UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997.
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission File Number: 33-78866
______________________
MOTELS OF AMERICA, INC.
(Exact name of registrant as specified in its charter)
Delaware 33-0166914
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
______________________
701 Lee Street, Suite 1000
Des Plaines, Illinois 60016
(847) 803-1200
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
______________________
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
[X] Yes [ ] No
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.
[X] Yes [ ] No
Number of shares of Common Stock, $.01 par value outstanding as of
May 1, 1997: 800,000
_______
INDEX
MOTELS OF AMERICA, INC. AND SUBSIDIARIES
Part I - Financial Information
Item 1. Financial Statements
Condensed consolidated balance sheets -
March 31, 1997 (unaudited) and December 31, 1996 ........2
Condensed consolidated statements of operations -
Three months ended March 31, 1997 and 1996 (unaudited)...3
Condensed consolidated statements of cash flows -
Three months ended March 31, 1997 and 1996 (unaudited)...4
Notes to condensed consolidated financial statements -
March 31, 1997 (unaudited) ............................. 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
General ................................................ 6
Results of Operations .................................. 8
Liquidity and Capital Resources ........................10
Part II - Other Information
Item 1. Legal Proceedings ......................................12
Item 2. Changes in Securities ..................................12
Item 3. Defaults upon Senior Securities ........................12
Item 4. Submission of Matters to a Vote of Security Holders ....12
Item 5. Other Information ......................................12
Item 6. Exhibits and Reports on Form 8-K........................12
Signatures ......................................................13
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
MOTELS OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
________ ___________
(Unaudited)
<S> <C> <C>
ASSETS
Cash and cash equivalents ..................................... $ 7,580 $ 12,248
Restricted cash ............................................... 2,701 3,738
Accounts receivable from property operations .................. 3,287 2,795
Operating supplies and prepaid expenses ....................... 2,668 2,880
Deposits and other assets ..................................... 14,313 7,658
Mortgage and other notes receivable ........................... 11,140 8,932
Investment property:
Operating properties, net of accumulated depreciation
of $64,656 in 1997 and $61,855 in 1996 ................... 303,773 307,696
Land held for development .................................. 4,047 4,047
________ ________
Total investment property ..................................... 307,820 311,743
Financing and other deferred costs, net of accumulated
amortization of $3,515 in 1997 and $4,163 in 1996 .......... 17,886 18,439
________ ________
$367,395 $368,433
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Trade accounts payable ........................................ $ 1,899 $ 2,177
Real estate taxes payable ..................................... 2,902 2,612
Accrued interest payable ....................................... 6,139 3,693
Other accounts payable and accrued expenses .................... 4,135 3,847
Deferred tax liability ......................................... 3,848 3,685
Mortgage and other notes ....................................... 249,627 251,148
12% Senior Subordinated Notes, net of unamortized
discount of $3,515 in 1997 and $3,594 in 1996 ................ 76,485 76,406
________ ________
Total liabilities ............................................. 345,035 343,568
Minority interests ............................................. 1,794 1,899
Stockholders' equity:
Common stock, $.01 par value, 1,500,000 shares
authorized, 800,000 shares issued and outstanding.......... 8 8
Additional paid-in capital .................................. 15,294 15,294
Retained earnings ........................................... 5,264 7,664
________ _______
Total stockholders' equity ..................................... 20,566 22,966
________ _______
$367,395 $368,433
======== ========
See accompanying notes to condensed consolidated financial statements.
