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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 9, 2018

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 9, 2018, Condor Hospitality Trust, Inc. issued a press release on its earnings for the quarter ended March 31, 2018.  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 9, 2018.




 

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 9, 2018

By:  /s/ Arinn Cavey



Name: Arinn Cavey



Title: Chief Accounting Officer










(Back To Top)

Section 2: EX-99.1 (EX-99.1)

Earnings Release Q1 2018







 

Picture 3

Picture 1





For Immediate Release



Condor Hospitality Trust Reports First Quarter 2018 Results



BETHESDA, MD, May 9, 2018 – Condor Hospitality Trust, Inc. (NYSE American: CDOR) (the “Company”) today announced results for the first quarter ended March 31, 2018.  



FIRST QUARTER RELEASE FINANCIAL HIGHLIGHTS



·

Revenue of $16.7 million a 61% Increase to Revenue of $10.4 million in Last Year’s First Quarter

·

Net Earnings Attributable to Common Shareholders of $0.6 million or $0.05 per Diluted Share

·

Adjusted Funds from Operations Increased to $3.5 million, or $0.29 per Diluted Share, a 994% increase from $0.3 million in Last Year’s First Quarter

·

Hotel EBITDA Increased to $7.4 million from $4.0 million, and Adjusted EBITDAre Increased 136% Over Last Year’s First Quarter

·

Achieved 3.9%  First Quarter Same-Store RevPAR Growth over Prior Year*

·

Expanded First Quarter Same-Store Hotel EBITDA Margin by 60 Basis Points to 38.9% over Prior Year*



FIRST QUARTER PORTFOLIO ACCOMPLISHMENTS



·

Acquired Two New Investment Platform Hotels for Approximately $36.1 million

·

Sold Two Legacy Assets Generating $8.2 million in Gross Proceeds



*New investment platform hotels only; Includes results prior to our ownership to illustrate same-store performance



MANAGEMENT COMMENTARY



Bill Blackham, Condor’s Chief Executive Officer, commented:



“With the transformation of Condor substantially complete, we continued to deliver strong operating results in the first quarter of 2018 due to our differentiated acquisition strategy of acquiring relatively new high-quality select-service hotels mostly in leading secondary markets.  We achieved 3.9% same-store RevPAR growth and expanded hotel EBITDA margins by 60 bps on our new investment platform hotels.  Our differentiated investment thesis and our intensive asset management efforts are responsible for our favorable operating performance in the quarter



In addition to our strong operating results, we also achieved notable portfolio accomplishments.  In the first quarter, we sold two legacy hotel assets generating gross proceeds of $8.2 million and acquired two new investment platform hotels, located in Austin and Charleston, for $36.1 million.  We now have only three legacy hotels remaining, one of which is under contract to be sold.  Additionally, with the acquisition of the two new investment platform hotels, we have now assembled a portfolio of 15 high-quality, select-service assets in attractive growth markets with an average age of less than 4 years.”

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FINANCIAL SUMMARY

At March 31, 2018, the Company’s total portfolio included 18 hotels, representing 2,215 rooms.



Total Company Financial Results

($ in millions except per share amounts)







 

 

 

 

 

 

 



Three months ended March 31,



2018

 

2017

 

Change

Revenue

$

16.7 

 

$

10.4 

 

61.0% 

Net Earnings (Loss) Attributable to Common Shareholders

$

0.6 

 

$

(14.0)

 

N/A

Diluted Earnings (Loss) per Share

$

0.05 

 

$

(4.75)

 

N/A



 

 

 

 

 

 

 

Funds from Operations (FFO)*

$

3.3 

 

$

(0.7)

 

N/A

FFO per Diluted Share*

$

0.26 

 

$

(4.19)

 

N/A

Adjusted FFO*

$

3.5 

 

$

0.3 

 

994.4% 

Adjusted FFO per Diluted Share*

$

0.29 

 

$

0.10 

 

190.0% 



 

 

 

 

 

 

 

Hotel EBITDA*

$

7.4 

 

$

4.0 

 

83.8% 

Adjusted EBITDAre*

$

5.8 

 

$

2.5 

 

135.7% 



*Please see the Reg. G reconciliation tables at the end of this release.



The improvement in year-over-year financial performance was primarily driven by higher revenue and higher margins from the New Investment Platform hotels.



NEW INVESTMENT PLATFORM

At March 31, 2018, the Company’s new investment platform included 15 hotels, representing 1,908 rooms.



