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Section 1: 8-K (8-K)

soho-8k_20180227.htm

 

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

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

Date of Report (Date of earliest event reported): February 27, 2018

 

SOTHERLY HOTELS INC.

SOTHERLY HOTELS LP

(Exact name of Registrant as Specified in Its Charter)

 

 

Maryland (Sotherly Hotels Inc.)

Delaware (Sotherly Hotels LP)

001-32379 (Sotherly Hotels Inc.)

001-36091 (Sotherly Hotels LP)

20-1531029 (Sotherly Hotels Inc.)

20-1965427 (Sotherly Hotels LP)

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

 

 

 

410 W. Francis Street

Williamsburg, Virginia

 

23185

(Address of Principal Executive Offices)

 

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (757) 229-5648

Not Applicable

(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:

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).

Sotherly Hotels Inc.    Sotherly Hotels LP    

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.

Sotherly Hotels Inc.    Sotherly Hotels LP    

 

 

 

 


Item 2.02 Results of Operations and Financial Condition.

On February 27, 2018, Sotherly Hotels Inc., a Maryland corporation (the “Company”) and the sole general partner of Sotherly Hotels LP, a Delaware limited partnership, issued a press release (the “Press Release”) announcing the results of operations and financial condition of the Company for the quarter and year ended December 31, 2017.  A copy of the Press Release is furnished as Exhibit 99.1 to this report and is incorporated by reference herein.

The Press Release contains “non-GAAP financial measures” as defined in Item 10 of Regulation S-K of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  In the Press Release, the Company has provided reconciliations of the non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles in the United States.

In accordance with General Instruction B.2 and B.6 of Form 8-K, the information included in this Item 2.02 (including Exhibit 99.1 hereto), shall not be deemed “filed” for the purposes of Section 18 of the Exchange Act, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit

Number

 

Description

99.1

 

Press Release of Sotherly Hotels Inc. dated February 27, 2018, reporting financial results for the quarter and year ended December 31, 2017.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.

 

Date:  February 27, 2018

 

SOTHERLY HOTELS INC.

 

 

 

 

 

 

By:

/s/ Anthony E. Domalski

 

 

 

Anthony E. Domalski

 

 

 

Chief Financial Officer

 

 

 

SOTHERLY HOTELS LP

 

 

 

 

 

 

 

by its General Partner,

 

 

 

SOTHERLY HOTELS INC.

 

 

 

 

 

 

By:

/s/ Anthony E. Domalski

 

 

 

Anthony E. Domalski

 

 

 

Chief Financial Officer

 

 

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

soho-ex991_6.htm

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

TUESDAY, FEBRUARY 27, 2018

 

SOTHERLY HOTELS INC. REPORTS FINANCIAL RESULTS

FOR THE YEAR ENDED DECEMBER 31, 2017

Williamsburg, Virginia – February 27, 2018 – 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 fourth quarter and year ended December 31, 2017. The Company’s results include the following*:

 

Three Months Ended

 

 

Year Ended

 

 

December 31, 2017

 

 

December 31, 2016

 

 

December 31, 2017

 

 

December 31, 2016

 

 

($ in thousands except per share data)

 

 

($ in thousands except per share data)

 

Total Revenue

$

38,160

 

 

$

35,935

 

 

$

154,267

 

 

$

152,846

 

Net loss available to common stockholders

 

(3,937

)

 

 

(746

)

 

 

(3,339

)

 

 

(218

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

8,552

 

 

 

6,732

 

 

 

34,625

 

 

 

33,954

 

Hotel EBITDA

 

10,003

 

 

 

8,392

 

 

 

40,989

 

 

 

40,013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO

 

107

 

 

 

2,915

 

 

 

12,418

 

 

 

15,140

 

Adjusted FFO available to common stockholders

 

3,333

 

 

 

2,077

 

 

 

15,664

 

 

 

15,100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share available to common stockholders

$

(0.29

)

 

$

(0.05

)

 

$

(0.24

)

 

$

(0.01

)

FFO per share and unit

$

0.01

 

 

$

0.17

 

 

$

0.80

 

 

$

0.91

 

Adjusted FFO available to common holders per share and unit

$

0.22

 

 

$

0.12

 

 

$

1.00

 

 

$

0.90

 

 

(*)  Earnings before interest, taxes, depreciation and amortization (“EBITDA”), hotel EBITDA, funds from operations (“FFO”), adjusted FFO, FFO per share and unit and adjusted FFO per 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 where otherwise indicated.

