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Section 1: 8-K (8-K)

soho-8k_20190507.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): May 7, 2019

 

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    

 

Securities registered or to be registered pursuant to Section 12(b) of the Act.

 

 


Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value

SOHO

The NASDAQ Stock Market LLC

8.0% Series B Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value

SOHOB

The NASDAQ Stock Market LLC

7.875% Series C Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value

SOHOO

The NASDAQ Stock Market LLC

8.25% Series D Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value

SOHON

The NASDAQ Stock Market LLC

7.25% Senior Unsecured Notes due 2021

SOHOK

The NASDAQ Stock Market LLC

 

 

 

 


Item 2.02 Results of Operations and Financial Condition.

On May 7, 2019, 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 March 31, 2019.  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 May 7, 2019, reporting financial results for the quarter ended March 31, 2019.

 

 

 

 

 

 


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:  May 7, 2019

 

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, MAY 7, 2019

 

SOTHERLY HOTELS INC. REPORTS FINANCIAL RESULTS

FOR THE FIRST QUARTER ENDED MARCH 31, 2019

Williamsburg, Virginia – May 7, 2019 – Sotherly Hotels Inc. (NASDAQ: SOHO), (“Sotherly” or the “Company”), a self-managed and self-administered lodging real estate investment trust (a “REIT”), today reported its consolidated results for the first quarter ended March 31, 2019. The Company’s results include the following*:

 

 

Three Months Ended

 

 

March 31, 2019

 

 

March 31, 2018

 

 

($ in thousands except per share data)

 

Total Revenue

$

47,390

 

 

$

41,736

 

Net loss available to common stockholders

 

(1,654

)

 

 

(238

)

 

 

 

 

 

 

 

 

EBITDA

 

11,163

 

 

 

11,212

 

Hotel EBITDA

 

13,172

 

 

 

11,879

 

 

 

 

 

 

 

 

 

FFO available to common stockholders and unitholders

 

3,988

 

 

 

4,482

 

Adjusted FFO available to common stockholders and unitholders

 

4,778

 

 

 

4,746

 

 

 

 

 

 

 

 

 

Net loss per common share

$

(0.12

)

 

$

(0.02

)

FFO per common share and unit

$

0.26

 

 

$

0.29

 

Adjusted FFO per common share and unit

$

0.31

 

 

$

0.31

 

 

(*)  Earnings before interest, taxes, depreciation and amortization (“EBITDA”), hotel EBITDA, funds from operations (“FFO”) available to common stockholders and unitholders, adjusted FFO available to common stockholders and unitholders, FFO per common share and unit and adjusted FFO per common share and unit are non-GAAP financial measures. See further discussion of these non-GAAP measures, including definitions related thereto, and reconciliations to net income (loss) later in this press release. The Company is the sole general partner of Sotherly Hotels LP, a Delaware limited partnership (the “Operating Partnership”), and all references in this release to the “Company”, “Sotherly”, “we”, “us” and “our” refer to Sotherly Hotels Inc., its Operating Partnership and its subsidiaries and predecessors, unless the context otherwise requires or where otherwise indicated.

HIGHLIGHTS:

 

Revenue and RevPAR.  For the three-month period ending March 31, 2019, Total Revenue increased 13.5% over the three-month period ending March 31, 2018.  Room revenue per available room (“RevPAR”) for the Company’s composite portfolio, which includes the Hyatt Centric Arlington and the rooms participating in our rental program at the Hyde Resort & Residences, during the three-month period ending March 31, 2019, increased 8.8% over the three months ended March 31, 2018, to $121.86 reflecting a 5.2% increase in occupancy and a 3.5% increase in average daily rate (“ADR”).

 

Common Dividends. On April 29, 2019, the Company announced a quarterly dividend (distribution) on its common stock (and units) of $0.13 per share (and unit) to stockholders (and unitholders) of record as of June 14, 2019, payable on July 11, 2019.

 

Hotel EBITDA. The Company generated hotel EBITDA of approximately $13.2 million during the three-month period ending March 31, 2019, hotel EBITDA increased 10.9% or approximately $1.3 million, over the three months ended March 31, 2018.

