DiamondRock Reports Preliminary First Quarter RevPAR and EBITDA Results
BETHESDA, Md.,
(Logo: http://www.newscom.com/cgi-bin/prnh/20040708/DCTH028 )
The projected financial information for the fiscal quarter ended
-- RevPAR: DiamondRock's same-store revenue per available room, or
RevPAR, is expected to be approximately $98.80 , which is a decrease of
16.5 percent compared to the first fiscal quarter in 2008.
-- EBITDA: DiamondRock's EBITDA is expected to be between $17.5 million
and $19.5 million , compared to EBITDA of $28.8 million in the first
quarter of 2008. DiamondRock's EBITDA was reduced $1.4 million from
the impact of non-cash ground rent and non-cash amortization of
unfavorable contract liabilities for each of the fiscal quarters ended
March 27, 2009 and March 21, 2008 .
The comparisons of the 2009 first fiscal quarter to the 2008 first fiscal quarter are positively impacted by disruption from the renovation of the Chicago Marriott, which was ongoing during the first fiscal quarter in 2008. Excluding the Chicago Marriott from DiamondRock's 2009 and 2008 first fiscal quarters would increase DiamondRock's 2009 RevPAR contraction from the comparable period of 2008 by approximately 2.4%.
In addition, during the first fiscal quarter, DiamondRock repaid
approximately
Update on Near-Term Debt Maturities
DiamondRock has a limited amount of debt with near-term maturities and
believes it can refinance or repay all of such debt. Over 80% of
DiamondRock's debt matures in 2015 or later. DiamondRock expects that it will
be able to either refinance or repay the approximately
Possible Refinancing
DiamondRock has a
Update on Hotel Sales
DiamondRock recently announced that it was considering the sale of one or more of its hotels and had engaged two brokers to market eleven of its hotels. While a number of prospective buyers have toured DiamondRock's hotels and some have submitted bids, to date, DiamondRock has not received any bids that it considers attractive compared to its internal valuation. DiamondRock nevertheless continues to evaluate this process.
Non-GAAP Financial Measure
DiamondRock presents EBITDA, which is a non-GAAP financial measure, that it believes is useful to investors as key measures of its operating performance. DiamondRock cautions investors that amounts presented in accordance with its definition of EBITDA may not be comparable to similar measures disclosed by other companies, since not all companies calculate EBITDA in the same manner. EBITDA should not be considered as an alternative measure of DiamondRock's net income (loss), operating performance, cash flow or liquidity. EBITDA may include funds that may not be available for DiamondRock's discretionary use due to functional requirements to conserve funds for capital expenditures and property acquisitions and other commitments and uncertainties. Although DiamondRock believes that EBITDA can enhance your understanding of its results of operations, this non-GAAP financial measure, when viewed individually, is not necessarily a better indicator of any trend as compared to GAAP measures such as net income (loss) or cash flow from operations. In addition, you should be aware that adverse economic and market conditions may harm DiamondRock's cash flow. Under this section, as required, DiamondRock includes a quantitative reconciliation of EBITDA to the most directly comparable GAAP financial performance measure, which is net income (loss).
EBITDA is defined as net income (loss) before interest, taxes, depreciation and amortization. DiamondRock believes it is a useful financial performance measure for it and for its stockholders and is a complement to net income and other financial performance measures provided in accordance with GAAP. DiamondRock uses EBITDA to measure the financial performance of its operating hotels because it excludes expenses such as depreciation and amortization, taxes and interest expense, which are not indicative of operating performance. By excluding interest expense, EBITDA measures DiamondRock's financial performance irrespective of its capital structure or how it finances its properties and operations. By excluding depreciation and amortization expense, which can vary from hotel to hotel based on a variety of factors unrelated to the hotels' financial performance, DiamondRock can more accurately assess the financial performance of its hotels. Under GAAP, hotels are recorded at historical cost at the time of acquisition and are depreciated on a straight-line basis. By excluding depreciation and amortization, DiamondRock believes EBITDA provides a basis for measuring the financial performance of hotels unrelated to historical cost. However, because EBITDA excludes depreciation and amortization, it does not measure the capital DiamondRock requires to maintain or preserve its fixed assets. In addition, because EBITDA does not reflect interest expense, it does not take into account the total amount of interest DiamondRock pays on outstanding debt nor does it show trends in interest costs due to changes in its borrowings or changes in interest rates. Because DiamondRock uses EBITDA to evaluate its financial performance, DiamondRock reconciles it to net income (loss) which is the most comparable financial measure calculated and presented in accordance with GAAP. EBITDA does not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to operating income or net income determined in accordance with GAAP as an indicator of performance or as an alternative to cash flows from operating activities as an indicator of liquidity. The following is a reconciliation between net income (loss) and EBITDA (unaudited in thousands):
Fiscal Quarter Ended Fiscal Quarter Ended
March 27, 2009 March 21, 2008
(Projected) (Historical)
Low End High End
Net (loss) income(1) $(8,000) $(5,500) $5,177
Interest expense 12,000 11,500 10,695
Income tax benefit (6,500) (5,500) (3,723)
Depreciation and
amortization 20,000 19,000 16,687
EBITDA $17,500 $19,500 $28,836
(1) DiamondRock's EBITDA and net (loss) income was reduced $1.4 million
for the impact of non-cash ground rent and non-cash amortization of
unfavorable contract liabilities for each of the fiscal quarters ended
March 27, 2009 and March 21, 2008 .
About DiamondRock Hospitality Company
This press release contains forward-looking statements within the meaning
of federal securities laws and regulations. These forward-looking statements
are identified by their use of terms and phrases such as "anticipate,"
"believe," "could," "estimate," "expect," "intend," "may," "plan," "predict,"
"project," "should," "will," "continue" and other similar terms and phrases,
including references to assumptions and forecasts of future results.
Forward-looking statements are not guarantees of future performance and
involve known and unknown risks, uncertainties and other factors which may
cause the actual results to differ materially from those anticipated at the
time the forward-looking statements are made. These risks include, but are
not limited to: changes in preliminary first quarter results that may arise
during the financial statement closing process and quarterly review; the
ability to refinance the mortgage on the Courtyard Manhattan/Midtown East;
national and local economic and business conditions that will affect occupancy
rates at its hotels and the demand for hotel products and services; operating
risks associated with the hotel business; risks associated with the level of
its indebtedness and its ability to meet covenants in its debt agreements;
relationships with property managers; its ability to maintain its properties
in a first-class manner, including meeting capital expenditure requirements;
its ability to complete planned renovation on budget; its ability to compete
effectively in areas such as access, location, quality of accommodations and
room rate structures; changes in travel patterns, taxes and government
regulations which influence or determine wages, prices, construction
procedures and costs; its ability to complete acquisitions; its ability to
raise equity capital; the performance of acquired properties after they are
acquired; necessary capital expenditures on the acquired properties; and its
ability to continue to satisfy complex rules in order for DiamondRock to
qualify as a REIT for federal income tax purposes; and other risks and
uncertainties associated with its business described from time to time in its
filings with the
SOURCEDiamondRock Hospitality Company -0-04/13/2009 /CONTACT:Christopher King ofDiamondRock Hospitality Company , +1-240-744-1150, info@drhc.com/ /Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20040708/DCTH028 AP Archive: http://photoarchive.ap.org PRN Photo Desk photodesk@prnewswire.com/ /Web Site: http://www.drhc.com / (DRH) CO:DiamondRock Hospitality Company ST:Maryland IN: RLT CRL SU: ERP PR -- PH97926 -- 172604/13/2009 16:02 EDT http://www.prnewswire.com