Sotherly Hotels Inc. (NASDAQ: SOHO), (“Sotherly”
or the “Company”), a self-managed and self-administered lodging
real estate investment trust (a “REIT”), today reported its
consolidated results for the first quarter ended March 31, 2023.
The Company’s results include the following*:
|
Three Months
Ended |
|
|
March 31, 2023 |
|
|
March 31, 2022 |
|
|
March 31, 2019 |
|
|
($ in thousands
except per share data) |
|
Total
revenue |
$ |
43,491 |
|
|
$ |
38,353 |
|
|
$ |
47,390 |
|
Net loss attributable to common stockholders |
|
(582 |
) |
|
|
(2,508 |
) |
|
|
(1,654 |
) |
|
|
|
|
|
|
|
|
|
EBITDA |
|
9,948 |
|
|
|
9,453 |
|
|
|
11,163 |
|
Hotel EBITDA |
|
12,079 |
|
|
|
9,975 |
|
|
|
13,172 |
|
|
|
|
|
|
|
|
|
|
FFO attributable to common stockholders and unitholders |
|
3,941 |
|
|
|
1,773 |
|
|
|
3,988 |
|
Adjusted FFO attributable to common stockholders and
unitholders |
|
4,658 |
|
|
|
1,246 |
|
|
|
4,944 |
|
|
|
|
|
|
|
|
|
|
Net loss per common share |
$ |
(0.03 |
) |
|
$ |
(0.15 |
) |
|
$ |
(0.12 |
) |
FFO per common share and unit |
$ |
0.20 |
|
|
$ |
0.10 |
|
|
$ |
0.26 |
|
Adjusted FFO per common share and unit |
$ |
0.24 |
|
|
$ |
0.07 |
|
|
$ |
0.32 |
|
(*) Earnings before interest, taxes, depreciation and
amortization (“EBITDA”), hotel EBITDA, funds from operations
(“FFO”) attributable to common stockholders and unitholders,
adjusted FFO attributable 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 rooms participating in our rental programs at the Hyde Resort
& Residences and the Hyde Beach House Resort & Residences,
increased to $119.06, for the three months ended March 31,
2023, from $100.89 in the comparable period in 2022 and was 2.3%
below RevPAR of $121.86 for the comparable period in 2019.
Changes in RevPAR were driven by an increase in the average daily
rate (“ADR”) to $197.07 for the three months ended March 31, 2023,
from $187.23 for the comparable period in 2022 and by an increase
in occupancy to 60.4% from 53.9% in the comparable 2022
period. However, while ADR for the three months ended March
31, 2023, was 13.1% higher than ADR for the comparable period in
2019, occupancy for the three months ended March 31, 2023, was
still 9.5% below the 69.9% occupancy achieved during the comparable
2019 period.
- Revenue. Total revenue increased to
approximately $43.5 million for the three months ended March 31,
2023 from approximately $38.4 million during the comparable period
in 2022. Total revenue for the three months ended March 31,
2023 was 8.2% below total revenue of approximately $47.4 million
during the comparable 2019 period.
- Net income (loss) attributable to common
stockholders. For the three-month period ending March 31,
2023, net income attributable to common stockholders increased
76.8%, or approximately $1.9 million, over the three months ended
March 31, 2022, from a loss of approximately $2.5 million to a loss
of approximately $0.6 million.
- Hotel EBITDA. The Company increased
production of hotel EBITDA to approximately $12.1 million for the
three months ended March 31, 2023, from approximately $10.0 million
during the comparable period in 2022. Hotel EBITDA for the
three months ended March 31, 2023, was approximately $1.1 million
below the hotel EBITDA generated in the comparable 2019
period.
- Adjusted FFO attributable to common stockholders and
unitholders. For the three-month period ending March 31,
2023, adjusted FFO attributable to common stockholders and
unitholders increased 273.9%, or approximately $3.5 million, over
the three months ended March 31, 2022, from approximately $1.2
million to approximately $4.7 million.
- Preferred Dividends. On April 24, 2023
the Company announced a quarterly cash dividend of $0.50 per share
of beneficial interest of the Company’s 8.0% Series B Cumulative
Redeemable Perpetual Preferred Stock; a quarterly cash dividend of
$0.4921875 per share of beneficial interest of the Company’s 7.875%
Series C Cumulative Redeemable Perpetual Preferred Stock; and a
quarterly cash dividend of $0.515625 per share of beneficial
interest of the Company’s 8.25% Series D Cumulative Redeemable
Perpetual Preferred Stock. Each of the Series B, Series C and
Series D preferred dividends will be paid on June 15, 2023 to
shareholders of record as of May 31, 2023.
