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, 2017. The Company’s
results include the following*:
|
Three Months Ended |
|
|
March 31, 2017 |
|
|
March 31, 2016 |
|
|
($ in thousands except per share data) |
|
Total Revenue |
$ |
38,695 |
|
|
$ |
37,810 |
|
Net income
available to common stockholders |
|
1,851 |
|
|
|
483 |
|
|
|
|
|
|
|
|
|
EBITDA |
|
9,751 |
|
|
|
8,402 |
|
Hotel EBITDA |
|
11,479 |
|
|
|
10,060 |
|
|
|
|
|
|
|
|
|
FFO |
|
5,000 |
|
|
|
4,215 |
|
Adjusted FFO available
to common stockholders |
|
5,134 |
|
|
|
3,778 |
|
|
|
|
|
|
|
|
|
Net income/(loss) per
share available to common stockholders |
$ |
0.13 |
|
|
$ |
0.03 |
|
FFO per share and
unit |
$ |
0.32 |
|
|
$ |
0.25 |
|
Adjusted FFO available
to common holders per share and unit |
$ |
0.32 |
|
|
$ |
0.23 |
|
(*) 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:
- RevPAR. 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, 2017, increased 5.3% over the three months ended
March 31, 2016, to $105.03 driven by a 1.6% increase in occupancy
and a 3.6% increase in average daily rate (“ADR”).
- Common Dividends. As previously reported on
April 25, 2017, the Company announced its quarterly dividend
(distribution) on its common stock (and units) at $0.105 per share
(and unit) to be paid on July 11, 2017 to stockholders (and
unitholders) of record as of June 15, 2017.
- Hotel EBITDA. The Company generated hotel
EBITDA of approximately $11.5 million during the three-month period
ending March 31, 2017, an increase of 14.1%, or approximately $1.4
million, over the three months ended March 31, 2016.
- EBITDA. The Company generated EBITDA of
approximately $9.8 million during the three-month period ending
March 31, 2017, an increase of 16.1% or approximately $1.3 million
compared to the three months ended March 31, 2016.
- Adjusted FFO. For the three-month period
ending March 31, 2017, adjusted FFO increased 35.9% or
approximately $1.4 million over the three months ended March 31,
2016.
Andrew M. Sims, Chairman and Chief Executive Officer of Sotherly
Hotels Inc., commented, “After a difficult fourth quarter last
year, plagued by Hurricane Matthew and the Zika scare, the Company
regained its footing and posted strong first quarter operating
results. Both top and bottom line results exceeded our
expectations, putting us on the path to meeting our 2017
goals.”
Balance Sheet/Liquidity
At March 31, 2017, the Company had approximately $26.4 million
of available cash and cash equivalents, of which approximately $4.6
million was reserved for real estate taxes, insurance, capital
improvements and certain other expenses or otherwise restricted.
The Company had approximately $303.7 million in outstanding debt at
a weighted average interest rate of approximately 4.71%.
A photo accompanying this announcement is available
at http://www.globenewswire.com/NewsRoom/AttachmentNg/24bdf2a8-1ae3-4477-9a14-ee976394b803
Portfolio Update
On January 30, 2017, we closed on the purchase
of the commercial unit of the Hyde Resort & Residences, a
condominium hotel located in the Hollywood, Florida market, for an
aggregate price of approximately $4.8 million, including inventory
and closing fees, from 4111 South Ocean Drive, LLC. In
connection with the closing of the transaction, the Company entered
into a lease agreement for the 400-space parking garage and meeting
rooms associated with the condominium hotel, agreements relating to
the operation and management of the hotel condominium association
and a condominium unit rental program, and a pre-opening services
agreement whereby the Seller paid the Company a fee of
approximately $0.8 million for certain pre-opening related
preparations. As of March 31, 2017, 100 condominium units
were participating in our rental program.
On February 7, 2017, we closed on the sale of
the Crowne Plaza Hampton Marina to Marina Hotels, LLC for a price
of approximately $5.6 million.
At the Company’s hotel in Wilmington, North
Carolina, renovations of the guestrooms and public spaces
totaling an estimated $8.4 million are underway. As
of March 31, 2017, the Company had incurred costs totaling
approximately $3.0 million toward this renovation.
Renovations are expected to be complete in March 2018.
At the Company’s hotel in Savannah,
Georgia, renovations of the guestrooms and public spaces
totaling an estimated $8.2 million are nearing completion. As
of March 31, 2017, the Company had incurred costs totaling
approximately $7.2 million toward this renovation.