 

Adjusted FFO available to common stockholders and unitholders. For the three-month period ending March 31, 2019, Adjusted FFO available to common stockholders and unitholders increased 0.7% from the three months ended March 31, 2018.


Andrew M. Sims, Chairman and Chief Executive Officer of Sotherly Hotels Inc., commented, We experienced a strong quarter to start the year.  Each of our boutique hotels boasted double-digit gains in RevPAR, helping the portfolio achieve a RevPAR increase of 8.8% over the same quarter last year.  We are pleased to see our repositioning strategy begin to take full effect and we look forward to the conversion of our Tampa property to Hotel Alba later this quarter.

Balance Sheet/Liquidity

At March 31, 2019, the Company had approximately $33.4 million of available cash and cash equivalents, of which approximately $4.4 million was reserved for real estate taxes, insurance, capital improvements and certain other expenses or otherwise restricted. The Company had principal balances of approximately $366.3 million in outstanding debt at a weighted average interest rate of approximately 5.13%.

Subsequent to the balance sheet date, on April 18, 2019, the Company closed a sale and issuance of 1,080,000 shares of its 8.25% Series D cumulative redeemable perpetual preferred stock (the “Series D Preferred Stock”), for total gross proceeds of $27.0 million before underwriting discounts and commissions and expenses payable by the Company.  On May 1, 2019, the Company closed a sale and issuance of an additional 120,000 shares of its Series D Preferred Stock, for gross proceeds of $3.0 million, in connection with the partial exercise of the underwriters’ option to purchase additional shares.  We intend to use the net proceeds to redeem in full the Operating Partnership’s 7.25% Senior Unsecured Notes due 2021 (the “7.25% Notes”) and to use any remaining net proceeds for general corporate purposes, including potential future acquisitions of hotel properties.

Subsequent to the balance sheet date, on April 18, 2019, the Company notified Wilmington Trust, National Association, as Trustee, of the Operating Partnership’s intent to redeem the entire $25.0 million aggregate principal amount of its 7.25% Notes, pursuant to the terms of the indenture.  The 7.25% Notes redemption date is set for May 15, 2019 at a redemption price equal to 101% of the principal amount of the 7.25% Notes, plus any accrued and unpaid interest to, but not including, the redemption date.

Subsequent to the balance sheet date, on April 26, 2019, we entered into amended loan documents to modify the existing mortgage loan on the Crowne Plaza Tampa Westshore with the existing lender, Fifth Third Bank.  Pursuant to the amended loan documents, the mortgage loan principal balance remains at approximately $18.2 million; the maturity date is extended to June 30, 2022, and may be extended for two additional periods of one year each, subject to certain conditions; the mortgage loan continues to bear a floating interest rate of 1-month LIBOR plus 3.75% subject to a floor rate of 3.75%, with a new provision to reduce the floating interest rate to 1-month LIBOR plus 3.00% upon the successful achievement of certain performance hurdles; the mortgage loan amortizes on a 25-year schedule; and the mortgage loan continues to be guaranteed by Sotherly Hotels LP.

Portfolio Update

At the Company’s hotel in Tampa, Florida, renovations are underway for an estimated $11.4 million renovation project in anticipation of a planned conversion in June 2019 of the Crowne Plaza Tampa Westshore to Hotel Alba, which we expect to become a member of the Tapestry Collection by Hilton.  As of March 31, 2019, we have incurred costs totaling approximately $10.0 million toward this renovation.