HIGHLIGHTS:

 

RevPAR.  Room revenue per available room (“RevPAR”) for the Company’s composite portfolio, which includes the performance of the rooms participating in our rental program at the Hyde Resort & Residences, during the three-month period ending December 31, 2017, increased 7.6% over the three months ended December 31, 2016, to $94.42 driven by a 1.2% decrease in occupancy and an 8.9% increase in average daily rate (“ADR”). For the twelve-month period ending December 31, 2017, RevPAR increased 3.6% over the twelve months ended December 31, 2016, to $101.70 driven by a 1.4% decrease in occupancy and a 5.1% increase in ADR.

 

Common Dividends. As previously reported on January 30, 2018, the Company announced its quarterly dividend (distribution) on its common stock (and units) at $0.115 per share (and unit) to be paid on April 11, 2018 to stockholders (and unitholders) of record as of March 15, 2018.

 

Hotel EBITDA. The Company generated hotel EBITDA of approximately $10.0 million during the three-month period ending December 31, 2017, an increase of 19.2%, or approximately $1.6 million, from the three months ended December 31, 2016.  For the twelve-month period ending December 31, 2017, hotel EBITDA increased 2.4%, or approximately $1.0 million, from the twelve months ended December 31, 2016.


 

EBITDA. The Company generated EBITDA of approximately $8.6 million during the three-month period ending December 31, 2017, an increase of 27.0% or approximately $1.8 million compared to the three months ended December 31, 2016. For the twelve-month period ending December 31, 2017, EBITDA increased 2.0% or approximately $0.7 million from the twelve months ended December 31, 2016.

 

Impact of Tax Reform on Our Current Period Income Tax Provision. The Tax Cuts and Jobs Act was recently enacted and made numerous changes to the U.S. federal income tax laws. The Company is required to revalue its deferred tax assets and deferred tax liabilities to account for the future impact of lower corporate tax rates on these deferred amounts. The reduction in the federal corporate tax rate negatively impacted fourth quarter 2017 results but is expected to positively impact future after-tax earnings. The impact of the revaluation of the deferred tax asset is approximately $2.7 million, which is a one-time non-cash charge to earnings.

 

Adjusted FFO. For the three-month period ending December 31, 2017, adjusted FFO increased 60.5% or approximately $1.3 million from the three months ended December 31, 2016.  For the twelve-month period ending December 31, 2017, adjusted FFO increased 3.7% or approximately $0.6 million from the twelve months ended December 31, 2016.

Andrew M. Sims, Chairman and Chief Executive Officer of Sotherly Hotels Inc., commented, “The Company posted a very strong fourth quarter to end 2017 on a high note, with favorable financial metrics measured against the prior year. For the quarter, RevPAR increased 7.6%, EBITDA increased 27.0%, and Adjusted FFO increased 60.5%, as compared to prior year.  Notwithstanding two major hurricanes and a significant property casualty at our Houston hotel, we were able to manage through to post respectable year over year results, with annual Adjusted FFO per share increasing 11.1% over 2016.”

Balance Sheet/Liquidity

At December 31, 2017, the Company had approximately $33.4 million of available cash and cash equivalents, of which approximately $3.7 million was reserved for real estate taxes, insurance, capital improvements and certain other expenses or otherwise restricted. The Company had approximately $297.3 million in outstanding debt at a weighted average interest rate of approximately 4.66%.

On October 11, 2017, the Company closed a sale and issuance of 1,200,000 shares of its 7.875% Series C Cumulative Redeemable Perpetual Preferred Stock (the “Series C Preferred Stock”), for net proceeds after expenses of approximately $28.1 million.  On October 17, 2017, the Company closed a sale and issuance of an additional 100,000 shares of its Series C Preferred Stock, for net proceeds of approximately $2.4 million, in connection with the partial exercise of the underwriters’ option to purchase additional shares. We used a portion of the net proceeds to redeem on November 15, 2017, the entire $25.3 million aggregate principal amount of the Operating Partnership’s 7.0% Senior Unsecured Notes due 2019 (the “7% Notes”), and we intend to use the remaining net proceeds for general corporate purposes, including potential future acquisitions of hotel properties.

On December 2, 2016, the Company’s board of directors authorized a stock repurchase program under which the Company may purchase up to $10.0 million of its outstanding common stock, par value $0.01 per share, at prevailing prices on the open market or in privately negotiated transactions, at the discretion of management.  The Company has used and expects to continue to use available working capital to fund purchases under the stock repurchase program.  The repurchase program is authorized until December 31, 2018, unless extended by the board of directors.  As of December 31, 2017, the Company has repurchased 882,820 shares of common stock at an average price of $6.68 per share totaling approximately $5.9 million.  The repurchase program may be suspended or discontinued at any time, and the Company is not obligated to acquire any particular amount or number of shares.

