EX-99.1 2 g05774exv99w1.htm EX-99.1 PRESS RELEASE DATED MARCH 1, 2007 EX-99.1 PRESS RELEASE DATED MARCH 1, 2007
 

(LODGIAN LOGO)
     
For Immediate Release
    
Contact:
    
Debi Ethridge
  Jerry Daly or Carol McCune
Vice President, Finance & Investor Relations
  Daly Gray Public Relations (Media)
dethridge@lodgian.com
  jerry@dalygray.com
(404) 365-2719
  (703) 435-6293
Lodgian Reports 2006 Fourth Quarter and Full-Year 2006 Results
and Progress in Strategic Initiative
     ATLANTA, Ga., March 1, 2007—Lodgian, Inc. (AMEX: LGN), one of the nation’s largest independent owners and operators of full-service hotels, today reported results for the fourth quarter and full year ended December 31, 2006. The company will host a 10 a.m. ET conference call today to discuss results.
     In its continuing operations, the company reported strong results that reflect both the continued recovery of the hospitality industry and the effects of the company’s recent renovations, refurbishments and management changes.
Fourth Quarter 2006 Highlights for 44 Continuing Operations hotels
  •   Achieved a 7.3 percent improvement in revenue per available room (RevPAR) in the fourth quarter of 2006 compared to 2005 fourth quarter.
 
  •   Grew rooms revenue 11.4 percent to $45.6 million and total revenue 14.7 percent to $62.8 million.
 
  •   Increased Adjusted EBITDA (defined below) from $8.1 million to $9.6 million, a 19.6 percent improvement, despite a $1.2 million decrease at the Radisson New Orleans Airport related to Hurricane Katrina.
 
  •   Improved Adjusted EBITDA margin from 14.7 percent in 2005 fourth quarter to 15.3 percent in 2006 fourth quarter, despite a $1.8 million (or 260 margin point) increase in insurance expense.
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Lodgian Fourth Quarter Results
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  •   Increased F&B revenues from $12.0 million to $15.1 million, a 26.4 percent increase compared to the same quarter in 2005 (or $3.71 per available room).
Full Year 2006 Highlights for 44 Continuing Operations hotels
  •   Increased rooms revenue 17.7 percent compared to 2005; total revenue increased 17.5 percent
 
  •   Adjusted EBITDA up 34.9 percent to $48.6 million from $36.1 million.
 
  •   Increased Adjusted EBITDA margin from 16.2 percent to 18.6 percent.
To provide a better understanding of the company’s operations, Lodgian provides below three separate overviews of its operating and financial results, including its 44 continuing operations hotels; 41 comparable hotels to reflect hotels that were open in both periods; and consolidated financial results.
Statistics for 44 Continuing Operations hotels
                                                 
    4Q   4Q   %   Year   Year   %
    2006*   2005*   Change   2006*   2005*   Change
Rooms revenue
   $ 45,617     $ 40,957       11.4 %   $ 197,719     $ 168,028       17.7 %
RevPAR
   $ 62.57     $ 58.32       7.3 %   $ 68.45     $ 60.35       13.4 %
Total revenue
   $ 62,817     $ 54,779       14.7 %   $ 261,785     $ 222,762       17.5 %
EBITDA
   $ 10,100     $ 29,113       (65.3 %)   $ 54,833     $ 61,732       -11.2 %
Adjusted EBITDA (defined below)
   $ 9,629     $ 8,050       19.6 %   $ 48,648     $ 36,062       34.9 %
Net income/(loss)
   ($ 12,385 )   $ 8,505       n/m     $ (10,267 )   $ 10,836       n/m  
Statistics for 41 comparable hotels (hotels open in both periods)
                                                 
    4Q   4Q   %   Year   Year   %
    2006*   2005*   Change   2006*   2005*   Change
Rooms revenue
   $ 42,527     $ 40,266       5.6 %   $ 184,558     $ 165,433       11.6 %
RevPAR
   $ 62.19     $ 58.88       5.6 %   $ 68.03     $ 60.97       11.6 %
Total revenue
   $ 58,268     $ 53,800       8.3 %   $ 243,493     $ 219,314       11.0 %
EBITDA
   $ 9,094     $ 7,970       14.1 %   $ 45,479     $ 35,983       26.4 %
Adjusted EBITDA (defined below)
   $ 9,315     $ 8,971       3.8 %   $ 46,166     $ 38,480       20.0 %
Net income/(loss)
   $ 7,978       ($3,293 )     n/m     $ 7,941       ($4,565 )     n/m  
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Lodgian Fourth Quarter Results
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Consolidated Financial Results
                                                 
    4Q   4Q   %   Year   Year   %
    2006*   2005*   Change   2006*   2005*   Change
Rooms revenue — Continuing Operations
   $ 45,617     $ 40,957       11.4 %   $ 197,719     $ 168,028       17.7 %
RevPAR — Continuing Operations
   $ 62.57     $ 58.32       7.3 %   $ 68.45     $ 60.35       13.4 %
Total revenue — Continuing Operations
   $ 62,817     $ 54,779       14.7 %   $ 261,785     $ 222,762       17.5 %
Income/(loss) from continuing operations
   $ (12,385 )   $ 8,505       n/m     $ (10,267 )   $ 10,386       n/m  
Income/(loss) from discontinued operations
   $ (8,328 )   $ (701 )     n/m     $ (4,909 )   $ 1,465       n/m  
Net income/(loss) attributable to common stock
   $ (20,713 )   $ 7,804       n/m     $ (15,176 )   $ 12,301       n/m  
Net income/(loss) per share attributable to common stock
   $ (0.84 )   $ 0.32       n/m     $ (0.62 )   $ 0.50       n/m  
 
*   Dollars in thousands except for RevPAR and per share data
Continuing operations data in the Consolidated Financial Results table above includes the financial effects of the closure of two hotels in Florida, the Crowne Plaza West Palm Beach and the Crowne Plaza Melbourne-Oceanfront, which closed during the 2004 fourth quarter and reopened in December 2005 and January 2006, respectively. Continuing operations data also includes the impact of a hotel which closed in January 2006 due to fire damage.
The increase in “Rooms revenue — Continuing operations”, presented above, exceeds the increase in “RevPAR – Continuing operations” due to differing numbers of rooms being available in 2006 vs. 2005.
In this press release, Lodgian uses the term “Adjusted EBITDA” to mean earnings before interest, taxes, depreciation and amortization (“EBITDA”), but excluding the effects of the following charges: post-emergence Chapter 11 expenses; impairment losses; casualty (gains)/losses, net, for properties damaged by hurricane, fire or flood; proceeds arising from business interruption insurance claims; and minority interest adjustments related to casualty gains and business interruption insurance proceeds.
Corporate Highlights:
  •   Announced that the company had retained Goldman, Sachs & Co. and Genesis Capital, L.L.C., to assist in a review of strategic alternatives available to the company to enhance shareholder value.
 