New Investment Platform Operational Results**

($ in millions except per share amounts and operating metrics)





 

 

 

 

 

 

 



Three months ended March 31,



2018

 

2017

 

Change

Same-Store RevPAR

$

102.01 

 

$

98.16 

 

3.9% 

Same-Store Occupancy

 

79.74% 

 

 

79.39% 

 

0.4% 

Same-Store ADR

$

127.93 

 

$

123.64 

 

3.5% 



 

 

 

 

 

 

 

Same-Store Hotel EBITDA*^

$

6.2 

 

$

6.2 

 

1.0% 

Same-Store Hotel EBITDA Margin*

 

38.9% 

 

 

38.3% 

 

0.6% 



*Please see the Reg. G reconciliation tables at the end of this release.

**Financial results presented above include results from prior to our ownership. 

^Due to differences in the allocation of JV preferred returns, JV activity was 100% attributed to Condor in the first quarter of 2017 and 80% attributed to Condor in the first quarter of 2018

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LEGACY PLATFORM

At March 31, 2018, the Company’s legacy platform included 3 hotels, representing 307 rooms.



Legacy Platform Operational Results*

($ in millions except per share amounts and operating metrics)





 

 

 

 

 

 

 



Three months ended March 31,



2018

 

2017

 

Change

Same-Store RevPAR

$

49.91 

 

$

51.01 

 

-2.2%

Same-Store Occupancy

 

68.82% 

 

 

74.69% 

 

-7.9%

Same-Store ADR

$

72.51 

 

$

68.29 

 

6.2% 



 

 

 

 

 

 

 

Same-Store Hotel EBITDA*

$

0.4 

 

$

0.4 

 

-1.8%

Same-Store Hotel EBITDA Margin*

 

25.9% 

 

 

25.8% 

 

0.2% 



* Please see the Reg. G reconciliation tables at the end of this release.



PORTFOLIO ACTIVITY

The Company’s investment strategy is to assemble a portfolio of premium-branded, select-service hotels in the top 100 Metropolitan Statistical Areas (“MSAs”) with a particular focus on MSAs ranked between 20 to 60. Since restarting its portfolio transformation in 2015, the Company has acquired 14 high-quality select-service hotels representing 1,808 rooms in its target markets for a total purchase price of approximately $277 million. Additionally, during this time, the Company has sold 52 legacy assets for a total gross sales price of approximately $153 million.



Acquisitions

During the first quarter of 2018, the Company acquired the TownePlace Suites Austin North Tech Ridge and the Home2 Suites Summerville-Charleston in South Carolina for a combined purchase price of $36.1 million.  Aimbridge Hospitality was retained as the manager of the TownePlace Suites while Inn Ventures is the manager of our new Home2 Suites.



Dispositions

During the first quarter of 2018, the Company sold the Supertel Inn in Creston, IA for $2.1 million and the Comfort Suites in South Bend, IN for $6.1 million.  Net proceeds from the sales were applied to outstanding debt on the Company’s $150 million secured credit facility.  The Company has only three legacy hotels remaining in the portfolio, and one of these hotels is currently under contract for sale while another is being marketed for sale.



BALANCE SHEET AND CAPITAL MARKETS ACTIVITY

As of March 31, 2018, the Company had cash and cash equivalents (including restricted cash) of $9.6 million and available revolver lending capacity of $3.3 million.  As of March 31, 2018, the Company had total outstanding long-term debt of $145.0 million associated with assets held for use with a weighted average maturity of 2.8 years and a weighted average interest rate of 4.29%.



During the first quarter of 2018, the Company sold 12,334 shares of common stock under the ATM program at an average sales price of $10.40 per share for net proceeds totaling approximately $103,000. 



CAPITAL INVESTMENTS

The Company invested $0.7 million in capital improvements throughout the portfolio in the quarter ended March 31, 2018, to upgrade its properties and maintain brand standards.



OUTLOOK AND GUIDANCE

The Company reiterates its previously announced 2018 Outlook Forecast as included below.  Condor plans to reexamine full year 2018 guidance following the end of the second quarter of 2018.





