EXHIBIT 99.1
[LODGIAN LOGO]
For Immediate Release
Contact:
Debi Ethridge Jerry Daly or Carol McCune
Vice President, Finance & Investor Daly Gray Public Relations
Relations (Media)
dethridge@lodgian.com jerry@dalygray.com
(404) 365-2719 (703) 435-6293
LODGIAN REPORTS 2004 FIRST QUARTER RESULTS
ATLANTA, Ga., April 26, 2004 -- Lodgian, Inc. (AMEX: LGN and LGN.pr),
one of the nation's largest independent owners and operators of full-service
hotels, reported results for the first quarter ended March 31, 2004.
First quarter 2004 room revenues from continuing operations rose 6.8
percent to $57.6 million and total revenues from continuing operations increased
4.7 percent to $76.8 million.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
for continuing operations for the 2004 first quarter, reconciled to net (loss)
income in the attached schedules, were $12.9 million, including $0.2 million of
bankruptcy-related charges, up from $7.9 million for the same period last year,
including $3.4 million of bankruptcy-related charges.
Loss from continuing operations was $6.4 million, including $4.3
million of preferred stock dividends reported as interest expense, compared to a
$5.8 million loss for the first quarter of 2003. If the 2003 first quarter loss
from continuing operations was adjusted for the $3.8 million of preferred stock
dividends, the 2003 first quarter adjusted net loss from continuing operations
would have been $9.6 million. Loss from discontinued operations was $0.7
million,
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compared to a $3.2 million loss in the first quarter of 2003. Lodgian's net loss
attributable to common stock for the first quarter of 2004 was $7.1 million, or
$(1.01) per share. This compares to a net loss attributable to common stock of
$12.9 million, or $(1.84) for the first quarter of 2003.
"We made excellent progress in the first quarter, with March showing
the greatest improvement," said Thomas Parrington, president and chief executive
officer. "We continue to see strength in leisure travel and are finally seeing a
return of the business traveler. The economy continues to build momentum, which
is having a positive impact on hotel results. Increases in occupancy should lead
to improvements in room rates if corporate travel budgets continue to increase
and leisure travel remains strong."
OPERATING RESULTS
Revenue per available room (RevPAR) for the 77 hotels in continuing
operations rose 5.6 percent in the first quarter, based on a 4.3 percent
improvement in occupancy and a 1.3 percent increase in average daily rate (ADR).
"We are seeing steady improvement across our portfolio, especially
those hotels where we have completed our refurbishment and upgrade program.
During the first quarter, we spent an additional $5 million on renovations and,
subject to completion of our offering of common stock, expect to spend an
additional $35 million this year, substantially completing all of our deferred
renovations."
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The company continued to focus on cost containment in the first
quarter. Direct hotel operating costs as a percentage of total revenues were
38.4 percent for the first quarter of 2004, an improvement compared to 39.6
percent for the first quarter of 2003.
DISPOSITION PROGRAM
Parrington noted that the company made significant progress in its
announced plan to sell non-strategic assets. Lodgian sold five hotels in the
first quarter and two additional hotels to date in the second quarter. "Since we
announced plans to sell 19 hotels, an office building and three land parcels
last October, we have completed the sale of eight hotels and the office
building. We have contracts on an additional seven hotels and the three land
parcels. We remain comfortable with our goal of completing the disposition
program by year end."
CAPITAL STRUCTURE
Parrington noted that the company has used the majority of the proceeds
from asset sales to reduce debt. "Since we began our divestment program, we have
reduced debt by $21.8 million, which has further strengthened our balance
sheet." The company currently is in negotiations to finalize a commitment to
refinance approximately $370 million of existing mortgage debt.
ANNUAL SHAREHOLDER MEETING
At the company's annual meeting held on April 8, 2004, stockholders:
- Elected eight directors to serve until the 2005 annual
meeting.
- Approved the amended and restated Lodgian, Inc. 2002 Stock
Incentive Plan.
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- Approved the proposal to permit the board of directors to
implement a reverse stock split.
- Approved the Second Restated Certificate of incorporation
whereby the company will, among other things, (a) increase its
authorized shares, (b) provide stockholders the right to
remove any or all of the members of the board of directors
with or without cause, (c) elect out of the Delaware law
restricting business combinations.
- Ratified the appointment of Deloitte & Touche LLP as the
company's independent auditors.
