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, 2024.
The Company’s results include the following*:
|
Three Months
Ended |
|
|
March 31, 2024 |
|
|
March 31, 2023 |
|
|
($ in thousands
except per share data) |
|
Total revenue |
$ |
46,548 |
|
|
$ |
43,491 |
|
Net loss attributable to common stockholders |
|
(659 |
) |
|
|
(582 |
) |
|
|
|
|
|
|
EBITDA |
|
10,785 |
|
|
|
9,948 |
|
Hotel EBITDA |
|
12,360 |
|
|
|
12,079 |
|
|
|
|
|
|
|
FFO attributable to common stockholders and unitholders |
|
3,961 |
|
|
|
3,941 |
|
Adjusted FFO attributable to common stockholders and
unitholders |
|
5,178 |
|
|
|
4,658 |
|
|
|
|
|
|
|
Net loss per common share - diluted |
$ |
(0.03 |
) |
|
$ |
(0.03 |
) |
FFO per common share and unit |
$ |
0.20 |
|
|
$ |
0.20 |
|
Adjusted FFO per common share and unit |
$ |
0.26 |
|
|
$ |
0.24 |
|
(*) 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 3.8% to $123.59, for the three months ended March 31,
2024, from $119.06 in the comparable period in 2023. Changes in
RevPAR were driven by a 4.5% increase in occupancy to 64.9% from
60.4% in the comparable 2023 period, and a 3.3% decrease in the
average daily rate (“ADR”) to $190.50 for the three months ended
March 31, 2024, from $197.07 for the comparable period in
2023.
- Revenue. Total revenue was approximately
$46.5 million and $43.5 million, for the three month periods ended
March 31, 2024 and 2023, respectively.
- Net loss attributable to common stockholders.
For the three-month period ending March 31, 2024, net loss
attributable to common stockholders increased approximately $0.1
million, compared to the three months ended March 31, 2023, from a
loss of approximately $0.6 million to a loss of approximately $0.7
million.
- Hotel EBITDA. Hotel EBITDA increased to
approximately $12.4 million for the three months ended March 31,
2024, from approximately $12.1 million for the comparable period in
2023.
- Adjusted FFO attributable to common stockholders and
unitholders. For the three-month period ending March 31,
2024, adjusted FFO attributable to common stockholders and
unitholders increased 11.2%, or approximately $0.5 million, over
the three months ended March 31, 2023, from approximately $4.7
million to approximately $5.2 million.
- Preferred Dividends. On January 29, 2024 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
$0.492188 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 March 15, 2024 to
shareholders of record as of February 29, 2024.
Dave Folsom, President and Chief Executive Officer of Sotherly
Hotels Inc., commented, "We were pleased with our first quarter
results. Total revenues exceeded prior year by 7.0%, while EBITDA
exceeded prior year by over 8.0%. We continued to see improvements
at the property level, with overall RevPAR increasing nearly 4.0%
in the quarter as compared to the prior year, driven by a strong
4.5% pickup in occupancy. Hotel EBITDA also showed improvement over
prior year. All of these results reflect both continued strength in
our portfolio as well as the markets in which we own hotels.
Booking of group business remains strong, with our full-year
booking pace up 6.9% compared to prior year. Leisure and business
travel continue to show sustainability and improvement,
respectively. On the corporate front, the Company executed an
important mortgage refinancing of its Hotel Alba in Tampa, Florida,
in the first quarter, where we realized over $10.0 million in net
cash proceeds from the new loan. The headwinds associated with
commercial mortgage markets continue to present challenges to real
estate borrowers, but we are confident that we will be able to
navigate upcoming maturities by either extending existing mortgages
or refinancing them on favorable terms with new or existing
lenders. Looking forward to the remainder of the year, we are
optimistic about demand trends and our portfolio’s profitability
outlook."
Balance Sheet/Liquidity
As of March 31, 2024, the Company had approximately $39.6
million of available cash and cash equivalents, of which
approximately $10.3 million was reserved for real estate taxes,
insurance, capital improvements and certain other expenses or
otherwise restricted. The Company had principal balances of
approximately $328.0 million in outstanding debt, including
mortgage and unsecured principal balances, at a weighted average
interest rate of approximately 5.43%.
