<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended September 30, 1998 Commission File Number 0-9659
------------------ ------
SIGNATURE INNS, INC.
(Exact name of registrant as specified in its charter)
INDIANA 35-1426996
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
250 EAST 96TH STREET, SUITE 450, INDIANAPOLIS, IN 46240
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (317) 581-1111
Check whether the Registrant (1) has filed all reports required to be filed by
Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months, and (2) has been subject to such filing requirements for
the past 90 days.
YES [X] NO [ ]
2,105,703 Common Shares were outstanding as of November 9, 1998.
<PAGE> 2
SIGNATURE INNS, INC.
INDEX
Part I - FINANCIAL INFORMATION Page
----
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Operations 1
Three months ended September 30, 1998 and 1997
Consolidated Statements of Operations 2
Nine months ended September 30, 1998 and 1997
Consolidated Balance Sheets 3
September 30, 1998 and December 31, 1997
Consolidated Statements of Shareholders' Equity 4
Nine months ended September 30, 1998 and
Year ended December 31, 1997
Consolidated Statements of Cash Flows 5
Nine months ended September 30, 1998 and 1997
Note to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition 7
and Results of Operations
Part II - OTHER INFORMATION 12
SIGNATURES 13
<PAGE> 3
SIGNATURE INNS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
THREE MONTHS ENDED SEPTEMBER 30, 1998 1997
- -------------------------------------------------------------------------------------
<S> <C> <C>
Revenues:
Guestroom revenues $ 11,939,819 11,439,365
Other hotel revenues 429,418 449,914
Management and franchise fees 37,240 29,989
------------ -----------
Total revenues 12,406,477 11,919,268
------------ -----------
Operating costs and expenses:
Direct hotel expenses 6,412,705 6,625,496
Depreciation, amortization and retirements 1,233,418 994,538
Corporate expenses 676,484 632,421
------------ -----------
Total operating costs and expenses 8,322,607 8,252,455
------------ -----------
Operating income 4,083,870 3,666,813
------------ -----------
Other income (expense):
Equity in income of hotel limited partnerships 17,062 11,929
Interest income 154,197 184,980
Interest expense (1,567,975) (1,533,959)
Other 46,626 --
------------ -----------
Income before income tax expense 2,733,780 2,329,763
Income tax expense 820,000 467,000
------------ -----------
Net income 1,913,780 1,862,763
Preferred stock dividends 958,800 958,800
------------ -----------
Net income applicable to common stock $ 954,980 903,963
============ ===========
Earnings per common share:
Basic $ 0.45 0.43
============ ===========
Diluted $ 0.28 0.27
============ ===========
Weighted average common shares outstanding:
Basic 2,105,703 2,105,203
============ ===========
Diluted 6,798,183 6,797,683
============ ===========
</TABLE>
1
<PAGE> 4
SIGNATURE INNS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
ACTUAL PRO FORMA
--------------------
NINE MONTHS ENDED SEPTEMBER 30, 1998 1997 1997
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues:
Guestroom revenues $ 31,440,656 29,479,269 30,779,453
Other hotel revenues 1,336,667 1,242,498 1,329,120
Management and franchise fees 109,509 177,789 45,705
------------ ------------ -----------
Total revenues 32,886,832 30,899,556 32,154,278
------------ ----------- -----------
Operating costs and expenses:
Direct hotel expenses 17,798,839 16,652,098 17,764,469
Depreciation, amortization and retirements 3,525,036 2,672,781 2,815,781
Corporate expenses 2,104,673 1,959,351 1,959,351
------------ ----------- -----------
Total operating costs and expenses 23,428,548 21,284,230 22,539,601
------------ ----------- -----------
Operating income 9,458,284 9,615,326 9,614,677
------------ ----------- -----------
Other income (expense):
Equity in income of hotel limited partnerships 26,938 (49,747) 20,097
Interest income 448,359 396,164 396,164
Interest expense (4,693,422) (4,245,769) (4,477,764)
Other 52,610 -- --
------------ ----------- -----------
