Extended Stay America, Inc. (NYSE:ESA) today reported the results of its operations for the three months and nine months ended September 30, 1999.
Net income for the third quarter was $16.3 million or $0.17 per diluted share, an increase of 31% as compared to the third quarter of 1998 (excluding the valuation allowance recorded in 1998). Net income for the nine months ended September 30, 1999 was $37.7 million or $0.39 per diluted share.
Revenue increased by 44% to $116.5 million as compared to $81.0 million for the third quarter last year. Earnings before interest, taxes, depreciation and amortization (EBITDA) of $57.7 million, or $0.59 per diluted share, for the third quarter increased by 50% as compared to the same quarter of last year (excluding the valuation allowance recorded in 1998). Earnings before depreciation, amortization, and non-current deferred taxes (EBDADT) of $38.5 million, or $0.40 per diluted share, for the third quarter increased by 29% as compared to the same quarter of last year (excluding the valuation allowance recorded in 1998).
The results for the third quarter reflect the opening of 6 additional EXTENDED STAYAMERICA Efficiency Studios and 3 StudioPLUS Deluxe Studios during the quarter. A total of 9 properties were opened during the third quarter.
Property operating results for the third quarter include 33 EXTENDED STAYAMERICA properties (14% of open properties), 12 StudioPLUS properties (13% of open properties) and 6 Crossland properties (15% of open properties), that were open for less than nine months at the end of the quarter. Including these 51 properties (14% of all opened properties), the Company realized average occupancies of 79% and average weekly room rates of $296 for the quarter.
Average occupancy rates for EXTENDED STAYAMERICA, StudioPLUS and Crossland were 80%, 77% and 75%, respectively, while average weekly rates were $301, $338 and $214, respectively for the quarter. The 239 properties opened for at least one year at the beginning of the third quarter realized average occupancy rates of 81% and average weekly rates of $297.
Facility level EBITDA was 59% of revenue or $68.3 million for the third quarter, including the 51 properties open for less than nine months at the end of the quarter. Facility level EBITDA does not include corporate operating and site selection expenses of $10.6 million, which decreased as a percentage of revenue to 9% as compared to 12% for the third quarter of 1998 (excluding the valuation allowance).
As of September 30, 1999, the Company had total borrowings of $820 million under its $1.0 billion available credit facilities and had cash balances of approximately $8.8 million.
George Dean Johnson, Jr., President and CEO, commented: “We continue to be pleased with the operating results of our properties considering the large number of rooms added in the lodging industry over the past two years. We believe that additions to supply in our segment have slowed significantly and we expect that our ability to continue development with our available credit facilities and cash flow from operations will enhance our market share in the future.”
Certain statements and information included in this release 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.