 

 

 

 

 

 



 

 

 

 

 

 

2018 Outlook ($ in millions except per share amounts)

 

 

Low

 

 

High

RevPAR growth (13 new investment platform hotels owned as of December 31, 2017)

 

 

3.0% 

 

 

4.5% 

2018 Outlook for 17-Hotel Portfolio

 

 

 

 

 

 

    Forecast hotel revenue

 

$

74.0 

 

$

75.4 

    Forecast net earnings

 

$

1.7 

 

$

2.5 

    Forecast earnings per share - Diluted

 

$

0.09 

 

$

0.16 

    Forecast Hotel EBITDA*

 

$

28.8 

 

$

29.7 

    Forecast AFFO per common share and common unit - Diluted*

 

$

1.13 

 

$

1.19 



*Please see the Reg. G reconciliation tables at the end of this release.

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DIVIDENDS

On March 22, 2018, the Board of Directors declared a quarterly cash common stock dividend of $0.195 per share for the first quarter of 2018.  The common stock dividend represented an annualized yield of approximately 7.6% based on the closing price of the Company’s common shares on March 21, 2018.  The first quarter dividend was paid on April 9, 2018 to shareholders of record as of April 2, 2018.



EARNINGS CALL

The Company will conduct its quarterly conference call on Thursday,  May 10, 2018, at 9:30 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.



A live webcast of the Earnings Call will also 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. (NYSE American: 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 in the top 100 Metropolitan Statistical Areas (“MSAs”) with a particular focus on the top 20 to 60 MSAs. The Company currently owns 18 hotels in 10 states.  Condor’s hotels are franchised by a number of the industry’s most well-regarded brand families including Hilton, Marriott, and InterContinental Hotels.



Forward-Looking Statement

Certain matters within this press release are discussed using forward-looking language as specified in the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual events, results or performance to differ from those projected presented in the forward-looking statement. These forward-looking statements are based on assumptions that management has made in light of experience in the business in which the Company operates, as well as other factors management believes to be appropriate under the circumstances. As you read and consider this release, you should understand that these statements are not guarantees of events, performance or results. They involve risks, uncertainties (some of which are beyond the Company’s control) and assumptions. Although management believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect events, performance or results and cause them to differ materially from those anticipated in the forward-looking statements. These factors include among other things, risk factors described from time to time in the Company’s filings with the Securities and Exchange Commission. The Company cautions that any forward-looking statement included in this press release is made as of the date of this press release and the Company does not undertake to update any forward-looking statement.

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SELECTED FINANCIAL DATA:



Condor Hospitality Trust, Inc. and Subsidiaries

Consolidated Balance Sheets

 (Unaudited - In thousands, except share and per share data)







 

 

 

 

 

 



 

 

As of



 

March 31, 2018

 

December 31, 2017



 

 

 

 

 

 

Assets

 

 

 

 

 

 

Investment in hotel properties, net

 

$

240,307 

 

$

205,730 

Investment in unconsolidated joint venture

 

 

7,616 

 

 

7,747 

Cash and cash equivalents

 

 

4,609 

 

 

5,441 

Restricted cash, property escrows

 

 

4,983 

 

 

4,894 

Accounts receivable, net

 

 

1,995 

 

 

1,707 

Prepaid expenses and other assets

 

 

2,274 

 

 

3,220 

Derivative assets, at fair value

 

 

818 

 

 

391 

Investment in hotel properties held for sale, net

 

 

6,115 

 

 

13,850 

Total Assets

 

$

268,717 

 

$

242,980 



 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 



 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Accounts payable, accrued expenses, and other liabilities

 

$

6,835 

 

$

7,046 

Dividends and distributions payable

 

 

2,479 

 

 

2,470 

Convertible debt, at fair value

 

 

1,049 

 

 

1,069 

Long-term debt, net of deferred financing costs

 

 

141,825 

 

 

112,621 

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

 

 

6,007 

 

 

7,960 

Total Liabilities

 

 

158,195 

 

 

131,166 



 

 

 

 

 

 

Equity

 

 

 

 

 

 

Shareholders' Equity

 

 

 

 

 

 

Preferred stock,  40,000,000 shares authorized:

 

 

 

 

 

 

6.25% Series E, 925,000 shares authorized, $.01 par value, 925,000 shares outstanding, liquidation preference of $9,395

 

 

10,050 

 

 

10,050 

Common stock, $.01 par value, 200,000,000 shares authorized; 11,873,139 and 11,833,573 shares outstanding

 

 

119 

 

 

118 

Additional paid-in capital

 

 

231,071 

 

 

230,727 

Accumulated deficit

 

 

(132,164)

 

 

(130,489)

Total Shareholders' Equity

 

