Westcoast Hospitality (NYSE:WEH)
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RevPAR Grows 10.1% During the Fourth Quarter; WestCoast
Hospitality Corporation Announces Quarterly and Year-End Financial Results
SPOKANE, Wash., Feb. 10 /PRNewswire-FirstCall/ -- WestCoast Hospitality
Corporation (NYSE:WEH) today announced financial results for the fourth quarter
and year ended December 31, 2004.
Hotel Statistics
During the fourth quarter of 2004, system-wide RevPAR (revenue per available
room) for comparable hotels (hotels owned, leased, managed and franchised for
at least one year) increased 10.1% over the 2003 fourth quarter levels to
$35.45. This increase was due to a 2.2% increase in average daily rate to
$68.23, and a 3.7 point increase in occupancy, to 52.0%. For the full year
2004, system-wide RevPAR for comparable hotels increased 7.2% over the 2003
level to $41.75. The increase resulted from a 1.0% increase in average daily
rate, to $71.28, and a 3.4 point increase in occupancy, to 58.6%. Additional
statistics are set forth in the attached financial statements.
Company Performance
During the fourth quarter, the company announced its plan to invest $40 million
to improve comfort, freshen décor and upgrade technology at its hotels. The
company also announced its plan to sell 11 non-strategic hotels and other
non-core properties and use the proceeds from the sales to support its $40
million hotel investment. In connection with the company's announcement, it
reclassified 11 hotels and one office building as discontinued operations. It
also reclassified these properties as held for sale, which resulted in the
company recording an impairment on four hotels during the fourth quarter in the
aggregate amount of $5.8 million, as adjusted for the tax benefit.
For the fourth quarter, the company's loss applicable to common shareholders
was $0.63 per share, compared to $0.20 in the fourth quarter of 2003. For the
full year 2004, the company's loss applicable to common shareholders was $0.51
per share, compared to $0.10 in 2003. The impairment recorded by the company
in the fourth quarter accounted for $0.44 of the 2004 per share losses.
Without the impairment, the loss for 2004 would have been $0.07 per share, an
improvement of $0.03 per share over the prior year. Upon closing of the sales
of the properties to be divested, which is expected to occur during 2005, the
company anticipates that it will recognize aggregate post-tax gains on seven
hotels and non-core properties in the range of $6.6 million to $9.3 million.
In the fourth quarter, the company had total revenue from continuing operations
of $38.4 million, up 7.0% from the comparable period in 2003. EBITDA (earnings
before interest, taxes, depreciation and amortization) from continuing
operations was $3.0 million, up 24.1% from the prior year quarter. For the full
year 2004, the company achieved a 3.6% increase in revenues from continuing
operations, to $163.1 million. Full year EBITDA for 2004 from continuing
operations was up 4.5%, to $22.6 million.
Arthur Coffey, President and Chief Executive Officer, said, "The growth in
RevPAR we experienced during the fourth quarter substantially improved our
margins, validating the hotel improvement plan we implemented in 2004. Our
planned acceleration of this plan, along with the momentum continuing to build
in market demand, should combine to make 2005 a very positive year for the
company. We believe that our Red Lion brand is well-situated for expansion
into new markets. As a result of the improvements we are making to our owned
hotels and the consistency of high brand standards we are achieving,
prospective partners and franchisees are expressing strong interest in new
transactions. In addition, we expect our divestment of non-core properties in
2005 will result in recognition of gains that exceed the impairment we recorded
in the fourth quarter.
Recent Events
During the quarter, the company also announced the hiring of well-known
industry executive Anupam Narayan. Mr. Narayan joined the company in November
as Executive Vice President, Chief Investment Officer. On January 15, 2005,
Mr. Narayan was appointed to the additional position of Chief Financial
Officer. Mr. Narayan said, "I am excited to join the team at WestCoast
Hospitality Corporation at a time when the company is expanding the Red Lion
brand from its long-established western U.S. base and building it into a strong
North American competitor in the full-service, upper mid-scale market. I am
looking forward to working with the team to attain this goal."
The company also recently obtained a new $20 million credit facility with Wells
Fargo Bank which will allow it to further accelerate the improvements to its
hotels. Mr. Narayan noted, "Wells Fargo clearly understands our strategy and
has been very attentive to our desire to fund strategic improvements to our
hotels prior to the increased seasonal demand the lodging industry typically
experiences in the spring and summer."
