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Section 1: 8-K (8-K)

8Kearningsrelease

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8‑K

CURRENT REPORT Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934



May 15, 2017

Date of report (Date of earliest event reported)



Condor Hospitality Trust, Inc.

(Exact Name of Registrant as Specified in Its Charter)



Maryland

(State or Other Jurisdiction of Incorporation)



 

1-34087

52-1889548

(Commission File Number)

(IRS Employer Identification No.)

4800 Montgomery Lane, Suite 220

 

Bethesda, MD

20814

(Address of Principal Executive Offices)

(Zip Code)



 

(402) 371-2520

(Registrant’s Telephone Number, Including Area Code)



(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):



 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  


 

Item 2.02  Results of Operations and Financial Condition.

On May 15, 2017, Condor Hospitality Trust, Inc. issued a press release on its earnings for the quarter ended March 31, 2017.  The press release is furnished as Exhibit 99.1 to this Form 8-K and incorporated herein by reference.

Item 9.01  Financial Statements and Exhibits.

(d)  Exhibits.



 

99.1

Press Release dated May  15, 2017.






 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



 



Condor Hospitality Trust, Inc.



 

Date:  May 15, 2017

By:  /s/ Arinn Cavey



Name: Arinn Cavey



Title:   Chief Accounting Officer








 

EXHIBIT INDEX



 

 

Exhibit

Description

 

99.1

Press Release dated May 15, 2017.




(Back To Top)

Section 2: EX-99.1 (EX-99.1)

Earnings Release Q12017





 

Picture 3

Picture 1





For Immediate Release



Condor Hospitality Trust Reports 2017 First Quarter Results



4 Premium-Branded Hotels Acquired | Public Offering of 4,772,500 Shares | Closed $90 Million Facility



BETHESDA, MD, May 15, 2017 – Condor Hospitality Trust, Inc. (NASDAQ: CDOR) (the “Company”) today announced results for the first quarter ended March 31, 2017.   



“The first quarter of 2017 was a watershed quarter for Condor as we completed multiple significant accomplishments that were the result of a transition plan initiated two years ago to execute a new strategy for the Company involving the repositioning of the portfolio as part of a new investment strategy, improving the Company’s equity structure, and enhancing the Company’s debt profile.   We continued the dramatic transformation of our portfolio with the additional disposition of two legacy hotels and the acquisition of three Home2 Suites by Hilton.  Additionally, post the close of the first quarter, we disposed of two additional legacy hotels, closed the fourth Home2 Suites, and announced the execution of a purchase contract to acquire the Hampton Inn and Suites Lake Mary.  In the last five quarters, Condor has closed on or announced contracts on over $200 million of acquisitions representing ten high-quality premium-branded select-service hotels comprising 1,349 rooms and flagged under six leading hotel brands.  In March 2017, we successfully raised over $50 million of gross proceeds through a common offering of our stock.  The net proceeds from this capital raise were used to pay down outstanding debt on our secured credit facility which now can be redrawn to fund future acquisitions.  Prior to this successful raise, the holders of the Company’s Series D Preferred Stock voluntarily converted to common stock, which we feel is a strong indication of their belief in the long-term value of the common stock of the Company and their confidence in the management team.  Both of these equity capitalization events were significant milestones as the Company’s common market capitalization is now approximately $120 million as compared to just $10 million at the start of 2015.  Finally, the Company closed a $90 million secured revolving credit facility and subsequently announced post the close of the first quarter that the Company had closed on an increase to the facility to $150 million.  We believe all of these achievements have and will continue to create shareholder value, as evidenced by the declaration and payment of our fourth consecutive quarterly common dividend in the first quarter of 2017,” said Bill Blackham, Condor’s Chief Executive Officer.



First Quarter 2017 Key Accomplishments



Closed Public Offering of 4,772,500 Shares of Common Stock: On March 29, 2017, the Company announced the closing of its underwritten public offering of 4,772,500 shares of its common stock, including 622,500 shares issued pursuant to the full exercise of an option to purchase additional shares of common stock granted to the underwriters, at a public offering price per share of $10.50.  The Company used the net proceeds of the offering to repay amounts borrowed under its secured revolving credit facility, which amounts will then become available to fund future acquisitions.



Closed New $90 Million Secured Revolving Credit Facility and Announced Increase to $150 Million Subsequent to the Close of the First Quarter: On March 1, 2017, the Company announced the closing of its new $90 million secured revolving credit facility.  On April 24, 2017, the Company announced that it had secured commitments from three lenders to increase the $90 million senior secured revolving credit facility to $150 million.  On May 12, 2017, the Company announced that it had successfully closed on the increase to its credit facility to $150 million.  KeyBanc Capital Markets, BMO Capital Markets, and The Huntington National Bank are Joint Lead Arrangers for the $150 million revolving credit facility with KeyBank National Association serving

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as Administrative Agent and The Huntington National Bank and BMO Capital Markets serving as Co-Syndication Agents.  The revolving credit facility now provides for up to a $150 million of committed borrowing capacity and continues to include an accordion feature that would allow the Company to increase the size of the facility up to $400 million with additional lender commitments.  The facility matures in 2020 and has two one-year extension options following additional capital achievements.  Borrowings will continue to bear interest at a rate determined by a leverage-based pricing grid.



