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Press Release


Condor Hospitality Trust Reports Fourth Quarter and Full Year 2017 Results

Company Release - 3/19/2018 4:25 PM ET

BETHESDA, Md.--(BUSINESS WIRE)-- Condor Hospitality Trust, Inc. (NYSE American: CDOR) (the “Company”) today announced results for the fourth quarter and year ended December 31, 2017.

FOURTH QUARTER RELEASE FINANCIAL HIGHLIGHTS

  • Revenue Growth of 45.9% over Prior Year to $15.3 million
  • Net Earnings Attributable to Common Shareholders of $1.2 million or $0.10 per Diluted Share
  • Adjusted Funds from Operations Increased to $3.3 million or $0.28 per Diluted Share Versus a Loss in Last Year’s Fourth Quarter
  • Hotel EBITDA Doubled to $6.0 million from $3.0 million, and Adjusted EBITDA Increased 250% Over Last Year’s Fourth Quarter
  • Achieved 2.5% Fourth Quarter Same-Store RevPAR Growth over Prior Year*
  • Expanded Fourth Quarter Same-Store Hotel EBITDA Margin by 340 Basis Points to 37.0% over Prior Year*

FY2017 PORTFOLIO ACCOMPLISHMENTS

  • Achieved 5.0% FY2017 Same-Store RevPAR Growth over Prior Year*
  • Closed Seven New Investment Platform Hotels for Approximately $132 million and Signed Contracts for Two Additional Acquisitions for Approximately $36 million
  • Closed Eight Legacy Asset Sales Generating $29.1 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:

“The transition of Condor was substantially completed during 2017. We sold eight legacy hotel assets generating gross proceeds of $29.1 million and acquired or placed under contract nine new investment platform hotels for a purchase price of approximately $168 million. We continue to thrive in our operations, having achieved 5.0% RevPAR growth in 2017 for our same-store new investment platform hotels combined with a 50 bps increase in hotel EBITDA margin over last year. Our 5.0% RevPAR growth significantly outperformed both the industry and our public hotel REIT peer group.

“We have also had continued success subsequent to year end with the disposition of two additional legacy assets and the purchase of the TownePlace Suites Austin North Tech Ridge and Home2 Suites Summerville-Charleston bringing our new investment platform hotel acquisitions in and since 2015 to nearly $277 million. We have only three of our legacy assets remaining and one of these hotels is already under contract to be sold. We have now sold 52 legacy assets for approximately $153 million since the transition began almost three years ago. Our investment thesis continues to prove out as we execute our communicated strategy. We are excited to continue expanding our platform and create additional shareholder value in 2018 and beyond.”

FINANCIAL SUMMARY

At December 31, 2017, the Company’s total portfolio included 18 hotels, representing 2,176 rooms.

 

Total Company Financial Results

($ in millions except per share amounts)

             
Three months ended December 31, Year ended December 31,
2017 2016 Change 2017 2016 Change
Revenue $ 15.3 $ 10.5 45.9 % $ 55.5 $ 50.6 9.5 %
Net Earnings (Loss) Attributable to Common Shareholders $ 1.2 $ 3.6 -67.1 % $ (9.4 ) $ 2.0 -557.4 %
Diluted Earnings (Loss) per Share $ 0.10 $ 0.65 -84.6 % $ (1.00 ) $ 0.91 -209.9 %
 
Funds from Operations (FFO)* $ 2.3 $ (1.1 ) N/A $ 6.3 $ 6.8 -6.9 %
FFO per Diluted Share* $ 0.18 $ (2.26 ) N/A $ (0.22 ) $ (15.40 ) N/A
Adjusted FFO* $ 3.3 $ (1.1 ) N/A $ 9.8 $ 0.3 2961.4 %
Adjusted FFO per Diluted Share* $ 0.28 $ (1.20 ) N/A $ 0.98 $ 0.35 180.0 %
 
Hotel EBITDA* $ 6.0 $ 3.0 95.2 % $ 22.0 $ 15.0 46.1 %
Adjusted EBITDA* $ 4.6 $ 1.3 249.8 % $ 16.2 $ 9.1 77.3 %
 

*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. The per share amounts were impacted by an increased share count as a result of the conversion of our Series D preferred stock and the equity raise, both completed in the first quarter of 2017.

NEW INVESTMENT PLATFORM

At December 31, 2017, the Company’s new investment platform included 13 hotels, representing 1,693 rooms.