  •   Announced and began implementation of a strategic initiative to redefine the company’s portfolio, placing a total of 27 hotels on the market for sale, retaining 43 hotels in its core portfolio (excluding one continuing operations hotels, the Holiday Inn in Marietta, Ga., which is currently closed).
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Lodgian Fourth Quarter Results
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  •   Sold four hotels in the 2006 fourth quarter and an additional hotel in January 2007 for aggregate gross proceeds of $19.0 million.
Fourth Quarter Results
     Fourth quarter 2006 total revenues improved 14.7 percent to $62.8 million, compared to the 2005 same period. Net loss attributable to common shares was $(20.7) million, or a loss of $(0.84) per diluted share, compared to net income of $7.8 million, or $.032 per diluted share in the 2005 fourth quarter. The 2006 fourth quarter net loss was due to a deferred tax charge of $9.1 million for continuing operations, offset by a $4.4 million deferred tax credit for discontinued operations, as well as impairment charges of $13.1 million for discontinued operations in the quarter, compared to $4.1 million of impairment charges in the 2005 fourth quarter. Although consolidated results were adversely affected by these deferred tax charges, deferred tax credits, and impairment charges, they are non-cash items.
     The company received $0.5 million in business interruption insurance proceeds in the 2006 fourth quarter for continuing operations hotels, $1.3 million less than the $1.8 million received in the same period a year earlier. Additionally, the company realized a casualty gain for continuing operations in the 2005 fourth quarter of $28.8 million, partially offset by a related minority interest adjustment of $7.9 million.
     EBITDA for the 2006 fourth quarter from 44 continuing operations hotels declined 65.3 percent to $10.1 million compared to the prior year, primarily due to the absence of the net casualty gain of $20.9 million recorded in the 2005 fourth quarter. Adjusted EBITDA for the same group of properties increased 19.6 percent, from $8.1 million in the 2005 fourth quarter, to
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Lodgian Fourth Quarter Results
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$9.6 million in the 2006 fourth quarter. Adjusted EBITDA as a percent of total revenue increased 60 basis points to 15.3 percent.
     For the 41 comparable hotels open during both periods’ fourth quarter, total revenue increased 8.3 percent to $58.3 million. Adjusted EBITDA increased 3.8 percent in the 2006 fourth quarter compared to 2005. Absent a $1.1 million increase in insurance costs, Adjusted EBITDA would have increased 17.9 percent in the 2006 fourth quarter compared to the 2005 fourth quarter. Adjusted EBITDA margins for the 41 comparable hotels open in both periods’ fourth quarters declined 70 basis points to 16.0 percent, primarily due to a 139 percent increase in insurance expense. Without this increase in insurance, the margin would have increased 120 basis points to 17.9 percent.
Full Year Results
     Full year 2006 room revenue increased 17.7 percent for the 44 continuing operations hotels, while total revenues increased 17.5 percent over 2005. This group of hotels experienced a 13.4 percent increase in RevPAR, driven by a 10.9 percent increase in average daily rate.
     Adjusted EBITDA for the 44 continuing operations hotels increased 34.9 percent over 2005, to $48.6 million. Adjusted EBITDA as a percent of total revenue increased 240 basis points to 18.6 percent.
     For the 41 comparable hotels open during both years, total revenue increased 11.0 percent to $243.5 million. Adjusted EBITDA increased 20.0 percent in 2006 compared to 2005. Adjusted EBITDA margins for the 41 comparable hotels open in both periods increased 150
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Lodgian Fourth Quarter Results
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basis points to 19.0 percent, despite a 74 percent increase in insurance expense. For the full year 2006, Adjusted EBITDA margins for the 41 comparable hotels rose 150 bps over 2005, to 19.0 percent of total revenue.
     Net loss attributable to common shares was $(15.2) million, driven primarily by the 2006 fourth quarter loss discussed above.
Management Comments
     “Our 41 comparable hotels that were open during both periods had a solid fourth quarter with RevPAR up 5.6 percent. Taking the 44 continuing operations hotels into account, RevPAR increased by 7.3 percent in the quarter. For the 2006 full year, RevPAR for the 44 continuing operations hotels increased 13.4 percent, compared to the 2006 industry average of 7.5 percent, according to Smith Travel Research,” said Ed Rohling, Lodgian president and chief executive officer. “The 20 hotels that completed major renovations in 2004 and 2005 reported an 18.2 percent RevPAR increase in 2006 and an impressive 8.2 percent improvement in their RevPAR index. We believe there is still substantial future growth in these hotels. And excluding our Melbourne, West Palm Beach and Marietta properties, RevPAR increased 11.6 percent for the full year, still well ahead of the industry average.”
     In the 2006 fourth quarter, insurance expense for the 44 continuing operations hotels rose $1.8 million, or 210 percent, to $2.6 million. “Insurance costs will continue to be a factor through June of 2007, when our annual renewal will occur,” Rohling pointed out. “We’ve experienced far fewer casualty events since our last renewal, both as a company and the nation as a whole, which we hope will have a positive impact on our next renewal.
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Lodgian Fourth Quarter Results
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     “As mentioned in our 2006 third quarter results, payroll expenses rose in that quarter and we needed to get better control of our costs,” he said. “We accomplished that goal quickly in the fourth quarter. As a percentage of total revenue, payroll expenses declined 51 basis points in the fourth quarter, compared to the same period in the prior year, contributing significantly to the 60 basis point increase in Adjusted EBITDA margins.”
Strategic Repositioning
     In the 2006 fourth quarter, the company announced and commenced a program to strategically reposition its hotel portfolio. A total of 27 properties were identified for sale, with two properties sold by the end of 2006. The remaining 25 properties were listed and actively being marketed by year-end. A total of 43 hotels constitute the company’s core portfolio, which excludes the Marietta, Ga. Holiday Inn that has been closed since early 2006 due to a fire.
     “We have received very strong interest in our non-core hotels held for sale, both in portfolios and as individual assets,” Rohling noted. “We sold one property in January 2007 and are in active negotiations on the vast majority of hotels.”
     Lodgian sold four hotels in the fourth quarter: the Quality Hotel, Metairie, La.; the former Holiday Inn Jekyll Island, Ga.; and the Holiday Inn and Azalea Inn, Valdosta, Ga. Gross proceeds for the four hotels aggregated $16.6 million, with $3.4 million of net proceeds used to reduce debt and the remainder used for general corporate purposes.
     In January 2007, the company sold the 186-room University Plaza hotel in Bloomington, Ind. for gross proceeds of $2.4 million. The net proceeds were used for general corporate purposes. Below is a reconciliation of GAAP net loss from operations with Adjusted EBITDA
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Lodgian Fourth Quarter Results
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(a non-GAAP financial measure) for the Bloomington, Ind., property for the trailing 12 months ended December 31, 2006:
         
