MEMPHIS, Tenn - Oct. 29, 1998--RFS Hotel Investors, Inc.
(NYSE: RFS) today announced unaudited operating results for the third quarter
of 1998. For the quarter ended Sept. 30, 1998, funds from operations (FFO)
was $18,258,000, or $0.67 per share, compared to $16,090,000, or $0.60
per share, for the same quarter of 1997. This represents an increase
of approximately 12% in per share FFO. This excludes a one-time charge
of $1,617,000, or $0.06 per share, for expenses incurred by the Company
in connection with its planned merger with Equity Inns, Inc. (NYSE: ENN)
which was terminated on Sept. 8, 1998.
For the nine months ended Sept. 30, funds from operations (FFO) was
$49,532,000, or $1.82 per share, compared to $43,480,000, or $1.61 per
share, for the same period in 1997. This represents an increase in year-to-date
FFO per share of approximately 13%.
The Company raised its quarterly dividend to $.385 per share, which
represents an increase of $.01 per share over the dividend for the previous
quarter. The dividend is payable on Nov. 16, 1998 to shareholders of record
on Nov. 10, 1998.
Additionally, the Company announced a number of promotions, including
the election of J. William Lovelace as president and chief operating officer
and a member of the Company's Board of Directors. Lovelace was previously
executive vice president of the Company. He has been involved in the hotel
business for over 30 years, having previously served as controller for
Holiday Inns, Inc. and president of Servico, Inc., both publicly-held companies.
He also previously owned and operated a very successful hotel management
company.
Also promoted were: Mike Pascal from vice president and chief financial
officer to executive vice president and chief financial officer; Angie
Mock from vice president to senior vice president in charge of asset management;
William Crosby from vice president to senior vice president in charge of
capital projects; and Craig Hofer, from director of financial analysis
to vice president.
Robert Solmson, RFS chairman and chief executive officer, said, "We
are extremely proud of our senior management team. They are a group of
individuals who have demonstrated that they work well together, have a
broad diversity of talent and experience, and a keen understanding of the
hospitality business. Bill Lovelace has been a stabilizing influence with
the Company since its inception and has participated and been an active
force in every important initiative."
Bill Lovelace stated, "We are extremely pleased with this quarter's
operating results. Our FFO per share was up 12%. Pro forma revenue per
available room (REVPAR) was up 5.8% over third quarter 1997 and, for the
trailing 12 months, the Company earned an unencumbered return on its investment
of approximately 13%. Additionally, we have managed to attain this growth
almost exclusively from internal sources as opposed to acquisitions. The
result is that our balance sheet remains modestly leveraged and we are
optimistic regarding our future growth prospects," Lovelace explained.
"Our hotels continue to generate substantial increases in cash flow, well
in excess of foreseeable dividend or capital expenditure requirements.
Our internal calculations indicate that it would take a decline in REVPAR
of more than 10% to precipitate a reduction in our current dividend," Lovelace
said.
In May 1998, the Financial Accounting Standards Board's Emerging Issues
Task Force (EITF) issued EITF 98-9, "Accounting for Contingent Rent in
Interim Financial Periods" ("EITF 98-9"). EITF 98-9 provides that a lessor
shall defer recognition of contingent rental income in interim periods
until specified targets that trigger the contingent income are met. Using
EITF standards, the Company's net income for the third quarter is $16,640,000,
or $0.64 per share (diluted), and $13,565,000, or $0.50 per share (diluted),
for the nine months. The EITF ruling is expected to have no impact on the
Company's annual results of operations, dividend policy, cash flow, or
FFO. Rather, the accounting changes required by EITF 98-9 are expected
to, in general, defer recognition of certain percentage rental income from
the first, second, and third quarters to the fourth quarter within a fiscal
year.
RFS Hotel Investors, Inc. is a Memphis-based real estate investment
trust (REIT) that owns 60 hotels comprising approximately 8,810 rooms in
24 states.
RFS Hotel Investors,
Inc.
Statistical Data
for the nine months ended Septmeber 30,
1998
Segment
|
ADR
|
Occupancy
|
REVPAR
|
|
|
|
Full Service |
|
|
|
|
|
|
Pro forma (1) |
$100.04 |
9.9% |
76.4% |
-2.0% |
$76.42 |
7.7% |
Actual |
$99.94 |
17.6% |
74.5% |
-2.9% |
$74.43 |
14.3% |
Extended Stay: |
|
|
|
|
|
|
Pro forma (1) |
$92.89 |
3.8% |
83.9% |
-0.1% |
$77.93 |
3.7% |
Actual |
$92.75 |
3.2% |
81.5% |
-3.8% |
$75.55 |
-0.7% |
Limited Service: |
|
|
|
|
|
|
Pro forma (1) |
$66.62 |
6.0% |
74.7% |
0.2% |
$49.75 |
6.3% |
Actual |
$65.87 |
6.8% |
73.8% |
1.0% |
$48.58 |
7.8% |
Total |
|
|
|
|
|
|
Pro forma (1) |
$83.46 |
6.5% |
77.2% |
-0.6% |
$64.41 |
5.9% |
Actual |
$83.34 |
6.5% |
75.8% |
-1.2% |
$69.23 |
9.2% |
(1) Pro forma data includes 52 of the 60 hotels owned at
Sept. 30, 1998 as if the hotels were owned for the entire period; excludes
four new hotels and one expanded hotel where room additions was not open
for all of both periods presented and three hotels which were undergoing
major renovations.
RFS Hotel Investors,
Inc.
Acquisitions and Development Data
Location
|
Brand
|
# of Rooms
|
Investiment (millions)
|
Estimated Opening date
|
Completed During
Third Quarter 1998 |
|
|
|
|
Acquisitions (None) |
|
|
|
|
Development |
|
|
|
|
Charlotte, NC |
Residence Inn |
36 |
3.6 |
|
Development
Projects at Sept. 30, 1998 |
|
|
|
|
Ft. Worth, TX |
TownePlace Suites |
95 |
6.5 |
4Q98 |
Miami Lakes, FL |
TownePlace Suites |
95 |
6.5 |
2Q99 |
Tampa, FL |
TownePlace Suites |
95 |
6.3 |
3Q99 |
Olathe, KS |
Residence Inn |
90 |
7.1 |
4Q99 |
Miami Airport-West, FL |
TownePlace Suites |
95 |
6.5 |
4Q99 |
Crystal Lake, IL (Chicago) |
Courtyard |
90 |
7.5 |
4Q99 |
Additions |
|
|
|
|
Milpitas, CA (Silicon Valley) |
Beverly Heritage |
40 |
3.8 |
3Q99 |
Certain matters discussed in this press release may constitute
forward-looking statements within the meaning of the federal securities
laws. Actual results and the timing of certain events could differ materially
from those projected in or contemplated by the forward-looking statements
due to a number of factors including general economic conditions, competitive
factors, interest rates and
the other risks inherent in the real estate business.
For further information on factors which could impact the Company and the
statements contained herein, reference is made to the filings of RFS Hotel
Investors, Inc. with the Securities and Exchange Commission, including
quarterly reports on Form 10Q, reports on Form 8-K and annual reports on
Form 10-K, including factors described in the Form 10-K for the fiscal
year ended Dec. 31, 1997 filed by RFS Hotel Investors, Inc. |