AUSTIN, Texas, Nov. 3, 2020 /PRNewswire/ -- Summit Hotel
Properties, Inc. (NYSE: INN) (the "Company"), today announced
results for the third quarter ended September 30, 2020.
"We were encouraged by the significant improvement in demand
during the third quarter as our portfolio RevPAR more than doubled
from the second quarter driven by improved short-term leisure
demand and significant market share gains. Our monthly
corporate cash burn rate has been reduced by nearly 70% which has
significantly extended our liquidity runway as our disciplined
focus on cost controls and refining of an already efficient
operating model lead to improved hotel-level profitability," said
Dan Hansen, the Company's Chairman,
President and Chief Executive Officer. "We remain confident
that the quality of our portfolio, the strength of our team, and
the actions we are taking today position us well to resume our
place as an industry leader as the headwinds related to the
COVID-19 pandemic begin to abate," commented Mr. Hansen.
Third Quarter 2020 Summary
- Net Income: Net loss attributable to common
stockholders was $38.3 million, or
($0.37) per diluted share, compared
with net income of $7.8 million, or
$0.07 per diluted share, in the same
period of 2019.
- Pro Forma RevPAR: Pro forma revenue per available
room ("RevPAR") decreased 63.5 percent to $46.83 from the same period in 2019. Pro
forma average daily rate ("ADR") decreased 34.6 percent to
$103.98 compared to the same period
in 2019, and pro forma occupancy decreased 44.2 percent to 45.0
percent.
- Same-Store RevPAR: Same-store RevPAR decreased
63.9 percent to $45.17 from the same
period in 2019. Same-store ADR decreased 34.7 percent to
$101.83 compared to the same period
in 2019, and same-store occupancy decreased 44.6 percent to 44.4
percent.
- Pro Forma Hotel EBITDA: Pro forma hotel EBITDA was
$5.7 million, a decrease of 89.6
percent from the same period in 2019. Pro forma hotel EBITDA
margin contracted to 10.8 percent from 37.6 percent in the same
period of 2019.
- Adjusted EBITDAre: Adjusted EBITDAre
decreased 94.4 percent to $2.5
million from $45.2 million in
the same period of 2019.
- Adjusted FFO: Adjusted FFO was ($10.8) million, or ($0.10) per diluted share, compared to
$32.5 million, or $0.31 per diluted share, in the same period of
2019.
- Cash Burn Rate and Liquidity: Monthly cash burn
run-rate was $4.5 million in
September and liquidity was $262.5
million at the end of the third quarter, including cash on
hand.
The Company's results for the three and nine months ended
September 30, 2020 and 2019 are as
follows (in thousands, except per share amounts):
|
For the Three
Months Ended
September
30,
|
|
For the Nine
Months Ended
September
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(unaudited)
|
Net (loss) income
attributable to
common
stockholders
|
$
(38,256)
|
|
$
7,824
|
|
$
(111,413)
|
|
$
62,240
|
Net (loss) income per
diluted share
|
$
(0.37)
|
|
$
0.07
|
|
$
(1.07)
|
|
$
0.60
|
Total
revenues
|
$
52,412
|
|
$
133,685
|
|
$
186,233
|
|
$
415,567
|
EBITDAre
(1)
|
$
2,258
|
|
$
44,207
|
|
$
14,859
|
|
$
139,019
|
Adjusted
EBITDAre (1)
|
$
2,539
|
|
$
45,201
|
|
$
16,498
|
|
$
144,346
|
FFO
(1)
|
$
(12,642)
|
|
$
30,903
|
|
$
(31,117)
|
|
$
96,555
|
Adjusted FFO
(1)
|
$
(10,806)
|
|
$
32,470
|
|
$
(23,459)
|
|
$
103,382
|
FFO per diluted share
and unit (1,2)
|
$
(0.12)
|
|
$
0.30
|
|
$
(0.30)
|
|
$
0.93
|
Adjusted FFO per
diluted share and unit (1,2)
|
$
(0.10)
|
|
$
0.31
|
|
$
(0.22)
|
|
$
0.99
|
|
|
|
|
|
|
|
|
Pro
Forma (3)
|
|
|
|
|
|
|
|
RevPAR
|
$
46.83
|
|
$
128.41
|
|
$
55.31
|
|
$
131.18
|
RevPAR
Growth
|
-63.5%
|
|
|
|
-57.8%
|
|
|
Hotel
EBITDA
|
$
5,663
|
|
$
54,290
|
|
$
25,379
|
|
$
169,003
|
Hotel EBITDA
margin
|
10.8%
|
|
37.6%
|
|
13.6%
|
|
38.5%
|
Hotel EBITDA margin
growth
|
-2,675 bps
|
|
|
|
-2,491 bps
|
|
|
|
|
(1)
|
See tables later
in this press release for a discussion and reconciliation of net
income to non-GAAP financial measures, including
earnings before
interest, taxes, depreciation and amortization ("EBITDA"),
EBITDAre, adjusted EBITDAre, funds from operations
("FFO"), FFO per
diluted share and unit, adjusted FFO ("AFFO"), and AFFO per diluted
share and unit, as well as a reconciliation
of operating income
to hotel EBITDA. See "Non-GAAP Financial Measures" at the end
of this release.
|
|
|
(2)
|
Amounts are based
on 104,375,000 weighted average diluted common shares and units and
104,310,000 weighted average diluted
common shares and
units for the three months ended September 30, 2020, and 2019,
respectively, and 104,302,000 weighted
average diluted
common shares and units and 104,318,000 weighted average diluted
common shares and units for the nine months
ended September 30,
2020, and 2019, respectively. The Company includes the
outstanding common units of limited partnership
interests ("OP
Units") in Summit Hotel OP, LP, the Company's operating
partnership, held by limited partners other than the
Company
in the determination
of weighted average diluted common shares and units because the OP
Units are redeemable for cash or, at the
Company's option,
shares of the Company's common stock on a one-for-one
basis.
|
|
|
(3)
|
Unless stated
otherwise in this release, all pro forma information includes
operating and financial results for 72 hotels owned as
of
September 30, 2020,
as if each hotel had been owned by the Company since January 1,
2019 and remained open for the entirety
of the measurement
period. As a result, all pro forma information includes
operating and financial results for hotels acquired
since
January 1, 2019,
which includes periods prior to the Company's ownership. Pro
forma and non-GAAP financial measures are unaudited.
|
Year-to-Date 2020 Summary
- Net Income: Net loss attributable to common
stockholders was $111.4 million, or
($1.07) per diluted share, compared
with net income of $62.2 million, or
$0.60 per diluted share, in the same
period of 2019.
