Condor Hospitality Trust, Inc. (NYSE American: CDOR) (the
“Company”) today announced results for the second quarter ended
June 30, 2019.
SECOND QUARTER RELEASE FINANCIAL HIGHLIGHTS
- Revenue in the second quarter 2019 of $16.2 million,
comprised of $16.2 million generated entirely from New Investment
Platform Hotels, a 1.2% decrease from $16.4 million generated by
New Investment Platform Hotels in the $17.8 million 2018 second
quarter Revenue that included $1.4 million of Legacy Hotel
Revenue.
- Same-Store Revenue of $37.5 million for the first six months
of 2019 increased $0.5 million over the first six months Same-Store
Revenue of $37.0 million in 2018.
- Same-Store RevPAR for the New Investment Platform Hotels in
the 2019 second quarter decreased 0.7% compared to the same quarter
in 2018, affected by a weak convention schedule in San Antonio that
had a direct impact on the SpringHill Suites. Excluding the
SpringHill Suites, New Investment Platform RevPAR increased by
0.4%. Same-Store RevPAR of $105.47 for the New Investment Platform
Hotels for the first six months of 2019 Increased 1.6% over 2018
first six months RevPAR of $103.84.
- Net Earnings (Loss) Attributable to Common Shareholders of
($1.4 million), or ($0.12) per Diluted Share, compared to $2.7
million, or $0.23 per share, in the 2018 second quarter. Decline in
Net Earnings Attributable to Common Shareholders primarily caused
by no Legacy Hotels remaining in the second quarter 2019, compared
to $0.4 million of EBITDA generated from Legacy Hotels in the
second quarter 2018, $0.8 million in Equity Transaction and
Strategic Alternatives costs incurred in the second quarter 2019,
$0.4 million increase in income tax expense, and $0.5 million
Decline in Net Gain on Derivatives and Convertible Debt for the
quarter. Additionally, the second quarter 2018 included a $1.9
million gain from Legacy Hotel sales.
- Adjusted Funds from Operations was $3.5 million, or $0.28
per Diluted Share, a $0.9 million Decline from $4.4 million, or
$0.34, in the 2018 second quarter. The decline was a result of a
$0.4 million increase in income tax expense, and a $0.2 million
increase in stock-based compensation expense in the second quarter
2019 and the second quarter 2018 included $0.4 million of EBITDA
from Legacy Hotels.
- Same-Store Hotel EBITDA decreased to $7.5 million from $7.6
million, a 1.3% decrease over prior year second quarter influenced
by the weakness in the San Antonio market mentioned above and the
positive impact of FEMA business in hurricane affected Texas and
Florida markets in Q2 2018.
MANAGEMENT COMMENTARY
Bill Blackham, Condor’s Chief Executive Officer, commented:
“For the first six months of 2019 our portfolio has outperformed
the overall market when compared to the U.S. national RevPAR growth
of 1.3% for all chain scales excluding luxury and upper upscale
reported by Smith Travel Research. Our proforma same-store RevPAR
for the second quarter 2019 excluding the SpringHill Suites
increased 0.4% as compared to (0.4)% for upscale and 0.0% for upper
midscale, as reported by Smith Travel Research. Importantly for the
first six months our operating results as a portfolio are slightly
ahead of our projections. In the first six months of 2019
Same-Store Hotel EBITDA is approximately 0.7% higher than the same
period in the prior year at $14.9 million compared to $14.8
million, and our margins while declining in the quarter, did so
moderately reducing 30 bps from 40.2% in 2018 to 39.9% in 2019 and
were 39.8% for the first six months of 2019 compared to 40.1%.
Additionally, we have elected to not renew 3 hotel management
contracts and with new management we believe we will be better
positioned to increase performance on our San Antonio and
Jacksonville assets which experienced $0.33 million in revenue
decline and $0.28 million in EBITDA decline in the quarter compared
to 2018. On July 22, 2019 Condor announced the conclusion of a
strategic alternatives process with the signing of a definitive
agreement that contemplates the merger of the Company with the
operating partnership of NexPoint Hospitality Trust, an
unincorporated, open-ended real estate investment trust established
pursuant to a declaration of trust under the laws of the Province
of Ontario and listed on the TSXV, resulting in a $11.10 per share
cash price to be paid to common shareholders and a $10.00 per share
cash price to be paid to Series E preferred shareholders at
closing. We anticipate completing and closing the mergers during
the fourth quarter of 2019.”
FINANCIAL SUMMARY
At June 30, 2019, the Company’s total portfolio included 15
hotels, representing 1,908 rooms. The Company’s last remaining
legacy asset was sold during the first quarter of 2019.
Total Company Financial Results
($ in millions except per share
amounts)
Three months ended June
30,
Six months ended June
30,
2019
2018
Change
2019
2018
Change
Revenue
$
16.2
$
17.8
-9.3%
$
32.1
$
34.5
-7.0%
Net Earnings (Loss) Attributable to Common
Shareholders
$
(1.4)
$
2.7
NA
$
(1.5)
$
3.4
NA
Diluted Earnings (Loss) per Share
$
(0.12)
$
0.23
NA
$
(0.13)
$
0.28
NA
Funds from Operations (FFO)*
$
1.4
$
3.8
-61.7%
$
4.1
$
7.0
-42.0%
FFO per Diluted Share*
$
0.11
$
0.30
-63.3%
$
0.32
$
0.56
-42.9%
Adjusted FFO*
$
3.4
$
4.2
-19.4%
$
6.9
$
7.7
-10.7%
Adjusted FFO per Diluted Share*
$
0.28
$
0.34
-17.6%
$
0.57
$
0.63
-9.5%
Hotel EBITDA*
$
7.5
$
8.0
-6.8%
$
15.0
$
15.4
-2.6%
Adjusted EBITDAre*
$
6.3
$
6.6
-4.8%
$
12.4
$
12.4
0.0%
*Please see the Reg. G reconciliation
tables at the end of this release.