In December, 2004, the company engaged Colliers International as its listing
broker for the sale of the 11 hotel properties. Colliers reports significant
market interest in the hotels being held for sale.
Hotel Division Performance
For the fourth quarter, the company reported hotel and restaurant revenue from
continuing operations of $32.9 million, up $0.9 million from the previous
comparable quarter. Operating margins improved substantially during the
quarter, with expenses increasing only $0.4 million. For full-year 2004, hotel
and restaurant revenue from continuing operations increased $2.8 million while
expenses increased $3.0 million. John Taffin, Executive Vice President, Hotel
Operations, said, "Our investment in new brand initiatives during the past year
yielded great returns in the form of significant RevPAR growth during the third
and fourth quarters. As a result, we have achieved substantial increases in
operating margins during the second half of the year in hotels we own and
operate. Guests have embraced our Stay Comfortable beds and room amenities
package, our Net4Guests free wireless internet access and our 'We Promise or We
Pay' lowest rate website guarantee. We believe these initiatives have played a
large role in our increased occupancy year on year for each of the last 13
months, and our increased ADR year on year for each of the last six months."
During the second quarter of 2005, the company expects to complete the upgrade
of all beds and bedding in its owned hotels to Stay Comfortable standards and
begin renovations on the balance of the guestrooms, guest bathrooms and public
spaces.
Franchise, central services and development revenue was $0.6 million in the
fourth quarter of 2004, versus $0.7 million in the comparable period of 2003.
On February 1, 2005, the company announced the execution of a franchise license
agreement for conversion to the Red Lion brand of a full-service, 318 room
hotel at Jantzen Beach along the Columbia River in Portland, Oregon. Mr.
Taffin commented, "The property will be opening as the 'Red Lion Hotel on the
River' by the beginning of April. Our focus on new brand standards and our hub
and spoke strategy have boosted interest from prospective franchisees and we
expect to announce the execution of other new franchise license agreements in
key markets this year."
Entertainment Division Performance
Entertainment division revenue was $3.7 million in the fourth quarter of 2004,
compared to $2.0 million in the fourth quarter of 2003. The division's increase
in revenues was primarily due to an increase in the number of events presented
during the quarter, compared to the same quarter of 2003. The division
experienced a small decrease in operating margins due to the costs associated
with the event presentations. Year on year, entertainment division revenues
increased $3.6 million to $11.6 million. Associated expenses increased $3.5
million to $10.5 million. Jack Lucas, Vice President, TicketsWest, said, "Our
entertainment division continues to experience excellent revenue growth from
period to period. We expect increased ticketing activity this year and are
also looking forward to announcing our exciting Broadway Series lineup for the
2005-2006 season, which will include a 5 1/2 week engagement of The Lion King,
an excellent event for combined hotel and entertainment packaging."
Real Estate Division Performance
Real Estate division revenue from continuing operations in the fourth quarter
was steady at $1.2 million. At the same time, the division was able to
decrease its expenses by $0.1 million in the fourth quarter, to $0.7 million.
For all of 2004, real estate division revenue from continuing operations
increased $0.2 million while expenses were flat. In January, 2005, the company
engaged CB Richard Ellis as its listing broker for the national marketing and
sale of the Crescent Building in downtown Spokane, Washington. CB Richard Ellis
has begun actively marketing this property for sale.
WestCoast Hospitality Corporation is a hospitality and leisure company
primarily engaged in the ownership, management, development and franchising of
mid-scale, full service hotels under its Red Lion(R) and WestCoast(R) brands.
In addition, through its entertainment division, which includes its
TicketsWest.com, Inc. subsidiary, it engages in event ticket distribution and
promotes and presents a variety of entertainment productions. G&B Real Estate
Services, its real estate division, engages in traditional real estate-related
services, including developing, managing and brokering sales and leases of
commercial and multi-unit residential properties.
