Sotherly Hotels Inc. (NASDAQ: SOHO), (“Sotherly”
or the “Company”), a self-managed and self-administered lodging
real estate investment trust (a “REIT”), today reported its
consolidated results for the fourth quarter and year ended December
31, 2022. The Company’s results include the following*:
|
Three Months Ended |
|
|
Year Ended |
|
|
December 31, 2022 |
|
|
December 31, 2021 |
|
|
December 31, 2019 |
|
|
December 31, 2022 |
|
|
December 31, 2021 |
|
|
December 31, 2019 |
|
|
($ in thousands except per share data) |
|
|
($ in thousands except per share data) |
|
Total revenue |
$ |
41,342 |
|
|
$ |
35,076 |
|
|
$ |
44,305 |
|
|
$ |
166,077 |
|
|
$ |
127,588 |
|
|
$ |
185,788 |
|
Net income (loss) attributable to common
stockholders |
|
3,092 |
|
|
|
(17,209 |
) |
|
|
(3,419 |
) |
|
|
24,967 |
|
|
|
(33,402 |
) |
|
|
(5,911 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
14,982 |
|
|
|
5,871 |
|
|
|
7,836 |
|
|
|
43,298 |
|
|
|
25,980 |
|
|
|
42,011 |
|
Hotel EBITDA |
|
11,893 |
|
|
|
8,102 |
|
|
|
9,280 |
|
|
|
46,463 |
|
|
|
30,895 |
|
|
|
46,938 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO attributable to common stockholders and unitholders |
|
7,800 |
|
|
|
(1,571 |
) |
|
|
1,754 |
|
|
|
13,738 |
|
|
|
(4,789 |
) |
|
|
14,763 |
|
Adjusted FFO attributable to common stockholders and
unitholders |
|
7,991 |
|
|
|
(1,334 |
) |
|
|
1,026 |
|
|
|
17,820 |
|
|
|
(4,890 |
) |
|
|
17,549 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share |
$ |
0.17 |
|
|
$ |
(1.06 |
) |
|
$ |
(0.25 |
) |
|
$ |
1.40 |
|
|
$ |
(2.15 |
) |
|
$ |
(0.43 |
) |
FFO per common share and unit |
$ |
0.40 |
|
|
$ |
(0.09 |
) |
|
$ |
0.11 |
|
|
$ |
0.73 |
|
|
$ |
(0.29 |
) |
|
$ |
0.96 |
|
Adjusted FFO per common share and unit |
$ |
0.41 |
|
|
$ |
(0.08 |
) |
|
$ |
0.07 |
|
|
$ |
0.95 |
|
|
$ |
(0.29 |
) |
|
$ |
1.14 |
|
(*)
Earnings before
interest, taxes, depreciation and amortization (“EBITDA”), hotel
EBITDA, funds from operations (“FFO”) attributable to common
stockholders and unitholders, adjusted FFO attributable 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 it is otherwise indicated.
HIGHLIGHTS
- RevPAR. Room revenue per available room
(“RevPAR”) for the Company’s composite portfolio, which includes
the rooms participating in our rental programs at the Hyde Resort
& Residences and the Hyde Beach House Resort & Residences,
increased to $101.73, for the three months ended December 31, 2022,
from $85.80 in the comparable period in 2021 and was 0.5% below
RevPAR of $102.27 for the comparable period in 2019. Changes in
RevPAR were driven by an increase in the average daily rate (“ADR”)
to $180.05 for the three months ended December 31, 2022, from
$162.00 for the comparable period in 2021 and by an increase in
occupancy to 56.5% from 53.0% in the comparable 2021 period.
However, while ADR for the three months ended December 31, 2022,
was 15.7% higher than ADR for the comparable period in 2019,
occupancy for the three months ended December 31, 2022, was still
9.2% below the 65.7% occupancy achieved during the comparable 2019
period.
- Revenue. Total revenue increased to
approximately $41.3 million for the three months ended December 31,
2022 from approximately $35.1 million during the comparable period
in 2021. Total revenue for the three months ended December 31, 2022
was 6.7% below total revenue of approximately $44.3 million during
the comparable 2019 period. Total revenue increased to
approximately $166.1 million for the year ended December 31, 2022
from approximately $127.6 million during the comparable period in
2021. Total revenue for the year ended December 31, 2022 was 10.6%
below total revenue of approximately $185.8 million during the
comparable 2019 period.
- Net income (loss) attributable to common
stockholders. For the three-month period ending December
31, 2022, net income attributable to common stockholders increased
118.0%, or approximately $20.3 million, over the three months ended
December 31, 2021, from a loss of approximately $17.2 million to
income of approximately $3.1 million. For the twelve-month period
ending December 31, 2022, net income attributable to common
stockholders increased 174.7% or approximately $58.4 million over
the twelve months ended December 31, 2021.
- Hotel EBITDA. The Company increased production
of hotel EBITDA to approximately $11.9 million for the three months
ended December 31, 2022, from approximately $8.1 million during the
comparable period in 2021. Hotel EBITDA for the three months ended
December 31, 2022, was approximately $2.6 million above the hotel
EBITDA generated in the comparable 2019 period. For the
twelve-month period ending December 31, 2022, hotel EBITDA
increased 50.4% or approximately $15.6 million over the twelve
months ended December 31, 2021. Hotel EBITDA for the twelve months
ended December 31, 2022, was approximately $0.5 million below the
approximately $46.9 million hotel EBITDA produced during the
comparable 2019 period.
- Adjusted FFO attributable to common stockholders and
unitholders. For the three-month period ending December
31, 2022, adjusted FFO attributable to common stockholders and
unitholders increased 698.9%, or approximately $9.3 million, over
the three months ended December 31, 2021, from approximately (1.3)
million to approximately $8.0 million. For the twelve-month period
ending December 31, 2022, adjusted FFO attributable to common
stockholders and unitholders increased 464.4% or approximately
$22.7 million over the twelve months ended December 31, 2021.
- Preferred Dividends. The Company has
reinstated payment of quarterly dividends on its preferred stock.
On January 24, 2023 the Company announced a quarterly cash dividend
of $0.50 per share of beneficial interest of the Company’s 8.0%
Series B Cumulative Redeemable Perpetual Preferred Stock; a
quarterly cash dividend of $0.4921875 per share of beneficial
interest of the Company’s 7.875% Series C Cumulative Redeemable
Perpetual Preferred Stock; and a quarterly cash dividend of
$0.515625 per share of beneficial interest of the Company’s 8.25%
Series D Cumulative Redeemable Perpetual Preferred Stock. Each of
the Series B, Series C and Series D preferred dividends will be
paid on March 15, 2023 to shareholders of record as of February 28,
2023.