Same Store Operational
Results**
($ in millions except per share amounts
and operating metrics)
Three months ended June
30,
Six months ended June
30,
2019
2018
Change
2019
2018
Change
Same-Store RevPAR
$
104.63
$
105.36
-0.7%
$
105.47
$
103.84
1.6%
Same-Store Occupancy
82.64%
84.18%
-1.8%
81.24%
82.24%
-1.2%
Same-Store ADR
$
126.62
$
125.15
1.2%
$
129.83
$
126.25
2.8%
Same-Store Hotel EBITDA*
$
7.5
$
7.6
-1.5%
$
14.9
$
14.8
0.7%
Same-Store Hotel EBITDA Margin*
39.9%
40.1%
-0.2%
39.8%
40.1%
-0.3%
*Please see the Reg. G reconciliation
tables at the end of this release.
**Financial results presented above
include results from prior to our ownership.
PORTFOLIO ACTIVITY
The Company’s investment strategy is to assemble a portfolio of
premium-branded, select-service hotels in the top 100 Metropolitan
Statistical Areas (“MSAs”) with a particular focus on MSAs ranked
between 20 to 60. Since restarting its portfolio transformation in
2015, the Company has acquired 14 high-quality select-service
hotels representing 1,808 rooms in its target markets for a total
purchase price of approximately $277 million. Additionally, during
this time, the Company has sold 55 legacy assets for a total gross
sales price of approximately $170 million. Following the sale of
the Quality Inn Solomons in the first quarter of 2019, there are no
legacy hotels remaining in the Company’s portfolio.
BALANCE SHEET AND CAPITAL MARKETS ACTIVITY
As of June 30, 2019, the Company had cash and cash equivalents
(including restricted cash) of $8.9 million and available revolver
borrowing capacity of $9.0 million. As of June 30, 2019, the
Company had total outstanding long-term debt of $136.0 million
associated with assets held for use with a weighted average
maturity of 2.0 years and a weighted average interest rate of
5.12%.
CAPITAL INVESTMENTS
The Company invested $0.3 million in capital improvements
throughout the portfolio in the three months ended June 30, 2019 to
upgrade its properties and maintain brand standards.
OUTLOOK AND GUIDANCE
The Company has suspended guidance until further notice.
DIVIDENDS
On May 23, 2019, the Board of Directors declared a quarterly
cash common stock dividend of $0.195 per share for the second
quarter of 2019. The common stock dividend represented an
annualized yield of approximately 8.1% based on the closing price
of the Company’s common shares on June 7, 2019. The second quarter
dividend was paid on July 1, 2019 to shareholders of record as of
June 24, 2019.
On July 19, 2019, the Company entered into an Agreement and Plan
of Merger (the “Merger Agreement”) with NHT Operating Partnership
LLC, a Delaware limited liability company (the “Parent”) and other
parties thereto. During the term of the Merger Agreement, the
Company may not pay cash dividends to holders of the Company common
stock or the Series E Preferred Stock, except the Company is
permitted to declare and pay a dividend to shareholders during the
month in which an extension option for the closing of the
transactions contemplated by the Merger Agreement is exercised by
the Parent, subject to limitations as set forth in the Merger
Agreement and the disclosure schedule delivered therewith on amount
and the our prior month adjusted funds from operations. The holders
of the Series E preferred stock have agreed to waive accrual of any
unpaid dividends between signing and closing.
EARNINGS CALL
The Company will not be conducting a second quarter earnings
conference call.
About Condor Hospitality Trust, Inc.
Condor Hospitality Trust, Inc. (NYSE American: CDOR) is a
self-administered real estate investment trust that specializes in
the investment and ownership of upper midscale and upscale,
premium-branded, select-service, extended-stay, and limited-service
hotels in the top 100 Metropolitan Statistical Areas (“MSAs”) with
a particular focus on the top 20 to 60 MSAs. The Company currently
owns 15 hotels in 8 states. Condor’s hotels are franchised by a
number of the industry’s most well-regarded brand families
including Hilton, Marriott, and InterContinental Hotels.
Forward-Looking Statement
This news release (including statements about the expected
timing, completion and effects of the mergers and the other
transactions contemplated by the Merger Agreement) may contain
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements include all statements that are not historical facts,
and in some cases, can be identified by the use of forward-looking
terminology such as “may,” “will,” “expect,” “intend,”
“anticipate,” “estimate,” “believe,” “continue,” “project”, “plan”,
the negative version of these words or other similar expressions.
Readers are cautioned not to place undue reliance on any such
forward-looking statements.
All forward-looking statements speak only as of the date hereof
and are based on current expectations and involve a number of
assumptions, risks and uncertainties that could cause the actual
results to differ materially from such forward-looking statements.
