Candlewood Hotel Company Announces Second Quarter Results.WICHITA Wichita, indigenous people of North America Wichita (wĭch`ĭtô), Native North Americans whose language belongs to the Caddoan branch of the Hokan-Siouan linguistic stock (see Native American languages). , Kan Kan, river, China: see Gan. .--(BUSINESS WIRE)--Aug. 11, 1998--Candlewood Hotel Company, Inc. (Nasdaq NM: CNDL), owner, developer, operator and franchisor of value-oriented, business extended-stay hotels, today announced results for the second quarter and six months ended June June: see month. 30, 1998. For the second quarter, the Company reported net income before dividends to preferred stockholders of $0.8 million on hotel operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. of $10.4 million, compared to a net loss in the 1997 second quarter of $0.2 million on revenues of $1.3 million. Net loss to common stockholders for the 1998 second quarter, after preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. dividends, was four cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. compared to a per share loss of two cents for the same quarter of 1997 in which there were no preferred stock dividends. For the six month period, the Company reported net income before dividends to preferred stockholders of $1.3 million on hotel operating revenues of $17.5 million, compared to a net loss in the same period of 1997 of $0.5 million on revenues of $1.8 million. Net loss to common stockholders for the first six months of 1998, after preferred stock dividends, was twelve cents per share compared to a per share loss of six cents for the same period of 1997 in which there were no preferred stock dividends. In September and October of 1997, the Company completed a $65 million offering of Series A Cumulative Preferred Stock Cumulative preferred stock Preferred stock whose dividends accrue, should the issuer not make timely dividend payments. Related: Non-cumulative preferred stock. with a base dividend of 7.50% per annum Per annum Yearly. . While dividends on the preferred stock are not payable until August 31, 1998, the Company has included, for the calculation of earnings per share, amounts accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. for future payment. On August 3, 1998, the Company completed the $42 million Series B Cumulative Preferred Noun 1. cumulative preferred - preferred stock whose dividends if omitted accumulate until paid out cumulative preferred stock preference shares, preferred shares, preferred stock - stock whose holders are guaranteed priority in the payment of dividends but Placement. As with the Series A, dividends are not payable until August 31, 1998. Due to the timing of the close, the Series B has no impact on the calculation of the earnings for the second quarter. In May 1998, the Company announced a second agreement with Hospitality Properties Trust (NYSE NYSE See: New York Stock Exchange : HPT HPT Human Performance Technology HPT Hyperparathyroidism HPT Heartland Poker Tour HPT Home Pregnancy Test HPT High Pressure Turbine HPT Host Print Transform HPT High-Performance Team HPT high-payoff target (US DoD) ) to sell and leaseback A transaction whereby land is sold and subsequently rented by the seller from the purchaser who is the new owner. 17 hotels for a total purchase price of $141.4 million. As of June 30, 1998, the Company had completed the sales of 21 hotels to HPT, 16 of which have been sold in 1998. The first transaction with HPT was completed in April 1998. Six of the hotels in the second transaction have been sold. "The Candlewood Suites Candlewood Suites is a brand name applied to hotels within the InterContinental Hotels Group. History The Candlewood Suites chain was started in 1995 by Jack Deboer, founder of the Residence Inn and co-founder of the Summerfield Suites chain. concept -- quality, value-oriented business hotels -- continues to win high consumer acceptance and has strong operating results," said Jack DeBoer, Candlewood can·dle·wood n. 1. Any of several trees or shrubs yielding a usually resinous wood. 2. The wood of such a plant, burned for light or fuel. 3. The ocotillo. Noun 1. chairman and chief executive officer. "We are pleased with our hotels' performance in the second quarter. Our 33 company-operated hotels achieved a 69.4% occupancy and an average daily rate of $53.15. Of particular note is that these results