OUTLOOK
"We are encouraged by the rebound in the hotel industry, the
strengthening economy and improvements in our operations," Parrington said. "We
are focused on improving the quality of our hotels and our guests' experience
while increasing our occupancies and average room rates."
NON-GAAP FINANCIAL MEASURES
The non-GAAP financial measures included in this press release are
reconciled to the comparable GAAP measures in the schedules attached to this
press release.
ABOUT LODGIAN
Lodgian is one of the largest independent owners and operators of
full-service hotels in the United States. The company currently manages a
portfolio of 89 hotels with 16,806 rooms located in 30 states and Canada. Of the
company's 89 hotel portfolio, 75 are under the InterContinental Hotels Group
(Crowne Plaza, Holiday Inn, Holiday Inn Select and Holiday Inn Express) and
Marriott brands (Courtyard by Marriott, Fairfield Inn and Residence Inns), and
ten
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are affiliated with six other nationally recognized hospitality brands. Four
hotels are independent, unbranded properties. For more information about
Lodgian, visit the company's Website: www.lodgian.com.
This press release includes forward-looking statements related to
Lodgian's operations that are based on management's current expectations,
estimates and projections. These statements are not guarantees of future
performance and actual results could differ materially. The words "may,"
"should," "expect," "believe," "anticipate," "project," "estimate," "plan," and
similar expressions are intended to identify forward-looking statements. Certain
factors are not within the company's control and readers are cautioned not to
put undue reliance on forward-looking statements. These statements involve risks
and uncertainties including, but not limited to, the company's ability to
generate sufficient working capital from operations and other risks detailed
from time- to-time in the company's SEC reports. The company undertakes no
obligations to update events to reflect changed assumptions, the occurrence of
unanticipated events or changes to future results over time.
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LODGIAN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 2004 DECEMBER 31, 2003
-------------- -----------------
(UNAUDITED IN THOUSANDS, EXCEPT SHARE DATA)
ASSETS
Current assets:
Cash and cash equivalents $ 12,662 $ 10,897
Cash, restricted 7,447 7,084
Accounts receivable (net of allowances:
2004 - $730; 2003 - $689) 11,483 8,169
Inventories 5,666 5,609
Prepaid expenses and other current assets 16,670 17,068
Assets held for sale 55,788 68,567
--------- ---------
Total current assets 109,716 117,394
Property and equipment, net 561,461 563,818
Deposits for capital expenditures 13,577 15,782
Other assets, net 11,039 12,180
--------- ---------
$ 695,793 $ 709,174
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,456 $ 7,131
Other accrued liabilities 32,401 31,432
Advance deposits 3,133 1,882
Current portion of long-term debt 18,971 16,563
Liabilities related to assets held for sale 47,340 57,948
--------- ---------
Total current liabilities 109,301 114,956
Long-term debt:
12.25% Cumulative preferred shares subject to
mandatory redemption 146,462 142,177
Long-term debt - other 404,044 409,115
--------- ---------
Total long-term debt 550,506 551,292
--------- ---------
Total liabilities 659,807 666,248
Minority interests 2,467 2,320
Commitments and contingencies
Stockholders' equity:
Common stock, $.01 par value, 30,000,000 shares
authorized; 7,001,501 and 7,000,774 issued and
outstanding at March 31, 2004
and December 31, 2003, respectively 70 70
Additional paid-in capital 89,831 89,827
Unearned stock compensation (458) (508)
Accumulated deficit (57,193) (50,107)
Accumulated other comprehensive income 1,269 1,324
--------- ---------
Total stockholders' equity 33,519 40,606
--------- ---------
$ 695,793 $ 709,174
========= =========
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LODGIAN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED
---------------------------------
MARCH 31, 2004 MARCH 31, 2003
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(UNAUDITED IN THOUSANDS, EXCEPT
PER SHARE DATA)
Revenues:
Rooms $ 57,563 $ 53,914
Food and beverage 16,488 16,607
Other 2,754 2,858
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Total revenues 76,805 73,379
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Operating expenses:
Direct hotel operating costs:
Rooms 16,018 15,363
Food and beverage 11,534 11,734
Other 1,972 1,938
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Total direct hotel operating costs 29,524 29,035
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47,281 44,344
Other operating expenses:
Hotel operating costs - other 24,072 22,475
Property and other taxes, insurance and leases 5,751 6,661
Corporate and other 4,413 5,970
Depreciation and amortization 6,805 7,422
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Total other operating expenses 41,041 42,528
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6,240 1,816
