RevPAR Grows 10.1% During the Fourth Quarter; WestCoast Hospitality
Corporation Announces Quarterly and Year-End Financial Results
SPOKANE, Wash., Feb. 10 /PRNewswire-FirstCall/ -- WestCoast
Hospitality Corporation (NYSE:WEH) today announced financial
results for the fourth quarter and year ended December 31, 2004.
Hotel Statistics During the fourth quarter of 2004, system-wide
RevPAR (revenue per available room) for comparable hotels (hotels
owned, leased, managed and franchised for at least one year)
increased 10.1% over the 2003 fourth quarter levels to $35.45. This
increase was due to a 2.2% increase in average daily rate to
$68.23, and a 3.7 point increase in occupancy, to 52.0%. For the
full year 2004, system-wide RevPAR for comparable hotels increased
7.2% over the 2003 level to $41.75. The increase resulted from a
1.0% increase in average daily rate, to $71.28, and a 3.4 point
increase in occupancy, to 58.6%. Additional statistics are set
forth in the attached financial statements. Company Performance
During the fourth quarter, the company announced its plan to invest
$40 million to improve comfort, freshen d�cor and upgrade
technology at its hotels. The company also announced its plan to
sell 11 non-strategic hotels and other non-core properties and use
the proceeds from the sales to support its $40 million hotel
investment. In connection with the company's announcement, it
reclassified 11 hotels and one office building as discontinued
operations. It also reclassified these properties as held for sale,
which resulted in the company recording an impairment on four
hotels during the fourth quarter in the aggregate amount of $5.8
million, as adjusted for the tax benefit. For the fourth quarter,
the company's loss applicable to common shareholders was $0.63 per
share, compared to $0.20 in the fourth quarter of 2003. For the
full year 2004, the company's loss applicable to common
shareholders was $0.51 per share, compared to $0.10 in 2003. The
impairment recorded by the company in the fourth quarter accounted
for $0.44 of the 2004 per share losses. Without the impairment, the
loss for 2004 would have been $0.07 per share, an improvement of
$0.03 per share over the prior year. Upon closing of the sales of
the properties to be divested, which is expected to occur during
2005, the company anticipates that it will recognize aggregate
post-tax gains on seven hotels and non-core properties in the range
of $6.6 million to $9.3 million. In the fourth quarter, the company
had total revenue from continuing operations of $38.4 million, up
7.0% from the comparable period in 2003. EBITDA (earnings before
interest, taxes, depreciation and amortization) from continuing
operations was $3.0 million, up 24.1% from the prior year quarter.
For the full year 2004, the company achieved a 3.6% increase in
revenues from continuing operations, to $163.1 million. Full year
EBITDA for 2004 from continuing operations was up 4.5%, to $22.6
million. Arthur Coffey, President and Chief Executive Officer,
said, "The growth in RevPAR we experienced during the fourth
quarter substantially improved our margins, validating the hotel
improvement plan we implemented in 2004. Our planned acceleration
of this plan, along with the momentum continuing to build in market
demand, should combine to make 2005 a very positive year for the
company. We believe that our Red Lion brand is well-situated for
expansion into new markets. As a result of the improvements we are
making to our owned hotels and the consistency of high brand
standards we are achieving, prospective partners and franchisees
are expressing strong interest in new transactions. In addition, we
expect our divestment of non-core properties in 2005 will result in
recognition of gains that exceed the impairment we recorded in the
fourth quarter. Recent Events During the quarter, the company also
announced the hiring of well-known industry executive Anupam
Narayan. Mr. Narayan joined the company in November as Executive
Vice President, Chief Investment Officer. On January 15, 2005, Mr.
