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 third quarter ended September 30,
2019. The Company’s results include the following*:
|
Three Months
Ended |
|
|
Nine Months
Ended |
|
|
September 30, 2019 |
|
|
September 30, 2018 |
|
|
September 30, 2019 |
|
|
September 30, 2018 |
|
|
($ in thousands
except per share data) |
|
|
($ in thousands
except per share data) |
|
Total Revenue |
$ |
42,552 |
|
|
$ |
41,418 |
|
|
$ |
141,483 |
|
|
$ |
134,707 |
|
Net (loss) income available to common
stockholders |
|
(107 |
) |
|
|
(3,066 |
) |
|
|
(2,492 |
) |
|
|
(1,952 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
10,974 |
|
|
|
7,036 |
|
|
|
34,143 |
|
|
|
33,162 |
|
Hotel EBITDA |
|
8,904 |
|
|
|
9,175 |
|
|
|
37,658 |
|
|
|
37,437 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO available to common stockholders and unitholders |
|
4,719 |
|
|
|
991 |
|
|
|
13,010 |
|
|
|
12,446 |
|
Adjusted FFO available to common stockholders and
unitholders |
|
4,258 |
|
|
|
946 |
|
|
|
16,213 |
|
|
|
14,046 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per common share |
$ |
(0.01 |
) |
|
$ |
(0.23 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.14 |
) |
FFO per common share and unit |
$ |
0.31 |
|
|
$ |
0.06 |
|
|
$ |
0.84 |
|
|
$ |
0.82 |
|
Adjusted FFO per common share and unit |
$ |
0.28 |
|
|
$ |
0.06 |
|
|
$ |
1.05 |
|
|
$ |
0.92 |
|
(*) Earnings before interest, taxes,
depreciation and amortization (“EBITDA”), hotel EBITDA, funds from
operations (“FFO”) available to common stockholders and
unitholders, adjusted FFO available to common stockholders and
unitholders, FFO per common share and unit and adjusted FFO per
common 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 it is otherwise indicated.
HIGHLIGHTS:
- RevPAR. Room revenue per available room
(“RevPAR”) for the Company’s composite portfolio, which includes
the Hyatt Centric Arlington and the rooms participating in our
rental program at the Hyde Resort & Residences, during the
three-month period ending September 30, 2019, increased 0.3% over
the three months ended September 30, 2018, to $100.06 reflecting a
1.1% increase in occupancy offset by a 0.7% decrease in average
daily rate (“ADR”). For the nine-month period ending September 30,
2019, RevPAR increased 4.5% over the nine months ended September
30, 2018, to $116.57 driven by a 2.2% increase in occupancy and a
2.3% increase in ADR.
- Revenue. For the three-month period
ending September 30, 2019, total revenue increased 2.7% over the
three-month period ending September 30, 2018. For the
nine-month period ending September 30, 2019, total revenue
increased 5.0% or by approximately $6.8 million to approximately
$141.5 million, as compared to approximately $134.7 million for the
nine-month period ending September 30, 2018.
- Gain on Exercise of Development Right.
On September 26, 2019, the Company received title to a commercial
condominium unit of the Hyde Beach House Resort & Residences, a
newly constructed 342-unit condominium hotel located in Hollywood,
Florida (“Hyde Beach House”) consisting of a 3,000 square foot
ballroom and adjacent pre-function space. The unit will be
available for use as additional ballroom and function space for our
adjacent hotel, the DoubleTree Resort by Hilton Hollywood
Beach. Conveyance of the ballroom condominium unit was
required pursuant to an existing obligation on the part of the
owner of the property as a condition to the development of the Hyde
Beach House. Accompanying the title to the ballroom
condominium unit are dedicated rights to 200 parking spaces within
the six-story parking structure adjacent to the ballroom. The
estimated fair value of the ballroom condominium unit and parking
right is approximately $3.9 million.
- Common Dividends. On October 29, 2019, the
Company announced a quarterly dividend (distribution) on its common
stock (and units) of $0.13 per share (and unit) to stockholders
(and unitholders) of record as of December 13, 2019, payable on
January 10, 2020.
- Hotel EBITDA. The Company generated hotel
EBITDA of approximately $8.9 million during the three-month period
ending September 30, 2019. Hotel EBITDA decreased 3.0%, or
approximately $0.3 million, over the three months ended September
30, 2018. For the nine-month period ending September 30,
2019, hotel EBITDA increased 0.6%, or approximately $0.2 million,
over the nine months ended September 30, 2018.
- Adjusted FFO available to common stockholders and
unitholders. For the three-month period ending September
30, 2019, adjusted FFO available to common stockholders and
unitholders increased 349.9% from the three months ended September
30, 2018. For the nine-month period ending September 30,
2019, adjusted FFO available to common stockholders and unitholders
increased 15.4% or approximately $2.2 million over the nine months
ended September 30, 2018.
Andrew M. Sims, Chairman and Chief Executive Officer of Sotherly
Hotels Inc., commented, “Operationally, we had a difficult quarter
as a result of Hurricane Dorian. While we did not experience
any significant damage to our hotels located near Dorian’s path
(South Florida, Tampa, Jacksonville, Savannah, Wilmington), we
incurred a significant loss in revenue. The hurricane
languished for almost two weeks, washing out the Labor Day weekend
and the following ten days. On a positive note, we acquired
two commercial condominium units in the Hyde Beach House in the
quarter, which included the conveyance of a freestanding ballroom
to our DoubleTree Resort by Hilton Hollywood Beach hotel.”
Balance Sheet/Liquidity
At September 30, 2019, the Company had approximately $35.3
million of available cash and cash equivalents, of which
approximately $5.2 million was reserved for real estate taxes,
insurance, capital improvements and certain other expenses or
otherwise restricted. The Company had principal balances of
approximately $363.0 million in outstanding debt at a weighted
average interest rate of approximately 4.92%.
