Sotherly Hotels Inc. (NASDAQ:SOHO), (“Sotherly” or
the “Company”), a self-managed and self-administered lodging real
estate investment trust (a “REIT”), today reported its consolidated
results for the first quarter ended March 31, 2018. The Company’s
results include the following*:
|
|
|
|
Three Months Ended |
|
|
March 31, 2018 |
|
|
March 31, 2017 |
|
|
($ in thousands except per share data) |
|
Total
Revenue |
$ |
41,736 |
|
|
$ |
38,695 |
|
Net (loss)
income available to common stockholders |
|
(238 |
) |
|
|
1,851 |
|
|
|
|
|
|
|
|
|
EBITDA |
|
10,345 |
|
|
|
9,751 |
|
Hotel
EBITDA |
|
11,879 |
|
|
|
11,479 |
|
|
|
|
|
|
|
|
|
FFO |
|
4,499 |
|
|
|
5,000 |
|
Adjusted FFO
available to common stockholders |
|
4,746 |
|
|
|
5,134 |
|
|
|
|
|
|
|
|
|
Net (loss)
income per share available to common stockholders |
$ |
(0.02 |
) |
|
$ |
0.13 |
|
FFO per share
and unit |
$ |
0.29 |
|
|
$ |
0.32 |
|
Adjusted FFO
available to common holders per share and unit |
$ |
0.31 |
|
|
$ |
0.32 |
|
|
|
|
|
|
|
|
|
(*) Earnings before interest, taxes, depreciation and
amortization (“EBITDA”), hotel EBITDA, funds from operations
(“FFO”), adjusted FFO, FFO per share and unit and adjusted FFO per
share and unit are non-GAAP financial measures. See further
discussion of these non-GAAP measures, including definitions
related thereto, and reconciliations to net income (loss) later in
this press release. The Company is the sole general partner of
Sotherly Hotels LP, a Delaware limited partnership (the “Operating
Partnership”), and all references in this release to the “Company”,
“Sotherly”, “we”, “us” and “our” refer to Sotherly Hotels Inc., its
Operating Partnership and its subsidiaries and predecessors, unless
the context otherwise requires or where otherwise indicated.
HIGHLIGHTS:
- Revenue and RevPAR. For the three-month
period ending March 31, 2018, Total Revenue increased 7.9% over the
three-month period ending March 31, 2017. Room revenue per
available room (“RevPAR”) for the Company’s composite portfolio,
which includes the performance of the rooms participating in our
rental program at the Hyde Resort & Residences, during the
three-month period ending March 31, 2018, increased 6.6% over the
three months ended March 31, 2017, to $112.03 reflecting a 4.6%
decrease in occupancy and an 11.8% increase in average daily rate
(“ADR”).
- Common Dividends. As previously reported on
May 1, 2018, the Company announced its quarterly dividend
(distribution) on its common stock (and units) of $0.12 per share
(and unit) to stockholders (and unitholders) of record as of June
15, 2018.
- Hotel EBITDA. The Company generated hotel
EBITDA of approximately $11.9 million during the three-month period
ending March 31, 2018, an increase of 3.5%, or approximately $0.4
million, from the three months ended March 31, 2017.
- EBITDA. The Company generated EBITDA of
approximately $10.3 million during the three-month period ending
March 31, 2018, an increase of 6.1% or approximately $0.6 million
compared to the three months ended March 31, 2017.
- Adjusted FFO. For the three-month period
ending March 31, 2018, Adjusted FFO decreased 7.5% or approximately
$0.4 million from the three months ended March 31, 2017.
Andrew M. Sims, Chairman and Chief Executive Officer of Sotherly
Hotels Inc., commented, “The first quarter of 2018 started out
slow, with January showing weakness, followed by a steady increase
in business volume during February and March. With Easter
week occurring in the first quarter this year, some revenue
migrated to the second quarter. We believe the first half of
2018 will be strong in terms of performance for the Company.
The acquisition of the Hyatt Centric Arlington is a nice addition
to the Company’s upper upscale portfolio.”
Balance Sheet/Liquidity
At March 31, 2018, the Company had approximately $35.6 million
of available cash and cash equivalents, of which approximately $4.9
million was reserved for real estate taxes, insurance, capital
improvements and certain other expenses or otherwise restricted.
The Company had approximately $380.7 million in outstanding debt at
a weighted average interest rate of approximately 4.94%.
On February 1, 2018, the Company drew down the final $5.0
million of loan proceeds available on the Hilton Wilmington
Riverside mortgage loan after completing a significant portion of
the renovation of the hotel and meeting certain other requirements
under the loan documents.
On February 12, 2018, the Company and the Operating Partnership
closed on a sale and issuance by the Operating Partnership of an
aggregate $25.0 million of the 7.25% senior unsecured notes of the
Operating Partnership, unconditionally guaranteed by the Company
(the “7.25% Notes”), for net proceeds after estimated expenses of
approximately $23.3 million. The Operating Partnership used
the net proceeds from this offering, together with existing cash on
hand and $57.0 million of first and second lien asset-level
mortgage indebtedness, to finance the acquisition of the Hyatt
Centric Arlington hotel located in Arlington, Virginia (the
“Arlington Hotel”) and for working capital.
