• | As of July 31, 2020, nearly 100% of the company’s 5,917 domestic hotels are operating. Even in April, when the effects of COVID-19 were felt most significantly in the industry, over 90% of Choice Hotels’ domestic hotels remained open. In addition, 96% of the company’s more than 1,200 international hotels were open as of July 31, 2020. |
• | Domestic systemwide revenue per available room (RevPAR) declined 49.6% for second quarter 2020 compared to the same period of the prior year, outperforming the total industry by 2,030 basis points and exceeding the chain scale segments in which the company competes, as reported by STR. Domestic comparable RevPAR declined 48.6% for second quarter 2020 compared to the same period of the prior year, outperforming the total industry by 2,130 basis points. |
• | The company’s domestic effective royalty rate for second quarter 2020 increased 10 basis points over the prior year second quarter to 4.94%. |
• | The company awarded 151 new domestic franchise agreements year to date through June 30, 2020, a 42% decrease compared to the same period of the prior year. Over 80% of the agreements were signed since mid-March and two-thirds of the agreements awarded in the first half of the year were for conversion hotels. The company built on its first half development performance with an additional 33 new domestic franchise agreements awarded in the month of July. |
• | Net loss was $2.4 million for the second quarter, representing diluted net loss per share of $0.04. |
• | Second quarter adjusted net income, excluding certain items described in Exhibit 6, decreased 90% to $6.7 million from second quarter 2019. |
• | Adjusted earnings per share for the second quarter were $0.13, an 89% decrease from second quarter 2019. |
• | Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the second quarter were $41.1 million, a 60% decrease from second quarter 2019. |
• | Domestic systemwide RevPAR decreased 49.6% for second quarter 2020 compared to the second quarter 2019, exceeding overall industry performance by 2,030 basis points. In the second quarter 2020, Choice Hotels outperformed the respective chain scales in which the company competes by 670 basis points. |
• | Since the onset of the pandemic in mid-March through the end of July, Choice Hotels’ domestic systemwide occupancy rates outperformed the industry by an average of nearly 565 basis points per week. The trough in the company’s domestic systemwide occupancy rate was |
• | In July, domestic systemwide RevPAR declined approximately 33% over the prior year comparable monthly period, with average weekly occupancy exceeding 53% during the week of July 26, 2020. Over half of the domestic portfolio achieved occupancy levels at or above 50% during the last week of July and trends of occupancy gains have been continuing into August. |
• | The company’s extended-stay portfolio has proven to be highly resilient, with average occupancy rates of 66% since the onset of pandemic in mid-March through June 30, 2020 - nearly double the industry average of 34%. Specifically, the WoodSpring Suites brand experienced occupancy levels of 69% in the second quarter, outperforming the industry by 3,570 basis points. WoodSpring Suites’ occupancy levels have remained above 70% since mid-May and returned to prior year levels during the last week of July. |