During the quarter, the Company sold and issued 202,469 shares
of its 7.875% Series C Cumulative Redeemable Perpetual Preferred
Stock (the “Series C Preferred Stock”) through its at-the-market
program, for aggregate net proceeds of approximately $4.9
million.
Portfolio Update
On September 26, 2019, we closed on the purchase of a commercial
unit of the Hyde Beach House from 4000 South Ocean Property Owner,
LLLP. In connection with the closing, we (i) acquired
commercial unit 2 of the Hyde Beach House, along with rights to
certain limited common elements appurtenant to the commercial unit,
for an adjusted purchase price of approximately $5.4 million; (ii)
purchased inventories and equipment for additional consideration in
the amount of approximately $0.7 million; (iii) entered into a
Second Addendum to the purchase agreement; (iv) entered into a
20-year parking and cabana management agreement for the parking
garage and poolside cabanas associated with the Hyde Beach House;
(v) entered into a 20-year management agreement relating to the
operation and management of the Hyde Beach House condominium
association; and (vi) received a pre-opening services fee of $1.0
million. We began operating a condominium unit rental program
for residential units in this facility in November 2019.
As stated above, in connection with the closing of the Hyde
Beach House acquisition, the DoubleTree Resort by Hilton Hollywood
Beach acquired a commercial condominium unit consisting of a 3,000
square foot ballroom and adjacent pre-function space as well as 200
dedicated parking spaces within the parking garage adjacent to the
hotel.
2019 Outlook
The Company is updating its previously issued guidance for 2019,
accounting for current and expected performance within its
portfolio, taking into account market conditions, weather-related
events and the acquisition of the commercial units within the Hyde
Beach House. The updated guidance is predicated on estimates
of occupancy and ADR that are consistent with the most recent 2019
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 2019, in thousands of
dollars, except per share and RevPAR data:
|
Previous 2019 Guidance |
|
|
Revised 2019 Guidance |
|
|
Low Range |
|
|
High Range |
|
|
Low Range |
|
|
High Range |
|
|
|
|
|
|
|
Total revenue |
$ |
184,247 |
|
|
$ |
187,053 |
|
|
$ |
184,274 |
|
|
$ |
185,755 |
|
Net income |
|
1,708 |
|
|
|
2,295 |
|
|
|
1,613 |
|
|
|
1,980 |
|
Net loss available to common stockholders and unitholders |
|
(5,899 |
) |
|
|
(5,311 |
) |
|
|
(6,208 |
) |
|
|
(5,840 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
41,977 |
|
|
|
42,914 |
|
|
|
42,330 |
|
|
|
42,782 |
|
Hotel EBITDA |
|
49,187 |
|
|
|
50,224 |
|
|
|
47,407 |
|
|
|
47,784 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO available to common stockholders and unitholders |
|
14,102 |
|
|
|
14,689 |
|
|
|
14,782 |
|
|
|
15,149 |
|
Adjusted FFO available to common stockholders and
unitholders |
|
15,832 |
|
|
|
16,769 |
|
|
|
17,559 |
|
|
|
18,021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share available to common
stockholders |
$ |
(0.38 |
) |
|
$ |
(0.34 |
) |
|
$ |
(0.40 |
) |
|
$ |
(0.38 |
) |
FFO per common share and unit |
$ |
0.91 |
|
|
$ |
0.95 |
|
|
$ |
0.96 |
|
|
$ |
0.98 |
|
Adjusted FFO per common share and unit |
$ |
1.02 |
|
|
$ |
1.08 |
|
|
$ |
1.14 |
|
|
$ |
1.17 |
|
Rev PAR |
$ |
109.60 |
|
|
$ |
110.49 |
|
|
$ |
110.02 |
|
|
$ |
110.91 |
|
Hotel EBITDA margin |
|
26.7 |
% |
|
|
26.9 |
% |
|
|
25.7 |
% |
|
|
25.7 |
% |
Earnings Call/Webcast
The Company will conduct its third quarter 2019 conference call
for investors and other interested parties at 10:00 a.m. Eastern
Time on Tuesday, November 12, 2019. 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 November 7, 2019 through
November 7, 2020. To access the rebroadcast, dial 877-344-7529 and
enter conference number 10135555. A replay of the call also
will be available on the Internet at www.sotherlyhotels.com until
November 7, 2020.
About Sotherly Hotels Inc.
Sotherly Hotels Inc. is a self-managed and self-administered
lodging REIT focused on the acquisition, renovation, upbranding and
repositioning of upscale to upper-upscale full-service hotels in
the Southern United States. Currently, the Company’s portfolio
consists of investments in twelve hotel properties, comprising
3,156 rooms, as well as interests in two condominium hotels and
their associated rental programs. The Company owns hotels that
operate under the Hilton Worldwide, Hyatt Hotels Corporation, and
Marriott International, Inc. brands, as well as independent hotels.
Sotherly Hotels Inc. was organized in 2004 and is headquartered in
Williamsburg, Virginia. For more information, please visit
www.sotherlyhotels.com.
