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Section 1: 8-K (8-K)

soho-8k_20180807.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): August 7, 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 August 7, 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 ended June 30, 2018.  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 August 7, 2018, reporting financial results for the quarter ended June 30, 2018.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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:  August 7, 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 (EX-99.1)

soho-ex991_6.htm

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

TUESDAY, AUGUST 7, 2018

 

SOTHERLY HOTELS INC. REPORTS FINANCIAL RESULTS

FOR THE SECOND QUARTER ENDED JUNE 30, 2018

Williamsburg, Virginia – August 7, 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 second quarter ended June 30, 2018. The Company’s results include the following*:

 

 

Three Months Ended

 

 

Six Months Ended

 

 

June 30, 2018

 

 

June 30, 2017

 

 

June 30, 2018

 

 

June 30, 2017

 

 

($ in thousands except per share data)

 

 

($ in thousands except per share data)

 

Total Revenue

$

51,554

 

 

$

40,643

 

 

$

93,289

 

 

$

79,338

 

Net income available to common stockholders

 

1,352

 

 

 

277

 

 

 

1,114

 

 

 

2,148

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

14,886

 

 

 

9,672

 

 

 

25,231

 

 

 

19,423

 

Hotel EBITDA

 

16,383

 

 

 

11,519

 

 

 

28,262

 

 

 

22,997

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO

 

7,097

 

 

 

4,582

 

 

 

11,596

 

 

 

9,602

 

Adjusted FFO available to common stockholders

 

8,353

 

 

 

4,961

 

 

 

13,099

 

 

 

10,115

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share available to common stockholders

$

0.10

 

 

$

0.02

 

 

$

0.08

 

 

$

0.15

 

FFO per share and unit

$

0.46

 

 

$

0.29

 

 

$

0.76

 

 

$

0.61

 

Adjusted FFO available to common holders per share and unit

$

0.55

 

 

$

0.32

 

 

$

0.86

 

 

$

0.65

 

 

(*)  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:

 

Revenue and RevPAR.  For the three-month period ending June 30, 2018, Total Revenue increased 26.8% over the three-month period ending June 30, 2017.  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 June 30, 2018, increased 11.3% over the three months ended June 30, 2017, to $123.17 reflecting a 2.0% increase in occupancy and a 9.1% increase in average daily rate (“ADR”). For the six-month period ending June 30, 2018, RevPAR increased 9.2% over the six months ended June 30, 2017, to $117.81 driven by a 1.1% decrease in occupancy and a 10.3% increase in ADR.

 

Common Dividends. As previously reported on July 24, 2018, the Company announced a quarterly dividend (distribution) on its common stock (and units) of $0.125 per share (and unit) to stockholders (and unitholders) of record as of September 14, 2018, payable on October 11, 2018.

 

Hotel EBITDA. The Company generated hotel EBITDA of approximately $16.4 million during the three-month period ending June 30, 2018, an increase of 42.2%, or approximately $4.9 million, from the three months ended June 30, 2017. For


 

the six-month period ending June 30, 2018, hotel EBITDA increased 22.9%, or approximately $5.3 million, over the six months ended June 30, 2017.  

 

EBITDA. The Company generated EBITDA of approximately $14.9 million during the three-month period ending June 30, 2018, an increase of 53.9% or approximately $5.2 million compared to the three months ended June 30, 2017. For the six-month period ending June 30, 2018, EBITDA increased 29.9% or approximately $5.8 million from the six months ended June 30, 2017.

 

Adjusted FFO. For the three-month period ending June 30, 2018, Adjusted FFO increased 68.4% or approximately $3.4 million from the three months ended June 30, 2017. For the six-month period ending June 30, 2018, adjusted FFO increased 29.5% or approximately $3.0 million over the six months ended June 30, 2017.

Andrew M. Sims, Chairman and Chief Executive Officer of Sotherly Hotels Inc., commented, “The company experienced a strong second quarter as a result of maturing asset repositionings executed over the past 24 months and the recent acquisition of the Hyatt Centric Arlington hotel.  In terms of Adjusted FFO, we believe the second quarter was one of the most successful in the history of the company.  We are pleased with the results and are focused on continuing the positive momentum for the balance of the year and beyond.”