Other Events
On February 7, 2024, affiliates of the Company
entered into loan documents to refinance its loan in the principal
amount of $35.0 million on the Hotel Alba Tampa located in Tampa,
FL with Citi Real Estate Funding Inc. The Company received
approximately $10.25 million in net proceeds. Pursuant to the
amended loan documents, the mortgage loan has a principal balance
of $35.0 million; matures on March 6, 2029; carries a fixed
interest rate of 8.49%; requires payments of interest only; is
guaranteed by the Operating Partnership only for traditional “bad
boy” acts; cannot be prepaid until the last four months of the
term; and contains customary representations, warranties, covenants
and events of default for a mortgage loan.
On April 29, 2024, the Company entered into a loan amendment to
amend the existing mortgage on the DoubleTree by Hilton
Philadelphia Airport hotel with the existing lender, TD Bank, N.A.
Pursuant to the amended loan documents, the mortgage loan: (i) has
a principal balance of approximately $35.9 million; (ii) extends
the maturity date by two years to April 29, 2026; (iii) continues
to carry a floating interest rate of SOFR plus 3.50%; (iv) requires
payments of interest only; (v) continues to be guaranteed by the
Operating Partnership; and (vi) contains customary representations,
warranties, covenants and events of default for a mortgage loan.
Concurrent with the execution of the loan amendment, the Company
(i) made a principal payment of $3.0 million; (ii) funded $0.3
million to the interest reserve escrow, bringing the balance in the
interest reserve escrow account to $1.3 million; and (iii) funded
$5.0 million into a PIP reserve account, and (iv) provided $1.7
million in additional cash collateral, of which $1.2 million can be
released into the PIP reserve account as early as June 30, 2025
assuming compliance with the financial covenants. On May 3, 2024,
an affiliate of the Company entered into an interest rate cap with
a notional amount of $26.0 million with Webster Bank, N.A. The cap
has a strike rate of 3.0%, is indexed to SOFR, and expires on May
1, 2026.
2024 Outlook
Set forth below is the Company's previously issued guidance for
2024. The table below reflects the Company’s projections, within a
range, of various financial measures for 2024, in thousands of
dollars, except per share and RevPAR data:
|
2024 Guidance |
|
|
Low Range |
|
|
High Range |
|
|
|
|
Total revenue |
$ |
178,952 |
|
|
$ |
182,567 |
|
Net income |
|
1,598 |
|
|
|
2,593 |
|
Net loss available to common stockholders and unitholders |
|
(6,377 |
) |
|
|
(5,382 |
) |
|
|
|
|
|
|
EBITDA |
|
39,858 |
|
|
|
40,853 |
|
Hotel EBITDA |
|
46,103 |
|
|
|
46,898 |
|
|
|
|
|
|
|
FFO available to common stockholders and unitholders |
|
12,373 |
|
|
|
13,368 |
|
Adjusted FFO available to common stockholders and
unitholders |
|
12,778 |
|
|
|
13,773 |
|
|
|
|
|
|
|
Net loss per share available to common
stockholders |
$ |
(0.32 |
) |
|
$ |
(0.27 |
) |
FFO per common share and unit |
$ |
0.62 |
|
|
$ |
0.67 |
|
Adjusted FFO per common share and unit |
$ |
0.64 |
|
|
$ |
0.69 |
|
Rev PAR |
$ |
117.16 |
|
|
$ |
119.52 |
|
Hotel EBITDA margin |
|
25.8 |
% |
|
|
25.7 |
% |
Earnings Call/Webcast
The Company will conduct its first quarter 2024 conference call
for investors and other interested parties at 10:00 a.m. Eastern
Time on Thursday, May 9, 2024. 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) and enter access code 218035. 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 9, 2024 through May 23,
2024. To access the rebroadcast, dial 866-813-9403 and enter access
code 940385.