Closed Acquisition of Four Home2 Suites by Hilton [Including One Closed Subsequent to the Close of the First Quarter]:  On March 27, 2017, the Company announced that it had closed on the acquisition of three Home2 Suites for $54.75 million.  The three hotels include the Home2 Suites Austin/Round Rock [Texas], the Home2 Suites Lexington University/Medical Center [Kentucky], and the Home2 Suites Tallahassee State Capitol [Florida].   Following the close of the first quarter on April 17, 2017, the Company announced that it had closed on the acquisition of the Home2 Suites Memphis/Southaven [Mississippi] for $19.0 million.  All four of the hotels will continue to be managed by the seller, Vista Host Inc.  With an average age of less than two years, these four Home2 Suites fit squarely within the Company’s stated investment strategy of acquiring newer, premium-branded select-service assets in secondary markets.



Four Non-Core Assets Sold [Including Two Closed Subsequent to the Close of the First Quarter]: In the first quarter of 2017, the Company continued to successfully dispose of legacy assets at what the Company’s considers to be attractive valuations.  The Company sold two assets in the first quarter resulting in $6.8 million of gross proceeds.  Subsequent to the close of the first quarter, the Company closed on two additional assets resulting in $5.7 million of gross proceeds.  Thus, year-to-date as of the time of this document, the Company has sold four legacy assets totaling $12.5 million in gross proceeds. The Company plans to dispose of a total of seven legacy hotels, including the four closed dispositions aforementioned, in the first half of 2017 and will continue to utilize the net proceeds to strategically reposition the portfolio.



Converted All Outstanding Series D Preferred Stock to Common Stock:  On March 1, 2017, the Company announced that the holders of $62.5 million of outstanding Series D Preferred Stock, which represented all of Condor’s outstanding Series D Preferred Stock, voluntarily converted their preferred shared into an aggregate of 6,004,957 shares of the Company’s common stock (adjusted on a post-reverse split basis) and 925,000 shares of newly issued Series E Preferred Stock, face value of $10 per share, in the aggregate amount of $9.25 million.  The common stock conversion price was previously established in the Series D Issuance Agreement in March 2016 and was $10.40 per share (adjusted on a post-reverse split basis). The new Series E Preferred Stock issued as part of the conversion transaction pays dividends at an annual rate of 6.25% of the aggregate face value of $9.25 million.  Commencing February 28, 2019, the Series E Preferred Stock is convertible into common stock at a conversion price of $13.85 per share of common stock (adjusted on a post-reverse split basis).



Executed 1-for-6.5 Reverse Stock Split: On March 15, 2017, the Company announced a 1-for-6.5 reverse stock split of its common stock.  The reverse stock split became effective at 4:01 p.m. EST on March 15, 2017.



Common Dividend Payment: On March 21, 2017, the Board of Directors declared a common stock dividend of $0.195 per share related to the first quarter of 2017.  This represents $0.78 per share on an annualized basis.  The first quarter dividend was paid on April 7, 2017 to shareholders of record on March 31, 2017.  The first quarter dividend represents the fourth consecutive quarterly dividend for the Company since declaring a dividend in July of 2016 for the first time since 2009.



Subsequent Events



Announced Executed Agreement to Acquire the Hampton Inn and Suites Lake Mary:  On May 1, 2017, the Company announced that it had executed an agreement to purchase the 130-room Hampton Inn and Suites located in Lake Mary, a suburb approximately 18 miles northeast of Orlando, at 850 Village Oak Lane, Lake Mary, Florida 32746.  The minimum purchase price of the hotel is $19.25 million with the potential to increase to $19.5 million under certain circumstances.  The hotel is expected to managed by Peachtree Hospitality Management, LLC.  The closing of the acquisition of the hotel is expected to occur late second quarter or early third quarter of 2017, but is subject to customary closing conditions including accuracy of representations and warranties and compliance with covenants and obligations.

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Summary Financial Results



Revenue:  Condor’s first quarter 2017 revenue from continuing operations was $10.4 million compared to $12.5 million in the same 2016 period.  Revenue from wholly owned properties new investment platform properties acquired in and since 2012 totaled $6.0 million in the three months ended March 31, 2017.  Revenue from legacy properties totaled $4.4 million in this same period.



