Choice Hotels International, Inc. (CHH) has reported 8.96 percent rise in profit for the quarter ended Dec. 31, 2016. The company has earned $31.82 million, or $0.56 a share in the quarter, compared with $29.20 million, or $0.51 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $31.82 million, or $0.56 a share compared with $29.20 million or $0.51 a share, a year ago.

Revenue during the quarter went down marginally by 1.31 percent to $208.20 million from $210.95 million in the previous year period. Total expenses were 74.80 percent of quarterly revenues, down from 77.63 percent for the same period last year. This has led to an improvement of 283 basis points in operating margin to 25.20 percent.

Operating income for the quarter was $52.46 million, compared with $47.20 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $55.99 million compared with $50.56 million in the prior year period. At the same time, adjusted EBITDA margin improved 292 basis points in the quarter to 26.89 percent from 23.97 percent in the last year period.

"We are pleased to report another record year of revenue, operating income and net income performance. 2016 was a strong year for Choice Hotels highlighted by our domestic RevPAR growth which continues to outpace industry performance and strong development results," said Stephen P. Joyce, chief executive officer of Choice Hotels.

For fiscal year 2017, Choice Hotels International expects net income to be in the range of $157 million to $160 million. The company forecasts diluted earnings per share to be in the range of $2.78 to $2.84.

For the first-quarter, The company projects diluted earnings per share to be $0.49. 

Operating cash flow declines
Choice Hotels International, Inc. has generated cash of $152.04 million from operating activities during the year, down 7.90 percent or $13.04 million, when compared with the last year.

The company has spent $98.47 million cash to meet investing activities during the year as against cash outgo of $99.81 million in the last year. It has incurred net capital expenditure of $16.31 million on net basis during the year, down 26.37 percent or $5.84 million from year ago.

The company has spent $44.08 million cash to carry out financing activities during the year as against cash outgo of $84.66 million in the last year period.

Cash and cash equivalents stood at $202.46 million as on Dec. 31, 2016, up 4.66 percent or $9.02 million from $193.44 million on Dec. 31, 2015.

Working capital declines
Choice Hotels International, Inc. has witnessed a decline in the working capital over the last year. It stood at $81.20 million as at Dec. 31, 2016, down 21.11 percent or $21.73 million from $102.94 million on Dec. 31, 2015. Current ratio was at 1.31 as on Dec. 31, 2016, down from 1.49 on Dec. 31, 2015.

Days sales outstanding went up to 24 days for the quarter compared with 19 days for the same period last year.

Debt moves up marginally
Choice Hotels International, Inc. has witnessed an increase in total debt over the last one year. It stood at $840.60 million as on Dec. 31, 2016, up 3.25 percent or $26.47 million from $814.14 million on Dec. 31, 2015. Total debt was 98.61 percent of total assets as on Dec. 31, 2016, compared with 113.55 percent on Dec. 31, 2015. Interest coverage ratio improved to 4.78 for the quarter from 4.38 for the same period last year.