• | Nearly 90% of the company's domestic hotels are in suburban, small towns and interstate locations, which have reported higher occupancy levels and less significant RevPAR declines than other locations during the second quarter, driven by relatively stronger consumer demand for these destinations. |
• | Total revenues decreased 52% to $151.7 million for second quarter 2020, compared to the same period of 2019. |
• | Total revenues excluding marketing and reservation system fees decreased 50% to $72.1 million for second quarter 2020, compared to the same period of 2019. |
• | Second quarter 2020 domestic royalties decreased 52% to $48.3 million, compared to the same period of 2019. |
• | The company’s extended-stay portfolio continued to expand, reaching 414 domestic hotels as of June 30, 2020, an 8% increase since June 30, 2019, with the domestic extended-stay pipeline expanding to nearly 300 hotels awaiting conversion, under construction or approved for development. Since June 30, 2019, the WoodSpring Suites brand grew the number of open domestic hotels by 7% and its domestic pipeline by 22%. |
• | As of June 30, 2020, the number of domestic rooms in the company’s upscale portfolio expanded 37% since June 30, 2019, driven by an increase in room count of 24% for the Cambria Hotels brand and 42% for the Ascend Hotel Collection, the latter of which includes 17 properties associated with the company's strategic partnership with AMResorts, an Apple Leisure Group brand. |
• | The number of domestic hotels and rooms, as of June 30, 2020, increased 0.6% and 2.0%, respectively, from June 30, 2019. The company's domestic upscale, midscale and extended stay segments reported a 2.3% aggregate increase in units and a 3.7% increase in rooms since June 30, 2019. The number of international hotels and rooms as of June 30, 2020, increased 3.0% and 12.7%, respectively, from the comparable period of 2019. |
• | The company's total domestic pipeline of hotels awaiting conversion, under construction or approved for development as of June 30, 2020 reached over 980 hotels and over 78,500 rooms. |
• | The company awarded 93 domestic franchise agreements in second quarter 2020, a 49% decrease compared to the same period in the prior year. Of the total domestic franchise agreements awarded in the second quarter, over 60% were conversions and more than half were executed in the month of June. |
Choice Hotels International, Inc. and Subsidiaries | Exhibit 1 | ||||||||||||||||||||||||||||
Condensed Consolidated Statements of Income | |||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||
Variance | Variance | ||||||||||||||||||||||||||||
2020 | 2019 | $ | % | 2020 | 2019 | $ | % | ||||||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||||||||||||
REVENUES | |||||||||||||||||||||||||||||
Royalty fees | $ | 50,152 | $ | 106,427 | $ | (56,275 | ) | (53 | )% | $ | 120,491 | $ | 186,780 | $ | (66,289 | ) | (35 | )% | |||||||||||
Initial franchise and relicensing fees | 6,676 | 6,675 | 1 | 0 | % | 13,960 | 13,482 | 478 | 4 | % | |||||||||||||||||||
Procurement services | 10,697 | 20,829 | (10,132 | ) | (49 | )% | 24,494 | 32,776 | (8,282 | ) | (25 | )% | |||||||||||||||||
Marketing and reservation system | 79,677 | 172,465 | (92,788 | ) | (54 | )% | 190,062 | 282,529 | (92,467 | ) | (33 | )% | |||||||||||||||||
Owned hotels | 2,108 | — | 2,108 | NM | 11,530 | — | 11,530 | NM | |||||||||||||||||||||
