|SILVER SPRING, Md., April 21, 1999 - Choice Hotels
International, Inc. (NYSE: CHH) today reported first quarter 1999 net income
of $10.3 million, or $0.18 diluted earnings per share (EPS), increases
of 26% and 36% respectively, over the $8.1 million in net income and $0.13
diluted EPS reported for first quarter 1998. Recurring net income for the
first quarter of this year was $9.5 million, or $0.17 diluted EPS, representing
a 34% increase in net income and a 42% increase in diluted EPS compared
to recurring net income of $7.1 million, or $0.12 diluted EPS for the same
period a year ago.
"Choice Hotels continues to register very strong earnings because of solid unit growth and hotel performance," said Charles A. Ledsinger, Jr., president and chief executive officer. He continued, "We are very pleased that the fundamentals of the business continue to be strong, as we achieve a higher effective royalty rate through a shift in product mix that matches our overall brand strategy." The company reported franchise-related revenues of $28.8 million for first quarter 1999, compared to $26.7 million for first quarter 1998.
Franchise-related revenues exclude product sales and European hotel operations revenue, both of which are classified as non-strategic operations. The company sold its European hotel operations to Friendly Hotels PLC in January 1998. In the fourth quarter of 1998, the company discontinued the group purchasing program as previously operated.
Royalty revenues for first quarter 1999 increased 15% to $23.8 million from $20.6 million for the same period a year ago, with the system-wide domestic effective royalty rate also increasing from 3.46% in first quarter 1998 to 3.61% for the first quarter of 1999. Domestic revenue per available room (RevPAR) increased 2.0% from $26.34 in first quarter 1998 to $26.87 in the quarter just ended.
As of March 31, 1999, the total number of Choice hotels on-line worldwide grew 15% to 4,056 from 3,522 as of the same date a year ago. As of March 31, 1999, the total number of rooms worldwide increased 10% to 325,326 from 294,937 as of the same date a year ago. As of March 31, 1999, the company had 778 franchised hotels with 63,427 rooms either in design or under construction in its worldwide hotel system.
During the first quarter of 1999, the company introduced its revolutionary Internet purchasing system -- Choicebuys.com. Choicebuys.com allows hotel owners to purchase goods and services for their hotels at discounted prices. By virtue of its ease of usage and its preferred pricing, the system may potentially drive annual expenditures of $1.5 billion in goods and services by Choice franchisees.
"Choicebuys.com is just the first step for Choice in maximizing the value of the Internet to our hotels and our guests," said Ledsinger. "Choice is aggressively exploring ways to bring technology to our guests through in-room Internet service, a strategy that will bring significant value to our franchisees, guests and shareholders."
Among the notable company events occurring since the first of the year:
Three Months Ended
TOTAL CHOICE - DOMESTIC
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. For further information on factors that could impact Choice and the statements contained therein, we refer you to the filings made by Choice with the Securities and Exchange Commission, including its registration statement on Form S-4 and report on Form 8-K.
|Also See:||Occupancy Leader for Choice Brands in 1998; Comfort Suites at 68.2% (Rodeway Last at 49.9%) / Feb 1999|
|Hotel Industry Veteran Charles A. Ledsinger, Jr Named as President and CEO at Choice Hotels International / Aug 1998|