This press release contains forward-looking statements within the meaning of
federal securities law, including statements concerning plans, objectives,
goals, strategies, projections of future events or performance and underlying
assumptions (many of which are based, in turn upon further assumptions). The
forward-looking statements in this press release are inherently subject to a
variety of risks and uncertainties that could cause actual results to differ
materially from those expressed. Such risks and uncertainties include, among
others, economic cycles; international conflicts; changes in future demand and
supply for hotel rooms; competitive conditions in the lodging industry;
relationships with franchisees and properties; impact of government
regulations; ability to obtain financing; changes in energy, healthcare,
insurance and other operating expenses; ability to sell non-core assets;
ability to locate lessees for rental property and managing and leasing
properties owned by third parties; dependency upon the ability and experience
of executive officers and ability to retain or replace such officers as well as
other matters discussed in the Company's annual report on Form 10-K for the
2003 fiscal year and in other documents filed by the Company with the
Securities and Exchange Commission.
Contact: Anupam Narayan
Title: Executive Vice President, Chief Financial Officer
Phone: 1-509-459-6100
Internet:
http://www.westcoasthotels.com/
http://www.ticketswest.com/
http://www.redlion.com/
http://www.g-b.com/
WestCoast Hospitality Corporation
Consolidated Statements of Operations
(unaudited)
($ in thousands, except footnotes)
Three months ended
December 31,
2004 2003 $ Change % Change
Revenue:
Hotels and restaurants $32,874 $31,928 $946 3.0%
Franchise, central services and
development 551 691 (140) -20.3%
Entertainment 3,663 1,972 1,691 85.8%
Real estate 1,245 1,213 32 2.6%
Corporate services 71 81 (10) -12.3%
Total revenues 38,404 35,885 2,519 7.0%
Operating expenses:
Hotels and restaurants 30,731 30,349 382 1.3%
Franchise, central services and
development 400 250 150 60.0%
Entertainment 3,455 1,646 1,809 109.9%
Real estate 710 790 (80) -10.1%
Corporate services 74 71 3 4.2%
Depreciation and amortization 2,807 2,429 378 15.6%
Gain on asset dispositions, net (619) (189) (430) -227.5%
Total direct expenses 37,558 35,346 2,212 6.3%
Undistributed corporate expenses 968 600 368 61.3%
Total expenses 38,526 35,946 2,580 7.2%
Operating loss (122) (61) (61) -100.0%
Other income (expense):
Interest expense (3,664) (2,476) (1,188) -48.0%
Interest income 120 111 9 8.1%
Other income (expense), net 1 (131) 132 100.8%
Equity income (loss) in investments,
net (11) 19 (30) -157.9%
Minority interest in partnerships,
net 236 75 161 214.7%
Loss from continuing operations before
income taxes (3,440) (2,463) (977) -39.7%
Income tax benefit (1,287) (1,176) (111) -9.4%
Net loss from continuing operations (2,153) (1,287) (866) -67.3%
Discontinued operations:
Impairment loss on discontinued
operations, net
of income tax benefit of $3,107 (5,770) -- (5,770)
Loss from operations of discontinued
business units,
net of income tax benefit of
$170 and $404 (317) (751) 434 57.8%
Loss on discontinued operations (6,087) (751) (5,336) -710.5%
Net loss (8,240) (2,038) (6,202) -304.3%
Preferred stock dividend -- (625) 625 100.0%
Loss applicable to common
shareholders $(8,240) $(2,663) $(5,577) -209.4%
EBITDA (1)(2) $(5,496) $2,276 $(7,772) -341.5%
EBITDA as a percentage of
revenues(2) -12.4% 5.5%
EBITDA from continuing
operations (1) $3,031 $2,442 $589 24.1%
EBITDA from continuing
operations (1)(2) as a
percentage of revenues 7.9% 6.8%
(1) The definition of "EBITDA" and how that measure relates to net income
is discussed further in this release under Non-GAAP Financial
Measures. EBITDA represents net income (or loss) before interest
expense, income tax benefit or expense, depreciation, and
amortization. EBITDA is not intended to represent net income as
defined by generally accepted accounting principles in the United
States and such information should not be considered as an
alternative to net income, cash flows from operations or any other
measure of performance prescribed by generally accepted accounting
principles in the United States. We utilize EBITDA because management
believes that investors find it to be a useful tool to perform more
meaningful comparisons of past, present and future operating results
and as a means to evaluate the results of core on-going operations.
