Lodgian Sells Two Hotels in Separate Transactions
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Lodgian Sells Two Hotels in Separate Transactions
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Category: North America & West Indies / Carribean islands
This is a press release selected by our editorial committee and published online for free on 2007-07-24
Five Hotels Remain in Previously Announced Dispostion Program
Lodgian, Inc. (Amex: LGN), one of the nation's largest independent owners and operators of full-service hotels, today announced it had sold the 202-room Holiday Inn hotel in Ft. Wayne, Ind. and the 159-room Holiday Inn in Bridgeport, W. Va. to undisclosed buyers in separate transactions for an aggregate price of $5.6 million. Proceeds will be used for general corporate purposes.
HREC Investment Advisors represented Lodgian in both transactions. "Our disposition program, which was announced in November 2006, continues as planned," Ed Rohling, chief executive officer of Lodgian. "We now have sold 22 of the 27 non-core hotels designated in the program, have an additional three properties under contract and two hotels being actively marketed."
Below is a reconciliation of GAAP net loss from operations with Adjusted
EBITDA (a non-GAAP financial measure) for the two hotels for the trailing 12
months ended June 30, 2007:
Holiday Inn Holiday Inn
(in thousands) Bridgeport, WV Ft. Wayne, IN
Net (loss)/income from operations ($106) ($83)
Depreciation and amortization 60 63
Interest expense 311 145
Income taxes (941) (66)
Business interruption proceeds (297) 0
Loss on extinguishment of debt 27 0
Impairment loss 1,876 0
Adjusted EBITDA $930 $59
EBITDA and Adjusted EBITDA
EBITDA and Adjusted EBITDA are non-GAAP measures and should not be used as a substitute for measures such as net income (loss), cash flows from operating activities, or other measures computed in accordance with GAAP. The company uses EBITDA and Adjusted EBITDA to measure its performance and to assist in the assessment of hotel property values. EBITDA is also a widely used industry measure which Lodgian believes provides pertinent information to investors and is an additional indicator of the company's operating performance.
The company defines Adjusted EBITDA as EBITDA excluding the effects of certain charges such as impairment losses, gains or losses related to extinguishment of debt, casualty losses or gains related to damage to and insurance recoveries for properties damaged by hurricane, fire or flood, business interruption insurance proceeds, and minority interest adjustments related to casualty gains/losses and business interruption insurance proceeds.
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