Balance Sheet/Liquidity

At June 30, 2018, the Company had approximately $33.7 million of available cash and cash equivalents, of which approximately $5.3 million was reserved for real estate taxes, insurance, capital improvements and certain other expenses or otherwise restricted. The Company had principal balances of approximately $381.6 million in outstanding debt at a weighted average interest rate of approximately 4.99%.

On April 5, 2018, the Company drew down an additional $3.3 million of loan proceeds available on the Crowne Plaza Tampa Westshore mortgage loan.

On May 10, 2018, the Company made a principal payment of approximately $4.0 million on Note B to the Hyatt Centric Arlington mortgage.

Subsequent to the balance sheet date, on July 27, 2018, we entered into a promissory note and other loan documents to secure a mortgage on the DoubleTree by Hilton Raleigh Brownstone-University hotel with MetLife Commercial Mortgage Originator, LLC. The mortgage has an initial principal balance of $18.3 million, with an additional $5.2 million available upon the satisfaction of certain conditions. The mortgage has an initial term of 4 years with a 1-year extension subject to certain terms and conditions, bears a floating rate of interest equal to the 1-month LIBOR rate plus 4.00%, with an interest rate cap of 7.25%. The mortgage requires monthly interest-only payments and, following a 12-month lockout, can be prepaid with a penalty during its second year and without penalty thereafter. We used a portion of the proceeds to repay the existing first mortgage on the DoubleTree by Hilton Raleigh Brownstone-University hotel and to pay closing costs and intends to use the balance of the proceeds for general corporate purposes.

Also subsequent to the balance sheet date, on July 31, 2018, we entered into a second amendment to loan and security agreement; an amended, restated and consolidated mortgage loan note; and other related documents with its existing lender, TD Bank, N.A., to amend the terms of its mortgage loan on the DoubleTree by Hilton Philadelphia Airport hotel.  Concurrent with the loan modification, we also entered into a 5-year swap agreement with The Toronto-Dominion Bank.  Pursuant to the amended loan documents: (i) the principal balance of the loan was increased from approximately $30.0 million to $42.2 million; (ii) the loan’s maturity date was extended to July 31, 2023; (iii) the loan bears a floating interest rate equal to the 1-month LIBOR rate plus 2.27% (the “Loan Rate”); (iv) the loan amortizes on a 30-year schedule with payments of principal and interest beginning immediately; (v) the loan can be prepaid without penalty; and (vi) the loan will no longer be fully guaranteed by the Operating Partnership, but the Operating Partnership has guaranteed certain standard “bad boy” carveouts.  Pursuant to the swap agreement: (i) the Loan Rate is swapped for a fixed interest rate of 5.237%; (ii) notional amounts of the swap approximate the declining balance of the loan; and (iii) we are responsible for any potential termination fees associated with early termination of the swap agreement.  We used a portion of the proceeds to repay in full the existing Note B to the mortgage loan on our Hyatt Centric Arlington hotel and to pay closing costs associated with the amendment, and will use the balance of the proceeds for general corporate purposes.

Portfolio Update

At the Company’s hotel in Tampa, Florida, renovations are underway for an estimated $11.0 million renovation project in anticipation of a planned conversion in June 2019 from the Crowne Plaza Tampa Westshore to Hotel Alba, which we expect to become a member of the Tapestry Collection by Hilton.  As of June 30, 2018, we incurred costs totaling approximately $3.0 million toward this renovation.

Subsequent to the balance sheet date, on July 2, 2018 the Company purchased a portion of the parking lot located adjacent to the DoubleTree by Hilton Raleigh Brownstone-University hotel for $3.5 million, that the Company had previously leased.


2018 Updated Outlook

The Company is updating its previously issued guidance for 2018, accounting for current and expected performance within its portfolio, taking into account market conditions, the impact of renovations at the Company’s hotels in Wilmington and Tampa, the issuance of the 7.25% unsecured notes in February 2018, the acquisition of the Hyatt Centric Arlington hotel, the acquisition of the parking lot adjacent to the hotel in Raleigh, the refinance of the hotel in Raleigh and the amended loan on the hotel in Philadelphia.  The updated 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 prior and revised projections, within a range, of various financial measures for 2018, in thousands of dollars, except per share and RevPAR data:

 

 

Prior 2018 Guidance

 

 

Revised 2018 Guidance

 

 

Low Range

 

 

High Range

 

 

Low Range

 

 

High Range

 

 

 

 

 

 

 

Total revenue

$

167,750

 

 

$

169,095

 

 

$

172,308

 

 

$

175,187

 