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, 2024 |
|
|
December 31, 2023 |
|
|
|
(unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
Investment in hotel properties, net |
|
$ |
352,455,889 |
|
|
$ |
354,919,106 |
|
Cash and cash equivalents |
|
|
29,285,600 |
|
|
|
17,101,993 |
|
Restricted cash |
|
|
10,341,209 |
|
|
|
9,134,347 |
|
Accounts receivable, net |
|
|
6,968,335 |
|
|
|
5,945,724 |
|
Prepaid expenses, inventory and other assets |
|
|
5,637,355 |
|
|
|
6,342,310 |
|
TOTAL
ASSETS |
|
$ |
404,688,388 |
|
|
$ |
393,443,480 |
|
LIABILITIES |
|
|
|
|
|
|
Mortgage loans, net |
|
$ |
325,106,994 |
|
|
$ |
315,989,194 |
|
Unsecured notes |
|
|
1,347,998 |
|
|
|
1,536,809 |
|
Accounts payable and accrued liabilities |
|
|
25,782,354 |
|
|
|
23,315,677 |
|
Advance deposits |
|
|
2,879,763 |
|
|
|
2,614,981 |
|
Dividends and distributions payable |
|
|
2,088,160 |
|
|
|
2,088,160 |
|
TOTAL
LIABILITIES |
|
$ |
357,205,269 |
|
|
$ |
345,544,821 |
|
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 each $44,655,050, at March 31, 2024 and
December 31, 2023, 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 each $40,940,681, at March 31, 2024 and
December 31, 2023, 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 each $35,674,458, at March 31, 2024 and
December 31, 2023, respectively. |
|
|
11,631 |
|
|
|
11,631 |
|
Common stock, par value $0.01, 69,000,000 shares authorized,
19,849,165 shares issued and outstanding at March 31, 2024 and
19,696,805 shares issued and outstanding at December 31, 2023. |
|
|
198,492 |
|
|
|
196,968 |
|
Additional paid-in capital |
|
|
176,000,351 |
|
|
|
175,779,222 |
|
Unearned ESOP shares |
|
|
(1,731,209 |
) |
|
|
(1,764,507 |
) |
Distributions in excess of retained earnings |
|
|
(125,680,386 |
) |
|
|
(125,021,013 |
) |
Total Sotherly Hotels Inc. stockholders’ equity |
|
|
48,826,981 |
|
|
|
49,230,403 |
|
Noncontrolling interest |
|
|
(1,343,862 |
) |
|
|
(1,331,744 |
) |
TOTAL
EQUITY |
|
|
47,483,119 |
|
|
|
47,898,659 |
|
TOTAL LIABILITIES AND
EQUITY |
|
$ |
404,688,388 |
|
|
$ |
393,443,480 |
|
SOTHERLY
HOTELS INC.CONSOLIDATED STATEMENTS OF
OPERATIONS(unaudited) |
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
|
March 31, 2024 |
|
|
March 31, 2023 |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
REVENUE |
|
|
|
|
|
|
Rooms department |
|
$ |
29,739,657 |
|
|
$ |
28,401,688 |
|
Food and beverage department |
|
|
9,752,449 |
|
|
|
8,748,726 |
|
Other operating departments |
|
|
7,056,326 |
|
|
|
6,340,863 |
|
Total revenue |
|
|
46,548,432 |
|
|
|
43,491,277 |
|
EXPENSES |
|
|
|
|
|
|
Hotel operating expenses |
|
|
|
|
|
|
Rooms department |
|
|
6,552,184 |
|
|
|
6,413,094 |
|
Food and beverage department |
|
|
6,464,855 |
|
|
|
5,935,560 |
|
Other operating departments |
|
|
2,686,142 |