- Pro Forma RevPAR: Pro forma revenue per available
room ("RevPAR") decreased 57.8 percent to $55.31 from the same period in 2019. Pro
forma average daily rate ("ADR") decreased 22.6 percent to
$126.97 compared to the same period
in 2019, and pro forma occupancy decreased 45.5 percent to 43.6
percent.
- Same-Store RevPAR: Same-store RevPAR decreased
57.8 percent to $54.19 from the same
period in 2019. Same-store ADR decreased 22.3 percent to
$125.56 compared to the same period
in 2019, and same-store occupancy decreased 45.7 percent to 43.2
percent.
- Pro Forma Hotel EBITDA: Pro forma hotel EBITDA was
$25.4 million, a decrease of 85.0
percent from the same period in 2019. Pro forma hotel EBITDA
margin contracted to 13.6 percent from 38.5 percent in the same
period of 2019.
- Adjusted EBITDAre: Adjusted EBITDAre
decreased 88.6 percent to $16.5
million from $144.3 million in
the same period of 2019.
- Adjusted FFO: AFFO was ($23.5) million, or ($0.22) per diluted share, compared to
$103.4 million, or $0.99 per diluted share, in the same period of
2019.
Capital Improvements
The Company invested $3.3 million
and $19.2 million in capital
improvements during the three and nine months ended September 30, 2020, respectively, and anticipates
investing a total of approximately $23
million to $25 million in
capital improvements on a consolidated basis across its portfolio
during 2020.
Capital Markets & Balance Sheet
On September 30, 2020, inclusive
of its pro rata share of the Joint Venture credit facility, the
Company had the following:
- Pro rata outstanding debt of $1.0
billion with a weighted average interest rate of 3.51
percent.
- After giving effect to interest rate derivative agreements,
$546.6 million, or 53 percent, of our
pro rata outstanding debt had fixed interest rates, and
$475.5 million, or 47 percent, had
variable interest rates.
- Pro rata unrestricted cash and cash equivalents of $37.5 million.
- Revolving credit facility availability of $175.0 million, plus an additional $50.0 million available to borrow subject to
certain requirements.
On October 23, 2020, inclusive of
its pro rata share of the Joint Venture credit facility, the
Company had the following:
- Pro rata outstanding debt of $1.0
billion with a weighted average interest rate of 3.51
percent.
- After giving effect to interest rate derivative agreements,
$546.3 million, or 53 percent, of our
pro rata outstanding debt had fixed interest rates, and
$475.4 million, or 47 percent, had
variable interest rates.
- Pro rata unrestricted cash and cash equivalents of $33.6 million.
- Revolving credit facility availability of $175.0 million, plus an additional $50.0 million available to borrow subject to
certain requirements.
The Company's balance sheet continues to be well positioned with
no debt maturities until November
2022 and an average length to maturity of approximately 3.3
years.
Dividends
On October 30, 2020, the Company
declared a quarterly cash preferred dividend of $0.403125 per share on its 6.45% Series D
Cumulative Redeemable Preferred Stock and $0.390625 per share on its 6.25% Series E
Cumulative Redeemable Preferred Stock. The preferred
dividends are payable on November 30,
2020, to holders of record as of November 16, 2020.
Third Quarter 2020 Earnings Conference Call
The Company will conduct its quarterly conference call on
Wednesday, November 4, 2020, at
9:00 AM ET. To participate in
the conference call, dial 877-930-8101 approximately ten minutes
before the call begins (8:50 AM
ET). The conference identification code for the call
is 9188292. Additionally, a live webcast of the quarterly
conference call will be available through the Company's website,
www.shpreit.com. A replay of the quarterly conference call
webcast will be available until 12:00 PM ET Wednesday, November 11, 2020, by dialing
855-859-2056, conference identification code 9188292. A
replay will also be available in the Investor Relations section of
the Company's website until January 31,
2021.
About Summit Hotel Properties
Summit Hotel Properties, Inc. is a publicly traded real estate
investment trust focused on owning premium-branded hotels with
efficient operating models primarily in the Upscale segment of the
lodging industry. As of November 3,
2020, the Company's portfolio consisted of 72 hotels, 67 of
which are wholly owned, with a total of 11,288 guestrooms located
in 23 states.
For additional information, please visit the Company's website,
www.shpreit.com, and follow on Twitter at @SummitHotel_INN.
Forward-Looking Statements
This press release contains statements that are
"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, pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements are generally identifiable by
use of forward-looking terminology such as "may," "will," "should,"
"potential," "intend," "expect," "seek," "anticipate," "estimate,"
"approximately," "believe," "could," "project," "predict,"
"forecast," "continue," "plan," "likely," "would" or other similar
words or expressions. Forward-looking statements are based on
certain assumptions and can include future expectations, future
plans and strategies, financial and operating projections, or other
forward-looking information. Examples of forward-looking statements
include the following: the Company's ability to realize growth from
the deployment of renovation capital; projections of the Company's
revenues and expenses, capital expenditures or other financial
items; descriptions of the Company's plans or objectives for future
operations, acquisitions, dispositions, financings, redemptions or
services; forecasts of the Company's future financial performance
and potential increases in average daily rate, occupancy, RevPAR,
room supply and demand, EBITDAre, Adjusted EBITDAre, FFO and AFFO;
the Company's outlook with respect to pro forma RevPAR, pro forma
RevPAR growth, RevPAR, RevPAR growth, AFFO, AFFO per
diluted share and unit and renovation capital deployed; and
descriptions of assumptions underlying or relating to any of the
foregoing expectations regarding the timing of their occurrence.