 

109,076 

 

 

110,406 

Noncontrolling interest in consolidated partnership (Condor Hospitality Limited Partnership), redemption value of $925 and $871

 

 

1,446 

 

 

1,408 

Total Equity

 

 

110,522 

 

 

111,814 



 

 

 

 

 

 

Total Liabilities and Equity

 

$

268,717 

 

$

242,980 

5

 


 

Condor Hospitality Trust, Inc. and Subsidiaries

Consolidated Statements of Operations

(Unaudited - In thousands, except per share data)









 

 

 

 

 

 



 

 

 



 

Three months ended March 31,



 

2018

 

2017

Revenue

 

 

 

 

 

 

Room rentals and other hotel services

 

$

16,679 

 

$

10,361 

Operating Expenses

 

 

 

 

 

 

Hotel and property operations

 

 

10,414 

 

 

7,613 

Depreciation and amortization

 

 

2,259 

 

 

1,051 

General and administrative

 

 

1,869 

 

 

1,492 

Acquisition and terminated transactions

 

 

19 

 

 

502 

Equity transactions

 

 

 -

 

 

343 

Total operating expenses

 

 

14,561 

 

 

11,001 

Operating income (loss)

 

 

2,118 

 

 

(640)

Net loss on disposition of assets

 

 

(24)

 

 

(3)

Equity in earnings of joint venture

 

 

229 

 

 

111 

Net gain on derivatives and convertible debt

 

 

447 

 

 

175 

Other expense, net

 

 

(14)

 

 

(1)

Interest expense

 

 

(1,928)

 

 

(971)

Loss on debt extinguishment

 

 

 -

 

 

(800)

Impairment (loss) recovery, net

 

 

93 

 

 

(271)

Earnings (loss) from continuing operations before income taxes

 

 

921 

 

 

(2,400)

Income tax expense

 

 

(129)

 

 

 -

Net earnings (loss)

 

 

792 

 

 

(2,400)

(Earnings) loss attributable to noncontrolling interest

 

 

(6)

 

 

50 

Net earnings (loss) attributable to controlling interests

 

 

786 

 

 

(2,350)

Dividends declared and in kind dividends deemed on preferred stock

 

 

(144)

 

 

(11,603)

Net earnings (loss) attributable to common shareholders

 

$

642 

 

$

(13,953)



 

 

 

 

 

 

Earnings per Share

 

 

 

 

 

 

Total - Basic Earnings (Loss) per Share

 

$

0.05 

 

$

(4.75)

Total - Diluted Earnings (Loss) per Share

 

$

0.05 

 

$

(4.75)



 

 

 

 

 

 





6

 


 

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”), EBITDA for real estate (“EBITDAre”), Adjusted EBITDAre, 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, 2018 and 2017 (in thousands). All amounts presented include our portion of the results of our unconsolidated Atlanta JV.











 

 

 

 

 



Three months ended March 31,

Reconciliation of Net earnings (loss) to FFO and AFFO

2018

 

2017

Net earnings (loss)

$

792 

 

$

(2,400)

Depreciation and amortization expense

 

2,259 

 

 

1,051 

Depreciation and amortization expense from JV

 

285 

 

 

354 

Net loss on disposition of assets

 

24 

 

 

Net loss on disposition of assets from JV

 

 

 

Impairment loss (recovery), net

 

(93)

 

 

271 

FFO

 

3,274 

 

 

(720)

Dividends declared and in kind dividends deemed on preferred stock

 

(144)

 

 

(11,603)

FFO attributable to common shares and common units

 

3,130 

 

 

(12,323)

Net gain on derivatives and convertible debt

 

(447)

 

 

(175)

Acquisition and terminated transactions expense

 

19 

 

 

502 

Equity transactions expense

 

 -

 

 

343 

Loss on debt extinguishment

 

 -

 

 

800 

Stock-based compensation and LTIP expense

 

402 

 

 

77 

Amortization of deferred financing fees

 

353 

 

 

136 

Amortization of deferred financing fees from JV

 

45 

 

 

57 

Non-recurring dividends above stated rates declared and in kind dividends deemed on preferred stock

 

 -

 

 

10,903 

AFFO attributable to common shares and common units

$

3,502 

 

$

320 







 

 

 

 

 

FFO attributable to common shares and common units - Basic Shares

$

3,130 

 

$

(12,323)

Preferred dividends and fair value adjustments

 

111 

 

