SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 1998 COMMISSION FILE NO. 1-11915
CHOICE HOTELS INTERNATIONAL, INC.
10750 COLUMBIA PIKE
SILVER SPRING, MD. 20901
(301) 979-5000
Delaware 52-1209792
- ------------------------ ----------------------
(STATE OF INCORPORATION) (I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
-------------------------------------------
(Former name, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
--- ---
SHARES OUTSTANDING
CLASS AT JUNE 30, 1998
- ----------------------- ------------------------
Common Stock, $0.01
par value per share 58,636,732
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CHOICE HOTELS INTERNATIONAL, INC.
INDEX
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PAGE NO.
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PART I. FINANCIAL INFORMATION:
Consolidated Balance Sheets -
June 30, 1998 (Unaudited) and December 31, 1997....................... 3
Consolidated Statements of Income -
Three months ended June 30, 1998 and June 30, 1997 and Six Months
Ended June 30, 1998 and June 30, 1997 (Unaudited)..................... 5
Consolidated Statements of Cash Flows -
Six months ended June 30, 1998 and June 30, 1997 (Unaudited).......... 6
Notes to Consolidated Financial Statements (Unaudited).................. 7
Management's Discussion and Analysis of Results of
Operations and Financial Condition.................................... 9
PART II. OTHER INFORMATION AND SIGNATURE................................ 13
2
PART I. FINANCIAL INFORMATION
CHOICE HOTELS INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
JUNE 30, DECEMBER 31,
ASSETS 1998 1997
------------ ------------
(UNAUDITED)
CURRENT ASSETS
Cash and cash equivalents $ 6,365 $ 10,282
Receivables (net of allowance
for doubtful accounts of
$5,394 and $7,608, respectively) 26,868 28,347
Other 12,476 9,904
Receivable from Sunburst Hospitality 19,921 25,066
-------- --------
Total current assets 65,630 73,599
PROPERTY AND EQUIPMENT, AT COST, NET OF
ACCUMULATED DEPRECIATION 39,146 37,040
GOODWILL, NET OF ACCUMULATED AMORTIZATION 67,866 68,792
FRANCHISE RIGHTS, NET OF ACCUMULATED
AMORTIZATION 47,578 48,819
INVESTMENT IN FRIENDLY HOTELS, PLC, NET 41,552 17,011
OTHER ASSETS 24,204 12,935
ASSETS HELD FOR SALE -- 10,752
NOTE RECEIVABLE FROM SUNBURST HOSPITALITY 122,368 117,447
-------- --------
Total assets $408,344 $386,395
======== ========
The accompanying notes are an integral part of these consolidated balance
sheets.
3
CHOICE HOTELS INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
June 30, December 31,
1998 1997
--------- -------------
(UNAUDITED)
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ 10,041 $ 15,041
Accounts payable 24,149 26,452
Accrued expenses 16,302 20,702
Income taxes payable 6,754 6,007
-------- --------
Total current liabilities 57,246 68,202
-------- --------
LONG-TERM DEBT 283,678 267,780
DEFERRED INCOME TAXES AND OTHER 10,233 1,155
-------- --------
Total liabilities 351,157 337,137
-------- --------
SHAREHOLDERS' EQUITY
Common stock, $.01 par value 604 598
Additional paid-in capital 51,561 47,907
Accumulated other comprehensive income 1,660 (8,316)
Treasury stock (27,029) (189)
Retained earnings 30,391 9,258
-------- --------
Total shareholders' equity 57,187 49,258
-------- --------
Total liabilities & shareholders' equity $408,344 $386,395
======== ========
The accompanying notes are an integral part of these consolidated balance
sheets.