These forward-looking statements are subject to various risks and
uncertainties, not all of which are known to the Company and many
of which are beyond the Company's control, which could cause actual
results to differ materially from such statements. These risks and
uncertainties include, but are not limited to, the state of the
U.S. economy, supply and demand in the hotel industry, and other
factors as are described in greater detail in the Company's filings
with the Securities and Exchange Commission ("SEC"). Unless legally
required, the Company disclaims any obligation to update any
forward-looking statements, whether as a result of new information,
future events, or otherwise.
For information about the Company's business and financial
results, please refer to the "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and "Risk
Factors" sections of the Company's Annual Report on Form 10-K for
the year ended December 31, 2019,
filed with the SEC, and its quarterly and other periodic filings
with the SEC. The Company undertakes no duty to update the
statements in this release to conform the statements to actual
results or changes in the Company's expectations.
Summit Hotel
Properties, Inc. Condensed Consolidated Balance
Sheets (Dollars in thousands)
|
|
|
September
30,
2020
|
|
December 31,
2019
|
|
(unaudited)
|
|
|
ASSETS
|
|
|
|
Investment in hotel
properties, net
|
$
2,125,446
|
|
$
2,184,232
|
Undeveloped
land
|
1,500
|
|
1,500
|
Assets held for sale,
net
|
425
|
|
425
|
Cash and cash
equivalents
|
39,075
|
|
42,238
|
Restricted
cash
|
17,532
|
|
27,595
|
Investment in real
estate loans, net
|
29,689
|
|
30,936
|
Right-of-use assets,
net
|
28,809
|
|
29,884
|
Trade receivables,
net
|
12,512
|
|
13,281
|
Prepaid expenses and
other
|
6,659
|
|
8,844
|
Deferred charges,
net
|
4,364
|
|
4,709
|
Other
assets
|
9,185
|
|
12,039
|
Total
assets
|
$
2,275,196
|
|
$
2,355,683
|
LIABILITIES AND
EQUITY
|
|
|
|
Liabilities:
|
|
|
|
Debt, net of debt
issuance costs
|
$
1,084,092
|
|
$
1,016,163
|
Lease
liabilities
|
18,752
|
|
19,604
|
Accounts
payable
|
3,610
|
|
4,767
|
Accrued expenses and
other
|
72,340
|
|
71,759
|
Total
liabilities
|
1,178,794
|
|
1,112,293
|
|
|
|
|
Total stockholders'
equity
|
1,031,341
|
|
1,173,778
|
Non-controlling
interests in operating partnership
|
1,265
|
|
1,809
|
Non-controlling
interests in joint venture
|
63,796
|
|
67,803
|
Total
equity
|
1,096,402
|
|
1,243,390
|
Total liabilities and
equity
|
$
2,275,196
|
|
$
2,355,683
|
Summit Hotel
Properties, Inc. Condensed Consolidated Statements of
Operations (Unaudited) (Amounts in thousands,
except per share amounts)
|
|
|
For the Three
Months Ended
September
30,
|
|
For the Nine
Months Ended
September
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Room
|
$
48,636
|
|
$
123,112
|
|
$
171,067
|
|
$
382,868
|
|
Food and
beverage
|
628
|
|
5,411
|
|
5,760
|
|
17,565
|
|
Other
|
3,148
|
|
5,162
|
|
9,406
|
|
15,134
|
|
Total
revenues
|
52,412
|
|
133,685
|
|
186,233
|
|
415,567
|
|
Expenses:
|
|
|
|
|
|
|
|
|
Room
|
11,352
|
|
27,898
|
|
42,340
|
|
84,151
|
|
Food and
beverage
|
520
|
|
4,437
|
|
4,890
|
|
13,596
|
|
Other hotel operating
expenses
|
22,535
|
|
38,969
|
|
74,406
|
|
118,317
|
|
Property taxes,
insurance and other
|
11,007
|
|
10,696
|
|
34,171
|
|
32,799
|
|
Management
fees
|
1,335
|
|
3,676
|
|
5,051
|
|
13,280
|
|
Depreciation and
amortization
|
27,503
|
|
23,202
|
|
82,147
|
|
72,517
|
|
Corporate general and
administrative
|
4,652
|
|
5,532
|
|
14,635
|
|
17,442
|
|
Provision for credit
losses
|
-
|
|
-
|
|
2,530
|
|
-
|
|
Loss on impairment of
assets
|
-
|
|
-
|
|
782
|
|
1,685
|
|
Total
expenses
|
78,904
|
|
114,410
|
|
260,952
|
|
353,787
|
|
Gain (loss) on
disposal of assets, net
|
211
|
|
(31)
|
|
176
|
|
39,655
|
|
Operating (loss)
income
|
(26,281)
|
|
19,244
|
|
(74,543)
|
|
101,435
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
expense
|
(10,904)
|
|
(9,450)
|
|
(32,665)
|
|
(30,068)
|
Other income,
net
|
1,278
|
|
1,808
|
|
4,260
|
|
3,255
|
Total other
expense
|
(9,626)
|
|
(7,642)
|
|
(28,405)
|
|
(26,813)
|
(Loss) income from
continuing operations
before income taxes
|
(35,907)
|
|
11,602
|
|
(102,948)
|
|
74,622
|
Income tax benefit
(expense)
|
132
|
|
24
|
|
(1,589)
|
|
(1,027)
|
Net (loss)
income
|
(35,775)
|
|
11,626
|
|
(104,537)
|
|
73,595
|
Less - Loss (income)
attributable to non-
controlling interests:
|
|
|
|
|
|
|
|
Operating
Partnership
|
70
|
|
(15)
|
|
203
|
|
(150)
|
Joint
venture
|
1,159
|
|
(77)
|
|
4,049
|
|
(77)
|
Net (loss) income
attributable to Summit Hotel
Properties, Inc.
