LODGIAN, INC.
3445 PEACHTREE ROAD
ATLANTA, GA 30326
www.lodgian.com
[GRAPHIC OMITTED][GRAPHIC OMITTED]
: LOD
AT LODGIAN, INC. AT FRB / BSMG (WWW.FRBINC.COM)
Robert Cole Kenneth Posner Ginny Gaines Todd Tarbox Georganne Palffy
Chief Executive Officer Chief Financial Officer Director of Corp. Comm. General Information Analysts/Investors
rcole@lodgian.com k posner@logian.com ggaines@lodgian.com ttarbox@frb.bsmg.com gpalffy@frb.bsmg.com
(404) 365-3800 (404) 364-4469 (404) 365-3805 (312) 640-6742 (312) 640-6768
MONDAY, MAY 1, 2000
LODGIAN ANNOUNCES FILING OF FORM 8-K WITH UNAUDITED YEAR-END AND FOURTH
QUARTER 1999 RESULTS
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ACTUAL 2000 FIRST QUARTER REVENUE AND OPERATING MARGINS IN-LINE WITH
EXPECTATIONS
COMPANY'S CURRENT LIQUIDITY, WORKING CAPITAL AND INTEREST COVERAGE MORE
THAN ADEQUATE
SAME-UNIT REVPAR INCREASE OF 5.9% FOR 1999 AMONG BEST FOR PUBLIC LODGING
COMPANIES
ATLANTA--MAY 1, 2000--LODGIAN, INC., (NYSE: LOD), one of the nation's
largest owners and operators of hotels, today reported its unaudited fourth
quarter and year-end 1999 results in a Form 8-K filing. Management expects to
file the Company's 1999 Form 10-K immediately upon completion of the year-end
audit. The delay in the preparation of the 1999 financial statements and,
therefore, completion of the 1999 audit is primarily attributed to issues
associated with the integration of multiple accounting systems into the new
system used by Lodgian. Additionally, the Company was confronted with several
complex accounting matters related to the Merger that required more time to
satisfactorily address. The Company has already taken, and will continue to
take, significant action to resolve the systems-related accounting issues.
Despite these complexities, the Company believes that there will be no material
changes in the 1999 year-end unaudited financial statements when the audit is
completed. The Company expects that the audit will be completed in the next
several weeks.
Because of the substantial number and dollar amount of adjustments that have
been recorded in the fourth quarter of 1999, management is considering the
extent, if any, to which such adjustments affect a prior period and, whether
taken together are sufficiently material to require a restatement. Of the
charges recorded in the fourth quarter, totaling approximately $85 million,
$61.7 million is directly related to the asset impairment and goodwill charges
the Company had announced previously. The balance of the charges are a
combination of cash and non-cash charges including professional fees, reserves
for litigation, systems and merger integration costs, and franchise and brand
conversion costs, among others.
The Company continues to believe that the adjustments recorded in the fourth
quarter will have no material affect on its business, the market value of the
Company's assets and the revenue and earnings before interest, taxes,
depreciation and amortization (EBITDA) guidance management has previously
provided for the year 2000. This view is supported by the Company's actual first
quarter RevPAR, revenue and operating margins which were in-line with
management's expectations (pre-asset sales). Moreover, management continues to
anticipate the Company's second quarter RevPAR to be in-line with previously
communicated expectations, with an increase of approximately 5% over 1999
levels.
The Company has provided its 1999 unaudited financial statements to its senior
secured lenders and will deliver the required financial statements upon
completion of the audit. Although the delivery of audited financial statements
is required pursuant to its credit agreement, the Company is confident that its
lenders will work with the Company during the completion of the 1999 audit.
Furthermore, the unaudited financial results are in compliance with the
Company's financial covenants, including the consolidated EBITDA to interest
coverage ratio.
Although the Company is not currently entitled to receive advances under its
existing working capital facility, management is confident that it has
sufficient cash balances, working capital and cash generating capability to
adequately fund its business without additional advances under the revolving
credit facility.