Dave Folsom, President and Chief Executive Officer of Sotherly
Hotels Inc., commented, "The lodging markets continued to show good
improvement in the first quarter, and Sotherly’s hotels performed
well. Our urban properties showed strong growth in year over
year revenue growth, characterized by the long awaited return of
both group and business travel. For example, at our Hyatt
Centric in Arlington, Virginia, overall RevPAR was up 96.5% from Q1
2022, driven mainly by corporate group and business transient
travel. Rate continues to be the driving force for the
overall revenue picture. Across our portfolio ADR for the
first quarter was $197.07, a 5.3% increase over prior year.
Leisure transient remained strong in the quarter, although we did
see moderation in leisure travel in our Florida properties toward
the latter half of March. Overall, group booking pace remains
strong, with our overall booking pace as of May 1, 2023 ahead of
booking pace as of May 1, 2022 by 34.5%. Group rates are up
approximately $20.00 over last year. Further, we commenced
payment of dividends on our preferred stock in Q1, with a payment
made in March. This was an important milestone for Sotherly,
while concurrently, we have been able to execute favorable mortgage
refinancings. We were pleased with the quarter, as we met or
exceeded forecasted guidance in both FFO and AFFO."
Balance Sheet/Liquidity
As of March 31, 2023, the Company had approximately $32.0
million of available cash and cash equivalents, of which
approximately $8.6 million was reserved for real estate taxes,
insurance, capital improvements and certain other expenses or
otherwise restricted. The Company had principal balances of
approximately $322.1 million in outstanding debt, including
mortgage and unsecured principal balances, at a weighted average
interest rate of approximately 5.03%.
Other Events
On February 26, 2023, affiliates of the Company entered into
amended loan documents to modify the existing mortgage loan on The
Whitehall hotel located in Houston, TX with the existing lender,
International Bank of Commerce. The amended loan documents
extend the maturity date to February 26, 2028 and maintain a
floating interest rate of New York Prime Rate plus 1.25%, subject
to a floor rate of 7.50%. The amended loan continues to be
guaranteed by the Operating Partnership.
On May 4, 2023, affiliates of the Company entered into loan
documents to secure a $10.0 million mortgage loan on the DoubleTree
by Hilton Laurel hotel located in Laurel, MD with Citi Real Estate
Funding Inc. Pursuant to the loan documents, the mortgage
loan: (i) has a principal balance of $10.0 million; (ii) has a
maturity date of May 6, 2028; (iii) carries a fixed interest rate
of 7.35%; (iv) requires payments of interest only; (v) cannot be
prepaid until the last 4 months of the loan term; and (vi) contains
customary representations, warranties, covenants and events of
default for a mortgage loan.
Q2 2023 Outlook
Set forth below is the Company's guidance for Q2 2023. The
table below reflects the Company’s projections, within a range, of
various financial measures for Q2 2023, in thousands of dollars,
except per share and RevPAR data:
|
Q2 2023 Guidance |
|
|
Low Range |
|
|
High Range |
|
|
|
|
Total
revenue |
$ |
48,881 |
|
|
$ |
51,311 |
|
Net income |
|
4,862 |
|
|
|
5,641 |
|
Net income available to common stockholders and
unitholders |
|
2,867 |
|
|
|
3,646 |
|
|
|
|
|
|
|
EBITDA |
|
13,570 |
|
|
|
14,349 |
|
Hotel EBITDA |
|
15,645 |
|
|
|
16,424 |
|
|
|
|
|
|
|
FFO available to common stockholders and unitholders |
|
7,404 |
|
|
|
8,183 |
|
Adjusted FFO available to common stockholders and
unitholders |
|
7,770 |
|
|
|
8,549 |
|
|
|
|
|
|
|
Net income per share available to common
stockholders |
$ |
0.15 |
|
|
$ |
0.19 |
|
FFO per common share and unit |
$ |
0.38 |
|
|
$ |
0.42 |
|
Adjusted FFO per common share and unit |
$ |
0.40 |
|
|
$ |
0.44 |
|
Rev PAR |
$ |
132.63 |
|
|
$ |
139.23 |
|
Hotel EBITDA margin |
|
32.0 |
% |
|
|
32.0 |
% |
Earnings Call/Webcast
The Company will conduct its first quarter 2023 conference call
for investors and other interested parties at 10:00 a.m. Eastern
Time on Thursday, May 11, 2023. The conference call will be
accessible by telephone and through the Internet. Interested
individuals are invited to listen to the call by telephone at
833-470-1428 (United States) or +1 929-526-1599 (International) and
enter access code 339270. To participate on the webcast, log on to
www.sotherlyhotels.com at least 15 minutes before the call to
download the necessary software. For those unable to listen to the
call live, a taped rebroadcast will be available beginning one hour
after completion of the live call on May 11, 2023 through May 25,
2023. To access the rebroadcast, dial 866-813-9403 or +44
204-525-0658 and enter access code 131317.