Net loss

 

(2,804

)

 

 

(2,352

)

 

 

(7,177

)

 

 

(6,711

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

40,997

 

 

 

41,481

 

 

 

41,498

 

 

 

42,079

 

Hotel EBITDA

 

46,997

 

 

 

47,581

 

 

 

47,498

 

 

 

48,179

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO

 

15,843

 

 

 

16,352

 

 

 

15,259

 

 

 

15,725

 

Adjusted FFO available to common stockholders

 

15,873

 

 

 

16,493

 

 

 

15,874

 

 

 

16,490

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share available to common stockholders

$

(0.21

)

 

$

(0.17

)

 

$

(0.47

)

 

$

(0.44

)

FFO per share and unit

$

1.04

 

 

$

1.07

 

 

$

1.00

 

 

$

1.03

 

Adjusted FFO available to common holders per share and unit

$

1.04

 

 

$

1.08

 

 

$

1.04

 

 

$

1.08

 

Rev PAR

$

106.23

 

 

$

107.09

 

 

$

104.74

 

 

$

105.59

 

Hotel EBITDA margin

 

31.4

 

%

 

31.6

 

%

 

27.5

 

%

 

27.6

%

 

 

 

Earnings Call/Webcast

The Company will conduct its second quarter 2018 conference call for investors and other interested parties at 10:00 a.m. Eastern Time on Tuesday, August 7, 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 August 7, 2018 through August 6, 2019. To access the rebroadcast, dial 877-344-7529 and enter conference number 10121885.  A replay of the call also will be available on the Internet at www.sotherlyhotels.com until August 6, 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 twelve hotel properties, comprising 3,156 rooms, and an interest in the Hyde Resort & Residences, a luxury condo hotel. The Company owns hotels that operate under the Hilton Worldwide, InterContinental Hotels Group and Marriott International, Inc. brands, as well as independent hotels. Sotherly Hotels Inc. was organized in 2004 and is headquartered in Williamsburg, Virginia. For more information, please visit www.sotherlyhotels.com.


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

 

 

 

June 30, 2018

 

 

December 31, 2017

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Investment in hotel properties, net

 

$

434,285,458

 

 

$

357,799,512

 

Cash and cash equivalents

 

 

28,435,806

 

 

 

29,777,845

 

Restricted cash

 

 

5,301,033

 

 

 

3,651,197

 

Accounts receivable, net

 

 

10,972,446

 

 

 

5,587,077

 

Accounts receivable - affiliate

 

 

426,041

 

 

 

394,026

 

Prepaid expenses, inventory and other assets

 

 

6,693,982

 

 

 

7,292,565

 

Favorable lease assets, net

 

 

2,655,069

 

 

 

 

Deferred income taxes

 

 

3,929,188

 

 

 

5,451,118

 

TOTAL ASSETS

 

$

492,699,023

 

 

$

409,953,340

 

LIABILITIES

 

 

 

 

 

 

 

 

Mortgage loans, net

 

$

354,529,454

 

 

$

297,318,816

 

Unsecured notes, net

 

 

23,635,174

 

 

 

 

Accounts payable and accrued liabilities

 

 

17,277,577

 

 

 

13,813,623

 

Advance deposits

 

 

1,861,704

 

 

 

1,572,388

 

Dividends and distributions payable

 

 

3,302,095

 

 

 

3,073,483

 

TOTAL LIABILITIES

 

$

400,606,004

 

 

$

315,778,310

 

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 June 30, 2018 and December 31, 2017, respectively

 

 

16,100

 

 

 

16,100

 

7.875% Series C cumulative redeemable perpetual preferred stock,

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

   and outstanding at June 30, 2018 and December 31, 2017, respectively

 

 

13,000

 

 

 

13,000

 

Common stock, par value $0.01, 49,000,000 shares authorized, 14,121,081

   shares and 14,078,831 shares issued and outstanding at June 30, 2018

   and December 31, 2017, respectively

 

 

141,211

 

 

 

140,788

 

Additional paid-in capital

 

 

146,368,293

 

 

 

146,249,339

 

Unearned ESOP shares

 

 

(4,511,269

)

 

 

(4,633,112

)

Distributions in excess of retained earnings

 

 

(50,811,546

)

 

 

(48,765,860

)

Total Sotherly Hotels Inc. stockholders’ equity

 

 

91,215,789

 

 

 

93,020,255

 

