Boykin Lodging Announces 2004 Financial Results CLEVELAND, Feb. 23
/PRNewswire-FirstCall/ -- Boykin Lodging Company (NYSE:BOY), a
hotel real estate investment trust, today announced financial
results for the fourth quarter and full year ended December 31,
2004. Financial Highlights: Revenue per available room (RevPAR) for
the quarter for the open hotels increased 8.3% to $56.30 from last
year's $51.97. Occupancy increased to 58.1% from 54.3% and the
average daily room rate increased to $96.97 from $95.75. The
Company's net loss attributable to common shareholders for the
fourth quarter of 2004 totaled $4.8 million, or $0.27 per
fully-diluted share, compared with the same period last year when
the Company experienced a net loss of $3.6 million, or $0.21 per
share. Funds from operations attributable to common shareholders
(FFO) for the fourth quarter totaled $0.7 million, or $0.04 per
fully-diluted share, in line with the Company's guidance. The
decrease from fourth-quarter 2003 FFO of $2.1 million, or $0.12 per
share, was primarily due to the decrease in contribution from
condominium development and unit sales. In the fourth- quarter of
2003, condominium sales contributed $2.1 million net of minority
interest, whereas there was no similar contribution for the fourth
quarter of 2004. This decrease was partially offset by an
impairment charge taken in the fourth quarter of 2003, with no
similar impairment charge in 2004. The Company's earnings before
interest, taxes, depreciation and amortization (EBITDA) for the
fourth quarter, including the Company's share of EBITDA from
unconsolidated joint venture subsidiaries, totaled $6.0 million,
down from last year's fourth quarter EBITDA of $8.1 million,
primarily due to the decrease in contribution from condominium
sales. FFO and EBITDA are non- GAAP financial measures that should
not be considered as alternatives to any measures of operating
results under GAAP. Details of Fourth Quarter Results: Revenues
from continuing operations for the quarter ended December 31, 2004,
were $50.3 million, compared with revenues of $55.3 million for the
same period last year. The decrease in revenues was primarily
attributable to the decrease in condominium development and unit
sales due to the completion of the Sanibel View Villas project in
2003 and the completion of the White Sand Villas project during the
third quarter of 2004. Offsetting this decrease is an increase in
revenues from continuing hotel operations, which were $49.4 million
in 2004 versus $47.0 million for the same period last year. This
increase in revenues from continuing hotel operations occurred
despite the fact two hotels located in Melbourne, Florida, which
were closed for the entire fourth quarter of 2004 following
Hurricane Frances in September, contributed approximately 5% of the
fourth quarter 2003 hotel revenues. Included in fourth quarter 2004
hotel revenues is the recognition of approximately $0.9 million of
expected business interruption insurance recoveries related to
these properties. For the comparable properties, consisting of the
19 consolidated properties owned and operated under a Taxable REIT
Subsidiary (TRS) structure for the full fourth quarter of both
years, excluding hotels closed due to hurricane damage, RevPAR
increased 9.3% to $52.92 in 2004 from $48.40 in 2003. Occupancy
increased to 57.2% from 52.5% while the average daily room rate
increased slightly to $92.45 in 2004 versus $92.15 in 2003.
Increases in RevPAR were primarily the result of increases in
occupancy, negatively impacting hotel profit margins. Hotel profit
margins, defined as hotel operating profit (hotel revenues less
hotel operating expenses) as a percentage of hotel revenues, for
the consolidated properties included in continuing operations
averaged 20.5% for the fourth quarter of 2004, compared with 21.4%
for the 2003 period. Approximately 50 basis points of this decline
was attributable to the closure of the two Melbourne properties.
