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
YEAR-END AND FOURTH QUARTER 2003 RESULTS
(SPRINGFIELD, MO., February 18, 2004) ---- John Q. Hammons Hotels, Inc. (AMEX:
JQH) today reported results for the year-end and fourth quarter 2003.
YEAR-TO-DATE RESULTS
Basic loss per share for the twelve months ended January 2, 2004 was ($1.39),
compared to a loss per share of ($0.54) for the twelve months ended January 3,
2003. Net loss for the twelve months ended January 2, 2004 was $7.1 million,
compared to a net loss of $2.8 million for the same period in 2002. The 2003
results included two items, which, after giving effect to minority interest, had
an impact of approximately $6.2 million on the Company's net loss. One of the
items was the recognition of a $9.7 million impairment on one of our properties
due to the decline of the property's fair value. The other item was related to
the allocation of partnership losses to the limited partner's minority interest,
which are restricted to the limited partner's net contribution; therefore, the
minority interest account cannot be reduced below zero. As a result, the
allocations of the partnership losses to the minority interest were limited to
$5.9 million rather than the expected $9.7 million based on their approximate
76% ownership interest.
The following represents a reconciliation of the net loss, as reported, to the
net loss, as adjusted (in thousands):
<Table>
<Caption>
THREE MONTHS ENDED TWELVE MONTHS ENDED
JAN. 2, 2004 JAN. 3, 2003 JAN. 2, 2004 JAN. 3, 2003
------------ ------------ ------------ ------------
Net loss, as reported $ (7,510) $ (934) $ (7,061) $ (2,761)
Additions:
Asset impairment, net of expected minority interest 2,334 -- 2,334 --
Reallocation of minority interest losses 3,839 -- 3,839 --
------------ ------------ ------------ ------------
Sub total 6,173 -- 6,173 --
------------ ------------ ------------ ------------
Net loss, as adjusted $ (1,337) $ (934) $ (888) $ (2,761)
============ ============ ============ ============
</Table>
Total revenues for 2003 were $431.2 million, a decrease of 2.1% compared to
2002. We produced EBITDA for 2003 of $108.8 million ($118.5 million before the
$9.7 million item
related to asset impairment), compared to $121.7 million in the 2002 period,
which included 53 weeks, rather than 52 weeks in the 2003 period (See attached
table for reconciliation of net income to EBITDA and for the definition of
EBITDA).
Revenue Per Available Room (RevPAR) was $63.19 for 2003, up from prior year's
level of $62.68, while the upscale sector of the industry's RevPAR was down 0.8%
as reported by Smith Travel Research.
FOURTH QUARTER RESULTS
Basic loss per share for the three months ended January 2, 2004 was ($1.47),
compared to a loss per share of ($0.18) for the same period in 2002. Net loss
was $7.5 million for the 2003 quarter, compared to a loss of $0.9 million for
the 2002 quarter, reflecting the impact of the special items discussed above.
EBITDA was $16.2 million for the 2003 quarter, down $13.3 million compared to
the 2002 fourth quarter EBITDA of $29.5 million, reflecting the $9.7 million
item related to asset impairment in 2003 (See attached table for reconciliation
of net income to EBITDA and for the definition of EBITDA).
Total revenues for the 2003 fourth quarter were $103.6 million, compared to
$111.9 million for the 2002 quarter. Our Revenue Per Available Room (RevPAR) was
$57.15 for the 2003 fourth quarter, up compared to the prior year's level of
$56.62.
EXECUTIVE COMMENTS
"Our operations have continued to remain stable during the industry's downturn.
As lodging demand increases, particularly in the group segments, we should
benefit due to our extensive meeting space facilities," stated Mr. John Q.
Hammons, Chairman and Chief Executive Officer.
FINANCING AND INVESTING ACTIVITIES
During 2003, we retired a $6.3 million mortgage (Springdale Hampton Inn), set to
mature in the fourth quarter of 2003, as well as $5.2 million and $6.6 million
notes (Denver Airport Holiday Inn and Ft. Collins Holiday Inn, respectively),
bringing total debt reduction for 2003 to over $25 million, including scheduled
principal amortization. Our current portion of long-term debt ($7.4 million) is
attributable to scheduled principal amortization on various individual hotel
mortgages.
OPERATIONS OUTLOOK
We forecast that the industry should recover throughout 2004, generating RevPAR
above 2003 levels. This recovery should enhance our cash generation and produce
favorable results as we focus on operational efficiencies.
Although we are not developing new hotels, Mr. Hammons personally has numerous
projects in various stages of development, which will be managed by the public
Company upon completion, including properties in St. Charles, Missouri; Junction
City, Kansas; Frisco, Texas; Albuquerque, New Mexico and North Charleston, South
Carolina.
John Q. Hammons Hotels, Inc. is 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 11,630 guest rooms or
suites, and manage 13 additional hotels located in seven states, containing
3,094 guest rooms or suites. The majority of these 60 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.
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," "forecast," "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;
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 - -
JOHN Q. HAMMONS HOTELS, INC.
