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EXHIBIT 99.1
[LODGIAN, LOGO]
LODGIAN, INC.
3445 PEACHTREE ROAD
ATLANTA, GA 30326
NYSElgian.com
: LOD
AT LODGIAN, INC. AT THE FINANCIAL RELATIONS BOARD/BSMG
Robert Cole Thomas Eppich Leslie Hunziker Georganne Palffy
Chief Executive Officer Chief Financial Officer General Information Analysts/Investors
rcole@lodgian.com teppich@lodgian.com lhunzike@frb.bsmg.com gpalffy@frb.bsmg.com
(404) 365-3800 (404) 365-4469 (312) 640-6760 (312) 640-6768
FOR IMMEDIATE RELEASE
THURSDAY, SEPTEMBER 14, 2000
LODGIAN RELEASES 1Q RESULTS, PROVIDES UPDATE FOR BALANCE OF 2000;
CLOSES SUNSTONE TRANSACTION
ATLANTA--SEPTEMBER 14, 2000--Lodgian, Inc., (NYSE: LOD), today released results
for its first quarter ended March 31, 2000. It is the Company's intention to
release second quarter 2000 financial statements on October 2, 2000.
SUMMARY OF FIRST QUARTER OPERATING RESULTS
Attached are the Company's unaudited consolidated balance sheets at March 31,
2000 and December 31, 1999, consolidated statement of operations and
consolidated statement of cash flows for the three months ended March 31, 2000.
Management believes these financial statements have been prepared in conformity
with generally accepted accounting principles in the United States and will not
materially change when the Company's auditors complete their review of the
financial statements as required by SEC regulations.
The Company's first quarter performance reflects Lodgian's continued investment
in improving the quality of its hotel assets through an aggressive program of
renovation and repositioning. For the first three months of 2000, Lodgian
incurred approximately $31.4 million in capital expenditures on its
repositioning and renovation strategy. Approximately 55,000 total room nights
were out of inventory during this period as upgrades and renovations were
implemented. These capital expenditures, which were primarily funded by asset
sales and the Company's revolving credit facility, equated to approximately 23%
of the Company's first quarter total revenue.
Despite the significant impact from renovations, same-unit RevPAR was $44.96,
an increase of 2.9% compared to first quarter 1999. Total revenue for the first
quarter 2000 was $138.4 million, an increase of 1.9% compared to 1999, despite
a decrease of five hotels in the owned portfolio. After adjusting for nearly
$2.5 million of unusual expenses primarily related to nonrecurring professional
fees and contracted labor, first quarter EBITDA was $28.4 million. In addition,
Lodgian's working capital or current assets to current liabilities improved by
approximately $8 million in the first quarter of 2000 compared to year-end
1999. The Company incurred a $.43 per share loss for the first quarter 2000.
Included in this loss were the unusual expenses mentioned above, approximately
$1 million in losses from asset dispositions as well as substantially higher
interest and depreciation expenses compared to the first quarter 1999, even
with fewer hotels in 2000. The Company's first quarter 2000 combined interest
(including interest on the convertible redeemable preferred equity
securities---CRESTS) and depreciation expenses were approximately $43 million
compared to period ending March 31, 1999 when Lodgian reported approximately
$36 million.
SUMMARY OF SECOND QUARTER REVENUES
Total revenues for the second quarter 2000 were approximately $161 million
compared to $159.9 million in the second quarter 1999. Year-to-date through
June 2000, Lodgian's total revenue was $299.5 million compared to $295.7
million in
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1999. Again, despite experiencing significant displacement as a result of
on-going renovations, same-unit RevPAR increased 2.5% to $53.36 in the second
quarter 2000 compared to second quarter 1999.
"As we anticipated, our investment in enhancing the quality of our portfolio
and our strategy to de-lever our balance sheet through asset sales impacted our
overall first half 2000 operating and financial performance compared to 1999.
However, we are optimistic about the long-term impact and positive affect on
the overall value of the portfolio as a result of our efforts, as we are
already experiencing the benefits of these actions in the second half of 2000,"
said Robert S. Cole, chief executive officer.
