Extended Stay America, Inc. (NYSE:ESA), a leading provider of extended stay lodging, today reported the results of its operations for the three months and six months ended June 30, 2000. Net income for the second quarter increased by 52% to $21.2 million or $0.22 per diluted share, compared with $14.0 million or $0.14 per diluted share (excluding a valuation allowance reduction) for the second quarter last year. Net income for the six months ended June 30, 2000 was $32.5 million or $0.34 per diluted share.
Revenue increased by 25% to $133.2 million as compared to $106.5 million for the second quarter last year. Earnings before interest, taxes, depreciation and amortization (EBITDA) of $70.2 million, or $0.73 per diluted share, for the quarter increased by 35% as compared to the second quarter last year. Earnings before depreciation, amortization and deferred taxes (EBDADT) of $46.5 million, or $0.48 per diluted share, for the quarter increased by 30% as compared to the second quarter of last year (excluding a valuation allowance reduction).
The results for the second quarter reflect the opening of 6 EXTENDED STAYAMERICA Efficiency Studios during the quarter. At June 30, 2000, the Company had 378 operating facilities (39 Crossland Economy Studios, 248 EXTENDED STAYAMERICA Efficiency Studios, and 91 StudioPLUS Deluxe Studios) and had 23 facilities under construction (20 EXTENDED STAYAMERICA Efficiency Studios and 3 StudioPLUS Deluxe Studios). The Company expects to open a total of 30 properties with total costs of approximately $250 million during the year.
Average occupancy rates for Crossland, EXTENDED STAYAMERICA, and StudioPLUS were 82%, 84% and 82%, respectively, while average weekly rates were $213, $308, and $342, respectively, for the second quarter of 2000. Property operating results for the quarter include 35 EXTENDED STAYAMERICA properties (14% of open properties), and 9 StudioPLUS properties (10% of open properties) that were open for less than one year at the beginning of the quarter. Including these 44 properties (12% of all opened properties), the Company realized average occupancies of 83% and average weekly room rates of $302 for the quarter. The 334 properties opened for at least one year at the beginning of the second quarter realized average occupancy rates of 84% and average weekly rates of $294 during the quarter.
Facility level EBITDA for the second quarter of 2000, including the 44 properties that were open for less than one year at the beginning of the quarter, was 61% of revenue or $81.3 million, compared to 59% of revenue or $62.4 million for the second quarter of 1999. Facility level EBITDA does not include corporate operating and site selection expenses of $11.1 million which decreased as a percentage of revenue to 8% as compared to 10% for the second quarter of 1999.
As of June 30, 2000, the Company had invested approximately $2.0 billion in the 378 open properties and had invested approximately $130 million in sites under development. The Company had cash balances of approximately $10.1 million. On June 8, 2000, the Company announced that it had increased availability under its bank credit facility from $800 million to $1 billion with the addition of a $200 million Tranche D term loan. As of June 30, 2000, the Company had outstanding loans of $920 million (including $200 million of senior subordinated notes), leaving $278 million available under its $1.2 billion total credit facilities.
George D. Johnson Jr., CEO, commented: “We are extremely pleased with our results for the second quarter. Our revenue growth reflects improved occupancies at our mature properties and more rapid occupancy growth at our new properties. As a result of these gains in revenue and diligent cost controls, we recorded record profitability with property level margins of 61%, EBITDA margins of 53% and a 57% increase in earnings per share. We believe that these results reflect the strength of our brands and the faithful execution of our concept by over 6,000 employees. We look forward to continued growth as our newer properties continue to mature and as we add additional properties 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.