SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
APRIL 22, 1997
HOST MARRIOTT SERVICES CORPORATION
DELAWARE 1-14040 52-1938672
- ------------------------ ------------------------ ----------------------
(State of Incorporation) (Commission File Number) (I.R.S. Employer
Identification Number)
6600 ROCKLEDGE DRIVE
BETHESDA, MARYLAND 20817
(301) 380-7000
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
None.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
None.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
None.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
None.
ITEM 5. OTHER EVENTS.
News Release dated April 22, 1997 announcing first quarter 1997 results
and containing forward looking statements.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
None.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
EXHIBIT NO.
20 News Release dated April 22, 1997
ITEM 8. CHANGE IN FISCAL YEAR.
None.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HOST MARRIOTT SERVICES CORPORATION
APRIL 22, 1997 /S/ BRIAN W. BETHERS
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Date Brian W. Bethers
Senior Vice President and Chief Financial Officer
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EXHIBIT 20
PAGE 1 OF 4
FOR IMMEDIATE RELEASE
FOR MORE INFORMATION:
INVESTOR / ANALYST INFORMATION
LORI CRAMP, V.P. & TREASURER
(301) 380-4840
MEDIA INFORMATION
WENDY WATKINS, DIRECTOR OF PUBLIC RELATIONS
(301) 380-7903
HOST MARRIOTT SERVICES REPORTS 18% GAIN IN FIRST QUARTER EBITDA
BETHESDA, MD, APRIL 22, 1997 -- Host Marriott Services Corporation
today reported earnings before interest expense, taxes, depreciation,
amortization and other non-cash items (EBITDA) of $14.9 million for the first
quarter of 1997, an increase of 18% over EBITDA of $12.6 million reported for
the first quarter of 1996. The Company reported a net loss per share for the
first quarter of 1997 of $0.12, an improvement of 20% as compared to a net loss
per share of $0.15 for the first quarter of 1996. Revenues for the first quarter
of 1997 increased by $3.3 million, or 1%, to $263.1 million compared to revenues
of $259.8 million in the first quarter of 1996. The Company's concessions
operations, both in airports and on tollroads, are significantly affected by the
various travel seasons. The first quarter has historically represented about 10%
of annual EBITDA and less than 10% of annual operating profit. The Company has
historically incurred losses in the first quarter of its fiscal year when
customer traffic is lightest. Traffic is generally the strongest in the summer
vacation months, particularly from Memorial Day through Labor Day.
William W. McCarten, President and Chief Executive Officer, noted, "We
are very pleased with our continued cashflow and earnings growth. We continue to
add new and exciting concepts in our markets that are increasing our revenues.
Excluding several noncomparable contracts, revenues grew 5% during the first
quarter despite weather-related benefits last year. We are very optimistic about
our prospects for the remainder of the year."
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EXHIBIT 20
PAGE 2 OF 4
ADD 1
HOST MARRIOTT SERVICES REPORTS 18% GAIN IN FIRST QUARTER EBITDA
The Company's operating profit more than tripled during the first
quarter of 1997 to $1.3 million from $0.4 million for the first quarter of 1996.
This improvement is attributable to several cost reduction initiatives begun in
1996 which contributed to the .3 percentage point improvement in the operating
cost margin.
Airport concession revenues grew by $1.6 million, or 1%, in the first
quarter of 1997. Excluding the effects of several noncomparable contracts (new
contracts, contracts with significant changes in scope of operation and
contracts undergoing significant construction of new facilities), revenues at
comparable domestic airport locations grew by 7% during the first quarter of
1997. Increased revenues during the first quarter of 1997 reflect an estimated
4% growth in passenger enplanements at the Company's comparable domestic airport
locations, selected moderate increases in prices, the addition of new branded
locations and benefits from other strategic initiatives.
Travel plaza revenues increased slightly by $0.8 million or 2% for the
first quarter of 1997. This increase reflects minimal traffic growth and
moderate price increases.