They are not guarantees of future performance and involve risks and
uncertainties that are difficult to control or predict. NexPoint
Hospitality Trust, an unincorporated, open-ended real estate
investment trust established pursuant to a declaration of trust
under the laws of the Province of Ontario (“NHT”) and listed on the
TSXV, and Condor may not be able to complete the proposed
transaction on the terms described herein or other acceptable terms
or at all because of a number of factors, including without
limitation, the following: (i) the occurrence of any event, change
or other circumstances that could give rise to the termination of
the Merger Agreement; (ii) unknown, underestimated or undisclosed
commitments or liabilities; (iii) the inability to complete the
proposed transaction due to the failure to obtain the approval of
Condor’s shareholders for the proposed transaction or the failure
to satisfy the other closing conditions to the proposed
transaction; (iv) risks related to disruption of management’s
attention from NHT’s and Condor’s ongoing business operations due
to the proposed transaction; (v) the effect of the announcement of
the proposed transaction on the ability of the parties to retain
and hire key personnel, maintain relationships with their
franchisors, management companies and suppliers, and maintain their
operating results and business generally; (vi) the risk that
certain approvals or consents will not be received in a timely
manner or that the proposed transaction will not be consummated in
a timely manner; (vii) adverse changes in U.S. and non-U.S.
governmental laws and regulations; and (viii) the risk of
litigation, including shareholder litigation in connection with the
proposed transaction, and the impact of any adverse legal
judgments, fines, penalties, injunctions or settlements.
Actual results may differ materially from those indicated by
such forward-looking statements. In addition, the forward-looking
statements represent Condor’s views as of the date on which such
statements were made. Condor anticipates that subsequent events and
developments may cause those views to change. These forward-looking
statements should not be relied upon as representing Condor’s views
as of any date subsequent to the date hereof. Condor expressly
disclaims a duty to provide updates to forward-looking statements,
whether as a result of new information, future events or other
occurrences.
Additional factors that may affect Condor’s business or
financial results are described in the risk factors included in
Condor’s filings with the Securities and Exchange Commission
(“SEC”), including its Annual Report on Form 10-K for the fiscal
year ended December 31, 2018, and subsequent Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K.
Additional Information and Where to Find It
The Merger Agreement was filed as an exhibit to the Company’s
Current Report on Form 8-K on July 22, 2019 with the Securities and
Exchange Commission (“SEC”) and can be obtained free of charge from
the sources indicated below.
The proposed transaction will be submitted to the Company’s
shareholders for their consideration. In connection with the
proposed transaction, the Company will file relevant materials with
the SEC, including a proxy statement on Schedule 14A. The
definitive proxy statement will be mailed to the Company’s
shareholders. This communication is not a substitute for the proxy
statement or for any other document that the Company may file with
the SEC and send to the Company’s shareholders in connection with
the proposed transaction. BEFORE MAKING ANY VOTING OR INVESTMENT
DECISION WITH RESPECT TO THE PROPOSED TRANSACTION, INVESTORS AND
SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ THE PROXY
STATEMENT AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN
THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and
security holders will be able to obtain free copies of the proxy
statement (if and when it becomes available), any amendments or
supplements thereto and other relevant materials, and any other
documents filed by the Company with the SEC through the website
maintained by the SEC at http://www.sec.gov. In addition, copies of
the documents filed by the Company with the SEC will be available
free of charge on the Company’s website at
www.condorhospitality.com, or by contacting the Company at Investor
Relations by phone at 402-371-2520 or by email at
investors@trustcondor.com. You may also read and copy any reports,
statements and other information filed by the Company with the SEC
at the SEC public reference room at 450 Fifth Street, N.W. Room
1200, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330
or visit the SEC’s website for further information on its public
reference room.
No Offer or Solicitation
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be
any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended.
SELECTED FINANCIAL DATA:
Condor Hospitality Trust, Inc.
and Subsidiaries
Consolidated Balance
Sheets
(Unaudited - In thousands,
except share and per share data)
As of
June 30, 2019
December 31, 2018
Assets
Investment in hotel properties, net
$
226,692
$
230,178
Investment in unconsolidated joint
venture
5,693
5,866
Cash and cash equivalents
3,179
4,151
Restricted cash, property escrows
5,702
5,005
Accounts receivable, net
1,874
1,290
Prepaid expenses and other assets
3,940
2,227
Derivative assets, at fair value
398
639
Investment in hotel properties held for
sale, net
-
4,092
Total Assets
$
247,478
$
253,448
Liabilities and
Equity
Liabilities
Accounts payable, accrued expenses, and
other liabilities
$
7,335
$
5,336
Dividends and distributions payable
2,479
2,330
Derivative liabilities, at fair value
372
-
Convertible debt, at fair value
1,072
1,000
Long-term debt, net of deferred financing
costs
134,029
135,810
Long-term debt related to hotel properties
held for sale, net of deferred financing costs
-
1,120
Total Liabilities
145,287
145,596
Equity
Shareholders' Equity
Preferred stock, 40,000,000 shares
authorized:
6.25% Series E, 925,000 shares authorized,
$.01 par value, 925,000 shares outstanding, liquidation preference
of $9,394 and $9,250
10,050
10,050
Common stock, $.01 par value, 200,000,000
shares authorized; 11,910,936 and 11,886,003 shares outstanding
119
119
Additional paid-in capital
232,405
231,805
Accumulated deficit
(141,154)
(134,970)
Total Shareholders' Equity
101,420
107,004
Noncontrolling interest in consolidated
partnership (Condor Hospitality Limited Partnership), redemption
value of $527 and $435
771
848
Total Equity
102,191
107,852
Total Liabilities and Equity
$
247,478
$
253,448
Condor Hospitality Trust, Inc.