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. Sotherly may also opportunistically
acquire hotels throughout the United States. Currently, the
Company’s portfolio consists of investments in ten hotel
properties, comprising 2,786 rooms, as well as interests in two
condominium hotels and their associated rental programs. The
Company owns hotels that operate under the Hilton Worldwide and
Hyatt Hotels Corporation 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.
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, and as such may involve known and unknown risks,
uncertainties and other factors which may cause our actual results,
performance or achievements to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements. Forward-looking statements, which
are based on certain assumptions and describe our current
strategies, expectations, and future plans are generally identified
by our use of words, such as “intend,” “plan,” “may,” “should,”
“will,” “project,” “estimate,” “anticipate,” “believe,” “expect,”
“continue,” “potential,” “opportunity,” and similar expressions,
whether in the negative or affirmative, but the absence of these
words does not necessarily mean that a statement is not
forward-looking. We also sometimes refer to our booking
pace. Booking pace is an industry term that we define as the
estimated value of committed future bookings at a given point in
time. Booking pace can be further separated into various
segments, including group booking pace or business travel booking
pace. All statements regarding our expected financial
position, booking pace, business and financing plans are
forward-looking statements.
Factors which could have a material adverse effect on the
Company’s future operations, results, performance and prospects,
include, but are not limited to: national and local economic and
business conditions that affect occupancy rates and revenues at our
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 the level of our
indebtedness and our ability to meet covenants in our debt
agreements, including our recently negotiated forbearance
agreements and loan modifications and, as necessary, to refinance
or seek an extension of the maturity of such indebtedness or
further modification of such debt agreements; risks associated with
adverse weather conditions, including hurricanes; impacts on the
travel industry from pandemic diseases, including COVID-19; the
availability and terms of financing and capital and the general
volatility of the securities markets; management and performance of
our 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 our current and
proposed market areas; risks associated with our ability to
maintain our franchise agreements with our third party franchisors;
our ability to acquire additional properties and the risk that
potential acquisitions may not perform in accordance with
expectations; our ability to successfully expand into new markets;
legislative/regulatory changes, including changes to laws governing
taxation of real estate investment trusts (“REITs”); the Company’s
ability to maintain its qualification as a REIT; and our ability to
maintain adequate insurance coverage. Although the Company
believes that the assumptions underlying the forward-looking
statements contained herein are reasonable, any of the assumptions
could be inaccurate, and therefore there can be no assurance that
such statements included in this report will prove to be
accurate. In light of the significant uncertainties inherent
in the forward-looking statements included herein, the inclusion of
such information should not be regarded as a representation by the
Company or any other person that the results or conditions
described in such statements or the objectives and plans of the
Company will be achieved.
Additional factors that could cause actual results to vary from
our forward-looking statements are set forth under the section
titled “Risk Factors” in our Annual Report on Form 10-K, in this
report and subsequent reports filed with the Securities and
Exchange Commission. The Company undertakes no obligation to
and does not intend to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise. Although the Company believes its
current expectations to be based upon reasonable assumptions, it
can give no assurance that its expectations will be attained or
that actual results will not differ materially.
