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Revenue, EBITDA, Revpar, and Income
all Show Strong Gains for Lodgian First Quarter
 
ATLANTA, May 10, 1999 - Lodgian, Inc., (NYSE: LOD - news), one of the nation's largest owners and operators of hotels, today reported significant increases in revenues, EBITDA, revenue per available room (RevPAR) and income from operations for the first quarter ended March 31, 1999. Lodgian, which owns or manages 143 hotels with more than 27,000 rooms, is a successor to Servico, Inc. as a result of Servico's merger with Impac Hotel Group. The merger was completed on December 11, 1998. Because the merger was accounted for under the purchase accounting method, Lodgian's results for the first quarter 1998 do not reflect Impac's contributions prior to the date of the merger. 
 
Summary of First Quarter Financial Highlights
(dollars in thousands except per share and RevPAR amounts)
 
Three Months Ended March 31,
 
1999
1998
Change
Revenue
$135,804
$82,881
+64%
EBITDA
$32,861
$19,828
+66%
Income from Operations
$18,613
$12,481
+49%
Net (Loss) Income
$(2,442)
$2,996
N/A
Net (Loss) Income Per Common Share
$(0.09)
$0.14
N/A
Wtd. Avg. Common Shares Outstanding
27,056
21,467
+26%
Revenue Per Available Room (Same Store)
$44.93
$41.91
+7.2%
Revenue Per Available Room (Total)
$42.90
$41.00
+4.6%
 
 
KEY DEVELOPMENTS - FIRST QUARTER 1999 
  • Same-store RevPAR increased 7.2 percent compared with 1998 
  • Ken Posner hired as new CFO 
  • Activities with regard to balance sheet restructuring ongoing 
  • Extensive renovating and repositioning continues 
"Our strong first quarter operating results, with significantly improved revenues, EBITDA, RevPAR and income from operations, are even more impressive given the fact that 13% of our hotel portfolio was negatively impacted during the first quarter because of substantial renovations." -- Robert S. Cole, CEO 

Revenues for the three months ended March 31, 1999 increased 64 percent to $135.8 million compared with $82.9 million in the prior year's quarter. 

Earnings before interest, taxes, depreciation and amortization (EBITDA) for the first quarter 1999 increased 66 percent to $32.9 million, compared with $19.8 million in the year ago quarter. RevPAR for the 131 consolidated hotels was $42.90 on 57.8 percent occupancy and $74.23 ADR compared to pro forma RevPAR of $41.00 on 56.2 percent occupancy and $73.00 ADR in the first quarter 1998, a 4.6 percent increase. Same-store RevPAR for the first quarter 1999 increased 7.2 percent over the 1998 period. 

Net loss for the first quarter 1999 was $2.4 million, compared to net income of $3.0 million for the first quarter 1998. Net loss per common share, on 27.06 million common shares outstanding, was nine cents in the first quarter 1999, compared to net income per common share, on 21.47 million shares outstanding, of 14 cents in the first quarter 1998. 

CEO Robert S. Cole Comments  

Robert S. Cole, Lodgian's President and Chief Executive Officer: "Our strong first quarter operating results, with significantly improved revenues, EBITDA, RevPAR and income from operations, are even more impressive when you realize that 13% of our hotel portfolio was negatively impacted during the first quarter because of substantial renovations as our repositioning strategy continues." 

According to Cole, Lodgian's ability to produce a same-store RevPAR increase of 7.2 percent ($44.93 on 60.5 percent occupancy and $74.21 Average Daily Room rate) on properties owned and operated for at least 12 months, clearly demonstrates the strength of Lodgian's primarily full-service and premium branded hotel portfolio. 

"Our ability to produce a RevPAR increase of 24.1 percent on 33 stabilizing hotels that were renovated or opened in the past 18 months (on 58.3 percent occupancy and $75.51 ADR compared to 49.1 percent occupancy and $72.22 ADR) is a clear indicator of the successful execution of our repositioning strategy and how quickly these hotels ramp-up following renovation," Cole noted. 

