||||||||||
Nine Months Ended | ||||||||||||||||||||||||
Hotels | Rooms | September 30, 2005 | September 30, 2004 | Change | % Change | |||||||||||||||||||
75 | 13,477 | All Continuing Operations | ||||||||||||||||||||||
Occupancy | 63.6 | % | 63.7 | % | (0.2 | %) | ||||||||||||||||||
ADR | $ | 82.16 | $ | 77.83 | $ | 4.33 | 5.6 | % | ||||||||||||||||
RevPAR | $ | 52.22 | $ | 49.55 | $ | 2.67 | 5.4 | % | ||||||||||||||||
Continuing Operations less two | ||||||||||||||||||||||||
hotels closed due to hurricane | ||||||||||||||||||||||||
73 | 13,963 | damage | ||||||||||||||||||||||
Occupancy | 63.6 | % | 63.5 | % | 0.2 | % | ||||||||||||||||||
ADR | $ | 82.16 | $ | 77.30 | $ | 4.86 | 6.3 | % | ||||||||||||||||
RevPAR | $ | 52.22 | $ | 49.05 | $ | 3.17 | 6.5 | % | ||||||||||||||||
RevPAR Index | 98.3 | % | 99.2 | % | (0.9 | %) | ||||||||||||||||||
Continuing Operations less two | ||||||||||||||||||||||||
hotels closed due to hurricane | ||||||||||||||||||||||||
damage and hotels under renovation | ||||||||||||||||||||||||
in the first, second & third | ||||||||||||||||||||||||
50 | 9,193 | quarters 2004 and 2005 | ||||||||||||||||||||||
Occupancy | 63.3 | % | 62.3 | % | 1.6 | % | ||||||||||||||||||
ADR | $ | 79.96 | $ | 75.50 | $ | 4.46 | 5.9 | % | ||||||||||||||||
RevPAR | $ | 50.57 | $ | 47.05 | $ | 3.52 | 7.5 | % | ||||||||||||||||
RevPAR Index | 100.3 | % | 99.5 | % | 0.8 | % | ||||||||||||||||||
Hotels completing major | ||||||||||||||||||||||||
21 | 3,013 | renovations in 2003 and 2004 | ||||||||||||||||||||||
Occupancy | 71.0 | % | 66.8 | % | 6.3 | % | ||||||||||||||||||
ADR | $ | 87.98 | $ | 82.72 | $ | 5.26 | 6.4 | % | ||||||||||||||||
RevPAR | $ | 62.49 | $ | 55.27 | $ | 7.22 | 13.1 | % | ||||||||||||||||
RevPAR Index | 108.8 | % | 103.9 | % | 4.7 | % | ||||||||||||||||||
16 | 1,845 | Marriott Hotels | ||||||||||||||||||||||
Occupancy | 72.0 | % | 68.6 | % | 5.0 | % | ||||||||||||||||||
ADR | $ | 88.08 | $ | 83.14 | $ | 4.94 | 5.9 | % | ||||||||||||||||
RevPAR | $ | 63.15 | $ | 57.05 | $ | 6.10 | 10.7 | % | ||||||||||||||||
RevPAR Index | 119.0 | % | 114.8 | % | 3.7 | % | ||||||||||||||||||
4 | 777 | Hilton Hotels | ||||||||||||||||||||||
Occupancy | 68.5 | % | 66.1 | % | 3.6 | % | ||||||||||||||||||
ADR | $ | 96.27 | $ | 90.99 | $ | 5.28 | 5.8 | % | ||||||||||||||||
RevPAR | $ | 65.93 | $ | 60.15 | $ | 5.78 | 9.6 | % | ||||||||||||||||
RevPAR Index | 96.0 | % | 92.1 | % | 4.2 | % | ||||||||||||||||||
IHG Hotels less two hotels closed | ||||||||||||||||||||||||
45 | 8,829 | due to hurricane damage | ||||||||||||||||||||||
Occupancy | 64.1 | % | 65.0 | % | (1.4 | %) | ||||||||||||||||||
ADR | $ | 81.46 | $ | 76.61 | $ | 4.85 | 6.3 | % | ||||||||||||||||
RevPAR | $ | 52.25 | $ | 49.77 | $ | 2.48 | 5.0 | % | ||||||||||||||||
RevPAR Index | 95.9 | % | 98.4 | % | (2.5 | %) | ||||||||||||||||||
8 | 1,512 | Other Brands and Independent Hotels | ||||||||||||||||||||||
Occupancy | 47.8 | % | 47.3 | % | 1.1 | % | ||||||||||||||||||
ADR | $ | 66.38 | $ | 63.30 | $ | 3.08 | 4.9 | % | ||||||||||||||||
RevPAR | $ | 31.70 | $ | 29.95 | $ | 1.75 | 5.8 | % | ||||||||||||||||
RevPAR Index | 83.8 | % | 83.5 | % | 0.4 | % |
5
Lodgian Competitive Set RevPAR Growth vs. Industry Performance
For Selected Quarters
Lodgian Hotels Included In Competitive Sets
Lodgian | Lodgian | |||||||||||||
Hotel Count | Quarter | Comp Sets | Industry | Ratio | ||||||||||
71 | 1st Qtr ‘04 | 4.5 | % | 7.7 | % | 58.4 | % | |||||||
71 | 2nd Qtr ‘04 | 5.6 | % | 8.6 | % | 65.1 | % | |||||||
71 | 3rd Qtr ‘04 | 5.2 | % | 6.4 | % | 81.3 | % | |||||||
71 | 4th Qtr ‘04 | 7.6 | % | 8.4 | % | 90.5 | % | |||||||
71 | 1st Qtr ‘05 | 6.3 | % | 7.2 | % | 87.5 | % | |||||||
71 | 2nd Qtr ‘05 | 8.1 | % | 8.3 | % | 97.6 | % | |||||||
71 | 3rd Qtr ‘05 | 8.4 | % | 8.3 | % | 101.2 | % |
Source: Smith Travel Research
Note: The 71 hotels represent the 75 consolidated continuing operations hotels less the two hotels closed due to hurricane damage, our Canadian property, and the property acquired in December 2004.
6
Lodgian, Inc.
Assets Held for Sale as of November 1, 2005
Location | Brand | Rooms | ||||||||||
Hotels: | Jekyll Island, GA | Holiday Inn | 198 | |||||||||
Metairie, LA | Quality Hotel | 205 | ||||||||||
Pittsburgh, PA (McKnight Road) | Holiday Inn | 146 | ||||||||||
Land: | Mt. Laurel, NJ (374,100 square feet) |
Note: The Holiday Inn Jekyll Island, GA will be removed from the held for sale list and reclassified into continuing operations in the 2005 fourth quarter.
7