AND COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(000's omitted, except share data)
<Table>
<Caption>
THREE MONTHS ENDED TWELVE MONTHS ENDED
JAN. 2, 2004 JAN. 3, 2003 JAN. 2, 2004 JAN. 3, 2003
------------ ------------ ------------ ------------
REVENUES:
Rooms $ 60,476 $ 64,555 $ 267,502 $ 270,534
Food and beverage 30,777 33,472 113,402 117,810
Meeting room rental, related party management fee and other 12,347 13,854 50,341 52,036
------------ ------------ ------------ ------------
Total revenues 103,600 111,881 431,245 440,380
OPERATING EXPENSES:
Direct operating costs and expenses:
Rooms 16,749 17,418 67,444 68,917
Food and beverage 23,032 25,239 87,079 91,310
Other 623 734 2,722 3,179
General, administrative, sales and management expenses 32,562 34,124 137,202 136,866
Repairs and maintenance 4,688 4,875 18,321 18,387
Asset impairment 9,700 -- 9,700 --
Depreciation and amortization 13,838 14,911 51,723 54,202
------------ ------------ ------------ ------------
Total operating costs 101,192 97,301 374,191 372,861
------------ ------------ ------------ ------------
INCOME FROM OPERATIONS 2,408 14,580 57,054 67,519
OTHER INCOME (EXPENSE):
Other income -- -- 175 --
Interest income 124 262 602 1,018
Interest expense and amortization of deferred financing fees (17,210) (18,574) (69,827) (71,989)
Extinguishment of debt costs (456) (28) (774) (7,411)
------------ ------------ ------------ ------------
LOSS BEFORE MINORITY INTEREST AND PROVISION
FOR INCOME TAXES (15,134) (3,760) (12,770) (10,863)
Minority interest in losses of partnership 7,654 2,856 5,859 8,252
------------ ------------ ------------ ------------
LOSS BEFORE PROVISION FOR INCOME TAXES (7,480) (904) (6,911) (2,611)
Provision for income taxes (30) (30) (150) (150)
------------ ------------ ------------ ------------
NET LOSS ALLOCABLE TO THE COMPANY $ (7,510) $ (934) $ (7,061) $ (2,761)
============ ============ ============ ============
BASIC LOSS PER SHARE:
Net loss allocable to Company $ (1.47) $ (0.18) $ (1.39) $ (0.54)
============ ============ ============ ============
WEIGHTED AVERAGE SHARES OUTSTANDING 5,102,979 5,083,829 5,092,829 5,081,285
============ ============ ============ ============
</Table>
See Notes to Consolidated Financial Statements
JOHN Q. HAMMONS HOTELS, INC.
AND COMPANIES
(AMOUNTS IN THOUSANDS EXCEPT EARNINGS PER SHARE AND OPERATING DATA)
<Table>
<Caption>
THREE MONTHS ENDED TWELVE MONTHS ENDED
JAN. 2, 2004 JAN. 3, 2003 JAN. 2, 2004 JAN. 3, 2003
------------ ------------ ------------ ------------
RECONCILIATION OF NET LOSS TO EBITDA:
Net loss $ (7,510) $ (934) $ (7,061) $ (2,761)
Provision for income taxes 30 30 150 150
Minority interest in losses of partnership (7,654) (2,856) (5,859) (8,252)
Extinguishment of debt costs 456 28 774 7,411
Interest expense and amortization of deferred financing fees 17,210 18,574 69,827 71,989
Interest income (124) (262) (602) (1,018)
Other income -- -- (175) --
Depreciation and amortization 13,838 14,911 51,723 54,202
------------ ------------ ------------ ------------
EBITDA (a) $ 16,246 $ 29,491 $ 108,777 $ 121,721
============ ============ ============ ============
EBITDA MARGIN (% OF TOTAL REVENUE) 15.7% 26.4% 25.2% 27.6%
</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 TWELVE MONTHS ENDED
JAN. 2, 2004 JAN. 3, 2003 JAN. 2, 2004 JAN. 3, 2003
------------ ------------ ------------ ------------
TOTAL OWNED HOTELS:
Occupancy 58.4% 57.8% 63.5% 63.8%
Average Room Rate $ 97.87 $ 97.95 $ 99.50 $ 98.31
RevPAR (Room Revenue per available room) $ 57.15 $ 56.62 $ 63.19 $ 62.68
</Table>
<Table>
<Caption>
JAN. 2, JAN. 3, DEC. 28,
2004 2003 2001
------------ ------------ ------------
SELECTED BALANCE SHEET DATA
Current Assets $ 54,022 $ 52,020 $ 60,673
Total Assets $ 822,183 $ 859,972 $ 881,724
Current Liabilities Excluding Debt $ 41,043 $ 40,789 $ 45,072
Current Portion of Long-Term Debt $ 7,423 $ 13,683 $ 38,862
Total Long-Term Debt Including Current Portion $ 781,072 $ 806,342 $ 813,007
Total Cash and Equivalents, Restricted Cash and
Marketable Securities $ 61,222 $ 50,368 $ 55,674
Net Debt $ 719,850 $ 755,974 $ 757,333
</Table>