The remainder of the decrease is a result of increased payroll
taxes, utilities and the enhanced focus on preventative maintenance
across all properties. Included in the prior year fourth-quarter
results related to discontinued operations is a $2.8 million
impairment loss. Net of minority interests, the impairment charge
approximated $1.3 million, or approximately $0.07 per share. The
operating results of the five properties sold during each of 2003
and 2004 are reflected in the financial statements as discontinued
operations for all periods presented. Additionally, the Company
acquired the Radisson Suite Beach Resort on Marco Island, Florida
in August 2003. Year-to-date Results: RevPAR for the open hotels
increased 4.7% to $60.65 from last year's $57.93. Occupancy
increased to 61.6% from 59.5% and the average daily room rate
increased to $98.47 from $97.31. The Company's net loss
attributable to common shareholders for the year ended December 31,
2004 totaled $4.9 million versus $8.2 million for 2003. Continuing
operating revenues for 2004 totaled $220.4 million, compared with
$231.6 million for 2003. RevPAR for the 18 comparable hotels,
excluding the two Melbourne hotels closed after Hurricane Frances,
increased 3.3% to $55.84 from last year's $54.06, as occupancy rose
to 60.8% from 58.9% and the average daily rate increased slightly,
to $91.89 from $91.76. During 2004, hotel profit margins of the
consolidated properties included in continuing operations averaged
24.4%, compared with 24.2% for the previous year. Excluding the two
Melbourne properties, margins would have increased 50 basis points.
EBITDA, including the Company's share of EBITDA from unconsolidated
joint venture subsidiaries, totaled $32.8 million, down from last
year's EBITDA of $45.6 million. For 2004, FFO of $9.7 million, or
$0.56 per fully-diluted share, was below last year's FFO of $18.3
million, or $1.05 per share. Included in the 2004 net loss, EBITDA
and FFO is a $4.3 million impairment charge, or $3.7 million net of
minority interest, or $0.21 per share. Included in the prior year
results was a $2.8 million impairment loss, or $1.3 million net of
minority interests, approximately $0.07 per share. Included in 2004
hotel revenues are approximately $2.3 million of business
interruption insurance recoveries related to the two Melbourne,
Florida properties and the Berkeley property. In 2004, the Company
received approximately $3.4 million of property insurance
recoveries in excess of the net book value of the assets disposed
in 2003 related to the ongoing renovation at its Berkeley property.
The proceeds are reflected as gain on sale/disposal of assets
within the financial statements. In 2003, this amount totaled $0.9
million. The renovation of the property was completed in July 2004.
Capital Structure: At December 31, 2004, Boykin had $13.5 million
of cash and cash equivalents, and total consolidated debt of $200.0
million. The Company's pro rata share of the debt of unconsolidated
joint ventures totaled $25.0 million at December 31, 2004. The
$91.1 million balance of the Company's $108.0 million term loan is
scheduled to mature in July 2005. The Company is currently
evaluating its refinancing options. Reconstruction of Melbourne,
Florida Hotels: Based upon current estimates of the availability of
labor and materials, the Company expects the repair of the two
Melbourne, Florida properties to be completed during late 2005 or
early 2006. Current estimates are that the aggregate costs for the
repairs of the two properties will exceed $30 million. The Company
anticipates that a majority of these costs will be recovered from
property insurance coverage. Condominium Hotels: The Company stated
that it is currently marketing units in the final phase of the
redevelopment of the Pink Shell Beach Resort & Spa, a new 43
beach- front unit condo-hotel tower named Captiva Villas. Buildings
previously located on the site were demolished in February 2005 and
construction of the new building is expected to commence this
summer. Additionally, the Company noted that it is currently
exploring the possibility of converting the Melbourne Quality
Suites into a condo-hotel. Outlook: Based upon the current booking
trends, the Company anticipates first- quarter 2005 RevPAR for the
portfolio will be 6.0% to 7.5% above the same period last year,
with full-year 2005 RevPAR 5.0% to 7.0% above 2004. Based upon
these assumptions, the Company expects a net loss ranging between
$0.18 and $0.16 for the first quarter and between $0.56 and $0.43
per share for the full year. FFO is expected to range between $0.13
and $0.15 per fully-diluted share for the first quarter and $0.61
and $0.75 per share for the full year. The net loss projections for
the quarter and the year do not include gains from property or
asset dispositions which may occur during the year. Robert W.