Noncontrolling interest

 

 

877,230

 

 

 

1,154,775

 

TOTAL EQUITY

 

 

92,093,019

 

 

 

94,175,030

 

TOTAL LIABILITIES AND EQUITY

 

$

492,699,023

 

 

$

409,953,340

 

 

 


 

SOTHERLY HOTELS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Six Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2018

 

 

June 30, 2017

 

 

June 30, 2018

 

 

June 30, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms department

 

$

35,330,676

 

 

$

28,906,872

 

 

$

63,616,121

 

 

$

56,273,506

 

Food and beverage department

 

 

11,080,568

 

 

 

8,583,358

 

 

 

19,432,551

 

 

 

16,907,117

 

Other operating departments

 

 

5,142,283

 

 

 

3,152,402

 

 

 

10,240,411

 

 

 

6,156,895

 

Total revenue

 

 

51,553,527

 

 

 

40,642,632

 

 

 

93,289,083

 

 

 

79,337,518

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hotel operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms department

 

 

8,176,164

 

 

 

6,743,788

 

 

 

14,876,545

 

 

 

13,426,067

 

Food and beverage department

 

 

7,673,049

 

 

 

6,151,495

 

 

 

14,068,125

 

 

 

11,879,968

 

Other operating departments

 

 

1,680,582

 

 

 

623,530

 

 

 

3,208,909

 

 

 

1,223,550

 

Indirect

 

 

17,640,285

 

 

 

15,605,262

 

 

 

32,873,541

 

 

 

29,810,493

 

Total hotel operating expenses

 

 

35,170,080

 

 

 

29,124,075

 

 

 

65,027,120

 

 

 

56,340,078

 

Depreciation and amortization

 

 

5,601,940

 

 

 

4,219,712

 

 

 

11,236,130

 

 

 

8,280,809

 

Loss on disposal of assets

 

 

 

 

 

51,507

 

 

 

3,739

 

 

 

51,507

 

Corporate general and administrative

 

 

1,503,549

 

 

 

1,834,930

 

 

 

3,049,849

 

 

 

3,547,012

 

Total operating expenses

 

 

42,275,569

 

 

 

35,230,224

 

 

 

79,316,838

 

 

 

68,219,406

 

NET OPERATING INCOME

 

 

9,277,958

 

 

 

5,412,408

 

 

 

13,972,245

 

 

 

11,118,112

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(5,087,482

)

 

 

(3,874,076

)

 

 

(9,264,501

)

 

 

(7,687,793

)

Interest income

 

 

66,505

 

 

 

13,294

 

 

 

148,209

 

 

 

72,925

 

Loss on early extinguishment of debt

 

 

 

 

 

(228,087

)

 

 

 

 

 

(228,087

)

Unrealized gain (loss) on hedging activities

 

 

5,798

 

 

 

(11,261

)

 

 

18,528

 

 

 

(27,206

)

Gain on sale of assets

 

 

 

 

 

 

 

 

 

 

 

100,407

 

Gain on involuntary conversion of assets

 

 

27,824

 

 

 

 

 

 

898,565

 

 

 

1,041,815

 

Net income before income taxes

 

 

4,290,603

 

 

 

1,312,278

 

 

 

5,773,046

 

 

 

4,390,173

 

Income tax provision

 

 

(1,323,014

)

 

 

(196,483

)

 

 

(1,628,969

)

 

 

(368,420

)

Net income

 

 

2,967,589

 

 

 

1,115,795

 

 

 

4,144,077

 

 

 

4,021,753

 

Less: Net income attributable to the noncontrolling interest

 

 

(170,331

)

 

 

(33,869

)

 

 

(140,318

)

 

 

(263,811

)

Net income attributable to the Company

 

 

2,797,258

 

 

 

1,081,926

 

 

 

4,003,759

 

 

 

3,757,942

 

Distributions to preferred stockholders

 

 

(1,444,844

)

 

 

(805,000

)

 

 

(2,889,688

)

 

 

(1,610,000

)

Net income available to common stockholders

 

$

1,352,414

 

 

$

276,926

 

 

$

1,114,071

 

 

$

2,147,942

 

Net income per share available to common stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.10

 

 

$

0.02

 

 

$

0.08

 

 

$

0.15

 

Diluted

 

$

0.10

 

 

$

0.02

 

 

$

0.08

 

 

$

0.15

 

Weighted average number of common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

13,488,526

 

 

 

13,813,168

 

 

 

13,480,529

 

 

 

13,898,910

 

Diluted

 

 

13,489,475

 

 

 

13,815,035

 

 

 

13,486,140

 

 

 

13,908,359

 

 

 

 


 

SOTHERLY HOTELS INC.