Income before income tax expense 5,292,769 5,715,974 5,553,174
Income tax expense 1,588,000 1,662,000 1,604,333
------------ ----------- -----------
Net income 3,704,769 4,053,974 3,948,841
Preferred stock dividends 2,876,400 2,662,080 2,876,400
============ =========== ===========
Net income applicable to common stock $ 828,369 1,391,894 1,072,441
============ =========== ===========
Earnings per common share:
Basic $ 0.39 0.66 0.51
============ =========== ===========
Diluted $ 0.39 0.63 0.51
============ =========== ===========
Weighted average common shares outstanding:
Basic 2,105,448 2,105,203 2,105,203
============ =========== ===========
Diluted 2,105,448 6,385,157 2,105,203
============ =========== ===========
</TABLE>
2
<PAGE> 5
SIGNATURE INNS, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
SEPTEMBER 30, DECEMBER 31,
1998 1997
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 12,152,884 11,126,602
Restricted cash 1,255,258 529,212
Accounts receivable 1,574,360 702,891
Federal income tax receivable -- 517,553
Other current assets 298,086 373,141
------------- ------------
Total current assets 15,280,588 13,249,399
Property and equipment, net 109,207,868 108,670,976
Furniture and equipment cash reserves 174,798 1,395,557
Hotel limited partnership investment 817,117 833,107
Deferred costs and other assets, net 805,449 678,599
------------- ------------
$ 126,285,820 124,827,638
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt 1,735,250 1,606,390
Accounts payable 896,344 743,086
Accrued property taxes 1,667,470 1,526,653
Accrued payroll 583,498 808,944
Accrued income taxes payable 627,416 --
Other current liabilities 898,594 583,525
------------- ------------
Total current liabilities 6,408,572 5,268,598
Deferred income taxes 586,000 --
Long-term debt, less current portion 68,512,783 69,611,507
------------- ------------
Total liabilities 75,507,355 74,880,105
------------- ------------
Shareholders' equity:
Cumulative convertible preferred stock (no par value;
5,000,000 shares authorized; 2,256,000 shares issued) 40,776,126 40,776,126
Common stock (no par value; 25,000,000 shares authorized;
2,105,703 and 2,105,203 shares issued and outstanding) 10,016,363 10,013,800
Accumulated deficit (14,024) (842,393)
------------- ------------
Total shareholders' equity 50,778,465 49,947,533
------------- ------------
$ 126,285,820 124,827,638
============= ============
</TABLE>
3
<PAGE> 6
SIGNATURE INNS, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)
<TABLE>
<CAPTION>
Common Stock Preferred Stock Accumulated
------------------------------ --------------------------
Shares Amount Shares Amount Deficit Total
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1996 2,104,413 $ 10,017,514 -- $ -- (3,355,521) 6,661,993
Net income -- -- -- -- 5,175,208 5,175,208
Fractional shares redeemed (2,005) (16,267) -- -- -- (16,267)
Restricted stock grant 500 3,000 -- -- -- 3,000
Exercise of stock options 2,295 9,553 -- -- -- 9,553
Preferred shares issued, net -- -- 2,256,000 40,776,126 -- 40,776,126
Preferred stock cash dividends
($1.18 per share) -- -- -- -- (2,662,080) (2,662,080)
---------- ------------ --------- ----------- ---------- -----------
BALANCE AT DECEMBER 31, 1997 2,105,203 10,013,800 2,256,000 40,776,126 (842,393) 49,947,533
Net income -- -- -- -- 3,704,769 3,704,769
Restricted stock grant 500 2,563 -- -- -- 2,563
Preferred stock cash dividends
($1.28 per share) -- -- -- -- (2,876,400) (2,876,400)
---------- ------------ --------- ----------- ---------- -----------
BALANCE AT SEPTEMBER 30, 1998 2,105,703 $ 10,016,363 2,256,000 $40,776,126 (14,024) 50,778,465
========== ============ ========= =========== ========== ===========
</TABLE>
4
<PAGE> 7
SIGNATURE INNS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
NINE MONTHS ENDED SEPTEMBER 30, 1998 1997
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 3,704,769 4,053,974
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation of property and equipment 3,475,238 2,619,469
Amortization of deferred costs 49,798 32,743
Equity in income of hotel limited partnerships,