Boykin, Chairman and Chief Executive Officer, commented, "We are
excited about the continuous improvement that we are seeing in
RevPAR as well as increases in demand, especially transient, now
that the economy and the hotel industry overall appear to be in
full recovery mode." Mr. Boykin continued, "With the expected
improvement in hotel performance in 2005, we will continue to
review our cash flow and taxable income projections throughout the
year and may consider recommending to the Board the reinstatement
of a common share dividend during 2005." The Company will hold a
conference call with financial analysts to discuss fourth-quarter
and full year 2004 results at 2:00 p.m. Eastern Time today,
February 23, 2005. A live webcast of the call can be heard on the
Internet by visiting the Company's website at
http://www.boykinlodging.com/ and clicking on the investor
relations page or by visiting other websites that provide links to
corporate webcasts. Boykin Lodging Company is a real estate
investment trust that focuses on the ownership of full-service,
upscale commercial and resort hotels. The Company currently owns
interests in 24 hotels containing a total of 7,166 rooms located in
16 states, and operating under such internationally known brands as
Doubletree, Marriott, Hilton, Radisson, Embassy Suites, and
Courtyard by Marriott among others. For more information about
Boykin Lodging Company, visit the Company's website at
http://www.boykinlodging.com/ . This news release contains
"forward-looking statements" within the meaning of Section 21E of
the Securities Exchange Act of 1934 regarding the Company,
including those statements regarding the Company's future
performance or anticipated financial results, among others. Except
for historical information, the matters discussed in this release
are forward-looking statements that involve risks and uncertainties
that may cause results to differ materially from those set forth in
those statements. Among other things, factors that could cause
actual results to differ materially from those expressed in such
forward-looking statements include financial performance, real
estate conditions, execution of hotel acquisition programs, changes
in local or national economic conditions, and other similar
variables and other matters disclosed in the Company's filings with
the SEC, which can be found on the SEC's website at
http://www.sec.gov/ . The Company defines comparable properties as
those that are consolidated into the Company's financial statements
and which are operated under the TRS structure for the period that
is being discussed for both the current and prior year and are
owned as of the last day of the most recent fiscal period. The
Company believes that FFO is helpful to investors as a measure of
the performance of an equity REIT because it provides investors
with another indication of the Company's performance prior to
deduction of real estate related depreciation and amortization. The
Company believes that EBITDA is helpful to investors as a measure
of the performance of the Company because it provides an indication
of the operating performance of the properties within the portfolio
and is not impacted by the capital structure of the REIT. Neither
FFO nor EBITDA represent cash generated from operating activities
as determined by GAAP and should not be considered as an
alternative to GAAP net income as an indication of the Company's
financial performance or to cash flow from operating activities as
determined by GAAP as a measure of liquidity, nor is it indicative
of funds available to fund cash needs, including the ability to
make cash distributions. FFO and EBITDA may include funds that may
not be available for the Company's discretionary use due to
functional requirements to conserve funds for capital expenditures
and property acquisitions, and other commitments and uncertainties.
