Quarterly Comparable EBITDA was $22.8 million compared with $55.7 million in the prior year.
Strategic Hotels & Resorts (NYSE: BEE) today reported results for the first quarter ended March 31, 2009.
First Quarter Recap
- Comparable funds from operations (Comparable FFO) was a loss of $0.15 per diluted share compared with income of $0.30 per diluted share in the prior year.
- Quarterly Comparable EBITDA was $22.8 million compared with $55.7 million in the prior year.
- North American total revenue per available room (Total RevPAR) decreased 22.8 percent and revenue per available room (RevPAR) decreased 24.1 percent driven by a 10.1 percentage point decrease in occupancy and an 11.1 percent decrease in average daily rate (ADR). Non-rooms revenue declined by 22.0 percent.
- European Total RevPAR decreased 26.1 percent (12.3 percent in constant dollars) and RevPAR decreased 29.3 percent (14.4 percent in constant dollars).
- North American gross operating profit (GOP) and EBITDA margins contracted 560 basis points and 630 basis points, respectively. North American EBITDA per room declined 43.7 percent.
Chief Executive Officer Laurence Geller remarked, "Despite continued pressures on the luxury market, we are executing plans on all of our key strategic fronts. Our revenue growth continues to outperform comparable national indices for luxury hotels. Operating controls at our hotels are significantly reducing costs while making substantial improvements in productivity. And, we have made great strides toward right sizing our corporate overhead for today's business realities with a run rate reduction over 20% from levels in 2007. We also have confidence in the structural elements of our balance sheet with no maturing debt until 2011 and liquidity provided through a durable amended bank credit facility.
"As we move forward, we continue to focus on further enhancing our liquidity through aggressive and innovative asset management, limiting capital outlays, and seeking opportunities to raise efficiently priced equity through disciplined processes and carefully executed hotel sales."
Financial Results
The company reported first quarter 2009 financial results as follows:
- Net loss attributable to common shareholders was $43.2 million, or $0.57 per diluted share, for the first quarter of 2009, compared with net loss attributable to common shareholders of $7.9 million, or $0.11 per diluted share, for the first quarter of 2008.
- Comparable EBITDA was $22.8 million compared with $55.7 million for the first quarter of 2008.
- FFO was a loss of $10.6 million, or $0.14 per diluted share, compared with income of $18.9 million, or $0.25 per diluted share, in the first quarter of 2008. Comparable FFO was a loss of $11.4 million, or $0.15 per diluted share, compared with income of $22.6 million, or $0.30 per diluted share, in the first quarter of 2008.
Bank Credit Facility Amendment
During the first quarter, the company completed an amendment to its bank credit facility which amended certain terms and covenants in order to provide protection against the deteriorating operating environment. The amended terms include a reduction in total facility size to $400.0 million, an increase in pricing to LIBOR plus 375 basis points and security interests in five previously unsecured hotel properties. In return, the company negotiated a reduction of the minimum corporate fixed charge coverage ratio to 0.9 times and an increase in maximum corporate leverage to 80%. The maturity date of the facility remains unchanged with an initial maturity in March 2011 and a one year extension option available upon achieving certain specified performance criteria.
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