and Subsidiaries
Consolidated Statements of
Operations
(Unaudited - In thousands,
except per share data)
Three months ended June
30,
Six months ended June
30,
2019
2018
2019
2018
Revenue
Room rentals and other hotel services
$
16,177
$
17,834
$
32,080
$
34,513
Operating Expenses
Hotel and property operations
9,755
10,756
19,548
21,170
Depreciation and amortization
2,394
2,444
4,756
4,703
General and administrative
1,572
1,605
3,235
3,474
Acquisition and terminated
transactions
7
71
14
90
Equity transaction and strategic
alternatives
834
-
834
-
Total operating expenses
14,562
14,876
28,387
29,437
Operating income
1,615
2,958
3,693
5,076
Net gain (loss) on disposition of
assets
(16)
1,895
23
1,871
Equity in earnings of joint venture
166
63
679
292
Net gain (loss) on derivatives and
convertible debt
(456)
156
(693)
603
Other expense, net
(24)
(20)
(53)
(34)
Interest expense
(2,094)
(2,091)
(4,257)
(4,019)
Impairment recovery, net
-
-
-
93
Earnings (loss) before income taxes
(809)
2,961
(608)
3,882
Income tax expense
(461)
(54)
(647)
(183)
Net earnings (loss)
(1,270)
2,907
(1,255)
3,699
Loss (earnings) attributable to
noncontrolling interest
6
(21)
7
(27)
Net earnings (loss) attributable to
controlling interests
(1,264)
2,886
(1,248)
3,672
Dividends declared on preferred stock
(144)
(145)
(289)
(289)
Net earnings (loss) attributable to
common shareholders
$
(1,408)
$
2,741
$
(1,537)
$
3,383
Earnings (Loss)
per Share
Total - Basic Earnings (Loss) per
Share
$
(0.12)
$
0.23
$
(0.13)
$
0.28
Total - Diluted Earnings (Loss) per
Share
$
(0.12)
$
0.23
$
(0.13)
$
0.28
Reconciliation of Non-GAAP Financial
Measures (Unaudited)
Non-GAAP financial measures are measures of our historical
financial performance that are different from measures calculated
and presented in accordance with accounting principles generally
accepted in the United States of America (“GAAP”). We report Funds
from Operations (“FFO”), Adjusted FFO (“AFFO”), Earnings Before
Interest, Taxes, Depreciation, and Amortization (“EBITDA”), EBITDA
for real estate (“EBITDAre”), Adjusted EBITDAre, and Hotel EBITDA
as non-GAAP measures that we believe are useful to investors as key
measures of our operating results and which management uses to
facilitate a periodic evaluation of our operating results relative
to those of our peers. Our non-GAAP measures should not be
considered as an alternative to U.S. GAAP net earnings as an
indication of financial performance or to U.S. GAAP cash flows from
operating activities as a measure of liquidity. Additionally, these
measures are not indicative of funds available to fund cash needs
or our ability to make cash distributions as they have not been
adjusted to consider cash requirements for capital expenditures,
property acquisitions, debt service obligations, or other
commitments.
FFO and AFFO
The following table reconciles net earnings (loss) to FFO and
AFFO for the three and six months ended June 30, 2019 and 2018 (in
thousands). All amounts presented include our portion of the
results of our unconsolidated Atlanta JV.
Three months ended June
30,
Six months ended June
30,
Reconciliation of
Net earnings (loss) to FFO and AFFO
2019
2018
2019
2018
Net earnings (loss)
$
(1,270)
$
2,907
$
(1,255)
$
3,699
Depreciation and amortization expense
2,394
2,444
4,756
4,703
Depreciation and amortization expense from
JV
299
292
596
577
Net (gain) loss on disposition of
assets
16
(1,895)
(23)
(1,871)
Net loss on disposition of assets from
JV
-
7
-
14
Impairment recovery, net
-
-
-
(93)
FFO
1,439
3,755
4,074
7,029
Dividends declared on preferred stock
(144)
(145)
(289)
(289)
FFO attributable to common shares and
common units
1,295
3,610
3,785
6,740
Net loss (gain) on derivatives and
convertible debt
456
(156)
693
(603)
Net loss on derivatives from JV
-
-
1
-
Acquisition and terminated transactions
expense
7
71
14
90
Equity transaction and strategic
alternatives
834
-
834
-
Stock-based compensation expense
424
263
760
665
Amortization of deferred financing
fees
322
364
695
717
Amortization of deferred financing fees
from JV
46
46
91
91
AFFO attributable to common shares and
common units
$
3,384
$
4,198
$
6,873
$
7,700
FFO attributable to common shares and
common units - Basic Shares
$
1,295
$
3,610
$
3,785
$
6,740
Convertible note interest and fair value
adjustments
-
17
0
13
Preferred dividends and fair value
adjustments
-
158
180
337
FFO attributable to common shares and
common units - Diluted Shares
$
1,295
$
3,785
$
3,965
$
7,090
FFO per common share and common unit -
Basic
$
0.11
$
0.30
$
0.32
$
0.57
FFO per common share and common unit -
Diluted
$
0.11
$
0.30
$
0.32
$
0.56
Weighted average common shares and common
units - Basic FFO
11,905,973
11,875,093
11,892,782
11,855,295
Weighted average common shares and common
units - Diluted FFO
11,922,198
12,648,633
12,587,456
12,641,162
AFFO attributable to common shares and
common units - Basic Shares
$
3,384
$
4,198
$
6,873
$
7,700
Convertible note interest
16
16
32
32
Preferred dividends at stated rates
144
145
289
289
AFFO attributable to common shares and
common units - Diluted Shares
$
3,544
$
4,359
$
7,194
$
8,021
AFFO per common share and common unit -
Basic
$
0.28
$
0.35
$
0.58
$
0.65
AFFO per common share and common unit -
Diluted
$
0.28
$
0.34
$
0.57
$
0.63
Weighted average common shares and common
units - Basic AFFO
11,905,973
11,875,093
11,892,782
11,855,295
Weighted average common shares and common
units - Diluted AFFO
12,687,578
12,648,633
12,684,725
12,641,162
We calculate FFO in accordance with the standards established by
the National Association of Real Estate Investment Trusts
(“NAREIT”), which defines FFO as net earnings or loss computed in
accordance with GAAP, excluding gains or losses from sales of real
estate assets, impairment, and the depreciation and amortization of
real estate assets. FFO is calculated both for the Company in total
and as FFO attributable to common shares and common units, which is
FFO reduced by preferred stock dividends. AFFO is FFO attributable
to common shares and common units adjusted to exclude items we do
not believe are representative of the results from our core
operations, including non-cash gains or losses on derivatives and
convertible debt, stock-based compensation expense, amortization of
certain fees, losses on debt extinguishment, and in-kind dividends
above stated rates, and cash charges for acquisition and equity
transaction and strategic alternatives costs. All REITs do not
calculate FFO and AFFO in the same manner; therefore, our
calculation may not be the same as the calculation of FFO and AFFO
for similar REITs.
