- Generated RevPAR Growth of 7.7%
- Achieved Pro forma Adjusted EBITDA Growth of 13.1%
- Increases Full Year 2014 Guidance
IRVING, Texas, Aug. 12, 2014 // PRNewswire // -- La Quinta Holdings Inc. (NYSE: LQ) today reported its second quarter 2014 results on a pro forma basis, giving effect to La Quinta's initial public offering (IPO) and the related transactions as described below, as well as the results of operations for the second quarter 2014 on a historical basis.
Second Quarter 2014 Highlights:
Wayne B. Goldberg, President & Chief Executive Officer of La Quinta, said, "Our second quarter results demonstrate another quarter of solid operating performance delivered across our key metrics including strong RevPAR growth, franchise unit growth, EBITDA growth, and EBITDA margin growth. Overall, the lodging industry remains healthy, with a steadily improving economy and strong transient travel demand. La Quinta is extremely well-positioned to continue to capture this demand as we capitalize on our refreshed and upgraded portfolio and our repositioned brand. With 12 new franchise openings and increased occupancy during the quarter, our geographic reach and customer base continue to grow. Franchise interest remains robust for the La Quinta brand as evidenced by a growing pipeline, including three new domestic central business district properties and two new international markets. Furthermore, we remain committed to continue de-levering the balance sheet by utilizing our strong free cash flow to prepay debt and delivering on our strategic objectives, all of which are designed to increase shareholder value."
The results of operations for the Company, on a pro forma basis and on a historical basis, for the three months ended June 30, 2014 include the following highlights(1) ($ in thousands):
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The Company opened 12 franchised hotels with over 1,000 rooms in the second quarter and achieved net system-wide growth of 9 hotels with over 650 rooms. Year to date through June 30, 2014, the Company opened 24 franchised hotels with approximately 2,400 rooms. As of June 30, 2014, the Company had a pipeline of 190 franchised hotels totaling over 15,500 rooms, to be located in the United States, Mexico, Canada, Colombia, Honduras, Nicaragua, and Guatemala.
The Company's system-wide portfolio, as of June 30, 2014, consisted of 848 hotels representing approximately 85,000 rooms located predominantly across 47 U.S. states, as well as in Canada and Mexico. This portfolio includes 353 owned and operated hotels and 495 franchised hotels.
During the quarter, the Company made a voluntary prepayment of $80 million on its senior secured term loan facility. As of June 30, 2014, the Company had approximately $2.0 billion of outstanding indebtedness with a weighted average interest rate of approximately 4.4%, including the impact of an interest rate swap. Total cash and cash equivalents was $103.0 million as of June 30, 2014.
On April 14, 2014, the Company issued approximately 44 million shares of common stock at an IPO price of $17.00 per share, including the full exercise of the underwriters' option to purchase additional shares. Upon completion of the IPO, the Company had approximately 129.7 million shares outstanding on a fully diluted basis including approximately 0.35 million shares issued under the Company's omnibus incentive plan.
Concurrently with the consummation of the IPO, the Company entered into a credit agreement providing for senior secured credit facilities consisting of a $2.1 billion senior secured term loan facility, which will mature in 2021, and a $250.0 million senior secured revolving credit facility, which will mature in 2019. At closing, the Company also entered into a five year interest rate swap on $850 million of the term loan principal balance.
The Company used the net proceeds from the IPO, together with the net proceeds from the senior secured term loan facility and available cash, to repay approximately $2.7 billion of the La Quinta Predecessor Entities' outstanding debt. Any remaining net proceeds are being used for general corporate purposes.
Based upon management's current estimates, the Company is increasing its guidance for full year 2014 and is expecting:
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La Quinta Holdings Inc. will host a conference call to discuss second quarter 2014 results on Tuesday, August 12, 2014 at 5:00 p.m. Eastern Daylight Time. Participants may listen to the live webcast by dialing (877) 407-3982, or (201) 493-6780 for international participants, or by logging onto the La Quinta Investor Relations website at www.lq.com/investorrelations. Participants are encouraged to dial into the call or link to the webcast at least fifteen minutes prior to the scheduled start time.
