Company Contact:
NEIL G. BERKMAN
ASSOCIATES [LOGO] Howard G. Anders
1900 AVENUE OF THE STARS Chief Financial Officer
SUITE 2850 HOSPITALITY Hospitality Worldwide
LOS ANGELES, CA 90067 ----------- Services
(310) 277-5162 WORLDWIDE (212) 223-0699
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SERVICES, INC.
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FOR IMMEDIATE RELEASE Thursday, November 13, 1997
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Third Quarter Revenue Doubles
HOSPITALITY WORLDWIDE SERVICES (ASE) NINE MONTH REVENUE TRIPLES
Adopts Shareholder Rights Plan
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NEW YORK, NEW YORK, . . . HOSPITALITY WORLDWIDE SERVICES, INC.
(ASE:HWS) announced today that revenue for the nine months ended September 30,
1997 tripled to $54,240,000 from $17,657,000 for the same period of 1996. Net
income after payment of preferred dividends for this year's first nine months
was $1,316,000, or $0.14 per share on approximately 9,166,000 common shares
outstanding, compared to $1,570,000, or $0.22 per share on approximately
7,065,000 shares outstanding, last year.
For the three months ended September 30, 1997, revenue more than
doubled to $16,532,000 from $8,240,000 for the third quarter of 1996. Net income
after payment of preferred dividends was $644,000, or $0.07 per share on
approximately 9,287,000 shares outstanding. This compares to net income of
$831,000, or $0.12 per share on approximately 7,138,000 shares outstanding, for
the same period a year earlier.
Results for this year's first nine months reflect the acquisition of
The Leonard Parker Company (LPC) on January 9, 1997. LPC generated revenue of
approximately $11,300,000 for the third quarter and approximately $38,000,000
for the period since its acquisition.
President and Chief Executive Officer Robert Berman said, "We continue
to be impressed by the magnitude of the growth opportunities in our core
restoration and purchasing businesses, as well as by the significant increase in
activity surrounding our joint venture with Apollo Realty to acquire, renovate
and reposition hotels and other properties throughout the United States."
Berman continued, "The increase in selling, general and administrative
expenses reflects the development of the infrastructure the Company needs to
fully benefit from these opportunities and to support our anticipated growth."
He said that SG&A expenses are expected to decline as a percentage of revenue in
the future.
450 Park Avenue (more)
Suite 2603
New York, NY
10022-2605
(212) 223-0609
Fax 223-0365
HOSPITALITY WORLDWIDE SERVICES NINE MONTH REVENUE TRIPLES
November 13, 1997
Page Two
Berman added that third quarter results also reflect additional
investments in the Company's wholly-owned subsidiary, Parker Reorder, for the
continuing development of the Parker FIRST software, a procurement system that
allows hotels to order all products used daily at the property, such as
tableware, linens, guest amenities and the like, through a direct computer line.
"The market for hotel operating equipment and supplies runs to many billions of
dollars, a major growth opportunity for Hospitality Worldwide Services. We
expect Parker FIRST, which currently is being beta-tested by several key
customers, to be fully operational by the first quarter of 1998," he said.
The Company also announced today that its Board of Directors has
adopted a Stockholder Rights Plan and declared a dividend granting to its
stockholders the right to purchase for each Common Share one one-hundredth of a
share of a series of preferred stock that will be established by the Company, at
a price of $80.00 for each one one-hundredth of a Preference Share. The Rights
will be issued on December 5, 1997 or shortly thereafter, to shareholders on
that date. Initially, the Rights are attached to the Company's Common Stock and
are not exercisable. They become detached from the Common Stock and become
immediately exercisable after any person or group becomes the beneficial owner
of 20% or more of the Company's Common Stock or 10 days after any person or
group of persons publicly announces a tender or exchange offer that would result
in that same beneficial ownership level.
The Company said that the Plan is designed to protect stockholders from
various abusive takeover tactics, including attempts to acquire control of the
Company at an inadequate price which would deny stockholders the full value of
their investments. The Plan is designed to assure that any acquisition of the
Company and/or any acquisition of control of the Company would take place under
circumstances in which the Board of Directors can secure the best available
transaction for all of the Company's stockholders. The Plan will encourage a
potential buyer to negotiate appropriately with the Board prior to attempting a
takeover and will have no effect on lawful proxy solicitation activity. Details
of the Plan are included with a letter which will be mailed shortly to all of
the Company's stockholders.
Through its subsidiaries, Hospitality Worldwide Services, Inc. (HWS)
provides interior and exterior renovation and procurement services for the
hospitality industry. HWS is based in New York; its Leonard Parker Purchasing
Division is located in Coral Gables, Florida; and its Hospitality Restoration &
Builders Division is headquartered in Los Angeles.
THE STATEMENTS CONTAINED IN THIS RELEASE WHICH ARE NOT HISTORICAL FACTS MAY BE
DEEMED TO CONTAIN FORWARD-LOOKING STATEMENTS WITH RESPECT TO EVENTS, THE
OCCURRENCE OF WHICH INVOLVE RISKS AND UNCERTAINTIES, INCLUDING, WITHOUT
LIMITATION, DEMAND AND COMPETITION FOR THE COMPANY'S PRODUCTS, AND OTHER RISKS
OR UNCERTAINTIES DETAILED IN THE COMPANY'S SECURITIES AND EXCHANGE COMMISSION
FILINGS.
(tables attached)
#1536
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HOSPITALITY WORLDWIDE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(in thousands, except per share data)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
Revenues $ 16,532 $ 8,240 $ 54,240 17,657
Cost of revenues 11,876 6,252 42,570 13,242
Selling, general and
administrative expenses 3,348 862 9,608 2,278
-------- -------- -------- --------
15,224 7,114 51,178 15,520
-------- -------- -------- --------
Income from operations 1,308 1,126 3,062 2,137
-------- -------- -------- --------
Other income (expense)
Interest (expense) (164) -- (420) --
Interest income 148 -- 289 --
-------- -------- -------- --------
(16) -- (131) --
Income before provision
for income taxes 1,292 1,126 2,931 2,137
Provision for income taxes 573 303 1,390 575
-------- -------- -------- --------
Income from continuing operations 719 823 1,541 1,562
Discontinued operations:
Income from discontinued operations
less applicable taxes of $2 -- 8 -- 8
-------- -------- -------- --------
Net Income 719 831 1,541 1,570
Preferred dividends 75 -- 225 --
-------- -------- -------- --------
Net income applicable to
common shareholders $ 644 $ 831 $ 1,316 $ 1,570
======== ======== ======== ========
Net income per share $ 0.07 $ 0.12 $ 0.14 $ 0.22
======== ======== ======== ========
Weighted average common and common
equivalent shares outstanding 9,287 7,138 9,166 7,065
======== ======== ======== ========
SUMMARY BALANCE SHEET
Sept. 30, Dec. 31,
1997 1996
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(unaudited) (audited)
Cash and cash equivalents $30,395 $ 276
Accounts receivable 10,955 3,135
Other current assets 8,284 2,686
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Total current assets 49,634 6,097
Property plant & equipment, net 2,480 143
Goodwill and other assets 19,602 6,510
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Total assets $71,716 $12,750
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Current liabilities $18,342 $ 4,971
Notes payable &
capital lease obligations 142 --
Shareholders' equity 53,232 7,779
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Total liabilities &
shareholders' equity $71,716 $12,750
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