             

New Investment Platform Operational Results*

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

 
Three months ended December 31, Year ended December 31,
2017 2016 Change 2017 2016 Change
Same-Store RevPAR $ 91.45 $ 89.23 2.5 % $ 96.08 $ 91.49 5.0 %
Same-Store Occupancy 76.01 % 76.42 % -0.5 % 79.51 % 77.09 % 3.1 %
Same-Store ADR $ 120.31 $ 116.76 3.0 % $ 120.85 $ 118.68 1.8 %
 
Same-Store Hotel EBITDA* $ 5.1 $ 4.5 13.0 % $ 21.2 $ 19.9 6.6 %
Same-Store Hotel EBITDA Margin* 37.0 % 33.6 % 3.4 % 37.1 % 36.6 % 0.5 %
 
*Financial results presented above include results from prior to our ownership. Please see the Reg. G reconciliation tables at the end of this release.
 

LEGACY PLATFORM

At December 31, 2017, the Company’s legacy platform included five hotels, representing 483 rooms.

             

Legacy Platform Operational Results*

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

 
Three months ended December 31, Year ended December 31,
2017 2016 Change 2017 2016 Change
Same-Store RevPAR $ 45.26 $ 50.52 -10.4 % $ 51.43 $ 49.18 4.6 %
Same-Store Occupancy 56.76 % 68.46 % -17.1 % 65.97 % 64.65 % 2.0 %
Same-Store ADR $ 79.74 $ 73.80 8.0 % $ 77.96 $ 76.06 2.5 %
 
Same-Store Hotel EBITDA* $ 0.4 $ 0.7 -41.4 % $ 2.5 $ 2.6 -1.9 %
Same-Store Hotel EBITDA Margin* 17.9 % 27.5 % -9.6 % 26.2 % 27.7 % -1.5 %
 

*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 or placed under contract 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 third quarter of 2017, the Company agreed to acquire the TownePlace Suites Austin North Tech Ridge, and during the fourth quarter of 2017, the Company agreed to acquire the Home2 Suites Summerville-Charleston in South Carolina. The Company acquired both of these hotels in the first quarter of 2018 for a combined purchase price of $36.1 million. These two assets represent the fourteenth and fifteenth hotels, respectively, under the Company’s new investment platform. Aimbridge Hospitality was retained as the manager of the TownePlace Suites while Inn Ventures is managing our new Home2 Suites.

Dispositions

During the fourth quarter, the Company sold one legacy hotel asset, a 71-room Comfort Inn & Suites in Warsaw, IN for $5.0 million. Subsequent to year end, the Company sold the 41-room 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 December 31, 2017, the Company had cash and cash equivalents (including restricted cash) of $10.3 million and available revolver lending capacity of $11.9 million. As of December 31, 2017, the Company had total outstanding long-term debt of $118.9 million associated with assets held for use with a weighted average maturity of 3.2 years and a weighted average interest rate of 4.5%.

In the fourth quarter, the Company refinanced three new investment platform hotels. The effect of this refinancing was to increase the ratio of fixed rate debt to total debt and to increase the credit facility availability for future acquisitions. The refinanced hotels were previously encumbered by floating-rate debt totaling $25.0 million (4.2% weighted average rate), which was refinanced with a $26.5 million mortgage loan from Wells Fargo. The new mortgage loan has an effective fixed rate of 4.44% and matures in five years with two one-year extension options.

During the fourth quarter, the Company sold 163,054 shares of common stock under the ATM program at an average sales price of $10.1328 per share for gross proceeds totaling $1,652,191 and net proceeds, including cash commission fees paid to the Sales Agents and additional related costs, totaling $1,588,414.

Subsequent to December 31, 2017 through March 16, 2018, the Company has sold 12,334 shares of common stock under the ATM program at an average sales price of $10.40 per share for gross proceeds totaling approximately $128,000 and net proceeds, including cash commission fees paid to the Sales Agents and additional related costs, totaling approximately $125,000.

CAPITAL INVESTMENTS

The Company invested $2.8 million in capital improvements throughout the portfolio in the year ended December 31, 2017, 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 first 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.

 

DIVIDENDS

On December 19, 2017, the Board of Directors declared a quarterly cash common stock dividend of $0.195 per share for the fourth quarter of 2017. The common stock dividend represents an annualized yield of approximately 7.8% based on the closing price of the Company’s common shares on December 18, 2017. The fourth quarter dividend was paid on January 10, 2018 to shareholders of record as of January 2, 2018.

EARNINGS CALL

The Company will conduct its quarterly conference call on Tuesday, March 20, 2018, at 9:00 AM ET. To participate in the conference call, dial 1-877-425-9470 [International: 1-201-389-0878] approximately ten minutes before the call begins.

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.

