EX-99.1 2 c92294aexv99w1.txt PRESS RELEASE EXHIBIT 99.1 Contact: Paul Muellner FOR IMMEDIATE RELEASE Chief Financial Officer John Q. Hammons Hotels, Inc. 417-864-4300 JOHN Q. HAMMONS HOTELS, INC. REPORTS 2004 YEAR-END FINANCIAL RESULTS (SPRINGFIELD, MO., February 15, 2005) ---- John Q. Hammons Hotels, Inc. (AMEX: JQH) today reported results for the fourth quarter and year end 2004. YEAR-END RESULTS Total revenues from continuing operations for the twelve months ended December 31, 2004 were $430.8 million, an increase of 4.2% compared to the twelve months ended January 2, 2004. We produced EBITDA from continuing operations for 2004 of $119.7 million, up 12.7% compared to $106.2 million in 2003. 2003 included an asset impairment charge, discussed below, which had a negative effect on EBITDA from continuing operations of $9.7 million. (See attached table for reconciliation of income from continuing operations to EBITDA from continuing operations and for our definition of EBITDA from continuing operations). Basic and diluted loss per share for the twelve months ended December 31, 2004 was $0.12, compared to basic and diluted loss per share of $1.39 for the twelve months ended January 2, 2004. Discontinued operations relating to the sale of the Holiday Inn Bakersfield, California, Holiday Inn Denver Northglenn, Colorado and Holiday Inn Bay Bridge, Emeryville, California had a negative effect on basic and diluted loss per share of $1.00, for 2004, compared to $0.20 in 2003. Net loss for 2004 was $0.6 million, compared to $7.1 million for 2003. Income from continuing operations for 2004 was $4.5 million, up $10.5 million, compared to a loss in 2003. The 2003 results from continuing operations included two items, which, after giving effect to minority interest, had an unfavorable net impact of approximately $5.4 million on the Company's income from continuing operations. One of the items was the recognition of a $2.3 million asset impairment, net of minority interest, due to the decline of the property's fair value. The other item includes $3.1 million for the limited partners' losses we must absorb, due to the inability of the limited partners' net contribution to fall below zero. 2004 includes $3.6 million for the recapture of the limited partners' losses we absorbed in previous quarters before the impact of discontinued operations. An additional $4.2 million must be recaptured before the limited partners can be allocated future earnings. Revenue Per Available Room (RevPAR) from continuing operations was $67.51 for 2004, up 4.0% from the prior year's level of $64.92. Occupancy from continuing operations for 2004 was 4 65.7%, up slightly from prior year, while our Average Daily Rate (ADR) from continuing operations was up 2.2% to $102.80. The following represents a reconciliation of the income from continuing operations, as reported, to income from continuing operations, as adjusted (in thousands):