Subsequent to the balance sheet date, on February 1, 2018 the Company drew down the final $5.0 million of loan proceeds available on the Hilton Wilmington Riverside mortgage loan after completing a significant portion of the renovation of the hotel and meeting certain other requirements under the loan documents.

Subsequent to the balance sheet date, on February 12, 2018 the Company and the Operating Partnership closed on a sale and issuance by the Operating Partnership of an aggregate $25.0 million of the 7.25% senior unsecured notes of the Operating Partnership, unconditionally guaranteed by the Company (the “7.25% Notes”), for net proceeds after estimated expenses of approximately $23.3 million.  The Operating Partnership intends to use the net proceeds from this offering, together with existing cash on hand and $57.0 million of first and second lien asset-level mortgage indebtedness, to finance the acquisition of the Hyatt Centric Arlington hotel located in Arlington, Virginia (the “Arlington Hotel”) and for general corporate purposes, including acquisition of additional hotels, the repayment of other outstanding indebtedness, capital expenditures, the improvement of hotels in our portfolio and working capital and other general purposes

Subsequent to the balance sheet date, on February 26, 2018 we entered into a First Amendment to Loan Agreement, Amended and Restated Promissory Note, and other related documents with International Bank of Commerce to amend the terms of the mortgage loan on The Whitehall hotel located in Houston, TX.  Pursuant to the amended loan documents, the maturity date is extended until February 26, 2023, the loan amortizes on a 25-year schedule with payments of principal and interest beginning immediately, and the loan has an initial principal balance of $15.0 million.

 

 


Portfolio Update

On October 25, 2017, the Company rebranded its property in Hollywood, Florida from the Crowne Plaza Hollywood Beach Resort to the DoubleTree Resort by Hilton Hollywood Beach and a $7.1 million renovation of the guestrooms and public space is complete. 

At the Company’s hotel in Wilmington, North Carolina, a $10.0 million renovation of the guestrooms and public space is underway, in anticipation of an upcoming rebranding in early 2018.  As of December 31, 2017, the Company had incurred costs of approximately $7.0 million.  Renovations are expected to be complete in March 2018.

On December 13, 2017, we entered into a hotel purchase and sale agreement to purchase the Arlington Hotel from RP/HH Rosslyn Hotel Owner, LP (the “Seller”) for an aggregate purchase price of approximately $81.0 million.  On January 11, 2018, we entered into an amendment to the hotel purchase and sale agreement to provide an additional credit at closing in the amount of $1.3 million, following which the aggregate purchase price will be approximately $79.7 million.  Pursuant to the hotel purchase and sale agreement, we have agreed to purchase, subject to the satisfaction of certain conditions, including entering into a new franchise agreement with Hyatt or making other arrangements to satisfy the obligations of the Seller under the existing franchise agreement, the accuracy of representations and warranties contained in the hotel purchase agreement through closing, and conditions related to the operation and maintenance of the Arlington Hotel, the Seller’s right, title, and interest in: (i) the Arlington Hotel; (ii) a ground lease for the real property associated with the Arlington Hotel; and (iii) certain other tangible and intangible property relating to the Arlington Hotel.  Pursuant to the hotel purchase and sale agreement, as amended, we have made non-refundable deposits totaling $2.0 million.  We structured the transaction to provide flexibility in qualifying the Arlington Hotel as a replacement property in a potential future like-kind exchange pursuant to Section 1031 of the Internal Revenue Code of 1986.

 

2018 Outlook

Set forth below is the Company’s guidance for 2018, which accounts for the impact of renovations at the Company’s hotels in Wilmington and Tampa, the issuance of the 7.25% Notes, and the anticipated closing of the acquisition of the Arlington Hotel.  The guidance is predicated on estimates of occupancy and ADR that are consistent with the most recent 2018 calendar year forecasts by STR for the market segments in which the Company operates.