We consider FFO to be a useful additional measure of performance
for an equity REIT because it facilitates an understanding of the
operating performance of our properties without giving effect to
real estate depreciation and amortization, which assumes that the
value of real estate assets diminishes predictably over time. Since
real estate values have historically risen or fallen with market
conditions, we believe that FFO provides a meaningful indication of
our performance. We believe that AFFO provides useful supplemental
information to investors regarding our ongoing operating
performance that, when considered with net income and FFO, is
beneficial to an investor’s understanding of our operating
performance. We present FFO and AFFO per common share and common
unit because our common units are redeemable for common shares. We
believe it is meaningful for the investor to understand FFO and
AFFO applicable to common shares and common units.
EBITDA, EBITDAre, Adjusted EBITDAre, and
Hotel EBITDA
The following table reconciles net earnings (loss) to EBITDA,
EBITDAre, Adjusted EBITDAre, and Hotel EBITDA for the three and six
months ended June 30, 2019 and 2018 (in thousands). All amounts
presented our portion of the results of our unconsolidated Atlanta
JV.
Three months ended June
30,
Six months ended June
30,
Reconciliation of
Net earnings (loss) to EBITDA, EBITDAre, Adjusted EBITDAre, and
Hotel EBITDA
2019
2018
2019
2018
Net earnings (loss)
$
(1,270)
$
2,907
$
(1,255)
$
3,699
Interest expense
2,094
2,091
4,257
4,019
Interest expense from JV
562
518
1,109
1,010
Income tax expense
461
54
647
183
Depreciation and amortization expense
2,394
2,444
4,756
4,703
Depreciation and amortization expense from
JV
299
292
596
577
EBITDA
4,540
8,306
10,110
14,191
Net (gain) loss on disposition of
assets
16
(1,895)
(23)
(1,871)
Net loss on disposition of assets from
JV
-
7
-
14
Impairment recovery, net
-
-
-
(93)
EBITDAre
4,556
6,418
10,087
12,241
Net loss (gain) on derivatives and
convertible debt
456
(156)
693
(603)
Net loss on derivative from JV
-
-
1
-
Stock-based compensation expense
424
263
760
665
Acquisition and terminated transactions
expense
7
71
14
90
Equity transaction and strategic
alternatives
834
-
834
-
Adjusted EBITDAre
6,277
6,596
12,389
12,393
General and administrative expense,
excluding stock compensation expense
1,148
1,342
2,475
2,809
Other expense, net
24
20
53
34
Unallocated hotel and property operations
expense
22
59
67
148
Hotel EBITDA
$
7,471
$
8,017
$
14,984
$
15,384
Revenue
$
16,177
$
17,834
$
32,080
$
34,513
JV revenue
2,546
2,484
5,646
5,102
Condor and JV revenue
$
18,723
$
20,318
$
37,726
$
39,615
Hotel EBITDA as a percentage of
revenue
39.9%
39.5%
39.7%
38.8%
We calculate EBITDA, EBITDAre, and Adjusted EBITDAre by adding
back to net earnings or loss certain non-operating expenses and
certain non-cash charges which are based on historical cost
accounting that we believe may be of limited significance in
evaluating current performance. We believe these adjustments can
help eliminate the accounting effects of depreciation and
amortization and financing decisions and facilitate comparisons of
core operating profitability between periods. In calculating
EBITDA, we add back to net earnings or loss interest expense, loss
on debt extinguishment, income tax expense, and depreciation and
amortization expense. NAREIT adopted EBITDAre in order to promote
an industry-wide measure of REIT operating performance. We adjust
EBITDA by adding back net gain/loss on disposition of assets and
impairment charges to calculate EBITDAre. To calculate Adjusted
EBITDAre, we adjust EBITDAre to add back acquisition and terminated
transactions expense and equity transaction and strategic
alternatives expense, which are cash charges. We also add back
stock –based compensation expense and gain/loss on derivatives and
convertible debt, which are non-cash charges. EBITDA, EBITDAre, and
Adjusted EBITDAre, as presented, may not be comparable to similarly
titled measures of other companies.
We believe EBITDA, EBITDAre, and Adjusted EBITDAre to be useful
additional measures of our operating performance, excluding the
impact of our capital structure (primarily interest expense), our
asset base (primarily depreciation and amortization expense), and
other items we do not believe are representative of the results
from our core operations.