</TABLE>
MOTELS OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands except share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31
__________________
1997 1996
____ ____
<S> <C> <C>
Revenues:
Motel operating revenues ....................................... $ 26,085 $ 27,249
Other revenues ................................................. 259 83
__________ __________
Total revenues..................................................... 26,344 27,332
Costs and expenses:
Motel operating expenses ....................................... 15,328 15,626
Marketing and royalty fees ..................................... 1,951 2,001
General and administrative ..................................... 2,184 1,529
Depreciation and amortization .................................. 3,636 3,296
__________ __________
Total direct expenses ............................................. 23,099 22,452
__________ __________
Net operating revenue ............................................. 3,245 4,880
Interest expense .................................................. 7,863 7,661
_________ __________
Loss from operations .............................................. (4,618) (2,781)
Gain on sale of properties ........................................ 669 -
Minority interests of others in
loss from operations ........................................... 26 (51)
__________ __________
Loss before income taxes .......................................... (3,923) (2,832)
Income tax expense (credit) ....................................... (1,523) (1,099)
__________ __________
Net loss .......................................................... $ (2,400) $ (1,733)
========== ==========
Net loss per common share ......................................... $ (3.00) $ (2.17)
========== ==========
Weighted average number of
common shares outstanding ...................................... 800,000 800,000
========== ==========
See accompanying notes to condensed consolidated financial statements.
</TABLE>
MOTELS OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31
__________________
1997 1996
____ ____
<S> <C> <C>
Cash flows provided by (used in) operating activities:
Net income (loss)................................................... $ (2,400) $ (1,733)
Adjustments to reconcile net income (loss) to cash provided by
operating activities:
Depreciation, amortization and accretion of
discount on notes ......................................... 3,715 3,365
Minority interests of others in net income (loss)
from operations ........................................... (26) 51
Deferred income taxes ........................................ 164 550
Net gain on sale of properties ............................... (669) -
Change in assets and liabilities:
(Increase) decrease in assets:
Accounts receivable .................................... (492) (1,036)
Operating supplies, prepaid expenses,
deposits and other assets ............................ (754) 623
Increase (decrease) in liabilities:
Accounts payable and accrued expenses .................... 323 2,882
Accrued interest payable ................................. 2,446 2,978
_________ _________
Net cash provided by operating activities ........................... 2,307 7,680
Cash flows provided by (used in) investing activities:
Acquisition and development of investment properties .............. (5,503) (44,410)
Refurbishment of investment properties ............................ (1,334) (2,109)
Net proceeds from sale of investment properties ................... 340 -
Cash restricted for refurbishment of properties ................... 1,037 148
Collections on mortgage and other notes receivable ................ 127 24
_________ ________
Net cash used in investing activities ............................... (5,333) (46,347)
Cash flows provided by (used in) financing activities:
Proceeds from secured notes payable ............................... - 41,659
Repayment of secured notes payable ................................ (1,521) (1,114)
Distributions to minority interests ............................... (78) (78)
Deferred financing costs .......................................... (43) (423)
_________ _________
Net cash provided by (used in) financing activities ................. (1,642) 40,044
_________ _________
Net increase (decrease) in cash and cash equivalents ................ (4,668) 1,377
Cash and cash equivalents at beginning of period .................... 12,248 13,897
_________ _________
Cash and cash equivalents at end of period .......................... $ 7,580 $ 15,274
========= =========
Supplementary disclosure of cash flow information:
Cash paid during the period for interest .......................... $ 5,417 $ 4,613
_________ _________
Cash paid (net of refunds received) during the period
for income taxes ............................................... $ (55) $ (45)
========= =========
See accompanying notes to condensed consolidated financial statements.
</TABLE>
MOTELS OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
March 31, 1997
1. Basis of Presentation
The accompanying unaudited interim condensed consolidated
financial statements have been prepared in accordance with generally
accepted accounting principles for interim financial information and
with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they 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 only of normal recurring adjustments) considered necessary
for a fair presentation have been included. Operating results for
the three-month period ended March 31, 1997 are not necessarily indicative
of the results that may be expected for the year ended December 31, 1997.
For further information, refer to the consolidated financial statements
and footnotes thereto included in Motels of America, Inc. and Sub-
sidiaries' Annual Report on Form 10-K for the year ended December 31,
1996. The terms "MOA" and the "Company" mean Motels of America, Inc. and
its subsidiaries.
2. Divestitures
In January 1997, the Company sold one lodging facility to an
unrelated party, for approximately $0.5 million in cash and a $2.3 million
note receivable with terms mirroring those of the $2.3 of debt secured by
the property. The Company recorded a gain of approximately $0.7 million.