   

SELECTED FINANCIAL DATA:

 

Condor Hospitality Trust, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share and per share data)

 
As of December 31,
2017 2016
 

Assets

Investment in hotel properties, net $ 206,925 $ 79,231
Investment in unconsolidated joint venture 7,747 9,036
Cash and cash equivalents 5,441 8,326
Restricted cash, property escrows 4,894 5,350
Accounts receivable, net of allowance for doubtful accounts of $11 and $21 1,707 1,416
Prepaid expenses and other assets 3,220 1,666
Derivative assets, at fair value 391 -
Investment in hotel properties held for sale, net   12,655     35,640  
Total Assets $ 242,980   $ 140,665  
 

Liabilities and Equity

 
Liabilities
Accounts payable, accrued expenses, and other liabilities $ 7,046 $ 4,698
Dividends and distributions payable 2,470 1,125
Derivative liabilities, at fair value - 8
Convertible debt, at fair value 1,069 1,315
Long-term debt, net of deferred financing costs 115,605 47,918
Long-term debt related to hotel properties held for sale, net of deferred financing costs   4,976     14,802  
Total Liabilities 131,166 69,866
 
Equity
Shareholders' Equity
Preferred stock, 40,000,000 shares authorized:
6.25% Series D, 6,700,000 shares authorized, $.01 par value, 6,245,156 shares outstanding, liquidation preference of $63,427 at December 31, 2016 - 61,333
6.25% Series E, 925,000 shares authorized, $.01 par value, 925,000 shares outstanding, liquidation preference of $9,395 at December 31, 2017 10,050 -
Common stock, $.01 par value, 200,000,000 shares authorized; 11,833,573 and 762,590 shares outstanding 118 8
Additional paid-in capital 230,727 118,655
Accumulated deficit   (130,489 )   (112,024 )
Total Shareholders' Equity 110,406 67,972
Noncontrolling interest in consolidated partnership (Condor Hospitality Limited Partnership), redemption value of $871 and $2,008   1,408     2,827  
Total Equity 111,814 70,799
   
Total Liabilities and Equity $ 242,980   $ 140,665  
 
 

Condor Hospitality Trust, Inc.

Consolidated Statements of Operations

(In thousands, except per share data)

 
 

(Unaudited)
Three months ended
December 31,

 

Year ended December 31,

2017   2016 2017   2016
Revenue    
Room rentals and other hotel services $ 15,278   $ 10,470   $ 55,453   $ 50,647  
Operating Expenses
Hotel and property operations 10,028 8,040 37,134 37,092
Depreciation and amortization 2,085 1,094 6,898 5,190
General and administrative 1,847 1,700 6,552 5,792
Acquisition and terminated transactions 80 175 1,250 550
Equity transactions   -     -     343     -  
Total operating expenses   14,040     11,009     52,177     48,624  
Operating income (loss) 1,238 (539 ) 3,276 2,023
Net gain on disposition of assets 2,004 7,318 6,807 23,132
Equity in earnings (loss) of joint venture (105 ) (190 ) 190 (244 )
Net gain on derivatives and convertible debt 20 72 436 6,377
Other income (expense), net (28 ) (32 ) (111 ) 55
Interest expense (1,706 ) (1,006 ) (5,174 ) (4,710 )
Loss on debt extinguishment (167 ) (639 ) (967 ) (2,187 )
Impairment loss, net   (553 )   (220 )   (2,151 )   (1,477 )
Earnings from continuing operations before income taxes 703 4,764 2,306 22,969
Income tax benefit (expense)   645     (125 )   595     (125 )
Earnings from continuing operations 1,348 4,639 2,901 22,844
Gain from discontinued operations, net of tax   -     -     -     678  
Net earnings   1,348     4,639     2,901     23,522  
Earnings attributable to noncontrolling interest   (10 )   (99 )   (20 )   (727 )
Net earnings attributable to controlling interests 1,338 4,540 2,881 22,795
Dividends declared and undeclared and in kind dividends deemed on preferred stock   (164 )   (975 )   (12,243 )   (20,748 )
Net earnings (loss) attributable to common shareholders $ 1,174   $ 3,565   $ (9,362 ) $ 2,047  
 

Earnings per Share

Continuing operations - Basic $ 0.10 $ 4.68 $ (1.00 ) $ 1.82
Discontinued operations - Basic   -     -     -     0.85  
Total - Basic Earnings (Loss) per Share $ 0.10   $ 4.68   $ (1.00 ) $ 2.67  
 

Diluted Earnings Per Share

Continuing operations - Diluted $ 0.10 $ 0.65 $ (1.00 ) $ 0.78
Discontinued operations - Diluted   -     -     -     0.13  
Total - Basic Earnings (Loss) per Share $ 0.10   $ 0.65   $ (1.00 ) $ 0.91  
 