Renovations are expected to be complete in August 2017.
At the Company’s hotel in Hollywood, Florida the Company
previously announced that it has entered into a 10-year franchise
agreement with Hilton Worldwide to rebrand its Hollywood, Florida
hotel as the DoubleTree Resort by Hilton Hollywood Beach. The
Company is currently making renovations of the guestrooms and
public spaces totaling an estimated $6.9 million. As of March
31, 2017, the Company had incurred costs totaling approximately
$2.0 million toward this rebranding. The conversion is
expected to take place on or before October 31, 2017.
2017 Outlook
As previously disclosed, set forth below is guidance for 2017,
which accounts for the sale of the Crowne Plaza Hampton
Marina. The guidance is predicated on estimates of occupancy
and ADR that are consistent with the most recent 2017 calendar year
forecasts by Smith Travel Research 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 2017, in thousands of
dollars, except per share and RevPAR data:
|
2017 Guidance |
|
|
Low Range |
|
|
High Range |
|
|
|
|
Total revenue |
$ |
156,016 |
|
|
$ |
158,494 |
|
Net income
available to common stockholders |
|
5,335 |
|
|
|
6,111 |
|
|
|
|
|
|
|
|
|
EBITDA |
|
35,375 |
|
|
|
36,336 |
|
Hotel EBITDA |
|
41,575 |
|
|
|
42,436 |
|
|
|
|
|
|
|
|
|
FFO |
|
17,115 |
|
|
|
17,891 |
|
Adjusted FFO available
to common stockholders |
|
16,265 |
|
|
|
17,541 |
|
|
|
|
|
|
|
|
|
Net income per share
available to common stockholders |
$ |
0.13 |
|
|
$ |
0.18 |
|
FFO per share and
unit |
$ |
1.07 |
|
|
$ |
1.12 |
|
Adjusted FFO available
to common holders per share and unit |
$ |
1.02 |
|
|
$ |
1.10 |
|
Rev PAR |
$ |
103.04 |
|
|
$ |
103.25 |
|
Hotel EBITDA
margin |
|
26.6 |
|
% |
|
26.8 |
|
Earnings Call/Webcast
The Company will conduct its first quarter 2017 conference call
for investors and other interested parties at 10:00 a.m. Eastern
Time on Tuesday, May 9, 2017. 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 9, 2017 through May
8, 2018. To access the rebroadcast, dial 877-344-7529 and enter
conference number 10105210. A replay of the call also will be
available on the Internet at www.sotherlyhotels.com until May
8, 2018.
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 eleven hotel properties, comprising
2,838 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.
Forward-Looking Statements
This news release includes “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. 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,
increases in wages, energy costs and other operating costs; the
magnitude and sustainability of the economic recovery in the
hospitality industry and in the markets in which the Company
operates; 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, 2017 |
|
|
December 31, 2016 |
|
|
|
(Unaudited) |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Investment in hotel properties, net |
|
$ |
355,997,751 |
|
|
$ |
348,593,912 |
|
Investment in hotel properties held for sale, net |
|
|
— |
|
|
|
5,333,000 |
|
Cash and
cash equivalents |
|
|
21,743,744 |
|
|
|
31,766,775 |
|
Restricted cash |
|
|
4,644,532 |
|
|
|
4,596,145 |
|
Accounts
receivable, net |
|
|
5,601,922 |
|
|
|
4,127,748 |
|
Accounts
receivable-affiliate |
|
|
475,537 |
|
|
|
4,175 |
|
Prepaid
expenses, inventory and other assets |
|
|
5,662,512 |
|
|
|
4,648,469 |
|
Deferred
income taxes |
|
|
6,831,290 |
|
|
|
6,949,340 |
|
TOTAL
ASSETS |
|
$ |
400,957,288 |
|
|
$ |
406,019,564 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
Mortgage
loans, net |
|
$ |
279,269,154 |
|
|
$ |
282,708,289 |
|
Unsecured
notes, net |
|
|
24,392,721 |
|
|
|
24,308,713 |
|
Accounts
payable and accrued liabilities |
|
|
14,445,106 |
|
|
|
12,970,960 |
|
Advance
deposits |
|
|
3,405,606 |
|
|
|
2,315,787 |
|
Dividends
and distributions payable |
|
|
2,362,619 |
|
|
|
2,376,527 |
|
TOTAL
LIABILITIES |
|
$ |
323,875,206 |
|
|
$ |
324,680,276 |
|
Commitments and contingencies |
