Strategic Hotels & Resorts Reports First Quarter 2009 Results
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Strategic Hotels & Resorts Reports First Quarter 2009 Results
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Category: Worldwide - Industry economy
- Figures / Studies
This is a press release selected by our editorial committee and published online for free on 2009-05-07
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.
Earnings Call
The company will conduct its first quarter 2009 conference call for investors and other interested parties on May 7, 2009 at 10:00 a.m. Eastern Time (ET). Interested individuals are invited to listen to the call by telephone at 888-713-4199 (toll international: 617-213-4861) with pass code 24417368. To participate on the web cast, log on to http://www.strategichotels.com/ or https://www.theconferencingservice.com/prereg/key.process?key=PPBXE66T7 15 minutes before the call to download the necessary software. For those unable to listen to the call live, a taped rebroadcast will be available beginning at 1:00 p.m. ET on May 7, 2009, through 11:59 p.m. ET on May 14, 2009. To access the replay, dial 888-286-8010 (toll international: 617-801-6888) and request replay pin number 33077752. A replay of the call will also be available on the Internet at http://www.strategichotels.com/ or http://www.earnings.com/ for 30 days after the call.
The company also produces supplemental financial data that includes detailed information regarding its operating results. This supplemental data is considered an integral part of this earnings release. These materials are available on the Strategic Hotels & Resorts' website at www.strategichotels.com within the first quarter information section.
Portfolio Definitions
North American hotel comparisons for the first quarter 2009 are derived from the company's hotel portfolio at March 31, 2009, consisting of properties in which operations are included in the consolidated results of the company.
European hotel comparisons for the first quarter 2009 are derived from the company's European owned and leased hotel properties at March 31, 2009.
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