| ATLANTA, Aug. 14, 2001 - Lodgian, Inc.,(NYSE:
LOD - news) today reported results for its second quarter and six months
ended June 30, 2001.
SUMMARY OF SECOND QUARTER 2001 RESULTS
Total revenues for the second quarter 2001 were $125.9 million compared
to $161.1 million for the second quarter of 2000. Of this $35.2 million
decrease(a 21.9% decrease), $30.2 million is due to the disposition of
20 hotels in the owned portfolio. Revenues for hotels owned as of June
30, 2001, on a same unit basis, were $124.7 million for the second quarter
2001 and $129.7 million for the second quarter 2000 (a decline of 3.9%).
RevPAR for the second quarter 2001, for hotels owned as of June 30, 2001,
on a same unit basis, decreased 4.0% as compared to the second quarter
2000. This primarily was as a result of a decline in occupancy of
5.9%, partially offset by a 2.0% increase in average daily rates. After
adjusting for $2.4 million of unusual overhead and other costs, primarily
related to nonrecurring professional and legal fees and severance costs,
second quarter 2001 EBITDA was $30.9 million, an 11.0% decrease compared
to second quarter 2000 EBITDA on a same unit basis. This decrease was primarily
due to a general decline in the industry, particularly in certain of the
Company's markets, partially offset by a decrease in direct hotel operating
expenses. Also contributing to the reduction in EBITDA was an aggregate
$2.0 million impact of higher utility, property insurance and property
tax costs. The Company realized a loss on asset dispositions in second
quarter 2001 of $0.3 million, principally due to the sale of three hotels
in the second quarter 2001 and recorded impairment charges of $4.0 million
on assets held for sale. The Company incurred a loss of $11.8 million ($0.42
loss per share) for the second quarter 2001 compared to a loss of $40.2
million ($1.43 loss per share) for the second quarter 2000.
| SUMMARY OF RESULTS FOR THE SIX MONTHS ENDED
JUNE 30, 2001 (THE 2001 PERIOD)
Total revenues for the 2001 period were $240.7 million compared to $299.4
million for the 2000 period. Of this $58.7 million decrease(a 19.6% decrease),
$52.6 million is due to the disposition of 20 hotels in the owned portfolio.
Revenues for hotels owned as of June 30, 2001, on a same unit basis
were $235.3 million for the 2001 period and $241.4 million for the 2000
period (a decline of 2.5%). RevPAR for the 2001 period, for hotels owned
as of June 30, 2001, on a same unit basis, decreased 1.8% as compared to
the 2000 period. This primarily was as a result of a decline in occupancy
of 4.7%, partially offset by a 3.0% increase in average daily rates. After
adjusting for $5.6 million of unusual overhead and other costs, primarily
related to nonrecurring professional and legal fees and severance costs,
EBITDA for the 2001 period was $50.6 million, a 16.8% decrease compared
to EBITDA of $60.8 million for the 2000 period, on a same unit basis. This
decrease was primarily due to a general decline in the industry, particularly
in certain of the Company's markets. Also contributing to the reduction
in EBITDA was an aggregate $5.6 million impact of higher utility, franchise
fees, property insurance and property tax costs.
The Company realized a gain on asset dispositions for the six months
ended June 30, 2001 of $24.1 million. The Company incurred a loss of $13.7
million ($0.48 loss per share) for the six months ended June 30, 2001 compared
to a loss of $57.0 million ($2.04 loss per share) for the six months ended
June 30, 2000.
SIGNIFICANT EVENTS SUBSEQUENT |
Tom Arasi, President and CEO of Lodgian, Inc., Continues to Build
His Management Team
ATLANTA, June 27, 2001
Stephen Powell has joined the Company as Vice President
of Sales and Marketing. Mr. Powell has over twenty years of hotel experience
at the property level with Loews and Fairmont Hotels and served in both
property and corporate sales and marketing roles in his ten years with
ITT Sheraton. His last position was Vice President of Marketing for Sheraton,
North America. Most recently he served as Senior Vice President of Global
Sales for PlanSoft, an internet meeting planning venture.
Thomas Stoughton has been appointed to the newly created
position of Senior Vice President of Finance. In this capacity, he will
focus on financial transactions and working with capital markets to maximize
the Company's assets. Mr. Stoughton joined Lodgian from Resurgens Capital
Partners, LLC, a private equity investment firm where he was a founding
partner. Formerly, Mr. Stoughton served as President of Resurgens Capital
& Investments, Inc. and as a partner with Trotter, Smith & Jacobs,
P.C., an Atlanta-based law firm.
James Bonner has joined Lodgian in the newly created position
of Vice President of Asset Management. Mr. Bonner brings over twenty years
of real estate investment experience with
Aetna, Mutual Benefit Life, New York Life and Selco and
will focus on strategic initiatives, asset dispositions, profit enhancement,
capital expenditures and branding.