The table below reflects the Company’s projections, within a range, of various financial measures for 2018, in thousands of dollars, except per share and RevPAR data:

 

 

2018 Guidance

 

 

Low Range

 

 

High Range

 

 

 

 

Total revenue

$

167,750

 

 

$

169,095

 

Net loss

 

(2,804

)

 

 

(2,352

)

 

 

 

 

 

 

 

 

EBITDA

 

40,997

 

 

 

41,481

 

Hotel EBITDA

 

46,997

 

 

 

47,581

 

 

 

 

 

 

 

 

 

FFO

 

15,843

 

 

 

16,352

 

Adjusted FFO available to common stockholders

 

15,873

 

 

 

16,493

 

 

 

 

 

 

 

 

 

Net income (loss) per share available to common stockholders

$

(0.21

)

 

$

(0.17

)

FFO per share and unit

$

1.04

 

 

$

1.07

 

Adjusted FFO available to common holders per share and unit

$

1.04

 

 

$

1.08

 

Rev PAR

$

106.23

 

 

$

107.09

 

Hotel EBITDA margin

 

31.4%

 

 

 

31.6%

 

 

 



Earnings Call/Webcast

The Company will conduct its fourth quarter 2017 conference call for investors and other interested parties at 10:00 a.m. Eastern Time on Tuesday, February 27, 2018. The conference call will be accessible by telephone and through the Internet. Interested individuals are invited to listen to the call by telephone at 888-339-0107 (United States) or 855-669-9657 (Canada) or +1 412-902-4188 (International). To participate on the webcast, log on to www.sotherlyhotels.com at least 15 minutes before the call to download the necessary software. For those unable to listen to the call live, a taped rebroadcast will be available beginning one hour after completion of the live call on February 27, 2018 through February 26, 2019. To access the rebroadcast, dial 877-344-7529 and enter conference number 10113019.  A replay of the call also will be available on the Internet at www.sotherlyhotels.com until February 26, 2019.

About Sotherly Hotels Inc.

Sotherly Hotels Inc. is a self-managed and self-administered lodging REIT focused on the acquisition, renovation, upbranding and repositioning of upscale to upper-upscale full-service hotels in the Southern United States. Currently, the Company’s portfolio consists of investments in eleven hotel properties, comprising 2,838 rooms, and an interest in the Hyde Resort & Residences, a luxury condo hotel. Most of the Company’s properties operate under the Hilton Worldwide, InterContinental Hotels Group and Marriott International, Inc. brands. Sotherly Hotels Inc. was organized in 2004 and is headquartered in Williamsburg, Virginia. For more information, please visit www.sotherlyhotels.com.

Contact at the Company:

Scott Kucinski

Vice President – Operations & Investor Relations

Sotherly Hotels Inc.

410 West Francis Street

Williamsburg, Virginia 23185

757.229.5648

Forward-Looking Statements

This news release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although the Company believes that the expectations and assumptions reflected in the forward-looking statements are reasonable, these statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions which are difficult to predict and many of which are beyond the Company’s control. Therefore, actual outcomes and results may differ materially from what is expressed, forecasted or implied in such forward-looking statements. Factors which could have a material adverse effect on the Company’s future results, performance and achievements, include, but are not limited to: national and local economic and business conditions that affect occupancy rates and revenues at the Company’s hotels and the demand for hotel products and services; risks associated with the hotel industry, including competition and new supply of hotel rooms, increases in wages, energy costs and other operating costs; risks associated with adverse weather conditions, including hurricanes; the availability and terms of financing and capital and the general volatility of the securities markets; the Company’s intent to repurchase shares from time to time; risks associated with the level of the Company’s indebtedness and its ability to meet covenants in its debt agreements and, if necessary, to refinance or seek an extension of the maturity of such indebtedness or modify such debt agreements; management and performance of the Company’s hotels; risks associated with maintaining our system of internal controls; risks associated with the conflicts of interest of the Company’s officers and directors; risks associated with redevelopment and repositioning projects, including delays and cost overruns; supply and demand for hotel rooms in the Company’s current and proposed market areas; risks associated with our ability to maintain our franchise agreements with our third party franchisors; the Company’s ability to acquire additional properties and the risk that potential acquisitions may not perform in accordance with expectations; the Company’s ability to successfully expand into new markets; legislative/regulatory changes, including changes to laws governing taxation of REITs; the Company’s ability to maintain its qualification as a REIT; and the Company’s ability to maintain adequate insurance coverage. These risks and uncertainties are described in greater detail under “Risk Factors” in the Company’s Annual Report on Form 10-K and subsequent reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to and does not intend to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Although the Company believes its current expectations to be based upon reasonable assumptions, it can give no assurance that its expectations will be attained or that actual results will not differ materially.

Financial Tables Follow…


 

SOTHERLY HOTELS INC.

