Prime Hospitality Corp. Reports an Increase Second Quarter Income

Prime Hospitality Corp. Reports an Increase Second Quarter Income



FAIRFIELD, N.J., July 29  /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, 2004.

Prime reported net income for the second quarter of 2004 of $3.6 million, or
$.08 per share, compared to a loss of $17.8 million, or $.40 per share, for the
second quarter of 2003.  The second quarter of 2003 included a loss of $.48 per
share from the termination of our lease with Hospitality Properties Trust
("HPT") and gains of $.03 per share from asset sales and debt retirements.

"Our second quarter results reflect our objective of emphasizing the quality of
our brand offerings and increasing our room rates," said A.F. Petrocelli,
chairman and CEO of Prime.  "For the quarter, we achieved an 8.1% increase in
average daily rate.  While this resulted in lower occupancy levels, it improved
operating margins by 160 basis points.  We believe that as more markets
recover, we will see occupancy improvements."

"During the quarter, we converted the 12 full-service hotels which we added
through our new management agreement with HPT to the Prime Hotels and Resorts
brand.  We now have 15 Prime Hotels open in 10 states and we look forward to
the opportunities this presents for all of our brands."

For the six months ended June 30, 2004, net income was $0.7 million, or $.02
per share, compared to a loss of $24.5 million, or $.55 per share, for the
comparable period in 2003.  The 2003 amounts reflect a loss of $.48 per share
related to the HPT lease.

Operating Results

For the quarter, total revenues increased by $12.8 million to $124.1 million
due to the addition of twelve full-service hotels in January 2004.

Operating income plus depreciation increased by $2.8 million to $20.8 million
in the second quarter of 2004.  This was due to the elimination of deficits
incurred in the second quarter of 2003 on our lease with HPT which was
converted to a management agreement in December 2003, and operating
improvements at existing hotels.  Interest expense declined by 11.0% to $4.8
million for the quarter ended June 30, 2004, due to debt reductions.

In addition, through June 30, 2004, we have earned approximately $2.5 million
in management and franchise fees as calculated under our agreement with HPT. 
This amount has been recorded as deferred income in accordance with generally
accepted accounting principles and may not be recognized as income until the
fourth quarter when the annual calculation is finalized.

For the second quarter of 2004, revenue per available room ("REVPAR") at our
comparable hotels decreased by 0.2% compared to the second quarter of 2003.
Average daily rate ("ADR") increased by 8.1% to $70.41 and occupancy decreased
by 5.3 percentage points to 64.5%.  Gross operating profit margins at
comparable hotels increased by 1.6 percentage points due to higher ADR and
operating efficiencies.

System-Wide Performance

For the second quarter of 2004, we reported a 1.4% REVPAR increase at our
comparable AmeriSuites hotels.  ADR increased by 6.5% to $71.33 and occupancy
decreased by 3.4 percentage points to 67.6%.  Increases were reported in Miami,
Nashville, Orlando and Richmond while decreases were posted in Albuquerque,
Austin, Chicago and Detroit.

For the second quarter of 2004, we reported a 0.4% REVPAR decrease at our
comparable Wellesley Inns & Suites hotels, ADR increased by 6.2% to $57.91 and
occupancy decreased by 4.2 percentage points to 62.2%.  The Austin, Orlando and
South Florida markets reported increases while revenues decreased in Atlanta,
Dallas, Houston and the Northeast.

For the second quarter of 2004, we reported a 2.0% REVPAR decrease at our three
owned Prime Hotels.  ADR increased by 3.4% to $116.45 while occupancy decreased
by 3.9 percentage points to 69.7%.  The Saratoga Springs Prime Hotel reported
an increase due to strong group business while the Secaucus and Fairfield Prime
Hotels' revenues decreased.

Our non-proprietary brand full-service hotels, reported a 1.0% REVPAR decrease
for the second quarter of 2004.  ADR increased by 3.3% to $110.93 and occupancy
decreased by 2.7 percentage points to 64.3%.  The full-service hotels were
impacted by a decrease in group business in Northern New Jersey partially
offset by a recovery in tourism at the Quebec City Holiday Inn.

Hotel Developments

As of June 30, 2004, we had 148 AmeriSuites, 81 Wellesley Inns & Suites and 15
Prime Hotels in operation.

Under our new management agreement with HPT, in the second quarter of 2004 we
converted twelve full-service Wyndham hotels to the Prime Hotels and Resorts
brand.  We now have 15 Prime Hotels open in 10 states encompassing almost 3,000
guestrooms.

Currently, we have four AmeriSuites under construction and another four in the
planning stage.

During the quarter, we completed our installation of high speed internet access
in all of our owned and all HPT-owned AmeriSuites, Wellesley Inns & Suites and
Prime Hotels and Resorts properties.  This new amenity is available on both a
wired and wireless basis in all guest and meeting rooms and via wireless access
in all common areas, including hotel lobbies, fitness centers, pool areas and
restaurants.