Narayan was appointed to the additional position of Chief Financial
Officer. Mr. Narayan said, "I am excited to join the team at
WestCoast Hospitality Corporation at a time when the company is
expanding the Red Lion brand from its long-established western U.S.
base and building it into a strong North American competitor in the
full-service, upper mid-scale market. I am looking forward to
working with the team to attain this goal." The company also
recently obtained a new $20 million credit facility with Wells
Fargo Bank which will allow it to further accelerate the
improvements to its hotels. Mr. Narayan noted, "Wells Fargo clearly
understands our strategy and has been very attentive to our desire
to fund strategic improvements to our hotels prior to the increased
seasonal demand the lodging industry typically experiences in the
spring and summer." In December, 2004, the company engaged Colliers
International as its listing broker for the sale of the 11 hotel
properties. Colliers reports significant market interest in the
hotels being held for sale. Hotel Division Performance For the
fourth quarter, the company reported hotel and restaurant revenue
from continuing operations of $32.9 million, up $0.9 million from
the previous comparable quarter. Operating margins improved
substantially during the quarter, with expenses increasing only
$0.4 million. For full-year 2004, hotel and restaurant revenue from
continuing operations increased $2.8 million while expenses
increased $3.0 million. John Taffin, Executive Vice President,
Hotel Operations, said, "Our investment in new brand initiatives
during the past year yielded great returns in the form of
significant RevPAR growth during the third and fourth quarters. As
a result, we have achieved substantial increases in operating
margins during the second half of the year in hotels we own and
operate. Guests have embraced our Stay Comfortable beds and room
amenities package, our Net4Guests free wireless internet access and
our 'We Promise or We Pay' lowest rate website guarantee. We
believe these initiatives have played a large role in our increased
occupancy year on year for each of the last 13 months, and our
increased ADR year on year for each of the last six months." During
the second quarter of 2005, the company expects to complete the
upgrade of all beds and bedding in its owned hotels to Stay
Comfortable standards and begin renovations on the balance of the
guestrooms, guest bathrooms and public spaces. Franchise, central
services and development revenue was $0.6 million in the fourth
quarter of 2004, versus $0.7 million in the comparable period of
2003. On February 1, 2005, the company announced the execution of a
franchise license agreement for conversion to the Red Lion brand of
a full-service, 318 room hotel at Jantzen Beach along the Columbia
River in Portland, Oregon. Mr. Taffin commented, "The property will
be opening as the 'Red Lion Hotel on the River' by the beginning of
April. Our focus on new brand standards and our hub and spoke
strategy have boosted interest from prospective franchisees and we
expect to announce the execution of other new franchise license
agreements in key markets this year." Entertainment Division
Performance Entertainment division revenue was $3.7 million in the
fourth quarter of 2004, compared to $2.0 million in the fourth
quarter of 2003. The division's increase in revenues was primarily
due to an increase in the number of events presented during the
quarter, compared to the same quarter of 2003. The division
experienced a small decrease in operating margins due to the costs
associated with the event presentations. Year on year,
entertainment division revenues increased $3.6 million to $11.6
million. Associated expenses increased $3.5 million to $10.5
million. Jack Lucas, Vice President, TicketsWest, said, "Our
entertainment division continues to experience excellent revenue
growth from period to period. We expect increased ticketing
activity this year and are also looking forward to announcing our
exciting Broadway Series lineup for the 2005-2006 season, which
will include a 5 1/2 week engagement of The Lion King, an excellent
event for combined hotel and entertainment packaging." Real Estate
Division Performance Real Estate division revenue from continuing
operations in the fourth quarter was steady at $1.2 million. At the
same time, the division was able to decrease its expenses by $0.1
million in the fourth quarter, to $0.7 million. For all of 2004,
real estate division revenue from continuing operations increased
$0.2 million while expenses were flat. In January, 2005, the
company engaged CB Richard Ellis as its listing broker for the
national marketing and sale of the Crescent Building in downtown
Spokane, Washington. CB Richard Ellis has begun actively marketing
this property for sale. WestCoast Hospitality Corporation is a
hospitality and leisure company primarily engaged in the ownership,
management, development and franchising of mid-scale, full service
hotels under its Red Lion(R) and WestCoast(R) brands. In addition,
through its entertainment division, which includes its
TicketsWest.com, Inc. subsidiary, it engages in event ticket
distribution and promotes and presents a variety of entertainment
productions. G&B Real Estate Services, its real estate
division, engages in traditional real estate-related services,
including developing, managing and brokering sales and leases of
commercial and multi-unit residential properties. This press
release contains forward-looking statements within the meaning of
federal securities law, including statements concerning plans,
objectives, goals, strategies, projections of future events or
performance and underlying assumptions (many of which are based, in
turn upon further assumptions). The forward-looking statements in
this press release are inherently subject to a variety of risks and
uncertainties that could cause actual results to differ materially
from those expressed. Such risks and uncertainties include, among
others, economic cycles; international conflicts; changes in future
demand and supply for hotel rooms; competitive conditions in the
lodging industry; relationships with franchisees and properties;
impact of government regulations; ability to obtain financing;
changes in energy, healthcare, insurance and other operating
expenses; ability to sell non-core assets; ability to locate
lessees for rental property and managing and leasing properties
owned by third parties; dependency upon the ability and experience
of executive officers and ability to retain or replace such
officers as well as other matters discussed in the Company's annual
report on Form 10-K for the 2003 fiscal year and in other documents
filed by the Company with the Securities and Exchange Commission.
