FAIRFIELD, N.J., July 31 /PRNewswire-FirstCall/—Prime Hospitality Corp. (NYSE: PDQ), a leading hotel owner, operator and franchisor, reported its results for the three and six months ended June 30, 2003.
Net income before asset transactions for the second quarter of 2003 was $2.3 million, or $.05 per share, compared to $6.1 million, or $.13 per share, for the second quarter of 2002.
Prime reported a net loss of $17.8 million, or $.40 per share, for the second quarter of 2003. Non-recurring items in the second quarter of 2003 were comprised primarily of a $35.0 million non-cash reserve against the net assets related to the HPT lease partially offset by gains on asset sales and debt retirements. For the second quarter of 2002, the net loss was $4.5 million, or $.10 per share. Non-recurring items in the second quarter of 2002 consisted of $12.9 million in charges associated with the retirement of debt and a $4.5 million litigation charge.
“The sluggish economy combined with the war in Iraq resulted in continued weak business travel trends,” said A.F. Petrocelli, Chairman and Chief Executive Officer of Prime. “With corporate travel down, we focused our sales efforts on local group and leisure travel and were able to increase our occupancy levels although at lower rates. While there is no strong indication of a recovery, we are encouraged by the improvements we saw beginning in May and continuing through July.
“Although the industry continues to struggle, we continue to make improvements in our financial structure. In July, we made the decision to discontinue funding the operating losses on our subsidiary`s lease with HPT. Over the past twelve months the lease had a negative cash flow impact of $11.5 million. We also sold two hotels for $17.4 million and financed our two joint venture deals at attractive rates realizing $12.5 million in proceeds. This resulted in a $25 million debt reduction in the quarter.”
For the six months ended June 30, 2003, the net loss before asset transactions was $3.3 million, or $.07 per share, compared to net income before asset transactions of $6.5 million, or $.14 per share, for the first half of 2002. The total net loss, which includes asset transactions and other one-time charges, for the six months ended June 30, 2003, was $24.5 million, or $.55 per share, compared to a net loss of $3.7 million, or $.08 per share, for the comparable period in 2002.
Full details at www.primehospitality.com