|
|
— |
|
|
|
— |
|
EQUITY |
|
|
|
|
|
|
|
|
Sotherly
Hotels Inc. stockholders’ equity |
|
|
|
|
|
|
|
|
8% Series
B cumulative redeemable perpetual preferred stock, par value $0.01,
11,000,000 shares authorized, liquidation preference $25 per share,
1,610,000 shares issued and outstanding at March 31, 2017 and
December 31, 2016 |
|
|
16,100 |
|
|
|
16,100 |
|
Common
stock, par value $0.01, 49,000,000 shares authorized,
13,798,051 shares and 14,468,551 shares issued and outstanding
at March 31, 2017 and December 31, 2016, respectively |
|
|
137,980 |
|
|
|
144,685 |
|
Additional paid-in capital |
|
|
118,564,177 |
|
|
|
118,395,082 |
|
Unearned
ESOP Shares |
|
|
(4,874,758 |
) |
|
|
— |
|
Distributions in excess of retained earnings |
|
|
(39,142,720 |
) |
|
|
(39,545,754 |
) |
Total
Sotherly Hotels Inc. stockholders’ equity |
|
|
74,700,779 |
|
|
|
79,010,113 |
|
Noncontrolling interest |
|
|
2,381,303 |
|
|
|
2,329,175 |
|
TOTAL
EQUITY |
|
|
77,082,082 |
|
|
|
81,339,288 |
|
TOTAL
LIABILITIES AND EQUITY |
|
$ |
400,957,288 |
|
|
$ |
406,019,564 |
|
|
|
|
|
|
|
|
|
|
SOTHERLY HOTELS INC. |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
|
March 31, 2017 |
|
|
March 31, 2016 |
|
|
|
(Unaudited) |
|
|
(Unaudited) |
|
REVENUE |
|
|
|
|
|
|
|
|
Rooms department |
|
$ |
27,366,634 |
|
|
$ |
27,322,413 |
|
Food and beverage department |
|
|
8,323,759 |
|
|
|
8,249,679 |
|
Other operating departments |
|
|
3,004,493 |
|
|
|
2,238,052 |
|
Total
revenue |
|
|
38,694,886 |
|
|
|
37,810,144 |
|
EXPENSES |
|
|
|
|
|
|
|
|
Hotel operating
expenses |
|
|
|
|
|
|
|
|
Rooms department |
|
|
6,682,279 |
|
|
|
7,080,633 |
|
Food and beverage department |
|
|
5,728,473 |
|
|
|
5,939,861 |
|
Other operating departments |
|
|
600,020 |
|
|
|
593,969 |
|
Indirect |
|
|
14,205,231 |
|
|
|
14,135,595 |
|
Total
hotel operating expenses |
|
|
27,216,003 |
|
|
|
27,750,058 |
|
Depreciation and
amortization |
|
|
4,061,097 |
|
|
|
3,668,638 |
|
Corporate general and
administrative |
|
|
1,712,082 |
|
|
|
1,607,294 |
|
Total
operating expenses |
|
|
32,989,182 |
|
|
|
33,025,990 |
|
NET
OPERATING INCOME |
|
|
5,705,704 |
|
|
|
4,784,154 |
|
Other income
(expense) |
|
|
|
|
|
|
|
|
Interest expense |
|
|
(3,813,717 |
) |
|
|
(4,632,632 |
) |
Interest income |
|
|
39,705 |
|
|
|
8,830 |
|
Unrealized loss on hedging activities |
|
|
(15,945 |
) |
|
|
(50,557 |
) |
Gain on sale of assets |
|
|
100,407 |
|
|
|
— |
|
Gain on involuntary conversion of assets |
|
|
1,041,815 |
|
|
|
— |
|
Net income before
income taxes |
|
|
3,057,969 |
|
|
|
109,795 |
|
Income tax (provision)/benefit |
|
|
(171,937 |
) |
|
|
436,079 |
|
Net income |
|
|
2,886,032 |
|
|
|
545,874 |
|
Less: Net income attributable to the noncontrolling
interest |
|
|
(229,942 |
) |
|
|
(62,779 |
) |
Net income
attributable to the Company |
|
|
2,656,090 |
|
|
|
483,095 |
|
Distributions to preferred stockholders |
|
|
(805,000 |
) |
|
|
— |
|
Net income
available to common stockholders |
|
$ |
1,851,090 |
|
|
$ |
483,095 |
|
Net income per
share available to common stockholders |
|
|
|
|
|
|
|
|
Basic and
diluted |
|
$ |
0.13 |
|
|
$ |
0.03 |
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding |
|
|
|
|
|
|
|
|
Basic and
diluted |
|
|
14,025,489 |
|
|
|
14,792,911 |
|
SOTHERLY HOTELS INC.KEY
OPERATING METRICS(unaudited)
The following tables illustrate the key operating metrics for
the three months ended March 31, 2017 and 2016, respectively, for
the Company’s wholly-owned properties (“actual” portfolio metrics),
as well as the eleven wholly-owned properties in the portfolio that
were under the Company’s control during the three months ended
March 31, 2017 and the corresponding period in 2016 (“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, or our interest in the Hyde Resort &
Residences which was acquired on January 30, 2017. 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, 2017 and the corresponding period in 2016.
