NORFOLK, Neb., Feb. 5 - Supertel Hospitality, Inc. (Nasdaq: SPPR - news) reported a 22 percent increase in net income on a 23 percent gain in revenues for the year ended December 31, 1997. Net income was $4.1 million, or 85 cents per share, compared to $3.4 million, or 70 cents per share, in 1997.
Total revenues increased to $46.3 million for 1997 from $37.8 million
for 1996. Operating income for 1997 was $11.1
million compared to $9.1 million for 1996, an increase of 22 percent.
Earnings before interest, taxes and
depreciation (EBITDA) were $15.3 million and $12.3 million for 1997
and 1996, respectively, an increase of 25
percent.
``We finished 1997 on a very strong note, continuing the healthy revenue
and income comparisons we have
experienced since the second quarter of the year,'' said Paul J. Schulte,
president and CEO of Supertel Hospitality,
Inc. ``The real differences in 1997 were the seasoning of and income
contribution from our Texas properties, as
well as the positive impact of our new open-book management system,
which gives all property employees a role
and stake in the performance of the company.''
The occupancy rate was flat at 65.7 percent for 1997 and 1996. For seasoned
properties (those owned/operated
for over one year), occupancy was 67.2 percent for 1997 versus 67.9
percent for 1996. The average daily room rate
(ADR) increased to $44.48 in 1997 from $41.87 in 1996, an increase
of 6.2 percent. The result was a 6.4 percent gain
in REVPAR (revenue per available room) to $29.24 for 1997 from $27.49
for 1996.
For the fourth quarter of 1997, net income increased 31 percent on a
19 percent gain in revenues. Revenues were
$11.5 million and $9.7 million, respectively, in the fourth quarters
of 1997 and 1996. Operating income was $2.3
million compared to $2.0 million, an increase of 13 percent. EBITDA
was ahead 15 percent to $3.5 million in the
fourth quarter of 1997 from $3.0 million in the year-ago period.
For the fourth quarter, total occupancy increased to 61.9 percent in
1997 from 60.3 percent for the year-ago period.
Fourth quarter occupancy for seasoned properties was 62.1 percent versus
62.2 percent. The ADR in the fourth
quarter increased to $45.27 in 1997 from $41.91 in 1996, an increase
of 8.0 percent. The result was a 10.9 percent
gain in fourth quarter REVPAR to $28.03 for 1997 from $25.28 for 1996.
``We were particularly pleased with the strong REVPAR gain in the fourth
quarter,'' continued Schulte. ``Clearly,
our efforts to use yield management to its fullest extent are paying
off.''
At year-end 1997, the company's room count totaled 4,459, up 7.3 percent from 4,156 at year-end 1996.
For 1998, Supertel has planned room additions at two properties and
is evaluating sites for an additional Wingate
Inn. The company will also continue to focus on acquisitions as a source
of growth. ``But as you have seen from
our experience in 1997 -_ with just one property acquisition -_ we
are not willing to make acquisitions that dilute
earnings and fail to create value,'' continued Schulte.
``We are looking forward to another good year in 1998,'' concluded Schulte.
``While revenue growth may slow
somewhat due to the limited property development, we expect to see
further benefits from our open-book
management system and our use of excess cash flow for acquisitions,
or to reduce our debt levels.''
This report contains certain forward-looking statements that reflect
management's current views as well as
estimates of future economic circumstances, industry conditions, company
performance and financial results. The
statements are based on many assumptions and factors, including competition,
seasonality and interest rates, as
well as risks related to expansion, leverage and lodging industry conditions.
Any changes in such assumptions
or factors could significantly affect results.
Supertel Hospitality, Inc. owns and operates limited-service motel properties
under the Super 8, Comfort Inn and
Wingate Inn names. The company has 62 motels, primarily in the Midwest
and Texas.
SUPERTEL HOSPITALITY, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited)
Three Months Ended Dec. 31, 12 Months Ended Dec. 31,
1997 1996
1997 1996
Motel revenues:
Lodging revenues $11,107,514
$9,343,452 $44,821,763 $36,609,035
Other lodging
activities
390,770 320,186 1,523,052
1,223,353
Total motel
revenues
11,498,284 9,663,638 46,344,815
37,832,388
Direct operating expenses:
Payroll and
payroll taxes
2,855,368 2,326,973 11,067,547
9,030,390
Royalties and
advertising fund
733,363 599,701 2,978,373
2,415,065
Other lodging
3,370,506 2,896,581 12,906,110
10,577,925
Total lodging
expenses
6,959,237 5,823,255 26,952,030
22,023,380
Other lodging
activities
278,447 247,754
1,056,457 906,058
Depreciation and
amortization
1,103,740 928,976
4,060,778 3,132,866
General and
administrative
842,252 618,090 3,154,737
2,665,794
Total operating
expenses
9,183,676 7,618,075 35,224,002
28,728,098
Operating
income 2,314,608
2,045,563 11,120,813 9,104,290
Other income (expense):
Interest expense (1,146,777)
(1,086,836) (4,529,700) (3,545,296)
Miscellaneous
income (expense)
40,004 34,199
105,384 27,753
(1,106,773) (1,052,637) (4,424,316) (3,517,543)
Income before taxes 1,207,835
992,926 6,696,497 5,586,747
Income tax expense 399,372
377,969 2,594,832 2,215,500
Net income $808,463 $614,957 $4,101,665 $3,371,247
Net income per share $0.17 $0.13 $0.85 $0.70
Weighted average
shares outstanding 4,840,000
4,840,000 4,840,000 4,840,000