2019 Outlook

Set forth below is the Company’s revised guidance for 2019.  We are revising guidance solely to account for the recent issuance of the Series D Preferred Stock and the anticipated redemption of the 7.25% Notes.  The guidance is predicated on estimates of occupancy and ADR that are consistent with the most recent 2019 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 2019, in thousands of dollars, except per share and RevPAR data:


 

 

Prior 2019 Guidance

 

 

Revised 2019 Guidance

 

 

Low Range

 

 

High Range

 

 

Low Range

 

 

High Range

 

 

 

 

 

 

 

Total revenue

$

184,247

 

 

$

187,053

 

 

$

184,247

 

 

$

187,053

 

Net income

 

1,511

 

 

 

2,099

 

 

 

1,708

 

 

 

2,295

 

Net loss available to common stockholders and unitholders

 

(4,631

)

 

 

(4,043

)

 

 

(5,899

)

 

 

(5,311

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

43,136

 

 

 

44,074

 

 

 

41,977

 

 

 

42,914

 

Hotel EBITDA

 

49,186

 

 

 

50,224

 

 

 

49,187

 

 

 

50,224

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO available to common stockholders and unitholders

 

15,369

 

 

 

15,957

 

 

 

14,102

 

 

 

14,689

 

Adjusted FFO available to common stockholders and unitholders

 

15,939

 

 

 

16,877

 

 

 

15,832

 

 

 

16,769

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share available to common stockholders

$

(0.30

)

 

$

(0.26

)

 

$

(0.38

)

 

$

(0.34

)

FFO per common share and unit

$

0.98

 

 

$

1.02

 

 

$

0.91

 

 

$

0.95

 

Adjusted FFO per common share and unit

$

1.02

 

 

$

1.08

 

 

$

1.02

 

 

$

1.08

 

Rev PAR

$

109.60

 

 

$

110.49

 

 

$

109.60

 

 

$

110.49

 

Hotel EBITDA margin

 

26.7

%

 

 

26.9

%

 

 

26.7

%

 

 

26.9

%

 

Earnings Call/Webcast

The Company will conduct its first quarter 2019 conference call for investors and other interested parties at 10:00 a.m. Eastern Time on Tuesday, May 7, 2019. 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 May 7, 2019 through May 6, 2020. To access the rebroadcast, dial 877-344-7529 and enter conference number 10130519.  A replay of the call also will be available on the Internet at www.sotherlyhotels.com until May 6, 2020.

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

 

 

 

March 31, 2019

 

 

December 31, 2018

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Investment in hotel properties, net

 

$

441,261,072

 

 

$

438,191,235

 

Cash and cash equivalents

 

 

29,004,070

 

 

 

33,792,773

 

Restricted cash

 

 

4,407,557

 

 

 

4,075,508

 

Accounts receivable, net

 

 

10,346,796

 

 

 

6,766,696

 

Accounts receivable - affiliate

 

 

237,710

 

 

 

262,572

 

Prepaid expenses, inventory and other assets

 

 

5,688,031

 

 

 

5,262,884

 

Deferred income taxes

 

 

4,846,500

 

 

 

5,131,179

 

TOTAL ASSETS

 

$

495,791,736

 

 

$

493,482,847

 

LIABILITIES

 

 

 

 

 

 

 

 

Mortgage loans, net

 

$

363,636,230

 

 

$

364,828,845

 

Unsecured notes, net

 

 

24,025,056

 

 

 

23,894,658

 

Accounts payable and accrued liabilities

 

 

23,714,256

 

 

 

16,268,096

 

Advance deposits

 

 

2,351,972

 

 

 

2,815,283

 

Dividends and distributions payable

 

 

3,414,285

 

 

 

3,409,593

 

TOTAL LIABILITIES

 

$

417,141,799

 

 

$

411,216,475

 

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 March 31, 2019 and December 31, 2018, respectively

 

 

16,100

 

 

 

16,100

 

7.875% Series C cumulative redeemable perpetual preferred stock,

   liquidation preference $25 per share, 1,352,141 shares issued

   and outstanding at March 31, 2019 and December 31, 2018, respectively

 

 

13,521

 

 

 

13,521

 

Common stock, par value $0.01, 49,000,000 shares authorized, 14,222,378

   shares and 14,209,378 shares issued and outstanding at March 31, 2019

   and December 31, 2018, respectively

 

 

142,223

 

 

 

142,093

 

Additional paid-in capital

 

 

147,184,199

 

 

 

147,085,112

 

