Lodgian Room Revenue Up Despite Hurricane Losses

Fourth quarter room revenue from continuing operations was $52.2 million versus $52 million in the same period last year. Total revenue was $74.1 million, up from $73.4 million. Revenue per available room rose 4.9%; occupancy increased 0.6%; and the average daily rate was up by 4.3% compared to last year's quarter.

Losses from continuing operations were reduced to $11 million from $17 million in the final quarter but stood at a negative $35.8 million for the full year compared to a loss of $27 million in 2003. Lodgian expects to spend $84.8 million in 2005 capital improvements at its continuing operations hotels.

Earnings before interest, taxes, depreciation and amortization was $2.5 million versus $1.7 million a year ago for the quarter. For the year, EBITDA was $49.5 million compared to $39 million in 2003.

"Following one of the most challenging periods in the lodging industry's history, we have moved into a strong, multi-year recovery," says W. Thomas Parrington, Lodgian's president and CEO. "Business travel demand has continued to improve and is augmented by the leisure sector which has remained strong."

Parrington, adds, "These improving fundamentals and an expanding US economy, combined with the positive effects of our completed renovations, allowed us to report solid results for a very difficult year filled with more challenges than we had anticipated."

The CEO notes several achievements for the year. Among them was the completion of 16 hotel renovations and the spending of $35.2 million on continuing operations hotels. Lodgian sold 11 properties and two land parcels in 2004 for total net proceeds of $41.7 million of which $37.4 million was used to reduce debt. The company still has eight hotels and one land parcel on the selling block.

Lodgian also completed a one-for-three reverse stock split and a common stock offering during 2004. A portion of the proceeds were used to redeem the company's Series A preferred shares, resulting in annual savings of about $17 million in preferred dividend interest expense, Parrington says.