WILLIAMSBURG, Va., May 08, 2018 (GLOBE NEWSWIRE) -- 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 Kucinski
Vice President – Operations & Investor Relations
Sotherly Hotels Inc.
410 West Francis Street
Williamsburg, Virginia 23185
757.229.5648
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.
![Primary Logo](https://resource.globenewswire.com/Resource/Download/0d30c244-f83e-45a0-bd34-389261843c54?size=1)
![](http://www.globenewswire.com/newsroom/ti?ndecode=NzA2MzkjNzI1MjU2MA==)