4
CHOICE HOTELS INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Three Months Ended Six Months Ended
----------------- ------------------
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
------- ------- ------- --------
(Unaudited) (Unaudited)
REVENUES
Royalty fees $29,214 $26,913 $50,058 $45,171
Product sales 7,218 5,486 12,374 11,900
Initial franchise fees and relicensing fees 4,235 4,647 7,649 8,831
Other, including partner service revenue 3,769 3,659 6,427 7,198
European hotel operations - 4,855 1,098 8,588
------- ------- ------- -------
Total revenues 44,436 45,560 77,606 81,688
------- ------- ------- -------
OPERATING EXPENSES
Selling, general and administrative 12,430 13,733 23,664 24,681
Product cost of sales 6,878 5,185 11,608 11,346
Depreciation and amortization 1,609 2,581 3,550 5,262
European hotel operations - 4,208 1,133 7,889
------- ------- ------- -------
Total operating expenses 20,917 25,707 39,955 49,178
------- ------- ------- -------
OPERATING INCOME 23,519 19,853 37,651 32,510
OTHER
Interest expense 4,925 2,142 9,583 5,008
Interest and dividend income (3,240) - (5,960) -
Gain from sale of investments (424) - (2,190) -
------- ------- ------- -------
Total other 1,261 2,142 1,433 5,008
------- ------- ------- -------
INCOME BEFORE INCOME TAXES 22,258 17,711 36,218 27,502
INCOME TAXES 9,270 7,377 15,085 11,455
------- ------- ------- -------
NET INCOME $12,988 $10,334 $21,133 $16,047
======= ======= ======= =======
Weighted average shares outstanding 59,255 60,665 59,522 62,674
======= ======= ======= =======
DILUTED SHARES OUTSTANDING 60,387 60,665 60,757 62,674
======= ======= ======= =======
BASIC EARNINGS PER SHARE $0.22 $0.17 $0.36 $0.26
======= ======= ======= =======
DILUTED EARNINGS PER SHARE $0.22 $0.17 $0.35 $0.26
======= ======= ======= =======
The accompanying notes are an integral part of these consolidated statements of
income.
5
CHOICE HOTELS INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, IN THOUSANDS)
Six Months Ended
------------------
June 30, June 30,
1998 1997
-------- --------
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 21,133 $ 16,047
Reconciliation of net income to net cash provided by
operating activities:
Depreciation and amortization 5,653 5,262
Provision for bad debts 553 486
Increase in deferred taxes and other 2,211 3,179
Non cash interest and dividend income (5,943) -
Changes in assets and liabilities:
Change in receivables 926 3,700
Change in inventories and other current assets (1,713) 542
Change in current liabilities (6,513) (1,414)
Change in income taxes payable 747 2,014
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 17,054 29,816
-------- --------
CASH FLOW FROM INVESTING ACTIVITIES:
Investment in property and equipment (5,593) (6,515)
Repayments of Sunburst Hospitality advances, net 5,286 -
Other items, net (8,393) -
-------- --------
NET CASH UTILIZED BY INVESTING ACTIVITIES (8,700) (6,515)
-------- --------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from long-term debt 118,959 -
Repayment of long-term debt (108,061) (21,775)
Purchase of treasury stock (26,840) -
Proceeds from issuance of common stock 3,671 -
Transfers to Parent, net - (1,045)
-------- --------
NET CASH UTILIZED BY FINANCING ACTIVITIES (12,271) (22,820)
-------- --------
Net change in cash and cash equivalents (3,917) 481
Cash and cash equivalents, beginning of period 10,282 2,973
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 6,365 $ 3,454
======== ========
The accompanying notes are an integral part of these consolidated statements of
cash flows.
6
CHOICE HOTELS INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. The accompanying consolidated financial statements of Choice Hotels
International, Inc. (the "Company") and subsidiaries have been prepared by the
Company without audit. Certain information and footnote disclosures normally
included in financial statements presented in accordance with generally accepted
accounting principles have been condensed or omitted. The Company believes the
disclosures made are adequate to make the information presented not misleading.