 

 -

FFO attributable to common shares and common units - Diluted Shares

$

3,241 

 

$

(12,323)



 

 

 

 

 

FFO per common share and common unit - Basic

$

0.26 

 

$

(4.19)

FFO per common share and common unit - Diluted

$

0.26 

 

$

(4.19)



 

 

 

 

 

Weighted average common shares and common units - Basic FFO

 

11,835,279 

 

 

3,089,987 

Weighted average common shares and common units - Diluted FFO

 

12,536,203 

 

 

3,089,987 











 

 

 

 

 

AFFO attributable to common shares and common units - Basic Shares

$

3,502 

 

$

320 

Convertible note interest

 

16 

 

 

 -

Preferred dividends at stated rates

 

144 

 

 

 -

AFFO attributable to common shares and common units - Diluted Shares

$

3,662 

 

$

320 



 

 

 

 

 

AFFO per common share and common unit - Basic

$

0.30 

 

$

0.10 

AFFO per common share and common unit - Diluted

$

0.29 

 

$

0.10 



 

 

 

 

 

Weighted average common shares and common units - Basic

 

11,835,279 

 

 

3,089,987 

Weighted average common shares and common units - Diluted

 

12,633,472 

 

 

3,106,961 



7

 


 

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 or loss 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 common units, which is FFO reduced by preferred stock dividends.  AFFO is FFO attributable to common shares and common units adjusted to exclude items we do not believe are representative of the results from our core operations, including non-cash gains or losses on derivatives and convertible debt, stock-based compensation expense, amortization of certain fees, losses on debt extinguishment, and in-kind dividends above stated rates, and cash charges for acquisition and equity transaction 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 to be a useful additional measure of performance for an equity REIT because it facilitates 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 provides a meaningful indication of our performance.  We believe that AFFO provides useful supplemental information to investors regarding our ongoing operating performance that, when considered with net income and FFO, is beneficial to an investor’s understanding of our operating performance. We present FFO and AFFO per common share and common unit because our common units are redeemable for common shares.  We believe it is meaningful for the investor to understand FFO and AFFO applicable to common shares and common units.  

8

 


 

EBITDA, EBITDAre, Adjusted EBITDAre, and Hotel EBITDA



The following table reconciles net earnings (loss) to EBITDA, EBITDAre, Adjusted EBITDAre, and Hotel EBITDA for the three months ended March 31, 2018 and 2017 (in thousands). All amounts presented our portion of the results of our unconsolidated Atlanta JV.







 

 

 

 

 



Three months ended March 31,

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

2018

 

2017

Net earnings (loss)

$

792 

 

$

(2,400)

Interest expense

 

1,928 

 

 

971 

Interest expense from JV

 

492 

 

 

662 

Loss on debt extinguishment

 

 -

 

 

800 

Income tax expense

 

129 

 

 

 -

Depreciation and amortization expense

 

2,259 

 

 

1,051 

Depreciation and amortization expense from JV

 

285 

 

 

354 

EBITDA

 

5,885 

 

 

1,438 

Net loss on disposition of assets

 

24 

 

 

Net loss on disposition of assets from JV

 

 

 

Impairment loss (recovery), net

 

(93)

 

 

271 

EBITDAre

 

5,823 

 

 

1,713 

Net gain on derivatives and convertible debt

 

(447)

 

 

(175)

Stock-based compensation and LTIP expense

 

402 

 

 

77 

Acquisition and terminated transactions expense

 

19 

 

 

502 

Equity transactions expense

 

 -

 

 

343 

Adjusted EBITDAre

 

5,797 

 

 

2,460 

General and administrative expense, excluding stock compensation and LTIP expense

 

1,467 

 

 

1,415 

Other expense, net

 

14 

 

 

Unallocated hotel and property operations expense

 

89 

 

 

132 

Hotel EBITDA

$

7,367 

 

$

4,008 



 

 

 

 

 

Revenue

$

16,679 

 

$

10,361 

JV revenue

 

2,618 

 

 

2,989 

Condor and JV revenue

$

19,297 

 

$

13,350 

Hotel EBITDA as a percentage of revenue

 

38.2% 

 

 

30.0% 



We calculate EBITDA, EBITDAre, and Adjusted EBITDAre by adding back to net earnings or loss 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 or loss interest expense, loss on debt extinguishment, income tax expense, and depreciation and amortization expense.  NAREIT adopted EBITDAre in order to promote an industry-wide measure of REIT operating performance.  We adjust EBITDA by adding back net gain/loss on disposition of assets and impairment charges to calculate EBITDAre.  To calculate Adjusted EBITDAre, we adjust EBITDAre to add back acquisition and terminated transactions expense and equity transactions expense, which are cash charges. We also add back stock –based compensation expense and gain/loss on derivatives and convertible debt, which are non-cash charges.  EBITDA, EBITDAre, and Adjusted EBITDAre, as presented, may not be comparable to similarly titled measures of other companies.