include ten hotels, or 30 percent of the portfolio, that opened during the second quarter. We attribute the rapid ramp-up of our properties to aggressive marketing, growing awareness of and demand for the brand along with the quality and value Candlewood Suites offers our guests." During the second quarter, the Company opened ten new company-operated hotels. At the end of the quarter, the system consisted of 33 company-operated hotels and five franchised hotels in operation. The Company also began construction on ten additional company-owned properties. At the end of the quarter, there were 29 company-owned hotels and five franchised hotels under construction. Thirty-three potential company development sites were under contract. "We are right on track with development for 1998 and look forward to greater recognition as a leading national brand," DeBoer said. "We're very excited about our guest satisfaction and occupancy levels, which reflect the demand for Candlewood. In addition, we are pleased to have completed the closing of our $42 million Series B Cumulative Preferred Offering on August 3." Candlewood targets mid-market, extended-stay business travelers. Room rates range from approximately $45 to $75 per night for Studio Suites and $65 to $95 per night for one-bedroom suites, depending on market location and length of stay. Candlewood Hotel Company, Inc., was formed in late 1995 as a joint venture between Jack DeBoer and the former Doubletree dou·ble·tree n. A crossbar on a wagon or carriage to which two whiffletrees are attached for harnessing two animals abreast. Noun 1. Corporation (now Promus Hotel Corporation Promus Hotel Corporation was a hotel management and franchise company from Memphis, Tennessee. History Promus Hotel Corporation's beginnings are tied to the original Holiday Inn company in Memphis, Tennessee. ). DeBoer, who founded Residence Inns in the 1970s, is recognized in the hotel industry as the creator of the extended-stay concept. Please note: Except for historical information, this press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties, including, but not limited to, timing and management of growth, the competitive environment and other risk factors as detailed in the company's filing with the Securities and Exchange Commission. Actual results may differ materially from the management's expectations. -0-
CANDLEWOOD HOTEL COMPANY, INC.
SECOND QUARTER OPERATING RESULTS
(in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- ------------------
1998 1997 1998 1997
Revenues:
Hotel operations $ 10,330 $ 1,218 $ 17,247 $ 1,757
Other income 114 60 288 60
Total hotel operating
revenues 10,444 1,278 17,535 1,817
Proceeds from sale of hotels,
net of deferred gain of
$ 6,446 55,592 - 104,514 -
Gain recognized on sale of
hotels 154 - 194 -
Total Revenues 66,190 1,278 122,243 1,817
Operating costs and expenses:
Hotel operating expenses 5,658 842 10,067 1,377
Corporate operating expenses 929 526 1,737 937
Depreciation and amortization 452 282 799 473
Rent expense on leased hotels 2,624 - 4,046 -
Total operating costs and
expenses 9,663 1,650 16,649 2,787
Cost of hotels sold 55,592 - 104,514 -
935 (372) 1,080 (970)
Interest income 124 248 486 623
Interest expense - (39) (38) (190)
Pre-tax income (loss) 1,059 (163) 1,528 (537)
Income tax (230) - (230) -
Net income (loss) 829 (163) 1,298 (537)
Preferred stock dividends (1,215) - (2,417) -
Net loss to common
stockholders $ (386) $ (163) $ (1,119) $ (537)
Per share data:
- Net loss per share of
common stock - basic and
diluted $ (0.04) $ (0.02) $ (0.12) $ (0.06)
Average weighted shares of
common stock
outstanding (in thousands) 9,025 9,025 9,025 9,025
Hotel statistics:
Occupancy % 69.4% 57.5% 65.3% 54.1%
Average Daily Rate 53.15 49.37 53.42 48.28
Revenue Per Available Room 36.88 28.40 34.88 26.12
Development Highlights as of
August 11, 1998:
Number of hotels open and
number of suites:
Company operated 34 3,729
Franchised 5 595
Number of hotels under
construction and number of
suites:
Company owned 30 3,692
Franchised 5 524
Potential Company sites under
contract 31
Franchise agreements signed
for hotels not yet under
construction 3
CONTACT: Candlewood Hotel Company, Inc. Warren Fix, Chief Financial Officer (316) 631-1300 or Daly Gray Public Relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most Jerry Daly (609) 383-1414 |
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