The consolidated financial statements should be read in conjunction with the
consolidated financial statements for the seven month period ended December 31,
1997 and notes thereto included in the Company's Form 10-K, dated March 31,
1998. In the opinion of management, all adjustments (which include any normal
recurring adjustments) considered necessary for a fair presentation have been
included. Interim results are not necessarily indicative of fiscal year
performance because of seasonal and short-term variations. All intercompany
transactions and balances between Choice Hotels International, Inc. and its
subsidiaries have been eliminated. Certain reclassifications have been made to
the prior year amounts to conform to current period presentation.
2. In January 1998, the Company completed a transaction with Friendly Hotels,
PLC ("Friendly")in which Friendly assumed the master franchise rights for
Choice's Comfort, Quality and Clarion brand hotels throughout Europe (with the
exception of Scandinavia) for the next 10 years. In exchange, the Company will
receive from Friendly $8.0 million, payable in eight equal annual installments.
As part of the transaction, Friendly acquired European hotels currently owned by
the Company for a total consideration of approximately $26.2 million in
convertible preferred shares and cash. In exchange for 10 hotels in France, two
in Germany and one in the United Kingdom, the Company received $22.2 million in
new unlisted 5.75 percent convertible preferred shares in Friendly at par,
convertible into one new Friendly ordinary share for every 150p nominal of the
preferred convertible shares. In addition, Friendly will pay the Company
deferred compensation of $4.0 million in cash, payable by the fifth anniversary
of completion or sooner dependent on the level of future profits of the hotels
acquired. The European hotels included in this transaction have a carrying
value, which included a cumulative translation adjustment of $(6.6) million,
totaling approximately $19.9 million. The Company had a gain on the sale of $2.0
million, which has been deferred and is presented net of the Investment in
Friendly Hotels, PLC in the accompanying consolidated balance sheets.
3. In May 1998, the Company issued $100 million senior unsecured notes (the
"Notes"), bearing a coupon rate of 7.125%. The Notes will mature on May 1, 2008,
with interest on the Notes to be paid semi-annually. The Company has used the
net proceeds from the offering of approximately $99 million to repay amounts
outstanding under the Company's $300 million revolving credit facility.
4. During the six months ended June 30, 1998, the Company's comprehensive
income (consisting of net income plus foreign currency translation adjustments)
exceeded net income by approximately $3 million.
5. During the second quarter of 1998, the Company changed its presentation of
marketing and reservation fees such that the fees collected and associated
expenses are reported net. The Company's franchise agreements require the
payment of franchise fees which include marketing and reservation fees. These
fees, which are based on a percentage of the franchisees' gross room revenues,
are used exclusively to reimburse the Company for expenses associated with
providing such franchise services as central reservation systems, national
marketing, and media advertising. The Company is contractually obligated to
expend the reservation and marketing fees it collects from franchisees in
accordance with the franchise agreements; as such no income or loss to the
Company is generated. All prior periods have been restated to conform to the new
presentation.
The total marketing and reservation fees received by the Company (previously
reported as revenue) were $56.7 million and $43.8 million for the six months
ended June 30, 1998 and June 30, 1997, respectively. Depreciation and
7
amortization charged to reservation and marketing expenses was $2.2 million and
$1.2 million for the six months ending June 30, 1998 and June 30, 1997,
respectively. Reservation fees and marketing fees not expended in the current
year are carried over to the next fiscal year and expended in accordance with
the franchise agreements. Shortfall amounts are similarly recovered in
subsequent years. Excess or shortfall amounts from the operation of these
programs are recorded as a payable or receivable from the particular fund. The
shortfall amount recorded as a current receivable in other assets on the
Company's balance sheet was $7.2 million and $1.7 million at June 30, 1998 and
December 31, 1997, respectively.
8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION
--------------------------------------------------------------------------
The principal factors that affect the Company's results are: (i) growth in the
number of hotels under franchise, (ii) occupancy and room rates achieved by the
hotels under franchise, (iii) the number and relative mix of franchised hotels,
and (iv) the Company's ability to manage costs. The number of rooms at
franchised properties and occupancy and room rates at those properties
significantly affect the Company's results because franchise royalty fees are
based upon room revenues at franchised hotels. The variable overhead costs
associated with franchise system growth are substantially less than incremental
royalty fees generated from new franchisees; therefore, the Company is able to
capture a significant portion of those royalty fees as operating income.