Contact: Anupam Narayan Title: Executive Vice President, Chief
Financial Officer Phone: 1-509-459-6100 Internet:
http://www.westcoasthotels.com/ http://www.ticketswest.com/
http://www.redlion.com/ http://www.g-b.com/ WestCoast Hospitality
Corporation Consolidated Statements of Operations (unaudited) ($ in
thousands, except footnotes) Three months ended December 31, 2004
2003 $ Change % Change Revenue: Hotels and restaurants $32,874
$31,928 $946 3.0% Franchise, central services and development 551
691 (140) -20.3% Entertainment 3,663 1,972 1,691 85.8% Real estate
1,245 1,213 32 2.6% Corporate services 71 81 (10) -12.3% Total
revenues 38,404 35,885 2,519 7.0% Operating expenses: Hotels and
restaurants 30,731 30,349 382 1.3% Franchise, central services and
development 400 250 150 60.0% Entertainment 3,455 1,646 1,809
109.9% Real estate 710 790 (80) -10.1% Corporate services 74 71 3
4.2% Depreciation and amortization 2,807 2,429 378 15.6% Gain on
asset dispositions, net (619) (189) (430) -227.5% Total direct
expenses 37,558 35,346 2,212 6.3% Undistributed corporate expenses
968 600 368 61.3% Total expenses 38,526 35,946 2,580 7.2% Operating
loss (122) (61) (61) -100.0% Other income (expense): Interest
expense (3,664) (2,476) (1,188) -48.0% Interest income 120 111 9
8.1% Other income (expense), net 1 (131) 132 100.8% Equity income
(loss) in investments, net (11) 19 (30) -157.9% Minority interest
in partnerships, net 236 75 161 214.7% Loss from continuing
operations before income taxes (3,440) (2,463) (977) -39.7% Income
tax benefit (1,287) (1,176) (111) -9.4% Net loss from continuing
operations (2,153) (1,287) (866) -67.3% Discontinued operations:
Impairment loss on discontinued operations, net of income tax
benefit of $3,107 (5,770) -- (5,770) Loss from operations of
discontinued business units, net of income tax benefit of $170 and
$404 (317) (751) 434 57.8% Loss on discontinued operations (6,087)
(751) (5,336) -710.5% Net loss (8,240) (2,038) (6,202) -304.3%
Preferred stock dividend -- (625) 625 100.0% Loss applicable to
common shareholders $(8,240) $(2,663) $(5,577) -209.4% EBITDA
(1)(2) $(5,496) $2,276 $(7,772) -341.5% EBITDA as a percentage of
revenues(2) -12.4% 5.5% EBITDA from continuing operations (1)
$3,031 $2,442 $589 24.1% EBITDA from continuing operations (1)(2)
as a percentage of revenues 7.9% 6.8% (1) The definition of
"EBITDA" and how that measure relates to net income is discussed
further in this release under Non-GAAP Financial Measures. EBITDA
represents net income (or loss) before interest expense, income tax
benefit or expense, depreciation, and amortization. EBITDA is not
intended to represent net income as defined by generally accepted
accounting principles in the United States and such information
should not be considered as an alternative to net income, cash
flows from operations or any other measure of performance
prescribed by generally accepted accounting principles in the
United States. We utilize EBITDA because management believes that
investors find it to be a useful tool to perform more meaningful
comparisons of past, present and future operating results and as a
means to evaluate the results of core on-going operations. EBITDA
