Extended Stay America, Inc. (NYSE: ESA) today reported the results of its operations for the three months and for the year ended December 31, 1997. Net income for the fourth quarter was $3.6 million or $.04 per share. Revenue more than tripled to $43.2 million as compared to $13.3 million for the fourth quarter last year. Earnings before interest, taxes, depreciation and amortization (EBITDA) of $13.7 million for the quarter was more than six times the amount reported for the fourth quarter last year.
The results for the fourth quarter reflect the opening of 15 additional EXTENDED STAYAMERICA Efficiency Studios facilities, 16 StudioPLUS hotels and 3 Crossland Economy Studios facilities during the quarter. A total of 110 properties were opened during the year ended December 31, 1997.
Property operating results include 40 EXTENDED STAYAMERICA properties (35% of open properties), 24 StudioPLUS properties (37% of open properties) and 5 Crossland properties (83% of open properties), that were open for less than six months as of December 31, 1997. Including these 69 properties (37% of all opened properties), the Company realized average occupancies of 69% and average weekly room rates of $264 for the quarter. Average occupancy rates for EXTENDED STAYAMERICA, StudioPLUS and Crossland were 70%, 71% and 54%, respectively, while average weekly rates were $256, $301, and $188, respectively, for the quarter. The Company also realized facility level EBITDA, including the 69 properties open for less than six months, of $22.8 million or 53% of total revenues. Facility level EBITDA does not include corporate operating and site selection expenses of $9.1 million, depreciation and amortization of $8.0 million and interest income of $0.4 million for the quarter.
Excluding certain one-time charges reported in the second quarter of 1997, the Company`s net income for the year ended December 31, 1997 was $17.0 million or $0.18 per share. As a result of the one-time charges, however, the Company reported net income for the year ended December 31, 1997 of $2.6 million or $0.03 per share.
As of December 31, 1997, the Company had utilized $135 million of its $500 million credit facility.
George D. Johnson Jr., President and CEO, commented: “We are extremely pleased with the progress made in 1997 toward our goal of becoming the nation`s leading provider of extended stay lodging. With the recent opening of our 200th property and with the properties under construction and under option, we are well on our way toward achieving our goal of more than 300 properties by the end of 1998. We continue to be pleased with the operating performance of our properties as evidenced by our occupancy levels and facility level EBITDA margins for the fourth quarter. These results are particularly encouraging considering the traditional seasonal impact of the holidays during the fourth quarter and the significant number of new properties that have not yet reached stabilized operating levels. We look forward to continued growth in revenue and cash flow as additional properties are opened and mature in the future.”