|
(34,546)
|
|
11,534
|
|
(100,285)
|
|
73,368
|
Preferred
dividends
|
(3,710)
|
|
(3,710)
|
|
(11,128)
|
|
(11,128)
|
Net (loss) income
attributable to common
stockholders
|
$
(38,256)
|
|
$
7,824
|
|
$
(111,413)
|
|
$
62,240
|
(Loss) earnings per
share:
|
|
|
|
|
|
|
|
Basic and
diluted
|
$
(0.37)
|
|
$
0.07
|
|
$
(1.07)
|
|
$
0.60
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
104,200
|
|
103,935
|
|
104,117
|
|
103,861
|
Diluted
|
104,200
|
|
103,970
|
|
104,117
|
|
103,916
|
|
|
|
|
|
|
|
|
|
Summit Hotel
Properties, Inc.
Reconciliation of Net Income to Non-GAAP Measures – Funds From
Operations (Unaudited)
(Amounts in thousands, except per share and unit
amounts)
|
|
|
For the Three
Months Ended
September
30,
|
|
For the Nine
Months Ended
September
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
$
(35,775)
|
|
$
11,626
|
|
$
(104,537)
|
|
$
73,595
|
Preferred
dividends
|
(3,710)
|
|
(3,710)
|
|
(11,128)
|
|
(11,128)
|
Loss (income) from
non-controlling interests in
joint venture
|
1,159
|
|
(77)
|
|
4,049
|
|
(77)
|
Net (loss) income
applicable to common
shares and common units
|
$
(38,326)
|
|
$
7,839
|
|
$
(111,616)
|
|
$
62,390
|
Real estate-related
depreciation (1)
|
27,388
|
|
23,098
|
|
81,802
|
|
72,200
|
Loss on impairment of
assets
|
-
|
|
-
|
|
782
|
|
1,685
|
(Gain) loss on
disposal of assets, net
|
(211)
|
|
31
|
|
(176)
|
|
(39,655)
|
Provision for credit
losses
|
-
|
|
-
|
|
2,530
|
|
-
|
Adjustments from
non-controlling interest in
joint venture
|
(1,493)
|
|
(65)
|
|
(4,439)
|
|
(65)
|
FFO applicable to
common shares and
common units
|
$
(12,642)
|
|
$
30,903
|
|
$
(31,117)
|
|
$
96,555
|
Amortization of
lease-related intangible assets,
net
|
22
|
|
34
|
|
65
|
|
105
|
Amortization of
deferred financing costs
|
643
|
|
327
|
|
1,655
|
|
1,041
|
Amortization of
franchise fees (1)
|
115
|
|
104
|
|
345
|
|
317
|
Equity-based
compensation
|
1,517
|
|
1,450
|
|
4,958
|
|
4,766
|
Debt transaction
costs
|
65
|
|
12
|
|
336
|
|
1,847
|
Non-cash interest
income (2)
|
(757)
|
|
(694)
|
|
(2,297)
|
|
(1,713)
|
Non-cash lease
expense, net
|
101
|
|
104
|
|
275
|
|
383
|
Casualty losses,
net
|
117
|
|
231
|
|
407
|
|
82
|
Increase in deferred
tax asset valuation
allowance
|
-
|
|
-
|
|
2,058
|
|
-
|
Adjustments from
non-controlling interest in
joint venture
|
(78)
|
|
(1)
|
|
(235)
|
|
(1)
|
Severance
payments
|
91
|
|
-
|
|
91
|
|
-
|
AFFO applicable to
common shares and
common units
|
$
(10,806)
|
|
$
32,470
|
|
$
(23,459)
|
|
$
103,382
|
Weighted average
diluted common shares /
common units (3)
|
104,375
|
|
104,310
|
|
104,302
|
|
104,318
|
FFO per common share /
common unit
|
$
(0.12)
|
|
$
0.30
|
|
$
(0.30)
|
|
$
0.93
|
AFFO per common share
/ common unit
|
$
(0.10)
|
|
$
0.31
|
|
$
(0.22)
|
|
$
0.99
|
|
|
(1)
|
The total of these
line items represents depreciation and amortization as reported on
the Company's Condensed Consolidated
Statements of Operations for the periods presented.
|
|
|
(2)
|
Non-cash interest
income relates to the amortization of the discount on certain notes
receivable. The discount on these notes
receivable was recorded at inception of the related loans based on
the estimated value of the embedded purchase options in
the notes receivable.
|
|
|
(3)
|
The Company
includes the outstanding OP units issued by Summit Hotel OP, LP,
the Company's operating partnership, held
by limited partners other than the Company because the OP units are
redeemable for cash or, at the Company's option, shares
of the Company's common stock on a one-for-one
basis.
