EXHIBIT 99.1
Contact: Paul Muellner FOR IMMEDIATE RELEASE
Chief Financial Officer
John Q. Hammons Hotels, Inc.
417-864-4300
JOHN Q. HAMMONS HOTELS, INC. REPORTS
BASIC EARNINGS OF $0.09 PER SHARE
FOR THE FIRST NINE MONTHS OF 2003
(SPRINGFIELD, MO., November 11, 2003) ---- John Q. Hammons Hotels, Inc. (AMEX:
JQH) today reported on its third quarter 2003 results.
YEAR-TO-DATE RESULTS
Basic earnings per share for the nine months ended October 3, 2003 were $0.09,
compared to a loss per share of ($0.36) for the nine months ended September 27,
2002. Net income for the nine months ended October 3, 2003 was $0.4 million,
compared to a net loss of ($1.8) million for the same period in 2002. The 2002
nine months included a charge of $7.4 million ($1.8 million, net of minority
interest) applicable to extinguishment of debt costs, primarily related to the
refinancing of a significant portion of our long-term debt completed in May of
2002. We produced EBITDA for the nine months ended October 3, 2003 of $92.5
million, compared to $92.2 million in the 2002 period (See attached table for
reconciliation of net income to EBITDA and for the definition of EBITDA).
Total revenues for the 2003 nine months were $327.6 million, a decrease of $0.9
million, compared to the same period in 2002. Revenue Per Available Room
(RevPAR) was $65.21 for the 2003 nine months, up slightly, compared to the prior
year's level of $64.85, while the industry's RevPAR for the first nine months of
2003 was down 0.8%, to 50.67, from the 2002 period, as reported by Smith Travel
Research.
THIRD QUARTER RESULTS
Basic earnings per share for the three months ended October 3, 2003 were $0.03,
compared to a loss per share of ($0.21) for the same period in 2002. Net income
was $0.2 million for the 2003 quarter, compared to a loss of ($1.1) million for
the 2002 quarter. EBITDA was $31.2 million for the 2003 quarter, up $4.1 million
or 15.1% compared to the 2002 third quarter EBITDA of $27.1 million (See
attached table for reconciliation of net income to EBITDA and for the definition
of EBITDA). The increase was primarily attributable to the improved management
of labor costs, favorable workers' compensation loss experience and decreases in
franchise termination fees (relating to the 2002 conversion of certain brand
names of our properties).
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Total revenues for the 2003 third quarter were $108.9 million, compared to
$105.9 million for the 2002 quarter, reflecting our ability to drive rate at our
properties. Our Revenue Per Available Room (RevPAR) was $66.78 for the 2003
third quarter, up 2.5% compared to the prior year's level of $65.12, while the
industry's RevPAR for the third quarter of 2003 was up 2.3% compared to the same
period in 2002, to $54.71 as reported by Smith Travel Research.
CHAIRMAN COMMENTS
"We continue to exceed the industry's RevPAR comparisons and maintain our
operating margins, while still attending to our high level of quality and
service," stated Mr. John Q. Hammons, Chairman and Chief Executive Officer. "We
pride ourselves in the fact that we have positioned ourselves as an industry
leader, set to outperform as the industry continues to show signs of
improvement."
FINANCING ACTIVITIES
Since the beginning of 2003, we retired a $6.3 million mortgage (Springdale
Hampton Inn), set to mature in the fourth quarter of 2003, as well as a $5.2
million note (Denver Airport Holiday Inn), bringing total debt reduction for the
first nine months of 2003 to over $17 million. The remaining current portion of
long-term debt ($7.6 million) is attributable only to scheduled principal
amortization on various individual hotel mortgages.
OPERATIONS OUTLOOK
We forecast that the industry should begin to recover in late 2003 and
throughout 2004, generating year-over-year RevPAR comparable to, or slightly
above last year's levels. This recovery should help to further our cash
generation and produce favorable results due to our focus on operational
efficiencies.
Although we are not developing new hotels, Mr. Hammons personally has numerous
projects in various stages of development, including properties in Oklahoma
City, Oklahoma; Hot Springs, Arkansas; St. Charles, Missouri; Junction City,
Kansas; Frisco, Texas; Albuquerque, New Mexico and North Charleston, South
Carolina.