3. Secured Notes Payable
On April 14, 1997, the Company borrowed $2 million under a
$2 million secured revolving line of credit. Terms of the revolving line
of credit include interest payable at the prime rate plus 100 basis
points and a maturity date of May 1, 1998.
4. Income Taxes
Income tax expense differs from the amounts computed by applying
the U.S. federal income tax rate of 34% to income before income taxes
principally as a result of state income taxes.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
THIS DISCUSSIONS SHOULD BE READ IN CONJUNCTION WITH THE INTERIM CONDENSED
CONSOLIDATED HISTORICAL FINANCIAL STATEMENTS OF THE COMPANY AND THE NOTES
THERETO INCLUDED ELSEWHERE HEREIN. THE SUPPLEMENTAL HISTORICAL OPERATING
RESULTS PRESENTED BELOW FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
HAVE BEEN PREPARED ON THE SAME BASIS AS THE INTERIM CONDENSED CONSOLIDATED
HISTORICAL FINANCIAL STATEMENTS AND, IN THE OPINION OF THE COMPANY,
INCLUDE ALL ADJUSTMENTS (CONSISTING ONLY OF NORMAL RECURRING ADJUSTMENTS)
NECESSARY TO PRESENT FAIRLY THE INFORMATION SET FORTH THEREIN.
General
MOA operates principally in the economy limited service segment
of the lodging industry. As a result, its average room rates tend to be
lower than the average room rates of full service lodging facilities.
However, due to the limited nature of the public space and ancillary
services provided by limited service motels, the Company's expenses tend
to be lower than those of full service lodging facilities. The profit-
ability of the lodging industry in general is significantly dependent
upon room rental rates and occupancy rates. Due to the fixed nature of a
relatively high portion of the Company's expenses, changes in either room
rates or occupancy rates result in significant changes in the operating
profit of the Company's motels.
Between January 1, 1996 and March 31, 1997, the Company has acquired
or developed and sold a number of motels in various transactions
summarized as follows:
Number of
Date Transaction Rooms
____ ____________ __________
January 1996 Purchased nineteen motels 1,794
located in the eastern half
of the United States from
Forte USA, Inc.
January through
March 1996 Purchased two motels located in 201
Newark, DE and Red Wing, MN.
Also purchased the land
underlying one of its existing
properties.
May 1996 Sold a motel located in (102)
Newport, KY.
June 1996 Sold a motel located in (60)
Waukegan, IL.
August 1996 Sold three motels located (306)
in York, PA and Romulus, MI.
September 1996 Sold two motels located (95)
Niagara Falls, NY and
Pittsfield, MA.
October 1996 Sold three motels located (447)
in West Des Moines, IA,
Phoenix, AZ and Orlando, FL.
November 1996 Sold a motel located in (223)
Las Vegas, NV.
January 1997 Sold a motel located in (130)
Kissimmee, FL.
February 1997 Completed construction and 48
opened a motel located
in Greensboro, GA. _____
680
=====
In the aggregate, the Company expended $29.5 million in cash (net
of proceeds from sales of $16.2 million) in conjunction with the above
listed transactions. Cash was funded from internal sources and $41.6
million in borrowings.
The above listed acquisitions have been accounted for under the
purchase method of accounting and therefore results from operations
have been included only since the date of acquisition.
Results of Operations
The following discussion and analysis address results of operations
for the three months ended March 31, 1997 and 1996.
Three Months Ended March 31, 1997 Compared to the Three Months Ended
March 31, 1996
The following chart presents certain historical operating results and
statistics discussed herein and is being provided as a supplement to the
interim condensed consolidated financial statements presented elsewhere.
