THE PROMUS COMPANIES INCORPORATED REPORTS RECORD SECOND QUARTER
THE PROMUS COMPANIES INCORPORATED REPORTS RECORD SECOND QUARTER MEMPHIS, Tenn., July 20 /PRNewswire/ -- The Promus Companies Incorporated (NYSE: PRI) today reported record second quarter net income of $13.9 million, a 42.6 percent increase over last year's second quarter. Income before extraordinary items increased 50.3 percent to $14.7 million, or 43 cents per share. Earnings per share for the second quarter were 41 cents compared to 35 cents during the same period last year. Average shares outstanding increased 20 percent. Revenues for the quarter were a record $281.2 million, a 7.2 percent increase over the second quarter 1991. Operating income before property transactions increased 17.0 percent to a record $63.5 million compared to $54.3 million during the same period last year. Revenue and operating income records were set in both the company's gaming and hotel businesses. HARRAH'S SETS OPERATING INCOME RECORD Led by record results at Harrah's Las Vegas, Harrah's Lake Tahoe and Bill's Lake Tahoe, Harrah's operating income reached a record $47.3 million, a 6.1 percent increase over the second quarter in 1991 and surpassing a record set in 1989. Records were set for second quarter operating income at Harrah's operations in both northern and southern Nevada. In northern Nevada, the combined operating income of the company's three properties rose 16.5 percent to set a new second quarter record. Both higher volume and continued cost management contributed to the performance. Harrah's Las Vegas set a new operating income record for the quarter, more than offsetting an operating income decline at Harrah's Laughlin. Construction on a 703 room hotel expansion and related parking additions disrupted access, particularly to parking areas, at Harrah's Laughlin during the quarter. On July 1, 190 of the new rooms and a portion of the new parking garage opened. Results have improved in the weeks following. Completion of the remaining rooms and the garage project is expected by August 31. Harrah's Las Vegas recorded an overall volume increase of 14.9 percent, including an increase in pit volume of over 22 percent, as well as increases in both hotel occupancy and room rate compared to the second quarter of 1991. "In April we rebranded our Las Vegas casino hotel to Harrah's Las Vegas," stated Michael D. Rose, chairman and chief executive officer of Promus. "The record results during the second quarter and the overall makeup of those results in terms of volume, games played, bets wagered and room rates at the hotel support our expectations for the strength and marketing synergy of the Harrah's brand name in that market." Harrah's Atlantic City posted a 5.7 percent increase in operating income during the second quarter. Second quarter results at Harrah's Atlantic City were negatively impacted by a lower than normal hold percentage in April. Operating income in May and June was up 19.8 percent compared to the same two months in 1991. "Our performance in Atlantic City continues to improve, as the market eases back from the difficult economic conditions of 1990 and 1991," Rose noted. "During the second quarter of 1992 we were able to maintain volume and increase operating income without some of the expensive promotional efforts that we undertook in 1991.
"We are very pleased with the overall results across our entire casino gaming business," Rose added. "The double digit percentage increases at each of our properties in northern Nevada, coupled with the very strong results in the highly competitive Las Vegas and Atlantic City markets, reflect the growing strength of our Harrah's brand name."
