Condor Hospitality Trust, Inc. (NYSE American: CDOR) (the
“Company”) today announced results for the third quarter ended
September 30, 2019.
THIRD QUARTER RELEASE FINANCIAL HIGHLIGHTS
- Revenue in the third quarter 2019 of $14.7 million,
comprised of $14.7 million generated entirely from New Investment
Platform Hotels, a 0.2% increase from $14.6 million generated by
New Investment Platform Hotels in the $15.4 million 2018 third
quarter Revenue that included $0.8 million of Legacy Hotel
Revenue.
- Same-Store Revenue of $54.6 million for the first nine
months of 2019 increased $0.5 million over the first nine months
Same-Store Revenue of $54.1 million in 2018.
- Same-Store ADR for the New Investment Platform Hotels
increased 2.1% in the first nine months of 2019 compared to the
first nine months of 2018.
- Same-Store RevPAR for the New Investment Platform Hotels in
the 2019 third quarter decreased 0.4% compared to the same quarter
in 2018, affected by a continued weak convention and event schedule
in San Antonio that had a direct impact on the SpringHill Suites.
Excluding the SpringHill Suites, New Investment Platform RevPAR
increased by 0.3%. Same-Store RevPAR of $101.71 for the New
Investment Platform Hotels for the first nine months of 2019
Increased 1.0% over 2018 first nine months RevPAR of
$100.74.
- Net Earnings (Loss) Attributable to Common Shareholders of
($2.1 million), or ($0.18) per Diluted Share in the third quarter,
compared to $2.5 million, or $0.21 per share, in the 2018 third
quarter. Decline in Net Earnings Attributable to Common
Shareholders primarily caused by no Legacy Hotels remaining in the
third quarter 2019, compared to $0.3 million of operating income
generated from Legacy Hotels in the third quarter 2018, $1.1
million in Equity Transaction and Strategic Alternatives costs
incurred in the third quarter 2019, and $0.2 million Decline in Net
Gain on Derivatives and Convertible Debt for the quarter.
Additionally, the third quarter 2018 included a $3.7 million gain
from Legacy Hotel sales.
- Net Earnings (Loss) Attributable to Common Shareholders of
($3.7 million), or ($0.31) per Diluted Share, in the first nine
months of 2019 compared to $5.9 million, or $0.49 per share, in the
first nine months of 2018. Decline in Net Earnings Attributable to
Common Shareholders primarily caused by decreased operating income
generated from Legacy Hotels in the first nine months of 2019 of
$1.0 million, $1.9 million in Equity Transaction and Strategic
Alternatives costs incurred in the first nine months of 2019, and
$1.6 million Decline in Net Gain on Derivatives and Convertible
Debt for the period. Additionally, the first nine months of 2018
included a $5.6 million gain from Legacy Hotel sales.
- Adjusted Funds from Operations was $2.6 million, or $0.22
per Diluted Share, a $0.4 million increase from $2.2 million, or
$0.18, in the 2018 third quarter.
- Same-Store Hotel EBITDA was flat for the quarter but is up
$0.1 million for the first nine months of 2019 compared to the same
time period in 2018.
MANAGEMENT COMMENTARY
Bill Blackham, Condor’s Chief Executive Officer, commented:
“For the first nine months of 2019 our portfolio has
outperformed the upscale and upper midscale chain scales with 1.2%
RevPAR growth compared to (0.5)% for upscale and 0.0% for upper
midscale as reported by Smith Travel Research. Our proforma
same-store RevPAR for the third quarter 2019 excluding the
SpringHill Suites increased 0.3% as compared to (0.5)% for upscale
and (0.1)% for upper midscale, as reported by Smith Travel Research
while unadjusted same-store RevPAR declined 0.4% for the third
quarter. In addition to the market conditions in San Antonio, the
portfolio during the quarter experienced revenue disruption from an
accidental fire protection sprinkler event in our Summerville hotel
and sales, marketing and revenue management disruptions caused by
management company changes at 7 of our hotels. In the first nine
months of 2019 Same-Store Hotel EBITDA is approximately 0.5% higher
than the same period in the prior year at $20.8 million compared to
$20.7 million, and our margins while declining in the first nine
months, did so moderately reducing 20 bps from 38.4% in 2018 to
38.2% in 2019 and notwithstanding industry cost pressures were flat
at 34.6% for the third quarter of 2019 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 $10.00 per share cash price to
be paid to Series E preferred shareholders at closing. We
anticipate completing and closing the merger during the fourth
quarter of 2019.”
