Choice Hotels International, Inc. (NYSE: CHH) today reported third quarter 1999 recurring net income of $18.3 million, or $0.33 recurring diluted earnings per share (EPS), increases of 24 percent and 32 percent respectively, over the $14.7 million in recurring net income and $0.25 recurring diluted EPS reported for third quarter 1998.
“Solid unit growth, coupled with an outstanding increase in royalty revenues, continues to drive our strong performance,” said Charles A. Ledsinger, Jr., president and chief executive officer. “In addition, we are very pleased with Choice`s continued improvement in RevPAR performance.”
He continued, “Our franchisees` hotels continue to benefit from the rollout of our proprietary property management system, which is currently in more than 50 percent of our 2,200 mid-priced and upper-end hotels. We also are seeing the positive impact of more targeted brand marketing and better support for our franchisees through our regional Market Area structure.”
For the first nine months of 1999, Choice reported recurring net income of $43.1 million, or $0.77 recurring diluted EPS, increases of 20 percent and 28 percent respectively over the $35.9 million of recurring net income and $0.60 recurring diluted EPS reported for the first nine months of 1998.
The company reported revenues of $46.9 million for third quarter 1999, compared to $42.7 million for third quarter 1998, a 10 percent increase. For the first nine months of 1999, revenues increased 8 percent to $114.1 million over the $105.9 million reported for the same period a year ago.
Royalty revenues for third quarter 1999 increased 13 percent to $40.5 million from $35.7 million for the same period a year ago, with the system-wide domestic effective royalty rate also increasing from 3.61 percent in third quarter 1998 to 3.77 percent for the third quarter of 1999. Domestic revenue per available room (RevPAR) increased 2.13 percent from $42.65 in third quarter 1998 to $43.56 in the quarter just ended.
For the first nine months of 1999, royalty revenues increased 11 percent to $95.5 million from $85.7 million for the same period a year ago. The system-wide domestic effective royalty rate increased 14 basis points for the first nine months of 1999 to 3.69 percent from 3.55 percent for the same period a year ago. Domestic RevPAR also was up 3.2 percent from $34.36 for the first three quarters of 1998 to $35.46 for the first nine months of 1999.
As of September 30, 1999:
* The total number of Choice hotels worldwide on-line grew 14.7 percent to 4,179 from 3,643 as of the same date a year ago;
* The total number of rooms worldwide increased 10.4 percent to 335,524 from 303,852 as of the same date a year ago;
* The company had 724 franchised hotels with 59,276 rooms either in design or under construction in its worldwide hotel system.
* Among the notable company events occurring since the previous earnings report:
* Record-breaking performance through the central reservations system, with single-day revenues topping $6 million on 18 days thus far this year. Prior to this summer, no single $6 million day had been recorded;
* Announcement of an exclusive agreement with GuesTech, a Baltimore-based Internet solutions company, to provide in-room, high-speed Internet access for hotel guests at the company`s various brands;
* Opening of a state-of-the-art, $2.5 million Learning Center at the company`s Silver Spring headquarters for introducing new hotel owners and general managers to the company`s marketing, reservations and business systems, as well as for training associates;
* Expansion of the mid-priced Sleep Inn hotel brand internationally, with more than 100 new hotels projected to be built in the United Kingdom, Spain, Japan and South America over the next five years;
* Continuation of the stock repurchase program announced June 25, 1998. The company has purchased 7.2 million shares of common stock at a total cost of $103.2 million as of October 20, 1999, and has remaining authority to acquire up to 1.5 million additional shares. As of October 20, 1999, 54.1 million shares are outstanding.