<TABLE>
<CAPTION>
Supplemental Operating Results and Statistics
_________________________________________________________________________
(unaudited)
Three Months Ended March 31
_________________________________________________________________________
Motels Owned Acquisitions/
Both Periods Divestitures Consolidated
____________________ _______________________ _______________________
1997 1996 1997 1996 1997 1996
____ ____ ____ ____ ____ ____
(dollars in thousands, except Other data)
<S> <C> <C> <C> <C> <C> <C>
Motel operations:
Motel operating revenues:
Room revenues ............................... $20,697 $19,739 $3,637 $5,441 $24,334 $25,180
Ancillary motel revenues .................... 1,608 1,509 143 560 1,751 2,069
________ ________ _______ _______ _______ ________
Total motel operating revenues ........... 22,305 21,248 3,780 6,001 26,085 27,249
Motel costs and expenses:
Motel operating expenses .................... 13,052 12,065 2,276 3,561 15,328 15,626
Marketing and royalty fees .................. 1,600 1,558 351 443 1,951 2,001
Depreciation and amortization ............... 2,910 2,763 567 329 3,477 3,092
________ ________ ________ _______ ________ ________
Total motel direct expenses .............. 17,562 16,386 3,194 4,333 20,756 20,719
________ ________ _________ _______ ________ ________
$4,743 $ 4,862 $ 586 $1,668 5,329 6,530
======== ======== ========= =======
Corporate operations:
Other revenues .............................. 259 83
General and administrative expenses ......... 2,184 1,529
Depreciation and amortization ............... 159 204
________ ________
(2,084) (1,650)
________ ________
Net operating revenue ............................. $ 3,245 $4,880
======== ========
Other data:
Number of motels at period end .............. 119 119 16 27 135 146
Number of rooms at period end ............... 9,671 9,671 1,562 2,897 11,233 12,568
Occupancy percentage ........................ 60.61% 60.56% 60.56% 62.88% 60.60% 61.02%
ADR (1) ..................................... $39.24 $36.98 $42.39 $39.94 $39.68 $37.58
REVPAR (2) .................................. $25.63 $24.11 $26.69 $27.70 $25.96 $24.82
Net operating revenue margin (3) ............ 12.32% 17.85%
Net motel revenue margin (4) ................ 36.98% 38.63% 31.70% 36.70% 36.19% 38.21%
</TABLE>
______________________
[FN]
(1) ADR represents room revenues divided by the total number of rooms
occupied.
(2) REVPAR represents total motel operating revenues divided by the total
number of rooms available.
(3) Net operating revenue margin represents net operating revenue divided
by total motel operating revenues plus corporate other revenues.
(4) Net motel revenue margin represents total motel operating revenues
less motel operating expenses and marketing and royalty fees,
divided by motel room revenues.
Total revenues consist principally of motel operating revenues.
Motel operating revenues are derived from room rentals and ancillary
motel revenues such as charges to guests for food and beverage service,
long distance telephone calls, fax machine use and from vending
machines. Other revenues include interest income, distributions on
partnership interests in excess of the Company's basis in such partner-
ships and other miscellaneous income. Total revenues decreased to
$26,344,000 for the three months ended March 31,1997 from $27,332,000
for the three months ended March 31, 1996, a decrease of$988,000
or 3.6%.
Motel revenues decreased to $26,085,000 for the three months ended
March 31, 1997 from $27,249,000 for the three months ended March 31,
1996, a decrease of $1,164,000 or 4.3%. Approximately $2,220,000 of
the decrease in motel revenues was attributable to motels acquired and
divested, since January 1, 1996 and $1,057,000 increase for motels
owned during both periods. Motel revenues for motels owned during
both periods increased 5.0%. The increase in motel revenues for motels
owned during both periods was attributable principally to an increase
in the average daily room rate ("ADR"). The ADR for the motels owned
during both periods increased to $39.24 for the three months ended
March 31, 1997 from $36.98 for the three months ended March 31, 1996,
an increase of $2.26 or 6.1%. The increase in ADR is reflective of
management's efforts to increase room rates at its lodging facilities.
The occupancy percentage for the three months ended March 31, 1997 for
the motels owned during both periods increased to 60.61% from 60.56%
for the three months ended March 31, 1996. REVPAR for motels owned
during both periods increased to $25.63 for the three months ended
March 31, 1997 from $24.11 for the three months ended March 31, 1996,
an increase of $1.52 or 6.3%. The acquired and divested motels had an
occupancy percentage of 60.56%, an ADR of $42.39 and REVPAR of $26.69
for the period which they were owned by the Company in 1997.
