Down 8% from Previous Year
Brand Operating Statistics
|SILVER SPRING, Md., April 25, 2007 - Choice Hotels International, Inc.,
(NYSE: CHH) today reported the following highlights for the first quarter
-- Diluted earnings per share ("EPS") for first
quarter 2007 were $0.24
-- Earnings before interest, taxes and depreciation
("EBITDA") were $29.5
-- Domestic unit growth increased 4.5 percent in first quarter 2007.
-- Domestic system-wide revenue per available
room (RevPAR) increased
-- Executed 111 new domestic hotel franchise
contracts with new
-- The number of domestic hotels under construction,
-- Six domestic hotel franchise contracts were
executed for the Cambria
-- Franchising revenues increased 5% and total
revenues increased 6% for
-- Franchising margins for the three months
ended March 31, 2007 were
-- The company purchased approximately 0.5
million shares of its common
"During our first quarter, we were very pleased with our net domestic unit growth and the continued significant interest in our Cambria Suites brand among hotel developers," said Charles A. Ledsinger, Jr., vice chairman and chief executive officer. "We recently surpassed the 50-contract milestone for the Cambria Suites brand, with the execution of franchise agreements to build two hotels in Toronto, the brand's first international properties. Across our entire family of brands, we see tremendous opportunities for growth in 2007. Additionally, we remain committed to returning value to our shareholders through a combination of share repurchases and dividends."
Items Affecting Comparability
Fourth Quarter 2006 Acquisition of Continental Europe Franchising Operations
During the fourth quarter of 2006, the company terminated the master franchising agreement covering continental Europe and acquired the direct franchising operations in this region from the former master franchisor. As a result of the acquisition, franchising revenues and selling, general and administrative costs for the three months ended March 31, 2007 increased approximately $0.7 million and $0.9 million, respectively, compared to first quarter 2006.
Outlook for 2007
The company's second quarter 2007 diluted EPS is expected to be $0.41. The company expects full year 2007 diluted EPS of $1.61. Earnings before interest, taxes, depreciation and amortization ("EBITDA") for full-year 2007 is expected to be approximately $187.5 million. These estimates include the following assumptions.
-- The company expects net domestic unit growth
of approximately 4% in
Use of Free Cash Flow
The company has consistently used its free cash flow (cash flow from operations less capital expenditures) generated from its operations to return value to shareholders, primarily through share repurchases and dividends.
For the three months ended March 31, 2007, the company paid $9.9 million of cash dividends to shareholders. The annual dividend rate per common share is $0.60.
For the three months ended March 31, 2007, the company purchased approximately 0.5 million shares of its common stock at an average price of $37.72 for a total cost of $17.8 million under its share repurchase program. The company has authorization to purchase up to an additional 4.6 million shares under the share repurchase program. Repurchases will continue to be made in the open market and through privately negotiated transactions subject to market and other conditions. No minimum number of shares has been fixed. Since Choice announced its stock repurchase program on June 25, 1998, the company has repurchased 34.1 million shares of its common stock for a total cost of $729.7 million through March 31, 2007. Considering the effect of a two-for-one stock split in October 2005, the company has repurchased 67.1 million shares under the share repurchase program at an average price of $10.87 per share.
The company expects to continue to return value to its shareholders
through a combination of share repurchases and dividends, subject to market
and other conditions.
Choice Hotels International franchises more than 5,400 hotels, representing more than 440,000 rooms, in the United States and 39 countries and territories. As of March 31, 2007, 833 hotels are under development in the United States, representing 64,078 rooms, and an additional 70 hotels, representing 6,463 rooms, are under development in more than 15 countries and territories. The company's Cambria Suites, Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites and Suburban Extended Stay Hotel brands serve guests worldwide.
Additional corporate information may be found on Choice Hotels' Internet site, which may be accessed at www.choicehotels.com.
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. Actual performance and results could differ from those expressed in or contemplated by the forward-looking statements due to a number of risks, uncertainties and other factors, many of which are beyond Choice's ability to predict or control. The company's Form 10-K for the year ended December 31, 2006 details some of the important risk factors that you should review.
Statement Concerning Non-GAAP Financial Measurements
Franchising revenues, franchising margins, and EBITDA 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, operating income, and operating margins. The company's calculation of these measurements may be different from the calculation used by other companies and therefore comparability may be limited. The company has included exhibits accompanying this release that reconcile these measures to the comparable GAAP measurement.
Cambria Suites, Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, MainStay Suites, Suburban Extended Stay Hotel, Econo Lodge, and Rodeway Inn are proprietary trademarks and service marks of Choice Hotels International, Inc.
2007 Choice Hotels International, Inc. All rights reserved.
Choice Hotels International, Inc.
|Also See:||Choice Hotels Net Income Up 29% to $112.8 million for Full-year 2006; Of Its 10 Brands, the Mainstay Suites Brand Records Highest Year End Occupancy of 69.4% / Brand Operating Statistics / February 2007|