- Common Dividends. As approved by its Board of
Directors, the Company has suspended its regular quarterly cash
dividend in order to preserve liquidity. Accordingly, the Company
did not pay a dividend on its common stock and common units for the
quarter ended December 31, 2022. The Board of Directors will
continue to monitor the situation and assess future quarterly
common dividend declarations. Per the terms of the Company’s
preferred stock, the Company cannot make any common dividend
payments unless full cumulative distributions have been declared
and paid for past distribution periods for each series of preferred
stock.
Dave Folsom, President and Chief Executive Officer
of Sotherly Hotels Inc., commented, "The results of Sotherly’s
fourth quarter helped cap a very good year for the Company. Fourth
quarter hotel EBITDA finished at $11.9 million, which was a 46.8%
increase over Q4 2021 and eclipsed Q4 2019 by 28.2%. Adjusted FFO
for Q4 2022 finished at $0.41 per share, compared to the prior
year’s deficit of $0.08 per share. As we saw throughout 2022, ADR
continued to outperform the prior year and 2019: Q4 ADR for our
wholly owned hotels exceeded prior year by 15.4% and exceeded Q4
2019 by 16.5%. Occupancy increased from 54.1% in Q4 2021 to 58.0%
in Q4 2022 but lagged occupancy of 67.5% in Q4 2019. Our group
booking pace continues to improve. Our current pace is 46.9% ahead
of the same time last year, and group ADR continues to grow.
Business travel continues to layer into our revenues, especially in
our urban markets. The strength of our booking pace has yet to be
impacted by any material slow down or evidence of an impending
recession. Further, we recently announced the resumption of
dividends on our preferred stock, which demonstrates the Company’s
ongoing recovery. We were very happy with 2022 results."
Balance Sheet/Liquidity
As of December 31, 2022, the Company had
approximately $27.3 million of available cash and cash equivalents,
of which approximately $5.4 million was reserved for real estate
taxes, insurance, capital improvements and certain other expenses
or otherwise restricted. The Company had principal balances of
approximately $324.4 million in outstanding debt, including
mortgage and unsecured principal balances, at a weighted average
interest rate of approximately 5.00%.
Other Events
On February 26, 2023, affiliates of the Company
entered into amended loan documents to modify the existing mortgage
loan on The Whitehall hotel located in Houston, TX with the
existing lender, International Bank of Commerce. The amended loan
documents extend the maturity date to February 26, 2028; maintain a
floating interest rate of New York Prime Rate plus 1.25%; and
subject the interest rate to a floor rate of 7.50%. The amended
loan continues to be guaranteed by the Operating Partnership.
Between April 16 and May 6, 2020, the Operating
Partnership and certain of its subsidiaries received proceeds of
three separate PPP Loans administered by the U.S. Small Business
Administration pursuant to the CARES Act totaling approximately
$10.7 million. On December 9, 2022, the Company was notified it had
received forgiveness for one its PPP Loans in the principal amount
of approximately $4.6 million. On January 11, 2023, the Company was
notified it has received forgiveness for another one of its PPP
Loans in the principal amount of approximately $0.3 million.
Q1 2023 Outlook
Set forth below is the Company's guidance for Q1
2023. The table below reflects the Company’s projections, within a
range, of various financial measures for Q1 2023, in thousands of
dollars, except per share and RevPAR data:
|
Q1 2023 Guidance |
|
|
Low Range |
|
|
High Range |
|
|
|
|
Total revenue |
$ |
42,309 |
|
|
$ |
44,349 |
|
Net income |
|
1,290 |
|
|
|
1,865 |
|
Net loss available to common stockholders and unitholders |
|
(705 |
) |
|
|
(130 |
) |
|
|
|
|
|
|
EBITDA |
|
10,026 |
|
|
|
10,601 |
|
Hotel EBITDA |
|
11,926 |
|
|
|
12,501 |
|
|
|
|
|
|
|
FFO available to common stockholders and unitholders |
|
3,890 |
|
|
|
4,465 |
|
Adjusted FFO available to common stockholders and unitholders |
|
4,155 |
|
|
|
4,730 |
|
|
|
|
|
|
|
Net loss per share available to common stockholders |
$ |
(0.04 |
) |
|
$ |
(0.01 |
) |
FFO per common share and unit |
$ |
0.20 |
|
|
$ |
0.23 |
|
Adjusted FFO per common share and unit |
$ |
0.21 |
|
|
$ |
0.24 |
|
Rev PAR |
$ |
111.77 |
|
|
$ |
117.16 |
|
Hotel EBITDA margin |
|
28.2 |
% |
|
|
28.2 |
% |
Earnings Call/Webcast
The Company will conduct its fourth quarter 2022
conference call for investors and other interested parties at 10:00
a.m. Eastern Time on Thursday, March 2, 2023. The conference call
will be accessible by telephone and through the Internet.
Interested individuals are invited to listen to the call by
telephone at 844-200-6205 (United States) or +1 929-526-1599
(International) and enter access code 847511. 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
March 2, 2023 through March 16, 2023. To access the rebroadcast,
dial 866-813-9403 or +44 204-525-0658 and enter access code
753517.
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.
Sotherly may also opportunistically acquire hotels throughout the
United States. Currently, the Company’s portfolio consists of
investments in ten hotel properties, comprising 2,786 rooms, as
well as interests in two condominium hotels and their associated
rental programs. The Company owns hotels that operate under the
Hilton Worldwide and Hyatt Hotels Corporation 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.
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, and as such may involve known and unknown
risks, uncertainties and other factors which may cause our actual
results, performance or achievements to be materially different
from future results, performance or achievements expressed or
implied by such forward-looking statements. Forward-looking
statements, which are based on certain assumptions and describe our
current strategies, expectations, and future plans are generally
identified by our use of words, such as “intend,” “plan,” “may,”
“should,” “will,” “project,” “estimate,” “anticipate,” “believe,”
“expect,” “continue,” “potential,” “opportunity,” and similar
expressions, whether in the negative or affirmative, but the
absence of these words does not necessarily mean that a statement
is not forward-looking. All statements regarding our expected
financial position, business and financing plans are
forward-looking statements.
