J.Q. Hammons Hotels' revenues rise 10.6 percent

John Q. Hammons Hotels Inc. reported Aug. 16 second-quarter revenues of $90.45 million and revenue for the six months that ended July 2 of $174.04 million. Net income was $982,000 for the quarter, or 16 cents per share.

The total revenues for the 1999 quarter represented an increase of $8.6 million, or 10.6 percent, compared to the same quarter in 1998. The increase was "primarily as a result of the continued growth of the new hotels, including the four hotels opened late in 1998 and during 1999 and, to a lesser extent, revenue growth at the mature hotels," the company's filing with the Securities and Exchange Commission said.

During the second quarter, total earnings before interest expense, taxes, depreciation and amortization (EBITDA) were $26.9 million, up 11.8 percent compared to the 1998 quarter.

"The mature hotels' EBITDA was $24.5 million in the 1999 quarter, up 29.6 percent from $18.9 million in the 1998 quarter, primarily due to six hotels moving to the mature hotels category from the new hotels category," the SEC filing said.

Those six hotels that changed from new to mature are in Omaha, Branson, Charleston, Kansas City and Little Rock.

The company's average room rate was $95.09, up 3.6 percent compared to 1998. The average room rate for the hotel industry was $80.38 for the quarter, a 3.4 percent increase in the industry figure from 1998.

Occupancy for the second quarter was 65 percent for Hammons, up 0.1 percent from 1998.

Revenue per available room for the company was $61.76 in the second quarter, up 3.7 percent from the 1998 quarter. The industry figure comparing the same periods increased 2 percent

"Income from operations increased $3 million, or 23.3 percent, compared to the 1998 quarter. Expenses, particularly depreciation and amortization, increased less rapidly than revenues, and the company began to realize increased benefits from the hotels opened over the past few years," the company filing said.

Income per basic and diluted share was 16 cents for the quarter, about 11 cents of which was attributable to the gain on the sale of a hotel in June.

June 16 the company sold its Holiday Inn Express Hotel and Conference Center in Joliet, Ill., for $6.5 million, resulting in a pre-tax gain of about $2.4 million.

For the six-month period that ended July 2, the company's EBITDA was $51.3 million, up 10.9 percent compared to the same period the year before.

Total revenues for the first six months were $174 million, up $13.3 million, or 8.3 percent, compared to the first six months of 1998. Continued growth in new hotels was cited for the increase.

Room revenues were $13.5 million in the first six months of 1999, up 7.7 percent from the period in 1998. This increase was due to increases in average room rates and total number of available rooms. The company's average room rate for the first six months was $95.03 in 1999, compared to $91 in 1998.

Food and beverage revenues were $48.2 million in the first six months, up $4 million, or 9.1 percent, from the first six months of 1998. Sales at new hotels and menu pricing adjustments were cited.

Meeting room rental and other revenues were $12.4 million in the first six months of 1999, up $1.2 million, or 10.7 percent, from the same period in 1998. "The majority of the increase was the result of revenues from the new hotels," the company's filing said.

The company had four hotels under construction as of July 2, one of which opened Aug. 3.

On July 2, the company's total debt was $809.4 million compared to $759.7 million at the end of 1998. The increase is attributable to the company's new hotels under construction and hotels that recently opened. The filing said the current portion of long-term debt was $39.7 million, compared to $42.3 million at the end of 1998. This is partially due to refinancing of the Topeka Capitol Plaza Hotel.

Donald H. Dempsey was named to the company's board of directors Aug. 18. He is executive vice president and chief financial officer of Equity Inns Inc. He also serves on the board of directors for Equity Inns, a real estate investment trust with headquarters in Germantown, Tenn. Equity Inns owns 100 hotels in 36 states.[[In-content Ad]]