RevPAR for Owned hotels Up 11%
Hotel Operating Statistics
|DALLAS, April 29, 2004 - La Quinta Corporation
(NYSE: LQI) today announced financial results for the first quarter ended
March 31, 2004.
La Quinta reported the following financial results. A detailed schedule reconciling net loss to Adjusted EBITDA is included in the supplemental tables.
For the first quarter 2004, La Quinta reported:
La Quinta's total company RevPAR increased 11% during the first quarter. Guidance for the first quarter was for a 9% RevPAR increase. The improvement was driven by an occupancy increase of 10 percentage points, partially offset by lower average rates. In addition, La Quinta continued to improve its performance relative to its local market competition. For the quarter, RevPAR of La Quinta's direct competitors in all markets increased 6% while La Quinta's RevPAR increased 11%. La Quinta's RevPAR in its top ten markets increased 12% compared to a RevPAR increase of 7% by La Quinta's direct competitors. As a result, La Quinta continues to expand its RevPAR premium.
"We continue to see strong performance from our Internet distribution channels and frequent stayer program," commented Mr. Cash. "We are pleased that our sales force generated revenues that exceeded last year's first quarter results as the new sales force gained traction. Leisure travel remains strong and we are encouraged by the signs that business travel is picking up."
During the first quarter, franchise rooms increased by 223 rooms (3 hotels). As of March 31, 2004, La Quinta had opened 8,925 franchise rooms (99 hotels) compared to 6,009 franchise rooms (68 hotels) at March 31, 2003. La Quinta continues to expect to open approximately 4,000 franchise rooms (50 hotels) annually.
Revenues for the first quarter increased 11% over the first quarter of 2003. The revenue increase was primarily the result of a total company RevPAR increase of 11% due to significantly increased occupancy levels and a more favorable travel environment compared to last year, which was impacted by the war in Iraq, partially offset by a decline in average rates.
Net loss was $12 million, or ($0.07) per share, for the first quarter of 2004, versus a net loss of $50 million, or ($0.35) per share, for the first quarter of 2003. The improved net loss during the quarter was primarily the result of revenue increases and lower impairment expense compared to the first quarter of 2003, partially offset by increased sales and marketing expenses.
Adjusted EBITDA for the first quarter of 2004 was $37 million, a 14% increase compared to $32 million in the first quarter of 2003 and $2 million ahead of first quarter guidance. The increase in Adjusted EBITDA was driven primarily by revenue improvement and strong cost management at the property level. La Quinta's cost per rented room decreased 5% over the same quarter last year.
"La Quinta once again benefited from an improvement in Adjusted EBITDA as we maintained our expense controls and increased revenues," said David L. Rea, Executive Vice President and Chief Financial Officer. "We continue to focus on our growth strategy to improve cash flow from existing company owned hotels, to grow our franchising program and to acquire limited service assets and/or brands that meet our strategic and economic objectives."
At March 31, 2004, La Quinta had $291 million in cash and cash equivalents and no borrowings under its $150 million credit facility (other than $20 million in letters of credit). La Quinta's net debt (total indebtedness less cash and the investment in its 7.114% Securities) was $463 million at March 31, 2004. During the quarter, La Quinta repaid $19.5 million of the remaining balance of its 7.25% Senior Notes that matured March 2004.
"La Quinta is in an excellent position to benefit from the recovering economy with a strong portfolio of well maintained properties, high guest satisfaction scores and an exceptional franchising program in place," concluded Mr. Cash. "Our balance sheet is strong, our revenue initiatives are positively impacting financial results and lodging demand is improving amidst low supply growth."
La Quinta is increasing its 2004 guidance and currently anticipates a total company RevPAR increase of 6%, Adjusted EBITDA of approximately $168 million and a net loss of $49 million. The net loss includes an estimated pretax loss of $28 million on early retirement of the 7.114% Notes. Capital expenditures for 2004 are currently estimated to be approximately $70 million, which includes $20 million related to a redevelopment project in downtown San Antonio. La Quinta continues to expect its 2004 RevPAR growth to be higher in the first half of the year than in the second half.
For the second quarter of 2004, La Quinta currently anticipates total
company RevPAR to increase approximately 9% over the second quarter of
2003. Adjusted EBITDA is currently anticipated to be approximately $47
million and net loss is currently anticipated to be approximately $5 million.
Schedules reconciling net loss to Adjusted EBITDA guidance for the second
quarter and full year 2004 are included in this press release.
Dallas based La Quinta Corporation, a leading limited service lodging company, owns, operates or franchises more than 370 La Quinta Inns and La Quinta Inn & Suites in 33 states.
Certain matters discussed in this press release may constitute "forward- looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995.
La Quinta Corporation
|Also See:||La Quinta Founder Sam Barshop Receives Hotel Industry Lifetime Achievement Award; Credited with Creating the Limited Service Lodging Concept / January 2004|
|La Quinta Inn & Suites in Galveston, Texas Is 100th Franchised Property for La Quinta Corporation / March 2004|