Factors which could have a material adverse effect
on the Company’s future operations, results, performance and
prospects, include, but are not limited to: national and local
economic and business conditions that affect occupancy rates and
revenues at our 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 the
level of our indebtedness and our ability to meet covenants in our
debt agreements, including our recently negotiated forbearance
agreements and loan modifications and, as necessary, to refinance
or seek an extension of the maturity of such indebtedness or
further modification of such debt agreements; risks associated with
adverse weather conditions, including hurricanes; impacts on the
travel industry from pandemic diseases, including COVID-19; the
availability and terms of financing and capital and the general
volatility of the securities markets; management and performance of
our 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 our current and
proposed market areas; risks associated with our ability to
maintain our franchise agreements with our third party franchisors;
our ability to acquire additional properties and the risk that
potential acquisitions may not perform in accordance with
expectations; our ability to successfully expand into new markets;
legislative/regulatory changes, including changes to laws governing
taxation of real estate investment trusts (“REITs”); the Company’s
ability to maintain its qualification as a REIT; and our ability to
maintain adequate insurance coverage. Although the Company believes
that the assumptions underlying the forward-looking statements
contained herein are reasonable, any of the assumptions could be
inaccurate, and therefore there can be no assurance that such
statements included in this report will prove to be accurate. In
light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such
information should not be regarded as a representation by the
Company or any other person that the results or conditions
described in such statements or the objectives and plans of the
Company will be achieved.
Additional factors that could cause actual results
to vary from our forward-looking statements are set forth under the
section titled “Risk Factors” in our Annual Report on Form 10-K, in
this report and subsequent reports filed with the Securities and
Exchange Commission. The Company undertakes no obligation to and
does not intend to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise. Although the Company believes its current expectations
to be based upon reasonable assumptions, it can give no assurance
that its expectations will be attained or that actual results will
not differ materially.
Financial Tables Follow…
SOTHERLY HOTELS INC.
CONSOLIDATED BALANCE SHEETS
|
|
December 31, 2022 |
|
|
December 31, 2021 |
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
Investment in hotel properties, net |
|
$ |
365,070,725 |
|
|
$ |
375,885,224 |
|
Investment in hotel properties held for sale, net |
|
|
— |
|
|
|
22,870,487 |
|
Cash and cash equivalents |
|
|
21,918,680 |
|
|
|
13,166,883 |
|
Restricted cash |
|
|
5,422,950 |
|
|
|
12,411,654 |
|
Accounts receivable, net |
|
|
5,844,904 |
|
|
|
4,822,187 |
|
Prepaid expenses, inventory and other assets |
|
|
6,754,956 |
|
|
|
6,894,228 |
|
TOTAL ASSETS |
|
$ |
405,012,215 |
|
|
$ |
436,050,663 |
|
LIABILITIES |
|
|
|
|
|
|
Mortgage loans, net |
|
$ |
320,482,103 |
|
|
$ |
351,170,883 |
|
Secured notes, net |
|
|
— |
|
|
|
19,128,330 |
|
Unsecured notes |
|
|
2,545,975 |
|
|
|
7,609,934 |
|
Accounts payable and accrued liabilities |
|
|
24,147,929 |
|
|
|
35,960,293 |
|
Advance deposits |
|
|
2,233,013 |
|
|
|
1,552,942 |
|
Dividends and distributions payable |
|
|
4,082,472 |
|
|
|
4,125,351 |
|
TOTAL LIABILITIES |
|
$ |
353,491,492 |
|
|
$ |
419,547,733 |
|
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,
1,464,100 and 1,510,000 shares issued and outstanding; aggregate
liquidation preference $44,655,050 and $43,035,000, at December 31,
2022 and 2021, respectively. |
|
|
14,641 |
|
|
|
15,100 |
|
7.875% Series C cumulative redeemable perpetual preferred stock,
1,346,110 and 1,384,610 shares issued and outstanding; aggregate
liquidation preference $40,940,681 and $39,385,669, at December 31,
2022 and 2021, respectively. |
|
|
13,461 |
|
|
|
13,846 |
|
8.25% Series D cumulative redeemable perpetual preferred stock,
1,163,100 and 1,165,000 shares issued and outstanding; aggregate
liquidation preference $35,674,458 and $33,329,922, at December 31,
2022 and 2021, respectively. |
|
|
11,631 |
|
|
|
11,650 |
|
Common stock, par value $0.01, 69,000,000 shares authorized,
18,951,525 shares issued and outstanding at December 31, 2022 and
17,441,058 shares issued and outstanding at December 31, 2021. |
|
|
189,515 |
|
|
|
174,410 |
|
Additional paid-in capital |
|
|
175,611,370 |
|
|
|
177,651,954 |
|
Unearned ESOP shares |
|
|
(2,601,134 |
) |
|
|
(3,083,398 |
) |
Distributions in excess of retained earnings |
|
|
(120,985,183 |
) |
|
|
(153,521,704 |
) |
Total Sotherly Hotels Inc. stockholders’ equity |
|
|
52,254,301 |
|
|
|
21,261,858 |
|
Noncontrolling interest |
|
|
(733,578 |
) |
|
|
(4,758,928 |
) |
TOTAL EQUITY |
|
|
51,520,723 |
|
|
|
16,502,930 |
|
TOTAL LIABILITIES AND EQUITY |
|
$ |
405,012,215 |
|
|
$ |
436,050,663 |
|
SOTHERLY HOTELS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
|
Twelve Months Ended |
|
|
|
December 31, 2022 |
|
|
December 31, 2021 |
|
|
December 31, 2022 |
|
|