PROMUS' THREE HOTEL BRANDS EACH SET RECORD Operating income and revenue records were set at each of the company's three hotel brands during the quarter. Hotel operating income reached a record $16.2 million during the quarter, up 60.7 percent over the same quarter in 1991. Increases in the total number of hotels, the number of company owned and operated hotels, higher revenues per available room at each brand and lower overhead costs led to the record hotel performance. "All Promus hotel brands continue to build their revenues per available room through a combination of increased occupancy and increased rate," Rose stated. "In fact, on a year-to-year basis, our Embassy Suites, Hampton Inn and Homewood Suites brands each increased revenues per available room at least twice as fast as their respective competitive segments." Eighteen licensed hotels opened during the quarter, bringing our total Hotel Group size to 443 properties, an increase of 13 percent over a year ago. At the close of the quarter there were 16 hotels under construction or in the process of converting to Promus brands. Property transactions includes a $3.6 million write down of a joint venture hotel that was sold during the quarter. This was entirely offset by an extraordinary gain on the forgiveness of the joint venture's debt associated with the sale, pursuant to an agreement with the hotel's lender. The property involved remains an Embassy Suites hotel under a franchise agreement. Corporate expense increased over the same quarter in 1991 due to increased incentive compensation related expenses, legal expenses and timing of certain other expenses. Interest expense net of interest income decreased 6.9 percent as a result of lower overall debt and lower rates. A $3.4 million extraordinary loss, net of income taxes, is related to retirement of certain short-term secured debt before maturity which was refinanced with long-term subordinated debt at a slightly lower interest rate. Other income includes a $3.7 million gain from the sale of our investment in Exel, Ltd., an insurance company. EARNINGS PER SHARE FOR FIRST SIX MONTHS DOUBLES, NET INCOME INCREASES 155 PERCENT For the first six months, net income rose 155.1 percent to $19.4 million. Earnings per share increased 107.1 percent to 58 cents compared to 28 cents during the first six months of 1991. Average shares outstanding increased 23 percent. Revenues for the first half increased 10.3 percent to a record $538.8 million on record gaming revenues of $426.1 million and hotel revenues of $110.4 million. Operating income before property transactions reached a record $110.5 million during the first six months, a 24.8 percent increase over the same period in 1991. Operating income records were set at Harrah's northern Nevada and southern Nevada, and in each of the company's three hotel brands. Income before extraordinary items during the first six months increased 164.9 percent. Promus is the parent company of four of the leading brand names in the casino and hotel industries: Harrah's Casino Hotels, Embassy Suites hotels, Hampton Inn hotels and Homewood Suites hotels. THE PROMUS COMPANIES INCORPORATED SUMMARY OF OPERATIONS (UNAUDITED) Second Quarter Ended Two Quarters Ended June 30, June 28, June 30, June 28, 1992 1991 1992 1991 (In thousands, except per share amounts) Revenues Gaming $223,011 $221,601 $426,145 $410,799 Hotel 57,460 39,944 110,358 74,982 Other 688 802 2,317 2,909 $281,159 $262,347 $538,820 $488,690 Operating income Gaming $ 47,312 $ 44,582 $ 84,729 $ 71,741 Hotel 16,182 10,070 25,846 17,054 Other (8) (393) (93) (274) Operating income before property transactions 63,486 54,259 110,482 88,521 Property transactions (4,077) 119 (4,986) 225 Operating income 59,409 54,378 105,496 88,746 Corporate expense (7,572) (5,376) (14,805) (10,071) Interest, net of interest capitalized (30,695) (33,255) (60,574) (67,199) Interest income 616 933 1,168 1,280 Other income, net 3,733 (88) 3,734 128 Income before income taxes and extraordinary items 25,491 16,592 35,019 12,884 Provision for income taxes (10,834) (6,840) (14,883) (5,283) Income before extraordinary items 14,657 9,752 20,136 7,601 Extraordinary items Loss on extinguishment of debt, net of tax benefit of $2,112 (3,446) - (3,446) - Gain on forgiveness of joint venture debt, net of tax provision of $1,654 2,699 - 2,699 Net income $ 13,910 $ 9,752 $ 19,389 $ 7,601 Earnings per share before extraordinary items $ 0.43 $ 0.35 $ 0.60 $ 0.28 Extraordinary items, net (0.02) - (0.02) - Earnings per share $ 0.41 $ 0.35 $ 0.58 $ 0.28 Average common shares outstanding 33,694 28,087 33,660 27,272 -0- 7/20/92 /CONTACT: Ralph Berry, The Promus Companies, 901-762-8629/ (PRI) CO: The Promus Companies Incorporated ST: Tennessee IN: LEI SU: ERN
DF -- CH004 -- 0793 07/20/92 13:43 EDT
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|Date:||Jul 20, 1992|
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