FAVORABLE OPERATING FORECAST FOR BALANCE OF 2000
The Company's revenue trends continue to improve by the month. August's 6.8%
increase in same-unit RevPAR marked the third consecutive month where Lodgian's
RevPAR grew faster than the previous month. This follows July's 4.5%
improvement in same-unit RevPAR compared to 1999. With the bulk of the
Company's planned capital expenditures for 2000 now completed, and in view of
the most recent actual results, management is still comfortable projecting that
second half 2000 RevPAR will be up at least 5% over 1999 levels and total
recurring EBITDA for the year 2000 will be up slightly over the $147 million
Lodgian reported in 1999 - even after considering the negative impact to EBITDA
from all of the asset sales completed year-to-date (for example, the Sunstone
Hotel Investors transaction noted below is estimated to have a negative impact
of approximately $5.5 million on 2000 EBITDA). In addition, management
estimates that approximately 140,000 available room nights were lost during the
first six months of 2000 due to renovations, thereby negatively impacting first
half RevPAR results. However, these renovations are now paving the way for
higher internal growth in the last half of 2000 as well as 2001 as evidenced by
the actual results to date during the third quarter 2000.
SUNSTONE TRANSACTION CLOSES
On August 31st, Lodgian successfully completed the previously announced sale of
10 of the Company's hotels, located in Alaska, California, Idaho, New Mexico
and Oregon to Sunstone Hotel Investors, LLC for $132 million in cash.
Approximately $118 million of the net proceeds were used to pay down debt.
"As stated previously, this transaction is consistent with Lodgian's strategy
of reducing debt by selling under-performing assets or assets that are in
markets where new supply has impacted the business trends," said Cole. "The
pricing of this deal reflects an attractive cash flow yield of eight times,
which is a meaningful premium to the Company's 2000 EBITDA multiple implied by
our current stock price."
In addition, the Company closed on the sale of the Holiday Inn Express in Ft.
Pierce, Florida on September 7th. The net proceeds from this transaction were
approximately $2.4 million and went directly to pay down debt. These
transactions bring the number of hotels sold since the first quarter of 1999 to
26. The 16 hotel sales the Company has completed in 2000 have generated
approximately $163 million in gross proceeds.
In terms of overall asset sales, the Company remains confident that it can meet
the previously stated target of $300 million in debt reduction via asset sales
by the end of 2001.
ABOUT LODGIAN
Lodgian, Inc. owns or manages a portfolio of 117 hotels with approximately
21,700 rooms in 32 states and Canada. The hotels are primarily full service,
providing food and beverage service, as well as meeting facilities.
Substantially all of Lodgian's hotels are affiliated with nationally recognized
hospitality brands such as Holiday Inn, Crowne Plaza, Marriott, Sheraton, and
Hilton.
Lodgian's common shares are listed on the New York Stock Exchange under the
symbol "LOD". Lodgian is a component of both the Russell 2000(R) Index,
representing small cap stocks, and the Russell 3000(R) Index, representing the
broader market.
FORWARD-LOOKING STATEMENTS
Note: Statements in this press release that are not strictly historical are
"forward-looking" statements that are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks, which may cause the
Company's actual results in the future to differ materially from expected
results. These risks include, among others, competition within the lodging and
contract service industries; the relationship between supply and demand for
hotel rooms; the effects of economic conditions; issues associated with the
ongoing integration of the former Servico, Inc. and Impac Hotel Group, LLC; the
acquisition and
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renovation of existing hotels and the development of new hotels; operating
risks; the cyclical nature of the lodging industry; risks associated with the
dependence on franchisers of the Company's lodging properties; and the
availability of capital to finance planned growth, as described in the
Company's filings with the Securities and Exchange Commission.
FOR MORE INFORMATION ON LODGIAN TOLL-FREE VIA FAX,
DIAL 1-800-PRO-INFO (1-800-776-4636), FOLLOW THE VOICE MENU PROMPTS AND
ENTER THE COMPANY TICKER LOD (OR 563)
OR VISIT THE LODGIAN PAGE ON THE FRB WEB SITE AT WWW.FRBINC.COM
VISIT LODGIAN AT WWW.LODGIAN.COM