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE |
|
|
|
|
|
|
|
|
|
|
|
|
Rooms department |
|
$ |
26,044,903 |
|
|
$ |
23,854,036 |
|
|
$ |
109,553,906 |
|
|
$ |
88,625,659 |
|
Food and beverage department |
|
|
9,409,840 |
|
|
|
5,961,822 |
|
|
|
29,556,213 |
|
|
|
15,829,487 |
|
Other operating departments |
|
|
5,887,004 |
|
|
|
5,260,100 |
|
|
|
26,967,185 |
|
|
|
23,132,778 |
|
Total revenue |
|
|
41,341,747 |
|
|
|
35,075,958 |
|
|
|
166,077,304 |
|
|
|
127,587,924 |
|
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
Hotel operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Rooms department |
|
|
6,088,239 |
|
|
|
6,275,085 |
|
|
|
25,782,888 |
|
|
|
22,688,063 |
|
Food and beverage department |
|
|
5,855,658 |
|
|
|
4,069,497 |
|
|
|
19,724,225 |
|
|
|
10,297,461 |
|
Other operating departments |
|
|
1,825,675 |
|
|
|
1,988,348 |
|
|
|
9,296,056 |
|
|
|
8,607,594 |
|
Indirect |
|
|
15,678,683 |
|
|
|
14,640,575 |
|
|
|
64,811,567 |
|
|
|
55,100,245 |
|
Total hotel operating expenses |
|
|
29,448,255 |
|
|
|
26,973,505 |
|
|
|
119,614,736 |
|
|
|
96,693,363 |
|
Depreciation and amortization |
|
|
4,760,715 |
|
|
|
4,952,338 |
|
|
|
18,650,336 |
|
|
|
19,909,226 |
|
Impairment of investment in hotel properties, net |
|
|
— |
|
|
|
12,201,461 |
|
|
|
— |
|
|
|
12,201,461 |
|
Loss (gain) on disposal of assets |
|
|
144,370 |
|
|
|
792 |
|
|
|
636,198 |
|
|
|
(158,286 |
) |
Corporate general and administrative |
|
|
1,847,081 |
|
|
|
2,850,345 |
|
|
|
6,621,221 |
|
|
|
6,997,166 |
|
Total hotel operating expenses |
|
|
36,200,421 |
|
|
|
46,978,441 |
|
|
|
145,522,491 |
|
|
|
135,642,930 |
|
NET OPERATING INCOME (LOSS) |
|
|
5,141,326 |
|
|
|
(11,902,483 |
) |
|
|
20,554,813 |
|
|
|
(8,055,006 |
) |
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(4,492,271 |
) |
|
|
(5,622,931 |
) |
|
|
(19,772,802 |
) |
|
|
(22,686,694 |
) |
Interest income |
|
|
96,776 |
|
|
|
35,726 |
|
|
|
189,291 |
|
|
|
147,025 |
|
Loss on early extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
(5,944,881 |
) |
|
|
— |
|
Unrealized gain (loss) on hedging activities |
|
|
(74,104 |
) |
|
|
538,281 |
|
|
|
2,918,207 |
|
|
|
1,493,841 |
|
PPP debt forgiveness |
|
|
4,720,278 |
|
|
|
— |
|
|
|
4,720,278 |
|
|
|
— |
|
Gain on sale of hotel properties |
|
|
— |
|
|
|
— |
|
|
|
30,053,977 |
|
|
|
— |
|
Gain on involuntary conversion of assets |
|
|
289,479 |
|
|
|
80,847 |
|
|
|
1,763,320 |
|
|
|
588,586 |
|
Net income (loss) before income taxes |
|
|
5,681,484 |
|
|
|
(16,870,560 |
) |
|
|
34,482,203 |
|
|
|
(28,512,248 |
) |
Income tax provision |
|
|
(488,611 |
) |
|
|
(11,267 |
) |
|
|
(522,355 |
) |
|
|
(27,392 |
) |
Net income (loss) |
|
|
5,192,873 |
|
|
|
(16,881,827 |
) |
|
|
33,959,848 |
|
|
|
(28,539,640 |
) |
Less: Net (income) loss attributable to noncontrolling
interest |
|
|
(106,102 |
) |
|
|
1,148,822 |
|
|
|
(1,423,327 |
) |
|
|
2,318,166 |
|
Net income (loss) attributable to the Company |
|
|
5,086,771 |
|
|
|
(15,733,005 |
) |
|
|
32,536,521 |
|
|
|
(26,221,474 |
) |
Undeclared distributions to preferred stockholders |
|
|
(1,994,313 |
) |
|
|
(1,744,340 |
) |
|
|
(7,634,219 |
) |
|
|
(7,541,891 |
) |
Gain on extinguishment of preferred stock |
|
|
— |
|
|
|
268,134 |
|
|
|
64,518 |
|
|
|
361,476 |
|
Net income (loss) attributable to common stockholders |
|
$ |
3,092,458 |
|
|
$ |
(17,209,211 |
) |
|
$ |
24,966,820 |
|
|
$ |
(33,401,889 |
) |
Net income (loss) per share attributable to common
stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.17 |
|
|
$ |
(1.06 |
) |
|
$ |
1.40 |
|
|
$ |
(2.15 |
) |
Diluted |
|
$ |
0.16 |
|
|
$ |
(1.06 |
) |
|
$ |
1.35 |
|
|
$ |
(2.15 |
) |
Weighted average number of common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
18,409,738 |
|
|
|
16,264,306 |
|
|
|
17,802,717 |
|
|
|
15,531,684 |
|
Diluted |
|
|
18,885,204 |
|
|
|
16,264,306 |
|
|
|
18,380,013 |
|
|
|
15,531,684 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOTHERLY HOTELS INC. KEY
OPERATING METRICS (unaudited)
The following tables illustrate the key operating
metrics for the three and twelve months ended December 31, 2022,
2021 and 2019, respectively, for the Company’s wholly-owned
properties (“actual” portfolio metrics), accordingly, the actual
data does not include the participating condominium hotel rooms of
the Hyde Resort & Residences and the Hyde Beach House Resort
& Residences. The ten wholly-owned properties in the portfolio
that were under the Company’s control during the three and twelve
months ended December 31, 2022 and the corresponding periods in
2021 and 2019 are considered same-store properties (“same-store”
portfolio metrics). Accordingly, the same-store data does not
reflect the performances of the Sheraton Louisville Riverside which
was sold in February 2022, or the DoubleTree by Hilton
Raleigh-Brownstone University which was sold in June 2022. The
composite portfolio metrics represent the Company’s wholly-owned
properties and the participating condominium hotel rooms at the
Hyde Resort & Residences and the Hyde Beach House Resort &
Residences, during the three and twelve months ended December 31,
2022 and the corresponding periods in 2021 and 2019. The same-store
(composite) portfolio metrics includes all properties with the
exceptions of the Sheraton Louisville Riverside, DoubleTree by
Hilton Raleigh-Brownstone University and the Hyde Beach House
Resort & Residences, during the three and twelve months ended
December 31, 2022 and the corresponding periods in 2021 and
2019.