(in thousands)
        
Net loss from operations
   $ (748 )
Depreciation and amortization
     40  
Impairment loss
     725  
 
      
 
Adjusted EBITDA
   $ 17  
 
      
     During 2006, Lodgian sold a total of six hotels and one land parcel comprising an aggregate 929 rooms for an aggregate sales price of $27.1 million, $5.0 million of which was used to reduce mortgage debt. The remaining proceeds were used for capital expenditures and general corporate purposes. The company realized gains of approximately $3.0 million from the sale of these assets in 2006. Additionally in 2006, the company surrendered two Holiday Inn hotels, located in Lawrence and Manhattan, Kans., and the venture which owned the Holiday Inn City Center Columbus, Ohio deeded the hotel to the lender.
Strategic Alternative Review
     In January 2007, Lodgian announced that it had retained Goldman, Sachs & Co. and Genesis Capital, L.L.C., to initiate a review of strategic alternatives available to the company to enhance shareholder value. The study is on-going and the company intends to announce developments with respect to the process at such time as its board of directors approves a specific alternative.
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Lodgian Fourth Quarter Results
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Balance Sheet Update
     The company is currently pursuing a refinancing strategy which would pay off a floating rate facility secured by 15 hotels and defease a fixed rate facility secured by nine hotels. Sixteen of the 24 hotels in the two facilities combined are held for sale. “We are seeking a structure that will provide maximum flexibility to accommodate the numerous potential strategic alternatives,” said James MacLennan, executive vice president and chief financial officer. “At year-end 2006, the company had $62 million in cash and restricted cash on the balance sheet.”
     During the fourth quarter, Lodgian acquired approximately 46,000 shares of common stock at an average price of $13.17 per share, for a total of approximately $600,000, as part of its previously announced plan to repurchase up to $15 million of its common shares over a period ending no later than May 26, 2007. As of March 1, 2007, the company has acquired almost 372,000 shares, or approximately 1.5 percent of common stock outstanding prior to initiating the repurchase program, for a total cost of approximately $4.6 million, since the program was announced in late May 2006.
Conference Call
     Lodgian will hold a conference call to discuss its 2006 fourth quarter results today, March 1, at 10 a.m. Eastern time. To hear the webcast, interested parties may visit the company’s Web site at www.lodgian.com and click on Investor Relations and then Webcast, Q4 Earnings Conference Call. A recording of the call will be available by telephone until midnight on Thursday, March 8 by dialing (800) 405-2236, reference number 11083235. A replay of the conference call will be posted on Lodgian’s Web site.
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Lodgian Fourth Quarter Results
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Non-GAAP Financial Measures
     The historical non-GAAP financial measures included in this press release are reconciled to the comparable GAAP measures in the schedules attached to this press release.
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 post-emergence Chapter 11 expenses included in corporate and other on the company’s consolidated statement of operations, impairment losses, 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. Adjusted EBITDA also excludes charges related to the surrender of two wholly-owned hotels to the bond trustee and the disposition or surrender of one minority interest hotel to the lender.
About Lodgian
     Lodgian is one of the largest independent owners and operators of full-service hotels in the United States. The company currently manages a portfolio of 68 hotels with 12,353 rooms
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Lodgian Fourth Quarter Results
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located in 28 states and Canada. Of the company’s 68-hotel portfolio, 42 are InterContinental Hotels Group brands (Crowne Plaza, Holiday Inn, Holiday Inn Select and Holiday Inn Express), 13 are Marriott brands (Courtyard by Marriott, Fairfield Inn, SpringHill Suites and Residence Inn), and 11 are affiliated with four other nationally recognized hospitality franchisors such as Hilton and Carlson (Radisson and Park Inn). Two hotels are independent, unbranded properties. Three hotels are owned by partnerships, in each of which Lodgian has at least a 50 percent equity interest, and is the operating partner for each. For more information about Lodgian, visit the company’s Web site: www.lodgian.com.
Forward-Looking Statements
     This press release includes forward-looking statements related to Lodgian’s operations that are based on management’s current expectations, estimates and projections. These statements are not guarantees of future performance and actual results could differ materially. The words “guidance,” “may,” “should,” “expect,” “believe,” “anticipate,” “project,” “estimate,” “plan,” and similar expressions are intended to identify forward-looking statements. Certain factors are not within the company’s control and readers are cautioned not to put undue reliance on forward-looking statements. These statements involve risks and uncertainties including, but not limited to, the company’s ability to generate sufficient working capital from operations and other risks detailed from time to time in the company’s SEC reports. The company undertakes no obligations to update events to reflect changed assumptions, the occurrence of unanticipated events or changes to future results over time.
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LODGIAN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
                 