Comparison of Three Month Period Ended June 30, 1998 Operating Results and Three
Month Period Ended June 30, 1997 Operating Results
The Company reported net income of $13.0 million, or $0.22 per diluted share,
for the second quarter ended June 30, 1998, compared to net income for the same
period of 1997 of $10.3 million, or $0.17 per diluted share. The $0.22 per share
includes approximately $0.01 resulting from a sale of certain investments held
by the Company. Exclusive of this gain, diluted earnings per share increased
23.5% to $0.21 per share from $0.17 per share. The increase in net income for
the period is attributable to an increase in franchise revenue as a direct
result of the addition of new licensees to the franchise system, increases in
the effective royalty rate achieved for the domestic hotel system and the
control of the Company's selling, general and administrative costs.
Franchise Revenues
- ------------------
In operating the franchise business, the Company collects marketing and
reservation fees and assessments from its franchisees. The Company is
contractually obligated to disburse these fees for marketing and reservation
activities to be provided on behalf of its franchisees. Therefore, the Company
presents these fees and expenses on a net basis in the accompanying consolidated
statements of income. The Company also provides certain services to its
franchisees, specifically a group purchasing program, where the Company utilizes
bulk purchasing power to obtain favorable pricing from third-party vendors for
franchisees. This program is provided to the franchisees as a service and is
not designed to be a major component of the Company's profitability. Management
therefore analyzes its franchise business based on revenues net of marketing and
reservation fees and product sales ("net franchise revenues").
Net franchise revenues include royalty fees, initial franchise fees and
relicensing fees earned on contracts signed and other revenues, including
partner service revenue. Net franchise revenues are dependent upon growth in
the number of franchised properties as well as the underlying performance of the
franchised hotels for continued growth. The key industry standard for measuring
hotel operating performance is revenue per available room, ("RevPAR"), which is
calculated by multiplying the percentage of occupied rooms by the average daily
room rate realized.
The Company's net franchise revenues were $37.2 million for the three months
ended June 30, 1998 and $35.2 million for the three months ended June 30, 1997.
Total net franchise revenues are computed as follows:
(In millions)
Three Months Ended Three Months Ended
June 30, 1998 June 30, 1997
------------------- -------------------
Total franchise revenues $44.4 $40.7
Product sales (7.2) (5.5)
----- -----
Total net franchise revenues $37.2 $35.2
===== =====
9
Royalties increased $2.3 million to $29.2 million in 1998 from $26.9 million in
1997, an increase of 8.6%. The increase in royalties is attributable to a net
increase of 85 franchisees during the period representing an additional 6,500
rooms added to the system and an increase in the effective royalty rate of the
domestic hotel system to 3.54% from 3.50%. Also, foreign fees for the three
months ended June 30, 1998 increased $1.3 million from the three months ended
June 30, 1997. Initial and relicensing fee revenue generated from domestic
franchise contracts signed decreased to $4.2 million from $4.6 million in 1997.
However, total franchise agreements signed in the second quarter 1998 were 198,
as compared to 142 for the second quarter 1997. The decline in initial and
relicensing fee revenue is attributable to certain incentives offered related to
the Company's Sleep Inn brand. The total number of hotels open and under
development, increased to 4,437 from 4,191 an increase of 5.9% for the period
ending June 30, 1998. This represents an increase in the number of rooms open
and under development of 4.6% from 357,451 as of June 30, 1997 to 373,919 as of
June 30, 1998.
Franchise Expenses
- ------------------
The cost to operate the franchising business is reflected in selling, general
and administrative costs. Selling, general and administrative expenses decreased
approximately $1.3 million between years. As a percentage of total net
franchising revenues, total franchising selling, general and administrative
expenses declined to 33.3% for the second quarter of 1998 as compared to 38.9%
for 1997. The improvement in the franchising margins relates to the economies of
scale generated from operating a larger franchisee base and cost control
initiatives.