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Year Ended |
|
|
Year Ended |
|
|
Year Ended |
|
|
|
December 31, 2022 |
|
|
December 31, 2021 |
|
|
December31, 2019 |
|
|
December 31, 2022 |
|
|
December 31, 2021 |
|
|
December31, 2019 |
|
Actual Portfolio Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy % |
|
|
58.0 |
% |
|
|
54.1 |
% |
|
|
67.5 |
% |
|
|
60.8 |
% |
|
|
52.9 |
% |
|
|
71.3 |
% |
ADR |
|
$ |
175.34 |
|
|
$ |
151.93 |
|
|
$ |
150.50 |
|
|
$ |
171.34 |
|
|
$ |
145.50 |
|
|
$ |
155.92 |
|
RevPAR |
|
$ |
101.61 |
|
|
$ |
82.16 |
|
|
$ |
101.61 |
|
|
$ |
104.17 |
|
|
$ |
76.94 |
|
|
$ |
111.17 |
|
Same-Store Portfolio Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy % |
|
|
58.0 |
% |
|
|
54.0 |
% |
|
|
67.3 |
% |
|
|
61.2 |
% |
|
|
53.1 |
% |
|
|
71.2 |
% |
ADR |
|
$ |
175.34 |
|
|
$ |
156.90 |
|
|
$ |
153.99 |
|
|
$ |
172.28 |
|
|
$ |
150.32 |
|
|
$ |
159.63 |
|
RevPAR |
|
$ |
101.61 |
|
|
$ |
84.75 |
|
|
$ |
103.69 |
|
|
$ |
105.45 |
|
|
$ |
79.81 |
|
|
$ |
113.62 |
|
Composite Portfolio Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy % |
|
|
56.5 |
% |
|
|
53.0 |
% |
|
|
65.7 |
% |
|
|
60.0 |
% |
|
|
52.5 |
% |
|
|
70.1 |
% |
ADR |
|
$ |
180.05 |
|
|
$ |
162.00 |
|
|
$ |
155.57 |
|
|
$ |
181.34 |
|
|
$ |
160.51 |
|
|
$ |
161.17 |
|
RevPAR |
|
$ |
101.73 |
|
|
$ |
85.80 |
|
|
$ |
102.27 |
|
|
$ |
108.87 |
|
|
$ |
84.29 |
|
|
$ |
112.94 |
|
Same-Store (Composite) Portfolio Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy % |
|
|
57.4 |
% |
|
|
53.6 |
% |
|
|
66.0 |
% |
|
|
61.0 |
% |
|
|
53.1 |
% |
|
|
70.0 |
% |
ADR |
|
$ |
178.41 |
|
|
$ |
163.20 |
|
|
$ |
159.01 |
|
|
$ |
178.01 |
|
|
$ |
160.03 |
|
|
$ |
165.27 |
|
RevPAR |
|
$ |
102.34 |
|
|
$ |
87.43 |
|
|
$ |
105.01 |
|
|
$ |
108.56 |
|
|
$ |
85.04 |
|
|
$ |
115.68 |
|
SOTHERLY HOTELS INC.
SUPPLEMENTAL DATA (unaudited)
The following tables illustrate the key operating
metrics for the three and twelve months ended December 31, 2022,
2021 and 2019, respectively, for each of the Company’s wholly-owned
properties during each respective reporting period, irrespective of
ownership percentage during any period.
Occupancy
|
Q4 2022 |
|
|
Q4 2021 |
|
|
Q4 2019 |
|
|
YTD |
|
|
YTD |
|
|
YTD |
|
The DeSoto Savannah, Georgia |
|
60.5 |
% |
|
|
64.6 |
% |
|
|
62.9 |
% |
|
|
65.7 |
% |
|
|
59.3 |
% |
|
|
65.4 |
% |
DoubleTree by Hilton Jacksonville Riverfront Jacksonville,
Florida |
|
62.9 |
% |
|
|
63.7 |
% |
|
|
75.4 |
% |
|
|
68.8 |
% |
|
|
65.7 |
% |
|
|
78.5 |
% |
DoubleTree by Hilton Laurel Laurel, Maryland |
|
57.6 |
% |
|
|
49.1 |
% |
|
|
65.2 |
% |
|
|
59.7 |
% |
|
|
48.0 |
% |
|
|
69.9 |
% |
DoubleTree by Hilton Philadelphia Airport Philadelphia,
Pennsylvania |
|
60.9 |
% |
|
|
61.9 |
% |
|
|
73.9 |
% |
|
|
64.6 |
% |
|
|
58.9 |
% |
|
|
76.6 |
% |
DoubleTree Resort by Hilton Hollywood Beach Hollywood, Florida |
|
47.9 |
% |
|
|
45.3 |
% |
|
|
69.5 |
% |
|
|
60.6 |
% |
|
|
52.2 |
% |
|
|
70.5 |
% |
Georgian Terrace Atlanta, Georgia |
|
59.8 |
% |
|
|
47.7 |
% |
|
|
67.5 |
% |
|
|
51.8 |
% |
|
|
48.7 |
% |
|
|
70.0 |
% |
Hotel Alba Tampa, Tapestry Collection by Hilton Tampa, Florida |
|
72.9 |
% |
|
|
73.7 |
% |
|
|
61.8 |
% |
|
|
76.3 |
% |
|
|
72.8 |
% |
|
|
66.2 |
% |
Hotel Ballast Wilmington, Tapestry Collection by Hilton Wilmington,
North Carolina |
|
57.3 |
% |
|
|
60.0 |
% |
|
|
60.3 |
% |
|
|
62.2 |
% |
|
|
54.3 |
% |
|
|
68.5 |
% |
Hyatt Centric Arlington Arlington, Virginia |
|
65.7 |
% |
|
|
46.3 |
% |
|
|
74.8 |
% |
|
|
64.3 |
% |
|
|
43.7 |
% |
|
|
79.1 |
% |
The Whitehall Houston, Texas |
|
34.5 |
% |
|
|
31.8 |
% |
|
|
56.0 |
% |
|
|
40.0 |
% |
|
|
29.5 |
% |
|
|
62.2 |
% |
Hyde Resort & Residences (1) Hollywood Beach, Florida |
|
34.5 |
% |
|
|
40.3 |
% |
|
|
44.6 |
% |
|
|
52.8 |
% |
|
|
54.2 |
% |
|
|
50.5 |
% |
Hyde Beach House Resort & Residences (1) Hollywood Beach,
Florida |
|
27.0 |
% |
|
|
32.3 |
% |
|
|
15.0 |
% |
|
|
42.4 |
% |
|
|
40.1 |
% |
|
|
15.0 |
% |
All properties weighted average |
|
57.4 |
% |
|
|
53.6 |
% |
|
|
66.0 |
% |
|
|
61.0 |
% |
|
|
53.1 |
% |
|
|
70.0 |
% |
(1 |
) |
Reflects
only those condominium units participating in our rental program
for the period. |
ADR
|
Q4 2022 |
|
|
Q4 2021 |
|
|
Q4 2019 |
|
|
YTD |
|
|
YTD |
|
|
YTD |
|
The DeSoto Savannah, Georgia |
