Extended Stay America, Inc. (NYSE:ESA) today reported the results of its operations for the three months ended March 31, 1998. Net income for the first quarter was $4.8 million or $0.05 per share, compared with $2.5 million, or $0.03 per share for the first quarter last year.
Revenue increased by 174% to $54.2 million as compared to $19.8 million for the first quarter last year. Earnings before depreciation, amortization and deferred taxes (EBDADT) of $16.5 million, or $0.17 per share, for the quarter increased by 132% as compared to the first quarter last year. Earnings before interest, taxes, depreciation and amortization (EBITDA) of $18.6 million, or $0.19 per share, for the quarter increased by 385% as compared to the first quarter last year.
The results for the first quarter reflect the opening of 24 additional EXTENDED STAYAMERICA Efficiency Studios, 8 StudioPLUS Deluxe Studios and 1 Crossland Economy Studios during the quarter. A total of 33 properties were opened during the first quarter.
Property operating results include 39 EXTENDED STAYAMERICA properties (28% of open properties), 24 StudioPLUS properties (33% of open properties) and 4 Crossland properties (57% of open properties), that were open for less than six months as of March 31, 1998. Including these 67 properties (31% of all opened properties), the Company realized average occupancies of 68% and average weekly room rates of $278 for the quarter. Average occupancy rates for EXTENDED STAYAMERICA, StudioPLUS and Crossland were 70%, 62% and 59%, respectively, while average weekly rates were $271, $317, and $190, respectively, for the quarter. The Company also realized facility level EBITDA, including the 67 properties open for less than six months, of $27.9 million or 52% of total revenues. Facility level EBITDA does not include corporate operating and site selection expenses of $9.4 million, depreciation and amortization of $9.4 million and net interest expense of $1.1 million for the quarter.
As of March 31, 1998, the Company had utilized $300 million of its $900 million available credit facilities and had cash balances of approximately $38 million.
George D. Johnson Jr., President and CEO, commented: “With a total of 293 properties open or under construction at the end of the first quarter, we are well positioned to meet or exceed our goal of more than 300 operating properties by the end of this year. We continue to be pleased with the operating performance of our properties, particularly considering the number of properties opened and the traditional seasonal impact on occupancy in the first quarter. We look forward to continued growth in revenue and cash flow as the newly opened properties reach stabilized operating levels in the second and third quarters.”
Certain statements and information included in thirelease constitute “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance, or achievements expressed or implied in such forward-looking statements. Additional discussion of factors that could cause actual results to differ materially from management`s projections, forecasts, estimates and expectations is contained in the Company`s SEC filings.