Unearned ESOP shares

 

 

(4,312,508

)

 

 

(4,379,742

)

Distributions in excess of retained earnings

 

 

(64,406,087

)

 

 

(61,052,418

)

Total Sotherly Hotels Inc. stockholders’ equity

 

 

78,637,448

 

 

 

81,824,666

 

Noncontrolling interest

 

 

12,489

 

 

 

441,706

 

TOTAL EQUITY

 

 

78,649,937

 

 

 

82,266,372

 

TOTAL LIABILITIES AND EQUITY

 

$

495,791,736

 

 

$

493,482,847

 

 

 


 

SOTHERLY HOTELS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

March 31, 2019

 

 

March 31, 2018

 

 

 

(unaudited)

 

 

(unaudited)

 

REVENUE

 

 

 

 

 

 

 

 

Rooms department

 

$

32,951,871

 

 

$

28,285,445

 

Food and beverage department

 

 

9,723,124

 

 

 

8,351,983

 

Other operating departments

 

 

4,715,309

 

 

 

5,098,128

 

Total revenue

 

 

47,390,304

 

 

 

41,735,556

 

EXPENSES

 

 

 

 

 

 

 

 

Hotel operating expenses

 

 

 

 

 

 

 

 

Rooms department

 

 

7,781,439

 

 

 

6,700,381

 

Food and beverage department

 

 

7,136,833

 

 

 

6,395,076

 

Other operating departments

 

 

1,910,135

 

 

 

1,528,327

 

Indirect

 

 

17,389,680

 

 

 

15,233,256

 

Total hotel operating expenses

 

 

34,218,087

 

 

 

29,857,040

 

Depreciation and amortization

 

 

6,028,735

 

 

 

5,634,190

 

(Gain) loss on disposal of assets

 

 

(4,008

)

 

 

3,739

 

Corporate general and administrative

 

 

1,684,444

 

 

 

1,546,300

 

Total operating expenses

 

 

41,927,258

 

 

 

37,041,269

 

NET OPERATING INCOME

 

 

5,463,046

 

 

 

4,694,287

 

Other income (expense)

 

 

 

 

 

 

 

 

Interest expense

 

 

(5,305,114

)

 

 

(4,177,019

)

Interest income

 

 

99,296

 

 

 

81,704

 

Unrealized gain (loss) on hedging activities

 

 

(490,611

)

 

 

12,730

 

Gain on involuntary conversion of assets

 

 

161,334

 

 

 

870,741

 

Net (loss) income before income taxes

 

 

(72,049

)

 

 

1,482,443

 

Income tax provision

 

 

(318,156

)

 

 

(305,955

)

Net (loss) income

 

 

(390,205

)

 

 

1,176,488

 

Less: Net loss attributable to the noncontrolling interest

 

 

206,949

 

 

 

30,013

 

Net (loss) income attributable to the Company

 

 

(183,256

)

 

 

1,206,501

 

Distributions to preferred stockholders

 

 

(1,470,507

)

 

 

(1,444,844

)

Net loss available to common stockholders

 

$

(1,653,763

)

 

$

(238,343

)

Net loss per share available to common stockholders

 

 

 

 

 

 

 

 

Basic

 

$

(0.12

)

 

$

(0.02

)

Weighted average number of common shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

13,610,750

 

 

 

13,472,444

 

 

 

 

 

 

 

 

 

 

 

 

 


 

SOTHERLY HOTELS INC.

KEY OPERATING METRICS

(unaudited)

The following tables illustrate the key operating metrics for the three months ended March 31, 2019 and 2018, respectively, for the Company’s twelve 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 months ended March 31, 2019 and the corresponding periods in 2018 (“same-store” portfolio metrics). Accordingly, the actual data does not include the participating condominium hotel room at the Hyde Resort & Residences, and the same-store data does not include the performance of the Hyatt Centric Arlington which we acquired in March 2018 or the participating condominium hotel rooms at the Hyde Resort & Residences.  The composite portfolio metrics represent Company’s twelve wholly-owned properties and the participating condominium hotel rooms at the Hyde Resort & Residences during the three months ended March 31, 2019 and the corresponding period in 2018.

