MeriStar Hotels & Resorts Reports Fourth-Quarter Results, Amends Credit Facility

MeriStar Hotels & Resorts (NYSE: MMH), the nation`s largest independent hotel management company, today announced results for the fourth quarter and full year ended December 31, 2001.
For comparative purposes, the results for the three and 12 months ended December 31, 2000, are presented on a pro forma basis as if the company`s 106 leases with MeriStar Hospitality Corporation (NYSE: MHX) that were converted to management contracts on January 1, 2001, had been converted on January 1, 2000. In addition, the company announced that it has amended its senior credit facility.

Fourth-quarter revenues for 2001 declined 11.0 percent to $65.0 million. Excluding non-recurring items, net loss for the quarter was $(1.7) million, or $(0.05) per share on a diluted basis, compared to net loss of $(0.5) million or $(0.01) per share in the 2000 fourth quarter. Recurring earnings before interest, taxes, depreciation and amortization (EBITDA) decreased 6.1 percent to $3.7 million. During the fourth quarter, the company recorded $1.6 million of non-recurring charges related to restructuring at its corporate headquarters and BridgeStreet Corporate Housing Worldwide subsidiary. The net loss per share was $0.01 ahead of the consensus analysts` estimate of $(0.06).

Same-store revenue per available room (RevPAR) for all full-service managed hotels in the 2001 fourth quarter declined 22.7 percent to $53.84. Occupancy declined 14.7 percent to 56.1 percent and average daily rate (ADR) fell 9.3 percent to $96.02.

Same-store RevPAR for all limited-service leased hotels in the 2001 fourth quarter declined 10.4 percent to $43.45. ADR declined 2.9 percent to $77.04, and occupancy decreased 7.7 percent to 56.4 percent.

``While the events of September 11 were unprecedented, management`s extensive experience in all phases of the economic cycle played an important role in controlling costs and weathering the dramatic falloff in travel,`` said Paul W. Whetsell, chairman and chief executive officer of MeriStar. ``We had already implemented cost containment policies in response to the declining economy in the second quarter and modified them following the terrorist attacks. As a result, in the fourth quarter we held gross operating profit margins to a decline of approximately 10 basis points for each 100 basis point drop in RevPAR at our full-service managed hotels and improved margins by 80 basis points at our limited-service leased hotels.``