Choice Hotels Reports Q4 Net Income of $31.8 million and $139.4 million for Full Year; Q4 Domestic RevPAR Increased 5%
February 16, 2017 7:11am
ROCKVILLE, Md., Feb. 15, 2017 -- Choice Hotels International, Inc. (NYSE: CHH) today reported its results for the three months and year ended December 31, 2016. Net income for the fourth quarter of 2016 was $31.8 million or $0.56 per diluted share, compared with $29.2 million or $0.51 per diluted share for the fourth quarter of 2015. Fourth quarter adjusted earnings before income taxes, depreciation and amortization (EBITDA) was $56.0 million, compared with $50.6 million in the prior year, an increase of 11 percent.
"We are pleased to report another record year of revenue, operating income and net income performance. 2016 was a strong year for Choice Hotels highlighted by our domestic RevPAR growth which continues to outpace industry performance and strong development results," said Stephen P. Joyce, chief executive officer of Choice Hotels. "There are many contributing factors to our success highlighted by our efforts to deliver new strategic programs and tools designed to increase reservation delivery to our franchisees, the acceleration of our growth and performance in the upscale category, and our strong development momentum. We are optimistic that our expanded programs and services will result in continued strong RevPAR performance and developer interest in 2017 and beyond."
Highlights of the company's fourth quarter and full-year 2016 results are as follows:
"We continue to have great success in executing and opening new construction hotels in top markets, as developers have taken note of our strong RevPAR performance and the brand strategies that we have implemented to improve hotel performance," said Patrick Pacious, president and chief operating officer, Choice Hotels. "We are particularly pleased that Cambria hotel & suites and the Comfort brands continue to draw attention from top hotel developers, resulting in an increase in new construction projects in prime urban locations. We expect to see continued interest and development of these brands in highly desirable markets."
During the year ended December 31, 2016, the company recorded an executive termination benefit charge of approximately $2.2 million. This special item impacted diluted EPS by $0.03 per share for the year ended December 31, 2016. The company uses non-GAAP measures that exclude executive termination benefits because those non-GAAP measures allow for period-over-period comparison of on-going core operations before the impact of these charges. These non-GAAP measures, which are reconciled to the comparable GAAP measures in Exhibit 8, include adjusted net income, adjusted diluted EPS, adjusted hotel franchising selling, general and administrative expenses, adjusted EBITDA and adjusted hotel franchising margins.
Use of Cash Flows
During the fourth quarter of 2016, the company's board of directors announced a 5 percent increase, effective the first quarter of 2017, of the current quarterly dividend rate per common share to $0.215 per share. During the year ended December 31, 2016, the company paid cash dividends totaling approximately $46 million.
The company repurchased 0.6 million shares of common stock under its share repurchase program during the year ended December 31, 2016, at a total cost of approximately $30 million. During the fourth quarter, the company's board of directors approved increasing the number of shares authorized under its long-standing share repurchase program by 3 million shares. Thus, the company currently has authorization to purchase up to 4.0 million additional shares under this program.
Hotel Development & Financing
Pursuant to its program to encourage acceleration of the growth of our upscale select-service Cambria hotels & suites brand, the company advanced approximately $104 million in support of the brand's development during the year ended December 31, 2016. The company also recycled approximately $28 million of investments in support of Cambria development projects resulting in net advances of $76 million for the current year. These advances are primarily in the form of joint venture investments, forgivable key money loans, senior and mezzanine lending and site acquisitions. On December 31, 2016, the company had approximately $204 million reflected in its consolidated balance sheet pursuant to these financial support activities. With respect to lending and joint venture investments, the company generally expects to recycle these loans and investments within a five-year period.
The company's consolidated 2017 outlook reflects the following assumptions:
Non-Hotel Franchising Activities
To view full financial release and corresponding tables please click the PDF icon or visit:
Tags: choice hotels,
q4 2016 results
Choice Hotels International, Inc. (NYSE: CHH) is one of the world's largest lodging companies. With more than 6,500 hotels franchised in more than 40 countries and territories, Choice Hotels International represents more than 500,000 rooms around the globe. As of December 31, 2016, 775 hotels were in our development pipeline. Our company's Ascend Hotel Collection®, Cambria® hotels & suites, Comfort Inn®, Comfort Suites®, Sleep Inn®, Quality®, Clarion®, MainStay Suites®, Suburban Extended Stay Hotel®, Econo Lodge®, Rodeway Inn®, and Vacation Rentals by Choice Hotels™ brands provide a spectrum of lodging choices to meet guests' needs. With more than 30 million members and counting, our Choice Privileges® rewards program enhances every trip a guest takes, with benefits ranging from instant, every day rewards to exceptional experiences, starting right when they join. All hotels and vacation rentals are independently owned and operated. Visit us at www.choicehotels.com for more information.
SkyTouch Technology® is a business division of Choice Hotels that develops and markets cloud-based technology products, including inventory management, pricing and connectivity to third party channels, to hoteliers not under franchise agreements with the company.
Contact: Scott Oaksmith, Senior Vice President, Finance & Chief Accounting Officer
Contact: Scott Carman, Director, Public Relations
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