For the first quarter of 2002, total revenues from hotel operations were $4.4 million compared with $4.3 million in the first quarter of 2001. For ShoLodge's 12 hotels opened for all of both quarterly periods (same-hotels), total revenues decreased 8.9% to $3.4 million in the first quarter of this year from $3.7 million in the first quarter of 2001. Revenue per available room (RevPAR) for these 12 same-hotels was $21.73 in the first quarter of 2002 compared with $23.54 in the first quarter of last year. Three hotels opened or acquired since the first quarter of 2001 contributed $1.0 million to the first quarter 2002 hotel revenues, whereas two hotels sold near the end of the first quarter of last year contributed $638,000 to hotel revenues in the first quarter of 2001. RevPAR for all company-owned hotels was $23.33 in the first quarter of this year compared with $23.88 in the first quarter of last year.

The Company reported gains on the sale of properties of $3.6 million in the first quarter of 2001 in contrast to only $99,000 in the first quarter of this year.

Leon Moore, chief executive officer of ShoLodge, said, "Since the end of our first fiscal quarter, we have acquired the exclusive franchising rights for the GuestHouse Inns & Suites hotel brand, consisting of 71 properties currently open and operating. We are currently the franchisor of 70 Shoney's Inns & Suites. We recently announced our intentions to convert all of the Shoney's brand to the GuestHouse brand. This will result in our having 141 franchised hotels with the same brand name, giving us a greater presence in the marketplace and allowing more effective use of advertising dollars. We believe that the GuestHouse name suggests a warm hospitality and will be well received. We intend to aggressively grow the expanded chain and are very optimistic about its future. These 71 additional properties will be added to our proprietary reservation center in August. Over the past year we have increased the number of hotels and resort properties served by our reservation center from approximately 100 to approximately 550. The GuestHouse additions will increase this number to approximately 620. In addition to our increased franchising efforts and continued expansion of our reservation services, we intend to continue to develop hotels for third parties as these opportunities arise."

This press release contains forward-looking statements relating to certain matters, which reflect management's best judgment, based on factors currently known and involve risks and uncertainties. Actual results could differ materially from the anticipated results or expectations expressed in the Company's forward-looking statements. Forward-looking information provided by the Company pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 should be evaluated in the context of these factors which are contained in the Company's Securities and Exchange Commission (SEC) filings, including its periodic reports filed under the Securities Exchange Act of 1934, as amended. Copies of these filings are available upon request from the Company. In addition, the Company disclaims any intent or obligation to update these forward-looking statements

                                SHOLODGE, INC.
                        Unaudited Financial Highlights
                   (In thousands, except per share amounts)


                                                         16 Weeks Ended
                                                     4/21/02        4/22/01
    Total operating revenues                         $10,731        $11,063

    Hotel operating revenues                         $ 4,426        $ 4,348

    Net earnings (loss)                               ($903)         $1,586

    Net earnings (loss) per common share:
      Basic                                          ($0.18)          $0.29
      Diluted                                        ($0.18)          $0.29

    Average shares outstanding:
      Basic                                            5,103          5,542
      Diluted                                          5,103          6,839