Net Earnings: First quarter net earnings attributable to common shareholders was ($14.0) million, or ($4.75) per basic share and ($4.75) per diluted share, compared to ($10.4) million, or ($13.72) per basic share and ($13.72) per diluted share for the same 2016 period.  The 2016 and 2017 periods included substantial dividends declared and undeclared and in kind dividends on preferred stock.  Decreased gains on the sale of assets and decreased net gain on derivatives and convertible debt also drove the differences in net income between the two years.



RevPAR:  For the first quarter, Revenue per Available Room (“RevPAR”) for the nine hotels considered the new investment platform hotels (includes the three Home2 Suites acquired in the first quarter of 2017, two Alofts acquired in 2016, the three hotels acquired in 2016 and the Hilton Garden Inn acquired in 2012) increased by 7.7% to $96.65 from $89.78 for the same period in 2016 (comparable operating results given for these hotels include results prior to the Company’s ownership based on information obtained from the prior owners).  The increase is attributable to a 1.6% increase in Average Daily Rate (“ADR”) over the same period 2016 and a 5.9% increase in occupancy.  ADR rose to $123.46 for the first quarter 2017 as compared to $121.48 for the same period in 2016.  Occupancy increased to 78.28% for the first quarter 2017 as compared to 73.91% for the same period in 2016.



For the first quarter, RevPAR for the six same-store hotels not considered held for sale at March 31, 2017 increased 17.2% from the same period in 2016 to $46.85.  The increase is attributable to a 23.0%  increase in occupancy to 66.20%, while ADR decreased by 4.8% to $70.77. 



Funds From Operations (FFO) and Adjusted Funds from Operations (AFFO):  FFO for the three months ended March 31, 2017 decreased to ($0.7) million as compared to $5.8 million for the same period prior year. The decrease in FFO was primarily driven by a decrease in net gains on derivatives and convertible debt which decreased by $5.9 million between the first quarter periodsAFFO for the first quarter 2017 was ($11.6) million as compared to ($17.9) million for the same period in 2016.  The increase in AFFO, which excludes net gains on derivatives and convertible debt, was primarily driven by lower preferred dividend expensePreferred dividends were driven in the first quarter of 2017 by the value of the Series E Preferred Stock offered as an inducement to voluntarily convert the Series D Preferred Stock and were driven in the first quarter of 2016 by the redemption of the Series A and B Preferred Stock and the exchange of the Series C Preferred Stock.



Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) and Adjusted EBITDA:  EBITDA for the three months ended March 31, 2017 decreased to $1.4 million as compared to $10.6 million for the same period prior year, a decrease of 86.4%The decrease in EBITDA for the three months ended March 31, 2017 was primarily driven by a decrease in net gains on the disposition of assets, which decreased by $4.0 million between the first quarter periods, and by a decrease in net gains on derivatives and convertible debt, which decreased by $5.9 million between the first quarter periods.  Adjusted EBITDA for the three months ended March 31, 2017 increased to $2.4 million as compared to $1.3 million for the same period prior year, an increase of 79.8%.  The increase in Adjusted EBITDA was primarily driven by strong performance in the new investment platform assets.



Capital Reinvestment:  The Company invested $0.9 million in capital improvements throughout the portfolio in the three ended March 31, 2017, to upgrade its properties and maintain brand standards.

Balance Sheet:  The Company had cash and cash equivalents (including restricted cash) and available revolver of $19.2 million and $20.9 million, respectively, at March 31, 2017.  As of March 31, 2017, the Company had total outstanding long-term debt, net of deferred financing costs, of $73.2 million, with $70.0 million associated with assets held for use with a weighted average maturity of 3.4 years and a weighted average interest rate of 4.60%.



Common Dividends:  On March 21, 2017, the Board of Directors declared a common stock dividend of $0.195 per share related to the first quarter of 2017.  This represents $0.78 per share on an annualized basis.  The first quarter dividend was paid on April 7, 2017 to shareholders of record on March 31, 2017.  The first quarter dividend represents

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the fourth consecutive quarterly dividend for the Company since declaring a dividend in July of 2016 for the first time since 2009.    Although the Board of Directors will evaluate the Company’s dividend policy on a quarterly basis, it believes that the common dividend level is sustainable.



Outlook



“The start of 2017 marked multiple significant moments in Condor’s strategic repositioning.  We continued to dramatically enhance the quality of the portfolio with the acquisition of four Home2 Suites, the disposition of four legacy hotels assets, and the announcement of one purchase contract.  Additionally, we closed on a $90 million senior secured credit facility and subsequent to quarter-end closed on the expansion of the facility to $150 million.  Finally, we successfully closed a public issuance of our common stock providing the Company the necessary capital to continue to acquire high-quality, premium-branded select-service assets in secondary markets,” said Jonathan Gantt, Condor’s Chief Financial Officer.  “The entire Condor organization is proud of our accomplishments to-date and highly focused on continuing to faithfully execute our strategy throughout 2017 to deliver shareholder value.”