On February 26, 2018, we entered into a First Amendment to the
Loan Agreement, Amended and Restated Promissory Note, and other
related documents with International Bank of Commerce to amend the
terms of the mortgage loan on The Whitehall hotel located in
Houston, TX. Pursuant to the amended loan documents, the
maturity date is extended until February 26, 2023, the loan
amortizes on a 25-year schedule with payments of principal and
interest beginning immediately, and the loan has an initial
principal balance of $15.0 million, with no additional principal
available.
On April 5, 2018, the Company drew down an additional $3.30
million of loan proceeds available on the Crowne Plaza Tampa
Westshore mortgage loan.
Portfolio Update
On March 1, 2018, we acquired the Arlington Hotel from RP/HH
Rosslyn Hotel Owner, LP for an aggregate purchase price of
approximately $79.7 million. Concurrent with the closing, we
entered into an agreement with Highgate Hotels L.P. to manage the
Arlington Hotel. The management agreement has an initial term
of three years commencing on March 1, 2018. In connection
with the acquisition, we entered into a loan agreement, a first and
second promissory note (“Note A” and “Note B”,
respectively), and other loan documents, including a
guarantee by the Operating Partnership, to secure an aggregate
$57.0 million mortgage (the “Mortgage Loan”) on the Arlington Hotel
with Fifth Third Bank. Pursuant to the Mortgage Loan
documents, Note A is in the amount of $50.0 million; has a term of
3 years, with two 1-year extension options, each of which is
subject to certain criteria and bears a floating interest rate of
one-month LIBOR plus 3.00%. Pursuant to the Mortgage
Loan documents, Note B is in the amount of $7.0 million; has a term
of 1-year, with two 1-year extension options, each of which is
subject to certain criteria; bears a floating interest rate of
three-month LIBOR plus 5.00%; and requires monthly principal
payments of $100,000 during the initial 1-year term, $150,000
during the first 1-year extended term, and $250,000 during the
second 1-year extended term, with interest payments due monthly on
the outstanding principal amount during all three terms.
On April 2, 2018, the Company’s hotel in Wilmington, North
Carolina was converted to the Hotel Ballast, a member of the
Tapestry Collection by Hilton, following the completion of a $10.0
million renovation of the guest rooms and public space, which
included the addition of two new food and beverage outlets the
Board & Barrel Coastal Kitchen and the Buffalo Bayou.
At the Company’s hotel in Tampa, Florida, renovations are
underway for an estimated $11.0 million renovation project in
anticipation of a planned conversion in March 2019 from the Crowne
Plaza Tampa Westshore to Hotel Alba, which we expect to become a
member of the Tapestry Collection by Hilton. As of March 31,
2018, we incurred costs totaling approximately $1.3 million toward
this renovation.
2018 Outlook
As previously disclosed, set forth below is the Company’s
guidance for 2018, which accounts for the impact of renovations at
the Company’s hotels in Wilmington and Tampa, the issuance of the
7.25% Notes, and the acquisition of the Arlington Hotel. The
guidance is predicated on estimates of occupancy and ADR that are
consistent with the most recent 2018 calendar year forecasts by STR
for the market segments in which the Company operates.
The table below reflects the Company’s projections, within a
range, of various financial measures for 2018, in thousands of
dollars, except per share and RevPAR data:
|
|
|
|
2018 Guidance |
|
|
Low Range |
|
|
High Range |
|
|
|
|
Total
revenue |
$ |
167,750 |
|
|
$ |
169,095 |
|
Net loss |
|
(2,804 |
) |
|
|
(2,352 |
) |
|
|
|
|
|
|
|
|
EBITDA |
|
40,997 |
|
|
|
41,481 |
|
Hotel
EBITDA |
|
46,997 |
|
|
|
47,581 |
|
|
|
|
|
|
|
|
|
FFO |
|
15,843 |
|
|
|
16,352 |
|
Adjusted FFO
available to common stockholders |
|
15,873 |
|
|
|
16,493 |
|
|
|
|
|
|
|
|
|
Net loss per
share available to common stockholders |
$ |
(0.21 |
) |
|
$ |
(0.17 |
) |
FFO per share
and unit |
$ |
1.04 |
|
|
$ |
1.07 |
|
Adjusted FFO
available to common holders per share and unit |
$ |
1.04 |
|
|
$ |
1.08 |
|
Rev PAR |
$ |
106.23 |
|
|
$ |
107.09 |
|
Hotel EBITDA
margin |
|
31.4 |
% |
|
|
31.6 |
% |
|
|
|
|
|
|
|
|
Earnings Call/Webcast
The Company will conduct its first quarter 2018 conference call
for investors and other interested parties at 10:00 a.m. Eastern
Time on Tuesday, May 8, 2018. The conference call will be
accessible by telephone and through the Internet. Interested
individuals are invited to listen to the call by telephone at
888-339-0107 (United States) or 855-669-9657 (Canada) or +1
412-902-4188 (International). To participate on the webcast, log on
to www.sotherlyhotels.com at least 15 minutes before the call
to download the necessary software. For those unable to listen to
the call live, a taped rebroadcast will be available beginning one
hour after completion of the live call on May 8, 2018 through May
7, 2019. To access the rebroadcast, dial 877-344-7529 and enter
conference number 10118957. A replay of the call also will be
available on the Internet at www.sotherlyhotels.com until May
7, 2019.