EBITDA from continuing operations is calculated in the same manner,
but excludes the operating activities of business units identified as
discontinued.
(2) EBITDA as presented includes the results of discontinued operations,
including a pre-tax impairment charge of $8,877,000 during the three
months ended December 31, 2004. The calculation of EBITDA as a
percentage of revenues is based upon total operating revenues, from
both continuing and discontinued operations, of $44,349,000 and
$41,246,000 for the three months ended December 31, 2004 and 2003,
respectively. EBITDA from continuing operations as a percentage of
revenues is based upon the operating results of continuing business
units as presented in the statements.
WestCoast Hospitality Corporation
Earnings Per Share and Hotel Statistics
(unaudited)
(shares in thousands)
Three months ended
December 31,
2004 2003 $ Change % Change
Earnings per common share:
Basic
Loss applicable to common
shareholders before
discontinued operations (1) (0.16) $(0.14)
Loss on discontinued operations (0.47) (0.06)
Loss applicable to common
shareholders $(0.63) $(0.20)
Diluted
Loss applicable to common
shareholders before
discontinued operations (1) $(0.16) $(0.14)
Loss on discontinued operations (0.47) (0.06)
Loss applicable to common
shareholders $(0.63) $(0.20)
Weighted average shares - basic 13,069 13,006
Weighted average shares - diluted (2) 13,069 13,006
Key Comparable Hotel Statistics:
Combined (owned, leased, managed
and franchised) (3)
Average occupancy (4)(7) 52.0% 48.3%
ADR (5) $68.23 $66.73 $1.50 2.2%
RevPAR (6)(7) $35.45 $32.20 $3.25 10.1%
(1) The net loss used to calculate the net earnings or loss per share
applicable to common shareholders before discontinued operations
includes all dividends on the recently retired cumulative preferred
shares if applicable for the period presented.
(2) For the three months ended December 31, 2004 and 2003, all 1,083,938
and 826,009 options outstanding to purchase common stock were
anti-dilutive and are therefore not included in the calculation of
earnings per common share. In addition, the 286,161 convertible
operating partnership ("OP") units were anti-dilutive and are
therefore not included in the calculation of diluted weighted
average shares for those same periods.
(3) Includes all hotels owned, leased, managed and franchised for greater
than one year by WestCoast Hospitality Corporation. No adjustment
has been made for hotels classified as discontinued operations.
(4) Average occupancy represents total paid rooms divided by total
available rooms. Total available rooms represents the number of
rooms available multiplied by the number of days in the reported
period.
(5) Average daily rate ("ADR") represents total room revenues divided by
the total number of paid rooms occupied by hotel guests.
(6) Revenue per available room ("RevPAR") represents total room and
related revenues divided by total available rooms.
(7) Rooms under significant renovation were excluded from total available
rooms. Due to the short duration of renovation, in the opinion of
management, excluding these rooms did not have a material impact on
RevPAR or average occupancy.
