NEW YORK--(BUSINESS WIRE)--Aug. 10, 2009-- Morgans Hotel Group Co. (NASDAQ: MHGC) (“MHG”) today reported financial results for the second quarter ended June 30, 2009.
Revenue per available room (“RevPAR”) for System-Wide Comparable Hotels decreased 36.8% in constant dollars in the second quarter from the comparable period in 2008. Adjusted EBITDA for the second quarter was $11.3 million, a decrease of 59% from the comparable period in 2008.
-On August 5th, MHG announced the successful amendment of its revolving credit facility. This includes, among other things, the elimination of the leverage test, a reduction of the debt service coverage ratio to 0.90x from 1.75x, and an adjustment to the borrowing base test that is expected to allow MHG to access substantial liquidity for the life of the credit facility.
-As a result of the cost reduction plans, EBITDA at System-Wide Comparable Hotels during the second quarter declined at a rate of 1.8 times the related RevPAR percentage change, beating industry norms.
-MHG achieved a 19.8% reduction in operating expenses at System-Wide Comparable Hotels and a 37% reduction in corporate expenses in the second quarter of 2009 from the comparable period in 2008. Through our multi-phase contingency plans implemented beginning in early 2008, we estimate that we have reduced hotel operating expenses and corporate expenses by approximately $20 million and $10 million, respectively, on an annualized basis.
-With the completion of the redesigned Mondrian Los Angeles and Morgans properties in September 2008, MHG has no significant deferred capital expenditure requirements at its owned hotels.
-In April, Hard Rock opened a new and expanded Joint Music Venue and added approximately 65,000 square feet of meeting and convention space. The new north tower, consisting of 490 rooms, opened in July and the casino expansion and south tower, consisting of 374 rooms, are projected to open in late 2009 or early 2010.
-Boston Ames and Mondrian SoHo are currently targeted to open in the fourth quarter of 2009 and the middle of 2010, respectively.
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