|
|
|
2,315,848 |
|
Indirect |
|
|
18,484,896 |
|
|
|
16,747,577 |
|
Total hotel operating expenses |
|
|
34,188,077 |
|
|
|
31,412,079 |
|
Depreciation and amortization |
|
|
4,769,717 |
|
|
|
4,578,311 |
|
Corporate general and administrative |
|
|
1,916,526 |
|
|
|
1,980,765 |
|
Total hotel operating expenses |
|
|
40,874,320 |
|
|
|
37,971,155 |
|
NET OPERATING
INCOME |
|
|
5,674,112 |
|
|
|
5,520,122 |
|
Other income (expense) |
|
|
|
|
|
|
Interest expense |
|
|
(4,888,806 |
) |
|
|
(4,113,597 |
) |
Interest income |
|
|
214,772 |
|
|
|
146,665 |
|
Other income |
|
|
124,877 |
|
|
|
— |
|
Loss on early extinguishment of debt |
|
|
(241,878 |
) |
|
|
— |
|
Realized gain and unrealized (loss) on hedging activities |
|
|
335,446 |
|
|
|
(442,464 |
) |
PPP debt forgiveness |
|
|
— |
|
|
|
275,494 |
|
Gain on involuntary conversion of assets |
|
|
122,391 |
|
|
|
16,476 |
|
Net income before income
taxes |
|
|
1,340,914 |
|
|
|
1,402,696 |
|
Income tax provision |
|
|
(18,093 |
) |
|
|
(15,182 |
) |
Net income |
|
|
1,322,821 |
|
|
|
1,387,514 |
|
Add: Net loss attributable to noncontrolling interest |
|
|
12,118 |
|
|
|
24,960 |
|
Net income attributable to the
Company |
|
|
1,334,939 |
|
|
|
1,412,474 |
|
Undeclared distributions to preferred stockholders |
|
|
(1,994,312 |
) |
|
|
(1,994,312 |
) |
Net loss attributable to
common stockholders |
|
$ |
(659,373 |
) |
|
$ |
(581,838 |
) |
Net loss per share
attributable to common stockholders: |
|
|
|
|
|
|
Basic |
|
$ |
(0.03 |
) |
|
$ |
(0.03 |
) |
Diluted |
|
$ |
(0.03 |
) |
|
$ |
(0.03 |
) |
Weighted average number of
common shares outstanding |
|
|
|
|
|
|
Basic |
|
|
19,359,151 |
|
|
|
18,635,004 |
|
Diluted |
|
|
19,359,151 |
|
|
|
18,635,004 |
|
SOTHERLY HOTELS INC.KEY
OPERATING METRICS(unaudited)
The following tables illustrate the key operating metrics for
the three months ended March 31, 2024 and 2023, 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 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, 2024 and the corresponding period
in 2023.
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
|
March 31, 2024 |
|
|
March 31, 2023 |
|
Actual Portfolio Metrics |
|
|
|
|
|
|
Occupancy % |
|
|
64.2 |
% |
|
|
60.5 |
% |
ADR |
|
$ |
182.75 |
|
|
$ |
187.19 |
|
RevPAR |
|
$ |
117.30 |
|
|
$ |
113.27 |
|
Composite Portfolio
Metrics |
|
|
|
|
|
|
Occupancy % |
|
|
64.9 |
% |
|
|
60.4 |
% |
ADR |
|
$ |
190.50 |
|
|
$ |
197.07 |
|
RevPAR |
|
$ |
123.59 |
|
|
$ |
119.06 |
|
SOTHERLY HOTELS
INC.SUPPLEMENTAL
DATA(unaudited)
The following tables illustrate the key operating metrics for
the three months ended March 31, 2024, 2023, and 2022,
respectively, for each of the Company’s wholly-owned properties
during each respective reporting period, irrespective of ownership
percentage during any period.