WestCoast Hospitality Corporation
Consolidated Statements of Operations
(unaudited)
($ in thousands, except footnotes)
Year ended
December 31,
2004 2003 $ Change % Change
Revenue:
Hotels and restaurants $143,193 $140,360 $2,833 2.0%
Franchise, central services and
development 2,600 3,642 (1,042) -28.6%
Entertainment 11,615 7,980 3,635 45.6%
Real estate 5,416 5,209 207 4.0%
Corporate services 319 337 (18) -5.3%
Total revenues 163,143 157,528 5,615 3.6%
Operating expenses:
Hotels and restaurants 123,858 120,852 3,006 2.5%
Franchise, central services and
development 1,409 1,518 (109) -7.2%
Entertainment 10,452 6,974 3,478 49.9%
Real estate 3,214 3,245 (31) -1.0%
Corporate services 297 313 (16) -5.1%
Depreciation and amortization 10,540 10,338 202 2.0%
(Gain) loss on asset
dispositions, net (1,148) 339 (1,487) -438.6%
Conversion expenses -- 349 (349) -100.0%
Total direct expenses 148,622 143,928 4,694 3.3%
Undistributed corporate expenses 3,273 2,640 633 24.0%
Total expenses 151,895 146,568 5,327 3.6%
Operating income 11,248 10,960 288 2.6%
Other income (expense):
Interest expense (13,828) (9,679) (4,149) -42.9%
Interest income 463 413 50 12.1%
Other income (expense), net 49 (335) 384 114.6%
Equity income in investments, net 78 119 (41) -34.5%
Minority interest in
partnerships, net 224 133 91 68.4%
Income (loss) from continuing
operations before income taxes (1,766) 1,611 (3,377) -209.6%
Income tax (benefit) expense (876) 51 (927) -1817.6%
Net income (loss) from continuing
operations (890) 1,560 (2,450) -157.1%
Discontinued operations:
Impairment loss on discontinued
operations, net of income tax
benefit of $3,107 (5,770) -- (5,770)
Income (loss) from operations of
discontinued business units,
net of income tax expense
(benefit) of $202 and ($184) 375 (341) 716 210.0%
Loss on discontinued operations (5,395) (341) (5,054) -1482.1%
Net income (loss) (6,285) 1,219 (7,504) -615.6%
Preferred stock dividend (377) (2,540) 2,163 85.2%
Loss applicable to common
shareholders $(6,662) $(1,321) $(5,341) -404.3%
EBITDA (1)(2) $18,268 $25,269 $(7,001) -27.7%
EBITDA as a percentage of
revenues (2) 9.6% 13.7%
EBITDA from continuing
operations (1) $22,602 $21,628 $974 4.5%
EBITDA from continuing
operations (1)(2) as a
percentage of revenues 13.9% 13.7%
(1) The definition of "EBITDA" and how that measure relates to net income
is discussed further in this release under Non-GAAP Financial
Measures. EBITDA represents net income (or loss) before interest
expense, income tax benefit or expense, depreciation, and
amortization. EBITDA is not intended to represent net income as
defined by generally accepted accounting principles in the United
States and such information should not be considered as an
alternative to net income, cash flows from operations or any other
measure of performance prescribed by generally accepted accounting
principles in the United States. We utilize EBITDA because management
believes that investors find it to be a useful tool to perform more
meaningful comparisons of past, present and future operating results
and as a means to evaluate the results of core on-going operations.
EBITDA from continuing operations is calculated in the same manner,
but excludes the operating activities of business units identified as
discontinued.
(2) EBITDA as presented includes the results of discontinued operations,
including a pre-tax impairment charge of $8,877,000 during the year
ended December 31, 2004. The calculation of EBITDA as a percentage
of revenues is based upon total operating revenues, from both
continuing and discontinued operations, of $190,902,000 and
$183,975,000 for the years ended December 31, 2004 and 2003,
respectively. EBITDA from continuing operations as a percentage of
revenues is based upon the operating results of continuing business
units as presented in the statements.
WestCoast Hospitality Corporation
Earnings Per Share and Hotel Statistics
(unaudited)
(shares in thousands)
Year ended
December 31,
2004 2003 $ Change % Change
Earnings per common share:
Basic
Loss applicable to common
shareholders before
discontinued operations (1) $(0.10) $(0.07)
Loss on discontinued operations $(0.41) $(0.03)
Loss applicable to common
shareholders $(0.51) $(0.10)
Diluted
Loss applicable to common
shareholders before
discontinued operations $(0.10) $(0.07)
Loss on discontinued operations $(0.41) $(0.03)
Loss applicable to common
shareholders $(0.51) $(0.10)
Weighted average shares - basic 13,049 12,999
Weighted average shares - diluted (2) 13,049 12,999
Key Comparable Hotel Statistics:
Combined (owned, leased, managed
and franchised) (3)
Average occupancy (4)(5) 58.6% 55.2%
ADR (5) $71.28 $70.59 $0.69 1.0%
RevPAR (6)(7) $41.75 $38.94 $2.81 7.2%
(1) The net loss used to calculate the net earnings or loss per share
applicable to common shareholders before discontinued
operations includes all dividends on the recently retired cumulative
preferred shares if applicable for the period presented.
(2) For the year ended December 31, 2004 and 2003, all 1,083,938 and
826,009 options outstanding to purchase common stock were
anti-dilutive and are therefore not included in the calculation of
earnings per common share. In addition, the 286,161 convertible
operating partnership ("OP") units were anti-dilutive and are
therefore not included in the calculation of diluted weighted average
shares for those same periods.