About Sotherly Hotels Inc.
Sotherly Hotels Inc. is a self-managed and self-administered
lodging REIT focused on the acquisition, renovation, upbranding and
repositioning of upscale to upper-upscale full-service hotels in
the Southern United States. Currently, the Company’s portfolio
consists of investments in twelve hotel properties, comprising
3,156 rooms, and an interest in the Hyde Resort & Residences, a
luxury condo hotel. Most of the Company’s properties operate under
the Hilton Worldwide, InterContinental Hotels Group and Marriott
International, Inc. brands. Sotherly Hotels Inc. was organized in
2004 and is headquartered in Williamsburg, Virginia. For more
information, please visit www.sotherlyhotels.com.
Contact at the Company:
Scott KucinskiVice President – Operations & Investor
RelationsSotherly Hotels Inc.410 West Francis StreetWilliamsburg,
Virginia 23185757.229.5648
Forward-Looking Statements
This news release includes “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of
1934, as amended. Although the Company believes that the
expectations and assumptions reflected in the forward-looking
statements are reasonable, these statements are not guarantees of
future performance and involve certain risks, uncertainties and
assumptions which are difficult to predict and many of which are
beyond the Company’s control. Therefore, actual outcomes and
results may differ materially from what is expressed, forecasted or
implied in such forward-looking statements. Factors which could
have a material adverse effect on the Company’s future results,
performance and achievements, include, but are not limited to:
national and local economic and business conditions that affect
occupancy rates and revenues at the Company’s hotels and the demand
for hotel products and services; risks associated with the hotel
industry, including competition and new supply of hotel rooms,
increases in wages, energy costs and other operating costs; risks
associated with adverse weather conditions, including hurricanes;
the availability and terms of financing and capital and the general
volatility of the securities markets; the Company’s intent to
repurchase shares from time to time; risks associated with the
level of the Company’s indebtedness and its ability to meet
covenants in its debt agreements and, if necessary, to refinance or
seek an extension of the maturity of such indebtedness or modify
such debt agreements; management and performance of the Company’s
hotels; risks associated with maintaining our system of internal
controls; risks associated with the conflicts of interest of the
Company’s officers and directors; risks associated with
redevelopment and repositioning projects, including delays and cost
overruns; supply and demand for hotel rooms in the Company’s
current and proposed market areas; risks associated with our
ability to maintain our franchise agreements with our third party
franchisors; the Company’s ability to acquire additional properties
and the risk that potential acquisitions may not perform in
accordance with expectations; the Company’s ability to successfully
expand into new markets; legislative/regulatory changes, including
changes to laws governing taxation of REITs; the Company’s ability
to maintain its qualification as a REIT; and the Company’s ability
to maintain adequate insurance coverage. These risks and
uncertainties are described in greater detail under “Risk Factors”
in the Company’s Annual Report on Form 10-K and subsequent reports
filed with the Securities and Exchange Commission. The Company
undertakes no obligation to and does not intend to publicly update
or revise any forward-looking statement, whether as a result of new
information, future events or otherwise. Although the Company
believes its current expectations to be based upon reasonable
assumptions, it can give no assurance that its expectations will be
attained or that actual results will not differ materially.