Contact at the Company:
Scott KucinskiVice President – Operations & Investor
RelationsSotherly Hotels Inc.410 West Francis StreetWilliamsburg,
Virginia 23185757.229.5648
Forward-Looking Statements
This news release includes “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of
1934, as amended. Although the Company believes that the
expectations and assumptions reflected in the forward-looking
statements are reasonable, these statements are not guarantees of
future performance and involve certain risks, uncertainties and
assumptions which are difficult to predict and many of which are
beyond the Company’s control. Therefore, actual outcomes and
results may differ materially from what is expressed, forecasted or
implied in such forward-looking statements. Factors which could
have a material adverse effect on the Company’s future results,
performance and achievements, include, but are not limited to:
national and local economic and business conditions that affect
occupancy rates and revenues at the Company’s hotels and the demand
for hotel products and services; risks associated with the hotel
industry, including competition and new supply of hotel rooms,
increases in wages, energy costs and other operating costs; risks
associated with adverse weather conditions, including hurricanes;
the availability and terms of financing and capital and the general
volatility of the securities markets; the Company’s intent to
repurchase shares from time to time; risks associated with the
level of the Company’s indebtedness and its ability to meet
covenants in its debt agreements and, if necessary, to refinance or
seek an extension of the maturity of such indebtedness or modify
such debt agreements; management and performance of the Company’s
hotels; risks associated with maintaining our system of internal
controls; risks associated with the conflicts of interest of the
Company’s officers and directors; risks associated with
redevelopment and repositioning projects, including delays and cost
overruns; supply and demand for hotel rooms in the Company’s
current and proposed market areas; risks associated with our
ability to maintain our franchise agreements with our third party
franchisors; the Company’s ability to acquire additional properties
and the risk that potential acquisitions may not perform in
accordance with expectations; the Company’s ability to successfully
expand into new markets; legislative/regulatory changes, including
changes to laws governing taxation of REITs; the Company’s ability
to maintain its qualification as a REIT; and the Company’s ability
to maintain adequate insurance coverage. These risks and
uncertainties are described in greater detail under “Risk Factors”
in the Company’s Annual Report on Form 10-K and subsequent reports
filed with the Securities and Exchange Commission. The Company
undertakes no obligation to and does not intend to publicly update
or revise any forward-looking statement, whether as a result of new
information, future events or otherwise. Although the Company
believes its current expectations to be based upon reasonable
assumptions, it can give no assurance that its expectations will be
attained or that actual results will not differ materially.
Financial Tables Follow…
SOTHERLY HOTELS
INC.CONSOLIDATED BALANCE SHEETS
|
|
September 30, 2019 |
|
|
December 31, 2018 |
|
|
|
(unaudited) |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Investment in hotel properties, net |
|
$ |
446,839,580 |
|
|
$ |
435,725,814 |
|
Cash and cash equivalents |
|
|
30,059,697 |
|
|
|
33,792,773 |
|
Restricted cash |
|
|
5,192,730 |
|
|
|
4,075,508 |
|
Accounts receivable, net |
|
|
6,298,119 |
|
|
|
6,766,696 |
|
Accounts receivable - affiliate |
|
|
86,663 |
|
|
|
262,572 |
|
Prepaid expenses, inventory and other assets |
|
|
5,494,165 |
|
|
|
5,262,884 |
|
Favorable lease assets, net |
|
|
— |
|
|
|
2,465,421 |
|
Deferred income taxes |
|
|
4,679,010 |
|
|
|
5,131,179 |
|
TOTAL
ASSETS |
|
$ |
498,649,964 |
|
|
$ |
493,482,847 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
Mortgage loans, net |
|
$ |
360,549,890 |
|
|
$ |
364,828,845 |
|
Unsecured notes, net |
|
|
— |
|
|
|
23,894,658 |
|
Accounts payable and accrued liabilities |
|
|
24,308,930 |
|
|
|
16,268,096 |
|
Advance deposits |
|
|
2,397,095 |
|
|
|
2,815,283 |
|
Dividends and distributions payable |
|
|
4,210,494 |
|
|
|
3,409,593 |
|
TOTAL
LIABILITIES |
|
$ |
391,466,409 |
|
|
$ |
411,216,475 |
|
Commitments and contingencies |
|
|
— |
|
|
|
— |
|
EQUITY |
|
|
|
|
|
|
|
|
Sotherly Hotels Inc. stockholders’ equity |
|
|
|
|
|
|
|
|
Preferred stock, $0.01 par value, 11,000,000 shares
authorized; |
|
|
|
|
|
|
|
|
8.0% Series B cumulative redeemable perpetual preferred
stock, liquidation preference $25 per share, 1,610,000 shares
issued and outstanding at September 30, 2019 and December 31,
2018, respectively. |
|
|
16,100 |
|
|
|
16,100 |
|
7.875% Series C cumulative redeemable perpetual preferred
stock, liquidation preference $25 per share, 1,554,610 and
1,352,141 shares issued and outstanding at September 30, 2019
and December 31, 2018, respectively. |
|
|
15,546 |
|
|
|
13,521 |
|
8.25% Series D cumulative redeemable perpetual preferred
stock, liquidation preference $25 per share, 1,200,000 shares
issued and outstanding at September 30, 2019 and none at
December 31, 2018. |
|
|
12,000 |
|
|
|
— |
|
Common stock, par value $0.01, 49,000,000 shares authorized,