The Company further excludes general and administrative
expenses, other non-operating income or expense, and certain hotel
and property operations expenses that are not allocated to
individual properties in assessing hotel performance (primarily
certain general liability and other insurance costs, land lease
costs, and office and banking fees) from Adjusted EBITDAre to
calculate Hotel EBITDA. Hotel EBITDA, as presented, may not be
comparable to similarly titled measures of other companies.
Hotel EBITDA is intended to isolate property level operational
performance over which the Company’s hotel operators have direct
control. We believe Hotel EBITDA is helpful to investors as it
better communicates the comparability of our hotels’ operating
results for all of the Company’s hotel properties and is used by
management to measure the performance of the Company’s hotels and
the effectiveness of the operators of the hotels.
Same-Store Revenue and Hotel EBITDA
The following tables present our same-store revenue, Hotel
EBITDA, and Hotel EBITDA margin broken down by property type for
the three and six months ended June 30, 2019 and 2018 (in
thousands) and reconcile these same-store measures to total revenue
and Hotel EBITDA as presented above. Same-store results include all
our hotels owned at June 30, 2019. Results for the hotels for
periods prior to our ownership were provided to us by prior owners
and have not been adjusted by us or audited or reviewed by our
independent auditors. All amounts presented include our portion of
the results of our unconsolidated Atlanta Aloft JV. Results for
periods prior to the Company’s ownership have not been included in
the Company’s actual consolidated financial statements and are
included here only for comparison purposes.
Revenue - Reconciliation of
Actual to Same-Store
Three months ended June
30,
Six months ended June
30,
2019
2018
2019
2018
Condor and JV Revenue - Actual
$
18,723
$
20,318
$
37,726
$
39,615
Revenue earned on properties disposed of
prior to June 30, 2019 during the period of ownership
-
(1,428)
(272)
(3,297)
Revenue earned on properties owned at June
30, 2019 prior to ownership
-
-
-
637
Total Revenue - Same-Store
$
18,723
$
18,890
$
37,454
$
36,955
Hotel EBITDA - Reconciliation
of Actual to Same-Store
Three months ended June
30,
Six months ended June
30,
2019
2018
2019
2018
Condor and JV Hotel EBITDA - Actual
$
7,471
$
8,017
$
14,984
$
15,384
Hotel EBITDA earned on properties disposed
of prior to June 30, 2019 during the period of ownership
-
(431)
(63)
(854)
Hotel EBITDA earned on properties owned at
June 30, 2019 prior to ownership
-
-
-
285
Total Hotel EBITDA - Same-Store
$
7,471
$
7,586
$
14,921
$
14,815
Hotel EBITDA Margin
Three months ended March,
31
Six months June 30,
2019
2018
2019
2018
Total Hotel EBITDA Margin
39.9%
40.2%
39.8%
40.1%
Condor Hospitality Trust, Inc. Operating
Statistics
The following tables present our same-store occupancy, ADR, and
RevPAR for all our hotels owned at June 30, 2019. Same-store
occupancy, ADR, and RevPAR reflect the performance of hotels during
the entire period, regardless of our ownership during the period
presented. Results for the hotels for periods prior to our
ownership were provided to us by prior owners and have not been
adjusted by us or audited or reviewed by our independent auditors.
The performance metrics for the hotel acquired through our Atlanta
JV, also presented below, reflect 100% of the operating results of
the property, including our interest and the interest of our
partner.
Three months ended June
30,
2019
2018
Occupancy
ADR
RevPAR
Occupancy
ADR
RevPAR
Growth
Solomons Hilton Garden Inn
79.63%
$
122.54
$
97.58
81.67%
$
122.71
$
100.22
-2.6%
Atlanta Hotel Indigo
80.41%
$
103.57
$
83.29
81.23%
$
100.03
$
81.25
2.5%
Jacksonville Courtyard by Marriott
77.59%
$
121.99
$
94.65
83.29%
$
122.33
$
101.88
-7.1%
San Antonio SpringHill Suites
83.09%
$
131.15
$
108.97
89.02%
$
143.42
