Prime Hospitality Corp. Reports First Quarter Results

Prime Hospitality Corp.
(NYSE: PDQ) today reported net income of $10.5 million, or $.22 per share, in
the first quarter of 2000 compared to net income of $6.2 million, or $.12 per
share, in 1999.  Earnings per share before asset transactions and
extraordinary items was also $.22 per share for the quarter which was even
with the prior year`s quarter.  The results for the first quarter of 2000 were
achieved despite the sale of the Frenchman`s Reef Marriott hotel in St. Thomas
U.S.V.I. during the quarter.  While the Company does not expect the sale to
materially affect earnings for the full year, it did have a $.01 dilutive
effect on earnings for the first quarter due to the seasonal nature of the
hotel.

“The first quarter was a very successful one for our Company,” said A.F.
Petrocelli, chairman and CEO of Prime.  “Our operating performance was strong,
despite a soft January affected by Y2K concerns.  We grew our comparable
AmeriSuites REVPAR by 4.2% and our total base portfolio by 3.8%.  In addition
based on the performance of our Wellesley Inn & Suites hotels we believe that
the conversion from the HomeGate brand will be a success.  These 38 hotels
generated encouraging results with REVPAR increasing by more than 25% over the
prior quarter.  Our franchise pipeline also remains strong.  The first two
franchisee constructed AmeriSuites opened in the quarter and we have another
57 AmeriSuites under executed franchise agreements.”

“In addition to the positive operating performance, we also accomplished
our goals on the transaction side,” said Petrocelli.  “We generated
approximately $110 million in proceeds from asset sales, including the sale of
the Frenchman`s Reef, two AmeriSuites and the remaining five HomeGate hotels
owned by the Company.  The combination of asset sale proceeds along with
strong operating cash flow enabled us to retire $93 million of debt and
repurchase 3.7 million shares of our stock.  Our achievements this year have
significantly strengthened our balance sheet and positioned us for future
growth.”

For the quarter, revenues increased by 3.4% to $137.9 million from
$133.3 million in the same period in the prior year and earnings before
interest, taxes, depreciation and amortization (EBITDA) increased by 1.5% to
$40.5 million from $39.9 million in the prior year.  Excluding the impact of
the hotels divested in the past year, revenues rose by 9.7% and EBITDA grew by
10.8%.

Non-recurring charges for the first quarter of 2000 which included gains
from asset sales and an extraordinary loss from the write-off of deferred loan
fees on debt retired in the quarter had no net impact on earnings per share.
For the first quarter of 1999, non-recurring charges included a $.10 charge
for a change in accounting principle related to the write-off of start-up
costs.

ADVERTISEMENT

——-