|DALLAS - May 13, 1999--Patriot American Hospitality, Inc.
(NYSE: PAH), whose shares are paired and trade with those of its operating
company, Wyndham International, Inc., today reported earnings before interest,
taxes, depreciation and amortization (EBITDA) of $184 million in the quarter
ended March 31, 1999, compared with $117.2 million for the comparable 1998
period. Funds from operations (FFO) reached $82.5 million, or $0.46 per
share for the first quarter, compared with $75.5 million, or $0.58 per
share for the 1998 first quarter. Revenues were $671 million in the 1999
quarter, up from $349.8 million the prior year.
Net income for the quarter includes $18.7 million of nonrecurring charges, related principally to severance, Y2K and transaction related costs.
James D. Carreker, Chief Executive Officer of Patriot American, said, "Our focus on building brand equity, integrating our recent best of class acquisitions, and maximizing the value of our real estate portfolio is clearly paying off, as demonstrated by our operating performance. Moreover, the $1 billion equity investment, which we expect to finalize next month, is providing flexibility to approach planned asset sales more strategically and opportunistically and to negotiate more attractive terms. With today's announcement on Richard Mahoney's appointment as CFO, our new management team is in place. We are confident that we have all the tools - people and resources - to successfully execute a focused growth strategy that will build a first-tier lodging company."
First quarter 1999 operating performance at the Company's owned portfolio continued to show improvement, with revenue per available room (RevPAR) for comparable properties increasing 3.5%. Gross operating profit (GOP) margin of owned assets increased to 38.4% from 38.1% of revenues. Performance of the owned portfolio was led by the 86 proprietary branded hotels, which achieved a 5.8% RevPAR increase in the quarter.
For the Wyndham brand, RevPAR for comparable properties increased 5.2%, led by Hotels and Resorts, the upper upscale product, which achieved a 7.1% increase, versus the industry average of 3.1%. For Wyndham Garden Hotels and Summerfield Suites, RevPAR was flat in the quarter, reflecting supply pressures in the suburban markets.
European properties posted a 9.4% RevPAR gain for the quarter, with same store increases at Arcadian and Malmaison of 9.3% and 9.6% respectively.
The Company is proceeding with its previously announced plan to focus on its core luxury and upscale lodging businesses in North America and to redeploy capital from sales of non-strategic assets. As part of this plan, the Company completed several divestitures year-to-date for a total purchase price of approximately $72 million, including three Holiday Inns, four Hampton Inns, and the Bay Meadows Racetrack.
The Company said it will not proceed with the previously announced sale of seven non-Wyndham hotels to affiliates of PaineWebber Real Estate Securities, Inc.
Also during the first quarter of 1999, the Company secured four new
management contracts, including the former Marriott I Drive in Orlando,
FL; a new Wyndham Resort in Telluride, CO; Teatro - A Wyndham Grand Heritage
in Denver, CO; and a new Wyndham Garden in Memphis, TN.
Note: Brand statistics are based on comparable hotels operated by the Company for both quarters.
(a) Includes Wyndham Hotels, Wyndham Resorts and Wyndham Grand Heritage which Smith Travel (STR) classifies as the Upper Upscale chain segment. STR classifies Wyndham Garden as an Upscale chain. (b) Total owned statistics for all hotels owned as of 3/31/99 excluding seven hotels that have been sold, one hotel that is closed, and one hotel with at least 25% of rooms and public areas out of service.
About Patriot American Hospitality, Inc. and Wyndham International, Inc.
Patriot American Hospitality, Inc. ranks among the nation's largest hotel companies. Its paired operating company, Wyndham International, Inc., comprised of the Grand Bay Hotels Resorts Division, the Wyndham Hotel Group and PAH Management Services, leases, manages and franchises primarily upscale and luxury hotel and resort properties represented by its proprietary brands and provides management services for third-party owned hotels and resorts. Upon completion of the spin-off of Interstate's third-party management business, the portfolio will include 311 hotels and resorts with more than 74,000 rooms.
|Also See:||The 1064-room Marriott International Drive in Orlando Will Convert to a Wyndham Resort / March 1999|
|Patriot American Hospitality, Inc. Divests of Hotels Not Candidates for Conversion to Wyndham Brand / Divestiture Transactions Totals $206.5 Million / Nov 1998|