CONSOLIDATED BALANCE SHEETS

 

 

December 31, 2017

 

 

December 31, 2016

 

 

 

(Unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Investment in hotel properties, net

 

$

357,799,512

 

 

$

348,593,912

 

Investment in hotel properties held for sale, net

 

 

-

 

 

 

5,333,000

 

Cash and cash equivalents

 

 

29,777,845

 

 

 

31,766,775

 

Restricted cash

 

 

3,651,197

 

 

 

4,596,145

 

Accounts receivable, net

 

 

5,587,077

 

 

 

4,127,748

 

Accounts receivable - affiliate

 

 

394,026

 

 

 

4,175

 

Prepaid expenses, inventory and other assets

 

 

7,292,565

 

 

 

4,648,469

 

Deferred income taxes

 

 

5,451,118

 

 

 

6,949,340

 

TOTAL ASSETS

 

$

409,953,340

 

 

$

406,019,564

 

LIABILITIES

 

 

 

 

 

 

 

 

Mortgage loans, net

 

$

297,318,816

 

 

$

282,708,289

 

Unsecured notes, net

 

 

-

 

 

 

24,308,713

 

Accounts payable and accrued liabilities

 

 

13,813,623

 

 

 

12,970,960

 

Advance deposits

 

 

1,572,388

 

 

 

2,315,787

 

Dividends and distributions payable

 

 

3,073,483

 

 

 

2,376,527

 

TOTAL LIABILITIES

 

$

315,778,310

 

 

$

324,680,276

 

Commitments and contingencies

 

 

 

 

 

 

EQUITY

 

 

 

 

 

 

 

 

Sotherly Hotels Inc. stockholders’ equity

 

 

 

 

 

 

 

 

Preferred stock, $0.01 par value, 11,000,000 shares authorized;

 

 

 

 

 

 

 

 

8.0% Series B cumulative redeemable perpetual preferred stock,

   liquidation preference $25 per share, 1,610,000 shares issued

   and outstanding at December 31, 2017 and 2016, respectively

 

 

16,100

 

 

 

16,100

 

7.875% Series C cumulative redeemable perpetual preferred stock,

   liquidation preference $25 per share, 1,300,000 and 0 shares issued

   and outstanding at December 31, 2017 and 2016, respectively

 

 

13,000

 

 

 

 

Common stock, par value $0.01, 49,000,000 shares authorized, 14,078,831

   shares and 14,468,551 shares issued and outstanding at December 31, 2017

   and 2016, respectively

 

 

140,788

 

 

 

144,685

 

Additional paid-in capital

 

 

146,249,339

 

 

 

118,395,082

 

Unearned ESOP shares

 

 

(4,633,112

)

 

 

 

Distributions in excess of retained earnings

 

 

(48,765,860

)

 

 

(39,545,754

)

Total Sotherly Hotels Inc. stockholders’ equity

 

 

93,020,255

 

 

 

79,010,113

 

Noncontrolling interest

 

 

1,154,775

 

 

 

2,329,175

 

TOTAL EQUITY

 

 

94,175,030

 

 

 

81,339,288

 

TOTAL LIABILITIES AND EQUITY

 

$

409,953,340

 

 

$

406,019,564

 

 

 


 

SOTHERLY HOTELS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Twelve Months Ended

 

 

Twelve Months Ended

 

 

 

December 31, 2017

 

 

December 31, 2016

 

 

December 31, 2017

 

 

December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms department

 

$

24,360,641

 

 

$

24,302,318

 

 

$

105,727,372

 

 

$

108,199,151

 

Food and beverage department

 

 

9,608,761

 

 

 

9,143,598

 

 

 

34,513,695

 

 

 

35,384,530

 

Other operating departments

 

 

4,190,302

 

 

 

2,489,423

 

 

 

14,025,626

 

 

 

9,262,071

 

Total revenue

 

 

38,159,704

 

 

 

35,935,339

 

 

 

154,266,693

 

 

 

152,845,752

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hotel operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms department

 

 

6,420,838

 

 

 

6,978,596

 

 

 

26,673,727

 

 

 

28,300,126

 

Food and beverage department

 

 

6,666,781

 

 

 

6,106,707

 

 

 

24,585,923

 

 

 

24,357,248

 

Other operating departments

 

 

782,820

 

 

 

558,242

 

 

 

2,711,481

 

 

 

2,438,860

 

Indirect

 

 

14,286,495

 

 

 

13,900,259

 

 

 

59,306,237

 

 

 

57,736,937

 

Total hotel operating expenses

 

 

28,156,934

 

 

 

27,543,804

 