Debi Etheridge joins the company as Director of Strategic
Planning. Her background includes several years of strategic planning and
financial analysis experience with Coopers & Lybrand, Crowne Plaza
Hotels and Bass Hotels. Ms. Ethridge recently received her MBA from the
Goizueta Business School at Emory University and is also a CPA.
Mr. Arasi stated, "The addition of these highly qualified
individuals significantly strengthens the Lodgian management team's ability
to drive strategic change and its ability to reposition the
Company and, ultimately, to drive shareholder value.'' |
|
TO JUNE 30, 2001
On July 12, 2001, one of the Company's directors, Lewis N. Wolff, resigned
from his position on the Board of Directors. The resignation took effect
on July 12, 2001 and was as a result of the time commitment needed to serve
on the board.
The Company has been notified by the New York Stock Exchange that it
is not in compliance with the Exchange's continuing listing requirements
because the average closing price of Lodgian stock was less than the $1.00
per share limit over a consecutive thirty trading day period. The Company
is considering actions that may be taken in order to bring itself into
compliance with the Exchange's requirements. The Company believes that
it has until its annual shareholders' meeting in 2002 to remedy this lack
of compliance.
2001 OUTLOOK UPDATE
Due to continued overall weakness in the current economic environment
and specific weakness in certain of the Company's markets, Lodgian now
anticipates that same unit RevPAR in 2001 will be down approximately 4.5%.
Primarily resulting from this revised projection, the Company currently
projects that EBITDA for 2001, after excluding an estimate of $6.6 million
of unusual overhead and
other costs, will range from $95 to $100 million, before considering
further hotel dispositions. Last quarter, the company projected annual
EBITDA to range from $103 to $108 million. As a result of the Company reducing
it's expectations for 2001, the Company will continue to closely monitor
capital expenditures.
Under the previous EBITDA guidance, underlying revenues were projected
at $489.5 million. Most recently, the revenue projection has been reduced
to $464.2 million. While equating to $25.3 million in lower revenues, this
revised EBITDA guidance is only $8 million lower than last quarter's EBITDA
guidance. Based on cost containment measures that have been initiated in
the last three months, direct hotel operating expenses and hotel level
general and administrative expenses have been reduced by $13.1 million
and $6.2 million respectively. These hotel level reductions were partially
offset by higher corporate overhead cost in the first half of the
year. Going forward however, the corporate overhead structure has now
undergone a fundamental change.
"Lodgian has completed an evaluation of business processes and best
practices and has implemented numerous profit enhancement actions which
will reduce corporate overheads from a projected $34.3 million for 2001,
to an annual run-rate, effective September 1, 2001, of approximately $23.0
million,'' said Thomas Arasi, Chief Executive Officer. ``From an original
2001 budget of 180 corporate positions, these cost reductions have reduced
the count to 118 positions. Furthermore, purchasing initiatives are being
site tested and will be implemented during the third and fourth quarters
as well as further overhead reductions.''
Year to date in 2001, the Company has sold five hotel properties for
gross proceeds of $72.2 million and used $61.5 million of these proceeds
to reduce debt. Between January 1, 2000 and June 30, 2001, the Company
sold 28 properties for gross proceeds of $281.0 million and used $212.6
million of these proceeds to reduce debt. Lodgian continues to actively
market a number of properties for sale. Currently the Company is exploring
the possibility of refinancing opportunities to completely pay off the
senior credit facility prior to January 2, 2002 and is in discussions with
certain potential leaders who have expressed an interest in participating
in such a
transaction. However, there can be no assurances that the Company can
complete a refinancing nor can there be any assurances that, if completed,
the refinancing will be on more favorable terms. Management believes that,
despite a very challenging economic environment, the combination of its
current cash position, cash flow from operations, availability on the revolving
credit facility and net
proceeds from asset sales will provide sufficient liquidity to fund
the Company's operating, capital expenditure and debt service obligations
through December 31, 2001.