14,222,378 shares and 14,209,378 shares issued and
outstanding at September 30, 2019 and December 31, 2018,
respectively. |
|
|
142,223 |
|
|
|
142,093 |
|
Additional paid-in capital |
|
|
180,415,231 |
|
|
|
147,085,112 |
|
Unearned ESOP shares |
|
|
(4,175,564 |
) |
|
|
(4,379,742 |
) |
Distributions in excess of retained earnings |
|
|
(68,687,461 |
) |
|
|
(61,052,418 |
) |
Total Sotherly Hotels Inc. stockholders’ equity |
|
|
107,738,075 |
|
|
|
81,824,666 |
|
Noncontrolling interest |
|
|
(554,520 |
) |
|
|
441,706 |
|
TOTAL
EQUITY |
|
|
107,183,555 |
|
|
|
82,266,372 |
|
TOTAL LIABILITIES AND
EQUITY |
|
$ |
498,649,964 |
|
|
$ |
493,482,847 |
|
SOTHERLY HOTELS
INC.CONSOLIDATED STATEMENTS OF
OPERATIONS(unaudited)
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, 2019 |
|
|
September 30, 2018 |
|
|
September 30, 2019 |
|
|
September 30, 2018 |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
REVENUE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms department |
|
$ |
29,253,447 |
|
|
$ |
28,626,265 |
|
|
$ |
98,561,643 |
|
|
$ |
92,242,385 |
|
Food and beverage department |
|
|
8,997,948 |
|
|
|
8,417,293 |
|
|
|
29,584,705 |
|
|
|
27,849,844 |
|
Other operating departments |
|
|
4,300,780 |
|
|
|
4,374,504 |
|
|
|
13,336,834 |
|
|
|
14,614,915 |
|
Total revenue |
|
|
42,552,175 |
|
|
|
41,418,062 |
|
|
|
141,483,182 |
|
|
|
134,707,144 |
|
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms department |
|
|
8,064,771 |
|
|
|
7,873,836 |
|
|
|
24,264,623 |
|
|
|
22,750,381 |
|
Food and beverage department |
|
|
7,036,887 |
|
|
|
6,680,563 |
|
|
|
21,795,051 |
|
|
|
20,748,688 |
|
Other operating departments |
|
|
1,352,205 |
|
|
|
1,661,128 |
|
|
|
5,007,651 |
|
|
|
4,870,037 |
|
Indirect |
|
|
17,194,148 |
|
|
|
16,027,496 |
|
|
|
52,757,527 |
|
|
|
48,901,037 |
|
Total hotel operating expenses |
|
|
33,648,011 |
|
|
|
32,243,023 |
|
|
|
103,824,852 |
|
|
|
97,270,143 |
|
Depreciation and
amortization |
|
|
4,980,168 |
|
|
|
4,547,043 |
|
|
|
16,117,278 |
|
|
|
15,783,174 |
|
Loss (gain) on disposal of
assets |
|
|
4,918 |
|
|
|
(7,555 |
) |
|
|
32,088 |
|
|
|
(3,816 |
) |
Corporate general and
administrative |
|
|
1,768,912 |
|
|
|
1,516,408 |
|
|
|
5,008,290 |
|
|
|
4,566,258 |
|
Total hotel operating expenses |
|
|
40,402,009 |
|
|
|
38,298,919 |
|
|
|
124,982,508 |
|
|
|
117,615,759 |
|
NET OPERATING
INCOME |
|
|
2,150,166 |
|
|
|
3,119,143 |
|
|
|
16,500,674 |
|
|
|
17,091,385 |
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(4,722,456 |
) |
|
|
(5,306,641 |
) |
|
|
(15,115,690 |
) |
|
|
(14,571,142 |
) |
Interest income |
|
|
102,768 |
|
|
|
88,484 |
|
|
|
357,576 |
|
|
|
236,693 |
|
Loss on early extinguishment of debt |
|
|
- |
|
|
|
(753,133 |
) |
|
|
(1,152,356 |
) |
|
|
(753,133 |
) |
Unrealized (loss) gain on hedging activities |
|
|
(226,491 |
) |
|
|
123,443 |
|
|
|
(1,554,924 |
) |
|
|
141,970 |
|
Gain on exercise of development right |
|
|
3,940,000 |
|
|
|
— |
|
|
|
3,940,000 |
|
|
|
— |
|
Gain on involuntary conversion of assets |
|
|
130,569 |
|
|
|
— |
|
|
|
291,902 |
|
|
|
898,565 |
|
Net (loss) income before
income taxes |
|
|
1,374,556 |
|
|
|
(2,728,704 |
) |
|
|
3,267,182 |
|
|
|
3,044,338 |
|
Income tax benefit (provision) |
|
|
694,190 |
|
|
|
746,924 |
|
|
|
(439,323 |
) |
|
|
(882,045 |
) |
Net (loss) income |
|
|
2,068,746 |
|
|
|
(1,981,780 |
) |
|
|
2,827,859 |
|
|
|
2,162,293 |
|
Less: Net loss attributable to noncontrolling interest |
|
|
13,337 |
|
|
|
385,616 |
|
|
|
311,642 |
|
|
|
245,298 |
|
Net (loss) income
attributable to the Company |
|
|
2,082,083 |
|
|
|
(1,596,164 |
) |
|
|
3,139,501 |
|
|
|
2,407,591 |
|
Distributions to preferred stockholders |
|
|
(2,188,910 |
) |
|
|
(1,469,719 |
) |
|
|
(5,631,799 |
) |
|
|
(4,359,407 |
) |
Net loss available to
common stockholders |
|
$ |
(106,827 |
) |
|
$ |
(3,065,883 |
) |
|
$ |
(2,492,298 |
) |
|
$ |
(1,951,816 |
) |
Net loss per share
available to common stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.01 |
) |
|
$ |
(0.23 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.14 |
) |
Weighted average number
of common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
13,636,706 |
|
|
|
13,513,996 |
|
|
|
13,624,760 |
|
|
|
13,491,807 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOTHERLY HOTELS INC.KEY
OPERATING METRICS(unaudited)
The following tables illustrate the key operating metrics for
the three and nine months ended September 30, 2019 and 2018,
respectively, for the Company’s twelve 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 and nine months ended September 30, 2019 and the
corresponding periods in 2018 (“same-store” portfolio metrics).
Accordingly, the actual data does not include the participating
condominium hotel rooms at the Hyde Resort & Residences or the
Hyde Beach House, and the same-store data does not include the
performance of the Hyatt Centric Arlington which we acquired in
March 2018 or the participating condominium hotel rooms at the Hyde
Resort & Residences or the Hyde Beach House. The
composite portfolio metrics represent the Company’s twelve
wholly-owned properties and the participating condominium hotel
rooms at the Hyde Resort & Residences during the three and nine
months ended September 30, 2019 and the corresponding period in
2018. No metrics are reflected for the results of the Hyde
Beach House because the condominium unit rental program did not
begin until November 2019.