We are a leading independent owner and manager of affordable upscale, full
service hotels located primarily in key secondary markets. We own 47 hotels
located in 20 states, containing 11,629 guest rooms or suites, and manage 11
additional hotels located in seven states, containing 2,623 guest rooms or
suites. The majority of these 58 hotels operate under the Embassy Suites,
Holiday Inn and Marriott trade names. Most of our hotels are located near a
state capitol, university, convention center, corporate headquarters, office
park or other stable demand generator. A copy of this press release announcing
our earnings as well as other statistical information will be available in the
Investor Relations section of our website at www.jqhhotels.com.
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***
NOTE - FORWARD-LOOKING STATEMENTS: This press release contains "forward-looking
statements" within the meaning of Section 21E of the Securities Exchange Act of
1934, regarding, among other things, our operations outlook, business strategy,
prospects and financial position. These statements contain the words "believe,"
"anticipate," "estimate," "expect," "project," "intend," "may," "will," and
similar words. These forward-looking statements are not guarantees of future
performance, and involve known and unknown risks, uncertainties and other
factors that may cause our actual results to be materially different from any
future results expressed or implied by such forward-looking statements. Such
factors include, among others:
o General economic conditions, including the duration and
severity of the current economic slowdown and the pace at
which the lodging industry adjusts to the continuing war on
terrorism;
o The impact of any serious communicable diseases on travel,
including any increase or further spread in Severe Respiratory
Syndrome (SARS);
o Competition;
o Changes in operating costs, particularly energy and labor
costs;
o Unexpected events, such as the September 11, 2001 terrorist
attacks, or outbreaks of war;
o Risks of hotel operations, such as hotel room supply exceeding
demand, increased energy and other travel costs and general
industry downturns;
o Seasonality of the hotel business;
o Cyclical over-building in the hotel and leisure industry;
o Requirements of franchise agreements, including the right of
some franchisors to immediately terminate their respective
agreements if we breach certain provisions; and
o Costs of complying with applicable state and federal
regulations.
These risks and uncertainties should be considered in evaluating any
forward looking statements contained in this press release. We undertake no
obligation to update or revise publicly any forward looking statement, whether
as a result of new information, future events or otherwise, other than as
required by law.
- - Tables Attached - -
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JOHN Q. HAMMONS HOTELS, INC.
AND COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(000's omitted, except share data)
(unaudited)
<Table>
<Caption>
THREE MONTHS ENDED NINE MONTHS ENDED
OCT. 3, 2003 SEPT. 27, 2002 OCT. 3, 2003 SEPT. 27, 2002
-------------- -------------- -------------- --------------
REVENUES:
Rooms $ 70,664 $ 68,938 $ 207,026 $ 205,979
Food and beverage 26,096 24,950 82,625 84,338
Meeting room rental, related party
management fee and other 12,091 12,021 37,994 38,182
-------------- -------------- -------------- --------------
Total revenues 108,851 105,909 327,645 328,499
OPERATING EXPENSES:
Direct operating costs and expenses:
Rooms 17,369 17,731 50,695 51,499
Food and beverage 20,159 20,697 64,047 66,071
Other 706 840 2,099 2,445
General, administrative, sales and
management expenses 34,818 34,963 104,640 102,742
Repairs and maintenance 4,595 4,555 13,633 13,512
Depreciation and amortization 12,818 13,203 37,885 39,291
-------------- -------------- -------------- --------------
Total operating costs 90,465 91,989 272,999 275,560
-------------- -------------- -------------- --------------
INCOME FROM OPERATIONS 18,386 13,920 54,646 52,939
OTHER INCOME (EXPENSE):
Other income -- -- 175 --
Interest income 143 308 478 756
Interest expense and amortization of
deferred financing fees (17,410) (17,931) (52,617) (53,415)
Extinguishment of debt costs (318) (591) (318) (7,383)
-------------- -------------- -------------- --------------
INCOME (LOSS) BEFORE MINORITY INTEREST
AND PROVISION FOR INCOME TAXES 801 (4,294) 2,364 (7,103)
Minority interest in (earnings) loss
of partnership (608) 3,262 (1,795) 5,396
-------------- -------------- -------------- --------------
INCOME (LOSS) BEFORE PROVISION FOR
INCOME TAXES 193 (1,032) 569 (1,707)
Provision for income taxes (30) (30) (120) (120)
-------------- -------------- -------------- --------------
NET INCOME (LOSS) ALLOCABLE TO THE
COMPANY $ 163 $ (1,062) $ 449 $ (1,827)
============== ============== ============== ==============
BASIC EARNINGS (LOSS) PER SHARE:
Net earnings (loss) allocable to
Company $ 0.03 $ (0.21) $ 0.09 $ (0.36)
============== ============== ============== ==============
BASIC WEIGHTED AVERAGE SHARES OUTSTANDING 5,094,778 5,083,829 5,089,445 5,080,372
============== ============== ============== ==============
DILUTED EARNINGS (LOSS) PER SHARE:
Net earnings (loss) allocable to
Company $ 0.03 $ (0.21) $ 0.09 $ (0.36)
============== ============== ============== ==============
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING 5,384,894 5,083,829 5,262,806 5,080,372
============== ============== ============== ==============
</Table>
8
JOHN Q. HAMMONS HOTELS, INC.