During the first quarter of 1997, the Company was awarded five-year
contract extensions at San Diego International Airport to operate both the food
and beverage and merchandise concessions until 2012. In addition, the Company
was also awarded the rights to develop and operate the new West Terminal Annex
in San Diego. The combined annual revenues for the San Diego operations are
estimated to be $25 million. The Company's contract at Columbus Airport will
expire in April of this year. This contract had estimated annual revenues of $5
million.
The Company continues to focus on expansion opportunities in new
markets -- shopping mall food courts and international airports. Discussions
with nationally recognized mall developers on over twenty mall opportunities are
expected to result in the addition of several new mall food court contracts
during 1997. The Company is assembling a Europe-based development team to
evaluate international contract acquisition opportunities.
Host Marriott Services Corporation [NYSE:HMS], with its worldwide
headquarters in Bethesda, Maryland, is the leading food, beverage and retail
concessionaire at nearly 200 travel and entertainment venues, with approximately
23,000 employees in five countries around the globe. Host Marriott Services is
best known for its custom solutions business approach that combines
internationally known brands with regional favorites in airports, travel plazas,
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EXHIBIT 20
PAGE 3 OF 4
ADD 2
HOST MARRIOTT SERVICES REPORTS 18% GAIN IN FIRST QUARTER EBITDA
shopping malls and entertainment attractions. Many of the Company's concessions
operate under license agreements with branded partners such as Burger King,
Starbucks Coffee, Pizza Hut, Chili's, T.G.I. Friday's, Cinnabon, TCBY, Sbarro,
Taco Bell, Cheers, California Pizza Kitchen, Tie Rack and The Body Shop.
Host Marriott Services Corporation's annual shareholder meeting will be
held at 11:00 a.m. (PST), Tuesday, May 13, 1997, at the Marina Beach Marriott
Hotel at 4100 Admiralty Way in Marina Del Rey, CA 90292. Doors will open at
10:30 a.m.
The Company's new shareholder services make available its latest
business results, financial reports and press releases via fax, mail or audio
playback by dialing 1-888-380-HOST. Such information can also be accessed on the
Internet's World Wide Web at http://www.hmscorp.com.
Certain matters discussed within this news release are forward-looking
statements within the meaning of the Private Litigation Reform Act of 1995 and
as such may involve known and unknown risks, uncertainties, and other factors
which may cause the actual results, performance or achievements of Host Marriott
Services to be different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Although Host Marriott
Services believes the expectations reflected in such forward-looking statements
are based upon reasonable assumptions, it can give no assurance that its
expectations will be attained. These risks are detailed from time to time in the
company's filings with the Securities and Exchange Commission.
--Table Follows--
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EXHIBIT 20
PAGE 4 OF 4
HOST MARRIOTT SERVICES CORPORATION
CONSOLIDATED OPERATING RESULTS (UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
TWELVE TWELVE
WEEKS ENDED WEEKS ENDED
MARCH 28, MARCH 22,
1997 1996
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<S> <C> <C>
OPERATING SUMMARY
REVENUES $ 263.1 $ 259.8
OPERATING COSTS AND EXPENSES 261.8 259.4
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OPERATING PROFIT 1.3 0.4
Interest expense (9.2) (9.2)
Interest income 0.8 0.2
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LOSS BEFORE INCOME TAXES (7.1) (8.6)
Benefit for income taxes (2.8) (3.7)
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NET LOSS $ (4.3) $ (4.9)
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LOSS PER COMMON SHARE $ (0.12) $ (0.15)
Weighted Average Common Shares Outstanding 34.6 32.7
EBITDA $ 14.9 $ 12.6
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REVENUES BY BUSINESS LINE
Airports $ 197.9 $ 196.3
Travel Plazas 52.7 51.9
Shopping Malls and Entertainment 12.5 11.6
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Total revenues $ 263.1 $ 259.8
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OPERATING PROFIT BY BUSINESS LINE (1)
Airports $ 16.8 $ 15.6
Travel Plazas (3.6) (3.4)
Shopping Malls and Entertainment 0.6 0.4
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Total operating profit $ 13.8 $ 12.6
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<FN>
(1) Before general and administrative expenses.
</FN>
</TABLE>
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