BOYKIN LODGING COMPANY STATEMENTS OF OPERATIONS, FUNDS FROM
OPERATIONS ATTRIBUTABLE TO COMMON SHAREHOLDERS, AND EARNINGS BEFORE
INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (Unaudited, amounts
in thousands) OPERATING DATA: Three Months Ended Year Ended
December 31, December 31, 2004 2003 2004 2003 Revenues: Hotel
revenues Rooms $29,131 $ 28,299 $133,597 $122,821 Food and beverage
16,709 16,247 62,407 58,268 Other 3,580 2,496 14,414 11,314 Total
hotel revenues 49,420 47,042 210,418 192,403 Lease revenue 788 783
2,045 1,958 Other operating revenue 84 80 380 311 Revenues from
condominium development and unit sales - 7,351 7,541 36,883 Total
revenues 50,292 55,256 220,384 231,555 Expenses: Hotel operating
expenses Rooms 8,093 7,576 33,772 30,850 Food and beverage 10,930
10,835 43,045 40,877 Other direct 1,888 1,666 8,181 7,142 Indirect
16,920 15,715 68,256 61,672 Management fees to related party 1,451
1,166 5,801 4,339 Management fees - other 10 27 59 882 Total hotel
operating expenses 39,292 36,985 159,114 145,762 Property taxes,
insurance and other 3,633 3,774 15,117 14,530 Cost of condominium
development and unit sales - 4,825 5,509 24,645 Real estate related
depreciation and amortization 6,163 6,326 24,017 26,085 Corporate
general and administrative 2,068 2,329 8,801 8,138 Total operating
expenses 51,156 54,239 212,558 219,160 Operating income (loss)
(864) 1,017 7,826 12,395 Interest income 247 238 387 602 Other
income - 18 8 39 Interest expense (3,119) (3,498) (13,629) (14,923)
Amortization of deferred financing costs (364) (217) (1,367)
(1,906) Minority interest in earnings of joint ventures (61) (60)
(141) (133) Minority interest in loss of operating partnership 987
542 1,879 1,946 Equity in loss of unconsolidated joint ventures
(240) (52) (814) (870) Loss before gain on sale/disposal of assets
and discontinued operations (3,414) (2,012) (5,851) (2,850) Gain
(loss) on sale/ disposal of assets (196) 944 3,157 954 Loss before
discontinued operations (3,610) (1,068) (2,694) (1,896)
Discontinued operations: Operating loss from discontinued
operations, net of operating partnership minority interest income
of $33 and $246 for the three months ended December 31, 2004 and
2003, respectively, and $1,038 and $387 for the years ended
December 31, 2004 and 2003, respectively (188) (1,388) (5,890)
(2,184) Gain on sale of assets, net of operating partnership
minority interest expense of $39 for the three months ended
December 31, 2004 and $1,484 and $116 for the years ended December
31, 2004 and 2003, respectively 231 - 8,424 654 Net loss $(3,567)
$(2,456) $(160) $(3,426) Preferred dividends (1,188) (1,188)
(4,751) (4,751) Net loss attributable to common shareholders
$(4,755) $(3,644) $(4,911) $(8,177) FUNDS FROM OPERATIONS
ATTRIBUTABLE TO COMMON SHAREHOLDERS (FFO): Three Months Ended Year
Ended December 31, December 31, 2004 2003 2004 2003 Net loss
$(3,567) $(2,456) $(160) $(3,426) Minority interest (a) (943)
(1,964) 803 (3,319) Gain on sale/disposal of assets (74) (944)
(13,065) (1,724) Gain on sale/disposal of assets included in
discontinued operations - (212) (15) (550) Real estate related
depreciation and amortization 6,163 6,326 24,017 26,085 Real estate
related depreciation and amortization included in discontinued
operations 54 1,247 2,602 5,632 Equity in loss of unconsolidated
joint ventures 240 52 814 870 FFO adjustment related to joint
ventures 169 1,593 1,016 2,324 Preferred dividends declared (1,188)
(1,188) (4,751) (4,751) Funds from operations after preferred
dividends $854 $2,454 $11,261 $21,141 Less: Funds from operations
related to minority interest 114 333 1,519 2,866 Funds from
operations attributable to common shareholders $740 $2,121 $9,742
$18,275 EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND
AMORTIZATION (EBITDA): Operating income (loss) $(864) $1,017 $7,826