Other | 2,423 | 11,288 | (8,865 | ) | (79 | )% | 9,371 | 20,437 | (11,066 | ) | (54 | )% | |||||||||||||||||
Total revenues | 151,733 | 317,684 | (165,951 | ) | (52 | )% | 369,908 | 536,004 | (166,096 | ) | (31 | )% | |||||||||||||||||
OPERATING EXPENSES | |||||||||||||||||||||||||||||
Selling, general and administrative | 43,964 | 46,980 | (3,016 | ) | (6 | )% | 72,799 | 86,494 | (13,695 | ) | (16 | )% | |||||||||||||||||
Depreciation and amortization | 6,398 | 3,405 | 2,993 | 88 | % | 12,927 | 7,021 | 5,906 | 84 | % | |||||||||||||||||||
Marketing and reservation system | 89,309 | 160,121 | (70,812 | ) | (44 | )% | 219,756 | 279,960 | (60,204 | ) | (22 | )% | |||||||||||||||||
Owned hotels | 2,976 | — | 2,976 | NM | 9,010 | — | 9,010 | NM | |||||||||||||||||||||
Total operating expenses | 142,647 | 210,506 | (67,859 | ) | (32 | )% | 314,492 | 373,475 | (58,983 | ) | (16 | )% | |||||||||||||||||
Loss on sale, disposition and impairment of assets, net | (1,226 | ) | (4,641 | ) | 3,415 | NM | (1,226 | ) | (14,942 | ) | 13,716 | NM | |||||||||||||||||
Operating income | 7,860 | 102,537 | (94,677 | ) | (92 | )% | 54,190 | 147,587 | (93,397 | ) | (63 | )% | |||||||||||||||||
OTHER INCOME AND EXPENSES, NET | |||||||||||||||||||||||||||||
Interest expense | 13,082 | 11,093 | 1,989 | 18 | % | 24,462 | 22,304 | 2,158 | 10 | % | |||||||||||||||||||
Interest income | (2,245 | ) | (2,784 | ) | 539 | (19 | )% | (4,533 | ) | (5,397 | ) | 864 | (16 | )% | |||||||||||||||
Loss on extinguishment of debt | — | — | — | NM | 607 | — | 607 | NM | |||||||||||||||||||||
Other (gains) losses | (3,585 | ) | (906 | ) | (2,679 | ) | 296 | % | 692 | (3,104 | ) | 3,796 | (122 | )% | |||||||||||||||
Equity in net loss of affiliates | 3,486 | 980 | 2,506 | 256 | % | 5,441 | 3,151 | 2,290 | 73 | % | |||||||||||||||||||
Total other income and expenses, net | 10,738 | 8,383 | 2,355 | 28 | % | 26,669 | 16,954 | 9,715 | 57 | % | |||||||||||||||||||
Income (loss) before income taxes | (2,878 | ) | 94,154 | (97,032 | ) | (103 | )% | 27,521 | 130,633 | (103,112 | ) | (79 | )% | ||||||||||||||||
Income tax (benefit) expense | (437 | ) | 19,765 | (20,202 | ) | (102 | )% | (25,501 | ) | 26,163 | (51,664 | ) | (197 | )% | |||||||||||||||
Net (loss) income | $ | (2,441 | ) | $ | 74,389 | $ | (76,830 | ) | (103 | )% | $ | 53,022 | $ | 104,470 | $ | (51,448 | ) | (49 | )% | ||||||||||
Basic (losses) earnings per share | $ | (0.04 | ) | $ | 1.34 | $ | (1.38 | ) | (103 | )% | $ | 0.96 | $ | 1.88 | $ | (0.92 | ) | (49 | )% | ||||||||||
Diluted (losses) earnings per share | $ | (0.04 | ) | $ | 1.33 | $ | (1.37 | ) | (103 | )% | $ | 0.95 | $ | 1.87 | $ | (0.92 | ) | (49 | )% | ||||||||||
Choice Hotels International, Inc. and Subsidiaries | Exhibit 2 | ||||||||||
Condensed Consolidated Balance Sheets | |||||||||||
(Unaudited) | |||||||||||
(In thousands, except per share amounts) | June 30, | December 31, | |||||||||
2020 | 2019 | ||||||||||
ASSETS | |||||||||||
Cash and cash equivalents | $ | 314,139 | $ | 33,766 | |||||||
Accounts receivable, net | 149,062 | 141,566 | |||||||||
Other current assets | 61,278 | 61,257 | |||||||||
Total current assets | 524,479 | 236,589 | |||||||||
Intangible assets, net | 291,198 | 290,421 | |||||||||
Goodwill | 159,196 | 159,196 | |||||||||
Property and equipment, net | 350,459 | 351,502 | |||||||||