FINANCIAL SUMMARY
At September 30, 2019, the Company’s total portfolio included 15
hotels, representing 1,908 rooms. The Company’s last remaining
legacy asset was sold during the first quarter of 2019.
Total Company Financial Results ($
in millions except per share amounts)
Three months ended September
30,
Nine months ended September
30,
2019
2018
Change
2019
2018
Change
Revenue
$
14.7
$
15.5
-5.1%
$
46.7
$
50.0
-6.5%
Net Earnings (Loss) Attributable to Common
Shareholders
$
(2.1)
$
2.5
NA
$
(3.7)
$
5.9
NA
Diluted Earnings (Loss) per Share
$
(0.18)
$
0.21
NA
$
(0.31)
$
0.49
NA
Funds from Operations (FFO)*
$
0.7
$
1.7
-56.7%
$
4.8
$
8.7
-44.9%
FFO per Diluted Share*
$
0.05
$
0.13
-61.5%
$
0.37
$
0.69
-46.4%
Adjusted FFO*
$
2.6
$
2.2
18.0%
$
9.4
$
9.9
-4.4%
Adjusted FFO per Diluted Share*
$
0.22
$
0.18
22.2%
$
0.78
$
0.82
-4.9%
Hotel EBITDA*
$
5.9
$
6.2
-4.5%
$
20.9
$
21.6
-3.1%
Adjusted EBITDAre*
$
4.7
$
4.7
0.0%
$
17.1
$
17.1
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 September
30,
Nine months ended September
30,
2019
2018
Change
2019
2018
Change
Same-Store RevPAR
$
94.31
$
94.64
-0.4%
$
101.71
$
100.74
1.0%
Same-Store Occupancy
78.06%
78.73%
-0.9%
80.17%
81.06%
-1.1%
Same-Store ADR
$
120.81
$
120.21
0.5%
$
126.87
$
124.28
2.1%
Same-Store Hotel EBITDA*
$
5.9
$
5.9
-0.1%
$
20.8
$
20.7
0.5%
Same-Store Hotel EBITDA Margin*
34.6%
34.6%
0.0%
38.2%
38.4%
-0.2%
*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 September 30, 2019, the Company had cash and cash
equivalents (including restricted cash) of $12.0 million and
available revolver borrowing capacity of $9.0 million. As of
September 30, 2019, the Company had total outstanding long-term
debt of $135.7 million associated with assets held for use with a
weighted average maturity of 1.8 years and a weighted average
interest rate of 4.52%.
CAPITAL INVESTMENTS
The Company invested $1.2 million in capital improvements
throughout the portfolio in the three months ended September 30,
2019 to upgrade its properties and maintain brand standards.
OUTLOOK AND GUIDANCE
The Company has suspended guidance until further notice.
DIVIDENDS
On July 19, 2019, the Company entered into an Agreement and Plan
of Merger (as amended from time to time, the “Merger Agreement”)
with NHT Operating Partnership LLC, a Delaware limited liability
company (the “Parent”) and other parties thereto pursuant to which
the Parent will acquire all of the issued and outstanding equity
interests of the Company and its operating partnership through two
mergers (the “proposed transaction”). 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 that sets
forth a limitation on the amount of any such dividends, and is
based on available prior month adjusted funds from operations as
calculated pursuant to the Merger Agreement. 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 third 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. 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 satisfy the closing conditions to the proposed
transaction; (iv) risks related to disruption of management’s
attention from 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.