from continuing operations is calculated in the same manner, but
excludes the operating activities of business units identified as
discontinued. (2) EBITDA as presented includes the results of
discontinued operations, including a pre-tax impairment charge of
$8,877,000 during the three months ended December 31, 2004. The
calculation of EBITDA as a percentage of revenues is based upon
total operating revenues, from both continuing and discontinued
operations, of $44,349,000 and $41,246,000 for the three months
ended December 31, 2004 and 2003, respectively. EBITDA from
continuing operations as a percentage of revenues is based upon the
operating results of continuing business units as presented in the
statements. WestCoast Hospitality Corporation Earnings Per Share
and Hotel Statistics (unaudited) (shares in thousands) Three months
ended December 31, 2004 2003 $ Change % Change Earnings per common
share: Basic Loss applicable to common shareholders before
discontinued operations (1) (0.16) $(0.14) Loss on discontinued
operations (0.47) (0.06) Loss applicable to common shareholders
$(0.63) $(0.20) Diluted Loss applicable to common shareholders
before discontinued operations (1) $(0.16) $(0.14) Loss on
discontinued operations (0.47) (0.06) Loss applicable to common
shareholders $(0.63) $(0.20) Weighted average shares - basic 13,069
13,006 Weighted average shares - diluted (2) 13,069 13,006 Key
Comparable Hotel Statistics: Combined (owned, leased, managed and
franchised) (3) Average occupancy (4)(7) 52.0% 48.3% ADR (5) $68.23
$66.73 $1.50 2.2% RevPAR (6)(7) $35.45 $32.20 $3.25 10.1% (1) The
net loss used to calculate the net earnings or loss per share
applicable to common shareholders before discontinued operations
includes all dividends on the recently retired cumulative preferred
shares if applicable for the period presented. (2) For the three
months ended December 31, 2004 and 2003, all 1,083,938 and 826,009
options outstanding to purchase common stock were anti-dilutive and
are therefore not included in the calculation of earnings per
common share. In addition, the 286,161 convertible operating
partnership ("OP") units were anti-dilutive and are therefore not
included in the calculation of diluted weighted average shares for
those same periods. (3) Includes all hotels owned, leased, managed
and franchised for greater than one year by WestCoast Hospitality
Corporation. No adjustment has been made for hotels classified as
discontinued operations. (4) Average occupancy represents total
paid rooms divided by total available rooms. Total available rooms
represents the number of rooms available multiplied by the number
of days in the reported period. (5) Average daily rate ("ADR")
represents total room revenues divided by the total number of paid
rooms occupied by hotel guests. (6) Revenue per available room
("RevPAR") represents total room and related revenues divided by
total available rooms. (7) Rooms under significant renovation were
excluded from total available rooms. Due to the short duration of
renovation, in the opinion of management, excluding these rooms did
not have a material impact on RevPAR or average occupancy.