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, 2019 |
|
|
September 30, 2018 |
|
|
September 30, 2019 |
|
|
September 30, 2018 |
|
Actual Portfolio Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy % |
|
|
70.6 |
% |
|
|
69.3 |
% |
|
|
72.7 |
% |
|
|
71.6 |
% |
ADR |
|
$ |
142.75 |
|
|
$ |
142.26 |
|
|
$ |
157.36 |
|
|
$ |
152.75 |
|
RevPAR |
|
$ |
100.75 |
|
|
$ |
98.59 |
|
|
$ |
114.40 |
|
|
$ |
109.44 |
|
Same-Store Portfolio
Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy % |
|
|
69.1 |
% |
|
|
67.4 |
% |
|
|
71.7 |
% |
|
|
70.2 |
% |
ADR |
|
$ |
139.98 |
|
|
$ |
140.71 |
|
|
$ |
153.33 |
|
|
$ |
149.16 |
|
RevPAR |
|
$ |
96.77 |
|
|
$ |
94.89 |
|
|
$ |
109.92 |
|
|
$ |
104.77 |
|
Composite Portfolio
Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy % |
|
|
68.8 |
% |
|
|
68.0 |
% |
|
|
71.7 |
% |
|
|
70.1 |
% |
ADR |
|
$ |
145.51 |
|
|
$ |
146.54 |
|
|
$ |
162.69 |
|
|
$ |
159.10 |
|
RevPAR |
|
$ |
100.06 |
|
|
$ |
99.72 |
|
|
$ |
116.57 |
|
|
$ |
111.60 |
|
SOTHERLY HOTELS
INC.SUPPLEMENTAL
DATA(unaudited)
The following tables illustrate the key operating metrics for
the three and nine months ended September 30, 2019, 2018 and 2017,
respectively, for each of the Company’s wholly-owned properties
during each respective reporting period, irrespective of ownership
percentage during any period.
Occupancy
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2019 |
|
|
Q3 2018 |
|
|
Q3 2017 |
|
|
YTD |
|
|
YTD |
|
|
YTD |
|
The DeSotoSavannah, Georgia |
|
60.1 |
% |
|
|
58.8 |
% |
|
|
62.8 |
% |
|
|
66.3 |
% |
|
|
63.4 |
% |
|
|
68.2 |
% |
DoubleTree by Hilton Jacksonville RiverfrontJacksonville,
Florida |
|
72.9 |
% |
|
|
79.1 |
% |
|
|
79.7 |
% |
|
|
79.5 |
% |
|
|
82.7 |
% |
|
|
80.5 |
% |
DoubleTree by Hilton LaurelLaurel, Maryland |
|
72.9 |
% |
|
|
70.3 |
% |
|
|
68.5 |
% |
|
|
71.5 |
% |
|
|
66.9 |
% |
|
|
67.3 |
% |
DoubleTree by Hilton Philadelphia AirportPhiladelphia,
Pennsylvania |
|
82.1 |
% |
|
|
81.3 |
% |
|
|
77.4 |
% |
|
|
77.5 |
% |
|
|
79.6 |
% |
|
|
76.6 |
% |
DoubleTree by Hilton Raleigh Brownstone – UniversityRaleigh,
North Carolina |
|
79.6 |
% |
|
|
74.7 |
% |
|
|
74.3 |
% |
|
|
77.6 |
% |
|
|
76.0 |
% |
|
|
75.7 |
% |
DoubleTree Resort by Hilton Hollywood BeachHollywood,
Florida |
|
60.8 |
% |
|
|
63.0 |
% |
|
|
68.7 |
% |
|
|
70.9 |
% |
|
|
71.4 |
% |
|
|
75.8 |
% |
Georgian TerraceAtlanta, Georgia |
|
66.4 |
% |
|
|
69.4 |
% |
|
|
69.4 |
% |
|
|
70.8 |
% |
|
|
69.3 |
% |
|
|
71.9 |
% |
Hotel Alba Tampa, Tapestry Collection by HiltonTampa,
Florida |
|
53.0 |
% |
|
|
56.1 |
% |
|
|
72.2 |
% |
|
|
67.6 |
% |
|
|
74.4 |
% |
|
|
79.3 |
% |
Hotel Ballast Wilmington, Tapestry Collection by
HiltonWilmington, North Carolina |
|
73.0 |
% |
|
|
69.8 |
% |
|
|
70.0 |
% |
|
|
71.2 |
% |
|
|
63.8 |
% |
|
|
70.5 |
% |
Hyatt Centric Arlington (1)Arlington, Virginia |
|
83.6 |
% |
|
|
86.0 |
% |
|
|
87.5 |
% |
|
|
81.7 |
% |
|
|
82.5 |
% |
|
|
86.7 |
% |
Sheraton Louisville RiversideJeffersonville, Indiana |
|
76.7 |
% |
|
|
63.1 |
% |
|
|
73.7 |
% |
|
|
68.9 |
% |
|
|
61.2 |
% |
|
|
69.0 |
% |
The WhitehallHouston, Texas |
|
63.9 |
% |
|
|
50.2 |
% |
|
|
65.0 |
% |
|
|
64.3 |
% |
|
|
58.5 |
% |
|
|
63.8 |
% |
Hyde Resort & Residences (2)Hollywood Beach, Florida |
|
35.3 |
% |
|
|
48.4 |
% |
|
|
46.3 |
% |
|
|
52.3 |
% |
|
|
47.9 |
% |
|
|
38.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
All properties weighted
average (1) |
|
68.8 |
% |
|
|
69.6 |
% |
|
|
75.7 |
% |
|
|
71.7 |
% |
|
|
71.4 |
% |
|
|
74.0 |
% |
(1 |
) |
Includes operating results under
previous ownership. Results for periods prior to the
Company’s ownership were provided by prior owners of the hotel and
have not been audited or confirmed by the Company. |
(2 |
) |
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
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2019 |
|
|
Q3 2018 |
|
|
Q3 2017 |
|
|
YTD |
|
|
YTD |
|
|
YTD |
|
The DeSotoSavannah, Georgia |
$ |
155.52 |
|
|
$ |
161.68 |
|
|
$ |
146.76 |
|
|
$ |
176.43 |
|
|
$ |
178.34 |
|
|
$ |
159.98 |
|