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
|
March 31, 2017 |
|
|
March 31, 2016 |
|
Actual Portfolio
Metrics |
|
|
|
|
|
|
|
|
Occupancy
% |
|
|
70.1 |
% |
|
|
68.6 |
% |
ADR |
|
$ |
149.08 |
|
|
$ |
145.37 |
|
RevPAR |
|
$ |
104.46 |
|
|
$ |
99.72 |
|
Same-Store Portfolio
Metrics |
|
|
|
|
|
|
|
|
Occupancy
% |
|
|
71.0 |
% |
|
|
69.9 |
% |
ADR |
|
$ |
147.33 |
|
|
$ |
147.91 |
|
RevPAR |
|
$ |
104.58 |
|
|
$ |
103.43 |
|
Composite Portfolio
Metrics |
|
|
|
|
|
|
|
|
Occupancy
% |
|
|
69.7 |
% |
|
|
68.6 |
% |
ADR |
|
$ |
150.65 |
|
|
$ |
145.37 |
|
RevPAR |
|
$ |
105.03 |
|
|
$ |
99.72 |
|
SOTHERLY HOTELS
INC.SUPPLEMENTAL
DATA(unaudited)
The following tables illustrate the key operating metrics for
the three months ended March 31, 2017, 2016 and 2015, respectively,
for each of the Company’s wholly-owned properties during each
respective reporting period, irrespective of ownership percentage
during any period.
Occupancy
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2017 |
|
|
Q1 2016 |
|
|
Q1 2015 |
|
Crowne Plaza Hampton
Marina (1)Hampton, Virginia |
|
34.4 |
% |
|
|
46.7 |
% |
|
|
40.7 |
% |
Crowne Plaza Hollywood
Beach Resort (2)(3)Hollywood, Florida |
|
83.0 |
% |
|
|
88.5 |
% |
|
|
87.5 |
% |
Crowne Plaza Tampa
WestshoreTampa, Florida |
|
85.7 |
% |
|
|
83.7 |
% |
|
|
82.4 |
% |
DoubleTree by Hilton
Jacksonville RiverfrontJacksonville, Florida |
|
80.9 |
% |
|
|
76.8 |
% |
|
|
70.2 |
% |
DoubleTree by Hilton
LaurelLaurel, Maryland |
|
50.2 |
% |
|
|
44.5 |
% |
|
|
47.4 |
% |
DoubleTree by Hilton
Philadelphia AirportPhiladelphia, Pennsylvania |
|
69.1 |
% |
|
|
73.1 |
% |
|
|
80.0 |
% |
DoubleTree by Hilton
Raleigh Brownstone – UniversityRaleigh, North Carolina |
|
74.2 |
% |
|
|
69.4 |
% |
|
|
70.8 |
% |
The Georgian
TerraceAtlanta, Georgia |
|
74.6 |
% |
|
|
70.2 |
% |
|
|
67.9 |
% |
Hilton Savannah DeSoto
(3)Savannah, Georgia |
|
66.8 |
% |
|
|
74.5 |
% |
|
|
74.2 |
% |
Hilton Wilmington
Riverside (3)Wilmington, North Carolina |
|
64.1 |
% |
|
|
58.6 |
% |
|
|
60.2 |
% |
Sheraton Louisville
RiversideJeffersonville, Indiana |
|
57.5 |
% |
|
|
51.1 |
% |
|
|
62.2 |
% |
The WhitehallHouston,
Texas |
|
65.5 |
% |
|
|
64.8 |
% |
|
|
80.0 |
% |
Hyde Resort &
Residences (4)Hollywood Beach, Florida |
|
39.3 |
% |
|
- |
|
|
- |
|
All properties weighted
average (1) (2) |
|
67.9 |
% |
|
|
68.6 |
% |
|
|
70.3 |
% |
1 |
Includes only the
period of ownership for the Crowne Plaza Hampton Marina up to
February 7, 2017. |
2 |
Includes periods of
partial ownership. |
3 |
Property undergoing
renovation during the current quarter. |
4 |
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 2017 |
|
|
Q1 2016 |
|
|
Q1 2015 |
|
Crowne Plaza Hampton
Marina (1)Hampton, Virginia |
$ |
84.95 |
|
|
$ |
82.95 |
|
|
$ |
82.25 |
|
Crowne Plaza Hollywood
Beach Resort (2)(3)Hollywood, Florida |
$ |
216.61 |
|
|