"Another step forward for us in the quarter was the addition of Ken Posner, our new Chief Financial Officer, to the Lodgian management team," Cole continued. "Ken has substantial hotel industry and capital market experience after serving more than 17 years as the CFO of the Hyatt Group of Companies. 

"One of Ken's first contributions to the company will be to lead the on-going activities with regard to our refinancing alternatives," said Cole. ‘Our refinancing goals continue to be to lower our total cost of capital, extend certain maturities and provide financial flexibility for Lodgian going forward as we look for opportunities to grow the company." 

Management's Overview for the rest of 1999  

According to Cole, the Company is on schedule to complete the final phase of its $150 million renovation and repositioning program within the next twelve months. With the completion of these capital expenditures, Lodgian will have either renovated or newly developed 90 percent of the hotels in the company's portfolio within the past five years. 

"We believe we have taken significant strides in the first quarter toward achieving our stated long-term vision of becoming the premier owner/operator of hotels and a recognized leader in the entire hospitality industry," said Cole. "As we work towards improving our capital structure, all Lodgian stakeholders should continue to expect our focus to be on achieving operational excellence, capturing internal growth through our successful renovation and repositioning strategy and improving market share and profit margins."

 
Same-Store RevPAR  
For the 110 hotels that were owned during both quarters ended March 31, 1999 and March 31, 1998, RevPAR statistics were as follows: 
 
Quarter Ended March 31, 1999
 
1999
1998
% Change
Occupancy
60.5%
57.1%
+6.1%
Average Daily Rate
$74.21
$73.42
+1.1%
Revpar
$44.93
$41.91
+7.2%
 
 
LODGIAN, INC.
STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
 
 
Three Months Ended March 31,
 
1999
1998
Revenues    
Rooms
$96,784
$55,833
Food & Beverage
32,070
22,146
Other
6,950
4,902
Total Revenues
$135,804
$82,881
     
Operating Expenses    
Direct    
Rooms
26,264
15,509
Food and Beverage
24,108
17,647
General and administrative
5,229
2,387
Depreciation and amortization
13,750
7,207
Other
47,840
27,650
Total costs and expenses
$117,191
$70,400
     
Income from operations
18,613
12,481
Interest Expense
(19,128)
(7,846)
     
Minority Interest: 

Preferred redeemable securities

(3,159)
---
Other Expense
(396)
(1,076)
(Loss) income before income taxes
(4,070)
4,995
Benefit (provision) for income taxes
1,628
(1,999)
Net (loss) Income
(2,442)
2,996
Basic (loss) earnings per common share
$(0.09)
$0.14
Weighted average shares outstanding
27,056
21,467
Other data:    
Earnings before interest, taxes, 

Depreciation and amortization (EBITDA)

$ 32,861
$19,828
 
About Lodgian  

Lodgian, Inc. owns or manages a portfolio of 143 hotels with more than 27,000 rooms in 35 states, Canada and Europe. The hotels are primarily full service, providing food and beverage service as well as lodging and meeting facilities. Substantially all of Lodgian's hotels are affiliated with nationally recognized hospitality brands such as Holiday Inn, Crowne Plaza, Marriott, Sheraton, Hilton, Doubletree and Westin. 

Forward-Looking Statements 

Note: Statements in this press release which 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. Forward-looking statements involve known and unknown risks, which may cause the company's actual results in the future to differ materially from expected results. These risks include, among others, competition within the lodging and contract service industries; the relationship between supply and demand for hotel rooms; the effects of economic conditions; issues associated with the ongoing integration of the former Servico, Inc. and Impac Hotel Group, the acquisition and renovation of existing hotels and the development of new hotels; operating risks; the cyclical nature of the lodging industry; risks associated with the dependence on franchisers of the company's lodging properties; and the availability of capital to finance planned growth, as described in the company's filings with the Securities and Exchange Commission. 

 
Contact:
Ginny Gaines 
Director of Corporate Communications
ggaines@lodgian.com

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