$12,395 Interest income 247 238 387 602 Other income - 18 8 39 Real
estate related depreciation and amortization 6,163 6,326 24,017
26,085 EBITDA attributable to discontinued operations (189) (1,508)
(1,959) 2,783 Company's share of EBITDA of unconsolidated joint
ventures 682 804 2,713 2,667 EBITDA attributable to joint venture
minority interest (72) 1,164 (185) 1,058 EBITDA $5,967 $8,059
$32,807 $45,629 (a) includes joint venture minority interest
expense included in discontinued operations BOYKIN LODGING COMPANY
PER-SHARE DATA (Unaudited) Three Months Ended Year Ended December
31, December 31, PER-SHARE DATA: 2004 2003 2004 2003 Net loss
attributable to common shareholders before discontinued operations
per share: Basic $ (0.28) $ (0.13) $ (0.43) $ (0.38) Diluted $
(0.28) $ (0.13) $ (0.43) $ (0.38) Discontinued operations per
share: Basic $ 0.00 $(0.08) $ 0.15 $(0.09) Diluted $ 0.00 $(0.08) $
0.14 $(0.09) Net loss attributable to common shareholders per share
(a): Basic $ (0.27) $ (0.21) $ (0.28) $ (0.47) Diluted $ (0.27) $
(0.21) $ (0.28) $ (0.47) FFO attributable to common shareholders
per share: Basic $ 0.04 $ 0.12 $ 0.56 $ 1.05 Diluted $ 0.04 $ 0.12
$ 0.56 $ 1.05 Weighted average common shares outstanding - Basic
17,450,314 17,344,380 17,426,458 17,336,258 Effect of dilutive
securities: Common stock options 34,488 39,586 28,213 18,332
Restricted share grants 101,819 125,020 98,530 115,062 Weighted
average common shares outstanding - Diluted 17,586,621 17,508,986
17,553,201 17,469,652 (a) per share amounts may not add due to
rounding BOYKIN LODGING COMPANY SELECTED HOTEL STATISTICS and
BALANCE SHEET INFORMATION (Unaudited, amounts in thousands except
statistical data) Three Months Ended Year Ended December 31,
December 31, 2004 2003 2004 2003 HOTEL STATISTICS: All Hotels (22
hotels)(a)(b) Hotel revenues $55,457 $51,503 $229,377 $217,161
RevPAR $56.30 $51.97 $60.65 $57.93 Occupancy 58.1% 54.3% 61.6%
59.5% Average daily rate $96.97 $95.75 $98.47 $97.31 Comparable
Hotels (c) Hotel revenues $48,506 $44,519 $187,452 $178,404 RevPAR
$52.92 $48.40 $55.84 $54.06 Occupancy 57.2% 52.5% 60.8% 58.9%
Average daily rate $92.45 $92.15 $91.89 $91.76 (a) Includes all
hotels owned or partially owned by Boykin as of December 31, 2004
less properties not operating due to damage caused by hurricanes.
(b) Results calculated including 35 lock-out rooms at the Radisson
Suite Beach Resort on Marco Island. (c) Includes all consolidated
hotels operated under the TRS structure for all periods presented
and owned or partially owned by Boykin as of December 31, 2004 less
properties not operating due to damage caused by hurricanes.
December 31, December 31, SELECTED BALANCE SHEET INFORMATION: 2004
2003 Assets Investment in hotel properties $545,142 $534,475
Accumulated depreciation (134,347) (124,599) Investment in hotel
properties, net 410,795 409,876 Cash and cash equivalents including
restricted cash 26,543 29,378 Accounts receivable, net 12,180
40,242 Investment in unconsolidated joint ventures 14,048 16,158
Other assets 13,814 12,854 Assets of discontinued operations, net -
82,784 Total Assets $477,380 $591,292 Liabilities and Shareholders'
Equity Outstanding debt $199,985 $282,019 Accounts payable and
accrued expenses 38,958 45,498 Minority interest in joint ventures
927 967 Minority interest in operating partnership 10,062 11,495
Liabilities related to discontinued operations - 19,772
Shareholders' equity 227,448 231,541 Total Liabilities and
Shareholders' Equity $477,380 $591,292 Tara Szerpicki Investor
Relations Boykin Lodging Company (216) 430-1333 DATASOURCE: Boykin
Lodging Company CONTACT: Tara Szerpicki, Investor Relations of
Boykin Lodging Company, +1-216-430-1333, or Web site:
http://www.boykinlodging.com/
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