PRNewswire-FirstCall ATLANTA Nov. 13 :
Jameson Inns, Inc. , a hotel real estate investment trust (REIT), and
owner of Jameson Inn and Signature Inn hotels, today announced financial
results for the quarter ending September 30, 2003.
Net income before dividends to preferred shareholders increased to
$1,354,000 for third quarter 2003 from $864,000 for third quarter 2002.
The Company reported a net loss attributable to common stockholders of
($313,000) or ($0.03) per share of common stock for third quarter 2003
versus a net loss of ($803,000) or ($0.07) per share of common stock for
third quarter 2002.
For third quarter 2003, funds from operations (FFO) were $0.34 per diluted
share of common stock compared to $0.33 per diluted share of common stock
for the same quarter in 2002. The Company believes this supplemental
“non-GAAP” measure of operating performance is meaningful but should not
be considered an alternative to accounting principles generally accepted
in the United States.
Combined revenue per available room (REVPAR) (another supplemental non-
GAAP measure used by management) for all of the Company`s Inns was $32.94
for third quarter 2003, up $0.47 or 1.4%, from third quarter 2002 due to
an increase in occupancy from 53.3% to 54.9%. REVPAR for the Jameson Inn
brand increased 3.1% to $33.54 for third quarter 2003 compared to $32.52
for third quarter 2002, resulting from an increase in occupancy to 57.3%
from 55.6%, and average daily rate unchanged. REVPAR for the Signature Inn
brand decreased 1.8% to $31.81 for third quarter 2003 compared to $32.38
for third quarter 2002. This was due to a 1.6% decrease in the average
daily rate which was offset slightly by an increase in occupancy from
49.0% to 50.4%.
Lease revenues earned from Kitchin Hospitality, LLC, the company that
leases and operates the Inns, increased $205,000 for the quarter compared
to the same quarter in 2002. This was due primarily to an increase in
REVPAR for the Jameson Inns as a result of occupancy increasing to 57.3%
during the third quarter of 2003 compared to 55.6% for the same period in
2002. Lease revenues earned from the Signature Inns consisted of only base
rent for both periods.
“We are encouraged by the results of the quarter REVPAR, which was up
because of our increased occupancy. We are pleased that occupancy rates
continue to rise. Occupancy was up 160 basis points during the quarter for
all our hotels. The key to sustaining REVPAR growth is selling more
rooms,” said Thomas W. Kitchin, CEO.
Funds from Operations
We believe FFO to be a meaningful measure of operating performance because
this measure negates the effects of depreciation and the one-time effects
of disposals. However, it should not be considered an alternative to
accounting principles generally accepted in the United States. We
calculate FFO for all periods consistent with the National Association of
Real Estate Investment Trusts, Inc. definition from their White Paper
issued in April 2002. FFO has been calculated as net income attributable
to common stockholders before depreciation expense, gains or losses on
disposal of depreciable real estate assets, and impairment losses of real
estate assets. However, FFO as presented in this table may not be
comparable to similarly titled measures presented by other companies. The
following table illustrates our calculation of funds from operations for
the three and nine months ended September 30, 2003 and 2002.
In light of the operating results of the Company for the first nine months
of 2003, FFO per diluted share of common stock for full year 2003 is
consistent with guidance given last quarter and is anticipated to be
within the range of $1.10 to $1.20.
On September 30, 2003, the Company owned 95 Jameson Inns and 24 Signature
Inns, compared to 96 Jameson Inns and 25 Signature Inns at December 31,
2002. The Company completed the expansion of one existing Jameson Inn and
sold one Signature Inn and one Jameson Inn during the first nine months of
The Company invested approximately $2.6 million into refurbishing projects
and product upgrades on existing hotels during the first nine months of
2003. The Company is currently anticipating full year 2003 capital
expenditures of approximately $4.4 million.
As of September 30, 2003, the Company had total indebtedness of $215.9
million compared to $222.8 million on December 31, 2002, a reduction in
debt of $6.9 million. During the first nine months of 2003, the Company
made scheduled long-term debt payments of $7.3 million and further reduced
debt by $3.1 million by retiring debt secured by Inns that were sold
during the first and third quarter of 2003. The Company refinanced two
hotel loans resulting in $3.2 million of net proceeds to the Company. The
Company anticipates full year 2003 required principal repayments of
approximately $10.1 million.