| August 15, 2003 - Candlewood Hotel Company,
Inc. (BULLETIN BOARD: CNDL) , a leading owner, manager and franchisor of
high-quality, value-oriented, business travel hotels, today announced results
for its second quarter ended June 30, 2003.
Second Quarter 2003 Results
Comparing the operating results of the Candlewood hotels owned, leased
and managed by the Company, occupancy decreased 4.6 points to 74.3 percent,
compared to 78.9 percent in the second quarter of 2002. Average daily rate
(ADR) for the quarter ended June 30, 2003 was $55.17, a 0.1 percent increase,
compared to $55.11 in the second quarter of 2002. Revenue per available
room (RevPAR) was $40.96 for the quarter ended June 30, 2003, a decrease
of 5.8 percent from $43.50 in the second quarter of 2002.
Revenue from the Company's owned and leased hotels for the quarter ended
June 30, 2003 was $30.9 million, compared to $32.4 million for the same
period in 2002. Total hotel operating revenue (including hotel operations,
franchise and management fee income, and loss from joint ventures) for
the quarter ended June 30, 2003 was $31.3 million, compared to $33.3 million
for the same period in 2002. The decrease in total revenue over the comparable
period was primarily attributable to the decrease in RevPAR at the Company's
hotels.
Hotel and corporate operating expense was $20.8 million for the second
quarter of 2003, a $1.5 million decrease compared to the second quarter
of 2002 operating expense of $22.3 million. The decrease in operating expense
was primarily attributable to reduced advertising expense and non-hotel
staffing reductions. Income from hotel operations (hotel operating revenues
less hotel and related corporate operating expenses) was $10.5 million
for the second quarter of 2003, compared with $11 million for the comparable
period in 2002. Loss before preferred dividends was $6.8 million
for the quarter ended June 30, 2003, compared with a loss of $4.3 million
for the same time period in 2002. The increase in net loss over the
comparable period during 2002 was primarily attributable to an impairment
loss of $3.6 million recorded by the Company in the second quarter of 2003
associated with the sale and leaseback of seven joint venture hotels. The
sale and leaseback transaction was completed in July of 2003.
During the second quarter, four franchised hotels opened. As of June
30, 2003, there were four Candlewood franchised hotels under construction.
In addition, during the quarter, the Company purchased one hotel from its
joint venture with Mass Mutual and Boston Capital.
CANDLEWOOD HOTEL COMPANY, INC.
SECOND QUARTER OPERATING RESULTS
(Unaudited) (In thousands, except share and per share data)
For the
For the
three-months ended six-months ended
June 30, June
30,
2003 2002 2003
2002
Revenues:
Hotel operations
$30,856 $32,397 $59,402 $62,373
Franchise and management
fee income 1,337 1,184
2,390 2,115
(Loss) from joint ventures
(870) (297) (1,964)
(772)
Total hotel
operating revenues 31,323 33,284
59,828 63,716
Proceeds from sales of
hotels, net
of deferred gain
of $0 and $0,
respectively
- 145,000 -
145,000
Deferred gain recognition
on sales
of hotels
405 355
810 638
Total revenues
31,728 178,639 60,638 209,354
Operating costs and expenses:
Hotel operating expenses
18,996 20,570 37,587 39,772
Corporate operating expenses
1,823 1,726 3,210
3,168
Rent expense on leased
hotels 11,500
10,946 22,982 18,120
Depreciation and amortization
1,351 1,121 2,603
3,790
Impairment loss on assets
held for
sale
3,645 -
3,645 8,604
Loss on extinguishment
of debt -
2,115 -
2,115
Total operating
costs and expenses 37,315 36,478 70,027
75,569
Costs of hotels sold
- 145,000 -
145,000
(5,587) (2,839) (9,389) (11,215)
Interest income
28 92
64 185
Interest expense
(1,258) (1,527) (2,405) (4,955)
Income (loss)
before preferred
stock
dividends
(6,817) (4,274) (11,730) (15,985)
Preferred stock dividends
(2,765) 2,000 (5,097) (3,979)
Net (loss) available to common stockholders
$(9,582) $6,274 $(16,827) $(19,964)
Per share data:
Net (loss) per share of common stock - basic and diluted
$(1.06) $(0.69) $(1.86) $(2.21)
Weighted average
shares
outstanding
- basic and diluted 9,025 9,025
9,025 9,025
CANDLEWOOD HOTEL COMPANY, INC.
For the For the
three-months ended six-months ended
June 30, June 30,
2003 2002 2003
2002
Hotel statistics (Candlewood
owned,
leased or managed)
# of Hotels
79 78
79 78
Average occupancy %
74.3% 78.9% 71.1%
75.8%
Average daily rate
$55.17 $55.11 $55.79 $55.57
Revenue per available room
$40.96 $43.50 $39.66 $42.12
Growth
-5.8%
-5.8%
Hotel statistics - comparable
hotels
(owned, leased or
managed open as
of beginning of
period)
# of Hotels
78 78
77 77
Average occupancy %
74.1% 78.9% 70.9%
75.8%
Average daily rate
$54.90 $55.11 $55.56 $55.56
Revenue per available room
$40.70 $43.50 $39.39 $42.12
Growth
-6.4%
-6.5%
As of June 30,
2003
2002
Open Hotels
Owned
12
11
Leased
57
57
Managed (A)
2
2
Joint Venture
8
9
Franchised
34
29
Total Open
113
108
Under Construction
Owned
-
-
Leased
-
-
Managed
-
-
Joint Venture
-
-
Franchised
4
2
Total Under Construction
4
2
Total Hotels
117
110
Open Rooms
Owned
1,443
1,300
Leased
6,888
6,888
Managed (A)
203
203
Joint Venture
1,016
1,159
Franchised
3,326
2,965
Total Open
12,876
12,515
Under Construction Rooms
Owned
-
-
Leased
-
-
Managed
-
-
Joint Venture
-
-
Franchised
433
149
Total Under Construction
433
149
Total Rooms
13,309
12,664
Signed Franchise Agreements
19
25
(A) Includes two managed
hotels not under the Candlewood brand. |
Form 10-Q
The Company filed its Quarterly Report on Form 10-Q for the quarter
ended June 30, 2003 on August 14, 2003.
Candlewood Hotel Company, headquartered in Wichita, Kansas, owns, operates
and franchises Candlewood Suites and Cambridge Suites -- hotel properties
that offer high-quality accommodations for all guests, while catering to
mid-market and upscale business and personal travelers seeking multiple
night stays. Jack DeBoer, Chairman and CEO and founder of Residence Inn,
started Candlewood Hotel Company in late 1995.
Interim financial results may not be indicative of results for future
periods. The matters in this press release include "forward looking statements"
within the meaning of the safe harbor provisions of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934 and are qualified by cautionary statements contained herein and in
Candlewood Hotel Corporation filings with the Securities and Exchange Commission.
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