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
2004 YEAR-END FINANCIAL RESULTS
(SPRINGFIELD, MO., February 15, 2005) ---- John Q. Hammons Hotels, Inc. (AMEX:
JQH) today reported results for the fourth quarter and year end 2004.
YEAR-END RESULTS
Total revenues from continuing operations for the twelve months ended December
31, 2004 were $430.8 million, an increase of 4.2% compared to the twelve months
ended January 2, 2004. We produced EBITDA from continuing operations for 2004 of
$119.7 million, up 12.7% compared to $106.2 million in 2003. 2003 included an
asset impairment charge, discussed below, which had a negative effect on EBITDA
from continuing operations of $9.7 million. (See attached table for
reconciliation of income from continuing operations to EBITDA from continuing
operations and for our definition of EBITDA from continuing operations).
Basic and diluted loss per share for the twelve months ended December 31, 2004
was $0.12, compared to basic and diluted loss per share of $1.39 for the twelve
months ended January 2, 2004. Discontinued operations relating to the sale of
the Holiday Inn Bakersfield, California, Holiday Inn Denver Northglenn, Colorado
and Holiday Inn Bay Bridge, Emeryville, California had a negative effect on
basic and diluted loss per share of $1.00, for 2004, compared to $0.20 in 2003.
Net loss for 2004 was $0.6 million, compared to $7.1 million for 2003. Income
from continuing operations for 2004 was $4.5 million, up $10.5 million, compared
to a loss in 2003. The 2003 results from continuing operations included two
items, which, after giving effect to minority interest, had an unfavorable net
impact of approximately $5.4 million on the Company's income from continuing
operations. One of the items was the recognition of a $2.3 million asset
impairment, net of minority interest, due to the decline of the property's fair
value. The other item includes $3.1 million for the limited partners' losses we
must absorb, due to the inability of the limited partners' net contribution to
fall below zero. 2004 includes $3.6 million for the recapture of the limited
partners' losses we absorbed in previous quarters before the impact of
discontinued operations. An additional $4.2 million must be recaptured before
the limited partners can be allocated future earnings.
Revenue Per Available Room (RevPAR) from continuing operations was $67.51 for
2004, up 4.0% from the prior year's level of $64.92. Occupancy from continuing
operations for 2004 was
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65.7%, up slightly from prior year, while our Average Daily Rate (ADR) from
continuing operations was up 2.2% to $102.80.
The following represents a reconciliation of the income from continuing
operations, as reported, to income from continuing operations, as adjusted (in
thousands):
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, JANUARY 2, DECEMBER 31, JANUARY 2,
2004 2004 2004 2004
------------ ---------- ------------ ----------
Income (loss) from continuing operations, as reported $ (3,606) $(6,711) $ 4,505 $(6,034)
Additions (subtractions):
Asset impairment, net $7,366 of expected minority interest - 2,334 2,334
Reallocation of minority interest earnings 2,711 3,059 (3,552) 3,059
--------- ------- ------- -------
Sub total 2,711 5,393 (3,552) 5,393
--------- ------- ------- -------
Income (loss) from continuing operations, as adjusted $ (895) $(1,318) $ 953 $ (641)
========= ======= ======= =======
FOURTH QUARTER RESULTS
Total revenues from continuing operations for the three months ended December
31, 2004 were $104.7 million, an increase of 5.5% compared to the three months
ended January 2, 2004. We produced EBITDA from continuing operations for the
2004 quarter of $25.9 million, up 68.1% compared to $15.4 million in the 2003
quarter. EBITDA from continuing operations for the 2003 quarter includes $9.7
million related to asset impairment. (See attached table for reconciliation of
income from continuing operations to EBITDA from continuing operations and for
our definition of EBITDA from continuing operations).
Basic and diluted loss per share for the three months ended December 31, 2004
was $0.77, compared to basic and diluted loss per share of $1.47 for the three
months ended January 2, 2004. Discontinued operations relating to the sale of
the Holiday Inn Bakersfield, California, Holiday Inn Denver Northglenn, Colorado
and Holiday Inn Bay Bridge, Emeryville, California had a negative effect on
basic and diluted loss per share of $0.08 for the 2004 quarter, compared to
$0.16 in the 2003 quarter.