 

 

113,277,368

 

 

 

112,833,171

 

Depreciation and amortization

 

 

4,291,071

 

 

 

3,758,083

 

 

 

16,999,619

 

 

 

15,019,071

 

Loss on disposal of assets

 

 

1,438,323

 

 

 

35,859

 

 

 

1,489,892

 

 

 

365,319

 

Corporate general and administrative

 

 

1,453,385

 

 

 

1,689,169

 

 

 

6,335,926

 

 

 

6,021,065

 

Total operating expenses

 

 

35,339,713

 

 

 

33,026,915

 

 

 

138,102,805

 

 

 

134,238,626

 

NET OPERATING INCOME

 

 

2,819,991

 

 

 

2,908,424

 

 

 

16,163,888

 

 

 

18,607,126

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(3,900,567

)

 

 

(3,862,974

)

 

 

(15,727,628

)

 

 

(17,735,107

)

Interest income

 

 

92,415

 

 

 

52,262

 

 

 

218,656

 

 

 

115,785

 

Loss on early debt extinguishment

 

 

(950,261

)

 

 

(260,217

)

 

 

(1,178,348

)

 

 

(1,417,905

)

Unrealized gain (loss) on hedging activities

 

 

2,364

 

 

 

29,182

 

 

 

(28,384

)

 

 

(37,384

)

Gain (loss) on sale of assets

 

 

(1,574

)

 

 

 

 

 

76,233

 

 

 

 

Gain on involuntary conversion of assets

 

 

1,201,061

 

 

 

 

 

 

2,242,876

 

 

 

 

Net income (loss) before income taxes

 

 

(736,571

)

 

 

(1,133,323

)

 

 

1,767,293

 

 

 

(467,485

)

Income tax (provision) benefit

 

 

(2,319,694

)

 

 

1,059,236

 

 

 

(1,737,804

)

 

 

1,367,634

 

Net income (loss)

 

 

(3,056,265

)

 

 

(74,087

)

 

 

29,489

 

 

 

900,149

 

Less: Net loss attributable to the noncontrolling interest

 

 

486,379

 

 

 

132,944

 

 

 

413,014

 

 

 

26,567

 

Net income (loss) attributable to the Company

 

 

(2,569,886

)

 

 

58,857

 

 

 

442,503

 

 

 

926,716

 

Distributions to preferred stockholders

 

 

(1,366,639

)

 

 

(805,000

)

 

 

(3,781,639

)

 

 

(1,144,889

)

Net loss available to common stockholders

 

$

(3,936,525

)

 

$

(746,143

)

 

$

(3,339,136

)

 

$

(218,173

)

Net loss per share available to common stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic & Diluted

 

$

(0.29

)

 

$

(0.05

)

 

$

(0.24

)

 

$

(0.01

)

Weighted average number of common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic & Diluted

 

 

13,699,225

 

 

 

14,895,203

 

 

 

13,829,330

 

 

 

14,896,994

 

 

 

 


 

SOTHERLY HOTELS INC.

KEY OPERATING METRICS

(unaudited)

The following tables illustrate the key operating metrics for the three and twelve months ended December 31, 2017 and 2016, respectively, for the Company’s wholly-owned properties (“actual” portfolio metrics), as well as the eleven wholly-owned properties in the portfolio that were under the Company’s control during the three and twelve months ended December 31, 2017 and the corresponding periods in 2016 (“same-store” portfolio metrics). Accordingly, the same-store data does not reflect the performance of the Crowne Plaza Hampton Marina which was sold in February 2017, or our interest in the Hyde Resort & Residences which was acquired on January 30, 2017.  The composite portfolio metrics represent all of the Company’s wholly-owned properties and the participating condominium hotel rooms at the Hyde Resort & Residences during the three and twelve months ended December 31, 2017 and the corresponding periods in 2016.

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

Year Ended

 

 

Year Ended

 

 

 

December 31, 2017

 

 

December 31, 2016

 

 

 

December 31, 2017

 

 

December 31, 2016

 

Actual Portfolio Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Occupancy %

 

 

64.0

%

 

 

63.2

%

 

 

 

70.4

%

 

 

69.8

%

ADR

 

$

145.71

 

 

$

138.81

 

 

 

$

144.03

 

 

$

140.63

 

RevPAR

 

$

93.30

 

 

$

87.73

 

 

 

$

101.44

 

 

$

98.18

 

Same-Store Portfolio Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Occupancy %

 

 

64.0

%

 

 

64.6

%

 

 

 

70.6

%

 