Investments in unconsolidated entities | 72,929 | 78,655 | |||||||||
Notes receivable, net of allowances | 97,935 | 103,054 | |||||||||
Investments, employee benefit plans, at fair value | 25,138 | 24,978 | |||||||||
Operating lease right-of-use-assets | 21,700 | 24,088 | |||||||||
Other assets | 143,007 | 118,189 | |||||||||
Total assets | $ | 1,686,041 | $ | 1,386,672 | |||||||
LIABILITIES AND SHAREHOLDERS' DEFICIT | |||||||||||
Accounts payable | $ | 57,814 | $ | 73,449 | |||||||
Accrued expenses and other current liabilities | 59,258 | 90,364 | |||||||||
Deferred revenue | 49,983 | 71,594 | |||||||||
Current portion of long-term debt | 7,157 | 7,511 | |||||||||
Liability for guest loyalty program | 44,525 | 82,970 | |||||||||
Total current liabilities | 218,737 | 325,888 | |||||||||
Long-term debt | 1,232,136 | 844,102 | |||||||||
Deferred revenue | 124,152 | 112,662 | |||||||||
Liability for guest loyalty program | 76,819 | 46,698 | |||||||||
Operating lease liabilities | 17,288 | 21,270 | |||||||||
Deferred compensation and retirement plan obligations | 29,590 | 29,949 | |||||||||
Other liabilities | 30,071 | 29,614 | |||||||||
Total liabilities | 1,728,793 | 1,410,183 | |||||||||
Total shareholders' deficit | (42,752 | ) | (23,511 | ) | |||||||
Total liabilities and shareholders' deficit | $ | 1,686,041 | $ | 1,386,672 | |||||||
Choice Hotels International, Inc. and Subsidiaries | Exhibit 3 | ||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(Unaudited) | |||||||
(In thousands) | Six Months Ended June 30, | ||||||
2020 | 2019 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 53,022 | $ | 104,470 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 12,927 | 7,021 | |||||
Depreciation and amortization - marketing and reservation system | 9,585 | 8,599 | |||||
Franchise agreement acquisition cost amortization | 5,558 | 5,051 | |||||
Loss on asset disposition and impairment of long-lived assets | 1,226 | 7,304 | |||||
Impairment of goodwill | — | 3,097 | |||||
Loss on sale of business | — | 4,641 | |||||
Gain on disposal of assets | — | (2,189 | ) | ||||
Provision for credit losses, net | 24,675 | 3,535 | |||||
Loss on extinguishment of debt | 607 | — | |||||
Non-cash stock compensation and other charges | 458 | 8,173 | |||||
Non-cash interest and other loss (income) | 1,097 | (2,910 | ) | ||||
Deferred income taxes | (27,098 | ) | 2,418 | ||||
Equity in net losses from unconsolidated joint ventures, less distributions received | 5,588 | 5,380 | |||||
Franchise agreement acquisition costs, net of reimbursements | (12,567 | ) | (19,122 | ) | |||
Change in working capital and other, net of acquisition | (73,626 | ) | (37,729 | ) | |||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 1,452 | 97,739 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Investment in property and equipment | (21,094 | ) | (38,177 | ) | |||
Investment in intangible assets | (830 | ) | (1,037 | ) | |||
Proceeds from sales of assets | — | 10,585 | |||||
Payment on business disposition, net | — | (10,783 | ) | ||||
Contributions to equity method investments | (2,997 | ) | (13,676 | ) | |||
Distributions from equity method investments | 3,113 | 7,509 | |||||
Purchases of investments, employee benefit plans | (1,932 | ) | (2,276 | ) | |||
Proceeds from sales of investments, employee benefit plans | 1,901 | 1,714 | |||||