Other income (expenses):
Interest income and other 43 83
Interest expense:
Preferred stock dividend (4,285) --
Other interest expense (contractual interest: $8.2 million and
$6.8 million for the three months ended March 31, 2004 and 2003,
respectively) (8,159) (6,279)
-------- --------
Loss before income taxes, reorganization items and minority interests (6,161) (4,380)
Reorganization items -- (1,237)
-------- --------
Loss before income taxes and minority interest (6,161) (5,617)
Minority interests (147) (148)
-------- --------
Loss before income taxes - continuing operations (6,308) (5,765)
Provision for income taxes - continuing operations (76) (76)
-------- --------
Loss - continuing operations (6,384) (5,841)
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Discontinued operations:
Loss from discontinued operations before income taxes (702) (3,243)
Income tax provision -- --
-------- --------
Loss from discontinued operations (702) (3,243)
-------- --------
Net loss (7,086) (9,084)
Preferred stock dividend -- (3,776)
-------- --------
Net loss attributable to common stock $ (7,086) $(12,860)
======== ========
Basic and diluted loss per common share:
Net loss attributable to common stock $ (1.01) $ (1.84)
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LODGIAN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED
----------------------------------
MARCH 31, 2004 MARCH 31, 2003
-------------- --------------
(UNAUDITED IN THOUSANDS)
Operating activities:
Net loss $ (7,086) $ (9,084)
Add: loss from discontinued operations 702 3,243
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Loss - continuing operations (6,384) (5,841)
Adjustments to reconcile loss from continuing operations
to net cash provided by operating activities:
Depreciation and amortization 6,805 7,422
Amortization of unearned stock compensation 50 --
Preferred stock dividends 4,285 --
Minority interests 147 148
Write-off and amortization of deferred financing costs 1,457 594
Other 209 184
Changes in operating assets and liabilities:
Accounts receivable, net of allowances (3,314) (2,275)
Inventories (57) 20
Prepaid expenses, other assets and restricted cash 422 10,833
Accounts payable 594 (55)
Other accrued liabilities 2,894 (3,508)
Advance deposits 1,251 1,062
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Net cash provided by operating activities from continuing operations 8,359 8,584
Net cash provided by operating activities from discontinued operations (2,246) (2,269)
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Net cash provided by operating activities 6,113 6,315
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Investing activities:
Capital improvements (5,001) (10,309)
Net proceeds from disposition of discontinued operations 13,983 --
Withdrawals for capital expenditures 2,205 6,176
Other (42) (357)
-------- --------
Net cash used in investing activities 11,145 (4,490)
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Financing activities:
Proceeds from exercise of stock options 4 --
Principal payments on long-term debt (14,936) (2,396)
Payments of deferred financing costs (561) (352)
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Net cash used in financing activities (15,493) (2,748)
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Effect of exchange rate changes on cash -- --
Net increase in cash and cash equivalents 1,765 (923)
Cash and cash equivalents at beginning of period 10,897 10,875
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$ 12,662 $ 9,952
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Supplemental cash flow information:
Cash paid during the period for:
Interest, net of the amounts capitalized shown below $ 7,561 $ 6,432
Interest capitalized 75 216
Income taxes, net of refunds 234 --
Supplemental disclosure of non-cash investing and financing activities:
Net non-cash debt increase (decrease) 44 (15,992)
Issuance of promissory notes as consideration for taxation liabilities 2,369 --
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LODGIAN, INC. AND SUBSIDIARIES
RECONCILIATION OF EBITDA (A NON-GAAP MEASURE) WITH LOSS FROM
CONTINUING OPERATIONS (A GAAP MEASURE)
THREE MONTHS ENDED
---------------------------------
MARCH 31, 2004 MARCH 31, 2003
(UNAUDITED IN THOUSANDS)
CONTINUING OPERATIONS:
Loss - continuing operations $ (6,384) $ (5,841)
Depreciation and amortization 6,805 7,422
Interest income and other (43) (83)
Interest expense 8,159 6,279
Preferred stock dividends 4,285 --
Provision for income taxes - continuing operations 76 76
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EBITDA $ 12,898 $ 7,853
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Loss - continuing operations is after deducting post-emergence Chapter 11
expenses, included in corporate and other on the consolidated statement of
operations, of $0.2 million and $2.2 million for the three months ended March
31, 2004 and 2003, respectively, and is after deducting $1.2 million of
reorganization expenses for the three months ended March 31, 2003.
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