AND COMPANIES
(Amounts in thousands except earnings per share and operating data)
<Table>
<Caption>
THREE MONTHS ENDED NINE MONTHS ENDED
OCT. 3, 2003 SEPT. 27, 2002 OCT. 3, 2003 SEPT. 27, 2002
-------------- -------------- -------------- --------------
RECONCILIATION OF NET INCOME TO EBITDA:
Net Income (Loss) $ 163 $ (1,062) $ 449 $ (1,827)
Provision for income taxes 30 30 120 120
Minority interest in earnings (loss) of
partnership 608 (3,262) 1,795 (5,396)
Extinguishment of debt costs 318 591 318 7,383
Interest expense and amortization of deferred
financing fees 17,410 17,931 52,617 53,415
Interest income (143) (308) (478) (756)
Other income -- -- (175) --
Depreciation and amortization 12,818 13,203 37,885 39,291
-------------- -------------- -------------- --------------
EBITDA (a) $ 31,204 $ 27,123 $ 92,531 $ 92,230
============== ============== ============== ==============
EBITDA Margin (% of Total Revenue) 28.7% 25.6% 28.2% 28.1%
</Table>
(a) EBITDA is defined as income before interest income and expense, income tax
expense, depreciation and amortization, minority interest, extinguishment of
debt costs and other income. Management considers EBITDA to be one measure of
operating performance for the Company before debt service that provides a
relevant basis for comparison, and EBITDA is presented to assist investors in
analyzing the performance of the Company. This information should not be
considered as an alternative to any measure of performance as promulgated under
accounting principles generally accepted in the United States, nor should it be
considered as an indicator of the overall financial performance of the Company.
The Company's calculation of EBITDA may be different from the calculation used
by other companies and, therefore, comparability may be limited.
<Table>
<Caption>
THREE MONTHS ENDED NINE MONTHS ENDED
OCT. 3, 2003 SEPT. 27, 2002 OCT. 3, 2003 SEPT. 27, 2002
-------------- -------------- -------------- --------------
TOTAL OWNED HOTELS:
Occupancy 67.2% 67.1% 65.2% 65.9%
Average Room Rate $ 99.40 $ 97.09 $ 99.98 $ 98.43
RevPAR (Room Revenue per available room) $ 66.78 $ 65.12 $ 65.21 $ 64.85
</Table>
<Table>
<Caption>
OCT. 3, JAN. 3, DEC. 28,
2003 2003 2001
------------ ------------ ------------
SELECTED BALANCE SHEET DATA
Current Assets $ 78,860 $ 52,020 $ 60,673
Total Assets $ 861,109 $ 859,972 $ 881,724
Current Liabilities Excluding Debt $ 56,432 $ 40,789 $ 45,072
Current Portion of Long-Term Debt $ 7,576 $ 13,683 $ 38,862
Total Long-Term Debt Including Current Portion $ 789,173 $ 806,342 $ 813,007
Total Cash and Equivalents, Restricted Cash and
Marketable Securities $ 65,228 $ 35,358 $ 44,196
Net Debt $ 723,945 $ 770,984 $ 768,811
</Table>