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Net Income of $9.7 million; Grows Number of Hotels 3.0% to 4,678 |
SILVER SPRING, Md. (April 22, 2003) � Choice
Hotels International, Inc. (NYSE:CHH) today reported first quarter 2003
net income of $9.7 million, or $0.26 diluted earnings per share (EPS),
a 30% increase in EPS over the same period of a year ago. These results
exceeded consensus estimates by $0.02 per share. At the end of first
quarter 2002, the company reported net income of $8.6 million, or $0.20
diluted EPS.
The company also announced that its operating income increased to $17.2 million for first quarter 2003, a 7.4% gain over the $16.0 million reported at the end of first quarter 2002. �First quarter results were especially gratifying, given the sluggish economy and uncertainty in travel markets,� said Charles A. Ledsinger, Jr., president and chief executive officer. �Choice continues to enjoy very strong unit growth, with this quarter topping 5%. This development pace speaks to the inherent value in our brands and the ongoing demand for them by both hotel owners and consumers.� First Quarter Performance The company reported royalty revenues of $27.3 million for first quarter
2003, compared to $26.0 million for the same period in 2002, an increase
of 5.0%. Royalty revenues in the first quarter of 2003 include $0.9
million attributable to Flag Choice Hotels, which the company began consolidating
in July of 2002.
The company adopted Statement of Financial Accounting Standards No. 148, �Accounting for Stock-Based Compensation � Transition and Disclosure,� and began expensing the cost of stock options based on their estimated fair value for all awards granted after January 1, 2003. During the first quarter 2003, the company�s net income includes approximately $0.1 million of expense related to stock options. For all of 2003, the expense associated with stock options is expected to be $0.7 million. 2003 Unit Growth The total number of domestic Choice hotels on-line grew by 5.1% to 3,516 as of March 31, 2003 from 3,344 as of the same period a year ago. Net domestic property additions in the first quarter of 2003 were 34, compared to 17 net domestic additions in the same period of 2002. Choice executed 71 new domestic hotel franchise contracts representing 7,607 rooms in first quarter 2003, compared to 59 new contracts representing 5,208 rooms for the same period a year ago. In the first quarter 2003, 20 contracts for new construction hotels, representing 1,444 rooms were executed, compared to 10 contracts, representing 639 rooms for the same period a year ago. At the end of first quarter 2003, Choice had 297 hotels under development in its domestic hotel system, representing 24,719 rooms. As of March 31, 2003, the total number of Choice hotels worldwide grew 3.0% to 4,678 from 4,541 as of the same date a year ago. This growth represents an increase of 3.5% in the number of rooms open to 375,859 from 363,074. At the end of first quarter 2003, Choice had 385 hotels under development worldwide, representing 35,018 rooms. Second Quarter & Year 2003 Estimates The company�s second quarter 2003 earnings, which more fully reflect the effect of the war in Iraq, are expected to be in the range of $0.39 to $0.41. Full year 2003 diluted EPS are expected to be between $1.65 and $1.68. Notable Events Among the notable company events occurring since the previous earnings report:
Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the federal securities law. |
John Hawkins Vice President, Corporate Communications Tel: (301) 592-5075 [email protected] www.choicehotels.com |