Financial Tables Follow…
SOTHERLY HOTELS INC. |
CONSOLIDATED BALANCE SHEETS |
|
|
|
March 31, 2023 |
|
|
December 31, 2022 |
|
|
|
(unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
Investment in hotel properties, net |
|
$ |
362,900,039 |
|
|
$ |
365,070,725 |
|
Cash and cash equivalents |
|
|
23,429,595 |
|
|
|
21,918,680 |
|
Restricted cash |
|
|
8,556,641 |
|
|
|
5,422,950 |
|
Accounts receivable, net |
|
|
4,316,649 |
|
|
|
5,844,904 |
|
Prepaid expenses, inventory and other assets |
|
|
8,015,602 |
|
|
|
8,311,862 |
|
TOTAL
ASSETS |
|
$ |
407,218,526 |
|
|
$ |
406,569,121 |
|
LIABILITIES |
|
|
|
|
|
|
Mortgage loans, net |
|
$ |
318,555,434 |
|
|
$ |
320,482,103 |
|
Unsecured notes |
|
|
2,135,164 |
|
|
|
2,545,975 |
|
Accounts payable and accrued liabilities |
|
|
27,738,428 |
|
|
|
25,704,835 |
|
Advance deposits |
|
|
3,532,639 |
|
|
|
2,233,013 |
|
Dividends and distributions payable |
|
|
2,088,160 |
|
|
|
4,082,472 |
|
TOTAL
LIABILITIES |
|
$ |
354,049,825 |
|
|
$ |
355,048,398 |
|
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,
1,464,100 and 1,464,100 shares issued and outstanding;
aggregate liquidation preference $45,387,100 and
$44,655,050, at March 31, 2023 and December 31,
2022, respectively. |
|
|
14,641 |
|
|
|
14,641 |
|
7.875% Series C cumulative redeemable perpetual preferred stock,
1,346,110 and 1,346,110 shares issued and
outstanding; aggregate liquidation preference
$41,603,220 and $40,940,681, at March 31, 2023 and
December 31, 2022, respectively. |
|
|
13,461 |
|
|
|
13,461 |
|
8.25% Series D cumulative redeemable perpetual preferred stock,
1,163,100 and 1,163,100 shares issued and outstanding;
aggregate liquidation preference $36,274,181 and
$35,674,458, at March 31, 2023 and December 31, 2022,
respectively. |
|
|
11,631 |
|
|
|
11,631 |
|
Common stock, par value $0.01, 69,000,000 shares authorized,
19,235,803 shares issued and outstanding at March 31,
2023 and 18,951,525 shares issued and outstanding at
December 31, 2022. |
|
|
192,358 |
|
|
|
189,515 |
|
Additional paid-in capital |
|
|
175,823,357 |
|
|
|
175,611,370 |
|
Unearned ESOP shares |
|
|
(2,555,500 |
) |
|
|
(2,601,134 |
) |
Distributions in excess of retained earnings |
|
|
(119,572,709 |
) |
|
|
(120,985,183 |
) |
Total Sotherly Hotels Inc. stockholders’ equity |
|
|
53,927,239 |
|
|
|
52,254,301 |
|
Noncontrolling interest |
|
|
(758,538 |
) |
|
|
(733,578 |
) |
TOTAL
EQUITY |
|
|
53,168,701 |
|
|
|
51,520,723 |
|
TOTAL LIABILITIES AND
EQUITY |
|
$ |
407,218,526 |
|
|
$ |
406,569,121 |
|
SOTHERLY
HOTELS INC. |
CONSOLIDATED
STATEMENTS OF OPERATIONS |
(unaudited) |
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
|
March 31, 2023 |
|
|
March 31, 2022 |
|
|
|
|
|
|
|
|
REVENUE |
|
|
|
|
|
|
Rooms department |
|
$ |
28,401,688 |
|
|
$ |
24,853,385 |
|
Food and beverage
department |
|
|
8,748,726 |
|
|
|
5,617,736 |
|
Other operating
departments |
|
|
6,340,863 |
|
|
|
7,881,482 |
|
Total revenue |
|
|
43,491,277 |
|
|
|
38,352,603 |
|
EXPENSES |
|
|
|
|
|
|
Hotel operating expenses |
|
|
|
|
|
|
Rooms department |
|
|
6,413,094 |
|
|
|
5,949,757 |
|
Food and beverage
department |
|
|
5,935,560 |
|
|
|
3,880,617 |
|
Other operating
departments |
|
|
2,315,848 |
|
|
|
2,484,107 |
|
Indirect |
|
|
16,747,577 |
|
|
|
16,063,361 |
|
Total hotel operating expenses |
|
|
31,412,079 |
|
|
|
28,377,842 |
|
Depreciation and amortization |
|
|
4,578,311 |
|
|
|
4,565,072 |
|
Loss (gain)
on disposal of assets |
|
|
— |
|
|
|
(29,542 |
) |
Corporate
general and administrative |
|
|
1,980,765 |
|
|
|
1,514,027 |
|
Total hotel operating expenses |
|
|
37,971,155 |
|
|
|
34,427,399 |
|
NET OPERATING
INCOME |
|
|
5,520,122 |
|
|
|
3,925,204 |
|
Other income (expense) |
|
|
|
|
|
|
Interest expense |
|
|
(4,113,597 |
) |
|
|
(5,713,205 |
) |
Interest income |
|
|
146,665 |
|
|
|
24,448 |
|
Unrealized (loss) gain on hedging activities |
|
|
(442,464 |
) |
|
|
962,263 |
|
PPP debt forgiveness |
|
|
275,494 |
|
|
|
— |
|
Gain on involuntary conversion of assets |
|
|
16,476 |
|
|
|
— |
|
Net income (loss) before
income taxes |
|
|
1,402,696 |
|
|
|
(801,290 |
) |
Income tax provision |
|
|
(15,182 |
) |
|
|
(9,654 |
) |
Net income (loss) |
|
|
1,387,514 |
|
|
|
(810,944 |
) |
Add: Net loss attributable to noncontrolling interest |
|
|
24,960 |
|
|
|
161,621 |
|
Net income (loss)
attributable to the Company |
|
|
1,412,474 |
|
|
|
(649,323 |
) |
Undeclared distributions to preferred stockholders |
|
|
(1,994,312 |
) |
|
|
(1,936,617 |
) |
Gain on extinguishment of preferred stock |
|
|
— |
|
|
|
78,175 |
|
Net loss attributable to
common stockholders |
|
$ |
(581,838 |
) |
|
$ |
(2,507,765 |
) |
Net loss per share
attributable to common stockholders |
|
|
|
|
|
|
Basic |
|
$ |
(0.03 |
) |
|
$ |
(0.15 |
) |
Weighted average number
of common shares outstanding |
|
|
|
|
|
|
Basic |
|
|
18,635,004 |
|
|
|
17,107,820 |
|
|
|
|
|
|
|
|
SOTHERLY HOTELS INC.KEY
OPERATING METRICS(unaudited)
The following tables illustrate the key operating metrics for
the three months ended March 31, 2023, 2022 and 2019, respectively,
for the Company’s wholly-owned properties (“actual” portfolio
metrics), accordingly, the actual data does not include the
participating condominium hotel rooms of the Hyde Resort &
Residences and the Hyde Beach House Resort & Residences.