Reconciliation of Non-GAAP Financial Measures (Unaudited)

Non-GAAP financial measures are measures of our historical financial performance that are different from measures calculated and presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We report Funds from Operations (“FFO”), Adjusted FFO (“AFFO”), Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”), Adjusted EBITDA, and Hotel EBITDA as non-GAAP financial measures that we believe are useful to investors as key measures of our operating results and that 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 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 to FFO and AFFO for the three months and years ended December 31, 2017 and 2016 (in thousands, except share and per share amounts). All amounts presented include both continuing and discontinued operations as well as our portion of the results of our unconsolidated Atlanta joint venture, the Atlanta Aloft JV, of which we own 80%.

   

Three months ended
December 31,

Years ended
December 31,

Reconciliation of Net earnings to FFO and AFFO

2017   2016 2017   2016
Net earnings $ 1,348 $ 4,639 $ 2,901 $ 23,522
Depreciation and amortization expense 2,085 1,094 6,898 5,190
Depreciation and amortization expense from JV 288 283 1,140 377
Net gain on disposition of assets (2,004 ) (7,318 ) (6,807 ) (23,813 )
Net loss on disposition of assets from JV 3 1 7 2
Impairment loss, net   553     220     2,151     1,477  
FFO 2,273 (1,081 ) 6,290 6,755
Dividends declared and undeclared and in kind dividends deemed on preferred stock   (165 )   (975 )   (12,244 )   (20,748 )
FFO attributable to common shares and common units 2,108 (2,056 ) (5,954 ) (13,993 )
Net gain on derivatives and convertible debt (20 ) (72 ) (436 ) (6,377 )
Net loss on derivatives from JV - 5 2 5
Acquisitions and terminated transactions expense 80 175 1,250 550
Acquisition expense from JV - 15 - 239
Equity and terminated transactions - - 343 -
Loss on debt extinguishment 167 639 967 2,187
Stock-based compensation and LTIP expense 572 77 1,237 305
Amortization of deferred financing fees 340 105 1,066 597
Amortization of deferred financing fees from JV 45 22 181 68
Non-recurring dividends above stated rates declared and undeclared and in kind dividends deemed on preferred stock   20     -     11,110     16,738  
AFFO attributable to common shares and common units $ 3,312   $ (1,090 ) $ 9,766   $ 319  
 
FFO attributable to common shares and partnership units - Basic and Diluted $ 2,108 $ (2,056 ) $ (5,954 ) $ (13,993 )
 
FFO per common share and partnership unit - Basic $ 0.18 $ (2.26 ) $ (0.22 ) $ (15.40 )
FFO per common share and partnership unit - Diluted $ 0.18 $ (2.26 ) $ (0.22 ) $ (15.40 )
 
Weighted average common shares and partnership units - Basic FFO 11,698,642 910,632 9,558,182 908,593
Weighted average common shares and partnership units - Diluted FFO 11,718,966 910,632 9,558,182 908,593
 
AFFO attributable to common shares and partnership units - Basic $ 3,312 $ (1,090 ) $ 9,766 $ 319
Convertible note interest 16 - 63 -
Preferred dividends at stated rates   144     -     1,134     -  
AFFO attributable to common shares and partnership units - Diluted $ 3,472   $ (1,090 ) $ 10,963   $ 319  
 
AFFO per common share and partnership unit - Basic $ 0.28 $ (1.20 ) $ 1.02 $ 0.35
AFFO per common share and partnership unit - Diluted $ 0.28 $ (1.20 ) $ 0.98 $ 0.35
 
Weighted average common shares and partnership units - Basic AFFO 11,698,642 910,632 9,558,182 908,593
Weighted average common shares and partnership units - Diluted AFFO 12,484,346 910,632 11,213,584 908,593
 

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 partnership units, which is FFO reduced by preferred stock dividends. AFFO is FFO attributable to common shares and partnership units adjusted to exclude items we do not believe are representative of the results from our core operations, 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 partnership unit because our partnership units are redeemable for common shares. We believe it is meaningful for the investor to understand FFO and AFFO applicable to common shares and partnership units.