    December 31, 2006     December 31, 2005  
    ($ in thousands, except share data)  
ASSETS
                
 
                
Current assets:
                
Cash and cash equivalents
   $ 48,188     $ 19,097  
Cash, restricted
     13,791       15,003  
Accounts receivable (net of allowances: 2006 - $277; 2005 - $1,101)
     7,404       8,054  
Insurance receivable
     2,347       11,725  
Inventories
     2,893       3,955  
Prepaid expenses and other current assets
     22,450       20,101  
Assets held for sale
     89,437       14,866  
 
            
 
                
Total current assets
     186,510       92,801  
 
                
Property and equipment, net
     487,022       606,862  
Deposits for capital expenditures
     19,802       19,431  
Other assets
     5,824       7,591  
 
            
 
                
 
   $ 699,158     $ 726,685  
 
            
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
 
                
Current liabilities:
                
Accounts payable
   $ 7,742     $ 14,709  
Other accrued liabilities
     27,724       31,528  
Advance deposits
     1,384       1,914  
Insurance advances
     2,063       700  
Current portion of long-term liabilities
     46,557       18,531  
Liabilities related to assets held for sale
     68,351       4,610  
 
            
 
                
Total current liabilities
     153,821       71,992  
 
                
Long-term liabilities
     292,301       394,432  
 
            
Total liabilities
     446,122       466,424  
 
                
Minority interests
     10,922       11,217  
Commitments and contingencies Stockholders’ equity:
                
Common stock, $.01 par value, 60,000,000 shares authorized; 24,822,821 and 24,648,405 issued at December 31, 2006 and December 31, 2005, respectively
     248       246  
Additional paid-in capital
     327,635       317,034  
Unearned stock compensation
     —       (604 )
Accumulated deficit
     (84,816 )     (69,640 )
Accumulated other comprehensive income
     2,088       2,234  
Treasury stock, at cost, 251,619 and 21,633 shares at December 31, 2006 and December 31, 2005, respectively
     (3,041 )     (226 )
 
            
 
Total stockholders’ equity
     242,114       249,044  
 
            
 
   $ 699,158     $ 726,685  
 
            

 

 

LODGIAN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
                         
    For the Year Ended  
    2006     2005     2004  
            ($ in thousands)          
Revenues:
                        
Rooms
   $ 197,719     $ 168,028     $ 160,863  
Food and beverage
     55,792       46,869       48,260  
Other
     8,274       7,865       8,066  
 
                  
Total revenues
     261,785       222,762       217,189  
 
                  
Direct operating expenses:
                        
Rooms
     51,272       45,028       43,557  
Food and beverage
     39,623       33,114       33,655  
Other
     6,161       6,019       5,793  
 
                  
Total direct operating expenses
     97,056       84,161       83,005  
 
                  
 
     164,729       138,601       134,184  
Other operating expenses:
                        
Other hotel operating costs
     74,699       67,232       62,318  
Property and other taxes, insurance, and leases
     20,793       16,751       15,590  
Corporate and other
     20,760       20,016       16,886  
Casualty (gains) losses, net
     (2,888 )     (28,464 )     1,986  
Depreciation and amortization
     30,718       22,040       18,946  
Impairment of long-lived assets
     758       1,244       412  
 
                  
Total other operating expenses
     144,840       98,819       116,138  
 
                  
Operating income
     19,889       39,782       18,046  
 
Other income (expenses):
                        
Business interruption insurance proceeds
     3,931       9,595       —  
Interest income and other
     2,607       833       680  
Interest expense and other financing costs:
                        
Preferred stock dividend
     —       —       (9,383 )
Interest expense
     (25,348 )     (21,353 )     (31,033 )
Loss on preferred stock redemption
     —       —       (6,063 )
 
                  
Income (loss) before income taxes and minority interests
     1,079       28,857       (27,753 )
Minority interests (net of taxes, nil)
     295       (9,492 )     595  
Provision for income taxes — continuing operations
     (11,641 )     (8,529 )     (225 )
 
                  
(Loss) income from continuing operations
     (10,267 )     10,836       (27,383 )
 
                  
Discontinued operations:
                        
(Loss) income from discontinued operations before income taxes
     (8,017 )     1,248       (4,547 )
Minority interests — discontinued operations
     —       (96 )     96  
Benefit (provision) for income taxes — discontinued operations
     3,108       313       —  
 
                  
(Loss) income from discontinued operations
     (4,909 )     1,465       (4,451 )
 
                  
Net (loss) income attributable to common stock
   $ (15,176 )   $ 12,301     $ (31,834 )
 
                  
 
                        
Net (loss) income per share attributable to common stock:
                        
Basic
   $ (0.62 )   $ 0.50     $ (2.30 )
 
                  
Diluted
   $ (0.62 )   $ 0.50     $ (2.30 )
 
                  

 

 

LODGIAN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS BY QUARTER
(UNAUDITED)
                                                                 
    2006     2005  
    Fourth     Third     Second     First     Fourth     Third     Second     First  
    Quarter     Quarter     Quarter     Quarter     Quarter     Quarter     Quarter     Quarter  
    ($ in thousands)  
Revenues:
                                                                
Rooms
   $ 45,617     $ 50,445     $ 53,788     $ 47,869     $ 40,957     $ 44,652     $ 44,058     $ 38,361  
Food and beverage
     15,134       12,912       15,636       12,110       11,973       11,570       13,152       10,174  
Other
     2,066       2,105       2,154       1,949       1,849       2,014       2,043       1,959  
 
                                                
 
     62,817       65,462       71,578       61,928       54,779       58,236       59,253       50,494  
 
                                                
 
                                                                
Operating expenses:
                                                                
Direct:
                                                                
