Acquisitions Hamper LodgeNet's Q2
Glen Dickson -- Broadcasting & Cable, 7/31/2007 1:55:00 PM
Hotel television provider LodgeNet Entertainment Corporation posted a net loss of $34 million, or $1.52 per share, for the second quarter of 2007. The company attributed the loss to the acquisitions of competitor On Command and Internet access provider StayOnline, and their associated financing costs.
The Sioux Falls, S.D.-based company, which recently signed a major deal to be the television provider to the Venetian hotel chain, reported quarterly revenue of $134.9 million, an increase of $63.1 million over the second quarter of 2006.
According to CFO Gary Ritondaro, LodgeNet's results were significantly affected by the acquisitions, since both companies reported negative operating income during the quarter and a related senior debt offering dragged down LodgeNet's net income by $(22.0) million. Ritondaro said that excluding all acquisitions and refinancing activities, net income would have been $2.0 million for the quarter compared to $0.4 million for the second quarter of 2006.
On the earnings conference call, LodgeNet President/CEO Scott Petersen noted that the pre-acquisition businesses under LodgeNet were doing well and that the newly expanded company would focus on the growth areas of providing hotels with high-speed Internet access and high-definition television.
Over half of the new contracts LodgeNet is signing are for high-definition platforms, said Petersen, and he expects that LodgeNet will serve some 80,000-90,000 hotel rooms with HDTV by year-end. By year-end 2008, he expects the HDTV room total to reach 200,000.
"There is an emerging evolution to high-definition TV," said Petersen.
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