Issuance of notes receivable | (7,730 | ) | (4,877 | ) | |||
Collections of notes receivable | 63 | 5,442 | |||||
Other items, net | (27 | ) | 309 | ||||
NET CASH USED IN INVESTING ACTIVITIES | (29,533 | ) | (45,267 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Net borrowings pursuant to revolving credit facilities | 170,300 | 9,400 | |||||
Net borrowings pursuant to term loan | 249,500 | — | |||||
Principal payments on long-term debt | (33,369 | ) | (248 | ) | |||
Debt issuance costs | (492 | ) | — | ||||
Purchase of treasury stock | (54,536 | ) | (42,437 | ) | |||
Dividends paid | (25,228 | ) | (24,131 | ) | |||
Proceeds from issuance of long-term debt | — | 20,715 | |||||
Payments on transfer of interest in notes receivable | — | (24,409 | ) | ||||
Proceeds from exercise of stock options | 2,768 | 16,271 | |||||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 308,943 | (44,839 | ) | ||||
Net change in cash and cash equivalents | 280,862 | 7,633 | |||||
Effect of foreign exchange rate changes on cash and cash equivalents | (489 | ) | 132 | ||||
Cash and cash equivalents at beginning of period | 33,766 | 26,642 | |||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 314,139 | $ | 34,407 | |||
CHOICE HOTELS INTERNATIONAL, INC AND SUBSIDIARIES | Exhibit 4 | |||||||||||||||||||||||||||||||
SUPPLEMENTAL OPERATING INFORMATION | ||||||||||||||||||||||||||||||||
DOMESTIC HOTEL SYSTEM (1) | ||||||||||||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||||||||||||
For the Six Months Ended June 30, 2020 | For the Six Months Ended June 30, 2019 | Change | ||||||||||||||||||||||||||||||
Average Daily | Average Daily | Average Daily | ||||||||||||||||||||||||||||||
Rate | Occupancy | RevPAR | Rate | Occupancy | RevPAR | Rate | Occupancy | RevPAR | ||||||||||||||||||||||||
Comfort(2) | $ | 84.20 | 42.6 | % | $ | 35.86 | $ | 95.09 | 61.6 | % | $ | 58.57 | (11.5 | )% | (1,900 | ) | bps | (38.8 | )% | |||||||||||||
Sleep | 76.97 | 43.6 | % | 33.58 | 85.53 | 61.3 | % | 52.40 | (10.0 | )% | (1,770 | ) | bps | (35.9 | )% | |||||||||||||||||
Quality | 71.07 | 38.7 | % | 27.48 | 79.24 | 53.5 | % | 42.40 | (10.3 | )% | (1,480 | ) | bps | (35.2 | )% | |||||||||||||||||
Clarion(3) | 72.51 | 31.4 | % | 22.75 | 83.23 | 49.2 | % | 40.91 | (12.9 | )% | (1,780 | ) | bps | (44.4 | )% | |||||||||||||||||
Econo Lodge | 57.15 | 38.1 | % | 21.79 | 62.64 | 47.1 | % | 29.48 | (8.8 | )% | (900 | ) | bps | (26.1 | )% | |||||||||||||||||
Rodeway | 58.38 | 40.9 | % | 23.87 | 63.43 | 48.4 | % | 30.70 | (8.0 | )% | (750 | ) | bps | (22.2 | )% | |||||||||||||||||
WoodSpring Suites | 45.99 | 69.7 | % | 32.07 | 46.63 | 76.6 | % | 35.73 | (1.4 | )% | (690 | ) | bps | (10.2 | )% | |||||||||||||||||
MainStay | 76.21 | 51.3 | % | 39.07 | 85.40 | 63.2 | % | 53.96 | (10.8 | )% | (1,190 | ) | bps | (27.6 | )% | |||||||||||||||||
Suburban | 52.52 | 61.4 | % | 32.24 | 58.76 | 69.3 | % | 40.70 | (10.6 | )% | (790 | ) | bps | (20.8 | )% | |||||||||||||||||
Cambria Hotels | 120.89 | 36.7 | % | 44.41 | 144.68 | 68.2 | % | 98.66 | (16.4 | )% | (3,150 | ) | bps | (55.0 | )% | |||||||||||||||||
Ascend Hotel Collection | 115.48 | 39.7 | % | 45.89 | 121.42 | 60.3 | % | 73.16 | (4.9 | )% | (2,060 | ) | bps | (37.3 | )% | |||||||||||||||||
Total | $ | 71.09 | 42.7 | % | $ | 30.34 | $ | 80.86 | 57.3 | % | $ | 46.32 | (12.1 | )% | (1,460 | ) | bps | (34.5 | )% | |||||||||||||
