JAMS Jameson Inns

Jameson Inns, Inc. Revises Report on Third quarter 2003 Financial Results ATLANTA, Nov. 14 /PRNewswire-FirstCall/ -- Jameson Inns, Inc. , has revised the previously announced third quarter 2003 results based on a decision with regard to the timing of recognition of transaction costs associated with the Company's proposed restructuring. After giving effect to these changes, the Company's net income before dividends to preferred shareholders was revised from $1,353,861 to $629,259 for third quarter 2003. The net loss attributable to common shareholders has been revised from a loss of $313,329 to a loss of $1,037,931. Under this proposal, the Company would terminate its status as a real estate investment trust, become a taxable corporation and acquire Kitchin Hospitality, LLC. The transaction terms were agreed among the interested parties on September 11, 2003 and are currently pending shareholder approval. The Company's definitive proxy statement, which was filed with the Securities and Exchange Commission on November 10, 2003, provides further details as to the restructuring and acquisition of Kitchin Hospitality. Management has determined that it will account for the acquisition as a purchase for financial reporting purposes. The cost of the acquisition, together with Kitchin Hospitality's accumulated members' deficit at the acquisition date, will be expensed in the period incurred as lease termination costs. Based on this accounting treatment, management determined that it was preferable to expense the transaction costs of $724,602 incurred in connection with this transaction through September 30, 2003 in the third quarter rather than upon the transaction's closing. The Company has revised its previously announced results to reflect this expense in the third quarter 2003. We have revised the presentation of FFO from our previously issued press release. We believe FFO to be a meaningful measure of operating performance because this measure negates the effects of depreciation and the one-time effects of disposals. However, it should not be considered an alternative to accounting principles generally accepted in the United States. The following table presents the revised calculation of FFO for the three and nine months ended September 30, 2003 and 2002: Three Months Ended Nine Months Ended September 30, September 30, 2003 2002 2003 2002 Net loss available to common stockholders $(1,037,931) $(802,950) $(3,583,459) $(3,698,363) Depreciation expense 4,311,054 4,878,251 13,533,435 14,941,069 (Gain) loss on disposal of operating property and equipment (20,165) (132,286) (23,576) (558,427) FFO $ 3,252,958 $3,943,015 $9,926,400 $10,684,279 Revised 2003 Guidance After giving effect to the expensing of the pending acquisition costs and in light of the operating results of the Company for the first nine months of 2003, FFO per diluted share of common stock for full year 2003 is anticipated to be within the range of $1.00 to $1.10. For more information about Jameson Inns, Inc., visit the Company's website at http://www.jamesoninns.com/ . Forward-Looking Statements Certain matters discussed in this press release are forward-looking statements within the meaning of federal securities regulations. All forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual transactions, results, performance or achievements to be materially different from any future transactions, results, performance or achievements expressed or implied by such forward-looking statements. General economic conditions, competition, and governmental actions will affect future transactions, results, performance, and achievements. These risks are presented in detail in our filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that our expectations will be attained or that any deviations will not be material. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances. Condensed Statements of Operations Three Months Ended Nine Months Ended September 30, September 30, 2003 2002 2003 2002 Lease Revenue $11,109,321 $10,904,410 $32,185,237 $31,991,717 Property and Other Taxes 1,079,825 947,762 3,324,057 2,668,530 Insurance 486,300 376,072 1,472,330 1,048,878 Depreciation 4,304,417 4,806,344 13,484,610 14,683,590 General and Administrative Expenses 688,949 591,383 2,072,647 1,721,534 Costs of Acquisition 724,602 - 724,602 - Early Extinguishment of Debt 9,249 - 115,635 57,645 Interest Expense, Net 3,219,444 3,568,334 9,674,685 11,371,980 Other (Income) Expense (513) (513) 45,254 (1,822) Income Before Discontinued Operations and Gain on Sale of Assets 597,048 615,028 1,271,417 441,382 Gain on Disposal of Real Estate - - - 426,141 Gain on Sale of Land - 1,235 35,921 9,205 Income From Continuing Operations 597,048 616,263 1,307,338 876,728 Income from Discontinued Operations 12,046 115,372 87,197 293,874 Gain on Sale of Discontinued Operations 20,165 132,286 23,576 132,286 Net Income 629,259 863,921 1,418,111 1,302,888 Less Preferred Stock Dividends 1,667,190 1,666,871 5,001,570 5,001,251 Net Loss Attributable to Common Shareholders $(1,037,931) $(802,950) $(3,583,459) $(3,698,363) Per common share (basic and diluted): Loss before discontinued operations (net of preferred dividends) $(0.09) $(0.09) $(0.33) $(0.37) Income from discontinued operations - 0.02 0.01 0.04 Net loss attributable to common stockholders $(0.09) $(0.07) $(0.32) $(0.33) Funds From Operations (FFO) $3,252,958 $3,943,015 $9,926,400 $10,684,279 FFO Per Common Share - Diluted $0.28 $0.33 $0.85 $0.90 Weighted Average Shares: Basic 11,329,449 11,255,393 11,298,921 11,244,836 Diluted (a) 11,700,949 11,873,242 11,670,421 11,862,943 Condensed Balance Sheets September 30, December 31, 2003 2002 Property and Equipment, Net $301,339,846 $315,182,881 Cash 4,789,179 3,832,477 Restricted Cash 1,090,209 1,449,825 Receivable from Affiliate 4,372,226 1,489,814 Other Assets, Net 3,896,026 4,552,450 Total Assets 315,487,486 326,507,447 Mortgage Notes Payable 215,943,868 222,820,439 Other Liabilities 3,959,312 3,151,329 Preferred Stock Dividends Payable 1,667,611 1,667,197 Total Shareholders' Equity 93,916,695 98,868,482 (a) Weighted average shares on a diluted basis are for a calculation of FFO only. DATASOURCE: Jameson Inns, Inc. CONTACT: Investor Relations, Alexander Lagerborg of EPOCH Financial, +1-888-917-5146, or Web site: http://www.jamesoninns.com/

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