LODGIAN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, DECEMBER 31,
2001
2000
(UNAUDITED)
(IN THOUSANDS,
EXCEPT SHARE DATA)
ASSETS
Current assets:
Cash
and cash equivalents
$19,518 $21,002
Cash,
restricted
2,944
2,237
Accounts
receivable, net of
allowances
20,692
20,624
Inventories
7,571
7,805
Prepaid
expenses and other
current assets
9,471
9,261
Total current assets
60,196
60,929
Property and equipment, net
1,003,667 1,059,048
Deposits for capital expenditures
12,481
14,005
Other assets, net
25,874
29,965
$1,102,218 $1,163,947
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$20,800 $25,088
Accrued interest
15,563
16,795
Other accrued liabilities
36,632
37,203
Advance deposits
2,125
1,854
Current portion of long-term
obligations
73,603
79,843
Total current liabilities
148,723 160,783
Long-term obligations, less current
portion
630,120 674,038
Deferred income taxes
3,603
3,603
Minority interests:
Preferred redeemable securities
(including related accrued
interest)
190,858 184,349
Other
5,485
4,294
Total liabilities
978,789 1,027,067
Commitments and contingencies
---
---
Stockholders' equity:
Common stock, $.01
par value,
75,000,000
shares authorized and
28,139,481
shares
issued at
June 30, 2001 and
December
31, 2000; 28,685,407
and
28,290,424
shares outstanding
at June 30,
2001
and December 31, 2000,
respectively
286
282
Additional paid-in
capital
264,513 263,320
Deferred stock compensation
(842)
---
Accumulated deficit
(139,200) (125,542)
Accumulated other
comprehensive
loss
(1,328) (1,180)
Total stockholders' equity
123,429 136,880
$1,102,218 $1,163,947
LODGIAN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30,
JUNE 30,
2001 2000 2001
2000
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Revenues:
Rooms
$91,937 $117,101 $175,955 $217,218
Food and beverage
27,799 36,445 53,001
67,949
Other
6,161 7,519 11,714
14,255
125,897 161,065 240,670 299,422
Operating expenses:
Direct:
Rooms
24,269 31,898 48,377
60,499
Food and beverage
19,492 25,465 38,155
48,683
Other
3,145 4,607 6,349
8,917
General, administrative and other
49,682 56,644 101,162 111,789
Depreciation and amortization
14,491 16,408 30,148
32,440
Impairment of long-lived assets
4,000 56,549 4,565
66,162
Severance and restructuring
expenses
717 1,502 1,467
1,502
Total operating expenses 115,796
193,073 230,223 329,992
10,101 (32,008) 10,447 (30,570)
Other income (expenses):
Interest income and other
214 358
480 663
Interest expense
(18,604) (25,843) (39,369) (49,830)
(Loss) gain on asset dispositions
(260) (98) 24,109
(3)
Minority interests:
Preferred redeemable securities
(3,283) (3,064) (6,509) (6,127)
Other
30 (236) (116)
(543)
Loss before income taxes
(11,802) (60,891) (10,958) (86,410)
Benefit (provision) for income
taxes
--- 20,703 (2,700) 29,380
Net loss
$(11,802) $(40,188) $(13,658) $(57,030)
Loss per common share - basic and
diluted
$(0.42) $(1.43) $(0.48) $(2.04)
LODGIAN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED
JUNE 30,
2001
2000
(IN THOUSANDS)
(UNAUDITED)
Operating activities:
Net loss
$(13,658) $(57,030)
Adjustments to reconcile
net loss
to net cash
(used in) provided
by operating
activities:
Depreciation
and amortization
30,148
32,440
(Gain) loss
on sale of assets
(24,109)
3
Deferred income
tax provision
(benefit)
2,700 (29,380)
Minority interests
6,625
3,607
Impairment
of long-lived assets
4,565
66,162
401 (k) plan
contributions
257
419
Amortization
of deferred stock
compensation
98
27
Amortization
of deferred loan
fees
2,802
2,332
Other
(835)
(948)
Changes in
operating assets and
liabilities:
Accounts receivable
(68)
(182)
Inventories
234
308
Prepaid expenses and other
assets
(917) (2,169)
Accounts payable
(4,995) (5,070)
Accrued liabilities
(4,504) 10,784
Advance deposits
271
717
Net cash (used in) provided by
operating activities
(1,386) 22,020
Investing activities:
Capital improvements,
net
(15,944) (51,365)
Proceeds from sale of
assets, net
64,590
33,734
Net withdrawals (deposits)
for
capital expenditures
1,524
(6,250)
Net cash provided by (used in)
investing activities
50,170 (23,881)
Financing activities:
Proceeds from borrowings
on working
capital revolver
16,000
30,000
Proceeds from issuance
of long-term
obligations
---
2,085
Principal payments on
long-term
obligations
(51,268) (9,795)
Principal payments on
working
capital revolver
(15,000) (5,000)
Distributions to minority
interests
---
(186)
Net cash (used in) provided
by
financing activities
(50,268) 17,104
Net (decrease) increase in cash and
cash equivalents
(1,484) 15,243
Cash and cash equivalents at
beginning of period
21,002
14,644
Cash and cash equivalents at end of
period
$19,518 $29,887
Supplemental cash flow information:
Cash paid during the period for:
Interest, net of amount
capitalized $37,799
$40,837
Income taxes, net of refunds
$---
$427 |
Lodgian, Inc. owns or manages a portfolio of 106 hotels with approximately
19,971 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 Marriott, Holiday Inn, Crowne Plaza, Radisson and Hilton.
Lodgian's common shares are listed on the New York Stock Exchange under
the symbol ``LOD''.
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.
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