Occupancy
|
Q1 2024 |
|
|
Q1 2023 |
|
|
Q1 2022 |
|
The DeSoto Savannah, Georgia |
|
70.9 |
% |
|
|
64.4 |
% |
|
|
62.0 |
% |
DoubleTree by Hilton Jacksonville Riverfront Jacksonville,
Florida |
|
70.2 |
% |
|
|
71.0 |
% |
|
|
64.5 |
% |
DoubleTree by Hilton Laurel Laurel, Maryland |
|
47.2 |
% |
|
|
47.2 |
% |
|
|
47.8 |
% |
DoubleTree by Hilton Philadelphia Airport Philadelphia,
Pennsylvania |
|
45.2 |
% |
|
|
54.5 |
% |
|
|
56.0 |
% |
DoubleTree Resort by Hilton Hollywood Beach Hollywood,
Florida |
|
75.5 |
% |
|
|
64.9 |
% |
|
|
63.4 |
% |
Georgian Terrace Atlanta, Georgia |
|
58.5 |
% |
|
|
46.7 |
% |
|
|
48.9 |
% |
Hotel Alba Tampa, Tapestry Collection by Hilton Tampa,
Florida |
|
83.8 |
% |
|
|
83.4 |
% |
|
|
81.1 |
% |
Hotel Ballast Wilmington, Tapestry Collection by Hilton
Wilmington, North Carolina |
|
60.2 |
% |
|
|
55.8 |
% |
|
|
43.1 |
% |
Hyatt Centric Arlington Arlington, Virginia |
|
73.0 |
% |
|
|
70.3 |
% |
|
|
43.8 |
% |
The Whitehall Houston, Texas |
|
59.1 |
% |
|
|
48.6 |
% |
|
|
36.3 |
% |
Hyde Resort & Residences (1) Hollywood Beach, Florida |
|
78.7 |
% |
|
|
60.5 |
% |
|
|
62.2 |
% |
Hyde Beach House Resort & Residences (1) Hollywood Beach,
Florida |
|
82.7 |
% |
|
|
56.6 |
% |
|
|
51.3 |
% |
All properties weighted
average |
|
64.9 |
% |
|
|
60.4 |
% |
|
|
53.9 |
% |
(1 |
) |
Reflects only those condominium
units participating in our rental program for the period. |
ADR
|
Q1 2024 |
|
|
Q1 2023 |
|
|
Q1 2022 |
|
The DeSoto Savannah, Georgia |
$ |
213.38 |
|
|
$ |
211.97 |
|
|
$ |
200.95 |
|
DoubleTree by Hilton Jacksonville Riverfront Jacksonville,
Florida |
$ |
148.38 |
|
|
$ |
160.63 |
|
|
$ |
148.26 |
|
DoubleTree by Hilton Laurel Laurel, Maryland |
$ |
124.42 |
|
|
$ |
120.26 |
|
|
$ |
105.50 |
|
DoubleTree by Hilton Philadelphia Airport Philadelphia,
Pennsylvania |
$ |
123.62 |
|
|
$ |
127.52 |
|
|
$ |
114.79 |
|
DoubleTree Resort by Hilton Hollywood Beach Hollywood,
Florida |
$ |
230.67 |
|
|
$ |
265.97 |
|
|
$ |
253.85 |
|
Georgian Terrace Atlanta, Georgia |
$ |
188.60 |
|
|
$ |
206.82 |
|
|
$ |
191.54 |
|
Hotel Alba Tampa, Tapestry Collection by Hilton Tampa,
Florida |
$ |
215.30 |
|
|
$ |
214.33 |
|
|
$ |
187.56 |
|
Hotel Ballast Wilmington, Tapestry Collection by Hilton
Wilmington, North Carolina |
$ |
164.87 |
|
|
$ |
163.84 |
|
|
$ |
165.53 |
|
Hyatt Centric Arlington Arlington, Virginia |
$ |
198.85 |
|
|
$ |
193.53 |
|
|
$ |
158.05 |
|
The Whitehall Houston, Texas |
$ |
163.57 |
|
|
$ |
164.55 |
|
|
$ |
145.64 |
|
Hyde Resort & Residences (1) Hollywood Beach, Florida |
$ |
368.11 |
|
|
$ |
443.65 |
|
|
$ |
505.41 |
|
Hyde Beach House Resort & Residences (1) Hollywood Beach,
Florida |
$ |
307.82 |
|
|
$ |
368.33 |
|
|
$ |
455.52 |
|
All properties weighted
average |
$ |
190.50 |
|
|
$ |
197.07 |
|
|
$ |
187.23 |
|
(1 |
) |
Reflects only those condominium
units participating in our rental program for the period. |
RevPAR
|
Q1 2024 |
|
|
Q1 2023 |
|
|
Q1 2022 |
|
The DeSoto Savannah, Georgia |
$ |
151.37 |
|
|
$ |
136.43 |
|
|
$ |
124.54 |