We believe EBITDA, EBITDAre, and Adjusted EBITDAre 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 EBITDAre to calculate Hotel EBITDA.  Hotel EBITDA, as presented, may not be comparable to similarly titled measures of other companies. 



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

 


 

Same-Store Revenue and Hotel EBITDA



The following tables present our same-store revenue, Hotel EBITDA, and Hotel EBITDA margin broken down by property type for the three months ended March 31, 2018 and 2017 (in thousands) and reconcile these same-store measures to total revenue and Hotel EBITDA as presented above.  Same-store results include all our hotels owned at March 31, 2018, with the exception of the Austin TownePlace Suites, opened on January 3, 2017, and the Summerville Home2 Suites, opened on July 18, 2017 (no prior period results available) and reflect the performance of these 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 or audited or reviewed by our independent auditors.  All amounts presented operations as well as our portion of the results of our unconsolidated Atlanta Aloft JV.  Results for periods prior to the Company’s ownership have not been included in the Company’s actual consolidated financial statements and are included here only for comparison purposes.









 

 

 

 

 

 



 

Revenue - Reconciliation of Same-Store to Actual



 

Three months ended March 31,



 

2018

 

2017

Condor and JV Revenue Actual*

 

$

19,297 

 

$

13,350 

Revenue earned on properties owned at March 31, 2018 prior to the Companys ownership, excluding the Austin TownePlace Suites and the Summerville Home2 Suites

 

 

 -

 

 

7,094 

Revenue earned on properties disposed of prior to March 31, 2018 during the period of ownership

 

 

(397)

 

 

(2,818)

Revenue earned on Austin TownePlace Suites and Summerville Home2 Suites subsequent to ownership

 

 

(1,413)

 

 

 -

Total Revenue Same-Store*

 

$

17,487 

 

$

17,626 







 

 

 

 

 

 



 

Revenue – Same-Store by Type



 

Three months ended March 31,



 

2018

 

2017

New investment platform*

 

$

16,015 

 

$

16,119 

Legacy held for use

 

 

265 

 

 

379 

Legacy held for sale

 

 

1,207 

 

 

1,128 

Total Revenue – Same-Store*

 

$

17,487 

 

$

17,626 









 

 

 

 

 

 



 

Hotel EBITDA Reconciliation of Same-Store to Actual



 

Three months ended March 31,



 

2018

 

2017

Condor and JV Hotel EBITDA Actual*

 

$

7,367 

 

$

4,008 

Hotel EBITDA earned on properties owned at March 31, 2018 prior to the Companys ownership, excluding the Austin TownePlace Suites and the Summerville Home2 Suites

 

 

 -

 

 

2,993 

Hotel EBITDA earned on properties disposed of prior to March 31, 2018 during the period of ownership

 

 

(42)

 

 

(436)

Hotel EBITDA earned on Austin TownePlace Suites and Summerville Home2 Suites subsequent to ownership

 

 

(707)

 

 

 -

Total Hotel EBITDA Same-Store*

 

$

6,618 

 

$

6,565 

10

 


 







 

 

 

 

 

 



 

Hotel EBITDA Same-Store by Type



 

Three months ended March 31,



 

2018

 

2017

New investment platform*

 

$

6,237 

 

$

6,177 

Legacy held for use

 

 

43 

 

 

77 

Legacy held for sale

 

 

338 

 

 

311 

Total Hotel EBITDA Same-Store*

 

$

6,618 

 

$

6,565 







 

 

 

 

 

 



 

Hotel EBITDA Margin by Property Type



 

Three months ended March 31,



 

2018

 

2017

New investment platform

 

 

38.9% 

 

 

38.3% 

Legacy held for use

 

 

16.2% 

 

 

20.3% 

Legacy held for sale

 

 

28.0% 

 

 

27.6% 

Total Portfolio – Same-Store

 

 

37.8% 

 

 

37.2% 



*Due to differences in the allocation of JV preferred returns, JV activity was 100% attributed to Condor in the first quarter of 2017 and 80% attributed to Condor in the first quarter of 2018

11

 


 

Non-GAAP Measures Included in 2018 Guidance and Outlook



The following tables reconcile forecast net earnings to forecast FFO and AFFO and forecast EBITDA, EBITDAre, Adjusted EBITDAre, and Hotel EBITDA for the year ending December 31, 2018 (in millions, except per share amounts) using the definitions of these non-GAAP measures as discussed above.