First Quarter 2017 Earnings Call



The Company will conduct its quarterly conference call on Monday, May 15, 2017, at 9:00 AM ET.  To participate in the conference call, dial 1-877-425-9470 [International: 1-201-389-0878] approximately ten minutes before the call begins (9:00 AM ET).



Additionally, a live webcast of the conference call will be available through the Company’s website.  To access, log on to http://condorhospitality.com ten minutes prior to the call. A replay of the conference call webcast will be archived and available online through the Investor Relations section of http://condorhospitality.com.



About Condor Hospitality Trust, Inc.



Condor Hospitality Trust, Inc. (NASDAQ: CDOR) is a self-administered real estate investment trust that specializes in the investment and ownership of upper midscale and upscale, premium-branded, select-service, extended stay, and limited service hotels.  The Company currently owns 19 hotels in 11 states.  Condor’s hotels are franchised by a number of the industry’s most well-regarded brand families including Hilton, Marriott/Starwood, InterContinental Hotels, Choice, and Wyndham.

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SELECTED FINANCIAL DATA:

Condor Hospitality Trust, Inc. and Subsidiaries

Consolidated Balance Sheets

 (In thousands, except share and per share data)







 

 

 

 

 

 



 

 

As of



 

March 31,

 

December 31,



 

2017

 

2016



 

 

 

 

 

 

Assets

 

 

 

 

 

 

Investment in hotel properties, net

 

$

150,652 

 

$

96,158 

Investment in unconsolidated joint venture

 

 

8,747 

 

 

9,036 

Cash and cash equivalents

 

 

15,032 

 

 

8,326 

Restricted cash, property escrows

 

 

4,131 

 

 

5,350 

Accounts receivable, net of allowance for doubtful accounts of $25 and $21

 

 

1,271 

 

 

1,416 

Prepaid expenses and other assets

 

 

1,396 

 

 

1,666 

Derivative assets, at fair value

 

 

137 

 

 

 -

Investment in hotel properties held for sale, net

 

 

12,013 

 

 

18,713 

Total Assets

 

$

193,379 

 

$

140,665 



 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 



 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Accounts payable, accrued expenses, and other liabilities

 

$

5,796 

 

$

4,698 

Dividends payable

 

 

2,253 

 

 

1,125 

Derivative liabilities, at fair value

 

 

 -

 

 

Convertible debt, at fair value

 

 

1,075 

 

 

1,315 

Long-term debt, net of deferred financing costs

 

 

69,945 

 

 

56,775 

Long-term debt related to hotel properties held for sale, net of deferred financing costs

 

 

3,288 

 

 

5,945 

Total Liabilities

 

 

82,357 

 

 

69,866 



 

 

 

 

 

 

Redeemable preferred stock

 

 

 

 

 

 

6.25% Series E, 925,000 shares authorized, $.01 par value, 925,000 shares outstanding, liquidation preference of $9,250

 

 

10,050 

 

 

 -



 

 

 

 

 

 

Equity

 

 

 

 

 

 

Shareholders' equity

 

 

 

 

 

 

Preferred stock,  40,000,000 shares authorized:

 

 

 

 

 

 

6.25% Series D, 6,700,000 shares authorized, $.01 par value, 6,245,156 shares outstanding, liquidation preference of $63,427

 

 

 -

 

 

61,333 

Common stock, $.01 par value, 200,000,000 shares authorized; 11,554,282 and 762,590 shares outstanding

 

 

115 

 

 

Additional paid-in capital

 

 

226,119 

 

 

118,655 

Accumulated deficit

 

 

(128,230)

 

 

(112,024)

Total Shareholders' Equity

 

 

98,004 

 

 

67,972 

Noncontrolling interest in consolidated partnership (Condor Hospitality Limited Partnership), redemption value of $1,726 and $2,008

 

 

2,968 

 

 

2,827 

Total Equity

 

 

100,972 

 

 

70,799 



 

 

 

 

 

 

Total Liabilities and Equity

 

$

193,379 

 

$

140,665 

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Condor Hospitality Trust, Inc.