net of distributions received of $776,883 in 1997 (26,938) 826,630
Gain on sale of land (52,610) --
Deferred income taxes 586,000 --
Refund of federal income tax receivable 517,553 --
Change in accrued revenue and expenses, net (313,219) (461,417)
----------- ----------
Net cash provided by operating activities 7,940,591 7,071,399
----------- ----------
Cash flows from investing activities:
Property and equipment additions (3,008,402) (2,062,403)
Proceeds from sale of land 97,624 --
Non-operating distributions from hotel limited partnerships -- 791,481
Net change in loans to hotel limited partnership 40,800 (207,131)
Deferred costs and other assets (177,664) (76,776)
Acquisition of hotels from affiliated entities -- (31,819,484)
Acquisition and conversion costs of other operating hotels -- (2,350,254)
----------- ----------
Net cash used by investing activities (3,047,642) (35,724,567)
----------- -----------
Cash flows from financing activities:
Proceeds of long-term debt -- 23,623,906
Repayments of long-term debt (990,267) (23,498,645)
Repayments of revolving line of credit -- (2,750,000)
Loan financing costs -- (310,684)
Proceeds from issuance of preferred stock -- 41,199,997
Cash dividends on preferred stock (2,876,400) (1,703,280)
Issuance of common stock -- 9,553
Fractional common shares redeemed -- (16,267)
----------- ----------
Net cash provided (used) by financing activities (3,866,667) 36,554,580
----------- ----------
Net change in cash and cash equivalents 1,026,282 7,901,412
Cash and cash equivalents at beginning of period 11,126,602 1,994,751
----------- ----------
Cash and cash equivalents at end of period $ 12,152,884 9,896,163
=========== ==========
Supplemental information:
Interest paid $ 4,399,000 3,853,000
Income taxes paid $ 590,000 1,165,000
Debt assumed to acquire property and equipment $ -- 61,306,000
</TABLE>
5
<PAGE> 8
SIGNATURE INNS, INC.
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note A - Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information.
Accordingly, the financial statements do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the interim period are not necessarily
indicative of the results that may be expected for the year ended December 31,
1998. For further information, refer to the financial statements included in the
Company's annual report on Form 10-KSB for the year ended December 31, 1997.
The 1997 pro forma statement of operations was prepared assuming the completion
of the Offering and the acquisition of the 23 hotels had occurred at the
beginning of 1997. The pro forma information is presented for supplemental
disclosure purposes and is not necessarily indicative of what would have
occurred if the acquisitions had taken place on that date. The pro forma
information also does not purport to project the Company's results of operations
for any future period.
Basic earnings per share is computed by dividing net income applicable to common
stock by the weighted average shares of common stock outstanding for the period.
Diluted earnings per share is computed on the basis of the weighted average
number of common shares outstanding plus the effect of outstanding preferred
shares using the "if-converted" method. For the nine month period ended
September 30, 1998 the effect of the preferred shares on the diluted earnings
per share calculation was anti-dilutive.
6
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries. The equity method is used for the investment in a
hotel limited partnership in which the Company is a partner with 50% or less
ownership and does not exercise legal, financial and operation control.
Through January 1997, the Company used the equity method for its seventeen
unconsolidated hotel limited partnerships, which owned a total of twenty hotels.
Additionally, the financial statements of three 50% owned hotel affiliates,
which each owned one hotel, were included in the Company's consolidated
financial statements.
In January 1997, the Company completed a public offering ("the Offering") of
2,256,000 shares of cumulative convertible preferred stock at $20 per share.