|
Summit Hotel
Properties, Inc. Reconciliation of Net Income to Non-GAAP
Measures – EBITDAre (Unaudited) (Dollars
in thousands)
|
|
|
For the Three
Months Ended
September
30,
|
|
For the Nine
Months Ended
September
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
$
(35,775)
|
|
$
11,626
|
|
$
(104,537)
|
|
$
73,595
|
Depreciation and
amortization
|
27,503
|
|
23,202
|
|
82,147
|
|
72,517
|
Interest
expense
|
10,904
|
|
9,450
|
|
32,665
|
|
30,068
|
Interest
income
|
(31)
|
|
(78)
|
|
(141)
|
|
(218)
|
Income tax (benefit)
expense
|
(132)
|
|
(24)
|
|
1,589
|
|
1,027
|
EBITDA
|
2,469
|
|
44,176
|
|
11,723
|
|
176,989
|
Loss on impairment of
assets
|
-
|
|
-
|
|
782
|
|
1,685
|
Provision for credit
losses
|
-
|
|
-
|
|
2,530
|
|
-
|
(Gain) loss on
disposal of assets, net
|
(211)
|
|
31
|
|
(176)
|
|
(39,655)
|
EBITDAre
|
2,258
|
|
44,207
|
|
14,859
|
|
139,019
|
Amortization of
lease-related intangible assets,
net
|
22
|
|
34
|
|
65
|
|
105
|
Equity-based
compensation
|
1,517
|
|
1,450
|
|
4,958
|
|
4,766
|
Debt transaction
costs
|
65
|
|
12
|
|
336
|
|
1,847
|
Non-cash interest
income (1)
|
(757)
|
|
(694)
|
|
(2,297)
|
|
(1,713)
|
Non-cash lease
expense, net
|
101
|
|
104
|
|
275
|
|
383
|
Casualty losses,
net
|
117
|
|
231
|
|
407
|
|
82
|
Loss (income) from
non-controlling interest in
joint venture
|
1,159
|
|
(77)
|
|
4,049
|
|
(77)
|
Adjustments from
non-controlling interest in
joint venture
|
(2,034)
|
|
(66)
|
|
(6,245)
|
|
(66)
|
Severance
payments
|
91
|
|
-
|
|
91
|
|
-
|
Adjusted
EBITDAre
|
$
2,539
|
|
$
45,201
|
|
$
16,498
|
|
$
144,346
|
|
|
(1)
|
Non-cash interest
income relates to the amortization of the discount on certain notes
receivable. The discount on these notes receivable
was recorded at inception of the related loans based on the
estimated value of the embedded purchase options in the notes
receivable.
|
Summit Hotel
Properties, Inc. Pro Forma Hotel Operating
Data (Unaudited) (Dollars in
thousands)
|
|
|
For the Three
Months Ended
September
30,
|
|
For the Nine
Months Ended
September
30,
|
Pro Forma
Operating Data (1) (2)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Pro forma room
revenue
|
$
48,636
|
|
$
133,358
|
|
$
171,067
|
|
$
404,238
|
Pro forma other hotel
operations revenue
|
3,777
|
|
11,206
|
|
15,166
|
|
34,322
|
Pro forma total
revenues
|
52,413
|
|
144,564
|
|
186,233
|
|
438,560
|
Pro forma total hotel
operating expenses
|
46,750
|
|
90,274
|
|
160,854
|
|
269,557
|
Pro forma hotel
EBITDA
|
$
5,663
|
|
$
54,290
|
|
$
25,379
|
|
$
169,003
|
Pro forma hotel
EBITDA Margin
|
10.8%
|
|
37.6%
|
|
13.6%
|
|
38.5%
|
|
|
Reconciliations of
Non-GAAP financial measures to comparable GAAP financial
measures
|
|
Revenue:
|
|
|
|
|
|
|
|
Total
revenues
|
$
52,412
|
|
$
133,685
|
|
$
186,233
|
|
$
415,567
|
Total revenues -
acquisitions (1)
|
-
|
|
12,761
|
|
-
|
|
38,003
|
Total revenues -
dispositions (2)
|
1
|
|
(1,882)
|
|
-
|
|
(15,010)
|
Pro forma total
revenues
|
52,413
|
|
144,564
|
|
186,233
|
|
438,560
|
|
|
|
|
|
|
|
|
Hotel Operating
Expenses:
|
|
|
|
|
|
|
|
Total hotel operating
expenses
|
46,749
|
|
85,676
|
|
160,858
|
|
262,143
|
Hotel operating
expenses - acquisitions (1)
|
-
|
|
6,145
|
|
-
|
|
18,954
|
Hotel operating
expenses - dispositions (2)
|
1
|
|
(1,547)
|
|
(4)
|
|
(11,540)
|
Pro forma hotel
operating expenses
|
46,750
|
|
90,274
|
|
160,854
|
|
269,557
|
|
|
|
|
|
|
|
|
Hotel
EBITDA:
|
|
|
|
|
|
|
|
Operating (loss)
income
|
(26,281)
|
|
19,244
|
|
(74,543)
|
|
101,435
|
(Gain) loss on
disposal of assets, net
|
(211)
|
|
31
|
|
(176)
|
|
(39,655)
|
Loss on impairment of
assets
|
-
|
|
-
|
|
782
|
|
1,685
|
Provision for credit
losses
|
-
|
|
-
|
|
2,530
|
|
-
|
Corporate general and
administrative
|
4,652
|
|
5,532
|
|
14,635
|
|
17,442
|
Depreciation and
amortization
|
27,503
|
|
23,202
|
|
82,147
|
|
72,517
|
Hotel
EBITDA
|
5,663
|
|
48,009
|
|
25,375
|
|
153,424
|
Hotel EBITDA -
acquisitions (1)
|
-
|
|
6,616
|
|
-
|
|
19,049
|
Hotel EBITDA -
dispositions (2)
|
-
|
|
(335)
|
|
4
|
|
(3,470)
|
Pro forma hotel
EBITDA
|
$
5,663
|
|
$
54,290
|
|
$
25,379
|
|
$
169,003
|
|
|
(1)
|
Unaudited
pro forma information includes operating results for 72 hotels
owned as of September 30, 2020, as if all such hotels had been
owned by the Company since January
1, 2019. For hotels acquired by the Company after January 1,
2019 (the "Acquired Hotels"), the Company has included in the pro
forma information the financial results of each
of the Acquired Hotels for the period from January 1, 2019, to the
date the Acquired Hotels were purchased by the Company (the
"Pre-acquisition Period"). The financial results
for the Pre-acquisition Period were provided by the third-party
owner of such Acquired Hotel prior to purchase by the Company and
have not been audited or reviewed by our
auditors or adjusted by us. The pro forma information
is included to enable comparison of results for the current
reporting period to results for the comparable period of the
prior year and are not indicative of future results.