Net loss for the 2004 fourth quarter was $4.0 million, compared to $7.5 million
for the 2003 quarter. Loss from continuing operations for the 2004 quarter was
$3.6 million, compared to $6.7 million in the 2003 quarter. The 2004 quarter's
income from continuing operations was negatively impacted by $2.7 million of the
limited partners' losses we absorbed, due to the inability of the limited
partners' net contribution to fall below zero. The 2003 quarter was negatively
impacted by $5.4 million, for the same reason mentioned above.
Revenue Per Available Room (RevPAR) from continuing operations was $61.88 for
the 2004 quarter, up 5.4% from the prior year's level of $58.72. Occupancy from
continuing operations for the 2004 quarter was 60.3%, up slightly from prior
year, while our Average Daily Rate (ADR) from continuing operations was up 3.9%
to $102.67.
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FINANCING AND INVESTING ACTIVITIES
Since the beginning of 2004, we have reduced total debt by over $15.9 million,
including scheduled principal amortization. We utilized the proceeds from the
sale of Holiday Inn Bakersfield, California to pay down debt, in addition to
regularly scheduled principal payments. Our current portion of long-term debt
($8.4 million) is attributable to scheduled principal amortization on various
individual hotel mortgages.
OPERATIONS OUTLOOK
As expected, the industry has continued to recover throughout 2004, generating
RevPAR and EBITDA above our 2003 levels. This recovery should continue to
enhance our cash generation and produce favorable results as we focus on
operational efficiencies into 2005.
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; Frisco, Texas;
Albuquerque, New Mexico; and Hampton, Virginia. Mr. Hammons opened properties in
Junction City, Kansas in September and in North Charleston, South Carolina in
October.
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 44 hotels located in 20 states, containing 10,853 guest rooms or
suites, and manage 14 additional hotels located in nine states, containing 3,158
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 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," 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:
- General economic conditions, including the speed and strength of the
economic recovery;
- The impact of any serious communicable diseases on travel;
- Competition;
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- Changes in operating costs, particularly energy and labor costs;
- Unexpected events, such as the September 11, 2001 terrorist attacks, or
outbreaks of war;
- Risks of hotel operations, such as hotel room supply exceeding demand,
increased energy and other travel costs and general industry downturns;
- Seasonality of the hotel business;
- Cyclical over-building in the hotel and leisure industry;
- Requirements of franchise agreements, including the right of some
franchisors to immediately terminate their respective agreements if we
breach certain provisions; and
- 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)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DEC. 31, JAN. 2, DEC. 31, JAN. 2,
REVENUES: 2004 2004 2004 2004
----------- ----------- ----------- -----------
Rooms
Food and beverage $ 61,128 $ 58,019 $ 266,800 $ 256,564
Meeting room rental, related party management fee and other 30,800 29,275 112,389 108,315
Total revenues 12,773 11,913 51,591 48,596
----------- ----------- ----------- -----------
104,701 99,207 430,780 413,475
OPERATING EXPENSES:
Direct operating costs and expenses:
Rooms 15,818 15,954 66,712 64,096
Food and beverage 21,827 21,779 84,178 82,524
Other 455 599 2,145 2,584
General, administrative, sales and management service expenses 36,132 31,337 139,902 130,980
Repairs and maintenance 4,582 4,440 18,193 17,430
Asset impairment -- 9,700 -- 9,700
Depreciation and amortization 13,277 13,351 49,519 49,783
----------- ----------- ----------- -----------
Total operating expenses 92,091 97,160 360,649 357,097