Financial Tables Follow…
|
SOTHERLY HOTELS INC. |
CONSOLIDATED BALANCE SHEETS |
|
|
|
March 31, 2018 |
|
|
December 31, 2017 |
|
|
|
(unaudited) |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Investment in hotel properties, net |
|
$ |
438,649,721 |
|
|
$ |
357,799,512 |
|
Cash and
cash equivalents |
|
|
30,673,556 |
|
|
|
29,777,845 |
|
Restricted cash |
|
|
4,901,392 |
|
|
|
3,651,197 |
|
Accounts
receivable, net |
|
|
9,424,697 |
|
|
|
5,587,077 |
|
Accounts
receivable - affiliate |
|
|
307,351 |
|
|
|
394,026 |
|
Prepaid
expenses, inventory and other assets |
|
|
6,207,626 |
|
|
|
7,292,565 |
|
Deferred
income taxes |
|
|
5,190,855 |
|
|
|
5,451,118 |
|
TOTAL
ASSETS |
|
$ |
495,355,198 |
|
|
$ |
409,953,340 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
Mortgage
loans, net |
|
$ |
357,170,859 |
|
|
$ |
297,318,816 |
|
Unsecured
notes, net |
|
|
23,530,323 |
|
|
|
- |
|
Accounts
payable and accrued liabilities |
|
|
16,534,533 |
|
|
|
13,813,623 |
|
Advance
deposits |
|
|
2,570,635 |
|
|
|
1,572,388 |
|
Dividends
and distributions payable |
|
|
3,229,002 |
|
|
|
3,073,483 |
|
TOTAL
LIABILITIES |
|
$ |
403,035,352 |
|
|
$ |
315,778,310 |
|
Commitments and contingencies |
|
|
— |
|
|
|
— |
|
EQUITY |
|
|
|
|
|
|
|
|
Sotherly
Hotels Inc. stockholders’ equity |
|
|
|
|
|
|
|
|
Preferred
stock, $0.01 par value, 11,000,000 shares authorized; |
|
|
|
|
|
|
|
|
8.0%
Series B cumulative redeemable perpetual preferred stock, |
|
|
|
|
|
|
|
|
liquidation preference $25 per share, 1,610,000 shares issued |
|
|
|
|
|
|
|
|
and
outstanding at March 31, 2018 and December 31, 2017,
respectively |
|
|
16,100 |
|
|
|
16,100 |
|
7.875%
Series C cumulative redeemable perpetual preferred stock, |
|
|
|
|
|
|
|
|
liquidation preference $25 per share, 1,300,000 shares issued |
|
|
|
|
|
|
|
|
and
outstanding at March 31, 2018 and December 31, 2017,
respectively |
|
|
13,000 |
|
|
|
13,000 |
|
Common
stock, par value $0.01, 49,000,000 shares authorized,
14,121,081 |
|
|
|
|
|
|
|
|
shares
and 14,078,831 shares issued and outstanding at March 31, 2018 |
|
|
|
|
|
|
|
|
and
December 31, 2017, respectively |
|
|
141,211 |
|
|
|
140,788 |
|
Additional paid-in capital |
|
|
146,360,268 |
|
|
|
146,249,339 |
|
Unearned
ESOP shares |
|
|
(4,572,942 |
) |
|
|
(4,633,112 |
) |
Distributions in excess of retained earnings |
|
|
(50,558,067 |
) |
|
|
(48,765,860 |
) |
Total
Sotherly Hotels Inc. stockholders’ equity |
|
|
91,399,570 |
|
|
|
93,020,255 |
|
Noncontrolling interest |
|
|
920,276 |
|
|
|
1,154,775 |
|
TOTAL
EQUITY |
|
|
92,319,846 |
|
|
|
94,175,030 |
|
TOTAL
LIABILITIES AND EQUITY |
|
$ |
495,355,198 |
|
|
$ |
409,953,340 |
|
|
|
SOTHERLY HOTELS INC. |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(unaudited) |
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
|
March 31, 2018 |
|
|
March 31, 2017 |
|
|
|
|
|
|
|
|
|
|
REVENUE |
|
|
|
|
|
|
|
|
Rooms
department |
|
$ |
28,285,445 |
|
|
$ |
27,366,634 |
|
Food and
beverage department |
|
|
8,351,983 |
|
|
|
8,323,759 |
|
Other
operating departments |
|
|
5,098,128 |
|
|
|
3,004,493 |
|
Total
revenue |
|
|
41,735,556 |
|
|
|
38,694,886 |
|
EXPENSES |
|
|
|
|
|
|
|
|
Hotel
operating expenses |
|
|
|
|
|
|
|
|
Rooms
department |
|
|
6,700,381 |
|
|
|
6,682,279 |
|
Food and
beverage department |
|
|
6,395,076 |
|
|
|
5,728,473 |
|
Other
operating departments |
|
|
1,528,327 |
|
|
|
600,020 |
|
Indirect |
|
|
15,233,256 |
|
|
|
14,205,231 |
|
Total
