Humphrey Hospitality Trust, Inc. (NASDAQ: HUMP), a real estate investment trust, today announced its results for the first quarter ended March 31, 2002.
Funds from operations (“FFO”) were $.6 million, or $.05 per basic and diluted share (“per share”), for the first quarter of 2002, versus $3.6 million, or $.33 per share for the same quarter in 2001. Earnings per share represented a net loss of ($.17) per share, or ($1.9) million for the first quarter of 2002, compared to earnings of $1.3 million, or $.11 per share, for the first quarter of 2001.
Revenue per available room (“RevPAR”) was $26.03 for the first quarter of 2002, down $2.03, or 7.2%, from the same quarter last year. Occupancy reached 54% during the 2002 first quarter, representing a three-point decline from the 57% occupancy rate reported during the same quarter last year. An average daily rate (“ADR”) of $47.82 was reported during the 2002 first quarter, representing a 2.5%, or $1.24 reduction in ADR from the same quarter last year.
“With the majority of our hotels being located in markets that rely heavily upon greater lodging demand during the second and third quarters of the year to drive annual profits, our shareholders should come to expect the Company to routinely report operating losses during the first and fourth quarters of the year when lower occupancies are typically experienced”, said Randy Whittemore, Humphrey Hospitality Trust`s President and CEO.
“While comparable earnings for the quarter were negatively impacted by a first quarter 2002 impairment charge of $588,000 ($.05 per share) on a hotel held for sale, comparable earnings were more significantly affected by the Company`s creation of a taxable REIT subsidiary (“TRS”) on January 1, 2002. Had the Company operated its hotels under a TRS structure during the first quarter of 2001 as well, we would have reported a $1.2 million reduction in hotel operating profits, with such reduction in profits being attributed substantially to the 7.2% decline in RevPAR ($1.6 million), offset partially by a reduction in hotel operating costs ($370,000) during the first quarter” stated Mr. Whittemore.
“Sustainable RevPAR growth continues to elude us with the ongoing effects of an economic recession and increased competition in some of our markets. Despite the weakened state of our industry, the Company has managed to maintain adequate cash reserves, and has continued to enjoy success in its asset disposition and debt reduction strategies” noted Mr. Whittemore. “During April 2002, many of our hotels reported marked increases in occupancy and room revenues, while others continued to show lower than normal demand. As the Company searches for greater stabilization, we will continue in the execution of our conservative cash retention and debt reduction strategies so as to ensure the company can operate without interruption during the months ahead”, concluded Mr. Whittemore.
Humphrey Hospitality Trust, Inc. specializes in limited-service lodging. The company owns 88 hotels in 19 mid-western and eastern states.
Certain matters within this press release are discussed using forward-looking language as specified in the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statement. These risks are discussed in the Company`s filings with the Securities and Exchange Commission.