- Double-Digit System-Wide RevPAR Increase
- Jameson Brand RevPAR jumps 11.5%
- Q2 Net Income Reverses Loss, Grows to $2.5 Million
- Sales of Three Signature Inns Completed
- Jameson Remains #1 in Guest Satisfaction for Three Consecutive Quarters
Jameson Inns, Inc. (NASDAQ:JAMS) , owner and operator of Jameson Inn and Signature Inn hotels, today announced financial results for the quarter ended June 30, 2005.
Second Quarter Results
Net income attributable to common stockholders was approximately $2.5 million, or $0.04 per share in the second quarter 2005, compared to a net loss of approximately $555,000, or $0.04 per share in same period of 2004. The net change was primarily due to the increase in ADR and occupancy, and the elimination of the preferred dividends of approximately $1.7 million accrued in second quarter 2004. Preferred dividends were eliminated as a result of the redemption of the preferred stock in August 2004.
Lodging revenue grew by approximately $1.3 million (or 5.9%) to $23.4 million in second quarter 2005 from $22.1 million in second quarter 2004.
RevPAR improvements by the Jameson Inn brand (11.5%), combined with a substantial slowing in the performance decline by the Signature brand produced an overall double-digit increase (10.2%) in company wide RevPAR. Along with a rising ADR (up $2.80, or 4.6%), occupancy rose by a full three percentage points. "We believe these results are a clear indication that our markets are improving across the company, and that we are well positioned in these markets to take advantage of the increased lodging demand," said Thomas W. Kitchin, Chairman and Chief Executive Officer of Jameson Inns, Inc. "The fact that we were able to grow both rate and occupancy validates our belief that customers continue to be drawn to our price value proposition and our Perfect Stay guarantee."
The Jameson Inn brand occupancy rate increased to 62.2% in second quarter 2005 from 59.2% in second quarter 2004. ADR for the Jameson Inn brand increased 6.1% in second quarter 2005 as compared to second quarter 2004. This combination drove RevPAR to $39.29, more than $4.00 higher than the same period last year.
ADR for the Signature Inn brand increased to $67.98 in second quarter 2005 from $67.36 in second quarter 2004, while the Signature Inn occupancy rate fell slightly to 43.1% from 44.2%. RevPAR at Signature Inns decreased by 1.7%. "We appear to have stemmed the tide of double digit decreases at Signature," said Kitchin. "It's especially impressive since three of our best Signature Inns are now Jameson Inns, and their 2005 results are no longer included with the Signature brand."
Net income attributable to common stockholders was approximately $630,000, or $0.01 per share in the first six months of 2005, compared to a net loss of approximately $8.6 million, or $0.64 per share in the same period of 2004. The net change was primarily due to a one time lease termination expense in 2004 of approximately $9.0 million as a result of the acquisition of Kitchin Hospitality, LLC, partially offset by an income tax benefit of approximately $1.4 million to establish initial deferred tax asset as a result of the change in taxable status in 2004, and by the elimination of the preferred dividends of approximately $3.3 million accrued in the six months ended June 30, 2004 due to the redemption of the preferred stock in August 2004.
Despite having 1.9% fewer rooms available to rent, lodging revenue rose 2.5% to $42.0 million during the first six months of 2005 compared to $40.9 million in the same period in 2004.
During the first six months, the occupancy rate for the Jameson Inn brand increased to 57.8% from 55.9%. ADR for the Jameson Inn brand increased 7.1% for the first six months 2005 as compared to the same period of 2004. This combination resulted in a RevPAR increase of 10.8% for the Jameson Inn brand.
During the first six months, the occupancy rate for the Signature Inn brand decreased to 35.7% from 38.9%. ADR for the Signature Inn brand increased 1.0% for the first six months of 2005 as compared to the first six months of 2004. This combination resulted in a RevPAR decrease of 7.6% for the Signature Inn brand.
During the second quarter of 2005, three Signature Inns located in Bettendorf, Iowa; Terre Haute, Indiana; and Dayton, Ohio, were sold for the aggregate sales price of approximately $6.1 million resulting in a net gain of approximately $289,000.
Hotels under Renovation and Conversion
The Company continues to execute a strategy of selling certain Signature Inn hotels and converting the remaining Signature Inns to its primary Jameson Inn brand. The conversions are accompanied by a significant renovation and upgrade to the physical property. "Early results from our newly converted Jameson Inns in Louisville, Kentucky and Knoxville, Tennessee are very encouraging," said Kitchin. "At each hotel, we have been able to win back business which had been lost over the years as newly built competition came to the markets. These are now properties that compete well and add to the strength of the Jameson brand." Work has already begun to convert two additional Signature Inns to Jameson Inns in South Bend and Elkhart, Indiana. These projects should be completed in the early fall of 2005. The Company invested approximately $3.1 million in the second quarter of 2005 and approximately $4.8 million in the first six months of 2005 for its capital refurbishment, renovation and conversion projects.
Guest Satisfaction Survey Results
For the third consecutive quarter, Jameson Inn dominated in the economy sector for guest satisfaction by Market Metrix, LLC, the leading provider of market research services for the hospitality industry. Jameson was also ranked number one in this survey for both calendar years 2003 and 2004. A link to the Market Metrix website results has been added to the Company's website, www.jamesoninns.com.
At June 30, 2005, the Company owned and operated 110 Inns, of which 93 are Jameson Inns, located predominantly in the southeastern United States and 17 are Signature Inns, located predominantly in the mid-western United States. The Company licenses the use of the Jameson Inn brand to the owners of 12 other Jameson Inns.
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