Choice Hotels International Reports Fourth Quarter and Full Year 2015 Results; Domestic RevPAR up 4.3%
February 18, 2016 11:24am
Domestic Pipeline of Hotels Awaiting Conversion or Approved for Development Increased 19%
ROCKVILLE, Md. , Feb. 18, 2016 -- Choice Hotels International, Inc. (NYSE:CHH) today reported the following highlights for the fourth quarter and full-year 2015:
Fourth Quarter Highlights
"We are pleased to report another record year of revenue, operating income and net income performance," said Stephen P. Joyce, president and chief executive officer, Choice Hotels. "Our performance was driven by continued improvement in our domestic royalty revenues resulting from growth all in 3 critical levers – RevPAR, system-size and effective royalty rate, as well as our franchise development results. Our effective royalty rates for the domestic system increased 9 basis points during the quarter and, excluding the impact of our Comfort rejuvenation strategy, our domestic units under franchise grew 4% from the prior year. As domestic franchise contracts for both new construction and conversion sales continue to strengthen, we are expecting an acceleration of the growth rates for our domestic system size in 2016. We are optimistic that developers will continue to respond to our strong family of brands and are optimistic that RevPAR performance and growth of our effective royalty rates will continue to be strong in 2016."
Use of Cash Flows
During the fourth quarter of 2015, the company's board of directors announced a 5% increase in the current quarterly dividend rate per common share to $0.205 per share. During the year ended December 31, 2015, the company paid cash dividends totaling approximately $45 million.
The company repurchased 1.3 million shares of common stock under its share repurchase program during 2015, at a total cost of approximately $66 million. The company currently has authorization to purchase up to 1.7 million additional shares under this program.
Hotel Development & Financing
Pursuant to its program to encourage acceleration of the growth of our upscale select-service Cambria hotel & suites brand, the company's net advances in support of the Cambria brand totaled $61 million during the year ended December 31, 2015. These advances are primarily in the form of joint venture investments, forgivable key money loans, senior and mezzanine lending and site acquisitions. At December 31, 2015, the Company had approximately $129 million outstanding pursuant to these financial support activities. With respect to lending and joint venture investments, the company generally expects to recycle these loans and investments within a five year period.
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 company's consolidated statement of income for the three months and year ended December 31, 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.
The company's consolidated 2016 outlook reflects the following assumptions:
Non-Hotel Franchising Activities
The company's first quarter 2016 diluted EPS is expected to be at least $0.38. The company expects full-year 2016 diluted EPS to range between $2.30 and $2.36 and full year 2016 EBITDA to range between $252 million and $257 million. The EPS and consolidated EBITDA estimates assume that we incur net reductions in EBITDA related to non-hotel franchising activities at the midpoint of the range for these investments.
Tables associated with this release are accessible via the PDF or by visiting:
Tags: choice hotels,
q4 2015 results
Choice Hotels International, Inc.® (NYSE: CHH) is one of the world's largest lodging companies. With more than 6,400 hotels franchised in more than 35 countries and territories, we represent more than 500,000 rooms around the globe. As of December 31, 2015, 720 hotels were in our development pipeline. Our company's Ascend Hotel Collection®, Cambria® hotels & suites, Comfort Inn®, Comfort Suites®, Sleep Inn®, Quality®, Clarion®, MainStay Suites®, Suburban Extended Stay Hotel®, Econo Lodge® and Rodeway Inn® brands provide a spectrum of lodging choices to meet guests' needs. With more than 25 million members and counting, check out our Choice Privileges® rewards program to see how you can reap the benefits of being a member of the Choice Hotels® family. Visit us at www.choicehotels.com for more information.
SkyTouch Technology® is a business division of Choice Hotels that develops and markets cloud-based technology products, including inventory management, pricing and connectivity to third party channels, to hoteliers not under franchise agreements with the company.
Contact: David White, Senior Vice President, Chief Financial Officer & Treasurer
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