Boykin Lodging Company (NYSE: BOY) today reported higher revenues and earnings for its fourth quarter and full year, which ended December 31, 1997.
Funds From Operations (FFO) for all of 1997 increased 25 percent to $27.4 million, or $2.52 per share/unit, from pro forma FFO of $22 million, or $2.02 per share/unit, for the same period in 1996. Percentage lease revenues for 1997 increased 36 percent to $37.9 million from a pro forma $27.8 million for 1996.
Same-unit hotel revenues increased six percent to $137.0 million from $129.2 million for the prior year. REVPAR, or room revenues per available room, for the portfolio increased 7.4 percent for 1997 to $61.12 from $56.93 a year ago. Occupancy in 1997 was 69.3 percent, slightly ahead of the 68.7 percent for 1996. The average daily rate for 1997 increased 6.4 percent to $88.14 from $82.84 the year before.
Net income for 1997 was $14.3 million, or $1.51 per share, a 17 percent increase from pro forma net income of $12.3 million, or $1.29 per share, for 1996. Net income for 1997 included extraordinary charges of $882,000, or approximately $0.09 per share, for losses on the early extinguishments of debt.
“Boykin Lodging’s first full year as a public company was very successful,” said Robert W. Boykin, chairman and chief executive officer. “We accomplished our goals for the year, and as a result, revenues, income, and funds from operations grew substantially. We increased the number of hotels in our portfolio from nine comprising 2,408 rooms to 17 comprising 4,568 rooms. We executed our plan to become a multitenant REIT, as we added three high-quality, third-party tenants to manage many of the eight hotels acquired during the year.”
“Setting the stage for an exciting 1998, we announced on New Year’s Eve a definitive agreement to acquire Red Lion Inns, L.P., which owns ten DoubleTree hotels containing 3,062 rooms in total,” Mr. Boykin continued. “We still need regulatory and shareholder approval, but once that occurs, these ten strong, profitable, full-service hotels would add to Boykin Lodging’s geographic diversity and give us a significant presence in healthy commercial markets in growing western cities such as Seattle, Portland, Sacramento, Boise, Colorado Springs, and Omaha. With Doubletree’s superior management, sales and marketing capabilities, and national brand recognition, these hotels should add a great deal to our 1998 funds from operations. This acquisition also offers us an opportunity to develop a good relationship with Promus Hotel Corporation, one of the nation’s largest and most respected lodging companies and the owner of the Doubletree brand.”
“Our acquisition program continues to have many excellent prospects,” Mr. Boykin said, “and discussions are proceeding with several additional acquisition candidates.”
For the fourth quarter of 1997, FFO increased 18 percent to $5.5 million, or $0.51 per share/unit, from pro forma FFO of $4.7 million, or $0.43 per share/unit, for the same period in 1996. Percentage lease revenue for the fourth quarter of 1997 jumped 50 percent to $9.0 million from a pro forma $6.0 million for the fourth quarter of 1996.
Same-unit hotel revenues increased 4.5 percent over the prior-year fourth quarter. REVPAR for the portfolio increased 3.8 percent for the fourth quarter of 1997 to $54.38 from $52.41 a year ago. The increased REVPAR was due to a 6.7 percent increase in the average daily rate to $87.24 from $81.77; occupancy decreased slightly to 62.3 percent from 64.1 percent.
Net income for the 1997 fourth quarter was $1.4 million, or $0.14 per share, a 43 percent decrease from pro forma net income of $2.4 million, or $0.25 per share, for the same period in 1996. Net income for the 1997 fourth quarter included an extraordinary charge of $741,000, or $0.08 per share, for a loss related to the early extinguishment of debt.
Boykin Lodging Company is a multitenant real estate investment trust which focuses on the ownership of full-service, premium-branded commercial and resort hotels. The company currently owns 17 full-service commercial and resort hotels containing a total of 4,568 rooms located in California, Florida, Indiana, New York, North Carolina, Maryland, Minnesota, Missouri, and Ohio.