----------- ----------- ----------- -----------
INCOME FROM OPERATIONS 12,610 2,047 70,131 56,378
OTHER (INCOME) EXPENSE:
Other income -- -- (193) (175)
Interest income (341) (124) (788) (546)
Interest expense and amortization of deferred financing fees 16,380 16,770 66,286 68,068
Extinguishment of debt costs 144 456 144 774
----------- ----------- ----------- -----------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
MINORITY INTEREST AND PROVISION FOR
INCOME TAXES (3,573) (15,055) 4,682 (11,743)
Minority interest in losses of partnership -- 8,374 -- 5,859
----------- ----------- ----------- -----------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
PROVISION FOR INCOME TAXES (3,573) (6,681) 4,682 (5,884)
Provision for income taxes (33) (30) (177) (150)
----------- ----------- ----------- -----------
INCOME (LOSS) FROM CONTINUING OPERATIONS (3,606) (6,711) 4,505 (6,034)
Discontinued operations (429) (799) (5,150) (1,027)
----------- ----------- ----------- -----------
NET LOSS ALLOCABLE TO THE COMPANY $ (4,035) $ (7,510) $ (645) $ (7,061)
=========== =========== =========== ===========
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE:
Income from continuing operations $ (0.69) $ (1.32) $ 0.87 $ (1.18)
Discontinued operations (0.08) (0.16) (1.00) (0.20)
----------- ----------- ----------- -----------
Net loss allocable to the Company $ (0.77) $ (1.47) $ (0.12) $ (1.39)
=========== =========== =========== ===========
BASIC AND DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING 5,245,334 5,102,979 5,173,705 5,092,829
=========== =========== =========== ===========
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JOHN Q. HAMMONS HOTELS, INC.
AND COMPANIES
(Amounts in thousands except earnings per share and operating data)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DEC. 31, JAN. 2, DEC. 31, JAN. 2,
2004 2004 2004 2004
--------- --------- --------- ---------
Reconciliation of Income (loss) from continuing operations to EBITDA from
continuing operations:
Income (loss) from continuing operations $ (3,606) $ (6,711) $ 4,505 $ (6,034)
Provision for income taxes 33 30 177 150
Minority interest in loss of partnership 0 (8,374) 0 (5,859)
Interest income (341) (124) (788) (546)
Interest expense and amortization of deferred financing fees 16,380 16,770 66,286 68,068
Other income 0 0 (193) (175)
Depreciation and amortization 13,277 13,351 49,519 49,783
Extinguishment of debt costs 144 456 144 774
--------- --------- --------- ---------
EBITDA from continuing operations (a) (b) $ 25,887 $ 15,398 $ 119,650 $ 106,161
========= ========= ========= =========
EBITDA MARGIN (% OF TOTAL REVENUE) 24.7% 15.5% 27.8% 25.7%
(a) EBITDA from continuing operations is defined as income from continuing
operations 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.
(b) EBITDA from continuing operations for the 2003 three and twelve months
include an Asset Impairment charge of $9.7 million.
THREE MONTHS ENDED TWELVE MONTHS ENDED
DEC. 31, JAN. 2, DEC. 31, JAN. 2,
2004 2004 2004 2004
----------- --------- ---------- ----------
TOTAL OWNED HOTELS:
Occupancy from continuing operations 60.3% 59.4% 65.7% 64.6%
Average Room Rate from continuing operations $ 102.67 $ 98.82 $ 102.80 $ 100.55
RevPAR (Room Revenue per available room) from continuing operations $ 61.88 $ 58.72 $ 67.51 $ 64.92
DEC. 31, JAN. 2, JAN. 3,
2004 2004 2003
--------- ---------- --------
SELECTED BALANCE SHEET DATA
Current Assets $ 81,923 $ 54,022 $ 52,020
Total Assets $816,499 $822,183 $859,972
Current Liabilities Excluding Debt $ 48,836 $ 41,043 $ 40,789
Current Portion of Long-Term Debt $ 8,378 $ 7,423 $ 13,683
Total Long-Term Debt Including Current Portion $765,204 $781,072 $806,342
Total Cash and Equivalents, Restricted Cash and
Marketable Securities $ 93,958 $ 61,222 $ 50,368
Net Debt (Total Long-Term Debt less Total Cash and
Equivalents, Restricted Cash and Marketable Securities) $671,246 $719,850 $755,974
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