Company Press Release
August 1, 2000
MeriStar Hotels & Resorts (NYSE: MMH), the nation's largest independent hotel management company, yesterday
announced results for the second quarter ended June 30, 2000.
Net income increased to $6.9 million for the 2000 second quarter, or $0.21 per diluted share, which was in line
with consensus analyst expectations. Second quarter revenues rose 8.0 percent to $372.7 million. Earnings before
interest expense, income taxes, depreciation and amortization (EBITDA) for the second quarter improved 24.7 percent
to $15.7 million.
Same-store average daily rate (ADR) for full-service, leased hotels increased 7.0 percent to $109.87, and occupancy
remained unchanged at 76.7 percent. RevPAR for these hotels increased 7.0 percent to $84.26.
For all leased hotels, RevPAR increased 6.1 percent to $79.32, ADR advanced 6.1 percent to $103.77 and occupancy
was steady at 76.4 percent.
``Second quarter operating results were particularly good due to a strong economy and aggressive marketing programs,
both at the property and regional levels,'' said Paul W. Whetsell, chairman and chief executive officer. ``We also
benefitted from the acquisition of BridgeStreet Accommodations, Inc., late in the second quarter, which had a small,
but positive impact on second quarter earnings.
``The addition of BridgeStreet broadens our hospitality management base and complements our hotel, golf course
and vacation ownership management segments,'' Whetsell said. He noted that the company also gained five new hotel
management contracts during the quarter, including two Embassy Suites hotels acquired by MeriStar Investment Partners.
In addition, MeriStar's Doral Golf unit added two contracts, the Nordic Hills Golf Club in suburban Chicago and
the Elkhorn Golf Club in Sun Valley, Idaho, bringing to 12 the number of golf courses managed by the company.
``The integration of BridgeStreet into our corporate structure has gone quite smoothly,'' said David E. McCaslin,
MeriStar Hotels & Resorts president. ``We already are beginning to see the benefits of synergies and cross-marketing
opportunities.''
MeriStar Hotels & Resorts operates 224 hotels, resorts, and conference centers with more than 48,000 rooms
in 34 states, the District of Columbia, Canada, Puerto Rico and the U.S. Virgin Islands. MeriStar develops and
operates timeshare resorts and condominiums through its Doral Vacation Ownership division. Through its Doral Golf
brand, MeriStar manages 12 golf courses. BridgeStreet Accommodations, a MeriStar subsidiary, is one of the world's
largest corporate housing providers, offering upscale, fully furnished corporate housing throughout the U.S., Canada,
the United Kingdom and 28 additional destinations worldwide. For more information about MeriStar Hotels & Resorts,
visit the company's web site: www.meristar.com
This press release contains forward-looking statements about MeriStar Hotels & Resorts, Inc., including those
statements regarding future operating results and the timing and composition of revenues, among others. Except
for historical information, the matters discussed in this press release are forward-looking statements that are
subject to certain risks and uncertainties that could cause the actual results to differ materially, including
the following: the ability of the company to successfully implement its acquisition strategy and operating strategy;
the company's ability to manage rapid expansion; changes in economic cycles; competition from other hospitality
companies; and changes in the laws and government regulations applicable to the company.
MeriStar Hotels & Resorts, Inc.
Statements of Operations (1)
(Unaudited, in thousands except per share
amounts and operating statistics)
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
Revenue
Rooms $253,242 $242,598 $489,548 $470,911
Food and beverage 80,193 76,888 154,579 149,201
Corporate housing 9,392 - 9,392 -
Other operating departments 25,186 22,294 49,594 45,661
Management and other fees 4,675 3,443 10,071 5,288
-------- -------- -------- --------
Total revenue 372,688 345,223 713,184 671,061
Operating expenses by department:
Rooms 56,868 56,041 110,868 108,608
Food and beverage 56,619 55,456 110,643 108,752
Corporate housing 6,037 - 6,037 -
Other 14,113 11,527 27,553 22,239
Undistributed operating expenses:
Administrative and general 58,155 53,005 115,624 108,714
Property operating costs 48,535 47,464 96,749 92,903
Participating lease expense 116,683 109,158 223,438 211,513
Depreciation and amortization 2,119 1,487 3,762 3,036
-------- -------- -------- --------
Total operating expenses 359,129 334,138 694,674 655,765
-------- -------- -------- --------
Net operating income 13,559 11,085 18,510 15,296
Interest expense, net 1,353 1,280 2,544 2,506
-------- -------- -------- --------
Income before minority
interests and income taxes 12,206 9,805 15,966 12,790
Minority interests 1,036 1,557 1,323 2,069
Income taxes 4,242 2,978 5,527 3,967
-------- -------- -------- --------
Net income $ 6,928 $ 5,270 $ 9,116 $ 6,754
======== ======== ======== ========
Diluted income from operations:
Net income $ 6,928 $ 5,270 $ 9,116 $ 6,754
Minority Interest, net of tax - 887 824 1,303
-------- -------- -------- --------
Diluted net income $ 6,928 $ 6,157 $ 9,940 $ 8,057
======== ======== ======== ========
Weighted average number of
diluted shares of common stock:
Common Shares Outstanding 33,128 27,366 32,380 26,426
Common Stock Equivalents 477 5,827 3,698 5,814
-------- -------- -------- --------
33,605 33,193 36,078 32,240
======== ======== ======== ========
Net income per diluted
common share $ 0.21 $ 0.19 $ 0.28 $ 0.25
======== ======== ======== ========
(1) Excludes the effect of EITF 98-9.
Pro forma operating statistics
for hotels leased:
Full-service hotels:
Occupancy 76.7% 76.7% 73.6% 73.9%
ADR $ 109.87 $ 102.69 $ 111.10 $ 105.14
RevPAR $ 84.26 $ 78.72 $ 81.79 $ 77.71
All hotels:
Occupancy 76.4% 76.4% 73.3% 73.7%
ADR $ 103.77 $ 97.78 $ 104.63 $ 99.48
RevPAR $ 79.32 $ 74.75 $ 76.66 $ 73.31
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Contact:
Bruce Riggins
Director of Finance
(202) 295-2276
OR
Melissa Thompson
Director of Corporate Communications
(202) 295-2228
OR
Jerry Daly or Carol McCune
Daly Gray Public Relations (Media)
(703) 435-6293