Extended Stay America, Inc. (NYSE:ESA) today reported the results of its operations for the three months and twelve months ended December 31, 1999. Net income for the fourth quarter was $9.5 million or $0.10 per diluted share, an increase of 24% as compared to the fourth quarter of 1998. Net income for the twelve months ended December 31, 1999 was $47.4 million or $0.49 per diluted share, an increase of 34% as compared to 1998, excluding certain non-recurring expenses incurred in each year and the cumulative effect of an accounting change in 1999.
Revenue increased by 35% to $105.3 million for the fourth quarter as compared to $77.8 million for the same quarter last year. Earnings before interest, taxes, depreciation and amortization (EBITDA) of $47.4 million, or $0.49 per diluted share, for the fourth quarter increased by 43% as compared to the same quarter of last year. Earnings before depreciation, amortization, and non-current deferred taxes (EBDADT) of $32.6 million, or $0.34 per diluted share, for the fourth quarter increased by 22% as compared to the same quarter of last year.
The results for the fourth quarter reflect the opening of 5 additional EXTENDED STAYAMERICA Efficiency Studios and 1 StudioPLUS Deluxe Studio during the quarter. A total of 57 properties were opened during the year ended December 31, 1999.
Average occupancy rates for Crossland, EXTENDED STAYAMERICA, and StudioPLUS were 69%, 71%, and 69%, respectively, while average weekly rates were $209, $299, and $333, respectively for the fourth quarter. Property operating results for the quarter include 18 Crossland properties (46% of open properties), 56 EXTENDED STAYAMERICA properties (24% of open properties) and 19 StudioPLUS properties (21% of open properties) that were opened during the quarter or had been open for less than one year at the beginning of the quarter. Including these 93 properties (26% of all opened properties), the Company realized average occupancies of 70% and average weekly room rates of $293 for the quarter. The 269 properties opened for at least one year at the beginning of the fourth quarter realized average occupancy rates of 71% and average weekly rates of $289.
Facility level EBITDA for the fourth quarter, including the 93 properties open for less than one year at the beginning of the quarter, was 55% of revenue or $58.1 million, compared to 55% of revenue or $43.1 million for the fourth quarter of 1998. Facility level EBITDA was 57% of revenue or $237.2 million for the twelve months ended December 31, 1999, compared to 57% of revenue or $160.6 million for 1998. Facility level EBITDA does not include corporate operating and site selection expenses of $10.7 million for the fourth quarter and $42.0 million for the year, which decreased as a percentage of revenue from 13% to 10% for the fourth quarter and from 14% to 10% for the year.
As of December 31, 1999, the Company had cash balances of approximately $6.4 million and had outstanding loans of $856 million, leaving $142 million available under its credit facilities. The Company expects to utilize the capacity under its credit facilities, along with cash on hand and cash generated from operations, to complete the development of the projects under construction and to continue the development of extended stay lodging facilities. As of December 31, 1999, the Company had approximately $110 million invested in facilities under construction or under consideration. The Company estimates the costs to complete the projects under construction as of December 31, 1999 to be approximately $100 million.
The Company expects that it will have sufficient funds to open properties with total costs exceeding $350 million in 2000. Due to uncertainties regarding the availability of additional capital for projects opening in 2001, however, the Company expects to limit the development of properties opening in 2000 to approximately 30 properties with total costs of approximately $250 million. The Company believes that this strategy will permit it to develop properties in markets with higher barriers to entry that generally have longer development cycles, while prudently managing its capital structure. In the event the Company obtains additional capital, the Company will seek to increase property openings in future years.
George Dean Johnson, Jr., President and CEO, commented: “We are extremely pleased with the operating performance of our properties. The fourth quarter results are particularly encouraging considering the traditional seasonal impact of the holidays and the number of new properties that have not yet reached stabilized operating levels. Our strong property margins plus the impact of increasing leverage of our corporate overhead resulted in EBITDA of over $195 million for 1999. We believe that our strategy of allocating our capital to those markets with higher barriers to entry will enhance our operating results while continuing to expand 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.