WestCoast Hospitality Corporation Consolidated Statements of
Operations (unaudited) ($ in thousands, except footnotes) Year
ended December 31, 2004 2003 $ Change % Change Revenue: Hotels and
restaurants $143,193 $140,360 $2,833 2.0% Franchise, central
services and development 2,600 3,642 (1,042) -28.6% Entertainment
11,615 7,980 3,635 45.6% Real estate 5,416 5,209 207 4.0% Corporate
services 319 337 (18) -5.3% Total revenues 163,143 157,528 5,615
3.6% Operating expenses: Hotels and restaurants 123,858 120,852
3,006 2.5% Franchise, central services and development 1,409 1,518
(109) -7.2% Entertainment 10,452 6,974 3,478 49.9% Real estate
3,214 3,245 (31) -1.0% Corporate services 297 313 (16) -5.1%
Depreciation and amortization 10,540 10,338 202 2.0% (Gain) loss on
asset dispositions, net (1,148) 339 (1,487) -438.6% Conversion
expenses -- 349 (349) -100.0% Total direct expenses 148,622 143,928
4,694 3.3% Undistributed corporate expenses 3,273 2,640 633 24.0%
Total expenses 151,895 146,568 5,327 3.6% Operating income 11,248
10,960 288 2.6% Other income (expense): Interest expense (13,828)
(9,679) (4,149) -42.9% Interest income 463 413 50 12.1% Other
income (expense), net 49 (335) 384 114.6% Equity income in
investments, net 78 119 (41) -34.5% Minority interest in
partnerships, net 224 133 91 68.4% Income (loss) from continuing
operations before income taxes (1,766) 1,611 (3,377) -209.6% Income
tax (benefit) expense (876) 51 (927) -1817.6% Net income (loss)
from continuing operations (890) 1,560 (2,450) -157.1% Discontinued
operations: Impairment loss on discontinued operations, net of
income tax benefit of $3,107 (5,770) -- (5,770) Income (loss) from
operations of discontinued business units, net of income tax
expense (benefit) of $202 and ($184) 375 (341) 716 210.0% Loss on
discontinued operations (5,395) (341) (5,054) -1482.1% Net income
(loss) (6,285) 1,219 (7,504) -615.6% Preferred stock dividend (377)
(2,540) 2,163 85.2% Loss applicable to common shareholders $(6,662)
$(1,321) $(5,341) -404.3% EBITDA (1)(2) $18,268 $25,269 $(7,001)
-27.7% EBITDA as a percentage of revenues (2) 9.6% 13.7% EBITDA
from continuing operations (1) $22,602 $21,628 $974 4.5% EBITDA
from continuing operations (1)(2) as a percentage of revenues 13.9%
13.7% (1) The definition of "EBITDA" and how that measure relates
to net income is discussed further in this release under Non-GAAP
Financial Measures. EBITDA represents net income (or loss) before
interest expense, income tax benefit or expense, depreciation, and
amortization. EBITDA is not intended to represent net income as
defined by generally accepted accounting principles in the United
States and such information should not be considered as an
alternative to net income, cash flows from operations or any other
measure of performance prescribed by generally accepted accounting
principles in the United States. We utilize EBITDA because
management believes that investors find it to be a useful tool to
perform more meaningful comparisons of past, present and future
operating results and as a means to evaluate the results of core
on-going operations. EBITDA from continuing operations is
calculated in the same manner, but excludes the operating
activities of business units identified as discontinued. (2) EBITDA
as presented includes the results of discontinued operations,
including a pre-tax impairment charge of $8,877,000 during the year
ended December 31, 2004. The calculation of EBITDA as a percentage
of revenues is based upon total operating revenues, from both
continuing and discontinued operations, of $190,902,000 and
$183,975,000 for the years ended December 31, 2004 and 2003,
respectively. EBITDA from continuing operations as a percentage of
revenues is based upon the operating results of continuing business
units as presented in the statements. WestCoast Hospitality
Corporation Earnings Per Share and Hotel Statistics (unaudited)
(shares in thousands) Year ended December 31, 2004 2003 $ Change %
Change Earnings per common share: Basic Loss applicable to common
shareholders before discontinued operations (1) $(0.10) $(0.07)
Loss on discontinued operations $(0.41) $(0.03) Loss applicable to
common shareholders $(0.51) $(0.10) Diluted Loss applicable to
common shareholders before discontinued operations $(0.10) $(0.07)
Loss on discontinued operations $(0.41) $(0.03) Loss applicable to
common shareholders $(0.51) $(0.10) Weighted average shares - basic
13,049 12,999 Weighted average shares - diluted (2) 13,049 12,999
Key Comparable Hotel Statistics: Combined (owned, leased, managed
and franchised) (3) Average occupancy (4)(5) 58.6% 55.2% ADR (5)
$71.28 $70.59 $0.69 1.0% RevPAR (6)(7) $41.75 $38.94 $2.81 7.2% (1)
The net loss used to calculate the net earnings or loss per share
applicable to common shareholders before discontinued operations
includes all dividends on the recently retired cumulative preferred
shares if applicable for the period presented. (2) For the year
ended December 31, 2004 and 2003, all 1,083,938 and 826,009 options
outstanding to purchase common stock were anti-dilutive and are
therefore not included in the calculation of earnings per common
share. In addition, the 286,161 convertible operating partnership
("OP") units were anti-dilutive and are therefore not included in
the calculation of diluted weighted average shares for those same
periods. (3) Includes hotels owned, leased, managed and franchised
for greater than one year by WestCoast Hospitality Corporation. No
adjustment has been made for hotels classified as discontinued
operations. (4) Average occupancy represents total paid rooms
divided by total available rooms. Total available rooms represents
the number of rooms available multiplied by the number of days in
the reported period. (5) Average daily rate ("ADR") represents
total room revenues divided by the total number of paid rooms
occupied by hotel guests. (6) Revenue per available room ("RevPAR")
represents total room and related revenues divided by total
available rooms. (7) Rooms under significant renovation were
excluded from total available rooms. Due to the short duration of
renovation, in the opinion of management, excluding these rooms did
not have a material impact on RevPAR or average occupancy.