Product Sales
- -------------
Sales made to franchisees through the Company's group purchasing program
increased $1.7 million (or 30.9%) to $7.2 million for the three months ended
June 30, 1998 from $5.5 million at June 30, 1997. The group purchasing program
utilizes bulk purchases to obtain favorable pricing from third party vendors for
franchisees ordering similar products. The Company acts as a "clearing-house"
between the franchisee and the vendor, and orders are shipped directly to the
franchisee.
Product cost of sales decreased $1.7 million (or 32.7%) for the three months
ended June 30, 1998. The product services margins decreased for the three
months ended June 30, 1998 to 4.7% from 5.5% at June 30, 1997. This purchasing
program is provided to the franchisees as a service and is not expected to be a
major component of the Company's profitability.
Other
- ------
For the three months ended June 30, 1998, the Company recognized approximately
$569,000 in dividend income from its investment in Friendly and approximately
$2.7 million of interest income from its subordinated term note to Sunburst
Hospitality, Inc. During the second quarter of 1998, the Company recognized
approximately $424,000 from the sale of certain investments.
10
Comparison of Six Month Period Ended June 30, 1998 Operating Results and Six
Month Period Ended June 30, 1997 Operating Results
The Company reported net income of $21.1 million, or $0.35 per diluted share,
for the six months ended June 30, 1998, compared to net income for the same
period of 1997 of $16.0 million, or $0.26 per diluted share. The $0.35 per share
includes approximately $0.02 resulting from a sale of certain investments held
by the Company. Exclusive of this gain, diluted earnings per share increased
26.9% to $0.33 per share from $0.26 per share. The increase in net income for
the period is primarily attributable to an increase in franchise revenue as a
direct result of the addition of new licensees to the franchise system,
improvements in the operating performance of franchised hotels and the control
of the Company's selling, general and administrative costs.
Franchise Revenues
- ------------------
The Company's net franchise revenues were $64.1 million for the six months ended
June 30, 1998 and $61.2 million for the six months ended June 30, 1997.
Total net franchise revenues are computed as follows:
(In millions)
June 30, 1998 June 30, 1997
-------------- --------------
Total franchise revenues $ 76.5 $ 73.1
Product sales (12.4) (11.9)
------ ------
Total net franchise revenues $ 64.1 $ 61.2
====== ======
Royalties increased $5.0 million to $50.1 million in 1998 from $45.1 million in
1997, an increase of 11.1%. The increase in royalties is attributable to a net
increase of 157 franchisees during the period representing an additional 12,077
rooms added to the system, an improvement in domestic RevPAR of 1.4% and an
increase in the effective royalty rate of the domestic hotel system to 3.50%
from 3.40%. Also, foreign fees increased $1.6 million for the six months ended
June 30, 1998 from the six months ended June 30, 1997. Initial fee and
relicensing fee revenue generated from domestic franchise contracts signed
decreased to $7.6 million from $8.8 million in 1997. However, total franchise
agreements signed in the six months ended June 30, 1998 were 368, as compared to
324 for the six months ended June 30, 1997. The decline in initial and
relicensing fee revenue is attributable to certain incentives offered related to
the Company's Sleep Inn brand. The total number of hotels open and under
development increased to 4,437 from 4,191, an increase of 5.9% for the period
ending June 30, 1998. This represents an increase in the number of rooms open
and under development of 4.6% from 357,451 as of June 30, 1997 to 373,919 as of
June 30, 1998.
Franchise Expenses
- ------------------
Selling, general and administrative expenses declined approximately $1 million
between years. As a percentage of total net franchising revenues, total
franchising selling, general and administrative expenses declined to 36.9% for
the six months ended June 30, 1998 as compared to 40.4% for 1997. The
improvement in the franchising margins relates to the economies of scale
generated from operating a larger franchisee base, cost control initiatives and
improvements in franchised hotel performance.