Using a portion of the proceeds of the Offering, other sources of funds and the
assumption of debt, the Company acquired the twenty-three hotel properties
previously owned by affiliated entities. The acquisitions included the purchase
of limited partners' interest in the unconsolidated hotel limited partnerships
and also the purchase of the remaining interest in the three 50% owned and
consolidated hotel affiliates.
Two additional company-owned hotels, which were acquired from nonaffiliates and
converted to Signature Inns, began operations in February 1997 (Louisville East)
and July 1997 (Springfield). The Springfield hotel was acquired in August 1996
and operations were closed from January to July 1997 to undergo the conversion
to a Signature Inn. The Signature Inn Carmel, owned by an unconsolidated limited
partnership, began operations in February 1997.
7
<PAGE> 10
RESULTS OF OPERATIONS
The following is a discussion of the results of the Company's operations for the
three and nine months ended September 30, 1998 and 1997.
THREE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED WITH THREE MONTHS ENDED SEPTEMBER
30, 1997
Hotel Revenues. Guestroom revenues are derived from the rental of guestrooms.
Other hotel revenues consist of meeting room rentals, charges to guests for
long-distance telephone service and vending commissions. Hotel revenues of
$12,369,000 for 1998 represented a $480,000 increase compared to 1997. Hotel
revenues increased $256,000 due to a full three months of operating results
during 1998 from the opening of the Springfield hotel in July 1997, with the
remaining increase in revenues attributable to other hotels' room rate increases
partially offset by a slight decline in rooms occupied.
Management and Franchise Fees. Revenue from management and franchise fees
increased $7,000 for 1998 compared to 1997.
Direct Hotel Expenses. Direct hotel expenses include costs associated with the
operations of the hotels including: compensation and benefit costs, room
supplies, administrative costs, maintenance, marketing, utilities and property
taxes. Direct hotel expenses for 1998 decreased $213,000 compared to 1997.
Direct hotel expenses of Springfield increased $57,000 due to a full three
months of operating results during 1998 from the opening of the hotel in July
1997, offset by a combined decrease in expenses from the other hotels. As a
percent of hotel revenues, direct hotel expenses decreased from 55.7% to 51.8%.
Depreciation, Amortization and Retirements. Depreciation, amortization and
retirements increased $239,000 for 1998 compared to 1997 resulting from
additions to property and equipment for refurbishings and other improvements to
the existing hotel properties during the fourth quarter of 1997 and during 1998.
Corporate Expenses. Corporate expenses include the costs of general management,
office rent, professional fees and other administrative expenses. Corporate
expenses for 1998 were $676,000 which represented a $44,000 increase compared to
1997. This 7.0% increase is attributable to increased employee costs and general
office related expenses incurred during the ordinary course of business.
Equity in Income of Hotel Limited Partnerships. Equity in income of hotel
limited partnership represents the Company's share of the unconsolidated
partnership's income or loss. The 1998 increase of $5,000 is due to the
increased profitability of the Signature Inn Carmel which began operations
February 1997.
8
<PAGE> 11
Interest Income and Expense. Interest income for 1998 decreased $31,000 compared
to 1997 due to slight changes in investment rates and investable cash balances.
The increase in interest expense for 1998 of $34,000 is primarily due to
additional debt related to the opening of the Springfield hotel in July 1997.
NINE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED WITH NINE MONTHS ENDED SEPTEMBER
30, 1997
Hotel Revenues. Guestroom revenues are derived from the rental of guestrooms.
Other hotel revenues consist of meeting room rentals, charges to guests for
long-distance telephone service and vending commissions. Hotel revenues of
$32,777,000 for 1998 represented a $2,056,000 increase compared to 1997. Hotel
revenues increased due to a full nine months of operating results during 1998
from the twenty previously unconsolidated Signature Inn hotels acquired on
January 24, 1997, the addition of the Louisville East hotel in February 1997 and
the opening of the Springfield hotel in July 1997.