Consolidated Statements of Operations

 (In thousands, except per share data)











 

 

 

 

 

 



 

 

 



 

Three months ended March 31,



 

2017

 

2016

Revenue

 

 

 

 

 

 

Room rentals and other hotel services

 

$

10,361 

 

$

12,503 

Operating Expenses

 

 

 

 

 

 

Hotel and property operations

 

 

7,613 

 

 

9,711 

Depreciation and amortization

 

 

1,051 

 

 

1,409 

General and administrative

 

 

1,492 

 

 

1,448 

Acquisition and terminated transactions

 

 

502 

 

 

94 

Equity transactions

 

 

343 

 

 

 -

Total operating expenses

 

 

11,001 

 

 

12,662 

Operating loss

 

 

(640)

 

 

(159)

Net gain (loss) on disposition of assets

 

 

(3)

 

 

3,367 

Equity in earnings of joint venture

 

 

111 

 

 

 -

Net gain on derivatives and convertible debt

 

 

175 

 

 

6,117 

Other expense, net

 

 

(1)

 

 

(21)

Interest expense

 

 

(971)

 

 

(1,329)

Loss on debt extinguishment

 

 

(800)

 

 

(173)

Impairment loss, net

 

 

(271)

 

 

(793)

Earnings (loss) from continuing operations before income taxes

 

 

(2,400)

 

 

7,009 

Income tax expense

 

 

 -

 

 

 -

Earnings (loss) from continuing operations

 

 

(2,400)

 

 

7,009 

Gain from discontinued operations, net of tax

 

 

 -

 

 

678 

Net earnings (loss)

 

 

(2,400)

 

 

7,687 

Loss (earnings) attributable to noncontrolling interest

 

 

50 

 

 

(389)

Net earnings (loss) attributable to controlling interests

 

 

(2,350)

 

 

7,298 

Dividends declared and undeclared and in kind dividends deemed on preferred stock

 

 

(11,603)

 

 

(17,740)

Net loss attributable to common shareholders

 

$

(13,953)

 

$

(10,442)



 

 

 

 

 

 

Earnings per Share

 

 

 

 

 

 

Continuing operations - Basic and Diluted

 

$

(4.75)

 

$

(14.63)

Discontinued operations - Basic and Diluted

 

 

 -

 

 

0.91 

Total - Basic and Diluted Earnings per Share

 

$

(4.75)

 

$

(13.72)



 

 

 

 

 

 

See accompanying notes to consolidated financial statements.

 

 

 

 

 

 



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Reconciliation of Non-GAAP Financial Measures (Unaudited)

Non-GAAP financial measures are measures of our historical financial performance that are different from measures calculated and presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”).  We report Funds from Operations (“FFO”), Adjusted FFO (“AFFO”), Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”), Adjusted EBITDA, and Hotel EBITDA as non-GAAP measures that we believe are useful to investors as key measures of our operating results and which management uses to facilitate a periodic evaluation of our operating results relative to those of our peers.  Our non-GAAP measures should not be considered as an alternative to U.S. GAAP net earnings as an indication of financial performance or to U.S. GAAP cash flows from operating activities as a measure of liquidity.  Additionally, these measures are not indicative of funds available to fund cash needs or our ability to make cash distributions as they have not been adjusted to consider cash requirements for capital expenditures, property acquisitions, debt service obligations, or other commitments.



FFO and AFFO

The following table reconciles net earnings (loss) to FFO and AFFO for the three months ended March 31, 2017 and 2016 (in thousands). All amounts presented include both continuing and discontinued operations as well as our portion of the results of our unconsolidated Atlanta JV.











 

 

 

 

 



Three months ended



March 31,

Reconciliation of Net earnings (loss) to FFO and AFFO

2017

 

2016

Net earnings (loss)

$

(2,400)

 

$

7,687 

Depreciation and amortization expense

 

1,051 

 

 

1,409 

Depreciation and amortization expense from JV

 

411 

 

 

 -

Net loss (gain) on disposition of assets

 

 

 

(4,048)

Net loss on disposition of assets from JV

 

 

 

 -

Impairment loss, net

 

271 

 

 

793 

FFO

 

(663)

 

 

5,841 

Dividends declared and undeclared and in kind dividends deemed on preferred stock

 

(11,603)

 

 

(17,740)

FFO attributable to common shares and partnership units

 

(12,266)

 

 

(11,899)

Net gain on derivatives and convertible debt

 

(175)

 

 

(6,117)

Acquisition and terminated transactions expense

 

502 

 

 

94 

Equity transactions expense

 

343 

 

 

 -

AFFO attributable to common shares and partnership units

$

(11,596)

 

$

(17,922)



We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (“NAREIT”), which defines FFO as net earnings computed in accordance with GAAP, excluding gains or losses from sales of real estate assets, impairment, and the depreciation and amortization of real estate assets.  FFO is calculated both for the Company in total and as FFO attributable to common shares and partnership units, which is FFO excluding preferred stock dividends.  AFFO is FFO attributable to common shares and partnership units adjusted to exclude items we do not believe are representative of the results from our core operations, such as non-cash gains or losses on derivative liabilities and convertible debt and cash charges for acquisition or equity raising costs. All REITs do not calculate FFO and AFFO in the same manner; therefore, our calculation may not be the same as the calculation of FFO and AFFO for similar REITs.