$ |
213.72 |
|
|
$ |
193.64 |
|
|
$ |
169.52 |
|
|
$ |
211.49 |
|
|
$ |
185.06 |
|
|
$ |
174.75 |
|
DoubleTree by Hilton Jacksonville Riverfront Jacksonville,
Florida |
$ |
160.82 |
|
|
$ |
145.64 |
|
|
$ |
137.96 |
|
|
$ |
146.53 |
|
|
$ |
135.34 |
|
|
$ |
139.53 |
|
DoubleTree by Hilton Laurel Laurel, Maryland |
$ |
121.18 |
|
|
$ |
107.37 |
|
|
$ |
103.73 |
|
|
$ |
117.20 |
|
|
$ |
100.75 |
|
|
$ |
107.34 |
|
DoubleTree by Hilton Philadelphia Airport Philadelphia,
Pennsylvania |
$ |
150.63 |
|
|
$ |
132.47 |
|
|
$ |
145.10 |
|
|
$ |
140.94 |
|
|
$ |
123.41 |
|
|
$ |
143.95 |
|
DoubleTree Resort by Hilton Hollywood Beach Hollywood, Florida |
$ |
189.20 |
|
|
$ |
188.48 |
|
|
$ |
159.34 |
|
|
$ |
206.18 |
|
|
$ |
186.73 |
|
|
$ |
173.25 |
|
Georgian Terrace Atlanta, Georgia |
$ |
200.04 |
|
|
$ |
196.76 |
|
|
$ |
193.56 |
|
|
$ |
198.90 |
|
|
$ |
183.53 |
|
|
$ |
204.60 |
|
Hotel Alba Tampa, Tapestry Collection by Hilton Tampa, Florida |
$ |
162.40 |
|
|
$ |
139.56 |
|
|
$ |
124.16 |
|
|
$ |
165.11 |
|
|
$ |
143.09 |
|
|
$ |
129.91 |
|
Hotel Ballast Wilmington, Tapestry Collection by Hilton Wilmington,
North Carolina |
$ |
174.23 |
|
|
$ |
163.37 |
|
|
$ |
157.48 |
|
|
$ |
183.90 |
|
|
$ |
171.60 |
|
|
$ |
161.50 |
|
Hyatt Centric Arlington Arlington, Virginia |
$ |
198.77 |
|
|
$ |
152.20 |
|
|
$ |
176.80 |
|
|
$ |
187.12 |
|
|
$ |
125.47 |
|
|
$ |
188.15 |
|
The Whitehall Houston, Texas |
$ |
163.23 |
|
|
$ |
134.44 |
|
|
$ |
142.79 |
|
|
$ |
150.17 |
|
|
$ |
128.31 |
|
|
$ |
143.33 |
|
Hyde Resort & Residences (1) Hollywood Beach, Florida |
$ |
377.71 |
|
|
$ |
411.79 |
|
|
$ |
284.03 |
|
|
$ |
420.53 |
|
|
$ |
415.38 |
|
|
$ |
295.49 |
|
Hyde Beach House Resort & Residences (1) Hollywood Beach,
Florida |
$ |
299.55 |
|
|
$ |
372.58 |
|
|
$ |
341.58 |
|
|
$ |
381.07 |
|
|
$ |
408.40 |
|
|
$ |
341.58 |
|
All properties weighted average |
$ |
178.41 |
|
|
$ |
163.20 |
|
|
$ |
159.01 |
|
|
$ |
178.01 |
|
|
$ |
160.03 |
|
|
$ |
165.27 |
|
|
|
(1 |
) |
Reflects
only those condominium units participating in our rental program
for the period. |
RevPAR
|
Q4 2022 |
|
|
Q4 2021 |
|
|
Q4 2019 |
|
|
YTD |
|
|
YTD |
|
|
YTD |
|
The DeSoto Savannah, Georgia |
$ |
129.27 |
|
|
$ |
125.02 |
|
|
$ |
106.56 |
|
|
$ |
139.00 |
|
|
$ |
109.76 |
|
|
$ |
114.34 |
|
DoubleTree by Hilton Jacksonville Riverfront Jacksonville,
Florida |
$ |
101.10 |
|
|
$ |
92.74 |
|
|
$ |
104.03 |
|
|
$ |
100.79 |
|
|
$ |
88.96 |
|
|
$ |
109.53 |
|
DoubleTree by Hilton Laurel Laurel, Maryland |
$ |
69.81 |
|
|
$ |
52.67 |
|
|
$ |
67.67 |
|
|
$ |
69.98 |
|
|
$ |
48.41 |
|
|
$ |
75.06 |
|
DoubleTree by Hilton Philadelphia Airport Philadelphia,
Pennsylvania |
$ |
91.79 |
|
|
$ |
82.01 |
|
|
$ |
107.16 |
|
|
$ |
91.01 |
|
|
$ |
72.71 |
|
|
$ |
110.20 |
|
DoubleTree Resort by Hilton Hollywood Beach Hollywood, Florida |
$ |
90.66 |
|
|
$ |
85.33 |
|
|
$ |
110.76 |
|
|
$ |
124.93 |
|
|
$ |
97.45 |
|
|
$ |
122.22 |
|
Georgian Terrace Atlanta, Georgia |
$ |
119.68 |
|
|
$ |
93.87 |
|
|
$ |
130.56 |
|
|
$ |
103.09 |
|
|
$ |
89.35 |
|
|
$ |
143.15 |
|
Hotel Alba Tampa, Tapestry Collection by Hilton Tampa, Florida |
$ |
118.38 |
|
|
$ |
102.84 |
|
|
$ |
76.79 |
|
|
$ |
125.92 |
|
|
$ |
104.15 |
|
|
$ |
85.97 |
|
Hotel Ballast Wilmington, Tapestry Collection by Hilton Wilmington,
North Carolina |
$ |
99.88 |
|
|
$ |
97.95 |
|
|
$ |
94.93 |
|
|
$ |
114.45 |
|
|
$ |
93.18 |
|
|
$ |
110.58 |
|
Hyatt Centric Arlington Arlington, Virginia |
$ |
130.59 |
|
|
$ |
70.51 |
|
|
$ |
132.25 |
|
|
$ |
120.33 |
|
|
$ |
54.83 |
|
|
$ |
148.77 |
|
The Whitehall Houston, Texas |
$ |
56.32 |
|
|
$ |
42.72 |
|
|
$ |
79.96 |
|
|
$ |
60.11 |
|
|
$ |
37.91 |
|
|
$ |
89.18 |
|
Hyde Resort & Residences (1) Hollywood Beach, Florida |
$ |
130.25 |
|
|
$ |
166.12 |
|
|
$ |
126.79 |
|
|
$ |
222.08 |
|
|
$ |
225.21 |
|
|
$ |
149.36 |
|
Hyde Beach House Resort & Residences (1) Hollywood Beach,
Florida |
$ |
80.99 |
|
|
$ |
120.52 |
|
|
$ |
51.36 |
|
|
$ |
161.42 |
|
|
$ |
163.93 |
|
|
$ |
51.36 |
|
All properties weighted average |
$ |
102.34 |
|
|
$ |
87.43 |
|
|
$ |
105.01 |
|
|
$ |
108.56 |
|
|
$ |
85.04 |
|
|
$ |
115.68 |
|
|
|
(1 |
) |
Reflects
only those condominium units participating in our rental program
for the period. |
|
|
SOTHERLY HOTELS INC.