Product Sales
- -------------
Sales made to franchisees through the Company's group purchasing program
increased $500,000 (or 4.2%) to $12.4 million for the six months ended June 30,
1998 from $11.9 million at June 30, 1997. The group purchasing program utilizes
bulk purchases to obtain favorable pricing from third party vendors for
franchisees ordering similar products. The Company acts as a "clearing-house"
between the franchisee and the vendor, and orders are shipped directly to the
franchisee.
11
Similarly, product cost of sales increased approximately $300,000 (or 2.7%) for
the six months ended June 30, 1998. The product services margins increased for
the six months ended June 30, 1998 to 6.2% from 4.7% at June 30, 1997. This
purchasing program is provided to the franchisees as a service and is not
expected to be a major component of the Company's profitability.
Other
- ------
For the six months ended June 30, 1998, the Company recognized approximately
$1.0 million in dividend income from its investment in Friendly and
approximately $4.9 million of interest income from its subordinated term note to
Sunburst Hospitality, Inc. For the six months ended June 30, 1998, the Company
recognized approximately $2.2 million from the sale of certain investments.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Net cash provided by operating activities was $16.7 million for the six months
ended June 30, 1998, a decrease of approximately $13.1 million from
$29.8 million for 1997. At June 30, 1998, the total long-term debt outstanding,
including amounts due this year for the Company was $293.7 million.
In May 1998, the Company consummated a $100 million senior unsecured note
offering (the "Notes"), bearing a coupon rate of 7.125%. The Notes will mature
on May 1, 2008, with interest on the Notes to be paid semi-annually. The
Company has used the net proceeds from the offering of approximately $99 million
to repay amounts outstanding under the Company's $300 million revolving credit
facility.
The Company believes that cash flow from operations and available financing
capacity is adequate to meet the expected operating, investing, financing and
debt service requirements for the business for the immediate future.
YEAR 2000 COMPLIANCE
- --------------------
The Company's reservations systems, its current software products offered for
license to franchisees as well as its internal financial systems are being
tested for year 2000 compliance. Although the testing of these systems is not
yet complete, the Company does not believe any of the above elements will have a
material impact on the Company's results of operations or financial condition.
FORWARD-LOOKING STATEMENTS
- --------------------------
The statements contained in this document that are not historical facts are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995.
A number of important factors could cause the Company's actual results for
future periods to differ materially from those expressed in any forward-looking
statements made by, or on behalf of the Company.
Certain statements contained in this Form 10-Q, including those in the section
entitled "Management's Discussion and Analysis of Operating Results and
Financial Condition," contain forward-looking information that involves risk and
uncertainties. Actual future results and trends may differ materially depending
on a variety of factors discussed in the "Risk Factors" section included in the
Company's SEC filings, including the nature and extent of future competition,
and political, economic and demographic developments in countries where the
Company does business or in the future may do business.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The Company undertakes no
obligation to revise or update these forward-looking statements.
12
PART II OTHER INFORMATION
-------------------------
ITEM 1. LEGAL PROCEEDINGS
-----------------
The Company is not party to any litigation, other than routine litigation
incidental to the business of the Company. None of such litigation, either
individually or in the aggregate, is expected to be material to the business,
financial condition or results of operations of the Company.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits
Exhibit 10.1 - Agreement and release dated June 16, 1998 between Choice
Hotels International, Inc. and William R. Floyd.
Exhibit 10.2 - Employment Agreement dated April 29, 1998 between Choice
Hotels International, Inc. and Michael J. DeSantis.
Exhibit 27.01 - Financial Data Schedule - June 30, 1998
(b) The following reports were filed pertaining to the period ended June 30,
1998.
None.
13
SIGNATURE
Pursuant to the requirements of the Securities Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
CHOICE HOTELS INTERNATIONAL, INC.
Date: August 10, 1998 /s/ Michael J. DeSantis
--------------- -----------------------------
By: Michael J. DeSantis
Senior Vice President, General Counsel
& Secretary
14