|
|
|
(2)
|
For hotels sold by
the Company between January 1, 2019 and September 30, 2020 (the
"Disposed Hotels"), the unaudited pro forma information excludes
the financial results
of each of the Disposed Hotels for the period of ownership by the
Company from January 1, 2019 through the date that the Disposed
Hotels were sold by the Company.
|
Summit Hotel
Properties, Inc. Pro Forma Hotel Operating
Data (Unaudited) (Dollars in thousands, except
operating statistics)
|
|
|
2019
|
|
2020
|
|
Trailing
Twelve
|
Pro Forma
Operating Data (1) (2)
|
Q4
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Months
Ended
Sept 30,
2020
|
Pro forma room
revenue
|
$
122,384
|
|
$
98,603
|
|
$
23,828
|
|
$
48,636
|
|
$
293,451
|
Pro forma other hotel
operations revenue
|
11,318
|
|
9,782
|
|
1,607
|
|
3,777
|
|
26,484
|
Pro forma total
revenues
|
133,702
|
|
108,385
|
|
25,435
|
|
52,413
|
|
319,935
|
Pro forma total hotel
operating expenses
|
87,333
|
|
78,660
|
|
35,444
|
|
46,750
|
|
248,187
|
Pro forma hotel
EBITDA
|
$
46,369
|
|
$
29,725
|
|
$
(10,009)
|
|
$
5,663
|
|
$
71,748
|
Pro forma hotel
EBITDA Margin
|
34.7%
|
|
27.4%
|
|
-39.4%
|
|
10.8%
|
|
22.4%
|
|
|
|
|
|
|
|
|
|
|
Pro Forma
Statistics (1) (2)
|
|
|
|
|
|
|
|
|
|
Rooms sold
|
788,040
|
|
630,278
|
|
249,310
|
|
467,734
|
|
2,135,362
|
Rooms
available
|
1,038,496
|
|
1,027,208
|
|
1,027,208
|
|
1,038,496
|
|
4,131,408
|
Occupancy
|
75.9%
|
|
61.4%
|
|
24.3%
|
|
45.0%
|
|
51.7%
|
ADR
|
$
155.30
|
|
$
156.44
|
|
$
95.57
|
|
$
103.98
|
|
$
137.42
|
RevPAR
|
$
117.85
|
|
$
95.99
|
|
$
23.20
|
|
$
46.83
|
|
$
71.03
|
|
|
|
|
|
|
|
|
|
|
Actual
Statistics
|
|
|
|
|
|
|
|
|
|
Rooms sold
|
790,751
|
|
630,278
|
|
249,310
|
|
467,734
|
|
2,138,073
|
Rooms
available
|
1,042,076
|
|
1,027,208
|
|
1,027,208
|
|
1,038,496
|
|
4,134,988
|
Occupancy
|
75.9%
|
|
61.4%
|
|
24.3%
|
|
45.0%
|
|
51.7%
|
ADR
|
$
154.88
|
|
$
156.44
|
|
$
95.57
|
|
$
103.98
|
|
$
137.29
|
RevPAR
|
$
117.53
|
|
$
95.99
|
|
$
23.20
|
|
$
46.83
|
|
$
70.99
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliations of
Non-GAAP financial measures to comparable GAAP financial
measures
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
$
133,781
|
|
$
108,385
|
|
$
25,436
|
|
$
52,412
|
|
$
320,014
|
Total revenues from
acquisitions (1)
|
775
|
|
-
|
|
-
|
|
-
|
|
775
|
Total revenues from
dispositions (2)
|
(854)
|
|
-
|
|
(1)
|
|
1
|
|
(854)
|
Pro forma total
revenues
|
133,702
|
|
108,385
|
|
25,435
|
|
52,413
|
|
319,935
|
|
|
|
|
|
|
|
|
|
|
Hotel Operating
Expenses:
|
|
|
|
|
|
|
|
|
|
Total hotel operating
expenses
|
87,629
|
|
78,663
|
|
35,446
|
|
46,749
|
|
248,487
|
Total hotel operating
expenses from acquisitions (1)
|
520
|
|
-
|
|
-
|
|
-
|
|
520
|
Total hotel operating
expenses from dispositions (2)
|
(816)
|
|
(3)
|
|
(2)
|
|
1
|
|
(820)
|
Pro forma total
hotel operating expenses
|
87,333
|
|
78,660
|
|
35,444
|
|
46,750
|
|
248,187
|
|
|
|
|
|
|
|
|
|
|
Hotel
EBITDA:
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
17,971
|
|
(5,340)
|
|
(42,922)
|
|
(26,281)
|
|
(56,572)
|
(Gain) loss on
disposal of assets, net
|
(5,763)
|
|
3
|
|
32
|
|
(211)
|
|
(5,939)
|
Loss on impairment of
assets
|
836
|
|
782
|
|
-
|
|
-
|
|
1,618
|
Provision for credit
losses
|
-
|
|
2,530
|
|
-
|
|
-
|
|
2,530
|
Corporate general and
administrative
|
6,180
|
|
4,668
|
|
5,315
|
|
4,652
|
|
20,815
|
Depreciation and
amortization
|
26,928
|
|
27,079
|
|
27,565
|
|
27,503
|
|
109,075
|
Hotel
EBITDA
|
46,152
|
|
29,722
|
|
(10,010)
|
|
5,663
|
|
71,527
|
Hotel EBITDA from
acquisitions (1)
|
255
|
|
-
|
|
-
|
|
-
|
|
255
|
Hotel EBITDA from
dispositions (2)
|
(38)
|
|
3
|
|
1
|
|
-
|
|
(34)
|
Pro forma hotel
EBITDA
|
$
46,369
|
|
$
29,725
|
|
$
(10,009)
|
|
$
5,663
|
|
$
71,748
|
|
|
(1)
|
Unaudited pro
forma information includes operating results for 72 hotels owned as
of September 30, 2020 as if all such hotels had been owned by the
Company since October
1, 2019. For hotels acquired by the Company after October 1,
2019 (the "Acquired Hotels"), the Company has included in the pro
forma information the financial results of each
of the Acquired Hotels for the period from October 1, 2019 to the
date the Acquired Hotels were purchased by the Company (the
"Pre-acquisition Period"). The financial results for the
Pre-acquisition Period were provided by the third-party owner of
such Acquired Hotel prior to purchase by the Company and have not
been audited or reviewed by our auditors or adjusted by
us. The pro forma information is included to enable
comparison of results for the current reporting period to results
for the comparable period of the prior year and are not indicative
of future results.