For the Three Months Ended June 30, 2020 | For the Three Months Ended June 30, 2019 | Change | ||||||||||||||||||||||||||||||
Average Daily | Average Daily | Average Daily | ||||||||||||||||||||||||||||||
Rate | Occupancy | RevPAR | Rate | Occupancy | RevPAR | Rate | Occupancy | RevPAR | ||||||||||||||||||||||||
Comfort(2) | $ | 79.57 | 36.6 | % | $ | 29.11 | $ | 98.61 | 67.3 | % | $ | 66.36 | (19.3 | )% | (3,070 | ) | bps | (56.1 | )% | |||||||||||||
Sleep | 74.34 | 38.0 | % | 28.23 | 88.08 | 66.7 | % | 58.73 | (15.6 | )% | (2,870 | ) | bps | (51.9 | )% | |||||||||||||||||
Quality | 68.97 | 35.5 | % | 24.49 | 81.69 | 58.7 | % | 47.97 | (15.6 | )% | (2,320 | ) | bps | (48.9 | )% | |||||||||||||||||
Clarion(3) | 69.24 | 25.6 | % | 17.71 | 86.78 | 54.9 | % | 47.67 | (20.2 | )% | (2,930 | ) | bps | (62.8 | )% | |||||||||||||||||
Econo Lodge | 57.06 | 37.9 | % | 21.65 | 64.93 | 51.6 | % | 33.53 | (12.1 | )% | (1,370 | ) | bps | (35.4 | )% | |||||||||||||||||
Rodeway | 57.10 | 40.9 | % | 23.37 | 65.20 | 52.2 | % | 34.02 | (12.4 | )% | (1,130 | ) | bps | (31.3 | )% | |||||||||||||||||
WoodSpring Suites | 44.96 | 69.2 | % | 31.09 | 47.79 | 78.2 | % | 37.35 | (5.9 | )% | (900 | ) | bps | (16.8 | )% | |||||||||||||||||
MainStay | 73.82 | 48.6 | % | 35.86 | 87.83 | 67.9 | % | 59.62 | (16.0 | )% | (1,930 | ) | bps | (39.9 | )% | |||||||||||||||||
Suburban | 50.79 | 60.9 | % | 30.95 | 59.15 | 71.0 | % | 41.96 | (14.1 | )% | (1,010 | ) | bps | (26.2 | )% | |||||||||||||||||
Cambria Hotels | 96.82 | 24.2 | % | 23.46 | 152.89 | 74.8 | % | 114.43 | (36.7 | )% | (5,060 | ) | bps | (79.5 | )% | |||||||||||||||||
Ascend Hotel Collection | 109.46 | 32.2 | % | 35.24 | 125.87 | 63.3 | % | 79.70 | (13.0 | )% | (3,110 | ) | bps | (55.8 | )% | |||||||||||||||||
Total | $ | 67.21 | 39.1 | % | $ | 26.27 | $ | 83.88 | 62.1 | % | $ | 52.11 | (19.9 | )% | (2,300 | ) | bps | (49.6 | )% | |||||||||||||
Effective Royalty Rate | ||||||||||||||||||||||||||||||||
For the Quarter Ended | For the Six Months Ended | |||||||||||||||||||||||||||||||
6/30/2020 | 6/30/2019 | 6/30/2020 | 6/30/2019 | |||||||||||||||||||||||||||||
System-wide(4) | 4.94% | 4.84% | 4.94% | 4.84% | ||||||||||||||||||||||||||||
(1) In response to partial hotel closures resulting from the COVID-19 pandemic, the Company revised its calculation of Occupancy to be reflective of full room availability. Additionally, the Company also made minor revisions to its ADR calculations, with respect to complimentary rooms. The revised ADR, Occupancy and RevPAR are reflected in the tables above for all periods noted. | ||||||||||||||||||||||||||||||||
(2) Includes Comfort family of brand extensions including Comfort and Comfort Suites | ||||||||||||||||||||||||||||||||
(3) Includes Clarion family of brand extensions including Clarion and Clarion Pointe | ||||||||||||||||||||||||||||||||
(4) Includes United States and Caribbean countries and territories |
CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES | Exhibit 5 | |||||||||||||||||||||||
SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA | ||||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||||
June 30, 2020 | June 30, 2019 | Variance | ||||||||||||||||||||||
Hotels | Rooms | Hotels | Rooms | Hotels | Rooms | % | % | |||||||||||||||||
Comfort(1) | 1,620 | 127,583 | 1,610 | 126,229 | 10 | 1,354 | 0.6 | % | 1.1 | % | ||||||||||||||