Motel operating expenses include payroll and related costs,
utilities, repairs and maintenance, property taxes, insurance, linens
and other operating supplies. Motel operating expenses decreased to
$15,328,000 for the three months ended March 31, 1997 from $15,626,000
for the three months ended March 31, 1996, a net decrease of $298,000
or 1.9%. Approximately $1,285,000 of the net decrease is attributable
to the cost of operating the divested and acquired motels since
January 1, 1996. The cost of operating motels owned during both
periods increased to $13,052,000 for the three months ended March 31,
1997 from $12,065,000 for the three months ended March 31, 1996, an
increase of $987,000 or 8.2%. Payroll and related costs experienced
the most significant increase of all of the motel operating expenses.
Management attributes this increase to the effect of the statutory
minimum wage increase and general tightening of the labor markets in
many of the areas where the Company's motels are located. Motel
operating expenses as a percentage of motel revenues increased to 58.8%
for the three months ended March 31, 1997 from 57.3% for the three
months ended March 31, 1996. Motel operating expenses as a percentage
of motel revenues for the motels owned in both periods increased to
58.5% for the three months ended March 31, 1997 from 56.8% for the
three months ended March 31, 1996. The decrease in the operating
margin for motels owned during both periods is primarily attributable
to the increase in motel operating expenses. Motel operating expenses
as a percentage of motel revenues for the acquired and divested motels
was 60.2% for the three months ended March 31, 1997.
Marketing and royalty fees include media advertising, billboard
rental expense, advertising fund contributions and royalty charges
paid to franchisors and other related marketing expenses. Marketing
and royalty fees decreased to $1,951,000 for the three months ended
March 31, 1997 from $2,001,000 for the three months ended March 31,
1996, a decrease of $50,000 or 2.5%. Approximately $92,000 of the net
decrease in marketing and royalty fees was attributable to the
acquired and divested motels since January 1, 1995. The marketing and
royalty fees for motels owned during both periods increased to
$1,600,000 for the three months ended March 31, 1997 from $1,558,000
for the three months ended March 31, 1996, an increase of $42,000 or
2.7%. For the motels owned during both periods, marketing and royalty
fees as a percentage of room revenues decreased to 7.7% for the three
months ended March 31, 1997 from 7.9% for the three months ended
March 31, 1996.
Corporate general and administrative expenses include the costs of
regional and corporate operation personnel, corporate training,
marketing, purchasing, administrative support, accounting and
development activities. The major components of these costs are
salaries, wages and related expenses, travel, rent and other
administrative expenses. Corporate general and administrative
expenses increased $655,000 to $2,184,000 for the three months ended
March 31, 1997 from $1,529,000 for the three months ended March 31,
1996, an increase of 42.8%. Salaries and other administrative costs
related to the Company's expanded development efforts account for a
significant portion of the overall increase in corporate general and
administrative expenses.
Depreciation and amortization increased to $3,636,000 for the three
months ended March 31, 1997 from $3,296,000 for the three months ended
March 31, 1996, a net increase of $340,000 or 10.3%. Approximately
$238,000 of the net increase in depreciation and amortization is
attributable to the acquired and divested motels since January 1, 1996.
Net operating revenue decreased to $3,245,000 for the three months
ended March 31, 1997 from $4,880,000 for the three months ended March
31, 1996, a decrease of $1,635,000 or 33.5%. The decrease in net
operating revenues included a decrease of $816,000 in net motel
revenues (motel revenues less motel operating expenses and marketing
and royalty fees). Of the $816,000 decrease in net motel revenues,
$844,000 resulted from the acquired and divested motels since January
1, 1996. Net motel revenues for motels owned during both periods
increased $28,000 or 0.3%. Net operating revenue as a percent of total
revenues was 12.3% for the three months ended March 31, 1997 as
compared to 17.9% for the three months ended March 31, 1996.
Interest expense increased to $7,863,000 for the three months ended
March 31, 1997 from $7,661,000 for the three months ended March 31,
1996, an increase of $202,000. The increase is principally due to an
increase in outstanding borrowings utilized to finance the acquisitions
of motel properties.