|
|
|
(2)
|
For hotels sold by
the Company between October 1, 2019 and September 30, 2020 (the
"Disposed Hotels"), the pro forma information excludes the
financial results of each of the Disposed Hotels for the period of
ownership by the Company from October 1, 2019 through the date that
the Disposed Hotels were sold by the Company.
|
Summit Hotel
Properties, Inc. Pro Forma and Same-Store
Data (Unaudited)
|
|
|
For the Three
Months Ended
September
30,
|
|
For the Nine
Months Ended
September
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Pro Forma
(1)
|
|
|
|
|
|
|
|
Rooms sold
|
467,734
|
|
838,378
|
|
1,347,322
|
|
2,463,477
|
Rooms
available
|
1,038,496
|
|
1,038,496
|
|
3,092,912
|
|
3,081,504
|
Occupancy
|
45.0%
|
|
80.7%
|
|
43.6%
|
|
79.9%
|
ADR
|
$
103.98
|
|
$
159.07
|
|
$
126.97
|
|
$
164.09
|
RevPAR
|
$
46.83
|
|
$
128.41
|
|
$
55.31
|
|
$
131.18
|
|
|
|
|
|
|
|
|
Occupancy
change
|
-44.2%
|
|
|
|
-45.5%
|
|
|
ADR
change
|
-34.6%
|
|
|
|
-22.6%
|
|
|
RevPAR
change
|
-63.5%
|
|
|
|
-57.8%
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
September
30,
|
|
For the Nine
Months Ended
September
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Same-Store
(2)
|
|
|
|
|
|
|
|
Rooms sold
|
428,046
|
|
772,938
|
|
1,240,433
|
|
2,276,614
|
Rooms
available
|
965,080
|
|
965,080
|
|
2,874,260
|
|
2,863,650
|
Occupancy
|
44.4%
|
|
80.1%
|
|
43.2%
|
|
79.5%
|
ADR
|
$
101.83
|
|
$
156.00
|
|
$
125.56
|
|
$
161.57
|
RevPAR
|
$
45.17
|
|
$
124.94
|
|
$
54.19
|
|
$
128.45
|
|
|
|
|
|
|
|
|
Occupancy
change
|
-44.6%
|
|
|
|
-45.7%
|
|
|
ADR
change
|
-34.7%
|
|
|
|
-22.3%
|
|
|
RevPAR
change
|
-63.9%
|
|
|
|
-57.8%
|
|
|
|
|
(1)
|
Unaudited pro
forma information includes operating results for 72 hotels owned as
of September 30, 2020, as if each hotel had been owned by the
Company since January 1, 2019. As a result, these pro forma
operating and financial measures include operating results for
certain hotels for
periods prior to the Company's ownership.
|
|
|
(2)
|
Same-store
information includes operating results for 67 hotels owned by the
Company as of January 1, 2019, and at all times during the three
and
nine months ended September 30, 2020, and 2019.
|
Non-GAAP Financial Measures
We disclose certain
"non-GAAP financial measures," which are measures of our historical
financial performance. Non-GAAP financial measures are financial
measures not prescribed by Generally Accepted Accounting Principles
("GAAP"). These measures are as follows: (i) Funds From
Operations ("FFO") and Adjusted Funds from Operations ("AFFO"),
(ii) Earnings before Interest, Taxes, Depreciation and Amortization
("EBITDA"), Earnings before Interest, Taxes, Depreciation and
Amortization for Real Estate ("EBITDAre"), Adjusted
EBITDAre, and hotel EBITDA (as described below). We caution
investors that amounts presented in accordance with our definitions
of non-GAAP financial measures may not be comparable to similar
measures disclosed by other companies, since not all companies
calculate these non-GAAP financial measures in the same manner. Our
non-GAAP financial measures should be considered along with, but
not as alternatives to, net income (loss) as a measure of our
operating performance. Our non-GAAP financial measures may include
funds that may not be available for our discretionary use due to
functional requirements to conserve funds for capital expenditures,
property acquisitions, debt service obligations and other
commitments and uncertainties. Although we believe that our
non-GAAP financial measures can enhance the understanding of our
financial condition and results of operations, these non-GAAP
financial measures are not necessarily better indicators of any
trend as compared to a comparable measure prescribed by GAAP such
as net income (loss).
Funds From Operations ("FFO") and Adjusted FFO
("AFFO")
As defined by Nareit, FFO represents net income or loss
(computed in accordance with GAAP), excluding preferred dividends,
gains (or losses) from sales of real property, impairment losses on
real estate assets, items classified by GAAP as extraordinary, the
cumulative effect of changes in accounting principles, plus
depreciation and amortization related to real estate assets, and
adjustments for unconsolidated partnerships, and joint ventures.