FOURTH QUARTER RESULTS Total revenues from continuing operations for the three months ended December 31, 2004 were $104.7 million, an increase of 5.5% compared to the three months ended January 2, 2004. We produced EBITDA from continuing operations for the 2004 quarter of $25.9 million, up 68.1% compared to $15.4 million in the 2003 quarter. EBITDA from continuing operations for the 2003 quarter includes $9.7 million related to asset impairment. (See attached table for reconciliation of income from continuing operations to EBITDA from continuing operations and for our definition of EBITDA from continuing operations). Basic and diluted loss per share for the three months ended December 31, 2004 was $0.77, compared to basic and diluted loss per share of $1.47 for the three months ended January 2, 2004. Discontinued operations relating to the sale of the Holiday Inn Bakersfield, California, Holiday Inn Denver Northglenn, Colorado and Holiday Inn Bay Bridge, Emeryville, California had a negative effect on basic and diluted loss per share of $0.08 for the 2004 quarter, compared to $0.16 in the 2003 quarter. Net loss for the 2004 fourth quarter was $4.0 million, compared to $7.5 million for the 2003 quarter. Loss from continuing operations for the 2004 quarter was $3.6 million, compared to $6.7 million in the 2003 quarter. The 2004 quarter's income from continuing operations was negatively impacted by $2.7 million of the limited partners' losses we absorbed, due to the inability of the limited partners' net contribution to fall below zero. The 2003 quarter was negatively impacted by $5.4 million, for the same reason mentioned above. Revenue Per Available Room (RevPAR) from continuing operations was $61.88 for the 2004 quarter, up 5.4% from the prior year's level of $58.72. Occupancy from continuing operations for the 2004 quarter was 60.3%, up slightly from prior year, while our Average Daily Rate (ADR) from continuing operations was up 3.9% to $102.67. 5 FINANCING AND INVESTING ACTIVITIES Since the beginning of 2004, we have reduced total debt by over $15.9 million, including scheduled principal amortization. We utilized the proceeds from the sale of Holiday Inn Bakersfield, California to pay down debt, in addition to regularly scheduled principal payments. Our current portion of long-term debt ($8.4 million) is attributable to scheduled principal amortization on various individual hotel mortgages. OPERATIONS OUTLOOK As expected, the industry has continued to recover throughout 2004, generating RevPAR and EBITDA above our 2003 levels. This recovery should continue to enhance our cash generation and produce favorable results as we focus on operational efficiencies into 2005. Although we are not developing new hotels, Mr. Hammons personally has numerous projects in various stages of development, which we will manage upon completion, including properties in St. Charles and Springfield, Missouri; Frisco, Texas; Albuquerque, New Mexico; and Hampton, Virginia. Mr. Hammons opened properties in Junction City, Kansas in September and in North Charleston, South Carolina in October. John Q. Hammons Hotels, Inc. is a leading independent owner and manager of affordable upscale, full service hotels located primarily in key secondary markets. We own 44 hotels located in 20 states, containing 10,853 guest rooms or suites, and manage 14 additional hotels located in nine states, containing 3,158 guest rooms or suites. The majority of these 58 hotels operate under the Embassy Suites, Holiday Inn and Marriott trade names. Most of our hotels are located near a state capitol, university, convention center, corporate headquarters, office park or other stable demand generator. A copy of this press release announcing our earnings as well as other financial information will be available in the Investor Relations section of our website at www.jqhhotels.com. *** NOTE -- FORWARD-LOOKING STATEMENTS: This press release contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, regarding, among other things, our operations outlook, business strategy, prospects and financial position. These statements contain the words "believe," "anticipate," "estimate," "expect," "forecast," "project," "intend," "may," and similar words. These forward-looking statements are not guarantees of future performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results to be materially different from any future results expressed or implied by such forward-looking statements. Such factors include, among others: - General economic conditions, including the speed and strength of the economic recovery; - The impact of any serious communicable diseases on travel; - Competition; 6 - Changes in operating costs, particularly energy and labor costs; - Unexpected events, such as the September 11, 2001 terrorist attacks, or outbreaks of war; - Risks of hotel operations, such as hotel room supply exceeding demand, increased energy and other travel costs and general industry downturns; - Seasonality of the hotel business; - Cyclical over-building in the hotel and leisure industry; - Requirements of franchise agreements, including the right of some franchisors to immediately terminate their respective agreements if we breach certain provisions; and - Costs of complying with applicable state and federal regulations. These risks and uncertainties should be considered in evaluating any forward-looking statements contained in this press release. We undertake no obligation to update or revise publicly any forward looking statement, whether as a result of new information, future events or otherwise, other than as required by law. - - Tables Attached - - 7 JOHN Q. HAMMONS HOTELS, INC. AND COMPANIES CONSOLIDATED STATEMENTS OF OPERATIONS (000's omitted, except share data)

8 JOHN Q. HAMMONS HOTELS, INC. AND COMPANIES (Amounts in thousands except earnings per share and operating data)

(a) EBITDA from continuing operations is defined as income from continuing operations before interest income and expense, income tax expense, depreciation and amortization, minority interest, extinguishment of debt costs and other income. Management considers EBITDA to be one measure of operating performance for the Company before debt service that provides a relevant basis for comparison, and EBITDA is presented to assist investors in analyzing the performance of the Company. This information should not be considered as an alternative to any measure of performance as promulgated under accounting principles generally accepted in the United States, nor should it be considered as an indicator of the overall financial performance of the Company. The Company's calculation of EBITDA may be different from the calculation used by other companies and, therefore, comparability may be limited. (b) EBITDA from continuing operations for the 2003 three and twelve months include an Asset Impairment charge of $9.7 million.

HAMMONS JOHN Q HOTELS INC 8-K