 

70.7

%

ADR

 

$

145.71

 

 

$

140.71

 

 

 

$

144.21

 

 

$

142.71

 

RevPAR

 

$

93.30

 

 

$

90.90

 

 

 

$

101.88

 

 

$

100.91

 

Composite Portfolio Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Occupancy %

 

 

62.4

%

 

 

63.2

%

 

 

 

68.8

%

 

 

69.8

%

ADR

 

$

151.21

 

 

$

138.81

 

 

 

$

147.77

 

 

$

140.63

 

RevPAR

 

$

94.42

 

 

$

87.73

 

 

 

$

101.70

 

 

$

98.18

 

 

 


 

SOTHERLY HOTELS INC.

SUPPLEMENTAL DATA

(unaudited)

The following tables illustrate the key operating metrics for the three and twelve months ended December 31, 2017, 2016 and 2015, respectively, for each of the Company’s wholly-owned properties during each respective reporting period, irrespective of ownership percentage during any period.

Occupancy

 

 

 

 

 

 

 

 

 

 

 

 

 

Q4 2017

 

 

Q4 2016

 

 

Q4 2015

 

 

YTD

 

 

YTD

 

 

YTD

 

Crowne Plaza Hampton Marina (1)

Hampton, Virginia

N/A

 

 

 

40.3

%

 

 

49.3

%

 

 

35.4

%

 

 

55.2

%

 

 

55.2

%

Crowne Plaza Tampa Westshore

Tampa, Florida

 

78.7

%

 

 

67.2

%

 

 

71.0

%

 

 

79.1

%

 

 

74.6

%

 

 

72.5

%

The DeSoto

Savannah, Georgia

 

61.6

%

 

 

63.0

%

 

 

72.4

%

 

 

66.6

%

 

 

71.5

%

 

 

76.9

%

DoubleTree by Hilton Jacksonville Riverfront

Jacksonville, Florida

 

78.0

%

 

 

72.0

%

 

 

62.7

%

 

 

79.9

%

 

 

77.4

%

 

 

67.4

%

DoubleTree by Hilton Laurel

Laurel, Maryland

 

57.8

%

 

 

52.7

%

 

 

39.0

%

 

 

64.9

%

 

 

60.5

%

 

 

48.2

%

DoubleTree by Hilton Philadelphia Airport

Philadelphia, Pennsylvania

 

72.2

%

 

 

67.7

%

 

 

72.9

%

 

 

75.5

%

 

 

77.0

%

 

 

79.3

%

DoubleTree by Hilton Raleigh Brownstone – University

Raleigh, North Carolina

 

69.9

%

 

 

66.9

%

 

 

61.7

%

 

 

74.2

%

 

 

70.0

%

 

 

71.5

%

DoubleTree Resort by Hilton Hollywood Beach (2)(3)

Hollywood, Florida

 

61.0

%

 

 

73.2

%

 

 

81.9

%

 

 

72.1

%

 

 

79.6

%

 

 

80.5

%

The Georgian Terrace

Atlanta, Georgia

 

67.0

%

 

 

70.2

%

 

 

65.7

%

 

 

70.6

%

 

 

70.8

%

 

 

69.9

%

Hilton Wilmington Riverside (3)

Wilmington, North Carolina

 

61.8

%

 

 

61.9

%

 

 

67.6

%

 

 

68.3

%

 

 

70.5

%

 

 

71.6

%

Sheraton Louisville Riverside

Jeffersonville, Indiana

 

48.6

%

 

 

53.8

%

 

 

63.6

%

 

 

63.8

%

 

 

63.1

%

 

 

69.5

%

The Whitehall

Houston, Texas

 

41.2

%

 

 

52.3

%

 

 

66.2

%

 

 

58.1

%

 

 

54.4

%

 

 

70.9

%

Hyde Resort & Residences (4)

Hollywood Beach, Florida

 

38.4

%

 

N/A

 

 

N/A

 

 

 

37.9

%

 

N/A

 

 

N/A

 

All properties weighted average (1)(2)

 

62.4

%

 

 

63.2

%

 

 

65.9

%

 

 

68.8

%

 

 

69.8

%

 

 

70.5

%

 

1

Includes only the period of ownership for the Crowne Plaza Hampton Marina up to February 7, 2017.

2

Includes periods of partial ownership in the YTD figures.

 


3

Property undergoing renovation during the current quarter.

4

Reflects only the condominium units at the Hyde Resort & Residences participating in our rental program for the period those units participated in our rental program.