The ten wholly-owned properties in the portfolio that were under
the Company’s control during the three months ended March 31, 2023
and the corresponding periods in 2022 and 2019 are considered
same-store properties (“same-store” portfolio metrics).
Accordingly, the same-store data does not reflect the performances
of the Sheraton Louisville Riverside which was sold in February
2022, or the DoubleTree by Hilton Raleigh-Brownstone University
which was sold in June 2022. The composite portfolio metrics
represent the Company’s wholly-owned properties and the
participating condominium hotel rooms at the Hyde Resort &
Residences and the Hyde Beach House Resort & Residences, during
the three months ended March 31, 2023 and the corresponding periods
in 2022 and 2019. The same-store (composite) portfolio
metrics includes all properties with the exceptions of the Sheraton
Louisville Riverside, DoubleTree by Hilton Raleigh-Brownstone
University and the Hyde Beach House Resort & Residences, during
the three months ended March 31, 2023 and the corresponding periods
in 2022 and 2019.
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
|
March 31, 2023 |
|
|
March 31, 2022 |
|
|
March 31, 2019 |
|
Actual Portfolio Metrics |
|
|
|
|
|
|
|
|
|
Occupancy % |
|
|
60.5 |
% |
|
|
53.7 |
% |
|
|
70.1 |
% |
ADR |
|
$ |
187.19 |
|
|
$ |
168.12 |
|
|
$ |
165.57 |
|
RevPAR |
|
$ |
113.27 |
|
|
$ |
90.36 |
|
|
$ |
116.01 |
|
Same-Store Portfolio
Metrics |
|
|
|
|
|
|
|
|
|
Occupancy % |
|
|
60.5 |
% |
|
|
54.3 |
% |
|
|
71.0 |
% |
ADR |
|
$ |
187.19 |
|
|
$ |
171.72 |
|
|
$ |
170.18 |
|
RevPAR |
|
$ |
113.27 |
|
|
$ |
93.29 |
|
|
$ |
120.79 |
|
Composite Portfolio
Metrics |
|
|
|
|
|
|
|
|
|
Occupancy % |
|
|
60.4 |
% |
|
|
53.9 |
% |
|
|
69.9 |
% |
ADR |
|
$ |
197.07 |
|
|
$ |
187.23 |
|
|
$ |
174.24 |
|
RevPAR |
|
$ |
119.06 |
|
|
$ |
100.89 |
|
|
$ |
121.86 |
|
Same-Store (Composite)
Portfolio Metrics |
|
|
|
|
|
|
|
|
|
Occupancy % |
|
|
60.5 |
% |
|
|
54.6 |
% |
|
|
70.8 |
% |
ADR |
|
$ |
193.03 |
|
|
$ |
182.87 |
|
|
$ |
179.55 |
|
RevPAR |
|
$ |
116.80 |
|
|
$ |
99.77 |
|
|
$ |
127.08 |
|
SOTHERLY HOTELS
INC.SUPPLEMENTAL
DATA(unaudited)
The following tables illustrate the key operating metrics for
the three months ended March 31, 2023, 2022 and 2019, respectively,
for each of the Company’s wholly-owned properties during each
respective reporting period, irrespective of ownership percentage
during any period.