Rooms
     12,462       13,297       13,310       12,203       11,253       11,766       11,586       10,423  
Food and beverage
     10,363       9,772       10,469       9,019       8,444       8,277       8,989       7,404  
Other
     1,456       1,523       1,657       1,525       1,484       1,517       1,567       1,451  
 
                                                
 
     24,281       24,592       25,436       22,747       21,181       21,560       22,142       19,278  
 
                                                
 
     38,536       40,870       46,142       39,181       33,598       36,676       37,111       31,216  
 
                                                                
Other operating expenses:
                                                                
Other hotel operating costs
     18,304       19,078       18,751       18,566       17,265       17,813       16,282       15,872  
Property and other taxes, insurance and leases
     5,813       5,862       4,717       4,401       3,937       4,357       4,278       4,179  
Corporate and other
     4,959       5,592       5,292       4,917       4,314       5,771       5,282       4,649  
Casualty (gain) losses, net
     0       (3,085 )     31       166       (28,754 )     190       0       100  
Depreciation and amortization
     7,770       7,886       7,704       7,358       7,002       5,250       5,007       4,781  
Impairment of long-lived assets
     225       323       16       194       1,018       83       64       79  
 
                                                
Other operating expenses
     37,071       35,656       36,511       35,602       4,782       33,464       30,913       29,660  
 
                                                
 
     1,465       5,214       9,631       3,579       28,816       3,212       6,198       1,556  
 
                                                                
Other income (expenses):
                                                                
Business interruption insurance proceeds
     530       2,706       695       0       1,772       6,094       1,729       0  
Interest income and other
     664       786       848       309       271       340       51       171  
Interest expense
     (6,297 )     (6,482 )     (6,228 )     (6,341 )     (5,485 )     (5,285 )     (5,275 )     (5,308 )
 
                                                
Income (loss) before income taxes and minority interest
     (3,638 )     2,224       4,946       (2,453 )     25,374       4,361       2,703       (3,581 )
Minority interests
     335       100       (136 )     (4 )     (8,486 )     (1,127 )     (120 )     241  
 
                                                
Income (loss) before income taxes — continuing operations
     (3,303 )     2,324       4,810       (2,457 )     16,888       3,234       2,583       (3,340 )
(Provision) benefit for income taxes — continuing operations
     (9,082 )     (1,039 )     (2,245 )     725       (8,383 )     (12 )     (67 )     (67 )
 
                                                
Income (loss) from continuing operations
     (12,385 )     1,285       2,565       (1,732 )     8,505       3,222       2,516       (3,407 )
 
                                                
Discontinued operations:
                                                                
(Loss) income from discontinued operations before income taxes
     (12,765 )     (1,917 )     1,852       4,813       (1,014 )     6,487       (642 )     (3,583 )
Minority interests
     0       0       0       0       0       0       0       (96 )
Income tax benefit (provision)
     4,437       794       (416 )     (1,707 )     313       0       0       0  
 
                                                      
(Loss) income from discontinued operations
     (8,328 )     (1,123 )     1,436       3,106       (701 )     6,487       (642 )     (3,679 )
 
                                                
Net income (loss) attributable to common stock
   $ (20,713 )   $ 162     $ 4,001     $ 1,374     $ 7,804     $ 9,709     $ 1,874     $ (7,086 )
 
                                                

 

 

LODGIAN, INC. AND SUBSIDIARIES
Reconciliation of EBITDA and Adjusted EBITDA (non-GAAP measures) with
Income (Loss) from Continuing Operations (a GAAP measure)
(UNAUDITED)
                         
    2006     2005     2004  
    ($ in thousands)  
Continuing operations:
                        
(Loss) income from continuing operations
   $ (10,267 )   $ 10,836     $ (27,383 )
Depreciation and amortization
     30,718       22,040       18,946  
Interest income
     (2,607 )     (1,026 )     (645 )
Interest expense
     25,348       21,353       31,033  
Preferred stock dividends
     —       —       9,383  
Loss on preferred stock redemption
     —       —       6,063  
Provision for income taxes — continuing operations
     11,641       8,529       225  
 
                  
EBITDA from continuing operations
   $ 54,833     $ 61,732     $ 37,622  
 
                  
Adjustments to EBITDA:
                        
Post-emergence Chapter 11 expenses, included in corporate and other on consolidated statement of operations
   $ 3     $ 173     $ 458  
Impairment of long-lived assets
     758       1,244       412  
Casualty (gains) losses, net
     (3,303 )     (20,570 )     1,576  
Business interruption insurance proceeds
     (3,643 )     (7,434 )     —  
Write-off of receivable from non-consolidated hotel
     —       747       —  
Adjustments to bankruptcy claims reserves
     —       —       (38 )
Write-off of investment in subsidiary for non-consolidated hotel
     —       170       —  
 
                  
Adjusted EBITDA from continuing operations
   $ 48,648     $ 36,062     $ 40,030  
 
                  

 

 

LODGIAN, INC. AND SUBSIDIARIES
Reconciliation of EBITDA and Adjusted EBITDA (non-GAAP measures) with Loss from Continuing
Operations (a GAAP measure)
(UNAUDITED)
                                                                 
    2006   2005
    Fourth Quarter   Third Quarter   Second Quarter   First Quarter   Fourth Quarter   Third Quarter   Second Quarter   First Quarter
    ($ in thousands)   ($ in thousands)
Continuing operations:
                                                                
(Loss) income from continuing operations
   $ (12,385 )   $ 1,285     $ 2,565     $ (1,732 )   $ 8,505     $ 3,222     $ 2,516     $ (3,407 )
Depreciation and amortization
     7,770       7,886       7,704       7,358       7,002       5,250       5,007       4,781  
Interest income
     (664 )     (786 )     (848 )     (309 )     (262 )     (340 )     (204 )     (220 )
Interest expense
     6,297       6,482       6,228       6,341       5,485       5,285       5,275       5,308  
Provision (benefit) for income taxes — continuing operations
     9,082       1,039       2,245       (725 )     8,383       12       67       67  
         