ADR

 

 

 

 

 

 

 

 

 

 

 

 

 

Q4 2017

 

 

Q4 2016

 

 

Q4 2015

 

 

YTD

 

 

YTD

 

 

YTD

 

Crowne Plaza Hampton Marina (1)

Hampton, Virginia

N/A

 

 

$

88.88

 

 

$

97.64

 

 

$

84.95

 

 

$

96.81

 

 

$

95.09

 

Crowne Plaza Tampa Westshore

Tampa, Florida

$

116.39

 

 

$

115.81

 

 

$

106.81

 

 

$

119.85

 

 

$

116.15

 

 

$

111.08

 

The DeSoto

Savannah, Georgia

$

157.93

 

 

$

151.81

 

 

$

152.61

 

 

$

159.50

 

 

$

155.87

 

 

$

154.52

 

DoubleTree by Hilton Jacksonville Riverfront

Jacksonville, Florida

$

140.34

 

 

$

143.00

 

 

$

122.40

 

 

$

132.19

 

 

$

126.67

 

 

$

99.48

 

DoubleTree by Hilton Laurel

Laurel, Maryland

$

104.74

 

 

$

105.18

 

 

$

95.19

 

 

$

107.77

 

 

$

104.35

 

 

$

94.09

 

DoubleTree by Hilton Philadelphia Airport

Philadelphia, Pennsylvania

$

138.64

 

 

$

137.14

 

 

$

136.33

 

 

$

135.54

 

 

$

144.92

 

 

$

136.32

 

DoubleTree by Hilton Raleigh Brownstone – University

Raleigh, North Carolina

$

131.29

 

 

$

140.87

 

 

$

138.33

 

 

$

133.24

 

 

$

134.74

 

 

$

131.61

 

DoubleTree Resort by Hilton Hollywood Beach (2)(3)

Hollywood, Florida

$

167.71

 

 

$

156.61

 

 

$

122.83

 

 

$

170.76

 

 

$

170.57

 

 

$

172.89

 

The Georgian Terrace

Atlanta, Georgia

$

186.21

 

 

$

160.31

 

 

$

153.83

 

 

$

175.06

 

 

$

160.89

 

 

$

155.56

 

Hilton Wilmington Riverside (3)

Wilmington, North Carolina

$

143.62

 

 

$

141.37

 

 

$

132.55

 

 

$

148.69

 

 

$

147.14

 

 

$

138.36

 

Sheraton Louisville Riverside

Jeffersonville, Indiana

$

138.65

 

 

$

125.95

 

 

$

131.74

 

 

$

133.86

 

 

$

137.44

 

 

$

161.03

 

The Whitehall

Houston, Texas

$

154.94

 

 

$

136.22

 

 

$

141.61

 

 

$

147.66

 

 

$

140.70

 

 

$

142.05

 

Hyde Resort & Residences (4)

Hollywood Beach, Florida

$

289.66

 

 

N/A

 

 

N/A

 

 

$

282.20

 

 

N/A

 

 

N/A

 

All properties weighted average (1)(2)

$

151.21

 

 

$

138.81

 

 

$

137.21

 

 

$

147.77

 

 

$

140.63

 

 

$

134.21

 

 

1

Includes only the period of ownership for the Crowne Plaza Hampton Marina up to February 7, 2017.

2

Includes periods of partial ownership in the YTD figures.

3

Property undergoing renovation during the current quarter.

4

Reflects only the condominium units at the Hyde Resort & Residences participating in our rental program for the period those units participated in our rental program.

 


RevPAR

 

 

 

 

 

 

 

 

 

 

 

 

 

Q4 2017

 

 

Q4 2016

 

 

Q4 2015

 

 

YTD

 

 

YTD

 

 

YTD

 

Crowne Plaza Hampton Marina (1)

Hampton, Virginia

N/A

 

 

$

35.80

 

 

$

43.63

 

 

$

30.03

 

 

$

53.40

 

 

$

51.64

 

Crowne Plaza Tampa Westshore

Tampa, Florida

$

91.57

 

 

$

77.81

 

 

$

75.85

 

 

$

94.81

 

 

$

86.69

 

 

$

80.53

 

The DeSoto

Savannah, Georgia

$

97.22

 

 

$

95.67

 

 

$

110.52

 

 

$

106.15

 

 

$

111.48

 

 

$

118.89

 

DoubleTree by Hilton Jacksonville Riverfront

Jacksonville, Florida

$

109.41

 

 

$

102.93

 

 

$

76.77

 

 

$

105.56

 

 

$

98.06