Actionable news
0
All posts from Actionable news
Actionable news in CHH: CHOICE HOTELS INTNL.,

Choice Hotels International Reports A 10% Increase In Third QUARTER EBITDA FROM FRANCHISING ACTIVITIES

The following excerpt is from the company's SEC filing.

New Executed Domestic Franchise Agreements Increase 14%

Company Repurchases 1 Million Shares of Stock During Third Quarter

Choice Hotels International, Inc. (NYSE:CHH) today reported the following highlights for the third quarter 2015:

Revenues for the three months ended September 30, 2015 totaled $241.5 million, an increase of 12 percent from the same period of 2014.

Earnings before interest, taxes, depreciation and amortization (EBITDA) from franchising activities for the three months ended September 30, 2015, totaled $81.1 million, an increase of 10 percent from the same period of 2014.

Franchising margins for the three months ended September 30, 2015, were 74.6 percent, an increase of 230 basis points from the same period of 2014.

Domestic royalty fees for the three months ended September 30, 2015, totaled $84.7 million, an increase of 6.5 percent from the same period of 2014.

Domestic system-wide revenue per available room (RevPAR) increased 5.8 percent in the third quarter of 2015, as occupancy and average daily rates increased 120 basis points and 4 percent, respectively from the same period of 2014.

Domestic units increased 0.2 percent from September 30, 2014.

Effective royalty rate for the three months ended September 30, 2015 increased 3 basis points to 4.27 percent from the same period of 2014.

Initial and relicensing fees for the three months ended September 30, 2015, totaled $6.2 million, an increase of 44 percent from the same period of 2014.

Domestic hotel executed franchise agreements totaled 129 for the three months ended September 30, 2015, an increase of 14 percent from the same period of 2014.

Executed 9 new domestic franchise agreements during the three months ended September 30, 2015 for the Cambria hotels & suites brand including 2 conversion projects in Chicago, Illinois and Atlanta, Georgia.

Domestic relicensing and contract renewal transactions totaled 119 for the three months ended September 30, 2015, an increase of 40 percent from the same period of 2014.

The companys new construction domestic pipeline of hotels under construction or approved for development increased 29 percent from September 30, 2014, and the total pipeline increased 28 percent.

Diluted earnings per share (EPS) from continuing operations for the three months ended September 30, 2015, totaled $0.72, an increase of 7 percent from the same period of 2014.

The company purchased 1.0 million shares of common stock under its share repurchase program during the three months ended September 30, 2015, at a total cost of approximately $50 million.

We are very pleased with our performance in the third quarter, with double-digit percentage growth in both total revenues and EBITDA. We were pleased with our year-over-year increase in domestic royalty revenue driven by growth in all 3 critical levers RevPAR, system-size and effective royalty rate. We had a terrific quarter on the development front with improvements in domestic franchise contracts for both new construction and conversion hotels demonstrating that the demand for our brands is strong, said Stephen P. Joyce, president and chief executive officer, Choice Hotels. The fundamental strength of our operating model enables us to generate strong free cash flows, which allows us to return value to our shareholders through a disciplined and prudent capital allocation strategy.

Discontinued Operations

During 2014, the company entered into and completed a plan to sell its three owned hotels operated under the MainStay Suites brand. The company determined that the sale of these hotels met the definition of a discontinued operation since the operations and cash flows of these components have been eliminated from the on-going operations of the company and the company does not have significant continuing involvement in the operations of the hotels after the transaction. As a result, the companys consolidated statement of income for the three and nine months ended September 30, 2014, reflects these three company-owned hotels as discontinued operations.

Summarized financial information related to these discontinued operations is presented in Exhibit 9 of this press release.

Outlook

The companys consolidated 2015 outlook reflects the following assumptions:

EBITDA from franchising activities for full-year 2015 are expected to range between $255 million and $257 million;

Net domestic unit growth for 2015 is expected to be approximately 1%;

RevPAR is expected to increase approximately 5.5% and 7% for fourth quarter and full-year 2015, respectively; and

The effective royalty rate is expected to increase 2 basis points for full-year 2015 as compared to full-year 2014.

SkyTouch

Net reductions in EBITDA relating to our investment in the SkyTouch division for full-year 2015 are expected to be approximately $17 million.

Other Items

The effective tax rate for continuing operations is expected to be approximately 31% and 32% for the fourth quarter and full-year 2015, respectively; and

All figures assume no further repurchases of common stock under the companys share repurchase program.

Consolidated Outlook

The companys fourth quarter 2015 diluted EPS is expected to be at least $0.47. The company expects full-year 2015 diluted EPS to range between $2.18 and $2.20 and full year 2015 EBITDA to range between $237 million and $241 million.

Conference Call

Choice will conduct a conference call on Friday, October 30, 2015 at 10:00 a.m. EDT to discuss the companys third quarter 2015 results. The dial-in number to listen to the call is 1-855-638-5678, and the access code is 52809803. International callers should dial 1-920-663-6286 and enter the access code 52809803. The conference call also will be webcast simultaneously via the companys website, www.choicehotels.com. Interested investors and other parties wishing to access the call via the webcast should go to the website and click on the Investor Info link. The Investor page will feature a conference call microphone icon to access the call.

The call will be recorded and available for replay beginning at 1:00 p.m. EDT on Friday, October 30, 2015 through Friday, November 6, 2015 by calling 1-855-859-2056 and entering access code 52809803. The international dial-in number for the replay is 1-404-537-3406 and the access code is 52809803. In addition, the call will be archived and available on www.choicehotels.com via the Investor Info link.

About Choice Hotels

Choice Hotels International, Inc.

(NYSE: CHH) is one of the worlds largest lodging companies. With more than 6,300 hotels franchised in more than 35 countries and territories, we represent more than 500,000 rooms around the globe. As of September 30, 2015, 638 hotels were...


More