EBITDA, Adjusted EBITDA, and Hotel EBITDA

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

       
Three months ended
December 31,
Year ended
December 31,

Reconciliation of Net earnings to EBITDA, Adjusted EBITDA, and Hotel EBITDA

2017 2016 2017 2016
Net earnings $ 1,348 $ 4,639 $ 2,901 $ 23,522
Interest expense 1,706 1,006 5,174 4,715
Interest expense from JV 471 427 1,941 618
Loss on debt extinguishment 167 639 967 2,187
Income tax expense (benefit) (645 ) 125 (595 ) 125
Depreciation and amortization expense 2,085 1,094 6,898 5,190
Depreciation and amortization expense from JV   288     283     1,140     377  
EBITDA 5,420 8,213 18,426 36,734
Net gain on disposition of assets (2,004 ) (7,318 ) (6,807 ) (23,813 )
Net loss on disposition of assets from JV 3 1 7 2
Impairment loss, net 553 220 2,151 1,477
Net gain on derivatives and convertible debt (20 ) (72 ) (436 ) (6,377 )
Net loss on derivative from JV - 5 2 5
Stock-based compensation and LTIP expense 572 77 1,237 305
Acquisition and terminated transactions expense 80 175 1,250 550
Acquisition and terminated transactions expense from JV - 15 - 239
Equity and terminated transactions expense   -     -     343     -  
Adjusted EBITDA 4,604 1,316 16,173 9,122
General and administrative expense, excluding stock compensation and LTIP expense 1,275 1,623 5,315 5,487
Other expense (income), net 28 32 111 (55 )
Unallocated hotel and property operations expense   43     77     351     467  
Hotel EBITDA $ 5,950   $ 3,048   $ 21,950   $ 15,021  
 
Revenue $ 15,278 $ 10,470 $ 55,453 $ 50,653
JV revenue   1,987     1,914     9,266     2,962  
Total Company and JV revenue $ 17,265   $ 12,384   $ 64,719   $ 53,615  
Hotel EBITDA as a percentage of revenue 34 % 25 % 34 % 28 %
 

We calculate EBITDA and Adjusted EBITDA by adding back to net earnings or loss certain non-operating expenses and certain non-cash charges that 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. In calculating Adjusted EBITDA, we adjust EBITDA to add back net gain/loss on disposition of assets, acquisition and terminated transactions expense, and equity transactions expense, which are cash charges. We also add back impairment, stock –based compensation expense, and gain/loss on derivatives and convertible debt, which are non-cash charges. EBITDA and Adjusted EBITDA, as presented, may not be comparable to similarly titled measures of other companies.

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

The Company further excludes general and administrative expenses, other non-operating income or expense, and certain hotel and property operations expenses that are not allocated to individual properties in assessing hotel performance (primarily certain general liability and other insurance costs, land lease costs, and office and banking fees) from Adjusted EBITDA to calculate Hotel EBITDA. Hotel EBITDA, 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.

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 and years ended December 31, 2017 and 2016 (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 December 31, 2017, with the exception of the Residence Inn Austin which was opened on August 3, 2016 (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 include both continuing and discontinued 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
December 31,
Year ended
December 31,
2017 2016 2017 2016
Condor and JV Revenue - Actual $ 17,265 $ 12,384 $ 64,719 $ 53,615
Revenue earned on properties owned at December 31, 2017 prior to the Company's ownership, including the JV prior to ownership and excluding the Residence Inn Austin - 7,378 8,344 34,984
Revenue earned on properties disposed of prior to December 31, 2017 during the period of ownership (367 ) (3,987 ) (5,004 ) (25,069 )
Revenue earned on Residence Inn Austin subsequent to ownership   (1,025 )   -     (1,386 )   -  
Total Revenue - Same-Store $ 15,873   $ 15,775   $ 66,673   $ 63,530  
 
Revenue - Same-Store by Type
Three months ended
December 31,
Year ended
December 31,
2017 2016 2017 2016
New investment platform $ 13,722 $ 13,377 $ 57,064 $ 54,255
Legacy held for use 767 895 3,612 3,399
Legacy held for sale   1,384     1,503     5,997     5,876  
Total Revenue - Same-Store $ 15,873   $ 15,775   $ 66,673   $ 63,530  
 
Hotel EBITDA - Reconciliation of Same-Store to Actual
Three months ended
December 31,
Year ended
December 31,
2017 2016 2017 2016
Condor and JV Hotel EBITDA - Actual $ 5,950 $ 3,048 $ 21,950 $ 15,021
Hotel EBITDA earned on properties owned at December 31, 2017 prior to the Company's ownership, including the JV prior to ownership and excluding the Residence Inn Austin - 3,056 3,416 13,738
Hotel EBITDA earned on properties disposed of prior to December 31, 2017 during the period of ownership (98 ) (952 ) (1,144 ) (6,330 )
Hotel EBITDA earned on Residence Inn Austin subsequent to ownership   (391 )   -     (528 )   -  
Total Hotel EBITDA - Same-Store $ 5,461   $ 5,152   $ 23,694   $ 22,429  
 
