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

Northampton Group Inc.

July 15, 2010 11:34 ET

Northampton Posts Fiscal 2010 Results

Ongoing Contraction in Travel and Tourism Affects Performance

TORONTO, ONTARIO--(Marketwire - July 15, 2010) -  Northampton Group Inc., (TSX VENTURE:NHG)(TSX VENTURE:NHG.DB) an integrated Canadian hotelier, today reported its results for fiscal 2010. Affected by increased supply and reduced demand, consolidated revenues for the year dropped 14.2% to $25.66 million from $29.90 million in fiscal 2009. Year-over-year decreases in both occupancy and average daily rates (ADRs) resulted in a decline in revenue per available room (RevPAR) of between 7% and 31%. All properties have been affected by the contraction, with the airport locations experiencing more severe declines.

In the fourth quarter, Northampton's revenues decreased 3.5% year-over-year to $5.44 million from $5.64 million for the same quarter in the previous year. Although the fourth quarter tends to be comparatively soft, the decline was not as severe as was the case in previous quarters this fiscal year. The quarter was affected primarily by reduced leisure and business travel, but also felt the impact of a strong Canadian dollar, higher energy prices, and the combination of decreased demand and increased hotel supply in most of Northampton's markets. Despite the difficult situation, Northampton posted a 200.6% increase in net income to $1.67 million from $0.55 million in the previous year, primarily as a result of the sale of the Four Points Montreal Centre-Ville in April of 2009.

Overall, the environment continues extremely challenging for everyone in the hospitality sector. Northampton's lean executive team, strict cost containment, and hands-on management have enabled the company to reduce costs both in the year and the quarter, and the company will continue to manage expenses aggressively.

Highlights of Fiscal 2010:
  • Consolidated revenues fell 14.2% to $25.66 million from $29.90 million in the previous fiscal year;
  • Operating expenses decreased 8.2% to $20.94 million from $22.82 million;
  • Income from operations decreased by 145.3% to ($0.71) million from $1.56 million for the previous fiscal year;
  • Operating profit or EBITDA (earnings before income taxes, interest, depreciation, and amortization) decreased 33.3% to $4.72 million from $7.08 million in the previous year;
  • Net income from continuing operations fell 217.2% to ($0.48) million or ($0.019) per share from $0.41 million or $0.016 per share in the previous year;
  • Net income rose 206.6% to $1.67 million from $0.55 million in fiscal 2009 or to $0.064 per share from $0.021 per share in fiscal 2009, as a result of the sale of a hotel asset;
  • Cash flow or net income plus amortization rose 32.4% in fiscal 2010 to $4.38 million or $0.168 per share from $3.31 million or $0.127 per share in the previous year; 
  • Same-hotel sales declined an average of 16.3% year-over-year, although the new aloft™ Montreal Airport has been a consistent positive performer subsequent to its break-in period;
  • Dividend payments were suspended in fiscal 2010 to preserve capital;
  • Among the hotel management teams that won awards: special mention goes to the Quality Suites Oakville, which was not only awarded Choice Hotels' 2009 Gold Hospitality Award, but named one of the best hotels in the world by travel services provider Expedia.ca.

"We were and are determined to manage our costs. All of our managers are successfully focused on cash flow and must be commended for their performance in this very tough, revenue-challenged environment. Going forward we will continue to support our managers in their efforts to better position our hotels to take advantage of improving market conditions, " said Vinod Patel, President and CEO of the Northampton Group.

The following is a tabulated summary of Northampton's results. Certain comparative amounts have been reclassified to conform to the current year's presentation:

  Three months ended March 31 Twelve months ended March 31
  2010 2009 %
change
2010 2009 %
change
Revenues 5,436,785 5,635,480 -3.5 25,662,029 29,898,703 -14.2
Income (loss)
 from operations
(626,071) (872,890) - (705,806) 1,558,295 -145.3
Net income
 (loss)
 – continuing
 operations
(150,985) (415,820) - (483,510) 412,401 -217.2
Net income
 (loss)
(141) (475,471) - 1,674,620 546,157 206.6
EBITDA 758,578 521,976 45.3 4,719,626 7,080,524 -33.3
Earnings per share
 – continuing
 operations
(0.006) (0.015) - (0.019) 0.016 -218.8
Earnings per
  share
(0.000) (0.018) - 0.064 0.021 204.8
Cash flow 677,825 203,397 233.3 4,384,676 3,312,842 32.4
Cash flow per
 share
0.026 0.008 233.3 0.168 0.127 32.4

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 demonstrated that it excels in this sector, offering services that exceed expectations. 

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 and CEO
    905-629-9992