Management and Franchise Fees. Revenue from management and franchise fees were
earned from unconsolidated partnership owned hotels prior to the acquisition by
the Company. These fees decreased $68,000 for 1998 compared to 1997 due to the
absence of fee income earned subsequent to January 24, 1997 from the hotels
acquired by the Company, offset partially by fee income from Signature Inn
Carmel which began operations February 1997.
Direct Hotel Expenses. Direct hotel expenses include costs associated with the
operations of the hotels including: compensation and benefit costs, room
supplies, administrative costs, maintenance, marketing, utilities and property
taxes. Direct hotel expenses for 1998 increased $1,147,000 compared to 1997.
Direct hotel expenses increased due to a full nine months of operating results
during 1998 from the twenty previously unconsolidated Signature Inn hotels
acquired on January 24, 1997, the addition of the Louisville East hotel in
February 1997 and the opening of the Springfield hotel in July 1997. As a
percent of hotel revenues, direct hotel expenses increased from 54.2% to 54.3%.
Depreciation, Amortization and Retirements. Depreciation, amortization and
retirements increased $852,000 for 1998 compared to 1997, $460,000 of the
increase resulted from the property and equipment increases associated with the
1997 acquired hotels, and the remaining increase was attributed to 1997 and 1998
property and equipment additions for refurbishings and other improvements to the
existing hotel properties.
Corporate Expenses. Corporate expenses include the costs of general management,
office rent, professional fees and other administrative expenses. Corporate
expenses for 1998 were $2,105,000 which represented a $145,000 increase compared
to 1997. This 7.4% increase is attributable to increased employee costs and
general office related expenses incurred during the ordinary course of business.
9
<PAGE> 12
Equity in Income of Hotel Limited Partnerships. Equity in income of hotel
limited partnership represents the Company's share of the unconsolidated
partnerships' income or loss. The 1998 increase of $77,000 is due to the
increased profitability of the Signature Inn Carmel and the exclusion of the
Company's pro rata share of the acquired hotels' losses prior to their
acquisition on January 24, 1997.
Interest Income and Expense. Interest income for 1998 increased $52,000 compared
to 1997 as a result of increased investable cash balances maintained during
1998, offset by a slight decline in rate. The increase in interest expense for
1998 of $448,000 is due to additional debt assumed by the Company in connection
with the acquired hotels.
CAPITAL RESOURCES AND LIQUIDITY
Historically, the Company has funded its operations principally through cash
flow from operations. Additionally, at September 30, 1998, the Company had
$12,152,000 of cash and cash equivalents available for operations or investment.
Net cash provided by operating activities increased to $7,941,000 in 1998
compared to $7,071,000 in 1997, an increase of $870,000. This change was a
result of improved operations before depreciation and amortization and a refund
of federal income taxes, offset partially by a decrease in distributions
received from hotel limited partnerships.
Net cash used by investing activities decreased to $3,048,000 in 1998 compared
to $35,725,000 in 1997, a decrease of $32,677,000. The primary element of change
from 1997 was the cash used in the hotel acquisitions during 1997 of
$34,170,000. Cash used for property and equipment additions for refurbishings
and other improvements to the existing hotel properties increased from
$2,062,000 to $3,008,000 during 1998.
Net cash used by financing activities was $3,867,000 in 1998 compared to a net
cash provided of $36,555,000 in 1997. The change is due primarily to net
proceeds from the issuance of preferred stock during 1997.
The Company believes that the cash generated from operations, along with
additional borrowing capabilities and cash balances, will provide adequate
liquidity to meet its operating needs, debt service and preferred dividend
requirements over the next twelve months.
The Company may seek to obtain credit facilities or issue corporate debt or
equity securities in order to raise additional capital. Any debt incurred or
issued by the Company may be secured or unsecured, bear interest at fixed or
variable rates, and be subject to such other terms as the Board of Directors of
the Company considers appropriate.
10
<PAGE> 13
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT.
