TORONTO— AFM Hospitality Corp., a North American hospitality franchise and management company, reported significant profit improvement and long-term debt reduction in 2001. AFM grew revenue by 21% to US$9.7 million and earnings from continuing operations to US$0.06 per share, from a loss of US$0.08 per share in 2000 on a diluted basis. The net loss for the year was reduced to US$0.02 per share versus a loss of US$0.12 per share in 2000. The turn-around in income from continuing operations, coupled with a 57% increase in the number of franchise and management agreements, sets the stage for improved income and balance sheet performance in 2002, noted AFM. The net addition of 66 franchise or management agreements committed, executed or commenced during 2001 involved all 10 brands in AFM’s franchise portfolio and included hotels under management in both Canada and the United States. Highlights of achievements during 2001 included: — Increasing shareholders’ equity from US$4.5 million to US$6.5 million, an annual growth of 46%. — Acquiring the Canadian rights to franchise the Park Plaza and Park Inns hotel brands from Carlson Hospitality Worldwide. — Acquiring the Canadian rights to franchise the La Quinta and La Quinta Inn & Suites hotel brands from U.S.-based LaQuinta Corp. — Selling AFM’s beneficial interest in the 205 room Howard Johnson Plaza Royal Connaught Hotel in Hamilton, Ontario. AFM also obtained a new 20-year management agreement for the hotel, and maintained its interest in the Howard Johnson license agreement. — Reducing long-term debt by USD$4.0 million, or 55% from USD$7.1 million to USD$3.2 million. In 2002, AFM’s primary focus will be to increase the number of hotels franchised by its respective brands. It will also seek further expansion of its hotel management and franchised services, acquire existing management companies with clusters of properties and management contracts, and continue leveraging AFM’s purchasing power and expanding the AFM Preferred Alliance Group (formerly HFS Purchasing Services).