DoubleTree by Hilton Jacksonville RiverfrontJacksonville,
Florida |
$ |
133.71 |
|
|
$ |
136.77 |
|
|
$ |
125.14 |
|
|
$ |
140.04 |
|
|
$ |
141.46 |
|
|
$ |
129.54 |
|
DoubleTree by Hilton LaurelLaurel, Maryland |
$ |
102.79 |
|
|
$ |
104.26 |
|
|
$ |
104.72 |
|
|
$ |
108.45 |
|
|
$ |
109.28 |
|
|
$ |
108.64 |
|
DoubleTree by Hilton Philadelphia AirportPhiladelphia,
Pennsylvania |
$ |
137.37 |
|
|
$ |
138.80 |
|
|
$ |
131.76 |
|
|
$ |
143.58 |
|
|
$ |
139.14 |
|
|
$ |
134.55 |
|
DoubleTree by Hilton Raleigh Brownstone – UniversityRaleigh,
North Carolina |
$ |
135.64 |
|
|
$ |
131.28 |
|
|
$ |
130.42 |
|
|
$ |
139.50 |
|
|
$ |
134.28 |
|
|
$ |
133.85 |
|
DoubleTree Resort by Hilton Hollywood BeachHollywood,
Florida |
$ |
130.16 |
|
|
$ |
131.74 |
|
|
$ |
134.83 |
|
|
$ |
177.85 |
|
|
$ |
177.20 |
|
|
$ |
171.58 |
|
Georgian TerraceAtlanta, Georgia |
$ |
180.82 |
|
|
$ |
183.46 |
|
|
$ |
173.31 |
|
|
$ |
208.14 |
|
|
$ |
183.98 |
|
|
$ |
171.56 |
|
Hotel Alba Tampa, Tapestry Collection by HiltonTampa,
Florida |
$ |
117.74 |
|
|
$ |
112.25 |
|
|
$ |
110.98 |
|
|
$ |
131.68 |
|
|
$ |
127.01 |
|
|
$ |
121.00 |
|
Hotel Ballast Wilmington, Tapestry Collection by
HiltonWilmington, North Carolina |
$ |
173.57 |
|
|
$ |
159.76 |
|
|
$ |
155.41 |
|
|
$ |
162.65 |
|
|
$ |
151.09 |
|
|
$ |
150.19 |
|
Hyatt Centric Arlington (1)Arlington, Virginia |
$ |
163.14 |
|
|
$ |
153.12 |
|
|
$ |
154.90 |
|
|
$ |
188.93 |
|
|
$ |
178.06 |
|
|
$ |
177.27 |
|
Sheraton Louisville RiversideJeffersonville, Indiana |
$ |
106.70 |
|
|
$ |
113.70 |
|
|
$ |
117.55 |
|
|
$ |
117.64 |
|
|
$ |
125.99 |
|
|
$ |
132.72 |
|
The WhitehallHouston, Texas |
$ |
137.58 |
|
|
$ |
141.85 |
|
|
$ |
135.55 |
|
|
$ |
143.49 |
|
|
$ |
145.51 |
|
|
$ |
146.08 |
|
Hyde Resort & Residences (2)Hollywood Beach, Florida |
$ |
247.31 |
|
|
$ |
242.62 |
|
|
$ |
256.68 |
|
|
$ |
300.07 |
|
|
$ |
299.26 |
|
|
$ |
278.60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
All properties weighted
average (1) |
$ |
145.51 |
|
|
$ |
147.25 |
|
|
$ |
155.45 |
|
|
$ |
162.69 |
|
|
$ |
161.38 |
|
|
$ |
154.06 |
|
(1 |
) |
Includes operating results under
previous ownership. Results for periods prior to the
Company’s ownership were provided by prior owners of the hotel and
have not been audited or confirmed by the Company. |
(2 |
) |
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
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2019 |
|
|
Q3 2018 |
|
|
Q3 2017 |
|
|
YTD |
|
|
YTD |
|
|
YTD |
|
The DeSotoSavannah, Georgia |
$ |
93.51 |
|
|
$ |
95.01 |
|
|
$ |
92.22 |
|
|
$ |
116.95 |
|
|
$ |
113.01 |
|
|
$ |
109.16 |
|
DoubleTree by Hilton Jacksonville RiverfrontJacksonville,
Florida |
$ |
97.54 |
|
|
$ |
108.12 |
|
|
$ |
99.69 |
|
|
$ |
111.38 |
|
|
$ |
117.01 |
|
|
$ |
104.27 |
|
DoubleTree by Hilton LaurelLaurel, Maryland |
$ |
74.88 |
|
|
$ |
73.25 |
|
|
$ |
71.71 |
|
|
$ |
77.55 |
|
|
$ |
73.08 |
|
|
$ |
73.06 |
|
DoubleTree by Hilton Philadelphia AirportPhiladelphia,
Pennsylvania |
$ |
112.82 |
|
|
$ |
112.78 |
|
|
$ |
101.98 |
|
|
$ |
111.23 |
|
|
$ |
110.75 |
|
|
$ |
103.07 |
|
DoubleTree by Hilton Raleigh Brownstone – UniversityRaleigh,
North Carolina |
$ |
107.98 |
|
|
$ |
98.11 |
|
|
$ |
96.83 |
|
|
$ |
108.26 |
|
|
$ |
102.07 |
|
|
$ |
101.30 |
|
DoubleTree Resort by Hilton Hollywood BeachHollywood,
Florida |
$ |
79.15 |
|
|
$ |
83.02 |
|
|
$ |
92.60 |
|
|
$ |
126.08 |
|
|
$ |
126.48 |
|
|
$ |
130.12 |
|
Georgian TerraceAtlanta, Georgia |
$ |
120.11 |
|
|
$ |
127.39 |
|
|
$ |
120.35 |
|
|
$ |
147.39 |
|
|
$ |
127.49 |
|
|
$ |
123.30 |
|
Hotel Alba Tampa, Tapestry Collection by HiltonTampa,
Florida |
$ |
62.44 |
|
|
$ |
62.98 |
|
|
$ |
80.08 |
|
|
$ |
89.07 |
|
|
$ |
94.47 |
|
|
$ |
95.91 |
|
Hotel Ballast Wilmington, Tapestry Collection by
HiltonWilmington, North Carolina |
$ |
126.71 |
|
|
$ |
111.52 |
|
|
$ |
108.74 |
|
|
$ |
115.86 |
|
|
$ |
96.34 |
|
|
$ |
105.95 |
|
Hyatt Centric Arlington (1)Arlington, Virginia |
$ |
136.32 |
|
|
$ |
131.66 |
|
|
$ |
135.55 |
|
|
$ |
154.33 |
|
|
$ |
146.94 |
|
|
$ |
153.75 |
|
Sheraton Louisville RiversideJeffersonville, Indiana |