WestCoast Hospitality Corporation Consolidated Balance Sheets
(unaudited) ($ in thousands, except share data) December 31,
December 31, 2004 2003 Assets: Current assets: Cash and cash
equivalents $9,577 $7,884 Restricted cash 4,092 4,736 Accounts
receivable, net 8,464 8,600 Inventories 1,831 1,808 Prepaid
expenses and other 3,286 1,926 Assets held for sale: Assets of
discontinued operations 61,757 63,349 Other assets held for sale
1,599 -- Total current assets 90,606 88,303 Property and equipment,
net 223,132 204,199 Goodwill 28,042 28,042 Intangible assets, net
13,641 14,412 Other assets, net 9,191 18,269 Total assets $364,612
$353,225 Liabilities: Current liabilities: Accounts payable $4,841
$6,491 Accrued payroll and related benefits 4,597 4,503 Accrued
interest payable 700 660 Advance deposits 188 216 Other accrued
expenses 7,322 7,732 Long-term debt, due within one year 7,455
4,623 Liabilities of discontinued operations 22,879 23,580 Total
current liabilities 47,982 47,805 Long-term debt, due after one
year 125,756 124,064 Deferred income 8,524 9,279 Deferred income
taxes 15,992 16,761 Minority interest in partnerships 2,548 3,127
Debentures due WestCoast Hospitality Capital Trust 47,423 -- Total
liabilities 248,225 201,036 Stockholders' equity: Preferred stock -
5,000,000 shares authorized; $0.01 par value 588,236 issued and
outstanding at December 31, 2003 -- 6 Additional paid-in capital,
preferred stock -- 29,406 Common stock - 50,000,000 shares
authorized; $0.01 par value; 13,079,454 and 13,006,361 shares
issued and outstanding 131 130 Additional paid-in capital, common
stock 84,467 84,196 Retained earnings 31,789 38,451 Total
stockholders' equity 116,387 152,189 Total liabilities and
stockholders' equity $364,612 $353,225 WestCoast Hospitality
Corporation Consolidated Statement of Cash Flows (unaudited) ($ in
thousands) Year ended December 31, 2004 2003 Operating activities:
Net income (loss) $(6,285) $1,219 Adjustments to reconcile net
income (loss) to net cash provided by operating activities:
Depreciation and amortization 12,827 13,032 (Gain) loss on
disposition of property and equipment and other assets (1,150) 390
Non-cash reduction of preferred stock resulting in gain -- (616)
Write-off of deferred loan fees -- 927 Impairment loss 8,877 --
Deferred income tax provision (769) 500 Minority interest in
partnerships (315) (288) Equity in investments (78) (119)
Compensation expense related to stock issuance 18 14 Provision for
doubtful accounts 572 338 Change in current assets and liabilities:
Restricted cash 694 (3,003) Accounts receivable (574) (168)
Inventories 4 (100) Prepaid expenses and other (1,418) 569 Accounts
payable (1,928) 217 Accrued payroll and related benefits 153
(1,324) Accrued interest payable 37 100 Other accrued expenses and
advance deposits 224 (350) Net cash provided by operating
activities 10,889 11,338 Investing activities: Purchases of
property and equipment (21,898) (7,339) Proceeds from disposition
of property and equipment 1,498 5,367 Proceeds from disposition of
investment 94 485 Investment in WestCoast Hospitality Capital Trust
(1,423) -- Advances to WestCoast Hospitality Capital Trust (2,116)
