Choice Hotels reveals latest results
Choice Hotels International has revealed its full-year (2009) and fourth quarter results.Excluding special items, adjusted earnings before interest, taxes and depreciation (“EBITDA”) were $163.7 million for the year ended December 31, 2009, compared to $200.5 million for full year 2008. Operating income was $148.1 million compared to $174.6 million for the same period of 2008 and franchising revenues declined $45.6 million or 15% from $300.3 million to $254.7 million. Total revenues declined $77.5 million or 12% to $564.2 million.Domestic unit and room growth increased 4% and 3.9% and domestic system-wide revenue per available room (RevPAR) declined 14.4% for full year 2009 compared to full year 2008. The company executed 369 new domestic hotel franchise contracts for the year ended December 31, 2009, a decline of 47% compared to the 698 contracts executed in the same period of the prior year. The number of domestic hotels under construction, awaiting conversion or approved for development declined 26% to 727 hotels representing 57,140 rooms; the worldwide pipeline declined 24% to 843 hotels representing 66,585 rooms. Fourth Quarter Results Adjusted EPS for fourth quarter 2009 were $0.43 compared to $0.41 for the same period of the prior year. Diluted EPS were $0.40 for fourth quarter 2009 compared to $0.30 for fourth quarter 2008. Adjusted diluted EPS for fourth quarter 2009 and 2008 exclude certain special items, as described below, totaling $0.03 and $0.11, respectively. Excluding special items, adjusted EBITDA were $39.7 million for the three months ended December 31, 2009, compared to $46.9 million for the same period of 2008. Operating income for both the three months ended December 31, 2009 and 2008 were $34.1 million. Franchising revenues declined 13% from $71.3 million for the three months ended December 31, 2008 to $62.2 million for the same period of 2009. Total revenues for the three months ended December 31, 2009 declined 9% compared to the same period of 2008. Domestic system-wide revenue per available room (“RevPAR”) declined 14.4% for the fourth quarter of 2009 compared to the same period of 2008. The company executed 112 new domestic hotel franchise contracts for the three months ended December 31, 2009, a decline of 46% compared to the 207 contracts executed in the same period of the prior year. 2010 outlookChoice Hotels said the uncertainty around the current economic environment and credit market conditions and their impact on travel patterns and hotel development activities makes it difficult to predict future results, particularly as they relate to underlying assumptions for RevPAR, new hotel franchise and relicensing sales and interest and investment income and expense. The company’s first quarter 2010 diluted EPS is expected to be $0.25. The company expects full-year 2010 diluted EPS to be between $1.65 and $1.70. EBITDA for full-year 2010 are expected to be between $166 million and $170 million. These estimates include the following assumptions: The company expects net domestic unit growth of approximately 2% in 2010; RevPAR is expected to decline approximately 12% for first quarter of 2010 and decline between 2% and 4% for full-year 2010; The effective royalty rate is expected to increase 6 basis points for full-year 2010; All figures assume the existing share count and an effective tax rate of 36.5% for the first quarter and full-year 2010.Projections assume that the company’s existing credit facility remains in place for full-year 2010.
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