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for the Year Ending 2005 of $25.0 million versus a Net Loss of $4.9 million for the Year-earlier; Currently Owns 21 Hotels |
| CLEVELAND, March 2, 2006 - Boykin Lodging Company (NYSE: BOY), a hotel
real estate investment trust, today announced financial results for the
fourth quarter and year ended December 31, 2005.
Financial Highlights: Revenue per available room (RevPAR) for the fourth quarter for hotels owned and operating as of December 31, 2005 increased 0.8% to $58.63 from last year's $58.19. The increase in RevPAR was the result of a 3.8% increase in average daily room rate to $97.96 and a 1.9 point decrease in occupancy to 59.8%. The Company's net income attributable to common shareholders for the fourth quarter of 2005 totaled $6.3 million, or $0.35 per fully-diluted share, compared with the same period last year when net loss totaled $4.8 million, or $0.27 per share. Funds from operations attributable to common shareholders (FFO) for the fourth quarter totaled $82,000, or $0.00 per fully diluted share, a decrease from fourth-quarter 2004 FFO of $0.7 million, or $0.04 per share. Primary contributors to the decrease in FFO included a $0.8 million decline in contribution from hotel operations as a result of lower levels of business interruption recoveries recorded and increasing insurance costs and a $0.4 million increase in corporate general and administrative expenses, all net of minority interest. The Company's EBITDA for the fourth quarter, including the Company's share of EBITDA from unconsolidated joint venture subsidiaries, totaled $4.7 million, down from last year's fourth quarter EBITDA of $6.0 million as the result of a $1.0 million decline in contribution from hotel operations combined with a $0.5 million increase in corporate general and administrative expenses. The EBITDA change is not impacted by minority interest. FFO and EBITDA are non-GAAP financial measures that should not be considered as alternatives to any measures of operating results under GAAP. A reconciliation of these non-GAAP measures to GAAP measures is included in the financial tables accompanying this release. The operating results of the five properties sold or divested during 2004, the two properties sold in 2005 and the joint venture which owned and leased out a third property sold in 2005 are reflected in the financial statements as discontinued operations for all periods presented. Details of Fourth Quarter Results: Revenues from continuing operations for the quarter ended December 31, 2005, were $45.5 million, compared with revenues of $46.6 million for the same period last year. Hotel revenues for the three months ended December 31, 2005 were $45.5 million, a 2.1% decrease from $46.5 million for the same period in 2004. Included in other hotel revenues in the fourth quarter of 2004 is $0.9 million related to business interruption insurance recoveries for the two Melbourne, Florida properties. Both hotels remained closed during the fourth quarter of 2005, and no business interruption insurance recoveries were recorded during the period. For the comparable properties, consisting of the 17 consolidated properties owned and operated under a Taxable REIT Subsidiary (TRS) structure as of December 31, 2005, excluding hotels closed due to hurricane damage, RevPAR decreased 0.1% to $57.07 in 2005 from $57.15 in 2004. Contributing to the RevPAR decrease was a 3.4% increase in average daily room rate to $96.93 from $93.78, combined with a 2.0 point decrease in occupancy to 58.9% from 60.9%. Hotel profit margins, defined as hotel operating profit (hotel revenues less hotel operating expenses) as a percentage of hotel revenues, of the consolidated hotels operated under the TRS structure for the fourth quarter were 21.4%, a decrease from the 22.3% hotel operating profit margin for the fourth quarter of 2004. Excluding the business interruption amounts from 2004 and the operating results of two Melbourne properties, hotel operating profit margins for the portfolio decreased 60 basis points to 21.6% from 22.2% in 2004. Corporate general and administrative expenses increased during the fourth quarter of 2005 as we recorded an estimated excise tax of $0.4 million as during 2005 we had REIT taxable income in excess of the dividends paid during 2005. We have and anticipate that we will pay additional dividends during 2006 that will be designated as 2005 dividends; and as such, we have recorded an estimated excise tax related to this anticipated timing. These charges were partially offset by interest savings and increased interest income due to lower debt levels as a result of higher amounts of cash available and on hand. During the fourth quarter of 2005, the Company recorded an approximate $11.5 million gain related to its share of the gain on the sale of the San Diego Hampton Inn. Year-to-date Results: The Company's net income attributable to common shareholders for the year ended December 31, 2005 totaled $25.0 million versus a net loss of $4.9 million for the year-earlier period. Year-to-date 2005 revenues totaled $204.5 million, compared with $203.9 for 2004. Hotel revenues for 2005 totaled $204.3 million compared to $196.0 million during 2004. Included in 2005 other hotel revenues is approximately $6.7 million of business interruption insurance recoveries related to the two closed Melbourne properties and a property which had rooms out of service as a result of a remediation project during 2003, the first half of 2004, and 2005. Included in 2004 hotel revenues are approximately $10.3 million related to business interruption insurance recoveries and the operating