First Quarter 2000 Loss of $0.02 per Share;
Hotels Paying Royalties Grow to 397
|ATLANTA, May 9, 2000 - U.S. Franchise Systems,
Inc. (Nasdaq: USFS) today reported earnings from operations, before certain
charges, of $405,000 or $0.02 per share in first quarter 2000 compared
to earnings of $505,000 or $0.03 per share in first quarter 1999.
Giving effect to charges of $760,000 or $0.04 per share recorded in the
first quarter of 2000 related to a settlement of a legal dispute involving
the Company’s management subsidiary and to costs associated with the Company’s
review and evaluation of strategic alternatives, it recorded a loss of
$355,000 or $0.02 per share. The Company also noted that it had recorded
no interest income during the first quarter of 2000 related to a $15 million
loan made to Alpine Hospitality Ventures, which had accounted for earnings
of $450,000 or $0.02 per share in the first quarter of 1999.
Total revenues for the three months ended March 31, 2000 increased 51 percent to $4.8 million, up from $3.2 million in the same period in 1999. The largest component of revenue growth continued to come from franchise royalty fees which increased 78 percent from approximately $1.8 million in the first quarter 1999 to approximately $3.1 million in the first quarter 2000. Franchise royalty fee growth reflects a 77 percent increase in the number of hotels paying royalties to the Company from 224 at March 31, 1999, to 397 at March 31, 2000.
Franchise sales, openings, ground breaks and brand performance statistics for the first quarter of 2000 were solid. During the quarter, U.S. Franchise Systems executed 76 franchise agreements systemwide, 38 properties broke ground or began the conversion process, and 33 properties opened. USFS ended the quarter with a systemwide total of 425 hotels open and 124 under construction. This includes 190 Microtel Inns & Suites, 110 Hawthorns and 125 Best Inns & Suites properties open, and 56 Microtels, 40 Hawthorns and 28 Bests under construction.
First Quarter 2000 Brand Highlights
Microtel Inns & Suites
Atlanta-based U.S. Franchise Systems was formed in 1995. USFS franchises Microtel Inns & Suites, the chain of all newly-constructed, budget hotels, Hawthorn, the predominantly upscale extended-stay chain, and Best Inns & Suites, the economy/mid-priced chain. The Company trades under the symbol USFS on the Nasdaq National Market.
Certain matters discussed in this release are “forward-looking statements”, including statements about the Company’s future plans, goals and other events which have not yet occurred.
Vice President, Corporate Communications
U.S. Franchise Systems, Inc.
|Also See:||Loss of $13.7 million Reported by U.S. Franchise Systems for 1999; Receives Inquiries Regarding the Possible Sale of the Company / Feb 2000|
|IMike Leven Recipient of the 1999 ISHC Pioneer Award for Trend-Setting Work in Hotel Franchising / Jan 2000|