SELECTED FINANCIAL DATA:
Condor Hospitality Trust, Inc.
and Subsidiaries Consolidated Balance Sheets (Unaudited - In
thousands, except share and per share data)
As of
September 30, 2019
December 31, 2018
Assets
Investment in hotel properties, net
$
224,376
$
230,178
Investment in unconsolidated joint
venture
4,649
5,866
Cash and cash equivalents
5,046
4,151
Restricted cash, property escrows
6,906
5,005
Accounts receivable, net
1,500
1,290
Prepaid expenses and other assets
1,131
2,227
Derivative assets, at fair value
428
639
Investment in hotel properties held for
sale, net
-
4,092
Total Assets
$
244,036
$
253,448
Liabilities and
Equity
Liabilities
Accounts payable, accrued expenses, and
other liabilities
$
7,993
$
5,336
Dividends and distributions payable
145
2,330
Derivative liabilities, at fair value
498
-
Convertible debt, at fair value
1,199
1,000
Long-term debt, net of deferred financing
costs
134,017
135,810
Long-term debt related to hotel properties
held for sale, net of deferred financing costs
-
1,120
Total Liabilities
143,852
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; 11,916,309 and 11,886,003 shares outstanding
119
119
Additional paid-in capital
232,627
231,805
Accumulated deficit
(143,277)
(134,970)
Total Shareholders' Equity
99,519
107,004
Noncontrolling interest in consolidated
partnership (Condor Hospitality Limited Partnership), redemption
value of $623 and $435
665
848
Total Equity
100,184
107,852
Total Liabilities and Equity
$
244,036
$
253,448
Condor Hospitality Trust, Inc.
and Subsidiaries Consolidated Statements of Operations (Unaudited -
In thousands, except per share data)
Three months ended September
30,
Nine months ended September
30,
2019
2018
2019
2018
Revenue
Room rentals and other hotel services
$
14,666
$
15,462
$
46,746
$
49,975
Operating Expenses
Hotel and property operations
9,718
10,148
29,266
31,318
Depreciation and amortization
2,405
2,423
7,161
7,126
General and administrative
1,210
1,599
4,445
5,073
Acquisition and terminated
transactions
1
96
15
186
Equity transaction and strategic
alternatives
1,052
-
1,886
-
Total operating expenses
14,386
14,266
42,773
43,703
Operating income
280
1,196
3,973
6,272
Net gain (loss) on disposition of
assets
(14)
3,716
9
5,587
Equity (loss) in earnings of joint
venture
(84)
(41)
595
251
Net gain (loss) on derivatives and
convertible debt
(223)
116
(916)
719
Other expense, net
(27)
(23)
(80)
(57)
Interest expense
(1,912)
(2,154)
(6,169)
(6,173)
Impairment recovery, net
-
-
-
93
Earnings (loss) before income taxes
(1,980)
2,810
(2,588)
6,692
Income tax expense
(8)
(132)
(655)
(315)
Net earnings (loss)
(1,988)
2,678
(3,243)
6,377
Loss (earnings) attributable to
noncontrolling interest
10
(20)
17
(47)
Net earnings (loss) attributable to
controlling interests
(1,978)
2,658
(3,226)
6,330
Dividends declared and undeclared on
preferred stock
(145)
(145)
(434)
(434)
Net earnings (loss) attributable to
common shareholders
$
(2,123)
$
2,513
$
(3,660)
$
5,896
Earnings (Loss)
per Share
Total - Basic Earnings (Loss) per
Share
$
(0.18)
$
0.21
$
(0.31)
$
0.50
Total - Diluted Earnings (Loss) per
Share
$
(0.18)
$
0.21
$
(0.31)
$
0.49
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 nine months ended September 30, 2019 and
2018 (in thousands). All amounts presented include our portion of
the results of our unconsolidated Atlanta JV.