(3) Includes hotels owned, leased, managed and franchised for greater
than one year by WestCoast Hospitality Corporation. No adjustment has
been made for hotels classified as discontinued operations.
(4) Average occupancy represents total paid rooms divided by total
available rooms. Total available rooms represents the number of
rooms available multiplied by the number of days in the reported
period.
(5) Average daily rate ("ADR") represents total room revenues divided by
the total number of paid rooms occupied by hotel guests.
(6) Revenue per available room ("RevPAR") represents total room and
related revenues divided by total available rooms.
(7) Rooms under significant renovation were excluded from total available
rooms. Due to the short duration of renovation, in the opinion of
management, excluding these rooms did not have a material impact on
RevPAR or average occupancy.
WestCoast Hospitality Corporation
Consolidated Balance Sheets
(unaudited)
($ in thousands, except share data)
December 31, December 31,
2004 2003
Assets:
Current assets:
Cash and cash equivalents $9,577 $7,884
Restricted cash 4,092 4,736
Accounts receivable, net 8,464 8,600
Inventories 1,831 1,808
Prepaid expenses and other 3,286 1,926
Assets held for sale:
Assets of discontinued
operations 61,757 63,349
Other assets held for sale 1,599 --
Total current assets 90,606 88,303
Property and equipment, net 223,132 204,199
Goodwill 28,042 28,042
Intangible assets, net 13,641 14,412
Other assets, net 9,191 18,269
Total assets $364,612 $353,225
Liabilities:
Current liabilities:
Accounts payable $4,841 $6,491
Accrued payroll and related
benefits 4,597 4,503
Accrued interest payable 700 660
Advance deposits 188 216
Other accrued expenses 7,322 7,732
Long-term debt, due within one
year 7,455 4,623
Liabilities of discontinued
operations 22,879 23,580
Total current liabilities 47,982 47,805
Long-term debt, due after one year 125,756 124,064
Deferred income 8,524 9,279
Deferred income taxes 15,992 16,761
Minority interest in partnerships 2,548 3,127
Debentures due WestCoast
Hospitality Capital Trust 47,423 --
Total liabilities 248,225 201,036
Stockholders' equity:
Preferred stock - 5,000,000 shares
authorized; $0.01 par value
588,236 issued and outstanding at
December 31, 2003 -- 6
Additional paid-in capital,
preferred stock -- 29,406
Common stock - 50,000,000 shares
authorized; $0.01 par value;
13,079,454 and 13,006,361 shares
issued and outstanding 131 130
Additional paid-in capital, common
stock 84,467 84,196
Retained earnings 31,789 38,451
Total stockholders' equity 116,387 152,189
Total liabilities and
stockholders' equity $364,612 $353,225
WestCoast Hospitality Corporation
Consolidated Statement of Cash Flows
(unaudited)
($ in thousands)
Year ended December 31,
2004 2003
Operating activities:
Net income (loss) $(6,285) $1,219
Adjustments to reconcile net income
(loss) to net cash
provided by operating activities:
Depreciation and amortization 12,827 13,032
(Gain) loss on disposition of
property and equipment and
other assets (1,150) 390
Non-cash reduction of preferred
stock resulting in gain -- (616)
Write-off of deferred loan fees -- 927
Impairment loss 8,877 --
Deferred income tax provision (769) 500
Minority interest in
partnerships (315) (288)
Equity in investments (78) (119)
Compensation expense related to
stock issuance 18 14
Provision for doubtful accounts 572 338
Change in current assets and
liabilities:
Restricted cash 694 (3,003)
Accounts receivable (574) (168)
Inventories 4 (100)
Prepaid expenses and other (1,418) 569
Accounts payable (1,928) 217
Accrued payroll and related
benefits 153 (1,324)
Accrued interest payable 37 100
Other accrued expenses and
advance deposits 224 (350)