$
127.67
-14.6%
Leawood Aloft
76.59%
$
136.63
$
104.65
78.73%
$
132.74
$
104.50
0.1%
Lexington Home2 Suites
82.94%
$
126.55
$
104.96
83.00%
$
122.70
$
101.84
3.1%
Round Rock Home2 Suites
85.09%
$
119.48
$
101.66
88.33%
$
121.28
$
107.13
-5.1%
Tallahassee Home2 Suites
92.61%
$
121.54
$
112.55
87.99%
$
116.02
$
102.09
10.3%
South Haven Home2 Suites
93.94%
$
122.93
$
115.48
91.40%
$
120.36
$
110.01
5.0%
Lake Mary Hampton Inn & Suites
79.95%
$
131.65
$
105.25
82.10%
$
132.43
$
108.72
-3.2%
Austin Residence Inn
87.66%
$
136.99
$
120.09
84.10%
$
132.67
$
111.58
7.6%
El Paso Fairfield Inn
84.89%
$
104.95
$
89.09
86.39%
$
100.19
$
86.55
2.9%
Austin TownePlace Suites
76.86%
$
115.84
$
89.03
83.85%
$
115.88
$
97.17
-8.4%
Summerville Home2 Suites
85.28%
$
138.39
$
118.02
88.03%
$
140.30
$
123.51
-4.4%
Wholly owned new investment platform
properties
83.07%
$
123.68
$
102.74
84.64%
$
122.69
$
103.84
-1.1%
Atlanta Aloft JV
79.81%
$
146.54
$
116.95
81.20%
$
141.89
$
115.21
1.5%
Total Same-Store Portfolio
82.64%
$
126.62
$
104.63
84.18%
$
125.15
$
105.36
-0.7%
Same-Store Hotel Comparison
2Q19
2Q18
Growth
8 Positive RevPAR Same-Store Hotels
$
106.61
$
102.77
3.7%
7 Negative RevPAR Same-Store Hotels
$
101.72
$
109.17
-6.8%
Total Same-Store Portfolio
$
104.63
$
105.36
-0.7%
Six months ended June
30,
2019
2018
Occupancy
ADR
RevPAR
Occupancy
ADR
RevPAR
Growth
Solomons Hilton Garden Inn
76.34%
$
124.37
$
94.95
77.56%
$
124.13
$
96.28
-1.4%
Atlanta Hotel Indigo
77.42%
$
110.78
$
85.76
81.18%
$
104.14
$
84.54
1.4%
Jacksonville Courtyard by Marriott
79.06%
$
123.47
$
97.61
84.16%
$
117.77
$
99.11
-1.5%
San Antonio SpringHill Suites
83.40%
$
135.42
$
112.95
87.70%
$
143.35
$
125.71
-10.2%
Leawood Aloft
69.03%
$
133.38
$
92.08
71.11%
$
130.41
$
92.74
-0.7%
Lexington Home2 Suites
78.09%
$
115.40
$
90.11
78.78%
$
113.57
$
89.47
0.7%
Round Rock Home2 Suites
84.59%
$
119.77
$
101.31
87.41%
$
120.73
$
105.53
-4.0%
Tallahassee Home2 Suites
93.76%
$
127.77
$
119.79
86.12%
$
123.09
$
106.00
13.0%
South Haven Home2 Suites
91.37%
$
117.42
$
107.28
86.36%
$
115.91
$
100.09
7.2%
Lake Mary Hampton Inn & Suites
84.36%
$
143.96
$
121.45
84.15%
$
143.81
$
121.01
0.4%
Austin Residence Inn
84.17%
$
140.11
$
117.93
83.77%
$
133.90
$
112.17
5.1%
El Paso Fairfield Inn
84.69%
$
104.72
$
88.69
81.18%
$
99.96
$
81.15
9.3%
Austin TownePlace Suites
74.43%
$
114.93
$
85.54
83.21%
$
121.19
$
100.84
-15.2%
Summerville Home2 Suites
83.52%
$
131.56
$
109.88
87.66%
$
130.22
$
114.15
-3.7%
Wholly owned new investment platform
properties
81.43%
$
124.75
$
101.59
82.54%
$
123.11
$
101.61
0.0%
Atlanta Aloft JV
79.98%
$
163.51
$
130.78
80.35%
$
147.26
$
118.32
10.5%
Total Same-Store Portfolio
81.24%
$
129.83
$
105.47
82.24%
$
126.25
$
103.84
1.6%
Same-Store Hotel Comparison
YTD19
YTD18
Growth
8 Positive RevPAR Same-Store Hotels
$
110.53
$
103.63
6.7%
7 Negative RevPAR Same-Store Hotels
$
98.43
$
104.43
-5.7%
Total Same-Store Portfolio
$
105.47
$
103.84
1.6%
Condor Hospitality Trust, Inc.
Property List | As of August 12, 2019
New Investment Platform | Acquired from
January 1, 2012 - August 12, 2019
Hotel
Name
City
State
Rooms
Acquisition Date
Purchase
Price (in millions)
1
Hilton Garden Inn
Dowell/Solomons
MD
100
05/25/2012
$11.5
2
SpringHill Suites
San Antonio
TX
116
10/01/2015
$17.5
3
Courtyard by Marriott
Jacksonville
FL
120
10/02/2015
$14.0
4
Hotel Indigo
College Park
GA
142
10/02/2015
$11.0
5
Aloft1
Atlanta
GA
254
08/22/2016
$43.6
6
Aloft
Leawood
KS
156
12/14/2016
$22.5
7
Home2 Suites
Lexington
KY
103
03/24/2017
$16.5
8
Home2 Suites
Round Rock
TX
91
03/24/2017
$16.8
9
Home2 Suites
Tallahassee
FL
132
03/24/2017
$21.5
10
Home2 Suites
Southaven
MS
105
04/14/2017
$19.0
11
Hampton Inn & Suites
Lake Mary
FL
130
06/19/2017
$19.3
12
Fairfield Inn & Suites
El Paso
TX
124
08/31/2017
$16.4
13
Residence Inn
Austin
TX
120
08/31/2017
$22.4
14
TownePlace Suites
Austin
TX
122
01/18/2018
$19.8
15
Home2 Suites
Summerville
SC
93
02/21/2018
$16.3