|
DoubleTree by Hilton Jacksonville Riverfront Jacksonville,
Florida |
$ |
104.15 |
|
|
$ |
114.05 |
|
|
$ |
95.60 |
|
DoubleTree by Hilton Laurel Laurel, Maryland |
$ |
58.67 |
|
|
$ |
56.71 |
|
|
$ |
50.46 |
|
DoubleTree by Hilton Philadelphia Airport Philadelphia,
Pennsylvania |
$ |
55.92 |
|
|
$ |
69.51 |
|
|
$ |
64.31 |
|
DoubleTree Resort by Hilton Hollywood Beach Hollywood,
Florida |
$ |
174.07 |
|
|
$ |
172.66 |
|
|
$ |
160.95 |
|
Georgian Terrace Atlanta, Georgia |
$ |
110.35 |
|
|
$ |
96.65 |
|
|
$ |
93.64 |
|
Hotel Alba Tampa, Tapestry Collection by Hilton Tampa,
Florida |
$ |
180.37 |
|
|
$ |
178.83 |
|
|
$ |
152.11 |
|
Hotel Ballast Wilmington, Tapestry Collection by Hilton
Wilmington, North Carolina |
$ |
99.25 |
|
|
$ |
91.46 |
|
|
$ |
71.35 |
|
Hyatt Centric Arlington Arlington, Virginia |
$ |
145.21 |
|
|
$ |
136.11 |
|
|
$ |
69.27 |
|
The Whitehall Houston, Texas |
$ |
96.60 |
|
|
$ |
80.03 |
|
|
$ |
52.88 |
|
Hyde Resort & Residences (1) Hollywood Beach, Florida |
$ |
289.74 |
|
|
$ |
268.51 |
|
|
$ |
314.39 |
|
Hyde Beach House Resort & Residences (1) Hollywood Beach,
Florida |
$ |
254.59 |
|
|
$ |
208.53 |
|
|
$ |
233.50 |
|
All properties weighted
average |
$ |
123.59 |
|
|
$ |
119.06 |
|
|
$ |
100.89 |
|
(1 |
) |
Reflects only those condominium
units participating in our rental program for the period. |
SOTHERLY HOTELS INC.RECONCILIATION OF NET
INCOME (LOSS) TOFFO, Adjusted FFO, EBITDA and
Hotel EBITDA(unaudited) |
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
|
March 31, 2024 |
|
|
March 31, 2023 |
|
Net
income |
|
$ |
1,322,821 |
|
|
$ |
1,387,514 |
|
Depreciation and amortization - real estate |
|
|
4,754,911 |
|
|
|
4,564,625 |
|
Gain on involuntary conversion of assets |
|
|
(122,391 |
) |
|
|
(16,476 |
) |
FFO |
|
|
5,955,341 |
|
|
|
5,935,663 |
|
Distributions to preferred stockholders |
|
|
(1,994,312 |
) |
|
|
(1,994,312 |
) |
FFO attributable to
common stockholders and unitholders |
|
|
3,961,029 |
|
|
|
3,941,351 |
|
Amortization |
|
|
14,806 |
|
|
|
13,686 |
|
ESOP and stock - based compensation |
|
|
255,956 |
|
|
|
260,463 |
|
Loss on early debt extinguishment |
|
|
241,878 |
|
|
|
— |
|
Unrealized loss on hedging activities |
|
|
704,671 |
|
|
|
442,464 |
|
Adjusted FFO
attributable to common stockholders and unitholders |
|
$ |
5,178,340 |
|
|
$ |
4,657,964 |
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding, basic |
|
|
19,359,151 |
|
|
|
18,635,004 |
|
|
|
|
|
|
|
|
Weighted average number of non-controlling units |
|
|
364,186 |
|
|
|
825,188 |
|
|
|
|
|
|
|
|
Weighted average number of shares and units outstanding, basic |
|
|
19,723,337 |
|
|
|
19,460,192 |
|
|
|
|
|
|
|
|
FFO per common share and unit |
|
$ |
0.20 |
|
|
$ |
0.20 |
|
|
|
|
|
|
|
|
Adjusted FFO per common share and unit |
|
$ |
0.26 |
|
|
$ |
0.24 |
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
|
March 31, 2024 |
|
|
March 31, 2023 |
|
Net
income |
|
$ |
1,322,821 |
|
|
$ |
1,387,514 |
|
Interest expense |
|
|
4,888,806 |
|
|
|
4,113,597 |
|