 

 

Three Months Ended

 

 

Three Months Ended

 

 

March 31, 2019

 

 

March 31, 2018

 

Actual Portfolio Metrics

 

 

 

 

 

 

 

Occupancy %

 

70.1

%

 

 

67.6

%

ADR

$

165.57

 

 

$

157.80

 

RevPAR

$

116.01

 

 

$

106.63

 

Same-Store Portfolio Metrics

 

 

 

 

 

 

 

Occupancy %

 

69.7

%

 

 

66.8

%

ADR

$

164.29

 

 

$

155.53

 

RevPAR

$

114.57

 

 

$

103.84

 

Composite Portfolio Metrics

 

 

 

 

 

 

 

Occupancy %

 

69.9

%

 

 

66.5

%

ADR

$

174.24

 

 

$

168.37

 

RevPAR

$

121.86

 

 

$

112.03

 

 

 


 

SOTHERLY HOTELS INC.

SUPPLEMENTAL DATA

(unaudited)

The following tables illustrate the key operating metrics for the three months ended March 31, 2019, 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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1 2019

 

 

Q1 2018

 

 

Q1 2017

 

Crowne Plaza Tampa Westshore

Tampa, Florida

 

79.7

%

 

 

90.6

%

 

 

85.7

%

The DeSoto

Savannah, Georgia

 

63.8

%

 

 

56.7

%

 

 

66.8

%

DoubleTree by Hilton Jacksonville Riverfront

Jacksonville, Florida

 

83.0

%

 

 

84.3

%

 

 

80.9

%

DoubleTree by Hilton Laurel

Laurel, Maryland

 

61.3

%

 

 

50.6

%

 

 

50.2

%

DoubleTree by Hilton Philadelphia Airport

Philadelphia, Pennsylvania

 

64.9

%

 

 

71.1

%

 

 

69.1

%

DoubleTree by Hilton Raleigh Brownstone – University

Raleigh, North Carolina

 

71.9

%

 

 

71.4

%

 

 

74.2

%

DoubleTree Resort by Hilton Hollywood Beach

Hollywood, Florida

 

78.3

%

 

 

77.8

%

 

 

83.0

%

Georgian Terrace

Atlanta, Georgia

 

75.3

%

 

 

63.6

%

 

 

74.6

%

Hotel Ballast Wilmington, Tapestry Collection by Hilton

Wilmington, North Carolina

 

62.4

%

 

 

51.4

%

 

 

64.1

%

Hyatt Centric Arlington (1)

Arlington, Virginia

 

73.0

%

 

 

72.2

%

 

 

80.2

%

Sheraton Louisville Riverside

Jeffersonville, Indiana

 

54.1

%

 

 

51.6

%

 

 

57.5

%

The Whitehall

Houston, Texas

 

64.6

%

 

 

57.6

%

 

 

65.5

%

Hyde Resort & Residences (2)

Hollywood Beach, Florida

 

67.7

%

 

 

52.3

%

 

 

39.3

%

All properties weighted average (1)

 

69.9

%

 

 

66.9

%

 

 

71.6

%

 

(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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1 2019

 

 

Q1 2018

 

 

Q1 2017

 

Crowne Plaza Tampa Westshore

Tampa, Florida

$

143.83

 

 

$

140.82

 

 

$

136.95

 

The DeSoto

Savannah, Georgia

$

180.28

 

 

$

178.65

 

 

$

162.04

 

DoubleTree by Hilton Jacksonville Riverfront

Jacksonville, Florida

$

146.30

 

 

$

144.30

 

 

$

132.16

 

DoubleTree by Hilton Laurel

Laurel, Maryland

$

109.61

 

 

$

109.13

 

 

$

113.28

 

DoubleTree by Hilton Philadelphia Airport

Philadelphia, Pennsylvania

$

125.43

 

 

$

128.84

 

 

$

120.02

 