hotel operating expenses |
|
|
29,857,040 |
|
|
|
27,216,003 |
|
Depreciation
and amortization |
|
|
5,634,190 |
|
|
|
4,061,097 |
|
Loss on
disposal of assets |
|
|
3,739 |
|
|
|
- |
|
Corporate
general and administrative |
|
|
1,546,300 |
|
|
|
1,712,082 |
|
Total
operating expenses |
|
|
37,041,269 |
|
|
|
32,989,182 |
|
NET OPERATING
INCOME |
|
|
4,694,287 |
|
|
|
5,705,704 |
|
Other income
(expense) |
|
|
|
|
|
|
|
|
Interest
expense |
|
|
(4,177,019 |
) |
|
|
(3,813,717 |
) |
Interest
income |
|
|
81,704 |
|
|
|
39,705 |
|
Unrealized gain (loss) on hedging activities |
|
|
12,730 |
|
|
|
(15,945 |
) |
Gain on
sale of assets |
|
|
— |
|
|
|
100,407 |
|
Gain on
involuntary conversion of assets |
|
|
870,741 |
|
|
|
1,041,815 |
|
Net income
before income taxes |
|
|
1,482,443 |
|
|
|
3,057,969 |
|
Income
tax provision |
|
|
(305,955 |
) |
|
|
(171,937 |
) |
Net
income |
|
|
1,176,488 |
|
|
|
2,886,032 |
|
Less: Net
loss (income) attributable to the noncontrolling interest |
|
|
30,013 |
|
|
|
(229,942 |
) |
Net income
attributable to the Company |
|
|
1,206,501 |
|
|
|
2,656,090 |
|
Distributions to preferred stockholders |
|
|
(1,444,844 |
) |
|
|
(805,000 |
) |
Net (loss)
income available to common stockholders |
|
$ |
(238,343 |
) |
|
$ |
1,851,090 |
|
Net (loss)
income per share available to common stockholders |
|
|
|
|
|
|
|
|
Basic
& Diluted |
|
$ |
(0.02 |
) |
|
$ |
0.13 |
|
Weighted
average number of common shares outstanding |
|
|
|
|
|
|
|
|
Basic
& Diluted |
|
|
13,472,221 |
|
|
|
14,025,489 |
|
|
|
|
|
|
|
|
|
|
SOTHERLY HOTELS INC.KEY
OPERATING METRICS(unaudited)
The following tables illustrate the key operating metrics for
the three months ended March 31, 2018 and 2017, respectively, for
the Company’s wholly-owned properties (“actual” portfolio metrics),
as well as the ten wholly-owned properties in the portfolio that
were under the Company’s control during the three months ended
March 31, 2018 and the corresponding periods in 2017 (“same-store”
portfolio metrics). Accordingly, the same-store data does not
reflect the performance of the Crowne Plaza Hampton Marina which
was sold in February 2017, our interest in the Hyde Resort &
Residences which was acquired on January 30, 2017, or the Hyatt
Centric Arlington which we acquired in March 2018. The
composite portfolio metrics represent all of the Company’s
wholly-owned properties and the participating condominium hotel
rooms at the Hyde Resort & Residences during the three months
ended March 31, 2018 and the corresponding periods in 2017.
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
|
March 31, 2018 |
|
|
March 31, 2017 |
|
Actual
Portfolio Metrics |
|
|
|
|
|
|
|
|
Occupancy
% |
|
|
67.6 |
% |
|
|
70.1 |
% |
ADR |
|
$ |
157.80 |
|
|
$ |
149.08 |
|
RevPAR |
|
$ |
106.63 |
|
|
$ |
104.52 |
|
Same-Store
Portfolio Metrics |
|
|
|
|
|
|
|
|
Occupancy
% |
|
|
66.8 |
% |
|
|
69.8 |
% |
ADR |
|
$ |
155.53 |
|
|
$ |
150.08 |
|
RevPAR |
|
$ |
103.84 |
|
|
$ |
104.80 |
|
Composite
Portfolio Metrics |
|
|
|
|
|
|
|
|
Occupancy
% |
|
|
66.5 |
% |
|
|
69.8 |
% |
ADR |
|
$ |
168.37 |
|
|
$ |
150.65 |
|
RevPAR |
|
$ |
112.03 |
|
|
$ |
105.10 |
|
SOTHERLY HOTELS
INC.SUPPLEMENTAL
DATA(unaudited)
The following tables illustrate the key operating metrics for
the three months ended March 31, 2018 and 2017, respectively, for
each of the Company’s wholly-owned properties during each
respective reporting period, irrespective of ownership percentage
during any period.