Three months ended September
30,
Nine months ended September
30,
Reconciliation of
Net earnings (loss) to FFO and AFFO
2019
2018
2019
2018
Net earnings (loss)
$
(1,988)
$
2,678
$
(3,243)
$
6,377
Depreciation and amortization expense
2,405
2,423
7,161
7,126
Depreciation and amortization expense from
JV
299
289
895
866
Net (gain) loss on disposition of
assets
14
(3,716)
(9)
(5,587)
Net loss on disposition of assets from
JV
2
15
2
29
Impairment recovery, net
-
-
-
(93)
FFO
732
1,689
4,806
8,718
Dividends declared and undeclared on
preferred stock
(145)
(145)
(434)
(434)
FFO attributable to common shares and
common units
587
1,544
4,372
8,284
Net loss (gain) on derivatives and
convertible debt
223
(116)
916
(719)
Net loss on derivatives from JV
-
-
1
-
Acquisition and terminated transactions
expense
1
96
15
186
Equity transaction and strategic
alternatives
1,052
-
1,886
-
Stock-based compensation expense
141
247
901
912
Amortization of deferred financing
fees
286
363
981
1,080
Amortization of deferred financing fees
from JV
143
45
234
136
Loss on extinguishment of debt from JV
138
-
138
-
AFFO attributable to common shares and
common units
$
2,571
$
2,179
$
9,444
$
9,879
FFO attributable to common shares and
common units - Basic Shares
$
587
$
1,544
$
4,372
$
8,284
Convertible note interest and fair value
adjustments
-
-
-
27
Preferred dividends and fair value
adjustments
-
-
-
-
FFO attributable to common shares and
common units - Diluted Shares
$
587
$
1,544
$
4,372
$
8,311
FFO per common share and common unit -
Basic
$
0.05
$
0.13
$
0.37
$
0.70
FFO per common share and common unit -
Diluted
$
0.05
$
0.13
$
0.37
$
0.69
Weighted average common shares and common
units - Basic FFO
11,919,944
11,892,404
11,901,936
11,867,801
Weighted average common shares and common
units - Diluted FFO
11,925,323
11,899,760
11,921,438
11,980,377
AFFO attributable to common shares and
common units - Basic Shares
$
2,571
$
2,179
$
9,444
$
9,879
Convertible note interest
16
16
48
48
Preferred dividends at stated rates
-
-
434
434
AFFO attributable to common shares and
common units - Diluted Shares
$
2,587
$
2,195
$
9,926
$
10,361
AFFO per common share and common unit -
Basic
$
0.22
$
0.18
$
0.79
$
0.83
AFFO per common share and common unit -
Diluted
$
0.22
$
0.18
$
0.78
$
0.82
Weighted average common shares and common
units - Basic AFFO
11,919,944
11,892,404
11,901,936
11,867,801
Weighted average common shares and common
units - Diluted AFFO
12,690,703
11,997,029
12,686,818
12,648,488
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
nine months ended September 30, 2019 and 2018 (in thousands). All
amounts presented our portion of the results of our unconsolidated
Atlanta JV.
Three months ended September
30,
Nine months ended September
30,
Reconciliation of
Net earnings (loss) to EBITDA, EBITDAre, Adjusted EBITDAre, and
Hotel EBITDA
2019
2018
2019
2018
Net earnings (loss)
$
(1,988)
$
2,678
$
(3,243)
$
6,377
Interest expense
1,912
2,154
6,169
6,173
Interest expense from JV
536
543
1,645
1,553
Loss on extinguishment of debt from JV
138
-
138
-
Income tax expense
8
132
655
315
Depreciation and amortization expense
2,405
2,423
7,161
7,126