DoubleTree by Hilton Raleigh Brownstone – University

Raleigh, North Carolina

$

136.22

 

 

$

133.58

 

 

$

135.59

 

DoubleTree Resort by Hilton Hollywood Beach

Hollywood, Florida

$

231.09

 

 

$

226.52

 

 

$

216.61

 

Georgian Terrace

Atlanta, Georgia

$

249.49

 

 

$

191.17

 

 

$

171.32

 

Hotel Ballast Wilmington, Tapestry Collection by Hilton

Wilmington, North Carolina

$

137.75

 

 

$

131.36

 

 

$

126.66

 

Hyatt Centric Arlington (1)

Arlington, Virginia

$

176.47

 

 

$

166.91

 

 

$

174.40

 

Sheraton Louisville Riverside

Jeffersonville, Indiana

$

113.18

 

 

$

120.39

 

 

$

121.10

 

The Whitehall

Houston, Texas

$

146.15

 

 

$

147.11

 

 

$

161.18

 

Hyde Resort & Residences (2)

Hollywood Beach, Florida

$

334.37

 

 

$

357.72

 

 

$

397.16

 

All properties weighted average (1)

$

173.29

 

 

$

166.77

 

 

$

154.02

 

 

(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.

 

 

 


RevPAR

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1 2019

 

 

Q1 2018

 

 

Q1 2017

 

Crowne Plaza Tampa Westshore

Tampa, Florida

$

114.67

 

 

$

127.56

 

 

$

117.43

 

The DeSoto

Savannah, Georgia

$

114.94

 

 

$

101.36

 

 

$

108.29

 

DoubleTree by Hilton Jacksonville Riverfront

Jacksonville, Florida

$

121.38

 

 

$

121.65

 

 

$

106.92

 

DoubleTree by Hilton Laurel

Laurel, Maryland

$

67.21

 

 

$

55.26

 

 

$

56.83

 

DoubleTree by Hilton Philadelphia Airport

Philadelphia, Pennsylvania

$

81.45

 

 

$

91.59

 

 

$

82.90

 

DoubleTree by Hilton Raleigh Brownstone – University

Raleigh, North Carolina

$

97.91

 

 

$

95.36

 

 

$

100.63

 

DoubleTree Resort by Hilton Hollywood Beach

Hollywood, Florida

$

180.89

 

 

$

176.17

 

 

$

179.81

 

Georgian Terrace

Atlanta, Georgia

$

187.75

 

 

$

121.49

 

 

$

127.77

 

Hotel Ballast Wilmington, Tapestry Collection by Hilton

Wilmington, North Carolina

$

86.00

 

 

$

67.48

 

 

$

81.18

 

Hyatt Centric Arlington (1)

Arlington, Virginia

$

128.87

 

 

$

120.57

 

 

$

139.78

 

Sheraton Louisville Riverside

Jeffersonville, Indiana

$

61.18

 

 

$

62.12

 

 

$

69.61

 

The Whitehall

Houston, Texas

$

94.37

 

 

$

84.74

 

 

$

105.55

 

Hyde Resort & Residences (2)

Hollywood Beach, Florida

$

226.23

 

 

$

187.03

 

 

$

155.97

 

All properties weighted average (1)

$

121.07

 

 

$

111.52

 

 

$

110.23

 

 

(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.

 

 

 


 

SOTHERLY HOTELS INC.

RECONCILIATION OF NET LOSS TO

FFO, Adjusted FFO, EBITDA and Hotel EBITDA

(unaudited)

 

 

Three Months Ended

 

 

Three Months Ended

 

 

March 31, 2019

 

 

March 31, 2018

 

Net loss available to common stockholders

$

(1,653,763

)

 

$

(238,343

)

Add: Net loss attributable to noncontrolling interest

 

(206,949

)

 

 

(30,013

)

Depreciation and amortization - real estate

 

6,013,866

 

 

 

5,617,574

 

Gain on involuntary conversion of assets

 

(161,334

)

 

 

(870,741

)

(Gain) loss on disposal of assets

 