Hotel EBITDA - Same-Store by Type
Three months ended
December 31,
Year ended
December 31,
2017 2016 2017 2016
New investment platform $ 5,075 $ 4,493 $ 21,175 $ 19,861
Legacy held for use 190 324 1,145 1,124
Legacy held for sale   196     335     1,374     1,444  
Total Hotel EBITDA - Same-Store $ 5,461   $ 5,152   $ 23,694   $ 22,429  
 
Hotel EBITDA Margin by Property Type
Three months ended
December 31,
Year ended
December 31,
2017 2016 2017 2016
Adjusted new investment platform, including JV 37.0 % 33.6 % 37.1 % 36.6 %
Legacy held for use 24.8 % 36.2 % 31.7 % 33.1 %
Legacy held for sale   14.2 %   22.3 %   22.9 %   24.6 %
Total Portfolio   34.4 %   32.7 %   35.5 %   35.3 %
 

Non-GAAP Measures Included in 2018 Guidance and Outlook

The following tables reconcile forecast net earnings to forecast FFO and AFFO and forecast EBITDA, Adjusted EBITDA, 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.

   
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
 
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
Acquisitions and terminated transactions expense - -
Stock-based compensation and LTIP expense 1.0 1.0
Net gain on disposition of assets   -     -  
Forecast Adjusted EBITDA 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  
 

Condor Hospitality Trust, Inc.
Operating Statistics

The following tables present our same-store occupancy, Average Daily Rate (“ADR”), and RevPAR for all our hotels owned at December 31, 2017, with the exception of the Austin Residence Inn, which was opened on August 3, 2016 (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 80% ownership of the Atlanta Aloft 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 December 31,
2017 2016
Occupancy ADR RevPAR Occupancy ADR RevPAR
Solomons Hilton Garden Inn 74.48 % $ 113.86 $ 84.80 67.21 % $ 116.60 $ 78.37
Atlanta Hotel Indigo 71.90 % $ 101.34 $ 72.86 67.45 % $ 101.61 $ 68.54
Jacksonville Courtyard by Marriott 73.03 % $ 113.20 $ 82.67 75.48 % $ 110.91 $ 83.72
San Antonio SpringHill Suites 83.78 % $ 120.32 $ 100.80 71.22 % $ 121.70 $ 86.68
Leawood Aloft 77.34 % $ 126.88 $ 98.13 79.81 % $ 123.95 $ 98.92
Lexington Home2 Suites 79.97 % $ 114.35 $ 91.44 78.09 % $ 113.64 $ 88.74
Round Rock Home2 Suites 80.47 % $ 114.07 $ 91.80 78.13 % $ 117.46 $ 91.77
Tallahassee Home2 Suites 77.92 % $ 133.72 $ 104.19 88.37 % $ 121.32 $ 107.21
South Haven Home2 Suites 87.07 % $ 109.76 $ 95.56 92.03 % $ 108.24 $ 99.61
Lake Mary Hampton Inn & Suites 88.50 % $ 128.98 $ 114.15 82.19 % $ 113.00 $ 92.87
El Paso Fairfield Inn 71.46 % $ 99.54 $ 71.13 82.12 % $ 106.75 $ 87.66
Wholly owned new investment platform properties 78.51 % $ 116.81 $ 91.71 78.41 % $ 114.24 $ 89.57
Atlanta Aloft JV 63.02 % $ 142.94 $ 90.09 66.11 % $ 132.30 $ 87.46
Total new investment platform 76.01 % $ 120.31 $ 91.45 76.42 % $ 116.76 $ 89.23
 
Legacy hotels held for sale 54.15 % $ 88.63 $ 47.99 63.99 % $ 81.24 $ 51.99
Legacy hotels held for use 61.12 % $ 66.55 $ 40.68 75.95 % $ 63.29 $ 48.07
Total legacy 56.76 % $ 79.74 $ 45.26 68.46 % $ 73.80 $ 50.52
           