Occupancy
|
|
|
|
|
|
|
|
|
|
Q1 2018 |
|
|
Q1 2017 |
|
|
Q1 2016 |
|
Crowne Plaza
Tampa Westshore |
90.6 |
% |
|
85.7 |
% |
|
83.7 |
% |
Tampa,
Florida |
The
DeSoto |
56.7 |
% |
|
66.8 |
% |
|
74.5 |
% |
Savannah,
Georgia |
DoubleTree by
Hilton Jacksonville Riverfront |
84.3 |
% |
|
80.9 |
% |
|
76.8 |
% |
Jacksonville,
Florida |
DoubleTree by
Hilton Laurel |
50.6 |
% |
|
50.2 |
% |
|
44.5 |
% |
Laurel,
Maryland |
DoubleTree by
Hilton Philadelphia Airport |
71.1 |
% |
|
69.1 |
% |
|
73.1 |
% |
Philadelphia,
Pennsylvania |
DoubleTree by
Hilton Raleigh Brownstone – University |
71.4 |
% |
|
74.2 |
% |
|
69.4 |
% |
Raleigh,
North Carolina |
DoubleTree
Resort by Hilton Hollywood Beach |
77.8 |
% |
|
83.0 |
% |
|
88.5 |
% |
Hollywood,
Florida |
Georgian
Terrace |
63.6 |
% |
|
74.6 |
% |
|
70.2 |
% |
Atlanta,
Georgia |
Hotel Ballast
(1) |
51.4 |
% |
|
64.1 |
% |
|
58.6 |
% |
Wilmington,
North Carolina |
Hyatt Centric
Arlington (2) |
72.2 |
% |
|
80.2 |
% |
|
79.1 |
% |
Arlington,
Virginia |
Sheraton
Louisville Riverside |
51.6 |
% |
|
57.5 |
% |
|
51.1 |
% |
Jeffersonville, Indiana |
The
Whitehall |
57.6 |
% |
|
65.5 |
% |
|
64.8 |
% |
Houston,
Texas |
Hyde Resort
& Residences (3) |
52.3 |
% |
|
39.3 |
% |
|
N/A |
|
Hollywood
Beach, Florida |
All
properties weighted average (2) |
66.9 |
% |
|
71.6 |
% |
|
70.8 |
% |
|
1 |
Property undergoing
renovation during the current quarter. |
2 |
Includes operating
results under previous ownership. Results for periods prior
to the Company’s ownership were provided by prior owners of the
hotel and have not been audited or confirmed by the Company. |
3 |
Reflects only the
condominium units at the Hyde Resort & Residences participating
in our rental program for the period those units participated in
our rental program. |
|
|
ADR
|
|
|
|
|
|
|
|
|
|
|
Q1 2018 |
|
Q1 2017 |
|
Q1 2016 |
|
Crowne Plaza
Tampa Westshore |
$ |
140.82 |
|
$ |
136.95 |
|
$ |
130.90 |
|
Tampa,
Florida |
The
DeSoto |
$ |
178.65 |
|
$ |
162.04 |
|
$ |
157.34 |
|
Savannah,
Georgia |
DoubleTree by
Hilton Jacksonville Riverfront |
$ |
144.30 |
|
$ |
132.16 |
|
$ |
122.43 |
|
Jacksonville,
Florida |
DoubleTree by
Hilton Laurel |
$ |
109.13 |
|
$ |
113.28 |
|
$ |
100.06 |
|
Laurel,
Maryland |
DoubleTree by
Hilton Philadelphia Airport |
$ |
128.84 |
|
$ |
120.02 |
|
$ |
121.90 |
|
Philadelphia,
Pennsylvania |
DoubleTree by
Hilton Raleigh Brownstone – University |
$ |
133.58 |
|
$ |
135.59 |
|
$ |
134.87 |
|
Raleigh,
North Carolina |
DoubleTree
Resort by Hilton Hollywood Beach |
$ |
226.52 |
|
$ |
216.61 |
|
$ |
221.48 |
|
Hollywood,
Florida |
Georgian
Terrace |
$ |
191.17 |
|
$ |
171.32 |
|
$ |
160.52 |
|
Atlanta,
Georgia |
Hotel Ballast
(1) |
$ |
131.36 |
|
$ |
126.66 |
|
$ |
128.12 |
|
Wilmington,
North Carolina |
Hyatt Centric
Arlington (2) |
$ |
166.91 |
|
$ |
174.40 |
|
$ |
153.51 |
|
Arlington,
Virginia |
Sheraton
Louisville Riverside |
$ |
120.39 |
|
$ |
121.10 |
|
$ |
141.14 |
|
Jeffersonville, Indiana |
The
Whitehall |
$ |
147.11 |
|
$ |
161.18 |
|
$ |
149.40 |
|
Houston,
Texas |
Hyde Resort
& Residences (3) |
$ |
357.72 |
|
$ |
397.16 |
|
N/A |
|
Hollywood
Beach, Florida |
All
properties weighted average (2) |
$ |
166.77 |
|
$ |
154.02 |
|
$ |
148.54 |
|
|
|
|
|
|
|
|
|
|
|
1 |
Property undergoing
renovation during the current quarter. |
2 |
Includes operating
results under previous ownership. Results for periods prior
to the Company’s ownership were provided by prior owners of the
hotel and have not been audited or confirmed by the Company. |
3 |
Reflects only the
condominium units at the Hyde Resort & Residences participating
in our rental program for the period those units participated in
our rental program. |
|
|
RevPAR
|
|
|
|
|
|
|
|
|
|
|
Q1 2018 |
|
Q1 2017 |
|
Q1 2016 |
|
Crowne Plaza
Tampa Westshore |
$ |
127.56 |
|
$ |
117.43 |
|
$ |
109.57 |
|
Tampa,
Florida |
The
DeSoto |
$ |
101.36 |
|
$ |
108.29 |
|
$ |
117.29 |
|
Savannah,
Georgia |
DoubleTree by
Hilton Jacksonville Riverfront |
$ |
121.65 |
|
$ |
106.92 |
|
$ |
94.08 |
|
Jacksonville,
Florida |
DoubleTree by
Hilton Laurel |
$ |
55.26 |
|
$ |
56.83 |
|
$ |
44.53 |
|
Laurel,
Maryland |
DoubleTree by
Hilton Philadelphia Airport |
$ |
91.59 |
|
$ |
82.90 |
|
$ |
89.12 |
|
Philadelphia,
Pennsylvania |
DoubleTree by
Hilton Raleigh Brownstone – University |
$ |
95.36 |
|
$ |
100.63 |
|
$ |
93.60 |