Financial Condition

As of June 30, 2004, we had $222.6 million in debt and $12.2 million in cash
and cash equivalents.  Our debt to book capitalization percentage is 24.7%. 
Our debt to last twelve months EBITDA ratio is 3.59 times, and our EBITDA to
interest is 3.39 times, as defined under our revolving credit facility.  The
covenants in this facility require us to maintain a debt to EBITDA ratio of
4.25 times and an EBITDA to interest ratio of 2.50 times.

2004 Outlook

Our current estimate for 2004 is for operating income plus depreciation to be
in the range of $65 - $70 million and earnings per share before asset
transactions to be in the $.05 - $.10 range.  We estimate earnings per share
for the third quarter of 2004 to be $0.07 per share.

We currently expect capital expenditures to be approximately $15 million in
2004 with the majority to be spent on maintenance capital.  We expect to
generate approximately $30 million in free cash flow in 2004 before asset
sales.

Prime Hospitality Corp., one of the nation's premiere lodging companies, owns,
manages and franchises 256 hotels throughout North America.  The Company owns
and operates three proprietary brands that compete in different segments:
AmeriSuites(R) (all-suites), Wellesley Inns & Suites(R) (limited-service) and
Prime Hotels & Resorts (full-service).  Also within our portfolio are owned
and/or managed hotels operated under franchise agreements with national hotel
chains including Hilton, Sheraton, Holiday Inn and Ramada.  Prime can be
accessed over the internet at http://www.primehospitality.com/.

Prime Hospitality Corp. will hold a conference call on July 29, 2004 at 9:30
a.m. EDT to discuss our second quarter results.  Investors and members of the
media may participate by calling 800-243-6403. A recording of the call will be
available through August 12, 2004 by calling 800-839-6713 and using the
conference ID# 6046677.

Statements in this press release, other than statements of historical
information, may constitute forward-looking statements pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. The
words "believe," "anticipate," "project," "expect," "estimate," "intends," "may
result," "will continue," and words of similar impact identify forward-looking
statements.  Forward-looking statements involve known and unknown risks which
may cause the Company's actual results in future periods to differ materially
from expected results.  These risks include but are not limited to changes in
economic conditions, supply and demand changes for hotel rooms, competition
within the lodging industry, relationships with owners, franchisees and
suppliers, the impact of government regulations, the availability of capital,
the ability to attract and retain personnel and the impact of emerging
technologies.  Prime undertakes no obligation to update the information set
forth herein.  For further information regarding forward- looking statements
and to some of the factors and uncertainties affecting us, please refer to the
Company's filings with the Securities and Exchange Commission (SEC) copies of
which are available from the SEC or may be obtained upon request from the
Company.

                 PRIME HOSPITALITY CORP. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF INCOME
                               (Unaudited)
            THREE AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                 (In Thousands, Except Per Share Amounts)

                                    Quarter                 Year to Date
                               2004         2003         2004         2003
  Revenues:
     Owned hotels           $69,903      $71,966     $131,090     $134,234
     Cash flow hotels        38,126       23,380       73,384       44,199
     Management, franchise
      and other fees          7,335        8,147       13,665       13,641
        Total revenue before
         reimbursable costs 115,364      103,493      218,139      192,054
     Cost reimbursements      8,730        7,754       16,625       14,960
        Total revenues      124,094      111,247      234,764      207,014

  Costs and expenses:
     Owned hotels            44,585       47,046       88,234       92,289
     Cash flow hotels        38,937       26,089       75,950       51,559
     Brand operating          4,224        5,422        8,430        8,953
     General and
      administrative          6,850        7,013       14,081       13,913
     Depreciation and
      amortization           10,363        9,662       20,618       20,295
        Total costs and
         expenses before
         reimbursable costs 104,959       95,232      207,313      187,009
     Reimbursable costs       8,730        7,754       16,625       14,960
        Total costs and
         expenses           113,689      102,986      223,938      201,969

  Operating income (loss)    10,405        8,261       10,826        5,045

  Investment income              26          429           51          871
  Interest expense           (4,773)      (5,365)      (9,591)     (10,993)
  Gains (losses) on
   retirement of debt            --          822           --        1,622
  Other income (loss)           303      (35,346)         314      (35,346)

  Income (loss) before
   equity in earnings of
   unconsolidated joint ventures,
   income taxes and
   discontinued operations    5,961      (31,199)       1,600     (38,801)

  Equity in earnings
   of unconsolidated
   joint ventures                94          263          168         453

  Income (loss) before
   income taxes and
   discontinued operations    6,055      (30,936)       1,768     (38,348)
  Provision (benefit) for
   income taxes               2,362      (12,065)         690     (14,956)

  Income (loss) before
   discontinued operations    3,693      (18,871)       1,078     (23,392)

  Discontinued operations:
     Income (loss) from
      discontinued operations,
      net of income taxes        --           85         (126)       (480)
     Gain (loss) on disposal,
      net of income taxes      (117)         964         (238)       (582)
  Net income (loss)          $3,576     $(17,822)        $714    $(24,454)