Occupancy
|
Q1 2023 |
|
|
Q1 2022 |
|
|
Q1 2019 |
|
The DeSoto
Savannah, Georgia |
|
64.4 |
% |
|
|
62.0 |
% |
|
|
63.8 |
% |
DoubleTree by Hilton Jacksonville Riverfront Jacksonville,
Florida |
|
71.0 |
% |
|
|
64.5 |
% |
|
|
83.0 |
% |
DoubleTree by Hilton Laurel Laurel, Maryland |
|
47.2 |
% |
|
|
47.8 |
% |
|
|
61.3 |
% |
DoubleTree by Hilton Philadelphia Airport Philadelphia,
Pennsylvania |
|
54.5 |
% |
|
|
56.0 |
% |
|
|
64.9 |
% |
DoubleTree Resort by Hilton Hollywood Beach Hollywood,
Florida |
|
64.9 |
% |
|
|
63.4 |
% |
|
|
78.3 |
% |
Georgian Terrace Atlanta, Georgia |
|
46.7 |
% |
|
|
48.9 |
% |
|
|
75.3 |
% |
Hotel Alba Tampa, Tapestry Collection by Hilton Tampa,
Florida |
|
83.4 |
% |
|
|
81.1 |
% |
|
|
79.7 |
% |
Hotel Ballast Wilmington, Tapestry Collection by Hilton
Wilmington, North Carolina |
|
55.8 |
% |
|
|
43.1 |
% |
|
|
62.4 |
% |
Hyatt Centric Arlington Arlington, Virginia |
|
70.3 |
% |
|
|
43.8 |
% |
|
|
73.0 |
% |
The Whitehall Houston, Texas |
|
48.6 |
% |
|
|
36.3 |
% |
|
|
64.6 |
% |
Hyde Resort & Residences (1) Hollywood Beach, Florida |
|
60.5 |
% |
|
|
62.2 |
% |
|
|
67.7 |
% |
Hyde Beach House Resort & Residences (1) Hollywood Beach,
Florida |
|
56.6 |
% |
|
|
51.3 |
% |
|
- |
|
All properties weighted
average |
|
60.5 |
% |
|
|
54.6 |
% |
|
|
70.8 |
% |
(1 |
) |
Reflects only those condominium
units participating in our rental program for the period. |
ADR
|
Q1 2023 |
|
|
Q1 2022 |
|
|
Q1 2019 |
|
The DeSoto
Savannah, Georgia |
$ |
211.97 |
|
|
$ |
200.95 |
|
|
$ |
180.28 |
|
DoubleTree by Hilton Jacksonville Riverfront Jacksonville,
Florida |
$ |
160.63 |
|
|
$ |
148.26 |
|
|
$ |
146.30 |
|
DoubleTree by Hilton Laurel Laurel, Maryland |
$ |
120.26 |
|
|
$ |
105.50 |
|
|
$ |
109.61 |
|
DoubleTree by Hilton Philadelphia Airport Philadelphia,
Pennsylvania |
$ |
127.52 |
|
|
$ |
114.79 |
|
|
$ |
125.43 |
|
DoubleTree Resort by Hilton Hollywood Beach Hollywood,
Florida |
$ |
265.97 |
|
|
$ |
253.85 |
|
|
$ |
231.09 |
|
Georgian Terrace Atlanta, Georgia |
$ |
206.82 |
|
|
$ |
191.54 |
|
|
$ |
249.49 |
|
Hotel Alba Tampa, Tapestry Collection by Hilton Tampa,
Florida |
$ |
214.33 |
|
|
$ |
187.56 |
|
|
$ |
143.83 |
|
Hotel Ballast Wilmington, Tapestry Collection by Hilton
Wilmington, North Carolina |
$ |
163.78 |
|
|
$ |
165.53 |
|
|
$ |
137.75 |
|
Hyatt Centric Arlington Arlington, Virginia |
$ |
193.53 |
|
|
$ |
158.05 |
|
|
$ |
176.47 |
|
The Whitehall Houston, Texas |
$ |
164.55 |
|
|
$ |
145.64 |
|
|
$ |
146.15 |
|
Hyde Resort & Residences (1) Hollywood Beach, Florida |
$ |
443.65 |
|
|
$ |
505.41 |
|
|
$ |
334.37 |
|
Hyde Beach House Resort & Residences (1) Hollywood Beach,
Florida |
$ |
368.33 |
|
|
$ |
455.52 |
|
|
$ |
- |
|
All properties weighted
average |
$ |
193.03 |
|
|
$ |
182.87 |
|
|
$ |
179.55 |
|
|
|
(1 |
) |
Reflects only those condominium
units participating in our rental program for the period. |
RevPAR
|
Q1 2023 |
|
|
Q1 2022 |
|
|
Q1 2019 |
|
The DeSoto
Savannah, Georgia |
$ |
136.43 |
|
|
$ |
124.54 |
|
|
$ |
114.94 |
|
DoubleTree by Hilton Jacksonville Riverfront Jacksonville,
Florida |
$ |
114.05 |
|
|
$ |
95.60 |
|
|
$ |
121.38 |
|
DoubleTree by Hilton Laurel Laurel, Maryland |
$ |
56.71 |
|
|
$ |
50.46 |
|
|
$ |
67.21 |
|
DoubleTree by Hilton Philadelphia Airport Philadelphia,
Pennsylvania |
$ |
69.51 |
|
|
$ |
64.31 |
|
|
$ |
81.45 |
|
DoubleTree Resort by Hilton Hollywood Beach Hollywood,
Florida |
$ |
172.66 |
|
|
$ |
160.95 |
|
|
$ |
180.89 |
|