AFFO represents FFO excluding amortization of deferred financing
costs, franchise fees, equity-based compensation expense, debt
transaction costs, premiums on redemption of preferred shares,
losses from net casualties, non-cash lease expense, non-cash
interest income and non-cash income tax related adjustments to our
deferred tax assets. Unless otherwise indicated, we present FFO and
AFFO applicable to our common shares and common units. We present
FFO and AFFO because we consider FFO and AFFO an important
supplemental measure of our operational performance and believe it
is frequently used by securities analysts, investors and other
interested parties in the evaluation of REITs, many of which
present FFO and AFFO when reporting their results. FFO and AFFO are
intended to exclude GAAP historical cost depreciation and
amortization, which assumes that the value of real estate assets
diminishes ratably over time. Historically, however, real estate
values have risen or fallen with market conditions. Because FFO and
AFFO exclude depreciation and amortization related to real estate
assets, gains and losses from real property dispositions and
impairment losses on real estate assets, FFO and AFFO provide
performance measures that, when compared year over year, reflect
the effect to operations from trends in occupancy, guestroom rates,
operating costs, development activities and interest costs,
providing perspective not immediately apparent from net income. Our
computation of FFO differs slightly from the computation of
Nareit-defined FFO related to the reporting of corporate
depreciation and amortization expense. Our computation of FFO may
also differ from the methodology for calculating FFO used by other
equity REITs and, accordingly, may not be comparable to such other
REITs. FFO and AFFO should not be considered as an alternative to
net income (loss) (computed in accordance with GAAP) as an
indicator of our liquidity, nor is it indicative of funds available
to fund our cash needs, including our ability to pay dividends or
make distributions. Where indicated in this release, FFO is
based on our computation of FFO and not the computation of
Nareit-defined FFO unless otherwise noted.
EBITDA, EBITDAre, Adjusted EBITDAre, and Hotel
EBITDA
EBITDA
EBITDA represents net income or loss, excluding:
(i) interest, (ii) income tax expense and
(iii) depreciation and amortization. We believe EBITDA is
useful to an investor in evaluating our operating performance
because it provides investors with an indication of our ability to
incur and service debt, to satisfy general operating expenses, to
make capital expenditures and to fund other cash needs or reinvest
cash into our business. We also believe it helps investors
meaningfully evaluate and compare the results of our operations
from period to period by removing the effect of our asset base
(primarily depreciation and amortization) from our operating
results. Our management team also uses EBITDA as one measure in
determining the value of acquisitions and dispositions.
EBITDAre and Adjusted EBITDAre
EBITDAre is based on EBITDA and is expected to provide
additional relevant information about REITs as real estate
companies in support of growing interest among generalist
investors. EBITDAre is intended to be a supplemental
non-GAAP performance measure that is independent of a company's
capital structure and will provide a uniform basis to measure the
enterprise value of a company compared to other REITs.
EBITDAre, as defined by Nareit, is calculated as EBITDA,
excluding: (i) loss and gains on disposition of property and (ii)
asset impairments, if any. We believe EBITDAre is useful to
an investor in evaluating our operating performance because it
provides investors with an indication of our ability to incur and
service debt, to satisfy general operating expenses, to make
capital expenditures and to fund other cash needs or reinvest cash
into our business. We also believe it helps investors meaningfully
evaluate and compare the results of our operations from period to
period by removing the effect of our asset base (primarily
depreciation and amortization) from our operating results.
We make additional adjustments to EBITDAre when
evaluating our performance because we believe that the exclusion of
certain additional non-recurring or certain non-cash items
described below provides useful supplemental information to
investors regarding our ongoing operating performance. We believe
that the presentation of Adjusted EBITDAre, when combined
with the primary GAAP presentation of net income, is useful to an
investor in evaluating our operating performance because it
provides investors with an indication of our ability to incur and
service debt, to satisfy general operating expenses, to make
capital expenditures and to fund other cash needs or reinvest cash
into our business. We also believe it helps investors meaningfully
evaluate and compare the results of our operations from period to
period by removing the effect of our asset base (primarily
depreciation and amortization) from our operating results.
Hotel EBITDA
With respect to hotel EBITDA, we believe that excluding the
effect of corporate-level expenses and non-cash items provides a
more complete understanding of the operating results over which
individual hotels and operators have direct control. We
believe the property-level results provide investors with
supplemental information on the ongoing operational performance of
our hotels and effectiveness of the third-party management
companies operating our business on a property-level basis.
We caution investors that amounts presented in accordance with
our definitions of EBITDA, EBITDAre, adjusted
EBITDAre, and hotel EBITDA may not be comparable to similar
measures disclosed by other companies, since not all companies
calculate these non-GAAP measures in the same manner. EBITDA,
EBITDAre, adjusted EBITDAre, and hotel EBITDA should
not be considered as an alternative measure of our net income
(loss) or operating performance. EBITDA, EBITDAre adjusted
EBITDAre, and hotel EBITDA may include funds that may not be
available for our discretionary use due to functional requirements
to conserve funds for capital expenditures and property
acquisitions and other commitments and uncertainties. Although we
believe that EBITDA, EBITDAre, adjusted EBITDAre, and
hotel EBITDA can enhance your understanding of our financial
condition and results of operations, these non-GAAP financial
measures are not necessarily a better indicator of any trend as
compared to a comparable GAAP measure such as net income (loss).
Above, we include a quantitative reconciliation of EBITDA,
EBITDAre, adjusted EBITDAre and hotel EBITDA to the
most directly comparable GAAP financial performance measure, which
is net income (loss) and operating income (loss).
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SOURCE Summit Hotel Properties, Inc.