Net cash provided by operating
activities 10,889 11,338
Investing activities:
Purchases of property and equipment (21,898) (7,339)
Proceeds from disposition of
property and equipment 1,498 5,367
Proceeds from disposition of
investment 94 485
Investment in WestCoast Hospitality
Capital Trust (1,423) --
Advances to WestCoast Hospitality
Capital Trust (2,116) --
Proceeds from collections under
note receivable 1,728 --
Distributions from equity investee 449 --
Other, net (208) 177
Net cash used in investing activities (21,876) (1,310)
Financing activities:
Proceeds from note payable to bank 11,000 47,700
Repayment of note payable to bank (11,000) (99,800)
Proceeds from debenture issuance 47,423 --
Repurchase and retirement of
preferred stock (29,412) --
Proceeds from long-term debt 83 55,200
Proceeds from short-term debt -- 2,658
Repayment of long-term debt (4,507) (3,892)
Proceeds from issuance of common
stock under
employee stock purchase plan 114 99
Preferred stock dividend payments (1,011) (2,561)
Principal payments on capital lease
obligations -- (268)
Proceeds from option exercises 140 --
Distributions to minority owners (3) --
Additions to deferred offering
costs -- (248)
Additions to deferred financing
costs (50) (1,547)
Net cash provided by (used in)
financing activities 12,777 (2,659)
Net cash in discontinued operations (97) 71
Change in cash and cash equivalents:
Net increase in cash and cash
equivalents 1,693 7,440
Cash and cash equivalents at
beginning of period 7,884 444
Cash and cash equivalents at end of
period $9,577 $7,884
WestCoast Hospitality Corporation
Additional Hotel Statistics
(unaudited)
System Hotels as of December 31, 2004
Meeting Space
Hotels Rooms (sq. ft.)
Owned or Leased Hotels: (1)
Red Lion Hotels 38 6,642 312,528
WestCoast Hotels 3 692 40,500
Other Brands 42 153 3,945
42 7,487 356,973
Managed Hotels:
Red Lion Hotels 1 150 5,234
WestCoast Hotels 1 72 1,800
Other Brands 1 254 36,000
3 476 43,034
Franchised Hotels:
Red Lion Hotels 19 3,171 104,759
WestCoast Hotels 3 389 27,784
22 3,560 132,543
Total 67 11,523 532,550
Comparable Hotel Statistics (2)
Three months ended December 31, 2004
Average
Occupancy (3)(6) ADR (4) RevPAR (5)(6)
Owned or Leased Hotels:
Continuing Operations 53.1% $68.18 $36.23
Discontinued Operations 39.9% 55.84 22.29
50.1% 65.95 33.07
Combined System Wide (7) 52.0 $68.23 $35.45
Red Lion Hotels (Owned, Leased,
Managed and Franchised) (8) 52.7% $67.16 $35.37
Year ended December 31, 2004
Average
Occupancy (3)(6) ADR (4) RevPAR (5)(6)
Owned or Leased Hotels:
Continuing Operations 60.4% $71.31 $43.06
Discontinued Operations 49.1% 58.97 28.93
57.8% 68.94 39.86
Combined System Wide (7) 58.6% $71.28 $41.75
Red Lion Hotels (Owned, Leased,
Managed and Franchised) (8) 59.2% $70.24 $41.60
Three months ended December 31, 2003
Average
Occupancy (3)(6) ADR (4) RevPAR (5)(6)
Owned or Leased Hotels: 50.4% $66.42 $33.51
Continuing Operations 36.8% 51.71 19.02
Discontinued Operations 47.3% 63.83 30.22
Combined System Wide (7) 48.3% $66.73 $32.20
Red Lion Hotels (Owned, Leased,
Managed and Franchised) (8) 49.3% $65.69 $32.36
Year ended December 31, 2003
Average
Occupancy (3)(6) ADR (4) RevPAR (5)(6)
Owned or Leased Hotels:
Continuing Operations 57.5% $70.94 $40.82
Discontinued Operations 46.7% 57.46 26.81
55.1% 68.35 37.65
Combined System Wide (7) 55.2% $70.59 $38.94
Red Lion Hotels (Owned, Leased,
Managed and Franchised) (8) 56.0% $69.54 $38.92
(1) Statistics include 11 hotels previously identified as discontinued
business units, aggregating 1,649 rooms and 57,645 square feet of
meeting space.
(2) Includes all hotels owned, leased, managed and franchised for greater
than one year by WestCoast Hospitality Corporation.