A replay of the call will be available from approximately 8 p.m. Eastern Time on August 12, 2014 through midnight Eastern Time on August 26, 2014. To access the replay, the domestic dial-in number is (877) 870-5176, the international dial-in number is (858) 384-5517, and the passcode is 13582658. The archive of the webcast will be available on the Company's website for a limited time.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934. These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial results, our liquidity and capital resources and other non-historical statements, including the statements in the "Outlook" section of this press release. You can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "could," "seeks," "projects," "predicts," "intends," "plans," "estimates," "anticipates" or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties, including those described under the section entitled "Risk Factors" in our prospectus dated April 8, 2014, filed with the Securities and Exchange Commission ("SEC") pursuant to Rule 424(b) of the Securities Act on April 9, 2014, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC's website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in our filings with the SEC. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.
We refer to certain non-GAAP financial measures in this press release including Adjusted EBITDA, Adjusted EBITDA margins, Segment Adjusted EBITDA, Adjusted Net Income, and Adjusted Earnings Per Share. Please see the schedules to this press release for additional information and reconciliations of such non-GAAP financial measures.
La Quinta Holdings Inc. (LQ) is a leading owner, operator and franchisor of select-service hotels primarily serving the upper-midscale and midscale segments. The Company's owned and franchised portfolio consists of more than 840 La Quinta Inn & Suites™ and La Quinta Inn™ branded hotels representing approximately 85,000 rooms located in 47 states, as well as Canada and Mexico. La Quinta's team is committed to providing guests with a refreshing and engaging experience. For more information, please visit: www.LQ.com.
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LA QUINTA HOLDINGS INC.
DEFINED TERMS"EBITDA" and "Adjusted EBITDA." Earnings before interest, taxes, depreciation and amortization ("EBITDA") is a commonly used measure in many industries. We adjust EBITDA when evaluating our performance because we believe that the adjustment for certain items, such as restructuring and acquisition transaction expenses, impairment charges related to long-lived assets, non-cash equity-based compensation, discontinued operations, and other items not indicative of ongoing operating performance, including other items relating to the IPO Transactions, provides useful supplemental information to management and investors regarding our ongoing operating performance. We believe that EBITDA and Adjusted EBITDA provide useful information to investors about us and our financial condition and results of operations for the following reasons: (i) EBITDA and Adjusted EBITDA are among the measures used by our management team to evaluate our operating performance and make day-to-day operating decisions; and (ii) EBITDA and Adjusted EBITDA are frequently used by securities analysts, investors, lenders and other interested parties as a common performance measure to compare results or estimate valuations across companies in our industry.EBITDA and Adjusted EBITDA are not recognized terms under GAAP, have limitations as analytical tools and should not be considered either in isolation or as a substitute for net income (loss), cash flow or other methods of analyzing our results as reported under GAAP. Some of these limitations are:
Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as discretionary cash available to us to reinvest in the growth of our business or as measures of cash that will be available to us to meet our obligations."Adjusted Net Income" and "Adjusted Earnings Per Share" are not recognized terms under U.S. GAAP and should not be considered as alternatives to net income (loss), earnings per share, or other measures of financial performance or liquidity derived in accordance with U.S. GAAP. In addition, the Company's definition of Adjusted Net Income and Adjusted Earnings Per Share, may not be comparable to similarly titled measures of other companies.Adjusted Net Income and Adjusted Earnings Per Share are included to assist investors in performing meaningful comparisons of past, present and future operating results and as a means of highlighting the results of the Company's ongoing operations."ADR" or "average daily rate" means hotel room revenues divided by total number of rooms sold in a given period."comparable hotels" means hotels that: (i) were active and operating in our system for at least one full calendar year as of the end of the applicable period and were active and operating as of January 1st of the previous year; and (ii) have not sustained substantial property damage or business interruption or for which comparable results are not available. Management uses comparable hotels as the basis upon which to evaluate ADR, occupancy, RevPAR and RevPAR Index on a system-wide basis and for each of our reportable segments."occupancy" means the total number of rooms sold in a given period divided by the total number of rooms available at a hotel or group of hotels."RevPAR" or "revenue per available room" means the product of the ADR charged and the average daily occupancy achieved."RevPAR Index" measures a hotel's fair market share of its competitive set's revenue per available room. "system-wide" refers collectively to our owned, franchised and managed hotel portfolios. SOURCE La Quinta Holdings Inc.
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The upper-midscale La Quinta by Wyndham brand is a bright spot in every travelers' journey.