Beats Guidance Due to Significant Increase in Occupancy
La Quinta Corporation (NYSE:LQI) today announced that total company RevPAR increased approximately 10% for the fourth quarter of 2003 versus the same period in the prior year. On October 30, 2003, La Quinta disclosed total company RevPAR expectations of a 4% increase for fourth quarter 2003. La Quinta also disclosed Adjusted EBITDA guidance of $25 million, and La Quinta now believes Adjusted EBITDA will exceed $25 million for the fourth quarter of 2003. La Quinta also previously issued guidance for a net loss of $17 million for the fourth quarter of 2003, and now believes the fourth quarter net loss will likely be less than a net loss of $17 million.
"Our RevPAR results were driven by a significant increase in occupancy during the quarter, partially offset by lower average rates," commented Francis W. ("Butch") Cash, President and Chief Executive Officer. "Our RevPAR results for the quarter make it clear that our revenue initiatives are working, particularly electronic distribution, which was the primary driver for our RevPAR increase. I'm very proud of the progress we have made that is enabling us to beat the competition. La Quinta's enhanced sales team, best- in-class Returns(R) program and completed renovations program are creating more loyal customers who are staying with us more often."
La Quinta also announced that it added 14 franchise properties (1,267 rooms) during the fourth quarter for a total of 96 franchised properties (8,702 rooms) open at the end of 2003. Further, the Company believes that the franchise pipeline for 2004 is very healthy with executed contracts for over 50 properties (4,000 rooms). The majority of the pipeline is new construction properties that are expected to open during 2004.
In the fourth quarter, La Quinta sold four company owned hotels for gross proceeds of approximately $10 million. During the full year 2003, La Quinta sold a total of eight hotels for gross proceeds of approximately $20 million. These eight hotels contributed approximately $6 million in revenues during 2003. La Quinta also completed the sale of its non-strategic business, TeleMatrix, in December 2003, and received cash proceeds of $6 million. The impact of the TeleMatrix sale is not expected to be material to La Quinta's operating results.
At December 31, 2003, La Quinta had over $325 million in cash and no borrowings under its new $150 million credit facility (other than $20 million in letters of credit).
Preliminary 2004 Guidance
La Quinta announced updated preliminary guidance for 2004 of total company RevPAR increase of 5%, Adjusted EBITDA of $165 million, net loss of $51 million and capital expenditures of $65 million, which includes $20 million related to the redevelopment project in San Antonio. The net loss includes pretax losses of $27 million on early retirement of debt. A schedule reconciling net loss to Adjusted EBITDA is included in this press release. La Quinta currently expects its 2004 RevPAR growth to be higher in the first half of the year than in the second half of 2004. RevPAR growth in the first half of 2004 is likely to be driven by continued occupancy gains partially offset by lower average rates. La Quinta management will discuss its 2004 guidance further when the Company announces fourth quarter and full year 2003 financial results, which it currently expects will be on Thursday, February 26, 2004. Details regarding the earnings release conference call and webcast will be announced in mid-February.
About La Quinta
Dallas based La Quinta Corporation, a limited service lodging company, owns, operates or franchises over 370 La Quinta Inns and La Quinta Inn & Suites in 33 states.
Logos, product and company names mentioned are the property of their respective owners.