$ |
81.83 |
|
|
$ |
71.78 |
|
|
$ |
86.60 |
|
|
$ |
81.02 |
|
|
$ |
77.17 |
|
|
$ |
91.54 |
|
The WhitehallHouston, Texas |
$ |
87.94 |
|
|
$ |
71.23 |
|
|
$ |
88.09 |
|
|
$ |
92.28 |
|
|
$ |
85.09 |
|
|
$ |
93.15 |
|
Hyde Resort & Residences (2)Hollywood Beach, Florida |
$ |
87.25 |
|
|
$ |
117.37 |
|
|
$ |
118.96 |
|
|
$ |
156.90 |
|
|
$ |
143.45 |
|
|
$ |
107.09 |
|
|
|
|
|
|
|
|
|
|
|
|
|
All properties weighted
average (1) |
$ |
100.06 |
|
|
$ |
102.48 |
|
|
$ |
117.60 |
|
|
$ |
116.57 |
|
|
$ |
115.19 |
|
|
$ |
114.01 |
|
(1 |
) |
Includes operating results under
previous ownership. Results for periods prior to the
Company’s ownership were provided by prior owners of the hotel and
have not been audited or confirmed by the Company. |
(2 |
) |
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 LOSS
TOFFO, Adjusted FFO, EBITDA and Hotel
EBITDA(unaudited)
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, 2019 |
|
|
September 30, 2018 |
|
|
September 30, 2019 |
|
|
September 30, 2018 |
|
Net loss available to
common stockholders |
|
$ |
(106,827 |
) |
|
$ |
(3,065,883 |
) |
|
$ |
(2,492,298 |
) |
|
$ |
(1,951,816 |
) |
Add: Net loss attributable to noncontrolling interest |
|
|
(13,337 |
) |
|
|
(385,616 |
) |
|
|
(311,642 |
) |
|
|
(245,298 |
) |
Depreciation and amortization - real estate |
|
|
4,965,299 |
|
|
|
4,450,181 |
|
|
|
16,073,505 |
|
|
|
15,545,088 |
|
Gain on involuntary conversion of assets |
|
|
(130,569 |
) |
|
|
— |
|
|
|
(291,902 |
) |
|
|
(898,565 |
) |
(Gain) loss on disposal of assets |
|
|
4,918 |
|
|
|
(7,555 |
) |
|
|
32,088 |
|
|
|
(3,816 |
) |
FFO available to
common stockholders and unitholders |
|
$ |
4,719,484 |
|
|
$ |
991,127 |
|
|
$ |
13,009,751 |
|
|
$ |
12,445,593 |
|
(Increase) decrease in deferred income taxes |
|
|
(702,775 |
) |
|
|
(771,190 |
) |
|
|
452,169 |
|
|
|
750,739 |
|
Amortization |
|
|
14,869 |
|
|
|
96,862 |
|
|
|
43,773 |
|
|
|
238,086 |
|
Loss on early extinguishment of debt |
|
|
— |
|
|
|
753,133 |
|
|
|
1,152,356 |
|
|
|
753,133 |
|
Unrealized (gain) loss on hedging activities |
|
|
226,491 |
|
|
|
(123,443 |
) |
|
|
1,554,924 |
|
|
|
(141,970 |
) |
Adjusted FFO available
to common stockholders and unitholders |
|
$ |
4,258,069 |
|
|
$ |
946,489 |
|
|
$ |
16,212,973 |
|
|
$ |
14,045,581 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding, basic |
|
|
13,636,706 |
|
|
|
13,513,996 |
|
|
|
13,624,760 |
|
|
|
13,491,807 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of non-controlling units |
|
|
1,778,140 |
|
|
|
1,778,140 |
|
|
|
1,778,140 |
|
|
|
1,778,140 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares and units outstanding, basic |
|
|
15,414,846 |
|
|
|
15,292,136 |
|
|
|
15,402,900 |
|
|
|
15,269,947 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per common share and unit |
|
$ |
0.31 |
|
|
$ |
0.06 |
|
|
$ |
0.84 |
|
|
$ |
0.82 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted FFO per common share and unit |
|
$ |
0.28 |
|
|
$ |
0.06 |
|
|
$ |
1.05 |
|
|
$ |
0.92 |
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, 2019 |
|
|
September 30, 2018 |
|
|
September 30, 2019 |
|
|
September 30, 2018 |
|
Net loss available to
common stockholders |
|
$ |
(106,827 |
) |
|
$ |
(3,065,883 |
) |
|
$ |
(2,492,298 |
) |
|
$ |
(1,951,816 |
) |
Add: Net loss attributable to noncontrolling interest |
|
|
(13,337 |
) |
|
|
(385,616 |
) |
|
|
(311,642 |
) |
|
|
(245,298 |
) |
Interest expense |
|
|
4,722,456 |
|
|
|
5,306,641 |
|
|
|
15,115,690 |
|
|
|
14,571,142 |
|
Interest income |
|
|
(102,768 |
) |
|
|
(88,484 |
) |
|
|
(357,576 |
) |
|
|
(236,693 |
) |
Income tax provision (benefit) |
|
|
(694,190 |
) |
|
|
(746,924 |
) |
|
|
439,323 |
|
|
|
882,045 |
|
Depreciation and amortization |
|
|
4,980,168 |
|
|
|
4,547,043 |
|
|
|
16,117,278 |
|
|
|
15,783,174 |
|
Distributions to preferred stockholders |
|
|
2,188,910 |
|
|
|
1,469,719 |
|
|
|
5,631,799 |
|
|
|
4,359,407 |
|
EBITDA |
|
|
10,974,412 |
|
|
|
7,036,496 |
|
|
|
34,142,574 |
|
|
|
33,161,961 |
|
(Gain) loss on disposal of assets |
|
|