Sleep | 399 | 28,251 | 397 | 28,099 | 2 | 152 | 0.5 | % | 0.5 | % | ||||||||||||||
Quality | 1,690 | 128,909 | 1,665 | 128,115 | 25 | 794 | 1.5 | % | 0.6 | % | ||||||||||||||
Clarion(2) | 179 | 22,651 | 175 | 22,085 | 4 | 566 | 2.3 | % | 2.6 | % | ||||||||||||||
Econo Lodge | 779 | 46,992 | 823 | 49,838 | (44 | ) | (2,846 | ) | (5.3 | )% | (5.7 | )% | ||||||||||||
Rodeway | 578 | 33,107 | 597 | 34,749 | (19 | ) | (1,642 | ) | (3.2 | )% | (4.7 | )% | ||||||||||||
WoodSpring Suites | 281 | 33,797 | 262 | 31,515 | 19 | 2,282 | 7.3 | % | 7.2 | % | ||||||||||||||
MainStay | 73 | 4,629 | 66 | 4,387 | 7 | 242 | 10.6 | % | 5.5 | % | ||||||||||||||
Suburban | 60 | 6,082 | 56 | 5,807 | 4 | 275 | 7.1 | % | 4.7 | % | ||||||||||||||
Cambria Hotels | 51 | 7,347 | 42 | 5,923 | 9 | 1,424 | 21.4 | % | 24.0 | % | ||||||||||||||
Ascend Hotel Collection | 207 | 22,136 | 186 | 15,628 | 21 | 6,508 | 11.3 | % | 41.6 | % | ||||||||||||||
Domestic Franchises(3) | 5,917 | 461,484 | 5,879 | 452,375 | 38 | 9,109 | 0.6 | % | 2.0 | % | ||||||||||||||
International Franchises | 1,201 | 135,534 | 1,166 | 120,284 | 35 | 15,250 | 3.0 | % | 12.7 | % | ||||||||||||||
Total Franchises | 7,118 | 597,018 | 7,045 | 572,659 | 73 | 24,359 | 1.0 | % | 4.3 | % | ||||||||||||||
(1) Includes Comfort family of brand extensions including Comfort and Comfort Suites | ||||||||||||||||||||||||
(2) Includes Clarion family of brand extensions including Clarion and Clarion Pointe | ||||||||||||||||||||||||
(3) Includes United States and Caribbean countries and territories |
CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES | Exhibit 6 | |||||||||||||||||
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION | ||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||
REVENUES AND ADJUSTED OPERATING MARGINS, EXCLUDING MARKETING AND RESERVATION ACTIVITIES | ||||||||||||||||||
(dollar amounts in thousands) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||
Total Revenues | $ | 151,733 | $ | 317,684 | $ | 369,908 | $ | 536,004 | ||||||||||
Adjustments: | ||||||||||||||||||
Marketing and reservation system revenues | (79,677 | ) | (172,465 | ) | (190,062 | ) | (282,529 | ) | ||||||||||
Revenues, excluding marketing and reservation activities | $ | 72,056 | $ | 145,219 | $ | 179,846 | $ | 253,475 | ||||||||||
ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA") | ||||||||||||||||||
(dollar amounts in thousands) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||
Net income | $ | (2,441 | ) | $ | 74,389 | $ | 53,022 | $ | 104,470 | |||||||||
Income tax (benefit) expense | (437 | ) | 19,765 | (25,501 | ) | 26,163 | ||||||||||||
Interest expense | 13,082 | 11,093 | 24,462 | 22,304 | ||||||||||||||
Interest income | (2,245 | ) | (2,784 | ) | (4,533 | ) | (5,397 | ) | ||||||||||
Other (gains) losses | (3,585 | ) | (906 | ) | 692 | (3,104 | ) | |||||||||||
Loss on extinguishment of debt | — | — | 607 | — | ||||||||||||||
Equity in net loss of affiliates | 3,486 | 980 | 5,441 | 3,151 | ||||||||||||||
Depreciation and amortization | 6,398 | 3,405 | 12,927 | 7,021 | ||||||||||||||
Loss on sale and dispositions & impairment of assets, net | 1,226 | 4,641 | 1,226 | 14,942 | ||||||||||||||
Mark to market adjustments on non-qualified retirement plan investments | 3,553 | 882 | (781 | ) | 3,055 | |||||||||||||
Operational restructuring charges | 7,154 | — | 8,518 | — | ||||||||||||||
