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 PER SHARE OF $1.28
(SPRINGFIELD, MO., May 11, 2005) ---- John Q. Hammons Hotels, Inc. (AMEX: JQH)
today reported results for the 2005 first quarter.
FIRST QUARTER RESULTS
Total revenues from continuing operations for the three months ended April 1,
2005 were $111.4 million, an increase of 1.9% compared to the three months ended
April 2, 2004. We produced EBITDA from continuing operations for the 2005
quarter of $32.1 million, down slightly compared to $32.3 million in the 2004
quarter. (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 earnings per share for the three months ended April 1, 2005 were $1.28,
compared to $0.85 for the three months ended April 2, 2004. Diluted earnings per
share for the 2005 quarter were $1.03, compared to $0.74 for the 2004 quarter.
Discontinued operations relating to the sale of the Holiday Inn Emeryville,
California had a positive effect on basic and diluted earnings per share of
$0.50 and $0.40, respectively, for the 2005 quarter, virtually all of which is
attributable to the gain on sale of this hotel (a gain on sale of $11.2 million,
of which $2.8 million is allocable to us, net of minority interest).
Discontinued operations had a positive effect of $0.01 in the 2004 quarter.
Net income for the 2005 first quarter was $7.0 million, compared to $4.3 million
for the 2004 quarter. Income from continuing operations for the 2005 quarter was
$4.2 million, compared to $4.3 million in the 2004 quarter. The 2005 quarter's
income from continuing operations was positively impacted by $3.1 million of the
limited partners' earnings we recaptured in the quarter. This was due to the
limited partners' losses we absorbed in previous quarters, as a result of the
inability of their net contribution to fall below zero. The 2004 quarter was
positively impacted by $3.3 million, for the same reason mentioned above.
The following represents a reconciliation of the income from continuing
operations, as reported, to income from continuing operations, as adjusted (in
thousands):
4
<Table>
<Caption>
THREE MONTHS ENDED
---------------------------------
APRIL 1, 2005 APRIL 2, 2004
------------- -------------
Income from continuing operations, as reported ................................... $ 4,235 $ 4,270
Subtractions:
Reallocation of minority interest earnings .................................... (3,140) (3,262)
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Income from continuing operations, as adjusted ................................... $ 1,095 $ 1,008
======= =======
</Table>
Revenue Per Available Room (RevPAR) from continuing operations was $69.41 for
the 2005 quarter, up 2.3% from the prior year's level of $67.84. Occupancy from
continuing operations for the 2005 quarter was 64.5%, down from 67.1% in the
prior year, while our Average Daily Rate (ADR) from continuing operations was up
6.5% to $107.65.
FINANCING AND INVESTING ACTIVITIES
Since the beginning of 2004, we have reduced total debt by over $35.4 million,
including scheduled principal amortization. We utilized the proceeds from the
sale of our disposition properties to retire a 9 1/2% mortgage on the World Golf
Village Renaissance Resort property. Our current portion of long-term debt ($7.2
million) is attributable to scheduled principal amortization on various
individual hotel mortgages.
OPERATIONS OUTLOOK
We expect the industry to continue its recovery during 2005, generating RevPAR
and EBITDA above our 2004 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, Missouri and Hampton, Virginia. Mr. Hammons
opened properties in Springfield, Missouri in March and Frisco, Texas and
Albuquerque, New Mexico in April.
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 17 additional hotels located in nine states, containing 3,873
guest rooms or suites. The majority of these 61 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.
5
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:
o General economic conditions, including the speed and strength of the
economic recovery;
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;
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 are uncertainties and, along with the risk factors
discussed in our Annual report on Form 10-K, 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 - -
6
JOHN Q. HAMMONS HOTELS, INC.
