Winston Hotels, Inc., (NYSE: WXH), a real estate investment trust and owner of premium limited-service, high-end extended-stay and full-service hotels, today announced results for the second quarter and six months ended June 30, 2001. FFO totaled $9.1 million for the second quarter of 2001 as compared to $9.3 million for the second quarter of 2000. On a per share basis, FFO for the second quarter of 2001 totaled $0.50 on 18.2 million weighted average shares outstanding compared to $0.51 on 18.2 million weighted average shares outstanding for the same quarter a year ago. Lease revenue prior to the adoption of SAB 101 totaled $16.0 million the second quarter of 2001 as compared to $17.4 million for the second quarter of 2000.
Bob Winston, Chief Executive Officer, commented: “Although we are not satisfied with our second quarter results, we are pleased that our portfolio has maintained steady results in these very difficult times and that year to date we have exceeded the prior year`s comparable period FFO results. We also are pleased with the contribution to earnings from revenue sources other than percentage lease revenue, including earnings from joint ventures, interest from mezzanine loans and development services fee income.
“We are continuing to sell older hotels and using the proceeds to reduce debt and to invest in new, premium, upscale properties. We recently announced the sale of the Raleigh Comfort Inn and the opening of the Hilton Garden Inn in Evanston, Illinois, which is owned and operated under a joint venture agreement with Regent Partners, Inc.”
Winston Hotels President & Chief Operating Officer, James D. Rosenberg commented on the second quarter highlights:
* On a per share basis, FFO for the quarter totaled $0.50, which compares to $0.51 in the prior year, and consensus analysts` and Company expectations of $0.52.
* RevPar decreased 2.4% for the quarter, compared to a 3.7% decrease for the industry.
* Our core brands, including Hampton Inn, Hilton Garden Inn and Homewood Suites all experienced positive RevPar growth for the quarter and year to date.
* Based on information provided by Smith Travel Research, the year to date RevPar yield for our entire portfolio exceeded 105%.
* The decrease in percentage lease revenue, which resulted from the decrease in RevPar, was partially offset by earnings from development fees, joint ventures, and interest income on mezzanine loans. In addition, through cost cutting efforts, the Company was able to reduce G&A expenses, and interest expense decreased as a result of falling interest rates.
* Sold Comfort Inn hotel in Raleigh, NC.
* We have now sold three hotels, and invested in three new, upscale, premium branded properties.
* Closed the quarter with consolidated debt to total assets at cost at 36%, down from 37% as of March 31, 2001.
* Fixed rate debt at 7.37% totaled approximately 70% of our outstanding debt.
* Weighted average interest rate for the quarter equaled 6.7%.
* Generated an unleveraged return on assets of 12.3%.
* Year to date return to common shareholders of 38.4% based on our stock price at the beginning of the year through August 6, 2001 and including our dividend payments.
During the second quarter, Winston Hotels declared a cash dividend of $0.28 per common share. The cash dividend was paid on July 16, 2001 to shareholders of record on June 29, 2001. The regular quarterly dividend is equivalent to $1.12 on an annualized basis. Also in the second quarter, the Company announced its regular quarterly cash dividend to preferred shareholders of record of $0.578125 per share. This dividend also was paid on July 16, 2001 to shareholders of record on June 29, 2001.