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 16, 1998
HOST MARRIOTT SERVICES CORPORATION
DELAWARE 1-14040 52-1938672
(State of Incorporation) (Commission (I.R.S. Employer
File Number) Identification Number)
6600 ROCKLEDGE DRIVE
BETHESDA, MARYLAND 20817
(301) 380-7000
<PAGE>
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 16, 1998 announcing first quarter 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 16, 1998
ITEM 8. CHANGE IN FISCAL YEAR.
None.
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<PAGE>
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 16, 1998 /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 3
FOR IMMEDIATE RELEASE
FOR MORE INFORMATION:
MEDIA INQUIRIES:
WENDY WATKINS: (301) 380-7903
INVESTOR RELATIONS:
SHARON WHITING: (301) 380-7215
HTTP://WWW.HMSCORP.COM
1-888-380-HOST
HOST MARRIOTT SERVICES REPORTS 7% GROWTH IN FIRST QUARTER EBITDA
COMPANY ALSO ANNOUNCES NEW SHOPPING MALL FOOD COURT PROJECT
BETHESDA, MD, APRIL 16, 1998 -- Host Marriott Services [NYSE:HMS] today
reported earnings before interest expense, taxes, depreciation, amortization and
other non-cash items (EBITDA) of $16.0 million for the first quarter of 1998, an
increase of 7% over EBITDA of $14.9 million reported for the first quarter of
1997. The company reported a net loss of $3.9 million, or ($0.11) per share for
the first quarter of 1998, compared to a net loss of $4.3 million, or ($0.12)
per share for the first quarter of 1997. Revenues for the first quarter of 1998
totaled $277.3 million, an increase of 5% over the first quarter of 1997. The
company's operating profit increased by 54% during the first quarter of 1998 to
$2.0 million from $1.3 million for the same period a year ago. The company's
concessions operations are significantly affected by the various travel and
shopping seasons. The company's airports and travel plazas have historically
incurred losses in the first quarter of the fiscal year when customer traffic is
lightest. Traffic is generally the strongest in the summer vacation months,
particularly from Memorial Day through Labor Day. Shopping mall food court
customer traffic is generally the busiest during the fall and winter holiday
season.
William W. McCarten, President and Chief Executive Officer, noted, "I
am optimistic about our prospects for the remainder of the year. The gains
reported in revenues, operating profit and EBITDA for the first quarter have
given us a solid start toward meeting our goals for 1998."
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EXHIBIT 20
PAGE 2 OF 3
ADD 1
HOST MARRIOTT SERVICES REPORTS 7% GROWTH IN FIRST QUARTER EBITDA
Airport concession revenues grew by $9.8 million, or 5.0%, during the
first quarter of 1998. Excluding the effects of a few 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, which represent over 90% of the company's
total domestic airport revenues, grew by 6.8%, during the first quarter of 1998,
reflecting an estimated 1.2% growth in passenger enplanements and a 5.6%
increase in revenues per enplaning passenger.
Travel plaza revenues were up $2.5 million or 4.8% during the first
quarter of 1998. An increase in tollroad traffic due to low gasoline prices and
favorable winter weather in the northeast, as well as moderate increases in menu
prices, resulted in solid revenue growth in this business line. Low gasoline
costs have led the Energy Department to forecast strong growth in vehicle miles
traveled for this summer.
Revenues in the shopping mall and entertainment business line were up
15% over a year ago. The openings of the food courts at the Grapevine Mills Mall
and the Vista Ridge Mall in late 1997 contributed significantly to the increase.
In a separate press release dated today, the company announced that it
reached agreement with Chelsea GCA Realty, Inc. to master lease the food and
beverage facilities at Leesburg Corner Premium Outlets in Virginia.
Host Marriott Services, with its worldwide headquarters in Bethesda,
Maryland, is the leading food, beverage and retail concessionaire at nearly 200
travel and entertainment venues, with approximately 24,000 employees in six
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, shopping malls and entertainment
attractions. Many of the company's concessions are operated under license
agreements with branded partners such as Burger King, Starbucks Coffee, Pizza
Hut, Chili's, Cinnabon, TCBY "Treats," Sbarro, Taco Bell, Cheers, California
Pizza Kitchen, Tie Rack and The Body Shop.
CERTAIN MATTERS DISCUSSED WITHIN THIS NEWS RELEASE ARE FORWARD-LOOKING
STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES 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 3 OF 3
HOST MARRIOTT SERVICES CORPORATION
CONSOLIDATED OPERATING RESULTS (UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
TWELVE TWELVE
WEEKS ENDED WEEKS ENDED
MARCH 27, MARCH 28,
1998 1997 (A)
- -------------------------------------------------------------------------- ------------------------ -----------------------
<S> <C> <C>
OPERATING SUMMARY
REVENUES $ 277.3 $ 263.1
OPERATING COSTS AND EXPENSES 275.3 261.8
- -------------------------------------------------------------------------- ------------------------ -----------------------
OPERATING PROFIT 2.0 1.3
Interest expense (9.2) (9.2)
Interest income 0.7 0.8
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LOSS BEFORE INCOME TAXES (6.5) (7.1)
Benefit for income taxes (2.6) (2.8)
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NET LOSS $ (3.9) $ (4.3)
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LOSS PER COMMON SHARE $ (0.11) $ (0.12)
Weighted Average Common Shares Outstanding 34.4 34.6
EBITDA $ 16.0 $ 14.9
- -------------------------------------------------------------------------- ------------------------ -----------------------
REVENUES BY BUSINESS LINE
Airports $ 207.7 $ 197.9
Travel Plazas 55.2 52.7
Shopping Malls and Entertainment 14.4 12.5
- -------------------------------------------------------------------------- ------------------------ -----------------------
Total revenues $ 277.3 $ 263.1
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OPERATING PROFIT (LOSS) BY BUSINESS LINE (B)
Airports $ 18.7 $ 16.9
Travel Plazas (3.7) (3.6)
Shopping Malls and Entertainment 0.6 0.5
- -------------------------------------------------------------------------- ------------------------ -----------------------
Total operating profit $ 15.6 $ 13.8
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PERIOD END BALANCE SHEET DATA MARCH 27, MARCH 28,
1998 1997
------------------------ -----------------------
Cash and cash equivalents $ 59.5 $ 85.0
Total assets 530.6 570.6
Long-term debt 406.3 407.3
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<FN>
(A) Certain minor reclassifications were made to the prior year financial
statements to conform to the 1998 presentation.
(B) Before general and administrative expenses.
</FN>
</TABLE>
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