 

 

 

 

 

 

2018 Outlook ($ in millions except per share amounts)

 

Low

 

High

RevPAR growth (13 new investment platform hotels owned as of December 31, 2017)

 

 

3.0% 

 

 

4.5% 

2018 Outlook for 17-Hotel Portfolio

 

 

 

 

 

 

    Forecast hotel revenue

 

$

74.0 

 

$

75.4 

    Forecast net earnings

 

$

1.7 

 

$

2.5 

    Forecast earnings per share - Diluted

 

$

0.09 

 

$

0.16 

    Forecast Hotel EBITDA*

 

$

28.8 

 

$

29.7 

    Forecast AFFO per common share and common unit - Diluted*

 

$

1.13 

 

$

1.19 









 

 

 

 

 

 



 

Low

 

High

Forecast net earnings

 

$

1.7 

 

$

2.5 

Interest expense

 

 

8.5 

 

 

8.5 

Depreciation and amortization expense

 

 

11.4 

 

 

11.4 

Forecast EBITDA

 

 

21.5 

 

 

22.4 

Net gain on disposition of assets

 

 

 -

 

 

 -

Forecast EBITDAre

 

 

21.5 

 

 

22.4 

Acquisitions and terminated transactions expense

 

 

 -

 

 

 -

Stock-based compensation and LTIP expense

 

 

1.0 

 

 

1.0 

Forecast Adjusted EBITDAre

 

 

22.5 

 

 

23.4 

Cash general and administrative expense and other expenses

 

 

6.3 

 

 

6.3 

Forecast Hotel EBITDA (17 Hotels)

 

$

28.8 

 

$

29.7 







 

 

 

 

 

 



 

Low

 

High

Forecast net earnings

 

$

1.7 

 

$

2.5 

Depreciation and amortization expense

 

 

11.4 

 

 

11.4 

Net gain on disposition of assets

 

 

 -

 

 

 -

Forecast FFO

 

 

13.1 

 

 

13.9 

Preferred dividends

 

 

(0.6)

 

 

(0.6)

Forecast FFO attributable to common shares and common units

 

 

12.5 

 

 

13.3 

Acquisitions and terminated transactions expense

 

 

 -

 

 

 -

Stock-based compensation and LTIP expense

 

 

1.0 

 

 

1.0 

Amortization of deferred financing fees

 

 

0.2 

 

 

0.2 

Forecast AFFO attributable to common shares and common units - Basic

 

$

13.7 

 

$

14.5 



 

 

 

 

 

 

Forecast AFFO attributable to common shares and common units - Diluted

 

$

14.3 

 

$

15.1 

Forecast AFFO per common share and common unit - Diluted

 

$

1.13 

 

$

1.19 

Diluted common shares and common units

 

 

12.7 

 

 

12.7 



12

 


 

Condor Hospitality Trust, Inc. Operating Statistics



The following tables present our same-store occupancy, ADR, and RevPAR for all our hotels owned at March 31, 2018, with the exception of the Austin TownePlace Suites, which was opened on January 3, 2017, and Summerville, SC Home2 Suites which was opened on July 18, 2017 (no prior period results available).  Same-store 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 or audited or reviewed by our independent auditors.  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,



2018

 

2017



Occupancy

 

ADR

 

RevPAR

 

Occupancy

 

ADR

 

RevPAR

Solomons Hilton Garden Inn

73.41% 

 

$

125.74 

 

$

92.30 

 

73.58% 

 

$

118.70 

 

$

87.33 

Atlanta Hotel Indigo

81.13% 

 

$

108.30 

 

$

87.87 

 

74.07% 

 

$

104.45 

 

$

77.37 

Jacksonville Courtyard by Marriott

85.04% 

 

$

113.26 

 

$

96.31 

 

76.02% 

 

$

114.83 

 

$

87.29 

San Antonio SpringHill Suites

86.36% 

 