Share-based compensation | 1,016 | 2,177 | (141 | ) | 4,191 | |||||||||||||
Exceptional allowances attributable to COVID-19 | 2,678 | — | 2,678 | — | ||||||||||||||
Marketing and reservation system reimbursable (surplus) deficit | 9,632 | (12,344 | ) | 29,694 | (2,569 | ) | ||||||||||||
Franchise agreement acquisition costs amortization | 1,579 | 1,321 | 3,177 | 2,842 | ||||||||||||||
Adjusted EBITDA | $ | 41,096 | $ | 102,619 | $ | 111,488 | $ | 177,069 | ||||||||||
ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE (EPS) | ||||||||||||||||||
(dollar amounts in thousands, except per share amounts) | Three Months Ended June 30, | Three Months Ended June 30, | ||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||
Net income | $ | (2,441 | ) | $ | 74,389 | $ | 53,022 | $ | 104,470 | |||||||||
Adjustments: | ||||||||||||||||||
Marketing and reservation system reimbursable (surplus) deficit | 4,231 | (10,013 | ) | 25,106 | (2,027 | ) | ||||||||||||
Loss on sale and disposition & impairment of assets, net | 539 | 2,280 | 1,037 | 11,329 | ||||||||||||||
Loss on extinguishment of debt | — | — | 513 | — | ||||||||||||||
Operational restructuring charges | 3,196 | — | 7,229 | — | ||||||||||||||
Exceptional allowances attributable to COVID-19 | 1,176 | — | 2,264 | — | ||||||||||||||
Foreign tax benefit on international restructuring | — | — | (30,572 | ) | — | |||||||||||||
Adjusted Net Income | $ | 6,701 | $ | 66,656 | $ | 58,599 | $ | 113,772 | ||||||||||
Diluted Earnings Per Share | $ | (0.04 | ) | $ | 1.33 | $ | 0.95 | $ | 1.87 | |||||||||
Adjustments: | ||||||||||||||||||
Marketing and reservation system reimbursable (surplus) deficit | 0.08 | (0.18 | ) | 0.45 | (0.04 | ) | ||||||||||||
Loss on sale and disposition & impairment of assets, net | 0.01 | 0.04 | 0.02 | 0.20 | ||||||||||||||
Loss on extinguishment of debt | — | — | 0.01 | — | ||||||||||||||
Operational restructuring charges | 0.06 | — | 0.13 | — | ||||||||||||||
Exceptional allowances attributable to COVID-19 | 0.02 | — | 0.04 | — | ||||||||||||||
Foreign tax benefit on international restructuring | — | — | (0.55 | ) | — | |||||||||||||
Adjusted Diluted Earnings Per Share (EPS) | $ | 0.13 | $ | 1.19 | $ | 1.05 | $ | 2.03 | ||||||||||
CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES | Exhibit 7 | |||||
DOMESTIC SYSTEM-WIDE OCCUPANCY VERSUS INDUSTRY (1) | ||||||
(UNAUDITED) | ||||||
Choice | Total | |||||
Week beginning | Hotels | Industry | ||||
March 8, 2020 | 51.2 | % | 53.0 | % | ||
March 15, 2020 | 38.2 | % | 30.3 | % | ||
March 22, 2020 | 30.1 | % | 22.6 | % | ||
March 29, 2020 | 28.8 | % | 21.6 | % | ||
April 5, 2020 | 27.7 | % | 21.0 | % | ||
April 12, 2020 | 30.1 | % | 23.4 | % | ||
April 19, 2020 | 31.6 | % | 26.0 | % | ||
April 26, 2020 | 34.4 | % | 28.6 | % | ||
May 3, 2020 | 36.1 | % | 30.1 | % | ||
May 10, 2020 | 37.8 | % | 32.4 | % | ||
May 17, 2020 | 40.3 | % | 35.4 | % | ||
May 24, 2020 | 41.2 | % | 36.6 | % | ||
May 31, 2020 | 44.8 | % | 39.3 | % | ||
June 7, 2020 | 47.2 | % | 41.7 | % | ||
June 14, 2020 | 48.6 | % | 43.9 | % | ||
June 21, 2020 | 50.4 | % | 46.2 | % | ||
June 28, 2020 | 50.5 | % | 45.6 | % | ||
July 5, 2020 | 51.5 | % | 45.9 | % | ||
July 12, 2020 | 52.6 | % | 47.5 | % | ||
July 19, 2020 | 52.5 | % | 48.1 | % | ||
July 26, 2020 | 53.2 | % | 48.9 | % | ||
(1) Source: Smith Travel Research (STR), STR Weekly Hotel Review. |