(3) Average occupancy represents total paid rooms divided by total
available rooms. Total available rooms represents the number of rooms
available multiplied by the number of days in the reported period.
(4) Average daily rate ("ADR") represents total room revenues divided by
the total number of paid rooms occupied by hotel guests.
(5) Revenue per available room ("RevPAR") represents total room and
related revenues divided by total available rooms.
(6) Rooms under significant renovation were excluded from total available
rooms. Due to the short duration of renovation, in the opinion of
management, excluding these rooms did not have a material impact on
RevPAR or average occupancy.
(7) Includes all hotels owned, leased, managed and franchised for greater
than one year by WestCoast Hospitality Corporation.
No adjustment has been made for hotels classified as discontinued
operations.
(8) Includes all hotels owned, leased, managed and franchised for greater
than one year operated under the Red Lion brand name. No adjustment
has been made for hotels classified as discontinued operations.
WestCoast Hospitality Corporation
Reconciliation of EBITDA to Net Income
(unaudited)
($ in thousands)
Three months ended Year ended
December 31, December 31,
2004 2003 2004 2003
EBITDA from continuing operations $3,031 $2,442 $22,602 $21,628
Income tax benefit (expense) -
continuing operations 1,287 1,176 876 (51)
Interest expense - continuing
operations (3,664) (2,476) (13,828) (9,679)
Depreciation and amortization -
continuing operations (2,807) (2,429) (10,540) (10,338)
Net income (loss) from continuing
operations (2,153) (1,287) (890) 1,560
Loss on discontinued operations (6,087) (751) (5,395) (341)
Net income (loss) $(8,240) $(2,038) $(6,285) $1,219
EBITDA $(5,496) $2,276 $18,268 $25,269
Income tax benefit 4,564 1,581 3,781 133
Interest expense (4,055) (2,911) (15,507) (11,151)
Depreciation and amortization (3,253) (2,984) (12,827) (13,032)
Net income (loss) $(8,240) $(2,038) $(6,285) $1,219
NON-GAAP FINANCIAL MEASURES
EBITDA is defined as net income (or loss), before interest, taxes, depreciation
and amortization. EBITDA is considered a non-GAAP financial measurement. We
believe it is a useful financial performance measure for us and for our
shareholders and is a complement to net income and other financial performance
measures provided in accordance with generally accepted accounting principles
in the United States ("GAAP"). EBITDA from continuing operations is calculated
in the same manner, but excludes the operating results of business units
identified as discontinued under GAAP.
We use EBITDA to measure the financial performance of our owned and leased
hotels because it excludes interest, taxes, depreciation and amortization,
which bear little or no relationship to operating performance. By excluding
interest expense, EBITDA measures our financial performance irrespective of our
capital structure or how we finance our properties and operations. We generally
pay federal and state income taxes on a consolidated basis, taking into account
how the applicable taxing laws apply to our company in the aggregate. By
excluding taxes on income, we believe EBITDA provides a basis for measuring the
financial performance of our operations excluding factors that our hotels and
other operations cannot control. By excluding depreciation and amortization
expense, which can vary from hotel to hotel based on historical cost and other
factors unrelated to the hotels' financial performance, EBITDA measures the
financial performance of our hotels without regard to their historical cost.
For all of these reasons, we believe that EBITDA provides us and investors with
information that is relevant and useful in evaluating our business.
However, because EBITDA excludes depreciation and amortization, it does not
measure the capital we require to maintain or preserve our long-lived assets.
In addition, because EBITDA does not reflect interest expense, it does not take
into account the total amount of interest we pay on outstanding debt nor does
it show trends in interest costs due to changes in our borrowings or changes in
interest rates. EBITDA, as defined by us, may not be comparable to EBITDA as
reported by other companies that do not define EBITDA exactly as we define the
term. Because we use EBITDA to evaluate our financial performance, we reconcile
all EBITDA measures to net income, which is the most comparable financial m
DATASOURCE: WestCoast Hospitality Corporation
CONTACT: Anupam Narayan, Executive Vice President, Chief Financial
Officer, of WestCoast Hospitality Corporation, +1-509-459-6100, or
Web site: http://www.westcoasthotels.com/