TAKEOVER RUMOUR.....END OF WEEK OR NEXT WEEK
Servico, Inc. owns and manages 72 hotels nationwide. Substantially all of the Company's hotels are ''full service'' properties offering lodging, food, beverage and meeting facilities. For the six months ended 6/30/98, total revenues increased 38% to $185.3 million. Net income before extraordinary item increased from $4.5 million to $10.3 million. Revenues reflect the acquisitions of hotels. Earnings also reflect a lower interest expense due to decreased debt levels.
Number of brokers recommending as:
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Strong Buy 3
Moderate Buy 0
Hold 0
Moderate Sell 0
Strong Sell 0
Per-Share Data
Book Value (mrq) $11.70
Earnings (ttm) $0.91
Sales (ttm) $17.49
Cash (mrq) $1.95
Valuation Ratios
Price/Book (mrq) 0.56
Price/Earnings (ttm) 7.13
Price/Sales (ttm) 0.37
Long-Term Debt/Equity (mrq) 1.21
Total Cash (mrq) $39.0M
Short Interest Shares Short of Nov 9, 1998 1.89M
Short Ratio 5.38
Huge short position.............Awesome chart with bottom in place
RECENT NEWS:
Servico, Inc. Reports Third Quarter And Nine Month Results
INCOME FROM RECURRING OPERATIONS UP 5% FOR THE QUARTER AND 68% FOR NINE MONTHS
WEST PALM BEACH, Fla.--(BUSINESS WIRE)--Nov. 16, 1998-- Servico, Inc. (NYSE:SER - news), a nationwide owner and operator of hotels, today announced a 5% increase in 1998 third quarter recurring net income and a 39% increase in earnings before interest, taxes, depreciation and amortization (''EBITDA'') compared with 1997's third quarter.
For the three months ended September 30, 1998, Servico reported recurring net income of $5.2 million, a 5% increase over the $5.0 million reported for the comparable 1997 period and recurring earnings per share increased 17% to $.27 compared with $.23 for the comparable 1997 period. Revenues for the quarter increased 48% to $101.4 million from $68.6 million reported in the prior year's quarter and EBITDA increased 39% to $25.3 million from $18.2 million in the third quarter of 1997.
For the nine months ended September 30, 1998, Servico reported recurring net income of $15.8 million, a 68% increase from the $9.4 million reported for the comparable 1997 period. Revenues during the 1998 nine month period increased to $286.6 million from $202.4 million in 1997 and EBITDA increased 40% to $74.1 million from $52.9 million for the comparable 1997 period. Recurring earnings per share for the nine months ended September 30, 1998 were $.78 based on 20.3 million shares outstanding as compared with $.69 per share and 13.7 million shares outstanding for the first nine months of 1997.
As previously announced, in the quarter and for the nine months Servico recognized a non-recurring charge of $18.9 million, net of income taxes, or $.98 per share, as a result of two swap transactions that were entered into by the Company in an effort to manage the interest rate risk associated with its financing of the Impac Hotel Group merger. The Company currently has no other pending swap transactions.
In the September 30, 1998 quarter, Company owned hotels achieved an occupancy rate of 73.4% and an average daily rate (''ADR'') of $73.77 which resulted in revenue per available room (''REVPAR'') of $54.15. This compares with occupancy of 71.8%, ADR of $70.58 and REVPAR of $50.68 for the comparable 1997 period. These results reflect a 6.8% increase in REVPAR for the third quarter of 1998 compared with the similar 1997 quarter.
David Buddemeyer, former Chairman of the Board and Chief Executive Officer of the Company, resigned from all of his positions with the Company effective as of November 13, 1998. Joseph C. Calabro was named Acting Chairman of the Board of Servico. Upon the consummation of the Impac merger, Robert S. Cole, currently the President of Impac, will become Chief Executive Officer of Lodgian. Lodgian will also establish an Office of the Chairman composed of directors Joseph C. Calabro, John Lang and Michael A. Leven, with Joseph C. Calabro serving as acting chairman of the Office of the Chairman.
Commenting on the results, Joseph C. Calabro stated, ''This has been an extremely difficult period for the Company. The third quarter of 1998 saw the lodging debt and credit markets reduced to a virtual standstill and the equity markets suffered a record setting quarterly decline. Unfortunately, the Company was also, during the period, caught in the middle of finalizing its financing of the Impac merger. Notwithstanding this, the Company's core operations remained strong with increases in revenues, increases in net income from operations and increases in EBITDA and we are extremely proud of these results.''
Servico currently owns or manages 90 hotels with more than 18,000 rooms located in 24 states, Canada and Europe. Pro forma for the pending Impac Hotel Group acquisition, Lodgian will own or manage 143 hotels with more than 27,000 rooms in 35 states, Canada and Europe. The hotels are primarily full service, providing food and beverage service as well as lodging and meeting facilities. Substantially all of Lodgian's hotels will be affiliated with nationally recognized hospitality franchises, including Marriott, Doubletree, Holiday Inn, Crowne Plaza, Hilton, Omni, Radisson, Sheraton and Westin. Lodgian will have assets in excess of $1.2 billion and will be one of the largest hotel owner/operators in the United States.
SERVICO ANNOUNCES EUROPEAN JOINT VENTURE, FINANCING COMMITMENT FOR MERGER WITH IMPAC HOTEL GROUP AND RESIGNATION OF DAVID BUDDEMEYER
WEST PALM BEACH, FLORIDA--(BUSINESS WIRE)--Nov. 9, 1998--Servico, Inc. (NYSE:SER), a nationwide owner and operator of hotels, announced the completion of a joint venture with Lehman Brothers for the purchase of several European hotel properties. The joint venture acquired six hotel subsidiaries of City Hotels located in Belgium and the Netherlands containing 1,200 rooms. As part of the joint venture, Servico will manage the day-to-day operations of the European hotels and oversee their renovation. This off-balance sheet transaction represents Servico's entrance into the European market.
Servico also announced that it has obtained a financing commitment from Lehman Brothers Holdings Inc. in connection with the previously announced merger with Impac Hotel Group. The financing commitment is subject to the satisfaction of customary conditions and the merger is expected to close before the end of the year. The terms of the merger call for Servico and Impac to merge and form a new company to be named Lodgian. Lodgian will own or manage 143 hotels with more than 27,000 rooms in 35 states, Canada and Europe, making it one of the largest independent, multi-brand owners and operators of hotels.
The financing commitment from Lehman Brothers in the amount of $265 million will be used to complete the Impac merger and includes funds necessary to make payment of approximately $31.5 million due as a result of two separate swap transactions that were entered into by Servico in an effort to manage the interest rate risk associated with its financing for the Impac merger.
David Buddemeyer, Chairman of the Board and Chief Executive Officer of Servico, will resign from all his positions with Servico upon the consummation of the merger.
Once the merger is completed, Robert S. Cole, currently the President of Impac, will become Chief Executive Officer of Lodgian. Lodgian will also establish an Office of the Chairman composed of directors Joseph C. Calabro, John Lang and Michael A. Leven, with Joseph C. Calabro serving as acting chairman of the Office of the Chairman. |