results of the two Melbourne properties which were open during a portion of that period. Offsetting this decrease in 2005 is the 6.8% RevPAR increase for the 17 consolidated hotels which were open throughout both 2005 and 2004. Offsetting the increases in hotel revenue is the $7.5 million decrease in condominium development and unit sales due to the completion of the White Sand Villas project in 2004. Total hotel portfolio RevPAR increased 7.1% to $67.35 from last year's $62.86. Occupancy increased to 66.9% from 64.8% and the average daily room rate increased 3.7% to $100.64 from $97.07. RevPAR for the comparable 17 hotels increased 6.8% to $66.54 from last year's $62.29, as occupancy rose to 66.4% from 64.5% and the average daily rate increased 3.7% to $100.24 from $96.62. During 2005, hotel profit margins of the consolidated properties owned and operated under the TRS structure increased to an average of 27.9%, compared with 26.0% for the previous year. A portion of the increased margin is the result of the recognition of the business interruption insurance recoveries during 2005 within hotel revenues. Excluding the business interruption amounts from 2005 and 2004 and the two Melbourne properties from the 2004 results, hotel operating profit margins for the portfolio increased to 26.1% from 25.1% in 2004. As previously announced, during 2005 the Company recorded a $5.5 million impairment charge related to the reduction of the intended holding period of one property. Additionally, the unconsolidated joint venture between the Company and AEW Partners III, L.P., sold Hotel 71 in Chicago, Illinois. The Company's share of the gain on the sale of Hotel 71 approximated $10.2 million, net of minority interest, and is reflected as equity in income of unconsolidated joint ventures within the financial statements. During 2005, the Company recorded gains on the sale/disposal of assets of approximately $12.1 million related to property casualty insurance recoveries in excess of the net book value of assets disposed for properties which were damaged by hurricanes or were involved in water infiltration remediation activity. The gain recorded related to property insurance recoveries received in excess of the net book value of assets disposed during 2004 totaled $3.4 million. For 2005, FFO of $6.8 million, or $0.38 per fully-diluted share, was below last year's FFO of $9.7 million, or $0.56 per share. EBITDA, including the Company's share of EBITDA from unconsolidated joint venture subsidiaries, totaled $26.7 million, down from last year's EBITDA of $32.8 million. Included in the year-to-date 2005 and 2004 net income (loss), EBITDA and FFO were $5.5 million and $4.3 million of impairment charges, respectively. Net of minority interest, these impairment charges approximated $4.7 million and $3.7 million, or $0.26 and $0.21 per share, respectively. As a result of the property sales in 2005, the Company reduced its outstanding debt from $200.0 million at December 31, 2004 to $138.5 million as of December 31, 2005. Capital Structure: At December 31, 2005, Boykin had $48.0 million of cash and cash equivalents, including restricted cash, and total consolidated debt of $138.5 million. The Company's pro rata share of the debt of unconsolidated joint ventures totaled $9.1 million at December 31, 2005. Business Update: The Company's two hotels located in Melbourne, Florida remain closed while repairs are underway. Based upon current estimates of the availability of labor and materials, the Company expects the rebuild to be completed late in the second quarter of 2006. The Company has commenced construction of the final phase of the redevelopment of the Pink Shell Beach Resort & Spa, a new 43-unit, beach-front condo-hotel tower named Captiva Villas. Construction of the building is expected to be completed during the first quarter of 2007. Subsequent to year end, a joint venture in which the Company owns a 50% interest, acquired the Banana Bay Resort & Marina-Marathon for $12.0 million. The joint venture acquired the property for potential redevelopment as a condo-hotel project. Outlook: Based upon the current booking trends the Company anticipates first-
quarter 2006 RevPAR for the portfolio will be 2.5% to 4.0% above the same
period last year, with full-year 2006 RevPAR 4.0% to 6.0% above 2005. Based
upon these assumptions, the Company expects a net loss ranging between
$0.21 and $0.18 for the first quarter and between $0.58 and $0.45 per share
for the full year. FFO is expected to range between $0.04 and $0.07 per
fully-diluted share for the first quarter and $0.42 and $0.55 per share
for the full year. This guidance does not incorporate any impact from property
acquisition or disposition activity which may occur during 2006 and may
be further impacted by potential insurance recoveries.
Boykin Lodging Company is a real estate investment trust that focuses on the ownership of full-service, upscale commercial and resort hotels. The Company currently owns interests in 21 hotels containing a total of 5,871 rooms located in 13 states, and operating under such internationally known brands as Doubletree, Marriott, Hilton, Radisson, Embassy Suites, and Courtyard by Marriott among others. This news release contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 regarding the Company, including those statements regarding the Company's future performance or anticipated financial results, among others. |
| Contact:
Tara Szerpicki
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| Also See: | Boykin Lodging Company Sells Hotel 71 in Chicago, Illinois for $95 million / April 2005 |
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