-- Proceeds from collections under note receivable 1,728 --
Distributions from equity investee 449 -- Other, net (208) 177 Net
cash used in investing activities (21,876) (1,310) Financing
activities: Proceeds from note payable to bank 11,000 47,700
Repayment of note payable to bank (11,000) (99,800) Proceeds from
debenture issuance 47,423 -- Repurchase and retirement of preferred
stock (29,412) -- Proceeds from long-term debt 83 55,200 Proceeds
from short-term debt -- 2,658 Repayment of long-term debt (4,507)
(3,892) Proceeds from issuance of common stock under employee stock
purchase plan 114 99 Preferred stock dividend payments (1,011)
(2,561) Principal payments on capital lease obligations -- (268)
Proceeds from option exercises 140 -- Distributions to minority
owners (3) -- Additions to deferred offering costs -- (248)
Additions to deferred financing costs (50) (1,547) Net cash
provided by (used in) financing activities 12,777 (2,659) Net cash
in discontinued operations (97) 71 Change in cash and cash
equivalents: Net increase in cash and cash equivalents 1,693 7,440
Cash and cash equivalents at beginning of period 7,884 444 Cash and
cash equivalents at end of period $9,577 $7,884 WestCoast
Hospitality Corporation Additional Hotel Statistics (unaudited)
System Hotels as of December 31, 2004 Meeting Space Hotels Rooms
(sq. ft.) Owned or Leased Hotels: (1) Red Lion Hotels 38 6,642
312,528 WestCoast Hotels 3 692 40,500 Other Brands 42 153 3,945 42
7,487 356,973 Managed Hotels: Red Lion Hotels 1 150 5,234 WestCoast
Hotels 1 72 1,800 Other Brands 1 254 36,000 3 476 43,034 Franchised
Hotels: Red Lion Hotels 19 3,171 104,759 WestCoast Hotels 3 389
27,784 22 3,560 132,543 Total 67 11,523 532,550 Comparable Hotel
Statistics (2) Three months ended December 31, 2004 Average
Occupancy (3)(6) ADR (4) RevPAR (5)(6) Owned or Leased Hotels:
Continuing Operations 53.1% $68.18 $36.23 Discontinued Operations
39.9% 55.84 22.29 50.1% 65.95 33.07 Combined System Wide (7) 52.0
$68.23 $35.45 Red Lion Hotels (Owned, Leased, Managed and
Franchised) (8) 52.7% $67.16 $35.37 Year ended December 31, 2004
Average Occupancy (3)(6) ADR (4) RevPAR (5)(6) Owned or Leased
Hotels: Continuing Operations 60.4% $71.31 $43.06 Discontinued
Operations 49.1% 58.97 28.93 57.8% 68.94 39.86 Combined System Wide
(7) 58.6% $71.28 $41.75 Red Lion Hotels (Owned, Leased, Managed and
Franchised) (8) 59.2% $70.24 $41.60 Three months ended December 31,
2003 Average Occupancy (3)(6) ADR (4) RevPAR (5)(6) Owned or Leased
Hotels: 50.4% $66.42 $33.51 Continuing Operations 36.8% 51.71 19.02
Discontinued Operations 47.3% 63.83 30.22 Combined System Wide (7)
48.3% $66.73 $32.20 Red Lion Hotels (Owned, Leased, Managed and
Franchised) (8) 49.3% $65.69 $32.36 Year ended December 31, 2003
Average Occupancy (3)(6) ADR (4) RevPAR (5)(6) Owned or Leased
Hotels: Continuing Operations 57.5% $70.94 $40.82 Discontinued
Operations 46.7% 57.46 26.81 55.1% 68.35 37.65 Combined System Wide
(7) 55.2% $70.59 $38.94 Red Lion Hotels (Owned, Leased, Managed and
Franchised) (8) 56.0% $69.54 $38.92 (1) Statistics include 11
hotels previously identified as discontinued business units,
aggregating 1,649 rooms and 57,645 square feet of meeting space.