RECONCILIATION OF NET INCOME (LOSS) TO
FFO, Adjusted FFO, EBITDA and Hotel EBITDA
(unaudited)
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Year Ended |
|
|
Year Ended |
|
|
|
December 31, 2022 |
|
|
December 31, 2021 |
|
|
December 31, 2022 |
|
|
December 31, 2021 |
|
Net income (loss) |
|
$ |
5,192,873 |
|
|
$ |
(16,881,827 |
) |
|
$ |
33,959,848 |
|
|
$ |
(28,539,640 |
) |
Depreciation and amortization - real estate |
|
|
4,746,622 |
|
|
|
4,933,630 |
|
|
|
18,593,359 |
|
|
|
19,838,017 |
|
Impairment of investment in hotel properties, net |
|
|
— |
|
|
|
12,201,461 |
|
|
|
— |
|
|
|
12,201,461 |
|
Distributions to preferred stockholders |
|
|
(1,994,313 |
) |
|
|
(1,744,340 |
) |
|
|
(7,634,219 |
) |
|
|
(7,541,891 |
) |
Loss (gain) on disposal of assets |
|
|
144,370 |
|
|
|
792 |
|
|
|
636,198 |
|
|
|
(158,286 |
) |
Gain on sale of hotel properties |
|
|
— |
|
|
|
— |
|
|
|
(30,053,977 |
) |
|
|
— |
|
Gain on involuntary conversion of assets |
|
|
(289,479 |
) |
|
|
(80,847 |
) |
|
|
(1,763,320 |
) |
|
|
(588,586 |
) |
FFO attributable to common stockholders and
unitholders |
|
|
7,800,073 |
|
|
|
(1,571,131 |
) |
|
|
13,737,889 |
|
|
|
(4,788,925 |
) |
Amortization |
|
|
14,093 |
|
|
|
18,708 |
|
|
|
56,977 |
|
|
|
71,209 |
|
ESOP and stock - based compensation |
|
|
102,479 |
|
|
|
124,486 |
|
|
|
998,424 |
|
|
|
689,547 |
|
Aborted offering costs |
|
|
— |
|
|
|
631,952 |
|
|
|
— |
|
|
|
631,952 |
|
Loss on early extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
5,944,881 |
|
|
|
— |
|
Unrealized loss (gain) on hedging activities |
|
|
74,104 |
|
|
|
(538,281 |
) |
|
|
(2,918,207 |
) |
|
|
(1,493,841 |
) |
Adjusted FFO attributable to common stockholders and
unitholders |
|
$ |
7,990,749 |
|
|
$ |
(1,334,266 |
) |
|
$ |
17,819,964 |
|
|
$ |
(4,890,058 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding, basic |
|
|
18,409,738 |
|
|
|
16,264,306 |
|
|
|
17,802,717 |
|
|
|
15,531,684 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of non-controlling units |
|
|
898,592 |
|
|
|
1,160,717 |
|
|
|
1,045,707 |
|
|
|
1,164,978 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares and units outstanding, basic |
|
|
19,308,330 |
|
|
|
17,425,023 |
|
|
|
18,848,424 |
|
|
|
16,696,662 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per common share and unit |
|
$ |
0.40 |
|
|
$ |
(0.09 |
) |
|
$ |
0.73 |
|
|
$ |
(0.29 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted FFO per common share and unit |
|
$ |
0.41 |
|
|
$ |
(0.08 |
) |
|
$ |
0.95 |
|
|
$ |
(0.29 |
) |
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Year Ended |
|
|
Year Ended |
|
|
|
December 31, 2022 |
|
|
December 31, 2021 |
|
|
December 31, 2022 |
|
|
December 31, 2021 |
|
Net income (loss) |
|
$ |
5,192,873 |
|
|
$ |
(16,881,827 |
) |
|
$ |
33,959,848 |
|
|
$ |
(28,539,640 |
) |
Interest expense |
|
|
4,492,271 |
|
|
|
5,622,931 |
|
|
|
19,772,802 |
|
|
|
22,686,694 |
|
Interest income |
|
|
(96,776 |
) |
|
|
(35,726 |
) |
|
|
(189,291 |
) |
|
|
(147,025 |
) |
Income tax provision |
|
|
488,611 |
|
|
|
11,267 |
|
|
|
522,355 |
|
|
|
27,392 |
|
Impairment of investment in hotel properties, net |
|
|
— |
|
|
|
12,201,461 |
|
|
|
— |
|
|
|
12,201,461 |
|
Gain on sale of hotel properties |
|
|
— |
|
|
|
— |
|
|
|
(30,053,977 |
) |
|
|
— |
|
Loss (gain) on disposal of assets |
|
|
144,370 |
|
|
|
792 |
|
|
|
636,198 |
|
|
|
(158,286 |
) |
Depreciation and amortization |
|
|
4,760,715 |
|
|
|
4,952,338 |
|
|
|
18,650,336 |
|
|
|
19,909,226 |
|
EBITDA |
|
|
14,982,064 |
|
|
|
5,871,236 |
|
|
|
43,298,271 |
|
|
|
25,979,822 |
|
Loss on early extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
5,944,881 |
|
|
|
— |
|
PPP debt forgiveness |
|
|
(4,720,278 |
) |
|
|
— |
|
|
|
(4,720,278 |
) |
|
|
— |
|
Gain on involuntary conversion of assets |
|
|
(289,479 |
) |
|
|
(80,847 |
) |
|
|
(1,763,320 |
) |
|
|
(588,586 |
) |
Subtotal |
|
|
9,972,307 |
|
|
|
5,790,389 |
|
|
|
42,759,554 |
|
|
|
25,391,236 |
|
Corporate general and administrative |
|
|
1,847,081 |
|
|
|
2,850,345 |
|
|
|
6,621,221 |
|
|
|
6,997,166 |
|
Unrealized loss (gain) on hedging activities |
|
|
74,104 |
|
|
|
(538,281 |
) |
|
|
(2,918,207 |
) |
|
|
(1,493,841 |
) |
Hotel EBITDA |
|
$ |
11,893,492 |
|
|
$ |
8,102,453 |
|
|
$ |
46,462,568 |
|
|
$ |
30,894,561 |
|
Tables below are reflected in thousands of
dollars:
Reconciliation of Outlook of Net Income to EBITDA and Hotel
EBITDA |
|
|
|
|
|
|
|
|
Q1 2023 Guidance |
|
|
Low Range |
|
|
High Range |
|
|
|
|
|
|
|
Net income |
$ |
1,290 |
|
|
$ |
1,865 |
|
Interest expense |
|
4,228 |
|
|
|
4,228 |
|
Interest income |
|
(130 |
) |
|
|
(130 |
) |
Income tax provision |
|
28 |
|
|
|
28 |
|
Depreciation and amortization |
|
4,610 |
|
|
|
4,610 |
|
|
|
|
|
|
|
EBITDA |
|
10,026 |
|
|
|
10,601 |
|
Corporate general and administrative |
|
1,900 |
|
|
|
1,900 |
|
|
|
|
|
|
|
Hotel EBITDA |
$ |
11,926 |
|
|
$ |
12,501 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Outlook of Net Income to FFO and Adjusted
FFO |
|
|
|
|
|
|
|
|
Q1 2023 Guidance |
|
|
Low Range |
|
|
High Range |
|
|
|
|
|
|
|
Net income |
$ |
1,290 |
|
|
$ |
1,865 |
|
Depreciation and amortization |
|
4,595 |
|
|
|
4,595 |
|
|
|
|
|
|
|
FFO |
|
5,885 |
|
|
|
6,460 |
|
Distributions to preferred stockholders |
|
(1,995 |
) |
|
|
(1,995 |
) |
|
|
|
|
|
|
FFO attributable to common stockholders and unitholders |
|
3,890 |
|
|
|
4,465 |
|
Amortization |
|
15 |
|
|
|
15 |
|
ESOP stock based compensation |
|
250 |
|
|
|
250 |
|
Adjusted FFO attributable to common stockholders and
unitholders |
$ |
4,155 |
|
|
$ |
4,730 |
|
|
|
|
|
|
|
Non-GAAP Financial Measures
The Company considers the non-GAAP financial
measures of FFO (including FFO per share), Adjusted FFO (including
