Up from $9.7 million Reported for First Quarter 2003,
12% Growth in Domestic Royalty Revenue
Hotel Operating Statistics by Brand
|SILVER SPRING, Md. - April 21, 2004 -- Choice
Hotels International, Inc. (NYSE:CHH) today reported first quarter 2004
diluted earnings per share (EPS) of $0.30, an increase of 15% compared
to first quarter 2003 diluted earnings per share of $0.26. First quarter
2004 net income was $10.6 million, which increased 9% over net income of
$9.7 million reported for the first quarter 2003.
The company also announced that its operating income increased to $18.9 million for first quarter 2004, a 10% gain over the $17.2 million reported at the end of first quarter 2003. Cash flow from operating activities increased to $22.5 million from $15.7 million, an increase of 43%.
"Our business is off to a very strong start for 2004," said Charles A. Ledsinger, Jr., president and chief executive officer. "We are seeing clear evidence of an improving economy and greater demand in travel, given the 12% growth in domestic royalty revenue and 31% growth in initial and relicensing fees."
He added, "The momentum from our record franchise development in 2003 has carried over into the first quarter of this year. Demand by hotel developers for our brands remains very strong and there is increased interest in our new construction brands."
First Quarter Performance
The company reported total revenues of $87.2 million for first quarter 2004, compared to $81.6 million for the same period in 2003, an increase of 7%. Franchising revenues, which include royalty fees, initial and relicensing fees, partner services income and other income, for the first quarter of 2004 were $37.1 million, an increase of 11% from the $33.4 million reported in the same period a year ago. Domestic royalty revenues increased 12% to $28.4 million for first quarter 2004, compared to $25.4 million for the same period a year ago. Initial franchising and relicensing fees increased 31%, from $2.6 million in first quarter 2003 to $3.4 million for the same period this year.
System-wide domestic revenue per available room (RevPAR) was $27.04 in first quarter 2004, compared to $25.78 for the first quarter of 2003, an increase of 5%.
2004 Unit Growth
Choice executed 81 new domestic hotel franchise contracts representing 6,893 rooms in first quarter 2004, compared to 71 new contracts representing 7,607 rooms for the same period a year ago.
The total number of domestic Choice hotels on-line grew by 5% to 3,688 as of March 31, 2004 from 3,516 as of the same period a year ago. Net domestic property additions in the first quarter of 2004 were 52, compared to 34 net domestic property additions in the same period of 2003.
In the first quarter 2004, 27 contracts for new construction hotels, representing 1,910 rooms were executed, compared to 20 contracts, representing 1,444 rooms for the same period a year ago. At the end of first quarter 2004, Choice had 372 hotels under development in its domestic hotel system, representing 28,671 rooms.
As of March 31, 2004, the total number of Choice hotels worldwide grew 4% to 4,854 from 4,678 as of the same date a year ago. This growth represents an increase of 5% in the number of rooms open to 394,238 from 375,859. At the end of first quarter 2004, Choice had 454 hotels under development worldwide, representing 36,392 rooms.
Second Quarter & 2004 Full-Year Estimates
The company's second quarter 2004 earnings are expected to be in the range of $0.50 to $0.52. Full year 2004 diluted EPS is expected to be between $2.04 and $2.07 assuming the existing share count.
Among the notable company events occurring since the previous earnings report:
Franchising revenues are non-GAAP financial measurements. These financial
measurements are presented as supplemental disclosures because they are
used by management in reviewing and analyzing the company's performance.
This information should not be considered as an alternative to any measure
of performance as promulgated under accounting principles generally accepted
in the United States (GAAP), such as total revenues. The company's calculation
of franchising revenues may be different from the calculation used by other
companies and therefore comparability may be limited. The company has included
an exhibit accompanying this release which reconcile these measures to
the comparable GAAP measurement.
Choice Hotels International is the second-largest hotel franchisor in the world with 4,854 hotels open, representing 394,238 rooms, in the United States and 42 other countries and territories. As of March 31, 2004, 372 hotels are under development in the United States, representing 28,671 rooms, and an additional 82 hotels, representing 7,721 rooms, are under development in 17 other countries and territories. Its Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, Econo Lodge, Rodeway Inn and MainStay Suites brands serve guests worldwide.
Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the federal securities law. Such statements are based on management's beliefs, assumptions and expectations, which in turn are based on information currently available to management.
Choice Hotels International, Inc.
|Also See:||Choice Hotels, With 4,810 Franchised Hotels, Reports 2003 Net Income of $71.9 million, Compared to Prior Year Net Income of $ 60.8 million / Hotel Operating Statistics / February 2004|
|Choice Hotels International, Inc. Reports 1st Qtr 2003 Net Income of $9.7 million; Grows Number of Hotels 3.0% to 4,678 / April 2003|