SILVER SPRING, MD— Choice Hotels International, Inc. has posted second-quarter net income of $18.5 million, or $0.53 diluted earnings per share (EPS), a 13% increase in EPS over the same period of a year ago, when the company reported net income of $17.1 million or $0.47 diluted EPS. Choice’s operating income increased to $32.1 million for the second quarter, a 12% gain over the $28.7 million reported at the end of second-quarter 2003. Franchising margins have increased to 61.5% from 58.1% in the year-ago period. Operating cash flows increased to $47.4 million or 18% compared to the same period of 2003. “Choice continues to enjoy very strong franchise development while seeing increased travel demand at our franchised hotels,” said Charles Ledsinger Jr., president/CEO. “We experienced 31% growth in our new domestic hotel franchise contracts, compared to a record development performance in 2003….” The company reported total revenues of $107.2 million for second-quarter 2004, compared to $103.5 million last year, an increase of 4%. Franchising revenues, which include royalty fees, initial and relicensing fees, partner services revenue and other revenue, were $51.8 million, an increase of 6% from the $49 million reported in the same period a year ago. Choice reported royalty revenues of $41.7 million for the quarter, compared to $37.6 million for the same period in 2003, an increase of 11%. Systemwide domestic RevPAR was $36.10 compared to $33.81 for the second quarter of 2003, an increase of 7%. The total number of domestic Choice hotels on-line grew by 4.5% to 3,723 (301,182 rooms on-line) as of June 30 from 3,562 (289,701 rooms on-line) as of the same period a year ago. Net domestic property additions in the second quarter were 35, compared to 46 net domestic additions in the same period of 2003. Choice executed 151 new domestic hotel franchise contracts representing 13,094 rooms in second-quarter 2004, compared to 115 new contracts representing 10,125 rooms for the same period a year ago, increases of approximately 30%. In second quarter 2004, 33 contracts for new construction hotels, representing 2,226 rooms were executed, compared to 28 contracts, representing 1,899 rooms for the same period a year ago, each representing an increase of better than 17%.