(4,008

)

 

 

3,739

 

FFO available to common stockholders and unitholders

$

3,987,812

 

 

$

4,482,216

 

Decrease in deferred income taxes

 

284,679

 

 

 

260,262

 

Amortization - franchise fees

 

14,869

 

 

 

16,616

 

Unrealized (gain) loss on hedging activities

 

490,611

 

 

 

(12,730

)

Adjusted FFO available to common stockholders and unitholders

$

4,777,971

 

 

$

4,746,364

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding, basic

 

13,610,750

 

 

 

13,472,444

 

 

 

 

 

 

 

 

 

Weighted average number of non-controlling units

 

1,778,140

 

 

 

1,778,140

 

 

 

 

 

 

 

 

 

Weighted average number of shares and units outstanding, basic

 

15,388,890

 

 

 

15,250,584

 

 

 

 

 

 

 

 

 

FFO per common share and unit

$

0.26

 

 

$

0.29

 

 

 

 

 

 

 

 

 

Adjusted FFO per common share and unit

$

0.31

 

 

$

0.31

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

March 31, 2019

 

 

March 31, 2018

 

Net loss available to common stockholders

$

(1,653,763

)

 

$

(238,343

)

Add: Net loss attributable to noncontrolling interest

 

(206,949

)

 

 

(30,013

)

Interest expense

 

5,305,114

 

 

 

4,177,019

 

Interest income

 

(99,296

)

 

 

(81,704

)

Income tax (benefit) provision

 

318,156

 

 

 

305,955

 

Depreciation and amortization

 

6,028,735

 

 

 

5,634,190

 

Distributions to preferred stockholders

 

1,470,507

 

 

 

1,444,844

 

EBITDA

 

11,162,504

 

 

 

11,211,948

 

Loss on disposal and/or sale of assets

 

(4,008

)

 

 

3,739

 

Gain on involuntary conversion of assets

 

(161,334

)

 

 

(870,741

)

Subtotal

 

10,997,162

 

 

 

10,344,946

 

Corporate general and administrative

 

1,684,444

 

 

 

1,546,300

 

Unrealized (gain) loss on hedging activities

 

490,611

 

 

 

(12,730

)

Hotel EBITDA

$

13,172,217

 

 

$

11,878,516

 

 

 

 

 


 


Reconciliation of Outlook of Net Income to EBITDA and Hotel EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior 2019 Guidance

 

 

Revised 2019 Guidance

 

 

Low Range

 

 

High Range

 

 

Low Range

 

 

High Range

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

1,511

 

 

$

2,099

 

 

 

1,708

 

 

 

2,295

 

Interest expense

 

21,255

 

 

 

21,255

 

 

 

19,899

 

 

 

19,899

 

Interest income

 

(380

)

 

 

(380

)

 

 

(380

)

 

 

(380

)

Income tax provision

 

750

 

 

 

1,100

 

 

 

750

 

 

 

1,100

 

Depreciation and amortization

 

20,000

 

 

 

20,000

 

 

 

20,000

 

 

 

20,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

43,136

 

 

 

44,074

 

 

 

41,977

 

 

 

42,914

 

Loss on early extinguishment of debt

 

-

 

 

 

-

 

 

 

1,160

 

 

 

1,160

 

Corporate general and administrative

 

6,050

 

 

 

6,150

 

 

 

6,050

 

 

 

6,150

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hotel EBITDA

$

49,186

 

 

$

50,224

 

 

$

49,187

 

 

$

50,224

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Outlook of Net Income to FFO and Adjusted FFO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior 2019 Guidance

 

 

Revised 2019 Guidance

 

 

Low Range

 

 

High Range

 

 

Low Range

 

 

High Range

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

1,511

 

 

 

2,099

 

 

 

1,708

 

 

 

2,295

 

Depreciation and amortization

 

20,000

 

 

 

20,000

 

 

 

20,000

 

 

 

20,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO

 

21,511

 

 

 

22,099

 

 

 

21,708

 

 

 

22,295