$

143.28 

 

$

123.74 

 

81.49% 

 

$

140.69 

 

$

114.66 

Leawood Aloft

63.41% 

 

$

127.49 

 

$

80.84 

 

74.00% 

 

$

126.10 

 

$

93.31 

Lexington Home2 Suites

74.51% 

 

$

103.30 

 

$

76.97 

 

74.23% 

 

$

105.56 

 

$

78.35 

Round Rock Home2 Suites

86.48% 

 

$

120.15 

 

$

103.91 

 

85.37% 

 

$

123.17 

 

$

105.16 

Tallahassee Home2 Suites

84.23% 

 

$

130.54 

 

$

109.95 

 

80.79% 

 

$

124.91 

 

$

100.92 

South Haven Home2 Suites

81.26% 

 

$

110.84 

 

$

90.07 

 

89.22% 

 

$

111.59 

 

$

99.56 

Lake Mary Hampton Inn & Suites

86.22% 

 

$

154.76 

 

$

133.44 

 

84.89% 

 

$

132.62 

 

$

112.58 

Austin Residence Inn

83.43% 

 

$

135.16 

 

$

112.76 

 

77.57% 

 

$

141.54 

 

$

109.80 

El Paso Fairfield Inn

75.92% 

 

$

99.69 

 

$

75.69 

 

77.89% 

 

$

109.61 

 

$

85.38 

Wholly owned new investment platform properties

79.78% 

 

$

123.56 

 

$

98.57 

 

78.84% 

 

$

121.52 

 

$

95.80 

Atlanta Aloft JV

79.49% 

 

$

152.80 

 

$

121.46 

 

82.52% 

 

$

135.12 

 

$

111.50 

Total new investment platform

79.74% 

 

$

127.93 

 

$

102.01 

 

79.39% 

 

$

123.64 

 

$

98.16 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Legacy hotels held for sale

74.44% 

 

$

71.43 

 

$

53.17 

 

72.78% 

 

$

67.84 

 

$

49.38 

Legacy hotels held for use

45.61% 

 

$

79.81 

 

$

36.40 

 

82.59% 

 

$

69.93 

 

$

57.76 

Total legacy

68.82% 

 

$

72.51 

 

$

49.91 

 

74.69% 

 

$

68.29 

 

$

51.01 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total portfolio

78.06% 

 

$

120.41 

 

$

93.99 

 

78.67% 

 

$

115.55 

 

$

90.90 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Austin TownePlace Suites (1)

82.56% 

 

$

126.63 

 

$

104.55 

 

59.71% 

 

$

108.42 

 

$

64.73 

Summerville Home2 Suites (1)

87.28% 

 

$

119.94 

 

$

104.68 

 

 -

 

$

 -

 

$

 -







1 | Excluded from the Total new investment platform calculation because the hotel was not operational for the entirety of the three months ended March 31, 2017























13

 


 







 

 

 

 

 

 

Condor Hospitality Trust, Inc.

 

Property List | As of the Date of this Release

 



 

 

 

 

 

 

New Investment Platform | Acquired from January 1, 2012 - May 9, 2018



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 

11

Hampton Inn & Suites

Lake Mary

FL

130 

06/19/2017

$19.3 

12

Fairfield Inn & Suites

El Paso

TX

124 

08/31/2017

$16.4 

13

Residence Inn

Austin

TX

120 

08/31/2017

$22.4 

14

TownePlace Suites

Austin

TX

122 

01/18/2018

$19.8 

15

Home2 Suites

Summerville

SC

93 

02/21/2018

$16.3 



Total New Investment Platform

 

 

1,908 

 

$288.1 



 

 

 

 

 

 

Current Legacy Hotel Portfolio

 

 

 



Hotel Name

City

State

Rooms

Acquisition Date

Status (2)

16

Super 8

Creston

IA

121 

09/19/1978

HFS

17

Quality Inn

Solomons

MD

59 

06/01/1986

Hold

18

Comfort Suites

Ft. Wayne

IN

127 

11/07/2005

HFS



Total

 

 

307 

 

 



 

 

 

 

 

 



Total Portfolio | As of May 9, 2018

 

 

2,215 

 

 



 

 

 

 

 

 

1 | Owned 80% by Condor

2| HFS indicates the asset was marketed as held for sale at March 31, 2018

14

 


 













 

 

 

 

 

 

52 Dispositions | For Period January 1, 2015 - May 9, 2018



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