Northampton Group Inc.
TSX VENTURE : NHG
TSX VENTURE : NHG.DB

Northampton Group Inc.

November 20, 2009 08:00 ET

Northampton Reports Six-Month Results

TORONTO, ONTARIO--(Marketwire - Nov. 20, 2009) - Northampton Group Inc. (TSX VENTURE:NHG)(TSX VENTURE:NHG.DB), an integrated Canadian hotelier, today reported its financial results for fiscal 2010's second quarter and six months ended September 30, 2009. The second quarter showed a quarter-over-quarter sales decline of 15.5%; the six-month period saw a decline of 16.7%, in an environment where both domestic travel and US overnight travel have contracted and price cutting is rampant (PKF Consulting).

Northampton's performance is on a par with the Toronto and Montreal areas generally. Both cities have been affected by the economic downturn, a reduction in travel, the high Canadian dollar, the reduction in day-trippers from the US as a result of the need for passports at the border, and the inability to raise rates to offset declines in occupancy.

"Like the majority of hotels in Canada, most of Northampton's hotels are experiencing an ongoing margin squeeze, with 25.1% operating margin in the quarter and 22.4% in the six months," said Vinod Patel, president and CEO of Northampton Group. "While industry experts predict improvement through calendar 2010, we expect the stress on margins to continue as long as US and domestic travel stays slow. That said, Northampton is well capitalized to withstand the margin pressure, and management will continue to exercise care in its expenditures while taking advantage of strategic opportunities to monetize, acquire, or build assets. In this context, we have been pleased with the performance of our newest hotel, the aloft Montreal Airport, as well as the success of the sale of the Sheraton Four Points in Montreal."

Highlights of the Quarter:

  • In the six months, consolidated revenues were off 16.7% to $14.36 million from $17.24 million in the same period in the previous fiscal year; for the second quarter, revenues decreased 15.5% to $7.73 million from $9.15 million in the same quarter in fiscal 2009;
  • Operating expenses decreased 8.1% in the six months and 10.4% in the quarter, as some costs decreased with the contraction in operations as well as due to cost cutting initiatives;
  • Income from operations decreased by 79.8% in the 6-month period to $0.49 million from $2.44 million for the same period in the previous fiscal year. In the quarter, income from operations decreased 57.1% to $0.55 million from $1.28 million in the same quarter of fiscal 2009;
  • Operating profit or EBITA (earnings before income taxes, interest, and amortization) decreased 37.1% in the six months and 27.8% in the quarter;
  • Net income (loss) from continuing operations fell 108.7% to ($0.91 million) in the first six months of fiscal 2010 from $1.05 million for the same period in the previous year, and in the second quarter decreased 44.1% to $0.29 million from $0.51 million for the same quarter in fiscal 2009;
  • Earnings/(loss) per share from continuing operations in the six months was ($0.004) per share compared to $0.04 in the same period in the previous year. In the quarter, earnings per share were $0.01 compared to $0.02 for the second quarter of the previous fiscal year;
  • Cash flow, or net income from continuing operations plus amortization, decreased 47.8% in the six months to $1.25 million or $0.048 per share. In the quarter, cash flow from continuing operations decreased 21.1% to $0.96 million or $0.037 per share;
  • Same-hotel sales contracted at most properties, with particular challenges in the Cambridge, Brampton, and Montreal markets, offset by strong performances in several hotels, especially in the Ottawa region.

The following is a tabulated summary of Northampton's results from continuing operations:

    Three months ended September 30 Six months ended September 30
    2009 2008 % change 2009 2008 % change
 Revenues 7,729,364 9,149,191 -15.5 14,359,325 17,242,973 -16.7
 Income from            
 operations 548,293 1,276,857 -57.1 494,219 2,442,215 -79.8
 Net income (loss)            
 from continuing 286,496 512,094 -44.1 (91,374) 1,047,467 -108.7
 operations            
 Earnings per share            
 from continuing 0.011 0.020 -45.0 (0.004) 0.040 -110.0
 operations            
 Net income 277,875 633,813 -56.2 1,942,929 1,263,846 53.7
 Earnings per share 0.010 0.024 -54.2 0.074 0.048 54.2
 Cash flow 951,382 1,338,404 -28.9 3,287,810 2,618,560 25.6
 Cash flow per            
 share   0.036 0.051   0.126 0.100  
 EBITDA 1,941,180 2,688,399 -27.8 3,219,334 5,114,909 -37.1

For a more complete discussion of the Company's results, please see Northampton's quarterly filings on www.sedar.com, or the quarterly MD&A, financials, and notes to the financial statements on the Company's website at www.nhgi.com.

About Northampton

Northampton Group Inc. is an integrated Canadian hotelier with ownership and management interests in 2,002 rooms in 16 hotels, with a selective strategic development program in place. Focused on creating the best return for all stakeholders, Northampton's proven, market-sensitive strategy is to acquire or build hotels that provide superior overnight accommodation in the mid-price market. Northampton has consistently excelled in this sector, offering services that exceed expectations while still posting industry-leading margins.

Disclaimer:

This news release contains forward-looking statements within the meaning of the "safe harbour" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties and other factors that may cause Northampton's results to differ materially from expectations. Such risks may relate to hotel performance, market fluctuations, investee performance, and other risks more fully described in the Company's annual report, posted on the Company's website and on SEDAR. These forward- looking statements speak only as of the date hereof. Northampton Group disclaims any intent or obligation to update these forward-looking statements.

The TSX Venture Exchange has neither approved nor disapproved the contents of this press release.

Contact Information

  • Northampton Group Inc.
    Vinod Patel
    President & CEO
    (905) 629-9992
    Website: www.nhgi.com