|
Raleigh,
North Carolina |
DoubleTree
Resort by Hilton Hollywood Beach |
$ |
176.17 |
|
$ |
179.81 |
|
$ |
196.11 |
|
Hollywood,
Florida |
Georgian
Terrace |
$ |
121.49 |
|
$ |
127.77 |
|
$ |
112.74 |
|
Atlanta,
Georgia |
Hotel Ballast
(1) |
$ |
67.48 |
|
$ |
81.18 |
|
$ |
75.13 |
|
Wilmington,
North Carolina |
Hyatt Centric
Arlington (2) |
$ |
120.57 |
|
$ |
139.78 |
|
$ |
121.38 |
|
Arlington,
Virginia |
Sheraton
Louisville Riverside |
$ |
62.12 |
|
$ |
69.61 |
|
$ |
72.19 |
|
Jeffersonville, Indiana |
The
Whitehall |
$ |
84.74 |
|
$ |
105.55 |
|
$ |
96.86 |
|
Houston,
Texas |
Hyde Resort
& Residences (3) |
$ |
187.03 |
|
$ |
155.97 |
|
N/A |
|
Hollywood
Beach, Florida |
All
properties weighted average (2) |
$ |
111.52 |
|
$ |
110.23 |
|
$ |
105.24 |
|
|
|
|
|
|
|
|
|
|
|
1 |
Property undergoing
renovation during the current quarter. |
2 |
Includes operating
results under previous ownership. Results for periods prior
to the Company’s ownership were provided by prior owners of the
hotel and have not been audited or confirmed by the Company. |
3 |
Reflects only the
condominium units at the Hyde Resort & Residences participating
in our rental program for the period those units participated in
our rental program. |
|
|
|
SOTHERLY HOTELS INC. |
RECONCILIATION OF NET INCOME (LOSS)
TO |
FFO, Adjusted FFO, EBITDA and Hotel
EBITDA |
(unaudited) |
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
|
March 31, 2018 |
|
|
March 31, 2017 |
|
Net
(loss) income available to common stockholders |
|
$ |
(238,343 |
) |
|
$ |
1,851,090 |
|
Add: Net
(loss) income attributable to noncontrolling interest |
|
|
(30,013 |
) |
|
|
229,942 |
|
Depreciation and amortization |
|
|
5,634,190 |
|
|
|
4,061,097 |
|
Gain on
involuntary conversion of assets |
|
|
(870,741 |
) |
|
|
(1,041,815 |
) |
Loss
(gain) on disposal and/or sale of assets |
|
|
3,739 |
|
|
|
(100,407 |
) |
FFO |
|
$ |
4,498,832 |
|
|
$ |
4,999,907 |
|
Decrease
in deferred income taxes |
|
|
260,262 |
|
|
|
118,050 |
|
Unrealized (gain) loss on hedging activities |
|
|
(12,730 |
) |
|
|
15,945 |
|
Adjusted FFO available to common stockholders |
|
$ |
4,746,364 |
|
|
$ |
5,133,902 |
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares outstanding, basic |
|
|
13,472,221 |
|
|
|
14,025,489 |
|
|
|
|
|
|
|
|
|
|
Weighted
average number of non-controlling units |
|
|
1,778,140 |
|
|
|
1,778,140 |
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares and units outstanding, basic |
|
|
15,250,361 |
|
|
|
15,803,629 |
|
|
|
|
|
|
|
|
|
|
FFO per
share and unit |
|
$ |
0.29 |
|
|
$ |
0.32 |
|
|
|
|
|
|
|
|
|
|
Adjusted
FFO per share and unit |
|
$ |
0.31 |
|
|
$ |
0.32 |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
|
March 31, 2018 |
|
|
March 31, 2017 |
|
Net
(loss) income available to common stockholders |
|
$ |
(238,343 |
) |
|
$ |
1,851,090 |
|
Add: Net
(loss) income attributable to noncontrolling interest |
|
|
(30,013 |
) |
|
|
229,942 |
|
Interest
expense |
|
|
4,177,019 |
|
|
|
3,813,717 |
|
Interest
income |
|
|
(81,704 |
) |
|
|
(39,705 |
) |
Income
tax provision |
|
|
305,955 |
|
|
|
171,937 |
|
Depreciation and amortization |
|
|
5,634,190 |
|
|
|
4,061,097 |
|
Loss
(gain) on disposal and/or sale of assets |
|
|
3,739 |
|
|
|
(100,407 |
) |
Gain on
involuntary conversion of assets |
|
|
(870,741 |
) |
|
|
(1,041,815 |
) |
Distributions to preferred stockholders |
|
|
1,444,844 |
|
|
|
805,000 |
|
EBITDA |
|
|
10,344,946 |
|
|
|
9,750,856 |
|
Corporate
general and administrative |
|
|
1,546,300 |
|
|
|
1,712,082 |
|
Unrealized (gain) loss on hedging activities |
|
|
(12,730 |
) |
|
|
15,945 |
|
Hotel
EBITDA |
|
$ |
11,878,516 |
|
|
$ |
11,478,883 |
|
|
Non-GAAP Financial Measures
The Company considers the non-GAAP measures of FFO (including
FFO per share), EBITDA and hotel EBITDA to be key supplemental
measures of the Company’s performance and could be considered along
with, not alternatives to, net income (loss) as a measure of the
Company’s performance. These measures do not represent cash
generated from operating activities determined by generally
accepted accounting principles (“GAAP”) or amounts available for
the Company’s discretionary use and should not be considered
alternative measures of net income, cash flows from operations or
any other operating performance measure prescribed by GAAP.