EBITDA from continuing operations
   $ 10,100     $ 15,906     $ 17,894     $ 10,933     $ 29,113     $ 13,429     $ 12,661     $ 6,529  
         
Adjustments to EBITDA:
                                                                
Post-emergence Chapter 11 expenses, included in corporate and other on consolidated statement of operations
   $ —     $ —     $ —     $ 3     $ (2 )   $ 13     $ 52     $ 110  
Impairment of long-lived assets
     225       324       16       193       1,019       83       64       78  
Casualty (gains) losses, net
     —       (3,465 )     30       132       (20,858 )     188       —       100  
Business interruption insurance proceeds
     (696 )     (2,252 )     (695 )     —       (1,223 )     (4,780 )     (1,431 )     —  
Write-off of receivable from non-consolidated hotel
     —       —       —       —       1       (200 )     946       —  
Write-off of investment in subsidiary for non-consolidated hotel
     —       —       —       —       —       —       170       —  
         
Adjusted EBITDA from continuing operations
   $ 9,629     $ 10,513     $ 17,245     $ 11,261     $ 8,050     $ 8,733     $ 12,462     $ 6,817  
           

 

 

LODGIAN, INC. AND SUBSIDIARIES
Reconciliation of EBITDA and Adjusted EBITDA (non-GAAP measures) with
Income (Loss) from Continuing Operations (a GAAP measure)
(UNAUDITED)
                         
    2006     2005     2004  
    ($ in thousands)  
Continuing operations:
                        
(Loss) income from continuing operations
   $ (10,267 )   $ 10,836     $ (27,383 )
Depreciation and amortization
     30,718       22,040       18,946  
Interest income
     (2,607 )     (1,026 )     (645 )
Interest expense
     25,348       21,353       31,033  
Preferred stock dividends
     —       —       9,383  
Loss on preferred stock redemption
     —       —       6,063  
Provision for income taxes — continuing operations
     11,641       8,529       225  
 
                  
EBITDA from continuing operations
   $ 54,833     $ 61,732     $ 37,622  
 
                  
Adjustments to EBITDA:
                        
Post-emergence Chapter 11 expenses, included in corporate and other on consolidated statement of operations
   $ 3     $ 173     $ 458  
Impairment of long-lived assets
     758       1,244       412  
Casualty (gains) losses, net
     (3,303 )     (20,570 )     1,576  
Business interruption insurance proceeds
     (3,643 )     (7,434 )     —  
Write-off of receivable from non-consolidated hotel
     —       747       —  
Adjustments to bankruptcy claims reserves
     —       —       (38 )
Write-off of investment in subsidiary for non-consolidated hotel
     —       170       —  
 
                  
Adjusted EBITDA from continuing operations
   $ 48,648     $ 36,062     $ 40,030  
 
                  
 
                        
West Palm Beach (WPB), Melbourne (MLB) and Marietta (MAR):
                        
(Loss) income from continuing operations
   $ (18,208 )   $ 15,401     $ (2,349 )
Depreciation and amortization
     5,302       882       1,165  
Interest income
     (15 )     (7 )     (13 )
Interest expense
     1,332       409       1,495  
Preferred stock dividends
     —       —       —  
Loss on preferred stock redemption
     —       —       —  
Provision for income taxes — continuing operations
     20,942       9,063       —  
 
                  
EBITDA from continuing operations
   $ 9,354     $ 25,749     $ 298  
 
                  
Adjustments to EBITDA:
                        
Post-emergence Chapter 11 expenses, included in corporate and other on consolidated statement of operations
   $ —     $ —     $ —  
Impairment of long-lived assets
     79       24       46  
Casualty (gains) losses, net
     (3,309 )     (20,757 )     1,563  
Business interruption insurance proceeds
     (3,643 )     (7,434 )     —  
Write-off of receivable from non-consolidated hotel
     —       —       —  
Adjustments to bankruptcy claims reserves
     —       —       (3 )
Write-off of investment in subsidiary for non-consolidated hotel
     —       —       —  
 
                  
Adjusted EBITDA from continuing operations
   $ 2,482     $ (2,418 )   $ 1,904  
 
                  
 
                        
Continuing operations excluding WPB, MLB and MAR:
                        
Income (loss) from continuing operations
   $ 7,941     $ (4,565 )   $ (25,034 )
Depreciation and amortization
     25,416       21,158       17,781  
Interest income
     (2,592 )     (1,019 )     (632 )
Interest expense
     24,016       20,944       29,538  
Preferred stock dividends
     —       —       9,383  
Loss on preferred stock redemption
     —       —       6,063  
(Benefit) provision for income taxes — continuing operations
     (9,301 )     (534 )     225  
 
                  
EBITDA from continuing operations
   $ 45,479     $ 35,983     $ 37,324  
 
                  
Adjustments to EBITDA:
                        
Post-emergence Chapter 11 expenses, included in corporate and other on consolidated statement of operations
   $ 3     $ 173     $ 458  
Impairment of long-lived assets
     679       1,220       366  
Casualty (gains) losses, net
     6       187       13  
Business interruption insurance proceeds
     (0 )     (0 )     —  
Write-off of receivable from non-consolidated hotel
     —       747       —  
Adjustments to bankruptcy claims reserves
     —       —       (35 )
Write-off of investment in subsidiary for non-consolidated hotel
     —       170       —  
 
                  
Adjusted EBITDA from continuing operations
   $ 46,166     $ 38,480     $ 38,126  
 
                  

 

 

LODGIAN, INC. AND SUBSIDIARIES
Reconciliation of EBITDA and Adjusted EBITDA (non-GAAP measures) with
Income (Loss) from Continuing Operations (a GAAP measure)
(UNAUDITED)
                 
    Three months ended  
($ in thousands)   Dec. 31, 2006     Dec. 31, 2005  
Continuing operations:
                
(Loss) income from continuing operations
   $ (12,385 )   $ 8,505  
Depreciation and amortization
     7,770       7,002  
Interest income
     (664 )     (262 )
Interest expense
     6,297       5,485  
Provision for income taxes — continuing operations
     9,082       8,383  
 