The Company's annual meeting will be scheduled immediately after filing of the
1999 Form 10-K.
KEY ACCOMPLISHMENTS
o Repositioning and renovation strategy continues as the Company has spent
approximately $30.0 million to date in 2000 on capital expenditures, thereby
continuing to improve the asset quality of the portfolio.
o For 1999, twelve of the Company's non-core assets were sold, generating a
total of $21 million in cash.
o Year-to-date 2000, the Company has realized another $27 million in proceeds
from four additional asset sales, with more hotels slated for disposition.
o In the first quarter of 2000, the Company converted its Clarion-Pittsburgh,
PA to a Crowne Plaza, completed the repositioning of its 150 room Comfort
Inn-Boston to a Courtyard by Marriott and opened the new 181 room Hilton
Garden in Lake Oswego, Oregon.
SUMMARY OF FOURTH QUARTER REVPAR RESULTS
For the fourth quarter 1999, Lodgian's 131 consolidated hotels consisted of 77
stabilized hotels, 33 stabilizing hotels and 21 hotels being repositioned. Total
RevPAR, composed of $42.31 on an occupancy rate of 58.4 percent and $72.47
average daily rate (ADR), was as follows:
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TOTAL REVPAR
FOURTH QUARTER ENDED DECEMBER 31, 1999
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HOTEL CLASSIFICATION OCCUPANCY ADR REVPAR
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Stabilized 60.8% $71.69 $43.58
Stabilizing 57.7% $71.93 $41.48
Being Repositioned 52.1% $76.08 $39.62
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Total 58.4% $72.47 $42.31
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The same-unit RevPAR increase of 4.3 percent for the fourth quarter 1999
consisted of 58.4 percent occupancy at a $71.84 ADR on properties owned and
operated for at least 12 months. Same-unit RevPAR for the fourth quarters of
1998 and 1999 was as follows:
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SAME-UNIT REVPAR
FOURTH QUARTER ENDED DECEMBER 31,
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HOTEL CLASSIFICATION 1998 1999 % CHANGE
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Stabilized $43.58 $43.58 0.0%
Stabilizing $36.43 $39.78 9.2%
Being Repositioned $34.67 $39.62 14.3%
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Total Same-Unit $40.22 $41.94 4.3%
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SUMMARY OF 1999 REVPAR RESULTS
For the year 1999, total RevPAR for Lodgian's 131 consolidated hotels, composed
of $47.03 on an occupancy rate of 63.1 percent and $74.58 ADR, was as follows:
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TOTAL REVPAR
TWELVE MONTHS ENDED DECEMBER 31, 1999
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HOTEL CLASSIFICATION OCCUPANCY ADR REVPAR
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Stabilized 66.1% $73.53 $48.60
Stabilizing 61.9% $74.59 $46.17
Being Repositioned 55.4% $78.42 $43.43
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Total 63.1% $74.58 $47.03
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Same-unit RevPAR for the year of 1999 increased 5.9 percent to $47.03 on an
occupancy rate of 63.2 percent and $74.38 ADR. For the years 1998 and 1999,
same-unit RevPAR was as follows:
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SAME-UNIT REVPAR
TWELVE MONTHS ENDED DECEMBER 31,
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HOTEL CLASSIFICATION 1998 1999 % CHANGE
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Stabilized $47.52 $48.79 2.7%
Stabilizing $39.00 $45.16
15.8%
Being Repositioned $40.89 $43.97
7.5%
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Total Same-Unit $44.41 $47.03 5.9%
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ABOUT LODGIAN
Lodgian, Inc. owns or manages a portfolio of 127 hotels with approximately
24,000 rooms in 35 states and Canada. The hotels are primarily full service,
providing food and beverage service, as well as meeting facilities.
Substantially all of Lodgian's hotels are affiliated with nationally recognized
hospitality brands such as Holiday Inn, Crowne Plaza, Marriott, Sheraton, Hilton
and Westin.