4,918 |
|
|
|
(7,555 |
) |
|
|
32,088 |
|
|
|
(3,816 |
) |
Loss on early extinguishment of debt |
|
|
— |
|
|
|
753,133 |
|
|
|
1,152,356 |
|
|
|
753,133 |
|
Gain on exercise of development right |
|
|
(3,940,000 |
) |
|
|
— |
|
|
|
(3,940,000 |
) |
|
|
— |
|
Gain on involuntary conversion of assets |
|
|
(130,569 |
) |
|
|
— |
|
|
|
(291,902 |
) |
|
|
(898,565 |
) |
Subtotal |
|
|
6,908,761 |
|
|
|
7,782,074 |
|
|
|
31,095,116 |
|
|
|
33,012,713 |
|
Corporate general and administrative |
|
|
1,768,912 |
|
|
|
1,516,408 |
|
|
|
5,008,290 |
|
|
|
4,566,258 |
|
Unrealized (gain) loss on hedging activities |
|
|
226,491 |
|
|
|
(123,443 |
) |
|
|
1,554,924 |
|
|
|
(141,970 |
) |
Hotel
EBITDA |
|
$ |
8,904,164 |
|
|
$ |
9,175,039 |
|
|
$ |
37,658,330 |
|
|
$ |
37,437,001 |
|
Reconciliation of Outlook of Net Income to EBITDA and Hotel
EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Previous 2019 Guidance |
|
|
Revised 2019 Guidance |
|
|
Low Range |
|
|
High Range |
|
|
Low Range |
|
|
High Range |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
1,708 |
|
|
$ |
2,295 |
|
|
|
1,613 |
|
|
|
1,980 |
|
Interest expense |
|
19,899 |
|
|
|
19,899 |
|
|
|
19,802 |
|
|
|
19,802 |
|
Interest income |
|
(380 |
) |
|
|
(380 |
) |
|
|
(435 |
) |
|
|
(450 |
) |
Income tax provision |
|
750 |
|
|
|
1,100 |
|
|
|
100 |
|
|
|
200 |
|
Depreciation and amortization |
|
20,000 |
|
|
|
20,000 |
|
|
|
21,250 |
|
|
|
21,250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
41,977 |
|
|
|
42,914 |
|
|
|
42,330 |
|
|
|
42,782 |
|
Loss on early extinguishment of debt |
|
1,160 |
|
|
|
1,160 |
|
|
|
1,152 |
|
|
|
1,152 |
|
(Gain) loss on disposal of assets |
|
- |
|
|
|
- |
|
|
|
40 |
|
|
|
40 |
|
Unrealized loss on hedging activities |
|
- |
|
|
|
- |
|
|
|
1,550 |
|
|
|
1,550 |
|
Gain on exercise of development right |
|
(1,160 |
) |
|
|
(1,155 |
) |
|
|
(3,940 |
) |
|
|
(3,940 |
) |
Gain on involuntary conversion of assets |
|
(12,763 |
) |
|
|
(12,867 |
) |
|
|
(300 |
) |
|
|
(300 |
) |
Corporate general and administrative |
|
6,050 |
|
|
|
6,150 |
|
|
|
6,575 |
|
|
|
6,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel EBITDA |
$ |
49,187 |
|
|
$ |
50,224 |
|
|
$ |
47,407 |
|
|
$ |
47,784 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Outlook of Net Income to FFO and Adjusted
FFO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Previous 2019 Guidance |
|
|
Revised 2019 Guidance |
|
|
Low Range |
|
|
High Range |
|
|
Low Range |
|
|
High Range |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
1,708 |
|
|
|
2,295 |
|
|
|
1,613 |
|
|
|
1,980 |
|
Depreciation and amortization |
|
20,000 |
|
|
|
20,000 |
|
|
|
21,250 |
|
|
|
21,250 |
|
(Gain) loss on disposal of assets |
|
- |
|
|
|
- |
|
|
|
40 |
|
|
|
40 |
|
Gain on involuntary conversion of assets |
|
- |
|
|
|
- |
|
|
|
(300 |
) |
|
|
(300 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO |
|
21,708 |
|
|
|
22,295 |
|
|
|
22,603 |
|
|
|
22,970 |
|
Distributions to preferred stockholders |
|
(7,606 |
) |
|
|
(7,606 |
) |
|
|
(7,821 |
) |
|
|
(7,821 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO available to common stockholders and unitholders |
|
14,102 |
|
|
|
14,689 |
|
|
|
14,782 |
|
|
|
15,149 |
|
Decrease in deferred income taxes |
|
570 |
|
|
|
920 |
|
|
|
75 |
|
|
|
170 |
|
Unrealized loss on hedging activities |
|
- |
|
|
|
- |
|
|
|
1,550 |
|
|
|
1,550 |
|
Loss on early extinguishment of debt |
|
1,160 |
|
|
|
1,160 |
|
|
|
1,152 |
|
|
|
1,152 |
|
Adjusted FFO available to common stockholders and
unitholders |
$ |
15,832 |
|
|
$ |
16,769 |
|
|
$ |
17,559 |
|
|
$ |
18,021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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) gain on exercise of development right, (12)
corporate general and administrative expense, (13) depreciation and
amortization, (14) gains and losses on involuntary conversions of
assets, (15) distributions to preferred stockholders and (16) 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.
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