            
EBITDA
   $ 10,100     $ 29,113  
 
            
Adjustments to EBITDA:
                
Post-emergence Chapter 11 expenses, included in corporate and other on consolidated statement of operations
   $ —     $ (2 )
Impairment of long-lived assets
     225       1,019  
Casualty (gains) losses, net
     —       (20,858 )
Business interruption insurance proceeds
     (696 )     (1,223 )
Write-off of receivable from non-consolidated hotel
     —       1  
Write-off of investment in subsidiary for non-consolidated hotel
     —       —  
 
            
Adjusted EBITDA
   $ 9,629     $ 8,050  
 
            
 
                
West Palm Beach (WPB), Melbourne (MLB) and Marietta (MAR):
                
(Loss) income from continuing operations
   $ (20,363 )   $ 11,798  
Depreciation and amortization
     1,346       227  
Interest income
     (4 )     (1 )
Interest expense
     357       56  
Provision for income taxes — continuing operations
     19,669       9,063  
 
            
EBITDA
   $ 1,006     $ 21,143  
 
            
Adjustments to EBITDA:
                
Post-emergence Chapter 11 expenses, included in corporate and other on consolidated statement of operations
   $ —     $ —  
Impairment of long-lived assets
   $ 3     $ 23  
Casualty (gains) losses, net
     —       (20,863 )
Business interruption insurance proceeds
     (695 )     (1,223 )
Write-off of receivable from non-consolidated hotel
     —       —  
Write-off of investment in subsidiary for non-consolidated hotel
     —       —  
 
            
Adjusted EBITDA
   $ 314     $ (921 )
 
            
 
                
Continuing operations excluding WPB, MLB and MAR:
                
Income (loss) from continuing operations
   $ 7,978     $ (3,293 )
Depreciation and amortization
     6,424       6,775  
Interest income
     (660 )     (261 )
Interest expense
     5,940       5,429  
Benefit for income taxes — continuing operations
     (10,587 )     (680 )
 
            
EBITDA
   $ 9,094     $ 7,970  
 
            
Adjustments to EBITDA:
                
Post-emergence Chapter 11 expenses, included in corporate and other on consolidated statement of operations
   $ —     $ (2 )
Impairment of long-lived assets
   $ 222     $ 996  
Casualty (gains) losses, net
     —       5  
Business interruption insurance proceeds
     (1 )     0  
Write-off of receivable from non-consolidated hotel
     —       1  
Write-off of investment in subsidiary for non-consolidated hotel
     —       —  
 
            
Adjusted EBITDA
   $ 9,315     $ 8,971  
 
            

 

 

Lodgian, Inc.
4th Quarter 2006 Supplemental Operating Information
(Unaudited)
                                             
Hotel   Room       Three Months Ended    
Count   Count       December 30, 2006   December 30, 2005   Increase (Decrease)
44     8,117    
All Continuing Operations
                                
           
Occupancy
     62.9 %     63.2 %             -0.5 %
           
ADR
   $ 99.51     $ 92.32     $ 7.19       7.8 %
           
RevPAR
   $ 62.57     $ 58.32     $ 4.25       7.3 %
           
 
                                
43     7,924    
All Continuing Operations less one hotel closed in 2006 due to a fire
                                
           
Occupancy
     62.9 %     62.8 %             0.2 %
           
ADR
   $ 99.51     $ 93.69     $ 5.82       6.2 %
           
RevPAR
   $ 62.57     $ 58.84     $ 3.73       6.3 %
           
RevPAR Index
   $ 1.01     $ 0.99               2.5 %
           
 
                                
41     7,433    
Continuing Operations less two hotels closed in 2005 due to hurricane damage and one hotel closed in 2006 due to fire
                                
           
Occupancy
     63.0 %     62.9 %             0.2 %
           
ADR
   $ 98.74     $ 93.68     $ 5.06       5.4 %
           
RevPAR
   $ 62.19     $ 58.88     $ 3.31       5.6 %
           
RevPAR Index
     100.8 %     99.9 %             0.9 %
           
 
                                
33     5,664    
Continuing Operations less two hotels closed in 2005 due to hurricane damage, one hotel closed in 2006 due to fire and hotels under renovation in 2005 and 2006
                                
           
Occupancy
     62.8 %     64.3 %             (2.3 %)
           
ADR
   $ 97.69     $ 90.52     $ 7.17       7.9 %
           
RevPAR
   $ 61.33     $ 58.23     $ 3.10       5.3 %
           
RevPAR Index
     102.5 %     103.2 %             (0.7 %)
           
 
                                
20     3,335    
Hotels completing major renovations in 2004 and 2005
                                
           
Occupancy
     65.6 %     64.5 %             1.7 %
           
ADR
   $ 100.77     $ 98.05     $ 2.72       2.8 %
           
RevPAR
   $ 66.14     $ 63.20     $ 2.94       4.7 %
           
RevPAR Index
     101.4 %     97.9 %             3.6 %
           
 
                                
12     1,398    
Marriott Hotels
                                
           
Occupancy
     67.1 %     69.9 %             -4.0 %
           
ADR
   $ 109.80     $ 97.86     $ 11.94       12.2 %
           
RevPAR
   $ 73.64     $ 68.43     $ 5.21       7.6 %
           
RevPAR Index
     118.1 %     114.0 %             3.6 %
           
 
                                
4     777    
Hilton Hotels
                                
           
Occupancy
     60.0 %     62.2 %             -3.5 %
           
ADR
   $ 104.93     $ 97.64     $ 7.29       7.5 %
           
RevPAR
   $ 62.91     $ 60.69     $ 2.22       3.7 %
           
RevPAR Index
     93.8 %     94.6 %             (0.8 %)
           
 
                                
22     4,750    
IHG Hotels less two hotels closed in 2005 due to hurricane damage and one hotel closed in 2006 due to fire.
                                