We consider FFO and AFFO to be useful additional measures of performance for an equity REIT because they facilitate an understanding of the operating performance of our properties without giving effect to real estate depreciation and amortization, which assumes that the value of real estate assets diminishes predictably over time.  Since real estate values have historically risen or fallen with market conditions, we believe that FFO and AFFO provide a meaningful indication of our performance. 



7

 


 

EBITDA, Adjusted EBITDA, and Hotel EBITDA



The following table reconciles net earning (loss) to EBITDA, Adjusted EBITDA, and Hotel EBITDA for the three months ended March 31, 2017 and 2016 (in thousands). All amounts presented include both continuing and discontinued operations as well as our portion of the results of our unconsolidated Atlanta JV.











 

 

 

 

 



Three months ended



March 31,

Reconciliation of Net earnings (loss) to EBITDA , Adjusted EBITDA, and Hotel EBITDA

2017

 

2016

Net earnings (loss)

$

(2,400)

 

$

7,687 

Interest expense

 

971 

 

 

1,334 

Interest expense from JV

 

605 

 

 

 -

Loss on debt extinguishment

 

800 

 

 

173 

Income tax expense

 

 -

 

 

 -

Depreciation and amortization expense

 

1,051 

 

 

1,409 

Depreciation and amortization expense from JV

 

411 

 

 

 -

EBITDA

 

1,438 

 

 

10,603 

Net loss (gain) on disposition of assets

 

 

 

(4,048)

Net loss on disposition of assets from JV

 

 

 

 -

Impairment loss, net

 

271 

 

 

793 

Net gain on derivatives and convertible debt

 

(175)

 

 

(6,117)

Acquisition and terminated transactions expense

 

502 

 

 

94 

Equity transactions expense

 

343 

 

 

 -

Adjusted EBITDA

 

2,383 

 

 

1,325 

General and administrative expense

 

1,492 

 

 

1,448 

Other expense, net

 

 

 

21 

Unallocated hotel and property operations expense

 

132 

 

 

116 

Hotel EBITDA

$

4,008 

 

$

2,910 



 

 

 

 

 

Revenue

$

10,361 

 

$

12,509 

JV revenue

 

2,989 

 

 

 -

Condor and JV revenue

$

13,350 

 

$

12,509 

Hotel EBITDA as a percentage of revenue

 

30% 

 

 

23% 



We calculate EBITDA and Adjusted EBITDA by adding back to net earnings certain non-operating expenses and certain non-cash charges which are based on historical cost accounting that we believe may be of limited significance in evaluating current performance. We believe these adjustments can help eliminate the accounting effects of depreciation and amortization and financing decisions and facilitate comparisons of core operating profitability between periods. In calculating EBITDA, we add back to net earnings interest expense, loss on debt extinguishment, income tax expense, and depreciation and amortization expense. In calculating Adjusted EBITDA, we adjust EBITDA to add back net gain/loss on disposition of assets, acquisition and terminated transactions expense, and equity transactions expense, which are cash charges. We also add back impairment and gain or loss on derivatives and convertible debt, which are non-cash charges.  EBITDA and Adjusted EBITDA, as presented, may not be comparable to similarly titled measures of other companies.



We believe EBITDA and Adjusted EBITDA to be useful additional measures of our operating performance, excluding the impact of our capital structure (primarily interest expense), our asset base (primarily depreciation and amortization expense), and other items we do not believe are representative of the results from our core operations.



The Company further excludes general and administrative expenses, other non-operating income or expense, and certain hotel and property operations expenses that are not allocated to individual properties in assessing hotel performance (primarily certain general liability and other insurance costs, land lease costs, and office and banking fees) from Adjusted EBITDA to calculate Hotel EBITDA.  Hotel EBITDA is similar to the non-GAAP measure of Property Operating Income (“POI”) presented in filings prior to the September 30, 2016 Form 10-Q except that Hotel EBITDA also excludes the unallocated hotel and property operations expenses previously included in POI.  Hotel EBITDA, as presented, may not be comparable to similarly titled measures of other companies. 

8

 


 



Hotel EBITDA is intended to isolate property level operational performance over which the Company’s hotel operators have direct control.  We believe Hotel EBITDA is helpful to investors as it better communicates the comparability of our hotels’ operating results for all of the Company’s hotel properties and is used by management to measure the performance of the Company’s hotels and the effectiveness of the operators of the hotels.

9

 


 

Condor Hospitality Trust, Inc.