From time to time, the Company may publish forward-looking statements relating
to such matters as anticipated financial performance, business prospects,
development activities and similar matters. The Private Securities Litigation
Reform Act of 1995 provides a safe harbor for forward-looking statements. In
order to comply with the terms of the safe harbor, the Company notes that a
variety of factors could cause the Company's actual results and experiences to
differ materially from the anticipated results or other expectations expressed
in the Company's forward-looking statements. The risks and uncertainties that
may affect the operations, performance, and results of the Company's business
include the following: (i) the risk of adverse changes in the future level of
demand by the Company's customers and prospective customers caused by regional
or real estate-specific economic downturns, and (ii) other risks detailed from
time to time in the filings with the Securities and Exchange Commission.
SEASONALITY
Demand for hotel accommodations varies seasonally in the Signature Inns hotels'
market areas. Typically, demand for hotel accommodations and correspondingly,
occupancy rates for the hotels, will be higher during the period from March
through October and lower during the period from November through February.
INFLATION
The rate of inflation as measured by changes in the average consumer price index
has not had a material effect on the Company's financial condition or results of
operations for the periods presented.
YEAR 2000 ISSUE
In 1997, the Company began the process of identifying and evaluating changes to
computer programs necessary to address the Year 2000 issue. This issue affects
computer systems that have time-sensitive programs that may not properly
recognize the year 2000 which could result in system failures. The Company is
communicating with software vendors and others with which it conducts business
to help identify and resolve the year 2000 issue. The Company is developing a
contingency plan for critical systems which it expects to have in place by the
first by the first quarter of 1999. The total Year 2000 associated costs,
including potential replacement costs of non-compliant systems, have not been
completely quantified, but it is not expected to have a material adverse impact
on the Company's financial condition or results of operations. However, no
estimates can be made as to the potential adverse impact that may result from
the failure of the Company's software vendors and others with which it conducts
business to become Year 2000 compliant. Costs related to the Year 2000 issue are
being expensed as incurred. It is management's understanding that significant
third party vendors with which it does business are now, or will be in a timely
manner, Year 2000 compliant. However, if the Company or one or more of the third
party vendors fail to complete its Year 2000 program in a timely manner, there
can be no assurance that such failure will not have a material adverse effect on
the Company's operations or financial position.
11
<PAGE> 14
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
See note below
Item 2. Changes in Securities
See note below
Item 3. Default upon Senior Securities
See note below
Item 4. Submission of matters to a Vote of Security Holders
See note below
Item 5. Other information
See note below
Item 6. Exhibits and Report on Form 8-K
See note below
NOTE: The response to each of the above items 1, 2, 3, 4, 5 and 6 is not
applicable or is in the negative and does not require a response pursuant
to the instructions.
12
<PAGE> 15
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 thereunto duly authorized.
SIGNATURE INNS, INC.
Date November 9, 1998 By /s/ John D. Bontreger
---------------- ----------------------------------------
John D. Bontreger
President and C.E.O.
Date November 9, 1998 By /s/ Mark D. Carney
---------------- ----------------------------------------
Mark D. Carney
Senior Vice President Finance and C.F.O.
Date November 9, 1998 By /s/ Martin D. Brew
---------------- ----------------------------------------
Martin D. Brew
Treasurer and Controller
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 12,152,884
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 15,280,588
<PP&E> 122,885,211
<DEPRECIATION> 13,677,343
<TOTAL-ASSETS> 126,285,820
<CURRENT-LIABILITIES> 6,408,572
<BONDS> 68,512,783
40,776,126
0
<COMMON> 10,016,363
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 126,285,820
<SALES> 0
<TOTAL-REVENUES> 32,886,832
<CGS> 0
<TOTAL-COSTS> 23,428,548
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,693,422
<INCOME-PRETAX> 5,292,769
<INCOME-TAX> 1,588,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,704,769
<EPS-PRIMARY> .39
<EPS-DILUTED> .39
</TABLE>