$ |
221.48 |
|
|
$ |
164.20 |
|
Crowne Plaza Tampa
WestshoreTampa, Florida |
$ |
136.95 |
|
|
$ |
130.90 |
|
|
$ |
122.49 |
|
DoubleTree by Hilton
Jacksonville RiverfrontJacksonville, Florida |
$ |
132.16 |
|
|
$ |
122.43 |
|
|
$ |
106.05 |
|
DoubleTree by Hilton
LaurelLaurel, Maryland |
$ |
113.28 |
|
|
$ |
100.06 |
|
|
$ |
87.72 |
|
DoubleTree by Hilton
Philadelphia AirportPhiladelphia, Pennsylvania |
$ |
120.02 |
|
|
$ |
121.90 |
|
|
$ |
117.55 |
|
DoubleTree by Hilton
Raleigh Brownstone – UniversityRaleigh, North Carolina |
$ |
135.59 |
|
|
$ |
134.87 |
|
|
$ |
128.41 |
|
The Georgian
TerraceAtlanta, Georgia |
$ |
171.32 |
|
|
$ |
160.52 |
|
|
$ |
140.75 |
|
Hilton Savannah DeSoto
(3)Savannah, Georgia |
$ |
162.04 |
|
|
$ |
157.34 |
|
|
$ |
152.18 |
|
Hilton Wilmington
Riverside (3)Wilmington, North Carolina |
$ |
126.66 |
|
|
$ |
128.12 |
|
|
$ |
122.22 |
|
Sheraton Louisville
RiversideJeffersonville, Indiana |
$ |
121.10 |
|
|
$ |
141.14 |
|
|
$ |
143.10 |
|
The WhitehallHouston,
Texas |
$ |
161.18 |
|
|
$ |
149.40 |
|
|
$ |
146.74 |
|
Hyde Resort &
Residences (4)Hollywood Beach, Florida |
$ |
397.16 |
|
|
- |
|
|
- |
|
All properties weighted
average (1) (2) |
$ |
152.25 |
|
|
$ |
141.05 |
|
|
$ |
128.03 |
|
1 |
Includes only the
period of ownership for the Crowne Plaza Hampton Marina up to
February 7, 2017. |
2 |
Includes periods of
partial ownership. |
3 |
Property undergoing
renovation during the current quarter. |
4 |
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 2017 |
|
|
Q1 2016 |
|
|
Q1 2015 |
|
Crowne Plaza Hampton
Marina (1)Hampton, Virginia |
$ |
29.24 |
|
|
$ |
38.73 |
|
|
$ |
33.51 |
|
Crowne Plaza Hollywood
Beach Resort (2)(3)Hollywood, Florida |
$ |
179.81 |
|
|
$ |
196.11 |
|
|
$ |
205.23 |
|
Crowne Plaza Tampa
WestshoreTampa, Florida |
$ |
117.43 |
|
|
$ |
109.57 |
|
|
$ |
100.94 |
|
DoubleTree by Hilton
Jacksonville RiverfrontJacksonville, Florida |
$ |
106.92 |
|
|
$ |
94.08 |
|
|
$ |
74.44 |
|
DoubleTree by Hilton
LaurelLaurel, Maryland |
$ |
56.83 |
|
|
$ |
44.53 |
|
|
$ |
41.61 |
|
DoubleTree by Hilton
Philadelphia AirportPhiladelphia, Pennsylvania |
$ |
82.90 |
|
|
$ |
89.12 |
|
|
$ |
94.04 |
|
DoubleTree by Hilton
Raleigh Brownstone – UniversityRaleigh, North Carolina |
$ |
100.63 |
|
|
$ |
93.60 |
|
|
$ |
90.96 |
|
The Georgian
TerraceAtlanta, Georgia |
$ |
127.77 |
|
|
$ |
112.74 |
|
|
$ |
110.07 |
|
Hilton Savannah DeSoto
(3)Savannah, Georgia |
$ |
108.29 |
|
|
$ |
117.29 |
|
|
$ |
112.95 |
|
Hilton Wilmington
Riverside (3)Wilmington, North Carolina |
$ |
81.18 |
|
|
$ |
75.13 |
|
|
$ |
73.60 |
|
Sheraton Louisville
RiversideJeffersonville, Indiana |
$ |
69.61 |
|
|
$ |
72.19 |
|
|
$ |
88.97 |
|
The WhitehallHouston,
Texas |
$ |
105.55 |
|
|
$ |
96.86 |
|
|
$ |
117.39 |
|
Hyde Resort &
Residences (4)Hollywood Beach, Florida |
$ |
155.97 |
|
|
- |
|
|
- |
|