Depreciation and amortization expense from
JV
299
289
895
866
EBITDA
3,310
8,219
13,420
22,410
Net (gain) loss on disposition of
assets
14
(3,716)
(9)
(5,587)
Net loss on disposition of assets from
JV
2
15
2
29
Impairment recovery, net
-
-
-
(93)
EBITDAre
3,326
4,518
13,413
16,759
Net loss (gain) on derivatives and
convertible debt
223
(116)
916
(719)
Net loss on derivative from JV
-
-
1
-
Stock-based compensation expense
141
247
901
912
Acquisition and terminated transactions
expense
1
96
15
186
Equity transaction and strategic
alternatives
1,052
-
1,886
-
Adjusted EBITDAre
4,743
4,745
17,132
17,138
General and administrative expense,
excluding stock compensation expense
1,069
1,352
3,544
4,161
Other expense, net
27
23
80
57
Unallocated hotel and property operations
expense
86
81
153
229
Hotel EBITDA
$
5,925
$
6,201
$
20,909
$
21,585
Revenue
$
14,666
$
15,462
$
46,746
$
49,975
JV revenue
2,446
2,485
8,092
7,587
Condor and JV revenue
$
17,112
$
17,947
$
54,838
$
57,562
Hotel EBITDA as a percentage of
revenue
34.6%
34.6%
38.1%
37.5%
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 nine months ended September 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 September 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 September
30,
Nine months ended September
30,
2019
2018
2019
2018
Condor and JV Revenue - Actual
$
17,112
$
17,947
$
54,838
$
57,562
Revenue earned on properties disposed of
prior to September 30, 2019 during the period of ownership
-
(825)
(272)
(4,122)
Revenue earned on properties owned at
September 30, 2019 prior to ownership
-
-
-
637
Total Revenue - Same-Store
$
17,112
$
17,122
$
54,566
$
54,077
Hotel EBITDA - Reconciliation
of Actual to Same-Store
Three months ended September
30,
Nine months ended September
30,
2019
2018
2019
2018
Condor and JV Hotel EBITDA - Actual
$
5,925
$
6,201
$
20,909
$
21,585
Hotel EBITDA earned on properties disposed
of prior to September 30, 2019 during the period of ownership
-
(274)
(63)
(1,128)
Hotel EBITDA earned on properties owned at
September 30, 2019 prior to ownership
-
-
-
285
Total Hotel EBITDA - Same-Store
$
5,925
$
5,927
$
20,846
$
20,742
Hotel EBITDA Margin
Three months ended September
30,
Nine months September
30,
2019
2018
2019
2018
Total Hotel EBITDA Margin
34.6%
34.6%
38.2%
38.4%
Condor Hospitality Trust, Inc. Operating
Statistics
The following tables present our same-store occupancy, ADR, and
RevPAR for all our hotels owned at September 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 September
30,
2019
2018
Occupancy
ADR
RevPAR
Occupancy
ADR
RevPAR
Growth
Solomons Hilton Garden Inn
81.29%
$
120.27
$
97.77
79.65%
$
129.80
$
103.39
-5.4%
Atlanta Hotel Indigo
73.70%
$
101.40
$
74.73
72.60%
$
101.94
$
74.00
1.0%
Jacksonville Courtyard by Marriott
71.65%
$
116.27
$
83.31
72.21%
$
113.52
$
81.97
1.6%
San Antonio SpringHill Suites
74.13%
$
119.90
$
88.88
78.39%
$
125.19
$
98.14
-9.4%
Leawood Aloft
70.38%
$
130.56
$
91.89
78.96%
$
123.19
$
97.28
-5.5%
Lexington Home2 Suites
86.50%
$
117.56
$
101.69
84.65%
$
111.14
$
94.07
8.1%
Round Rock Home2 Suites
83.29%
$
110.62
$
92.13
81.74%
$
113.74
$
92.97
-0.9%
Tallahassee Home2 Suites
80.09%
$
119.11
$
95.40
88.04%
