Exhibit 99.1
[CREATIVE HOST LOGO]
CREATIVE HOST SERVICES, INC. ANNOUNCES ITS 9th CONSECUTIVE
QUARTER OF PROFITABILITY FOR THE SECOND QUARTER OF 2003
FOR IMMEDIATE RELEASE
CONTACT:
- -------
Creative Host Services, Inc. Hayden Communications, Inc.
(858) 675-7711 (843) 272-4653
San Diego, CA - August 15, 2003 - Creative Host Services, Inc. (Nasdaq: CHST)
a leading provider of food and beverage concessions in airports throughout
the United States today announced its financial results for the three months
ended June 30, 2003.
Revenues for the second quarter ended June 30, 2003 increased to $9,477,176
versus $8,976,799 for the comparable prior year period. Total operating costs
and expenses for the quarter increased to $8,953,585 from $8,230,592 in the
year ago period. EBITDA (earnings before interest, taxes, depreciation, and
amortization) was $1,090,917 for the second quarter of 2003 compared to
$1,268,446 reported in the year ago period. Net income was $136,219 or $.02
per diluted share, compared to $531,329 and $.06 per share for the comparable
second quarter 2002.
For the six month period ended June 30, 2003, revenues increased to
$17,969,824 versus $16,619,257 for the comparable prior year period. Total
operating costs and expenses for the six months increased to $17,122,952 from
$15,520,393 in the year ago period. EBITDA (earnings before interest, taxes,
depreciation, and amortization) was $1,969,208 for the first half of 2003
compared to $2,129,708 reported in the year ago period. Net income was
$157,466, or $.02 per diluted share, compared to $790,377 and $.10 per share
for the comparable six month period of 2002. The first six months of 2002
included a one-time gain of $80,487 related to the sale of one concession
location.
The Company's balance sheet continued to strengthen as current assets have
increased 18 percent to $3,158,675 on June 30, 2003 versus $2,669,262 on
December 31, 2002. Shareholders' equity also increased to $18,277,934 on June
30, 2003, from $17,749,962 on December 31, 2002.
Revenues for the three and six month periods increased due to the opening of
new concessions locations at Newark, New Jersey, Sanford, Florida and Santa
Barbara, California. Several factors including; SARS, war with Iraq, and
customary expenses associated with opening new locations when combined,
resulted in a decrease in reported net income for the three and six months
ended June 30, 2003. The Company incurred start-up costs such as payroll and
other employee benefits related to the opening of new locations in Sanford,
Florida, Santa Barbara, California, and Boston, Massachusetts. Net interest
expense, which is directly related to financing of the new concession
locations increased to $296,372 from $165,463 for the three months ended June
30, 2003 and increased to $584,406 from $310,959 for the six months ended
June 30, 2003. Non-cash amortization of loan costs related to the Company's
financing agreement with ING increased the reported interest expense during
the quarter as well.
Sayed Ali, President and Chairman of the Board, stated, "While we were
pleased with our continued revenue growth for the quarter and year to date
comparisons, we continue to be very focused on improving the operating
margins and cash flow of our collective operations. In spite of SARS and war
with Iraq, we were able to grow revenue and maintain profitability. As we
expected, the opening of several new locations this year increased operating
costs on several fronts, but we are confident that these ventures will soon
begin to improve our bottom line. Air travel during the second half of the
quarter began to firm up and we are hopeful that the balance of the year will
show continued improvements. Our agreement with ING continues to provide us
the necessary capital to complete additional acquisitions."
"EBITDA" is defined as earnings before income taxes, depreciation,
amortization, amortization of a restricted stock award, interest, and, when
applicable, restructuring costs, impairment of assets, and other income and
expenses. EBITDA should not be considered as an alternative to operating
income, as defined by generally accepted accounting principles, as an
indicator of our operating performance, or to cash flows, as a measure of
liquidity.
About Creative Host Services:
Creative Host Services, Inc./GladCo Enterprises, Inc. are engaged in the
business of acquiring, managing, and operating airport concessions such as
food and beverage, cocktail and lounge, and news and gift retail facilities
at various locations across the United States. The Company's airport venue
allows its concession locations to provide services to a captive audience
within its airports, thereby limiting competition, and providing for more
predictable revenues than many other retail concepts. Creative Host
Services/GladCo operates approximately 100 concession facilities at 29
airports. To simplify accounting, the Company counts each food-court as one
concession. Creative Host Services, Inc. enjoys co-branding relationships
with several national and regional companies such as Carl's Jr., Schlotsky's
Deli, Houlighan's, TCBY Yogurt, Samuel Adams Brew Pubs, Mrs. Fields Cookies,
Pretzelmaker, Nathan's Famous Hot Dogs, Hot Licks Bar & Grill, Yuengling
Brewery, and Creative Croissants. For additional corporate information please
visit the Company's corporate website -- www.creativehostservices.com.
Statements in this news release that are not descriptions of historical facts
are forward-looking statements that are subject to risks and uncertainties.
Words such as "expect," "intends," "believes," "plans," "anticipates,"
"approximately," and "likely," also identify forward-looking statements. All
forward-looking statements are based on current facts and analyses. Actual
results may differ materially from those currently anticipated due to a
number of factors including, but not limited to history of operating losses,
anticipated future losses, competition, future capital needs, the need for
market acceptance, dependence upon third parties, disruption of vital
infrastructure, disruption of airport services, and due to natural disaster.
All forward-looking statements are made pursuant to the Securities Litigation
Reform Act of 1995. Additional information on factors that may affect the
business and financial results of the Company can be found in filings of the
Company with the Securities and Exchange Commission at www.freeedgar.com
using the Company's trading symbol CHST.
For further information, please contact: Creative Host Services, Inc., +1-
858-675-7711; or Hayden Communications, Inc. +1-843-272-4653, for Creative
Host Services, Inc.
CREATIVE HOST SERVICES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
Net Revenues $9,477,176 $8,976,799 $17,969,824 $16,619,257
Cost of Goods Sold
(excluding depreciation
& amortization) 2,500,408 2,387,911 4,765,620 4,428,635
Selling, General &
Admin. Expenses 1,322,440 1,229,615 2,391,927 2,316,042
Operating Income 523,591 746,207 846,872 1,098,864
Pretax Income 227,219 580,744 262,466 868,392
Federal Income
Tax Expense 91,000 49,415 105,000 78,015
Net Income $136,219 $531,329 $157,466 $790,377
Basic Earnings
Per Share $0.02 $0.07 $0.02 $0.10
Diluted Earnings
Per Share $0.02 $0.06 $0.02 $0.10
Basic Weighted
Average Shares 8,030,020 7,845,962 8,027,915 7,840,990
Diluted Weighted
Average Shares 8,158,256 8,816,492 8,146,011 8,640,764
BALANCE SHEET HIGHLIGHTS
June 30th December 31st
2003 2002
Cash $1,186,672 $1,241,766
Total Current Assets 3,158,675 2,669,262
Net Property and Equipment 19,817,016 17,073,751
Total Assets $30,646,787 $25,727,397
Total Current Liabilities 4,846,246 $4,005,567
Total Liabilities 12,368,853 7,977,435
Shareholders' Equity 18,277,934 17,749,962
Total Liabilities and Equity $30,646,787 $25,727,397