Net loss increased to $2,400,000 for the three months ended March
31, 1997 from $1,733,000 for the three months ended March 31, 1996.
Liquidity and Capital Resources
The Company's primary uses of its capital resources include debt
service, capital expenditures (primarily for motel refurbishment),
working capital; in addition on a discretionary basis the Company
utilizes its capital resources for the development and acquisition
of motel properties.
In April 1997, the Company borrowed $2,000,000 under a $2,000,000
secured revolving line of credit facility. Terms of the revolving line
of credit include interest payable at the prime rate plus 100 basis
points and a maturity date of May 1, 1998.
The Company's debt service requirements consist of the obligation to
make interest and principal payments on its outstanding indebtedness.
As of March 31, 1997, the Company had principal repayment obligations
of $6,293,000, $68,850,000 and $7,541,000 during the remainder of the
fiscal year ending December 31, 1997 and during the fiscal years
ending December 31, 1998 and 1999, respectively. Management believes
the Company will be able to extend the maturity of refinance mortgage
notes in the amount of $1,813,245 as of March 31, 1997 which would
otherwise require repayment in 1997. Management further believes that
the Company will have sufficient resources through the ability to
refinance certain indebtedness and generate funds internally to meet
all debt repayment obligations which are scheduled through December 31,
1999.
The Company's capital expenditure requirements principally include
capital improvements and refurbishment of its lodging facilities as
part of its ongoing operating strategy to provide well-maintained
facilities. The Company made capital expenditures (exclusive of
acquisitions and development of properties) of $1,334,000 and
$2,109,000 for the three months ended March 31, 1997 and 1996,
respectively. In addition, as of March 31, 1997, the Company had
$2,701,000 of cash restricted for future refurbishment of motel
properties, in accordance with certain debt agreements. Management
is not aware of any unusual required level of future capital
expenditures necessary to maintain its existing properties.
At March 31,1997, four properties were under various stages of
development for the Company. Management anticipates approximately
$5,500,000 will be expended throughout the remainder of 1997 to
complete construction of these motels.
For the three months ended March 31, 1997, cash and cash equivalents
decreased $4,668,000. This decrease consisted of $5,333,000 of funds
utilized in investing activities and $1,642,000 of funds used in
financing activities offset by $2,307,000 of funds provided from
operations. Net investing activities of $5,333,000 include:
$5,503,000 of cash utilized for motel development; $1,334,000
expended on refurbishment of existing properties, offset by a change
in cash restricted for refurbishment of $1,037,000 and $467,000 of
cash provided from the sale of investment properties and
collections on mortgage and other notes receivable. Cash used in
financing activities includes: $1,521,000 of cash utilized to repay
indebtedness; and $121,000 of cash used for deferred financing costs
and other items.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Not Applicable
Item 2. Changes in Securities
Not Applicable
Item 3. Defaults upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 5. Other Information
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Not Applicable
(b) Reports on Form 8-K:
Not Applicable
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.
MOTELS OF AMERICA, INC.
May 12, 1997 By: /s/ Kurt M. Mueller
____________________________________
Kurt M. Mueller
Chief Financial Officer
May 12, 1997 By: /s/ John D. Simon
____________________________________
John D. Simon
Secretary and Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 10,280
<SECURITIES> 0
<RECEIVABLES> 14,427
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 368,429
<DEPRECIATION> 64,656
<TOTAL-ASSETS> 367,394
<CURRENT-LIABILITIES> 0
<BONDS> 326,112
0
0
<COMMON> 8
<OTHER-SE> 20,558
<TOTAL-LIABILITY-AND-EQUITY> 367,394
<SALES> 0
<TOTAL-REVENUES> 26,344
<CGS> 0
<TOTAL-COSTS> 17,279
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,863
<INCOME-PRETAX> (3,923)
<INCOME-TAX> (1,523)
<INCOME-CONTINUING> (2,400)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,400)
<EPS-PRIMARY> (3.00)
<EPS-DILUTED> (3.00)
</TABLE>
