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SPOKANE, WA -- Cavanaughs Hospitality Corporation (NYSE:CVH) today reported results for the second quarter and six months ending June 30, 1998.
The Company reported a second quarter income before extraordinary item of $2.7 million, or $.21 per share, a 221% increase from $826 thousand, or $.12 per share for the same period a year ago. Total Revenues for the Company rose $7.4 million, or 53.7%, from $13.7 million in the second quarter of 1997 to $21.1 million for the comparable period in 1998. EBITDA (earnings before interest, income taxes, depreciation and amortization) a traditional measure of hotel company earnings, rose $2.2 million, or 47.2%, from $4.6 million in the second quarter of 1997 to $6.8 million in the second quarter of 1998. EBITDA as a percentage of revenue was 32.1% for the period. Comparable hotel RevPAR (Revenue Per Available Room), for hotels owned the full year, increased $4.99, or 9.7%, from $51.49 to $56.48 in 1998. These RevPAR gains were driven both by Occupancy, which increased 1.4%, from 66.4% to 67.8%, and Average Daily Rate, which increased $5.80, or 7.5%, from $77.55 to $83.35.
For the six months ended June 30, 1998 income before extraordinary item increased 433% to $2.6 million, or $.26 per share from $481 thousand, or $.07 per share for the same period a year ago. Total revenues for the Company rose 47.3%, from $24.2 million in the first six months of 1997 to $35.7 million for the comparable period in 1998. EBITDA rose 48.8%, from $7.1 million to $10.5 million. EBIDTA as a percentage of revenue was 29.5% for the period. Comparable hotel RevPAR increased $7.26, or 17.2%, from $42.21 to $49.47. Occupancy during the period increased 3.9% from 58.1% to 62.0%. ADR increased $7.14, or 9.8%, from $72.65 to $79.79.
During the second quarter Cavanaughs closed on the acquisitions of three hotels comprising 736 rooms located in Kalispell, MT, Hillsboro, OR, and Salt Lake City, UT. During the period the Company also entered into an agreement to purchase four additional hotels comprised of 651 rooms located in Boise, Twin Falls and Pocatello, ID, and Helena, MT. The purchase of this portfolio is expected to close in August. These seven hotel acquisitions were purchases at a blended Cap rate of 12.9% based on their trailing twelve month performance.
"We’ve been very pleased with the performance of all our hotels as an aggregate, and our ability to grow internally our occupancy as well as ADR has been especially encouraging," said Donald K. Barbieri, President and CEO. "Our newly acquired hotels are in various stages of conversion to the Cavanaughs brand and we are encouraged by their performance as well. We are in an interesting period in the hotel cycle that we believe will make available further acquisitions to our already full pipeline. Our most recent acquisitions in-fill a strategic region encompassing two state capitals and other key cities that will allow us to move customers more efficiently than ever around the Northwest as well as continue to increase our name recognition." The Company also stated that its relationship with Alaska/Horizon Airlines has benefited the chain and helped increase both ADR and Occupancy during the period. The Company is also entering into a relationship with Southwest Airlines to market its Salt Lake City property to leisure travelers visiting the major ski resorts in the area.
Including properties under contract, the Company serves the Northwest with 3,756 full service hotel rooms in 18 hotels, including 45 restaurants and lounges and 179,900 square feet of meeting space. In addition, the Company provides entertainment services through G&B Select-a-Seat, a 20-outlet computerized ticket company, and G&B Presents, a Broadway and special event presenting company. The Company also manages 3.1 million square feet of third party property management, 2,200 residential units, and owns 590,000 square feet of office and retail space.
Statements in this release may be construed to be forward looking and are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward looking statements involve risks and uncertainties, including without limitation, risks relating to the operation and acquisition of hotels, the availability of capital to finance growth and the historical cyclicality of the lodging industry, as well as the other matters disclosed in the documents filed by the Company with the Securities & Exchange Commission. SOURCE Cavanaughs Hospitality Corporation.
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