Total Portfolio | As of August 12,
2019
1,908
$288.1
1 | Owned 80% by Condor
55 Dispositions | For Period January 1,
2015 - August 12, 2019
Hotel
Name
City
State
Rooms
Disposition Date
Gross
Proceeds (in millions)
1
Super 8
West Plains
MO
49
01/15/2015
$1.5
2
Super 8
Green Bay
WI
83
01/29/2015
$2.2
3
Super 8
Columbus
GA
74
03/16/2015
$0.9
4
Sleep Inn & Suites
Omaha
NE
90
03/19/2015
$2.9
5
Savannah Suites
Chamblee
GA
120
04/01/2015
$4.4
6
Savannah Suites
Augusta
GA
172
04/01/2015
$3.4
7
Super 8
Batesville
AR
49
04/30/2015
$1.5
8
Days Inn
Ashland
KY
63
07/01/2015
$2.2
9
Comfort Inn
Alexandria
VA
150
07/13/2015
$12.0
10
Days Inn
Alexandria
VA
200
07/13/2015
$6.5
11
Super 8
Manhattan
KS
85
08/28/2015
$3.2
12
Quality Inn
Sheboygan
WI
59
10/06/2015
$2.3
13
Super 8
Hays
KS
76
10/14/2015
$1.9
14
Days Inn
Glasgow
KY
58
10/16/2015
$1.8
15
Super 8
Tomah
WI
65
10/21/2015
$1.4
16
Rodeway Inn
Fayetteville
NC
120
11/03/2015
$2.6
17
Savannah Suites
Savannah
GA
160
12/22/2015
$4.0
Total 2015
1,673
$54.7
18
Super 8
Kirksville
MO
61
01/04/2016
$1.5
19
Super 8
Lincoln
NE
133
01/07/2016
$2.8
20
Savannah Suites
Greenville
SC
170
01/08/2016
$2.7
21
Super 8
Portage
WI
61
03/30/2016
$2.4
22
Super 8
O'Neill
NE
72
04/25/2016
$1.7
23
Quality Inn
Culpeper
VA
49
05/10/2016
$2.2
24
Super 8
Storm Lake
IA
59
05/19/2016
$2.8
25
Clarion Inn
Cleveland
TN
59
05/24/2016
$2.2
26
Super 8
Coralville
IA
84
05/26/2016
$3.4
27
Super 8
Keokuk
IA
61
05/27/2016
$2.2
28
Comfort Inn
Chambersburg
PA
63
06/06/2016
$2.1
29
Super 8
Pittsburg
KS
64
08/08/2016
$1.6
30
Super 8
Mount Pleasant
IA
54
09/09/2016
$1.9
31
Quality Inn
Danville
KY
63
09/19/2016
$2.3
32
Super 8
Menomonie
WI
81
09/26/2016
$3.0
33
Comfort Inn
Glasgow
KY
60
10/14/2016
$2.4
34
Days Inn
Sioux Falls
SD
86
11/04/2016
$2.1
35
Comfort Inn
Shelby
NC
76
11/07/2016
$4.1
36
Comfort Inn
Rocky Mount
VA
61
11/17/2016
$2.2
37
Days Inn
Farmville
VA
59
11/17/2016
$2.4
38
Comfort Suites
Marion
IN
62
11/18/2016
$3.0
39
Comfort Inn
Farmville
VA
50
11/30/2016
$2.6
40
Quality Inn
Princeton
WV
50
12/05/2016
$2.1
41
Super 8
Burlington
IA
62
12/21/2016
$2.8
42
Savannah Suites
Atlanta
GA
164
12/22/2016
$2.9
Total 2016
1,864
$61.4
43
Comfort Inn
New Castle
PA
79
03/27/2017
$2.5
44
Super 8
Billings
MT
106
03/28/2017
$4.2
45
Comfort Inn
Harlan
KY
61
04/03/2017
$1.9
46
Comfort Suites
Lafayette
IN
62
04/18/2017
$3.9
47
Key West Inn
Key Largo
FL
40
05/17/2017
$7.6
48
Quality Inn
Morgantown
WV
81
08/30/2017
$2.6
49
Days Inn
Bossier City
LA
176
09/13/2017
$1.4
50
Comfort Inn & Suites
Warsaw
IN
71
12/20/2017
$5.0
Total 2017
676
$29.1
51
Supertel Inn/Conference Center
Creston
IA
41
01/25/2018
$2.1
52
Comfort Suites
South Bend
IN
135
03/15/2018
$6.1
53
Comfort Suites
Ft. Wayne
IN
127
05/30/2018
$7.1
54
Super 8
Creston
IA
121
08/30/2018
$5.1
Total 2018
424
$20.4
55
Quality Inn
Solomons
MD
59
03/22/2019
$4.3
Total 2019
59
$4.3
Total Dispositions
4,696
$169.9
Acquisitions | For Period January 1,
2015 - August 12, 2019
Hotel
Name
City
State
Rooms
Acquisition Date
Purchase
Price (in millions)
1
SpringHill Suites
San Antonio
TX
116
10/01/2015
$17.5
2
Courtyard by Marriott
Jacksonville
FL
120
10/02/2015
$14.0
3
Hotel Indigo
College Park
GA
142
10/02/2015
$11.0
4
Aloft1
Atlanta
GA
254
08/22/2016
$43.6
5
Aloft
Leawood
KS
156
12/14/2016
$22.5
6
Home2 Suites
Lexington
KY
103
03/24/2017
$16.5
7
Home2 Suites
Round Rock
TX
91
03/24/2017
$16.8
8
Home2 Suites
Tallahassee
FL
132
03/24/2017
$21.5
9
Home2 Suites
Southaven
MS
105
04/14/2017
$19.0
10
Hampton Inn & Suites
Lake Mary
FL
130
06/19/2017
$19.3
11
Fairfield Inn & Suites
El Paso
TX
124
08/31/2017
$16.4
12
Residence Inn
Austin
TX
120
08/31/2017
$22.4
13
TownePlace Suites
Austin
TX
122
01/18/2018
$19.8
14
Home2 Suites
Summerville
SC
93
02/21/2018
$16.3
Total Acquisitions
1,808
$276.6
1 | Owned 80% by Condor
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190812005614/en/
Arinn Cavey acavey@trustcondor.com
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