(2) Includes all hotels owned, leased, managed and franchised for
greater than one year by WestCoast Hospitality Corporation. (3)
Average occupancy represents total paid rooms divided by total
available rooms. Total available rooms represents the number of
rooms available multiplied by the number of days in the reported
period. (4) Average daily rate ("ADR") represents total room
revenues divided by the total number of paid rooms occupied by
hotel guests. (5) Revenue per available room ("RevPAR") represents
total room and related revenues divided by total available rooms.
(6) Rooms under significant renovation were excluded from total
available rooms. Due to the short duration of renovation, in the
opinion of management, excluding these rooms did not have a
material impact on RevPAR or average occupancy. (7) Includes all
hotels owned, leased, managed and franchised for greater than one
year by WestCoast Hospitality Corporation. No adjustment has been
made for hotels classified as discontinued operations. (8) Includes
all hotels owned, leased, managed and franchised for greater than
one year operated under the Red Lion brand name. No adjustment has
been made for hotels classified as discontinued operations.
WestCoast Hospitality Corporation Reconciliation of EBITDA to Net
Income (unaudited) ($ in thousands) Three months ended Year ended
December 31, December 31, 2004 2003 2004 2003 EBITDA from
continuing operations $3,031 $2,442 $22,602 $21,628 Income tax
benefit (expense) - continuing operations 1,287 1,176 876 (51)
Interest expense - continuing operations (3,664) (2,476) (13,828)
(9,679) Depreciation and amortization - continuing operations
(2,807) (2,429) (10,540) (10,338) Net income (loss) from continuing
operations (2,153) (1,287) (890) 1,560 Loss on discontinued
operations (6,087) (751) (5,395) (341) Net income (loss) $(8,240)
$(2,038) $(6,285) $1,219 EBITDA $(5,496) $2,276 $18,268 $25,269
Income tax benefit 4,564 1,581 3,781 133 Interest expense (4,055)
(2,911) (15,507) (11,151) Depreciation and amortization (3,253)
(2,984) (12,827) (13,032) Net income (loss) $(8,240) $(2,038)
$(6,285) $1,219 NON-GAAP FINANCIAL MEASURES EBITDA is defined as
net income (or loss), before interest, taxes, depreciation and
amortization. EBITDA is considered a non-GAAP financial
measurement. We believe it is a useful financial performance
measure for us and for our shareholders and is a complement to net
income and other financial performance measures provided in
accordance with generally accepted accounting principles in the
United States ("GAAP"). EBITDA from continuing operations is
calculated in the same manner, but excludes the operating results
of business units identified as discontinued under GAAP. We use
EBITDA to measure the financial performance of our owned and leased
hotels because it excludes interest, taxes, depreciation and
amortization, which bear little or no relationship to operating
performance. By excluding interest expense, EBITDA measures our
financial performance irrespective of our capital structure or how
we finance our properties and operations. We generally pay federal
and state income taxes on a consolidated basis, taking into account
how the applicable taxing laws apply to our company in the
aggregate. By excluding taxes on income, we believe EBITDA provides
a basis for measuring the financial performance of our operations
excluding factors that our hotels and other operations cannot
control. By excluding depreciation and amortization expense, which
can vary from hotel to hotel based on historical cost and other
factors unrelated to the hotels' financial performance, EBITDA
measures the financial performance of our hotels without regard to
their historical cost. For all of these reasons, we believe that
EBITDA provides us and investors with information that is relevant
and useful in evaluating our business. However, because EBITDA
excludes depreciation and amortization, it does not measure the
capital we require to maintain or preserve our long-lived assets.
In addition, because EBITDA does not reflect interest expense, it
does not take into account the total amount of interest we pay on
outstanding debt nor does it show trends in interest costs due to
changes in our borrowings or changes in interest rates. EBITDA, as
defined by us, may not be comparable to EBITDA as reported by other
companies that do not define EBITDA exactly as we define the term.
Because we use EBITDA to evaluate our financial performance, we
reconcile all EBITDA measures to net income, which is the most
comparable financial m DATASOURCE: WestCoast Hospitality
Corporation CONTACT: Anupam Narayan, Executive Vice President,
Chief Financial Officer, of WestCoast Hospitality Corporation,
+1-509-459-6100, or Web site: http://www.westcoasthotels.com/
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