AND COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(000's omitted, except share data)
(unaudited)
<Table>
<Caption>
THREE MONTHS ENDED
------------------------------
APRIL 1, 2005 APRIL 2, 2004
------------- -------------
REVENUES:
Rooms ........................................................ $ 68,550 $ 67,023
Food and beverage ............................................ 29,200 28,660
Meeting room rental, related party management fee and other .. 13,683 13,603
----------- -----------
Total revenues ........................................... 111,433 109,286
----------- -----------
OPERATING EXPENSES:
Direct operating costs and expenses:
Rooms .................................................... 16,832 16,394
Food and beverage ........................................ 21,577 20,905
Other .................................................... 440 586
General, administrative, sales and management service expenses 35,691 34,610
Repairs and maintenance ...................................... 4,785 4,475
Depreciation and amortization ................................ 11,447 11,489
----------- -----------
Total operating expenses ................................. 90,772 88,459
----------- -----------
INCOME FROM OPERATIONS .......................................... 20,661 20,827
OTHER EXPENSE:
Interest expense and amortization of deferred financing fees,
net of $362 and $117 of interest income in
2005 and 2004, respectively .............................. 15,939 16,527
Extinguishment of debt costs ................................. 234 --
----------- -----------
INCOME FROM CONTINUING OPERATIONS BEFORE
MINORITY INTEREST AND PROVISION FOR
INCOME TAXES ................................................. 4,488 4,300
Minority interest in income of partnership ................... (220) --
----------- -----------
INCOME FROM CONTINUING OPERATIONS BEFORE
PROVISION FOR INCOME TAXES ................................... 4,268 4,300
Provision for income taxes ................................... (33) (30)
----------- -----------
INCOME FROM CONTINUING OPERATIONS ................................ 4,235 4,270
Income from discontinued operations, net of $8,113 of minority
interest in 2005 and no minority interest in 2004 ........ 2,721 79
----------- -----------
NET INCOME ALLOCABLE TO THE COMPANY .............................. $ 6,956 $ 4,349
=========== ===========
BASIC EARNINGS PER SHARE:
Continuing operations ........................................ $ 0.78 $ 0.84
Discontinued operations ...................................... 0.50 0.01
----------- -----------
Net earnings allocable to Company ........................ $ 1.28 $ 0.85
=========== ===========
BASIC WEIGHTED AVERAGE SHARES OUTSTANDING ....................... 5,432,871 5,111,270
=========== ===========
DILUTED EARNINGS PER SHARE:
Continuing operations ........................................ $ 0.63 $ 0.73
Discontinued operations ...................................... 0.40 0.01
----------- -----------
Net earnings allocable to Company ........................ $ 1.03 $ 0.74
=========== ===========
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING ..................... 6,770,132 5,856,746
=========== ===========
</Table>
JOHN Q. HAMMONS HOTELS, INC.
AND COMPANIES
(AMOUNTS IN THOUSANDS EXCEPT EARNINGS PER SHARE AND OPERATING DATA)
<Table>
<Caption>
THREE MONTHS ENDED
------------------------------
APRIL 1, 2005 APRIL 2, 2004
------------- -------------
RECONCILIATION OF INCOME FROM CONTINUING OPERATIONS TO EBITDA FROM CONTINUING
OPERATIONS:
Income from continuing operations....................................................... $ 4,235 $ 4,270
Provision for income taxes.............................................................. 33 30
Minority interest in loss of partnership................................................ 220 0
Extinguishment of debt costs............................................................ 234 0
Interest expense and amortization of deferred financing fees, net of interest income.... 15,939 16,527
Depreciation and amortization........................................................... 11,447 11,489
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EBITDA from continuing operations (a)................................................... $32,108 $32,316
======= =======
EBITDA MARGIN (% OF TOTAL REVENUES)..................................................... 28.8% 29.6%
(a) EBITDA from continuing operations is defined as income from continuing
operations before interest expense, net, income tax expense, depreciation and
amortization, minority interest and extinguishment of debt costs. 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 1, 2005 APRIL 2, 2004
------------- -------------
TOTAL OWNED HOTELS:
Occupancy from continuing operations............................................... 64.5% 67.1%
Average Room Rate from continuing operations....................................... $107.65 $101.12
RevPAR (Room Revenue per available room) from continuing operations................ $69.41 $67.84
APR. 1, DEC. 31, JAN. 2,
2005 2004 2004
--------------------------------------------
SELECTED BALANCE SHEET DATA
Current Assets...................................................................... $90,083 $91,108 $54,022
Total Assets........................................................................ $818,451 $816,499 $822,183
Current Liabilities Excluding Debt.................................................. $59,578 $48,836 $41,043
Current Portion of Long-Term Debt................................................... $7,212 $25,719 $7,423
Total Long-Term Debt Including Current Portion...................................... $745,633 $765,204 $781,072
Total Cash and Equivalents, Restricted Cash and
Marketable Securities........................................................... $96,143 $93,958 $61,222
Net Debt (Total Long-Term Debt less Total Cash and
Equivalents, Restricted Cash and Marketable Securities)......................... $649,490 $671,246 $719,850