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
FIRST QUARTER BASIC EARNINGS OF
$0.85 PER SHARE
(SPRINGFIELD, MO., May 10, 2004) ---- John Q. Hammons Hotels, Inc. (AMEX: JQH)
today reported results for the first quarter of 2004.
FIRST QUARTER RESULTS
Basic earnings per share for the three months ended April 2, 2004 were $0.85,
compared to earnings per share of $0.04 for the three months ended April 4,
2003. Net income for the 2004 three months was $4.3 million, compared to net
income of $0.2 million for the 2003 quarter. Net income for the 2004 quarter,
includes $3.3 million for the recapture of the limited partner's losses we
absorbed in the fourth quarter of 2003. An additional $0.5 million must be
recaptured before the limited partner can be allocated future earnings in
minority interest.
The following represents a reconciliation of the net income, as reported, to the
net income, as adjusted (in thousands):
THREE MONTHS ENDED
APR. 2, 2004 APR. 4, 2003
------------ ------------
Net income, as reported $ 4,349 $207
Deductions:
Reallocation of minority interest earnings (3,322) -
----------- -----------
Net income, as adjusted $ 1,027 $207
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Total revenues for the 2004 quarter were $114.4 million, an increase of 3.9%
compared to the 2003 quarter. We produced EBITDA for the 2004 quarter of $33.3
million, up 8.5% compared to $30.7 million in the 2003 quarter. EBITDA margins
(EBITDA to total revenues) increased to 29.1% for the 2004 quarter compared to
27.9% in 2003, primarily as a result of reductions in
payroll, property taxes and insurance versus the 2003 quarter (See attached
table for reconciliation of net income to EBITDA and for the definition of
EBITDA).
Revenue Per Available Room (RevPAR) was $66.33 for the 2004 quarter, up 4.1%
from the prior year's level of $63.69.
EXECUTIVE COMMENTS
"We were extremely pleased with our results this quarter," stated Mr. John Q.
Hammons, Chairman and Chief Executive Officer, "The lodging industry appears to
be improving and our Company should benefit."
FINANCING AND INVESTING ACTIVITIES
Since the beginning of 2003, we have reduced total debt by over $27 million,
including scheduled principal amortization. Our current portion of long-term
debt ($7.3 million) is attributable to scheduled principal amortization on
various individual hotel mortgages.
OPERATIONS OUTLOOK
We forecast that the industry will continue recovery throughout 2004, generating
RevPAR and EBITDA above our 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 we will manage upon completion,
including properties in St. Charles and Springfield, 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 financial 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
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(000'S omitted, except share data)
THREE MONTHS ENDED
APRIL 2, 2004 APRIL 4, 2003
------------- -------------
REVENUES:
Rooms $ 70,188 $ 67,403
Food and beverage 30,074 29,139
Meeting room rental, related party management fee and other 14,114 13,588
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Total revenues 114,376 110,130
OPERATING EXPENSES:
Direct operating costs and expenses:
Rooms 17,284 16,280
Food and beverage 22,136 21,906
Other 616 692
General, administrative, sales and management service expenses 36,357 36,075
Repairs and maintenance 4,706 4,453
Depreciation and amortization 11,931 12,481
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Total operating expenses 93,030 91,887
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INCOME FROM OPERATIONS 21,346 18,243
OTHER INCOME (EXPENSE):
Other income - 175
Interest expense and amortization of deferred financing fees, net of $118 and $178
of interest income in April 2, 2004 and April 4, 2003, respectively (16,967) (17,433)
----------- -----------
INCOME BEFORE MINORITY INTEREST AND PROVISION FOR
INCOME TAXES 4,379 985
Minority interest in income of partnership - (748)
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INCOME BEFORE PROVISION FOR INCOME TAXES 4,379 237
Provision for income taxes (30) (30)
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NET INCOME ALLOCABLE TO THE COMPANY $ 4,349 $ 207
=========== ===========
BASIC EARNINGS PER SHARE:
Net earnings allocable to Company $ 0.85 $ 0.04
=========== ===========
BASIC WEIGHTED AVERAGE SHARES OUTSTANDING 5,111,270 5,083,829
=========== ===========
DILUTED EARNINGS PER SHARE:
Net earnings allocable to Company $ 0.74 $ 0.04
=========== ===========
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING 5,856,746 5,151,081
=========== ===========
JOHN Q. HAMMONS HOTELS, INC.
AND COMPANIES
(AMOUNTS IN THOUSANDS EXCEPT EARNINGS PER SHARE AND OPERATING DATA)
THREE MONTHS ENDED
APRIL 2, 2004 APRIL 4, 2003
-------------- --------------
RECONCILIATION OF NET INCOME TO EBITDA:
Net income $ 4,349 $ 207
Provision for income taxes 30 30
Minority interest in losses of partnership 0 748
Interest expense and amortization of deferred financing fees, net 16,967 17,433
Other income 0 (175)
Depreciation and amortization 11,931 12,481
-------- --------
EBITDA (a) $ 33,277 $ 30,724
======== ========
EBITDA MARGIN (% OF TOTAL REVENUE) 29.1% 27.9%
(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.
THREE MONTHS ENDED
APRIL 2, 2004 APRIL 4, 2003
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TOTAL OWNED HOTELS:
Occupancy 65.5% 62.8%
Average Room Rate $ 101.29 $ 101.42
RevPAR (Room Revenue per available room) $ 66.33 $ 63.69
APR. 2, JAN. 2, JAN. 3,
2004 2004 2003
-------- -------- --------
SELECTED BALANCE SHEET DATA
Current Assets $ 75,695 $ 54,022 $ 52,020
Total Assets $835,459 $822,183 $859,972
Current Liabilities Excluding Debt $ 51,808 $ 41,043 $ 40,789
Current Portion of Long-Term Debt $ 7,338 $ 7,423 $ 13,683
Total Long-Term Debt Including Current Portion $778,940 $781,072 $806,342
Total Cash and Equivalents, Restricted Cash and
Marketable Securities $ 82,066 $ 61,222 $ 50,368
Net Debt $696,874 $719,850 $755,974