Total portfolio 71.48 % $ 112.73 $ 80.58 74.55 % $ 107.48 $ 80.12
 
Austin Residence Inn 69.38 % $ 131.24 $ 91.06 - $ - $ -
 
 
Year ended December 31,
2017 2016
Occupancy ADR RevPAR Occupancy ADR RevPAR
Solomons Hilton Garden Inn 79.21 % $ 118.73 $ 94.04 71.66 % $ 119.48 $ 85.61
Atlanta Hotel Indigo 73.86 % $ 101.62 $ 75.06 70.27 % $ 103.87 $ 72.99
Jacksonville Courtyard by Marriott 74.40 % $ 114.03 $ 84.84 76.77 % $ 113.63 $ 87.23
San Antonio SpringHill Suites 80.24 % $ 128.61 $ 103.19 72.18 % $ 124.46 $ 89.83
Leawood Aloft 81.18 % $ 126.94 $ 103.05 81.81 % $ 125.70 $ 102.83
Lexington Home2 Suites 82.70 % $ 114.67 $ 94.84 78.84 % $ 111.76 $ 88.11
Round Rock Home2 Suites 83.18 % $ 118.31 $ 98.41 84.51 % $ 117.86 $ 99.61
Tallahassee Home2 Suites 81.48 % $ 125.71 $ 102.42 79.63 % $ 117.00 $ 93.17
South Haven Home2 Suites 90.40 % $ 115.25 $ 104.18 92.74 % $ 113.73 $ 105.47
Lake Mary Hampton Inn & Suites 84.51 % $ 122.91 $ 103.87 75.75 % $ 111.77 $ 84.67
El Paso Fairfield Inn 72.26 % $ 104.49 $ 75.51 75.96 % $ 107.85 $ 81.92
Wholly owned new investment platform properties 80.05 % $ 117.76 $ 94.27 77.95 % $ 115.29 $ 89.87
Atlanta Aloft JV 76.66 % $ 137.60 $ 105.49 72.62 % $ 137.61 $ 99.94
Total new investment platform 79.51 % $ 120.85 $ 96.08 77.09 % $ 118.68 $ 91.49
 
Legacy hotels held for sale 62.37 % $ 84.47 $ 52.68 61.22 % $ 83.70 $ 51.24
Legacy hotels held for use 72.01 % $ 68.53 $ 49.34 70.39 % $ 64.94 $ 45.71
Total legacy 65.97 % $ 77.96 $ 51.43 64.65 % $ 76.06 $ 49.18
           
Total portfolio 76.32 % $ 112.12 $ 85.58 74.16 % $ 109.94 $ 81.54
 
Austin Residence Inn 76.02 % $ 132.12 $ 100.43 - $ - $ -
 
 
Condor Hospitality Trust, Inc.
Property List | As of the Date of this Release
 
New Investment Platform | Acquired from January 1, 2012 - March 19, 2018

Ref

 

Hotel Name

 

City

 

State

 

Rooms

 

Acquisition Date

 

Purchase Price (in
millions)

1 Hilton Garden Inn Dowell/Solomons MD 100 05/25/2012 $11.5
2 SpringHill Suites San Antonio TX 116 10/01/2015 $17.5
3 Courtyard by Marriott Jacksonville FL 120 10/02/2015 $14.0
4 Hotel Indigo College Park GA 142 10/02/2015 $11.0
5 Aloft1 Atlanta GA 254 08/22/2016 $43.6
6 Aloft Leawood KS 156 12/14/2016 $22.5
7 Home2 Suites Lexington KY 103 03/24/2017 $16.5
8 Home2 Suites Round Rock TX 91 03/24/2017 $16.8
9 Home2 Suites Tallahassee FL 132 03/24/2017 $21.5
10 Home2 Suites Southaven MS 105 04/14/2017 $19.0
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

Ref

Hotel Name

City

State

Rooms

Acquisition Date

Status2

16 Super 8 Creston IA 121 09/19/1978 Hold3
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 March 19, 2018 2,215
                         
1 | Owned 80% by Condor
2 | HFS indicates the asset was marketed as held for sale at December 31, 2017
3 | Asset considered HFS subsequent to December 31, 2017
 
           
Dispositions | For Period January 1, 2015 - March 19, 2018

Ref

Hotel Name

City

State

Rooms

Disposition Date

Gross Proceeds
(in millions)