Adjusted FFO per share), EBITDA and hotel EBITDA to be key
supplemental measures of the Company’s performance and could be
considered along with, not alternatives to, net income (loss) as a
measure of the Company’s performance. These measures do not
represent cash generated from operating activities determined by
generally accepted accounting principles (“GAAP”) or amounts
available for the Company’s discretionary use and should not be
considered alternative measures of net income, cash flows from
operations or any other operating performance measure prescribed by
GAAP.
FFO
Industry analysts and investors use Funds from
Operations (“FFO”), as a supplemental operating performance measure
of an equity REIT. FFO is calculated in accordance with the
definition adopted by the Board of Governors of the National
Association of Real Estate Investment Trusts (“NAREIT”). FFO, as
defined by NAREIT, represents net income or loss determined in
accordance with GAAP, excluding extraordinary items as defined
under GAAP and gains or losses from sales of previously depreciated
operating real estate assets, gains or losses from involuntary
conversions of assets, plus certain non-cash items such as real
estate asset depreciation and amortization or impairment, stock
compensation costs and after adjustment for any noncontrolling
interest from unconsolidated partnerships and joint ventures.
Historical cost accounting for real estate assets in accordance
with GAAP implicitly assumes that the value of real estate assets
diminishes predictably over time. Since real estate values instead
have historically risen or fallen with market conditions, many
investors and analysts have considered the presentation of
operating results for real estate companies that use historical
cost accounting to be insufficient by itself.
The Company considers FFO to be a useful measure
of adjusted net income (loss) for reviewing comparative operating
and financial performance because we believe FFO is most directly
comparable to net income (loss), which remains the primary measure
of performance, because by excluding gains or losses related to
sales of previously depreciated operating real estate assets and
excluding real estate asset depreciation and amortization, FFO
assists in comparing the operating performance of a company’s real
estate between periods or as compared to different companies.
Although FFO is intended to be a REIT industry standard, other
companies may not calculate FFO in the same manner as we do, and
investors should not assume that FFO as reported by us is
comparable to FFO as reported by other REITs.
Adjusted FFO
The Company presents adjusted FFO, including
adjusted FFO per share and unit, which adjusts for certain
additional items that are not in NAREIT’s definition of FFO
including changes in deferred income taxes, any unrealized gain
(loss) on hedging instruments or warrant derivatives, loan
impairment losses, losses on early extinguishment of debt, gains on
extinguishment of preferred stock, aborted offering costs, loan
modification fees, franchise termination costs, costs associated
with the departure of executive officers, litigation settlement,
over-assessed real estate taxes on appeal, management contract
termination costs, operating asset depreciation and amortization,
change in control gains or losses, ESOP and stock compensation
expenses and acquisition transaction costs. We exclude these items
as we believe it allows for meaningful comparisons between periods
and among other REITs and is more indicative than FFO of the
on-going performance of our business and assets. Our calculation of
adjusted FFO may be different from similar measures calculated by
other REITs.
EBITDA
The Company believes that excluding the effect of
non-operating expenses and non-cash charges, and the portion of
those items related to unconsolidated entities, all of which are
also based on historical cost accounting and may be of limited
significance in evaluating current performance, can help eliminate
the accounting effects of depreciation and financing decisions and
facilitate comparisons of core operating profitability between
periods and between REITs, even though EBITDA also does not
represent an amount that accrued directly to shareholders.
Hotel EBITDA
The Company defines hotel EBITDA as net income or
loss excluding: (1) interest expense, (2) interest income, (3)
income tax provision or benefit, (4) depreciation and amortization,
(5) impairment of long-lived assets or investments, (6) gains and
losses on disposal and/or sale of assets, (7) gains and losses on
involuntary conversions of assets, (8) unrealized gains and losses
on derivative instruments not included in other comprehensive
income, (9) loss on early debt extinguishment, (10) Paycheck
Protection Program (PPP) debt forgiveness, (11) gain on exercise of
development right, (12) corporate general and administrative
expense, and (13) other operating revenue not related to our
wholly-owned portfolio. We believe this provides a more complete
understanding of the operating results over which our wholly-owned
hotels and its operators have direct control. We believe hotel
EBITDA provides investors with supplemental information on the
on-going operational performance of our hotels and the
effectiveness of third-party management companies operating our
business on a property-level basis. The Company’s calculation of
hotel EBITDA may be different from similar measures calculated by
other REITs.
Contact at the Company:
Mack Sims
Vice President – Operations & Investor Relations
Sotherly Hotels Inc.
306 South Henry Street, Suite 100
Williamsburg, Virginia 23185
757.229.5648
Sotherly Hotels (NASDAQ:SOHO)
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