KEY OPERATING METRICS

(unaudited)

The following tables illustrate the key operating metrics for the three and six months ended June 30, 2018 and 2017, respectively, for the Company’s wholly-owned properties (“actual” portfolio metrics), as well as the ten wholly-owned properties in the portfolio that were under the Company’s control during the three and six months ended June 30, 2018 and the corresponding periods in 2017 (“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, our interest in the Hyde Resort & Residences which was acquired on January 30, 2017, or the Hyatt Centric Arlington which we acquired in March 2018.  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 six months ended June 30, 2018 and the corresponding periods in 2017.

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

Six Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2018

 

 

June 30, 2017

 

 

 

June 30, 2018

 

 

June 30, 2017

 

Actual Portfolio Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Occupancy %

 

 

77.8

%

 

 

76.5

%

 

 

 

72.9

%

 

 

73.3

%

ADR

 

$

158.14

 

 

$

146.32

 

 

 

$

157.99

 

 

$

147.65

 

RevPAR

 

$

123.02

 

 

$

111.93

 

 

 

$

115.15

 

 

$

108.20

 

Same-Store Portfolio Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Occupancy %

 

 

76.5

%

 

 

76.5

%

 

 

 

71.7

%

 

 

73.8

%

ADR

 

$

151.19

 

 

$

146.32

 

 

 

$

153.20

 

 

$

148.02

 

RevPAR

 

$

115.69

 

 

$

111.93

 

 

 

$

109.80

 

 

$

109.18

 

Composite Portfolio Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Occupancy %

 

 

75.6

%

 

 

74.1

%

 

 

 

71.2

%

 

 

72.0

%

ADR

 

$

162.93

 

 

$

149.39

 

 

 

$

165.37

 

 

$

149.99

 

RevPAR

 

$

123.17

 

 

$

110.67

 

 

 

$

117.81

 

 

$

107.93

 

 

 


 

SOTHERLY HOTELS INC.

SUPPLEMENTAL DATA

(unaudited)

The following tables illustrate the key operating metrics for the three and six months ended June 30, 2018 and 2017, respectively, for each of the Company’s wholly-owned properties during each respective reporting period, irrespective of ownership percentage during any period.

Occupancy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q2 2018

 

 

Q2 2017

 

 

Q2 2016

 

 

YTD

 

 

YTD

 

 

YTD

 

Crowne Plaza Tampa Westshore

Tampa, Florida

 

76.8

%

 

 

80.0

%

 

 

79.9

%

 

 

83.7

%

 

 

82.9

%

 

 

81.8

%

The DeSoto

Savannah, Georgia

 

74.6

%

 

 

75.1

%

 

 

77.8

%

 

 

65.7

%

 

 

71.0

%

 

 

76.2

%

DoubleTree by Hilton Jacksonville Riverfront

Jacksonville, Florida

 

84.8

%

 

 

80.9

%

 

 

81.7

%

 

 

84.6

%

 

 

80.9

%

 

 

79.3

%

DoubleTree by Hilton Laurel

Laurel, Maryland

 

79.5

%

 

 

82.9

%

 

 

80.0

%

 

 

65.2

%

 

 

66.6

%

 

 

62.3

%

DoubleTree by Hilton Philadelphia Airport

Philadelphia, Pennsylvania

 

86.3

%

 

 

83.3

%

 

 

85.6

%

 

 

78.8

%

 

 

76.2

%

 

 

79.3

%

DoubleTree by Hilton Raleigh Brownstone – University

Raleigh, North Carolina

 

81.9

%

 

 

78.6

%

 

 

75.4

%

 

 

76.7

%

 

 

76.4

%

 

 

72.4

%

DoubleTree Resort by Hilton Hollywood Beach

Hollywood, Florida

 

73.5

%

 

 

76.0

%

 

 

78.0

%

 

 

75.6

%

 

 

79.5

%

 

 

83.3

%

Georgian Terrace

Atlanta, Georgia

 

74.8

%

 

 

71.6

%

 

 

74.3

%

 

 

69.2

%

 

 

73.1

%

 

 