1 Super 8 West Plains MO 49 01/15/2015 $1.5
2 Super 8 Green Bay WI 83 01/29/2015 $2.2
3 Super 8 Columbus GA 74 03/16/2015 $0.9
4 Sleep Inn & Suites Omaha NE 90 03/19/2015 $2.9
5 Savannah Suites Chamblee GA 120 04/01/2015 $4.4
6 Savannah Suites Augusta GA 172 04/01/2015 $3.4
7 Super 8 Batesville AR 49 04/30/2015 $1.5
8 Days Inn Ashland KY 63 07/01/2015 $2.2
9 Comfort Inn Alexandria VA 150 07/13/2015 $12.0
10 Days Inn Alexandria VA 200 07/13/2015 $6.5
11 Super 8 Manhattan KS 85 08/28/2015 $3.2
12 Quality Inn Sheboygan WI 59 10/06/2015 $2.3
13 Super 8 Hays KS 76 10/14/2015 $1.9
14 Days Inn Glasgow KY 58 10/16/2015 $1.8
15 Super 8 Tomah WI 65 10/21/2015 $1.4
16 Rodeway Inn Fayetteville NC 120 11/03/2015 $2.6
17 Savannah Suites Savannah GA 160 12/22/2015 $4.0
Total 2015 1,673 $54.7
18 Super 8 Kirksville MO 61 01/04/2016 $1.5
19 Super 8 Lincoln NE 133 01/07/2016 $2.8
20 Savannah Suites Greenville SC 170 01/08/2016 $2.7
21 Super 8 Portage WI 61 03/30/2016 $2.4
22 Super 8 O'Neill NE 72 04/25/2016 $1.7
23 Quality Inn Culpeper VA 49 05/10/2016 $2.2
24 Super 8 Storm Lake IA 59 05/19/2016 $2.8
25 Clarion Inn Cleveland TN 59 05/24/2016 $2.2
26 Super 8 Coralville IA 84 05/26/2016 $3.4
27 Super 8 Keokuk IA 61 05/27/2016 $2.2
28 Comfort Inn Chambersburg PA 63 06/06/2016 $2.1
29 Super 8 Pittsburg KS 64 08/08/2016 $1.6
30 Super 8 Mount Pleasant IA 54 09/09/2016 $1.9
31 Quality Inn Danville KY 63 09/19/2016 $2.3
32 Super 8 Menomonie WI 81 09/26/2016 $3.0
33 Comfort Inn Glasgow KY 60 10/14/2016 $2.4
34 Days Inn Sioux Falls SD 86 11/04/2016 $2.1
35 Comfort Inn Shelby NC 76 11/07/2016 $4.1
36 Comfort Inn Rocky Mount VA 61 11/17/2016 $2.2
37 Days Inn Farmville VA 59 11/17/2016 $2.4
38 Comfort Suites Marion IN 62 11/18/2016 $3.0
39 Comfort Inn Farmville VA 50 11/30/2016 $2.6
40 Quality Inn Princeton WV 50 12/05/2016 $2.1
41 Super 8 Burlington IA 62 12/21/2016 $2.8
42 Savannah Suites Atlanta GA 164 12/22/2016 $2.9
Total 2016 1,864 $61.4
43 Comfort Inn New Castle PA 79 03/27/2017 $2.5
44 Super 8 Billings MT 106 03/28/2017 $4.2
45 Comfort Inn Harlan KY 61 04/03/2017 $1.9
46 Comfort Suites Lafayette IN 62 04/18/2017 $3.9
47 Key West Inn Key Largo FL 40 05/17/2017 $7.6
48 Quality Inn Morgantown WV 81 08/30/2017 $2.6
49 Days Inn Bossier City LA 176 09/13/2017 $1.4
50 Comfort Inn & Suites Warsaw IN 71 12/20/2017 $5.0
Total 2017 676 $29.1
51 Supertel Inn/Conference Center Creston IA 41 01/25/2018 $2.1
52 Comfort Suites South Bend IN 135 03/15/2018 $6.1
Total 2018 176 $8.2
   
    Total Dispositions           4,389       $153.4
 
 
Acquisitions | For Period January 1, 2015 - March 19, 2018

Ref

 

Hotel Name

 

City

 

State

 

Rooms

 

Acquisition Date

 

Purchase Price (in
millions)

1 SpringHill Suites San Antonio TX 116 10/01/2015 $17.5
2 Courtyard by Marriott Jacksonville FL 120 10/02/2015 $14.0
3 Hotel Indigo College Park GA 142 10/02/2015 $11.0
4 Aloft1 Atlanta GA 254 08/22/2016 $43.6
5 Aloft Leawood KS 156 12/14/2016 $22.5
6 Home2 Suites Lexington KY 103 03/24/2017 $16.5
7 Home2 Suites Round Rock TX 91 03/24/2017 $16.8
8 Home2 Suites Tallahassee FL 132 03/24/2017 $21.5
9 Home2 Suites Southaven MS 105 04/14/2017 $19.0
10 Hampton Inn & Suites Lake Mary FL 130 06/19/2017 $19.3
11 Fairfield Inn & Suites El Paso TX 124 08/31/2017 $16.4
12 Residence Inn Austin TX 120 08/31/2017 $22.4
13 TownePlace Suites Austin TX 122 01/18/2018 $19.8
14 Home2 Suites Summerville SC 93 02/21/2018 $16.3
Total Acquisitions 1,808 $276.6
 
 

1 | Owned 80% by Condor

 

Condor Hospitality Trust, Inc.
Jonathan J. Gantt, 301-861-3305
Chief Financial Officer & Senior Vice President
[email protected]

Source: Condor Hospitality Trust, Inc.