/Not for distribution on U.S. newswire services or for dissemination in
the United States/
HALIFAX, May 13, 2014 /CNW/ - Holloway Lodging Corporation (TSX: HLC)
("Holloway") today announced financial results for the three months
ended March 31, 2014. All amounts are in Canadian dollars unless
otherwise indicated. Readers should refer to Holloway's unaudited
interim consolidated condensed financial statements as at March 31,
2014 and its management discussion and analysis which is available on
Holloway's website at www.hlcorp.ca and on SEDAR at www.sedar.com.
FIRST QUARTER OVERVIEW AND OUTLOOK
Holloway had a great first quarter. We increased our occupancy, ADR,
RevPar, margins, profits and, most importantly, cash flow. These
increases were broad-based with improvements coming in all of the
regions in which we operate. Our Western Canadian hotels performed
particularly well with strong demand coming from oil and gas companies,
forestry companies and ongoing infrastructure projects. The following
are certain highlights from the quarter:
|
(in millions where indicated except percentages and per room measures)
|
Q1, 2014
|
Q1, 2013
|
$ Increase
|
% Increase
|
|
|
|
|
|
Hotel revenues
|
$15.4 M
|
$14.7 M
|
$0.7 M
|
4.8%
|
Revenue per available room
|
$87.93
|
$84.77
|
$3.16
|
3.7%
|
Hotel operating income per available room before depreciation
|
$34.22
|
$31.85
|
$2.37
|
7.4%
|
Hotel operating income margin
|
36.1%
|
34.9%
|
-
|
1.2 ppt
|
Funds from operations
|
$3.2 M
|
$2.6 M
|
$0.6 M
|
23.1%
|
Adjusted funds from operations
|
$2.9 M
|
$2.4 M
|
$0.5 M
|
20.8%
|
We expect our positive results to continue in coming months. Western
Canada remains very busy with resource development, infrastructure
projects and strong economic growth. The improvements in natural gas
prices over the last several months are expected to generate additional
demand for accommodations and we are excited about that prospect. In
Eastern Canada and the U.S., we expect stable operating results.
In our year-end MD&A, we identified hotel acquisitions as an area of
focus for the Company. Since the beginning of 2014, we sold our Holiday
Inn Express® in Kamloops, BC and entered into an agreement to acquire the Days Inn® in Whitecourt, AB. Because the sale price of the Kamloops property and
the acquisition price of the Whitecourt property are the same, we view
this as trading hotels but will be receiving substantially more NOI
from the hotel being acquired than we are giving up at the hotel being
sold. The acquisition of the Whitecourt property is expected to close
in late May or early June 2014. We also acquired, in April 2014, the
10% interest in the Holiday Inn Express® in Stellarton, NS that we did not already own. We entered into an
agreement in May 2014 to acquire all of the issued and outstanding
common shares of Royal Host Inc. The combined business would have
generated more than $120 million of revenue and more than $34 million
of NOI in 2013. Pursuant to the arrangement agreement, Royal Host
shareholders will receive, for each Royal Host share they own, a
combination of $1.00 in cash and 0.1 of a Holloway common share.
As always, we will continue to be opportunistic in repurchasing our
shares, reducing our debt and acquiring hotels.
DIVIDEND DECLARATION
On May 13, 2014, the Board of Directors declared a quarterly dividend of
$0.035 per share, representing an annual dividend of $0.14 per share.
The dividend will be payable on June 13, 2014 to shareholders of record
on May 30, 2014.
SUMMARY OF OPERATING RESULTS
The following table provides a summary of the operating results for the
three months ended March 31, 2014 and 2013.
|
|
Three months ended
|
(in $000's except number of shares and per share results)
|
March 31, 2014
|
March 31, 2013
|
Hotel revenues
|
15,351
|
14,698
|
Hotel expenses
|
9,817
|
9,563
|
Hotel operating income before depreciation and amortization
|
5,534
|
5,135
|
Hotel depreciation and amortization
|
2,290
|
2,219
|
Income from hotel operations
|
3,244
|
2,916
|
Other expenses
|
2,332
|
2,475
|
Reversal of impairment of asset held-for-sale
|
(1,217)
|
-
|
Income before income taxes
|
2,129
|
441
|
Provision for income taxes
|
570
|
147
|
Net income for the periods
|
1,559
|
294
|
|
|
|
Weighted average basic and diluted shares outstanding
|
17,930,002
|
18,642,969
|
Basic and diluted income per share
|
0.09
|
0.02
|
|
|
|
Reconciliation to funds from operations (FFO)
|
|
|
Add / (deduct):
|
|
|
Depreciation and amortization on real property
|
2,280
|
2,201
|
Provision for income taxes
|
570
|
147
|
Reversal of impairment of asset held-for-sale
|
(1,217)
|
-
|
Loss (gain) on disposal of property and equipment
|
38
|
(4)
|
Loss on disposal of minority interest investments in hotel properties
|
-
|
10
|
FFO - basic and diluted
|
3,230
|
2,648
|
Basic and diluted FFO per share
|
0.18
|
0.14
|
|
|
|
Reconciliation to adjusted funds from operations (AFFO)
|
|
|
Add/(deduct):
|
|
|
Depreciation and amortization - corporate and other assets
|
25
|
19
|
Accretion of mortgages, loan due to a related party, and deferred
financing fees
|
41
|
44
|
Fair value adjustment of derivative liability
|
-
|
(4)
|
Share-based compensation
|
75
|
101
|
FF&E reserve
|
(468)
|
(448)
|
AFFO - basic and diluted
|
2,903
|
2,360
|
Basic and diluted AFFO per share
|
0.16
|
0.13
|
|
|
|
Dividends per share
|
0.035
|
0.035
|
Holloway Lodging Corporation
Holloway is a real estate corporation focused on acquiring, owning and
operating select and limited service lodging properties and a small
complement of full service hotels primarily in secondary, tertiary and
suburban markets. Holloway currently owns 17 hotels with 1,718 rooms.
Holloway's shares trade on the Toronto Stock Exchange under the symbol
HLC.
This press release contains forward-looking information within the
meaning of applicable securities laws. Forward-looking information may
relate to Holloway's future outlook and anticipated events or results
and may include statements regarding Holloway's future financial
position, business strategy, financial results, plans and objectives In
some cases, forward-looking information can be identified by terms such
as "may", "will", "should", "expect", "plan", "anticipate", "believe",
"intend", "estimate", "predict", "potential", "continue" or other
similar expressions concerning matters that are not historical facts.
Forward looking-information is subject to certain factors, including
risks and uncertainties, that could cause actual results to differ
materially from what Holloway currently expects and there can be no
assurance that such statements will prove to be accurate. Some of
these risks and uncertainties are described under "Risk Factors" in
Holloway's Annual Information Form ("AIF"), dated March 3, 2014 which
is available at www.sedar.com. Holloway does not intend to update or revise any such forward-looking
information should its assumptions and estimates change.
SOURCE Holloway Lodging Corporation
Michael Rapps, Chairman, at (416) 855-1925 or Jane Rafuse, Chief Financial Officer, at (902) 404-3499.