  Earnings (loss) per
   common share:
  Basic:
     Income (loss) before
      discontinued operations $0.08       $(0.42)       $0.02      $(0.53)
     Income (loss) from
      discontinued operations,
      net of income taxes        --         0.02           --       (0.02)
  Net income (loss)           $0.08       $(0.40)       $0.02      $(0.55)

  Diluted:
     Income (loss) before
      discontinued operations $0.08       $(0.42)       $0.02      $(0.53)
     Income (loss) from
      discontinued operations,
      net of income taxes        --         0.02           --       (0.02)
  Net income (loss)           $0.08       $(0.40)       $0.02      $(0.55)


                         Prime Hospitality Corp.
                        Balance Sheet Information
                               (Unaudited)
                 (In Thousands, except per share amounts)

                                                   June 30,     December 31,
                                                     2004            2003

  Cash and cash equivalents                        $12,182         $12,901
  Fixed assets                                     908,796         925,380
  Total assets                                     995,120       1,007,305

  Revolving credit facility                         30,000          35,000
  Other debt                                       192,641         193,602
  Total debt                                       222,641         228,602

  Stockholders' equity                            $680,153        $681,014

  Quarterly weighted average diluted shares
   outstanding                                      46,030          44,737
  Book value per quarterly weighted average
   diluted share                                    $14.78          $15.22


                         Prime Hospitality Corp.
                   Comparable Hotel Performance Summary
                              June 30, 2004

                      Three Months Ended           Six Months Ended
                         June 30,                      June 30,
                      2004       2003  Variance    2004     2003   Variance
  Owned and Leased Hotels:
        Occupancy     64.5%     69.8%  (5.3)pts.  61.1%    64.4%  (3.3)pts.
        ADR          $70.41    $65.16   8.1%     $69.86   $65.93   6.0%
        REVPAR       $45.44    $45.51  (0.2)%    $42.67   $42.48   0.5%

  System-Wide Hotels:
       AmeriSuites
        Occupancy     67.6%     71.0%   (3.4)pts.  63.8%   64.6%  (0.8)pts.
        ADR          $71.33    $66.97    6.5%     $71.24  $68.66   3.8%
        REVPAR       $48.23    $47.54    1.4%     $45.45  $44.36   2.4%

  Wellesley Inns & Suites
        Occupancy     62.2%     66.4%   (4.2)pts.  60.3%   64.7%  (4.4)pts.
        ADR          $57.91    $54.52    6.2%     $59.73  $56.07   6.5%
        REVPAR       $36.04    $36.18   (0.4)%    $36.02  $36.28  (0.7)%

  Prime Hotels
        Occupancy     69.7%     73.6%   (3.9)pts.  61.9%   65.3%  (3.4) pts.
        ADR         $116.45   $112.65    3.4%    $111.79 $110.01   1.6%
        REVPAR       $81.20    $82.88   (2.0)%    $69.15  $71.88  (3.8)%

  Non-Proprietary Brands
        Occupancy     64.3%     67.0%   (2.7)pts.  57.0%   59.7%  (2.7) pts.
        ADR         $110.93   $107.43    3.3%    $112.22 $108.83   3.1%
        REVPAR       $71.28    $72.00   (1.0)%    $63.98  $65.00  (1.6)%


                         Prime Hospitality Corp.
                             Hotel Statistics
                              June 30, 2004

                                                             June 2004
                                                        # of          # of
                                                      Hotels         Rooms
                                   AmeriSuites
                                         Owned            62         8,024
                (1) Managed-Cash Flow Interest            42         5,214
                                       Managed             8         1,077
                                    Franchised            36         4,189
                                         Total           148        18,504

                       Wellesley Inns & Suites
                                         Owned            56         6,901
                                       Managed             6           667
                                    Franchised            19         1,926
                                         Total            81         9,494

                        Prime Hotels & Resorts
                                         Owned             3           595
              (1) Managed - Cash Flow Interest            12         2,321
                                         Total            15         2,916

                        Non-Proprietary Brands
                                         Owned             2           505
                                       Managed             8         1,521
                                 Joint Venture             2           665
                                         Total            12         2,691

                               Total Portfolio
                                         Owned           123        16,025
                  Managed - Cash Flow Interest            54         7,535
                                       Managed            22         3,265
                                    Franchised            55         6,115
                                 Joint Venture             2           665
                                         Total           256        33,605

   Note: (1) The managed-cash flow interest hotels are operated under
             management agreements where Prime guarantees a minimum level of
             cash flow and has a significant participation in cash flow
             above the minimum levels.


DATASOURCE: Prime Hospitality Corp.



CONTACT:  Richard Szymanski, [phone], for Prime Hospitality

Corp.



Web site:  http://www.primehospitality.com/ 



Company News On-Call:  http://www.prnewswire.com/comp/130238.html

Copyright