Georgian Terrace Atlanta, Georgia |
$ |
96.65 |
|
|
$ |
93.64 |
|
|
$ |
187.75 |
|
Hotel Alba Tampa, Tapestry Collection by Hilton Tampa,
Florida |
$ |
178.83 |
|
|
$ |
152.11 |
|
|
$ |
114.67 |
|
Hotel Ballast Wilmington, Tapestry Collection by Hilton
Wilmington, North Carolina |
$ |
91.46 |
|
|
$ |
71.35 |
|
|
$ |
86.00 |
|
Hyatt Centric Arlington Arlington, Virginia |
$ |
136.11 |
|
|
$ |
69.27 |
|
|
$ |
128.87 |
|
The Whitehall Houston, Texas |
$ |
80.03 |
|
|
$ |
52.88 |
|
|
$ |
94.37 |
|
Hyde Resort & Residences (1) Hollywood Beach, Florida |
$ |
268.51 |
|
|
$ |
314.39 |
|
|
$ |
226.23 |
|
Hyde Beach House Resort & Residences (1) Hollywood Beach,
Florida |
$ |
208.53 |
|
|
$ |
233.50 |
|
|
$ |
- |
|
All properties weighted
average |
$ |
116.80 |
|
|
$ |
99.77 |
|
|
$ |
127.08 |
|
|
|
(1 |
) |
Reflects only those condominium
units participating in our rental program for the period. |
|
|
SOTHERLY HOTELS INC. |
RECONCILIATION OF NET INCOME (LOSS) TO |
FFO, Adjusted FFO, EBITDA and Hotel EBITDA |
(unaudited) |
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
|
March 31, 2023 |
|
|
March 31, 2022 |
|
Net income (loss) |
|
$ |
1,387,514 |
|
|
$ |
(810,944 |
) |
Depreciation and amortization - real estate |
|
|
4,564,625 |
|
|
|
4,550,376 |
|
Distributions to preferred stockholders |
|
|
(1,994,312 |
) |
|
|
(1,936,617 |
) |
Gain on disposal of assets |
|
|
— |
|
|
|
(29,542 |
) |
Gain on involuntary conversion of assets |
|
|
(16,476 |
) |
|
|
— |
|
FFO attributable to
common stockholders and unitholders |
|
|
3,941,351 |
|
|
|
1,773,273 |
|
Amortization |
|
|
13,686 |
|
|
|
14,696 |
|
ESOP and stock - based compensation |
|
|
260,463 |
|
|
|
420,161 |
|
Unrealized loss (gain) on hedging activities |
|
|
442,464 |
|
|
|
(962,263 |
) |
Adjusted FFO
attributable to common stockholders and unitholders |
|
$ |
4,657,964 |
|
|
$ |
1,245,867 |
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding, basic |
|
|
18,635,004 |
|
|
|
17,107,820 |
|
|
|
|
|
|
|
|
Weighted average number of non-controlling units |
|
|
825,188 |
|
|
|
1,133,720 |
|
|
|
|
|
|
|
|
Weighted average number of shares and units outstanding, basic |
|
|
19,460,192 |
|
|
|
18,241,540 |
|
|
|
|
|
|
|
|
FFO per common share and unit |
|
$ |
0.20 |
|
|
$ |
0.10 |
|
|
|
|
|
|
|
|
Adjusted FFO per common share and unit |
|
$ |
0.24 |
|
|
$ |
0.07 |
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
|
March 31, 2023 |
|
|
March 31, 2022 |
|
Net income (loss) |
|
$ |
1,387,514 |
|
|
$ |
(810,944 |
) |
Interest expense |
|
|
4,113,597 |
|
|
|
5,713,205 |
|
Interest income |
|
|
(146,665 |
) |
|
|
(24,448 |
) |
Income tax provision |
|
|
15,182 |
|
|
|
9,654 |
|
Depreciation and amortization |
|
|
4,578,311 |
|
|
|
4,565,072 |
|
EBITDA |
|
|
9,947,939 |
|
|
|
9,452,539 |
|
PPP loan forgiveness |
|
|
(275,494 |
) |
|
|
— |
|
Gain on disposal of assets |
|
|
— |
|
|
|
(29,542 |
) |
Gain on involuntary conversion of assets |
|
|
(16,476 |
) |
|
|
— |
|
Subtotal |
|
|
9,655,969 |
|
|
|
9,422,997 |
|
Corporate general and administrative |
|
|
1,980,765 |
|
|
|
1,514,027 |
|
Unrealized loss (gain) on hedging activities |
|
|
442,464 |
|
|
|
(962,263 |
) |
Hotel
EBITDA |
|
$ |
12,079,198 |
|
|
$ |
9,974,761 |
|
Tables below are reflected in thousands of dollars:
Reconciliation of Outlook of Net Income to EBITDA and Hotel
EBITDA |
|
|
|
|
|
|
|
|
Q2 2023 Guidance |
|
|
Low Range |
|
|
High Range |
|
|
|
|
|
|
|
Net
income |
$ |
4,862 |
|
|
$ |
5,641 |
|
Interest expense |
|