72.3

%

Hotel Ballast Wilmington, Tapestry Collection by Hilton

Wilmington, North Carolina

 

69.9

%

 

 

77.5

%

 

 

83.2

%

 

 

60.7

%

 

 

70.8

%

 

 

70.9

%

Hyatt Centric Arlington (1)

Arlington, Virginia

 

89.2

%

 

 

93.6

%

 

 

90.6

%

 

 

80.8

%

 

 

83.0

%

 

 

84.8

%

Sheraton Louisville Riverside

Jeffersonville, Indiana

 

68.9

%

 

 

75.6

%

 

 

75.1

%

 

 

60.3

%

 

 

66.6

%

 

 

63.1

%

The Whitehall

Houston, Texas

 

67.7

%

 

 

60.8

%

 

 

48.9

%

 

 

62.7

%

 

 

63.1

%

 

 

56.9

%

Hyde Resort & Residences (2)

Hollywood Beach, Florida

 

43.2

%

 

 

29.0

%

 

N/A

 

 

 

47.7

%

 

 

30.7

%

 

N/A

 

All properties weighted average (1)

 

75.6

%

 

 

75.7

%

 

 

78.0

%

 

 

71.0

%

 

 

74.0

%

 

 

74.4

%

 

1

Includes operating results under previous ownership.  Results for periods prior to the Company’s ownership were provided by prior owners of the hotel and have not been audited or confirmed by the Company.

 


2

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q2 2018

 

 

Q2 2017

 

 

Q2 2016

 

 

YTD

 

 

YTD

 

 

YTD

 

Crowne Plaza Tampa Westshore

Tampa, Florida

$

121.79

 

 

$

113.24

 

 

$

112.51

 

 

$

132.04

 

 

$

125.44

 

 

$

121.92

 

The DeSoto

Savannah, Georgia

$

191.37

 

 

$

169.35

 

 

$

166.42

 

 

$

185.91

 

 

$

165.93

 

 

$

161.98

 

DoubleTree by Hilton Jacksonville Riverfront

Jacksonville, Florida

$

143.08

 

 

$

131.32

 

 

$

123.12

 

 

$

143.69

 

 

$

131.74

 

 

$

122.79

 

DoubleTree by Hilton Laurel

Laurel, Maryland

$

113.85

 

 

$

109.15

 

 

$

108.41

 

 

$

112.03

 

 

$

110.70

 

 

$

105.43

 

DoubleTree by Hilton Philadelphia Airport

Philadelphia, Pennsylvania

$

147.86

 

 

$

149.11

 

 

$

153.11

 

 

$

139.32

 

 

$

136.00

 

 

$

138.73

 

DoubleTree by Hilton Raleigh Brownstone – University

Raleigh, North Carolina

$

137.65

 

 

$

135.52

 

 

$

136.50

 

 

$

135.77

 

 

$

135.55

 

 

$

135.72

 

DoubleTree Resort by Hilton Hollywood Beach

Hollywood, Florida

$

164.99

 

 

$

156.52

 

 

$

164.60

 

 

$

196.45

 

 

$

187.73

 

 

$

194.85

 

Georgian Terrace

Atlanta, Georgia

$

178.44

 

 

$

170.10

 

 

$

156.95

 

 

$

184.25

 

 

$

170.72

 

 

$

158.69

 

Hotel Ballast Wilmington, Tapestry Collection by Hilton

Wilmington, North Carolina

$

156.69

 

 

$

164.67

 

 

$

158.03

 

 

$

146.03

 

 

$

147.57

 

 

$

145.67

 

Hyatt Centric Arlington (1)

Arlington, Virginia

$

211.29

 

 

$

198.61

 

 

$

199.69

 

 

$

191.56

 

 

$

196.40

 

 

$

178.17

 

Sheraton Louisville Riverside

Jeffersonville, Indiana

$

141.53

 

 

$

156.41

 

 

$

160.36

 

 

$

132.53

 

 

$

141.25

 

 

$

152.57

 

The Whitehall

Houston, Texas

$

146.91

 

 

$

141.37

 

 

$

149.63

 

 

$

147.00

 

 

$

151.59

 

 

$

149.50

 

Hyde Resort & Residences (2)

Hollywood Beach, Florida

$

290.13

 

 

$

288.14

 

 

N/A

 

 

$

326.83

 

 

$

311.05

 

 

N/A

 

All properties weighted average (1)

$

162.93

 

 

$