$
114.45
$
100.77
-5.3%
South Haven Home2 Suites
89.40%
$
122.60
$
109.60
86.60%
$
112.06
$
97.05
12.9%
Lake Mary Hampton Inn & Suites
68.70%
$
126.29
$
86.76
77.72%
$
122.32
$
95.06
-8.7%
Austin Residence Inn
80.43%
$
127.59
$
102.62
78.07%
$
124.16
$
96.93
5.9%
El Paso Fairfield Inn
88.60%
$
107.52
$
95.26
82.52%
$
102.05
$
84.21
13.1%
Austin TownePlace Suites
68.32%
$
106.07
$
72.47
69.66%
$
109.98
$
76.62
-5.4%
Summerville Home2 Suites
82.92%
$
129.09
$
107.04
80.08%
$
126.55
$
101.35
5.6%
Wholly owned new investment platform
properties
77.89%
$
118.13
$
92.01
79.13%
$
116.21
$
91.95
0.1%
Atlanta Aloft JV
79.16%
$
138.00
$
109.24
76.16%
$
147.26
$
112.16
-2.6%
Total Same-Store Portfolio
78.06%
$
120.81
$
94.31
78.73%
$
120.21
$
94.64
-0.4%
Same-Store Hotel Comparison
3Q19
3Q18
Growth
8 Negative RevPAR Same-Store Hotels
$
89.31
$
93.02
-4.0%
7 Positive RevPAR Same-Store Hotels
$
99.04
$
96.18
3.0%
Total Same-Store Portfolio
$
94.31
$
94.64
-0.4%
Nine months ended September
30,
2019
2018
Occupancy
ADR
RevPAR
Occupancy
ADR
RevPAR
Growth
Solomons Hilton Garden Inn
78.01%
$
122.93
$
95.90
78.27%
$
126.07
$
98.68
-2.8%
Atlanta Hotel Indigo
76.16%
$
107.72
$
82.04
78.29%
$
103.45
$
80.99
1.3%
Jacksonville Courtyard by Marriott
76.56%
$
121.20
$
92.79
80.13%
$
116.48
$
93.34
-0.6%
San Antonio SpringHill Suites
80.28%
$
130.59
$
104.84
84.56%
$
137.68
$
116.42
-10.0%
Leawood Aloft
69.49%
$
132.42
$
92.01
73.76%
$
127.81
$
94.27
-2.4%
Lexington Home2 Suites
80.92%
$
116.18
$
94.01
80.76%
$
112.71
$
91.02
3.3%
Round Rock Home2 Suites
84.15%
$
116.72
$
98.22
85.50%
$
118.48
$
101.30
-3.0%
Tallahassee Home2 Suites
89.15%
$
125.15
$
111.57
86.77%
$
120.13
$
104.24
7.0%
South Haven Home2 Suites
90.70%
$
119.14
$
108.06
86.44%
$
114.61
$
99.07
9.1%
Lake Mary Hampton Inn & Suites
79.09%
$
138.79
$
109.76
81.98%
$
136.94
$
112.27
-2.2%
Austin Residence Inn
82.91%
$
136.01
$
112.77
81.85%
$
130.77
$
107.03
5.4%
El Paso Fairfield Inn
86.01%
$
105.69
$
90.90
81.63%
$
100.67
$
82.18
10.6%
Austin TownePlace Suites
72.37%
$
112.11
$
81.13
78.64%
$
117.84
$
92.68
-12.5%
Summerville Home2 Suites
83.32%
$
130.73
$
108.92
85.10%
$
129.06
$
109.83
-0.8%
Wholly owned new investment platform
properties
80.24%
$
122.58
$
98.36
81.39%
$
120.85
$
98.36
0.0%
Atlanta Aloft JV
79.70%
$
154.97
$
123.52
78.94%
$
147.26
$
116.24
6.3%
Total Same-Store Portfolio
80.17%
$
126.87
$
101.71
81.06%
$
124.28
$
100.74
1.0%
Same-Store Hotel Comparison
YTD19
YTD18
Growth
8 Negative RevPAR Same-Store Hotels
$
105.7
$
99.59
6.1%
7 Positive RevPAR Same-Store Hotels
$
97.49
$
101.95
-4.4%
Total Same-Store Portfolio
$
101.71
$
100.74
1.0%
Condor Hospitality Trust, Inc.
Property List | As of November 14,
2019
New Investment Platform | Acquired from
January 1, 2012 - November 14, 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 November 14,
2019
1,908
$288.1
1 | Owned 80% by Condor
55 Dispositions | For Period January 1,
2015 - November 14, 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 - November 14, 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/20191114005817/en/
Arinn Cavey acavey@trustcondor.com
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