Boykin Posts 1Q03 Financial Results

CLEVELAND, OH— Boykin Lodging Co. reported financial results for the first quarter ended Mar.ch 31, 2003 showed the company’s loss applicable to common shareholders totaled $2.7 million, or $0.16 per share, compared with the same period last year when the loss totaled $1.9 million, or $0.11 per share. Funds from operations applicable to common shareholders (FFO) for the first quarter totaled $2.6 million, or $0.15 per fully diluted share, representing a decrease from first-quarter 2002 FFO of $0.24 per share. First-quarter 2003 results include the hotel operating results for the Marriott’s Hunt Valley Inn, for which the Taxable REIT Subsidiary (TRS) structure was implemented effective Sept. 1, 2002, while comparative first-quarter 2002 results include lease revenue for the property. Moreover, as the company sold two assets— the Knoxville Hilton and the Hampton Inn Lake Norman— during the first quarter, the operating results of the properties for the quarter are included in the financial statements as discontinued operations. The operating results for first-quarter 2002 related to these properties have been reclassified to discontinued operations to conform to the current presentation. Revenues for the quarter ended Mar. 31, 2003 were $66.1 million, compared with revenues of $59.6 million for the same period last year. Revenue per available room (RevPAR) for the 31 hotels owned as of the end of the first quarter decreased 0.5% to $51.06 from last year’s corresponding $51.29. It was also noted occupancy rose slightly to 56.1% from 55.4%, while the average daily room rate (ADR) decreased 1.7% to $91.04 from $92.64. During the first quarter, there were approximately 3,600 room-nights out of service related to renovations, or 0.5% of the company’s room inventory. For the same period last year, there were approximately 20,500 room-nights out of service due to renovation activity, or approximately 2.5% of the company’s room inventory for the quarter. For the 27 consolidated properties operated under the TRS structure for both years, RevPAR declined 3.5% to $50.95 for the first quarter of 2003 versus $52.81 for the year-earlier period. The RevPAR change resulted from a slight increase in occupancy to 57.2% in 2003 versus 57.1% in 2002, offset by a 3.7% decrease in ADR to $89.15 in 2003 compared with $92.57 for the same period in the prior year. Hotel profit margins for these properties, defined as hotel-operating profit (hotel revenues less hotel operating expenses) as a percentage of hotel revenues, averaged 21.4% for the first quarter of 2003, compared with 26.0% for the 2002 period. Due to progress made on the White Sand Villas project, the company began recognizing revenue under the percentage of completion method during the first quarter of 2003. Included in first-quarter 2003 results are $6.4 million of revenue and $2.3 million of gross profit related to condominium development. The operating results of the two properties sold during the quarter are reflected as discontinued operations and totaled losses of $0.4 million in the first quarter of 2003 and $0.2 million during the same period in 2002, net of minority interest. Also included within first-quarter 2003 discontinued operations is the net gain of $1.2 million, net of minority interest, recognized upon the sale of the hotels. Finally, EBITDA for the first quarter, including the company’s share of EBITDA from unconsolidated joint-venture subsidiaries, totaled $9.8 million, an 8.3% decrease from last years first-quarter EBITDA of $10.6 million.