| COLUMBUS, Ohio, May 13, 1999 - Red Roof Inns, Inc.
(NYSE: RRI), one of the leading economy lodging chains in the United States,
today reported record financial results for first quarter 1999. Diluted
earnings per share for the quarter were 5 cents, up 150 percent over first
quarter diluted earnings per share of 2 cents in 1998. Revenues for the
quarter totaled $85.7 million, a 1 percent increase from the same period
last year. Fee-based revenue increased significantly this quarter to almost
$1 million, up 86 percent from first quarter 1998. Net income was $1.3
million, up 147 percent over first quarter 1998 net income of $0.5 million.
Earnings before interest, income taxes, depreciation and amortization (EBITDA)
increased 7 percent to $24.0 million for the quarter from $22.4 million
in 1998. Free cash flow (cash flows from operations less net capital expenditures)
was $4.2 million for the first quarter, an increase of $11.1 million over
the 1998 first quarter deficit of $6.9 million.
"Red Roof Inns had an excellent first quarter. We continue to have a
positive earnings outlook for the balance of the year," said Francis W.
"Butch" Cash, chairman of the board, president and chief executive officer.
"We are staying focused on our franchise growth strategy, continually improving
our operating efficiencies and implementing new marketing programs."
 "We've
now completed all the Inns in our corporate development pipeline, opening
three properties during the first quarter. They include Inns in Brentwood,
Tenn., Sky Harbor Airport in Phoenix, Ariz., and our newest property in
downtown Columbus," Cash continued. "Our strategic focus is now squarely
on franchised Inn development. At the end of the first quarter, we had
47 franchised properties open, up from 7 that were open at the end of first
quarter 1998. We are on target to exceed our 50 planned openings for 1999.
With our aggressive franchising strategy, we expect our fee-based revenue
to show continued significant increases in the future."
The Company's operating performance was impacted by a challenging quarter-
to-quarter comparison in which 1998 first quarter RevPAR increased more
than 6 percent and occupancy increased 8 percentage points. The Comparable
Inn occupancy rate dropped 2.7 percentage points to 69.2 percent for the
first quarter. This decline can be attributed to the Company's 25th anniversary
promotion in first quarter 1998 and the severe winter weather in 1999.
Net ADR (Average Daily Rate) for Comparable Inns was up 2.8 percent for
the first quarter while Comparable Inn RevPAR (Revenue Per Available Room)
dropped 1.0 percent.
The Company used its free cash flow to repurchase 447,500 shares of
its common stock during the first quarter of 1999, bringing the total shares
repurchased under the 1 million share authorization to 796,900 shares.
The Board of Directors authorized the expansion of the Company's share
repurchase program from 1 million to 2 million shares on May 12, 1999.
Cash commented, "The continuation of our share repurchase program represents
an excellent investment opportunity for Red Roof Inns."
Red Roof Inns, Inc. (NYSE: RRI) is one of the leading economy lodging
chains in the U.S. With more than 300 properties and over 35,000 rooms
in 37 states and the District of Columbia, Red Roof Inns offers business
and leisure travelers exceptional value, quality and convenience. With
one of the highest occupancy rates in the industry, Red Roof Inns is expanding
its operations through franchising and strategic partnerships.
Red Roof Inns, Inc.
Comparable Inn Statistics (a)
|
First Quarter Ended |
|
|
|
April 4, 1998 (13 weeks)
|
April 3, 1999 (13 weeks)
|
| Occupancy Percentage |
71.9% |
69.2% |
| Average Daily Rater per Occupied Room (b) |
$42.95 |
$44.16 |
| Renvenue Per Available Room (c) |
$30.88 |
$30.56 |
(a) Comparable Inns are the 247 Inns that the Company
owned and operated at the beginning of and throughout the first quarter
of 1999 following four successive quarters as open, operating, fully renovated
or constructed properties.
(b) Average daily rate per occupied room is room
revenue (less sales allowances) divided by the total number of rooms occupied.
(c) Revenue per available room is the occupancy
percentage times the average daily rate per occupied room.
Red Roof Inns, Inc.
Property Information
|
First Quarter April 4, 1998 |
Year Ended January 2, 1999 |
First Quarter April 3, 1999 |
| Company owned: |
|
|
|
|
Inns
|
258 |
256 (d) |
259 |
|
Rooms
|
29,648 |
29,562 (d) |
30,009 |
| Franchise: |
|
|
|
|
Inns
|
7 |
39 |
47 |
|
Rooms
|
690 |
4,619 |
5,489 |
(d) Four company-owned Inns (452 rooms) were sold
and a company-owned Inn (125 rooms) was leased to a franchisee in the second
quarter of 1998.
This press release includes forward-looking statements, including
without limitation, statements relating to expected openings of franchised
Inns and future revenues and earnings, which should be considered forward-looking
statements within the meaning of the Private Securities Litigation Reform
Act of 1995. The Company wishes to caution readers that these forward-looking
statements involve known and unknown risks and uncertainties, and are subject
to change based on various important risk factors that could cause actual
Company results, performance, plans, goals, and objectives to differ materially
from those expressed or implied by such forward-looking statements. The
following factors, among others, in some cases have affected and in the
future could affect the Company's results, performance, plans, goals, and
objectives: company expansion risks, lodging industry risks, financial
market risks, cyclicality, seasonality, competition, year 2000 issues,
regulatory issues, environmental matters, franchising risks and control
by existing stockholders. For a discussion of these and other risk factors,
please refer to the Company's Annual Report on Form 10-K and in other periodic
reports filed with the Securities and Exchange Commission (SEC), copies
of which are available from the SEC or may be obtained upon request from
the Company. The Company expressly disclaims any obligation or undertaking
to update or revise any forward-looking statements contained herein to
reflect any changes in the Company's expectations or results, or changes
in events.
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