Lodgian's common shares are listed on the New York Stock Exchange under the
symbol "LOD." Lodgian is a component of both the Russell 2000(R) Index,
representing small cap stocks, and the Russell 3000(R) Index, representing the
broader market.
FORWARD-LOOKING STATEMENTS
Note: Statements in this press release which are not strictly historical
are "forward-looking" statements that are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks, which may cause the
company's actual results in the future to differ materially from expected
results. These risks include, among others, competition within the lodging and
contract service industries; the relationship between supply and demand for
hotel rooms; the effects of economic conditions; issues associated with the
ongoing integration of the former Servico, Inc. and Impac Hotel Group, LLC; the
acquisition and renovation of existing hotels and the development of new hotels;
operating risks; the cyclical nature of the lodging industry; risks associated
with the dependence on franchisers of the company's lodging properties; and the
availability of capital to finance planned growth, as described in the company's
filings with the Securities and Exchange Commission.
FOR MORE INFORMATION ON LODGIAN TOLL-FREE VIA FAX, DIAL 1-800-PRO-INFO (OR
1-800-776-4636),
FOLLOW THE VOICE MENU PROMPTS AND ENTER THE COMPANY TICKER LOD (OR 563) OR
VISIT THE LODGIAN PAGE ON THE FRB WEB SITE AT WWW.FRBINC.COM
VISIT LODGIAN AT WWW.LODGIAN.COM
FINANCIAL TABLES FOLLOW...
LOGIAN, INC.
STATEMENT OF OPERATIONS
(in thousands, except per share amounts)
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1999 1998 1999 1998
---- ---- ---- ----
UNAUDITED UNAUDITED UNAUDITED
Revenues:
Rooms $ 96,313 $ 70,589 $ 424,525 $ 267,862
Food & beverage 38,456 32,661 139,474 107,334
Other 5,959 5,335 28,416 20,018
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Total Revenue 140,728 108,585 592,415 395,214
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Operating expenses:
Direct:
Rooms 31,177 21,301 121,512 75,316
Food and beverage 27,679 24,068 102,030 81,643
Other 4,589 3,094 17,357 11,023
General and administrative 9,025 2,843 27,006 10,080
Depreciation and amortization 15,757 8,586 56,359 31,114
Other 50,856 33,153 178,249 118,927
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Total Operating expenses 139,083 93,045 502,513 328,103
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Income from operations 1,645 15,540 89,902 67,111
Other income (expenses):
Interest income and other 419 (85) 279 (176)
Interest expense (21,384) (8,485) (78,840) (30,378)
Impairment of long-lived assets (40,283) (40,283)
Write off of goodwill (20,748) (20,748)
Gain (Loss) on asset disposition 1,242 (432)
Settlement on swap transactions (31,492)
Merger and other nonrecurring items (10,090) (3,400) (10,090) (3,400)
Minority interests - Preferred
Redeemable Securities (3,072) (3,152) (13,224) (6,475)
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(Loss) income before income taxes
and extraordinary item (93,513) 418 (71,762) (5,242)
(Benefit) provision for income taxes (28,399) 167 (19,699) (2,097)
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(Loss) income before extraordinary item (65,114) 251 (52,063) (3,145)
Extraordinary loss, net of tax benefit (1,414) (934) (7,750) (2,076)
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Net (loss) income $(66,528) $ (683) $ (59,813) $ (5,221)
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Earnings (loss) per common share:
(Loss) income before extraordinary item $ (2.34) $ 0.01 $ (1.91) $ (0.16)
Extraordinary item (0.05) (0.05) (0.28) (0.10)
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Net (loss) income $ (2.39) $ (0.04) $ (2.19) $ (0.26)
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Weighted average shares outstanding,
basic and assuming dilution 27,807 23,740 27,222 20,245
Earnings before interest, taxes,
depreciation and amortization (EBITDA) $ 17,402 $ 24,126 $ 147,257 $ 98,225
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