Interest income |
|
|
(214,772 |
) |
|
|
(146,665 |
) |
Income tax provision |
|
|
18,093 |
|
|
|
15,182 |
|
Depreciation and amortization |
|
|
4,769,717 |
|
|
|
4,578,311 |
|
EBITDA |
|
|
10,784,665 |
|
|
|
9,947,939 |
|
PPP loan forgiveness |
|
|
— |
|
|
|
(275,494 |
) |
Other income |
|
|
(124,877 |
) |
|
|
— |
|
Loss on early debt extinguishment |
|
|
241,878 |
|
|
|
— |
|
Gain on involuntary conversion of assets |
|
|
(122,391 |
) |
|
|
(16,476 |
) |
Subtotal |
|
|
10,779,275 |
|
|
|
9,655,969 |
|
Corporate general and administrative |
|
|
1,916,526 |
|
|
|
1,980,765 |
|
Realized (gain) and unrealized loss on hedging activities |
|
|
(335,446 |
) |
|
|
442,464 |
|
Hotel
EBITDA |
|
$ |
12,360,355 |
|
|
$ |
12,079,198 |
|
Tables below are reflected in thousands of dollars:
Reconciliation of Outlook of Net Loss to EBITDA and Hotel
EBITDA |
|
|
|
|
|
|
|
|
2024 Guidance |
|
|
Low Range |
|
|
High Range |
|
|
|
|
|
|
|
Net income |
$ |
1,598 |
|
|
$ |
2,593 |
|
Interest expense |
|
19,885 |
|
|
|
19,885 |
|
Interest income |
|
(550 |
) |
|
|
(550 |
) |
Income tax provision |
|
120 |
|
|
|
120 |
|
Depreciation and amortization |
|
18,805 |
|
|
|
18,805 |
|
|
|
|
|
|
|
EBITDA |
|
39,858 |
|
|
|
40,853 |
|
Loss on early extinguishment of debt |
|
165 |
|
|
|
165 |
|
Other income |
|
(445 |
) |
|
|
(445 |
) |
Realized and unrealized gain on hedging activities |
|
(250 |
) |
|
|
(250 |
) |
Corporate general and administrative |
|
6,775 |
|
|
|
6,575 |
|
|
|
|
|
|
|
Hotel EBITDA |
$ |
46,103 |
|
|
$ |
46,898 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Outlook of Net Loss to FFO and Adjusted
FFO |
|
|
|
|
|
|
|
|
2024 Guidance |
|
|
Low Range |
|
|
High Range |
|
|
|
|
|
|
|
Net income |
$ |
1,598 |
|
|
$ |
2,593 |
|
Depreciation and amortization |
|
18,750 |
|
|
|
18,750 |
|
|
|
|
|
|
|
FFO |
|
20,348 |
|
|
|
21,343 |
|
Distributions to preferred stockholders |
|
(7,975 |
) |
|
|
(7,975 |
) |
|
|
|
|
|
|
FFO attributable to common stockholders and unitholders |
|
12,373 |
|
|
|
13,368 |
|
Amortization |
|
55 |
|
|
|
55 |
|
Realized and unrealized gain on hedging activities |
|
(250 |
) |
|
|
(250 |
) |
Loss on early extinguishment of debt |
|
165 |
|
|
|
165 |
|
ESOP stock based compensation |
|
435 |
|
|
|
435 |
|
Adjusted FFO attributable to common stockholders and
unitholders |
$ |
12,778 |
|
|
$ |
13,773 |
|
|
|
|
|
|
|
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, 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, and 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) realized or unrealized gains
and losses on derivative instruments not included in other
comprehensive income, (9) other income at the properties (10) loss
on early debt extinguishment, (11) Paycheck Protection Program
(PPP) debt forgiveness, (12) gain on exercise of development right,
(13) corporate general and administrative expense, and (14) other
income 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
Sotherly Hotels (NASDAQ:SOHO)
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