Operating Statistics

The following table presents our same property occupancy, ADR, and RevPAR for all our hotels owned at March 31, 2017.  Same property occupancy, ADR, and RevPAR reflect the performance of hotels during the entire period, regardless of our ownership during the period presented.  Results for the hotels for periods prior to our ownership were provided to us by prior owners and have not been adjusted by us.  The performance metrics for the hotel acquired through our Atlanta JV, also presented below, reflect 100% of the operating results of the property, including our interest and the interest of our partner.





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three months ended March 31,



2017

 

2016



Occupancy

 

ADR

 

RevPAR

 

Occupancy

 

ADR

 

RevPAR

Solomons Hilton Garden Inn

73.58% 

 

$

118.70 

 

$

87.33 

 

68.53% 

 

$

116.75 

 

$

80.01 

Atlanta Hotel Indigo

74.07% 

 

 

104.45 

 

 

77.37 

 

75.17% 

 

 

101.92 

 

 

76.61 

Jacksonville Courtyard by Marriott

76.02% 

 

 

114.83 

 

 

87.29 

 

81.14% 

 

 

111.82 

 

 

90.72 

San Antonio SpringHill Suites

81.49% 

 

 

140.69 

 

 

114.66 

 

74.37% 

 

 

125.82 

 

 

93.57 

Leawood Aloft

74.00% 

 

 

126.10 

 

 

93.31 

 

75.27% 

 

 

124.09 

 

 

93.41 

Lexington Home2 Suites

74.23% 

 

 

105.56 

 

 

78.35 

 

71.95% 

 

 

105.46 

 

 

75.88 

Round Rock Home2 Suites

85.37% 

 

 

123.17 

 

 

105.16 

 

81.97% 

 

 

117.95 

 

 

96.68 

Tallahassee Home2 Suites

80.79% 

 

 

124.91 

 

 

100.92 

 

72.44% 

 

 

123.67 

 

 

89.58 

Wholly owned properties

77.16% 

 

$

120.17 

 

$

92.72 

 

75.07% 

 

$

116.05 

 

$

87.11 

Atlanta Aloft JV

82.52% 

 

 

135.12 

 

 

111.50 

 

69.52% 

 

 

143.61 

 

 

99.85 

Total new investment platform

78.28% 

 

$

123.46 

 

$

96.65 

 

73.91% 

 

$

121.48 

 

$

89.78 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Legacy held for sale

46.11% 

 

$

77.24 

 

$

35.61 

 

50.01% 

 

$

74.03 

 

$

37.02 

Legacy held for use

66.20% 

 

$

70.77 

 

$

46.85 

 

53.80% 

 

$

74.33 

 

$

39.99 

Total legacy

57.56% 

 

$

73.00 

 

$

42.02 

 

52.19% 

 

$

74.21 

 

$

38.73 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total portfolio as of March 31, 2017

69.06% 

 

$

104.74 

 

$

72.34 

 

64.17% 

 

$

104.24 

 

$

66.89 













































































10

 


 











 

 

 

 

 

 

Condor Hospitality Trust, Inc.

 

Property List | As of May 15, 2017

 



 

 

 

 

 

 

New Investment Platform | Acquired from January 1, 2012 - May 15, 2017

Ref

Hotel Name

City

State

Rooms

Acquisition Date

Purchase Price
(in millions)

1

Hilton Garden Inn

Dowell/Solomons

MD

100 

05/25/2012

$11.5 

2

SpringHill Suites

San Antonio

TX

116 

10/01/2015

$17.5 

3

Courtyard by Marriott

Jacksonville

FL

120 

10/02/2015

$14.0 

4

Hotel Indigo

College Park

GA

142 

10/02/2015

$11.0 

5

Aloft1

Atlanta

GA

254 

08/22/2016

$43.6 

6

Aloft

Leawood

KS

156 

12/14/2016

$22.5 

7

Home2 Suites

Lexington

KY

103 

03/24/2017

$16.5 

8

Home2 Suites

Round Rock

TX

91 

03/24/2017

$16.8 

9

Home2 Suites

Tallahassee

FL

132 

03/24/2017

$21.5 

10

Home2 Suites

Southaven

MS

105 

04/14/2017

$19.0 



Total New Investment Platform

 

 

1,319 

 

$193.9 



 

 

 

 

 

 

Current Legacy Hotel Portfolio

 

 

 

Ref

Hotel Name

City

State

Rooms

Acquisition Date

Status2

11

Super 8

Creston

IA

121 

09/19/1978

Hold

12

Quality Inn

Solomons

MD

59 

06/01/1986

Hold

13

Key West Inn

Key Largo

FL

40 

08/01/1987

HFS

14

Quality Inn

Morgantown

WV

81 

10/01/1996

HFS

15

Comfort Suites

Ft. Wayne

IN

127 

11/07/2005

Hold

16

Comfort Inn and Suites

Warsaw

IN

71 

11/07/2005

Hold

17

Comfort Suites

South Bend

IN

135 

11/30/2005

Hold

18

Supertel Inn/Conference Center

Creston

IA

41 

06/30/2006

Hold

19

Days Inn

Bossier City

LA

176 

04/04/2007

HFS



 