All properties weighted
average (1) (2) |
$ |
103.69 |
|
|
$ |
99.74 |
|
|
$ |
100.00 |
|
1 |
Includes only the
period of ownership for the Crowne Plaza Hampton Marina up to
February 7, 2017. |
2 |
Includes periods of
partial ownership. |
3 |
Property undergoing
renovation during the current quarter. |
4 |
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, 2017 |
|
|
March 31, 2016 |
|
Net income
available to common stockholders |
|
$ |
1,851,090 |
|
|
$ |
483,095 |
|
Add: Net
income attributable to noncontrolling interest |
|
|
229,942 |
|
|
|
62,779 |
|
Depreciation and amortization |
|
|
4,061,097 |
|
|
|
3,668,638 |
|
Gain on
involuntary conversion of assets |
|
|
(1,041,815 |
) |
|
|
— |
|
Gain on
sale of assets |
|
|
(100,407 |
) |
|
|
— |
|
FFO |
|
$ |
4,999,907 |
|
|
$ |
4,214,512 |
|
Decrease
(increase) in deferred income taxes |
|
|
118,050 |
|
|
|
(487,469 |
) |
Unrealized loss on hedging activities |
|
|
15,945 |
|
|
|
50,557 |
|
Adjusted FFO
available to common stockholders |
|
$ |
5,133,902 |
|
|
$ |
3,777,600 |
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares outstanding, basic and diluted |
|
|
14,025,489 |
|
|
|
14,792,911 |
|
|
|
|
|
|
|
|
|
|
Weighted
average number of non-controlling units |
|
|
1,778,140 |
|
|
|
1,922,133 |
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares and units outstanding, basic and
diluted |
|
|
15,803,629 |
|
|
|
16,715,044 |
|
|
|
|
|
|
|
|
|
|
FFO per
share and unit |
|
$ |
0.32 |
|
|
$ |
0.25 |
|
|
|
|
|
|
|
|
|
|
Adjusted
FFO per share and unit |
|
$ |
0.32 |
|
|
$ |
0.23 |
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
|
March 31, 2017 |
|
|
March 31, 2016 |
|
Net income
available to common stockholders |
|
$ |
1,851,090 |
|
|
$ |
483,095 |
|
Add: Net
income attributable to noncontrolling interest |
|
|
229,942 |
|
|
|
62,779 |
|
Interest
expense |
|
|
3,813,717 |
|
|
|
4,632,632 |
|
Interest
income |
|
|
(39,705 |
) |
|
|
(8,830 |
) |
Income
tax provision (benefit) |
|
|
171,937 |
|
|
|
(436,079 |
) |
Depreciation and amortization |
|
|
4,061,097 |
|
|
|
3,668,638 |
|
Gain on
sale of assets |
|
|
(100,407 |
) |
|
|
— |
|
Gain on
involuntary conversion of assets |
|
|
(1,041,815 |
) |
|
|
— |
|
Distributions to preferred shareholders |
|
|
805,000 |
|
|
|
— |
|
EBITDA |
|
|
9,750,856 |
|
|
|
8,402,235 |
|
Corporate
general and administrative |
|
|
1,712,082 |
|
|
|
1,607,294 |
|
Unrealized loss on hedging activities |
|
|
15,945 |
|
|
|
50,557 |
|
Hotel
EBITDA |
|
$ |
11,478,883 |
|
|
$ |
10,060,086 |
|
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 and (14) 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.
Contact at the Company:
Scott Kucinski
Vice President – Operations & Investor Relations
Sotherly Hotels Inc.
410 West Francis Street
Williamsburg, Virginia 23185
757.229.5648
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