FFO
Industry analysts and investors use Funds from Operations
(“FFO”), as a supplemental operating performance measure of an
equity REIT. FFO is calculated in accordance with the definition
adopted by the Board of Governors of the National Association of
Real Estate Investment Trusts (“NAREIT”). FFO, as defined by
NAREIT, represents net income or loss determined in accordance with
GAAP, excluding extraordinary items as defined under GAAP and gains
or losses from sales of previously depreciated operating real
estate assets, plus certain non-cash items such as real estate
asset depreciation and amortization, and after adjustment for any
noncontrolling interest from unconsolidated partnerships and joint
ventures. Historical cost accounting for real estate assets in
accordance with GAAP implicitly assumes that the value of real
estate assets diminishes predictably over time. Since real estate
values instead have historically risen or fallen with market
conditions, many investors and analysts have considered the
presentation of operating results for real estate companies that
use historical cost accounting to be insufficient by itself.
The Company considers FFO to be a useful measure of adjusted net
income (loss) for reviewing comparative operating and financial
performance because we believe FFO is most directly comparable to
net income (loss), which remains the primary measure of
performance, because by excluding gains or losses related to sales
of previously depreciated operating real estate assets and
excluding real estate asset depreciation and amortization, FFO
assists in comparing the operating performance of a company’s real
estate between periods or as compared to different companies.
Although FFO is intended to be a REIT industry standard, other
companies may not calculate FFO in the same manner as we do, and
investors should not assume that FFO as reported by us is
comparable to FFO as reported by other REITs.
Adjusted FFO
The Company presents adjusted FFO, including adjusted FFO per
share and unit, which adjusts for certain additional items
including changes in deferred income taxes, any unrealized gain
(loss) on hedging instruments or warrant derivative, loan
impairment losses, losses on early extinguishment of debt, aborted
offering costs, loan modification fees, franchise termination
costs, costs associated with the departure of executive officers,
litigation settlement, over-assessed real estate taxes on appeal,
change in control gains or losses and acquisition transaction
costs. We exclude these items as we believe it allows for
meaningful comparisons between periods and among other REITs and is
more indicative than FFO of the on-going performance of our
business and assets. Our calculation of Adjusted FFO may be
different from similar measures calculated by other REITs.
EBITDA
The Company believes that excluding the effect of non-operating
expenses and non-cash charges, and the portion of those items
related to unconsolidated entities, all of which are also based on
historical cost accounting and may be of limited significance in
evaluating current performance, can help eliminate the accounting
effects of depreciation and financing decisions and facilitate
comparisons of core operating profitability between periods and
between REITs, even though EBITDA also does not represent an amount
that accrued directly to shareholders.
Hotel EBITDA
The Company defines Hotel EBITDA as net income or loss
excluding: (1) interest expense, (2) interest income, (3) income
tax provision or benefit, (4) equity in the income or loss of
equity investees, (5) unrealized gains and losses on derivative
instruments not included in other comprehensive income, (6) gains
and losses on disposal of assets, (7) realized gains and losses on
investments, (8) impairment of long-lived assets or investments,
(9) loss on early debt extinguishment, (10) gains or losses on
change in control, (11) corporate general and administrative
expense, (12) depreciation and amortization, (13) gains and losses
on involuntary conversions of assets, (14) distributions to
preferred stockholders and (15) other operating revenue not related
to our wholly-owned portfolio. We believe this provides a
more complete understanding of the operating results over which our
wholly-owned hotels and its operators have direct control. We
believe Hotel EBITDA provides investors with supplemental
information on the on-going operational performance of our hotels
and the effectiveness of third-party management companies operating
our business on a property-level basis. The Company’s calculation
of hotel EBITDA may be different from similar measures calculated
by other REITs.
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