           
Occupancy
     62.0 %     59.8 %             3.7 %
           
ADR
   $ 95.02     $ 88.31     $ 6.71       7.6 %
           
RevPAR
   $ 58.94     $ 52.77     $ 6.17       11.7 %
           
RevPAR Index
     97.6 %     94.6 %             3.2 %
           
 
                                
3     508    
Other Brands and Independent Hotels (A)
                                
           
Occupancy
     65.3 %     73.5 %             (11.2 %)
           
ADR
   $ 91.77     $ 118.42     ($ 26.65 )     -22.5 %
           
RevPAR
   $ 59.95     $ 87.01     ($ 27.06 )     -31.1 %
           
RevPAR Index
     94.7 %     114.9 %             (17.6 %)

 

 

Lodgian, Inc.
2006 Supplemental Operating Information
(Unaudited)
                                             
Hotel   Room       Twelve Months Ended    
Count   Count       December 31, 2006   December 31, 2005   Increase (Decrease)
44     8,117    
All Continuing Operations
                                
           
Occupancy
     67.5 %     65.9 %             2.4 %
           
ADR
   $ 101.47     $ 91.51     $ 9.96       10.9 %
           
RevPAR
   $ 68.45     $ 60.35     $ 8.10       13.4 %
           
 
                                
43     7,924    
All Continuing Operations less one hotel closed in 2006 due to fire
                                
           
Occupancy
     67.4 %     66.0 %             2.1 %
           
ADR
   $ 101.54     $ 92.43     $ 9.11       9.9 %
           
RevPAR
   $ 68.48     $ 60.96     $ 7.52       12.3 %
           
RevPAR Index
     99.6 %     95.3 %             4.5 %
           
 
                                
41     7,433    
Continuing Operations less two hotels closed in 2005 due to hurricane damage and one hotel closed in 2006 due to fire
                                
           
Occupancy
     67.9 %     66.0 %             2.9 %
           
ADR
   $ 100.19     $ 92.43     $ 7.76       8.4 %
           
RevPAR
   $ 68.03     $ 60.97     $ 7.06       11.6 %
           
RevPAR Index
     99.7 %     96.6 %             3.2 %
           
 
                                
33     5,664    
Continuing Operations less two hotels closed in 2005 due to hurricane damage, one hotel closed in 2006 due to fire and hotels under renovation in 2005 and/or 2006.
                                
           
Occupancy
     68.2 %     68.6 %             (0.6 %)
           
ADR
   $ 98.43     $ 91.21     $ 7.22       7.9 %
           
RevPAR
   $ 67.09     $ 62.57     $ 4.52       7.2 %
           
RevPAR Index
     101.6 %     102.6 %             (1.0 %)
           
 
                                
20     3,335    
Hotels completing major renovations in 2004 and 2005
                                
           
Occupancy
     69.5 %     65.0 %             6.9 %
           
ADR
   $ 102.77     $ 92.64     $ 10.13       10.9 %
           
RevPAR
   $ 71.20     $ 60.22     $ 10.98       18.2 %
           
RevPAR Index
     100.0 %     92.0 %             8.7 %
           
 
                                
12     1,398    
Marriott Hotels
                                
           
Occupancy
     72.5 %     73.0 %             (0.7 %)
           
ADR
   $ 106.59     $ 96.16     $ 10.43       10.8 %
           
RevPAR
   $ 77.31     $ 70.15     $ 7.16       10.2 %
           
RevPAR Index
     116.9 %     115.5 %             1.2 %
           
 
                                
4     777    
Hilton Hotels
                                
           
Occupancy
     64.7 %     66.9 %             (3.3 %)
           
ADR
   $ 104.47     $ 96.59     $ 7.88       8.2 %
           
RevPAR
   $ 67.57     $ 64.61     $ 2.96       4.6 %
           
RevPAR Index
     91.3 %     91.7 %             (0.4 %)
           
 
                                
22     4,750    
IHG Hotels less two hotels closed in 2005 due to hurricane damage and one hotel closed in 2006 due to fire
                                
           
Occupancy
     67.2 %     64.7 %             3.9 %
           
ADR
   $ 97.32     $ 90.69     $ 6.63       7.3 %
           
RevPAR
   $ 65.39     $ 58.69     $ 6.70       11.4 %
           
RevPAR Index
     96.4 %     93.1 %             3.5 %
           
 
                                
3     508    
Other Brands and Independent Hotels (A)
                                
           
Occupancy
     66.7 %     57.1 %             16.8 %
           
ADR
   $ 101.72     $ 90.28     $ 11.44       12.7 %
           
RevPAR
   $ 67.85     $ 51.50     $ 16.35       31.7 %
           
RevPAR Index
     97.6 %     85.8 %             13.8 %
 
(A)   Other Brands and Independent Hotels include the Radisson New Orleans Airport Hotel in Kenner, LA which experienced dramatic increases in Occupancy and ADR as a result of Hurricane Katrina.

 

 

Lodgian, Inc.
Assets Held for Sale as of March 1, 2007
             
          Location   Brand   Rooms
Dothan, AL
   Quality Inn     102  
Dothan, AL
   Holiday Inn Express     112  
Sheffield, AL
   Holiday Inn     202  
Winter Haven, FL
   Holiday Inn     228  
Pensacola, FL
   Holiday Inn     152  
Pensacola, FL
   Holiday Inn Express     122  
Augusta, GA
   Fairfield Inn     117  
Brunswick, GA
   Park Inn     126  
Macon, GA
   Ramada Plaza     297  
Cedar Rapids, IA
   Crowne Plaza     275  
Ft. Wayne, IN
   Holiday Inn     208  
Louisville, KY
   Clarion     393  
Frederick, MD
   Holiday Inn     158  
Lansing, MI
   Holiday Inn     244  
St. Paul, MN
   Holiday Inn     156  
Hamburg, NY
   Holiday Inn     130  
Jamestown, NY
   Holiday Inn     146  
Lancaster, PA
   Holiday Inn     189  
Pittsburgh (Greentree), PA
   Holiday Inn     201  
York, PA
   Holiday Inn     100  
Charleston, SC
   Ramada     197  
Burlington, VT
   Independent     117  
Clarksburg, WV
   Holiday Inn     159  
Fairmont, WV
   Holiday Inn     106