4,308 |
|
|
|
4,308 |
|
Interest income |
|
(180 |
) |
|
|
(180 |
) |
Income tax provision |
|
30 |
|
|
|
30 |
|
Depreciation and amortization |
|
4,550 |
|
|
|
4,550 |
|
|
|
|
|
|
|
EBITDA |
|
13,570 |
|
|
|
14,349 |
|
Unrealized loss on hedging activities |
|
300 |
|
|
|
300 |
|
Corporate general and administrative |
|
1,775 |
|
|
|
1,775 |
|
|
|
|
|
|
|
Hotel EBITDA |
$ |
15,645 |
|
|
$ |
16,424 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Outlook of Net Income to FFO and Adjusted
FFO |
|
|
|
|
|
|
|
|
Q2 2023 Guidance |
|
|
Low Range |
|
|
High Range |
|
|
|
|
|
|
|
Net income |
$ |
4,862 |
|
|
$ |
5,641 |
|
Depreciation and amortization |
|
4,537 |
|
|
|
4,537 |
|
|
|
|
|
|
|
FFO |
|
9,399 |
|
|
|
10,178 |
|
Distributions to preferred stockholders |
|
(1,995 |
) |
|
|
(1,995 |
) |
|
|
|
|
|
|
FFO attributable to common stockholders and unitholders |
|
7,404 |
|
|
|
8,183 |
|
Amortization |
|
13 |
|
|
|
13 |
|
Unrealized loss on hedging activities |
|
300 |
|
|
|
300 |
|
ESOP stock based compensation |
|
53 |
|
|
|
53 |
|
Adjusted FFO attributable to common stockholders and
unitholders |
$ |
7,770 |
|
|
$ |
8,549 |
|
|
|
|
|
|
|
Non-GAAP Financial Measures
The Company considers the non-GAAP financial measures of FFO
(including FFO per share), Adjusted FFO (including Adjusted 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 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, gains or
losses from involuntary conversions of assets, plus certain
non-cash items such as real estate asset depreciation and
amortization or impairment, stock compensation costs 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 that are
not in NAREIT’s definition of FFO including changes in deferred
income taxes, any unrealized gain (loss) on hedging instruments or
warrant derivatives, loan impairment losses, losses on early
extinguishment of debt, gains on extinguishment of preferred stock,
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, management contract termination costs, operating asset
depreciation and amortization, change in control gains or losses,
ESOP and stock compensation expenses 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) depreciation and amortization, (5)
impairment of long-lived assets or investments, (6) gains and
losses on disposal and/or sale of assets, (7) gains and losses on
involuntary conversions of assets, (8) unrealized gains and losses
on derivative instruments not included in other comprehensive
income, (9) loss on early debt extinguishment, (10) Paycheck
Protection Program (PPP) debt forgiveness, (11) gain on exercise of
development right, (12) corporate general and administrative
expense, and (13) other operating revenue not related to our
wholly-owned portfolio. We believe this provides a more
complete understanding of the operating results over which our
wholly-owned hotels and its operators have direct control. We
believe hotel EBITDA provides investors with supplemental
information on the on-going operational performance of our hotels
and the effectiveness of third-party management companies operating
our business on a property-level basis. The Company’s calculation
of hotel EBITDA may be different from similar measures calculated
by other REITs.
Contact at the Company:
Mack Sims
Vice President – Operations & Investor Relations
Sotherly Hotels Inc.
306 South Henry Street, Suite 100
Williamsburg, Virginia 23185
757.229.5648
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