 

 

 

 

 



Total

 

 

851 

 

 



 

 

 

 

 

 



Total Portfolio | As of May 15, 2017

 

 

2,170 

 

 



 

 

 

 

 

 

1 | Owned 80% by Condor

2 | HFS indicates the asset is currently marketed for sale

 

 

 

 

 

11

 


 







 

 

 

 

 

 

Dispositions | For Period January 1, 2015 - May 15, 2017

Ref

Hotel Name

City

State

Rooms

Disposition Date

Gross Proceeds 
(in millions)

1

Super 8

West Plains

MO

49 

01/15/2015

$1.5 

2

Super 8

Green Bay

WI

83 

01/29/2015

$2.2 

3

Super 8

Columbus

GA

74 

03/16/2015

$0.9 

4

Sleep Inn & Suites

Omaha

NE

90 

03/19/2015

$2.9 

5

Savannah Suites

Chamblee

GA

120 

04/01/2015

$4.4 

6

Savannah Suites

Augusta

GA

172 

04/01/2015

$3.4 

7

Super 8

Batesville

AR

49 

04/30/2015

$1.5 

8

Days Inn

Ashland

KY

63 

07/01/2015

$2.2 

9

Comfort Inn

Alexandria

VA

150 

07/13/2015

$12.0 

10

Days Inn

Alexandria

VA

200 

07/13/2015

$6.5 

11

Super 8

Manhattan

KS

85 

08/28/2015

$3.2 

12

Quality Inn

Sheboygan

WI

59 

10/06/2015

$2.3 

13

Super 8

Hays

KS

76 

10/14/2015

$1.9 

14

Days Inn

Glasgow

KY

58 

10/16/2015

$1.8 

15

Super 8

Tomah

WI

65 

10/21/2015

$1.4 

16

Rodeway Inn

Fayetteville

NC

120 

11/03/2015

$2.6 

17

Savannah Suites

Savannah

GA

160 

12/22/2015

$4.0 



Total 2015

 

 

1,673 

 

$54.7 

18

Super 8

Kirksville

MO

61 

01/04/2016

$1.5 

19

Super 8

Lincoln

NE

133 

01/07/2016

$2.8 

20

Savannah Suites

Greenville

SC

170 

01/08/2016

$2.7 

21

Super 8

Portage

WI

61 

03/30/2016

$2.4 

22

Super 8

O'Neill

NE

72 

04/25/2016

$1.7 

23

Quality Inn

Culpeper

VA

49 

05/10/2016

$2.2 

24

Super 8

Storm Lake

IA

59 

05/19/2016

$2.8 

25

Clarion Inn

Cleveland

TN

59 

05/24/2016

$2.2 

26

Super 8

Coralville

IA

84 

05/26/2016

$3.4 

27

Super 8

Keokuk

IA

61 

05/27/2016

$2.2 

28

Comfort Inn

Chambersburg

PA

63 

06/06/2016

$2.1 

29

Super 8

Pittsburg

KS

64 

08/08/2016

$1.6 

30

Super 8

Mount Pleasant

IA

54 

09/09/2016

$1.9 

31

Quality Inn

Danville

KY

63 

09/19/2016

$2.3 

32

Super 8

Menomonie

WI

81 

09/26/2016

$3.0 

33

Comfort Inn

Glasgow

KY

60 

10/14/2016

$2.4 

34

Days Inn

Sioux Falls

SD

86 

11/04/2016

$2.1 

35

Comfort Inn

Shelby

NC

76 

11/07/2016

$4.1 

36

Comfort Inn

Rocky Mount

VA

61 

11/17/2016

$2.2 

37

Days Inn

Farmville

VA

59 

11/17/2016

$2.4 

38

Comfort Suites

Marion

IN

62 

11/18/2016

$3.0 

39

Comfort Inn

Farmville

VA

50 

11/30/2016

$2.6 

40

Quality Inn

Princeton

WV

50 

12/05/2016

$2.1 

41

Super 8

Burlington

IA

62 

12/21/2016

$2.8 

42

Savannah Suites

Atlanta

GA

164 

12/22/2016

$2.9 



Total 2016

 

 

1,864 

 

$61.4 

43

Comfort Inn

New Castle

PA

79 

03/27/2017

$2.5 

44

Super 8

Billings

MT

106 

03/28/2017

$4.3 

45

Comfort Inn

Harlan

KY

61 

04/03/2017

$1.9 

46

Comfort Suites

Lafayette

IN

62 

04/18/2017

$3.9 



Total YTD 2017

 

 

308 

 

$12.5 



12

 


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