DALLAS, Aug. 1, 2023
/PRNewswire/ -- Braemar Hotels & Resorts Inc. (NYSE: BHR)
("Braemar" or the "Company") today reported financial results and
performance measures for the second quarter ended June 30, 2023. The comparable performance
measurements for Occupancy, Average Daily Rate (ADR), Revenue Per
Available Room (RevPAR), and Hotel EBITDA assume each of the hotel
properties in the Company's hotel portfolio as of June 30, 2023, was owned as of the beginning of
each of the periods presented. Unless otherwise stated, all
reported results compare the second quarter ended June 30, 2023 with the second quarter ended
June 30, 2022 (see discussion below).
The reconciliation of non-GAAP financial measures is included in
the financial tables accompanying this press release.
SECOND QUARTER 2023 FINANCIAL HIGHLIGHTS
- Comparable RevPAR for all hotels decreased 4.2% over the
prior year quarter to $309.
Comparable ADR decreased 5.2% over the prior year quarter to
$436 and Comparable Occupancy
increased 1.0% over the prior year quarter to 70.9%.
- Net loss attributable to common stockholders for the quarter
was $(13.0) million or $(0.20) per diluted share.
- Adjusted funds from operations (AFFO) was $0.20 per diluted share for the quarter.
- Adjusted EBITDAre was $46.3
million for the quarter.
- Comparable Hotel EBITDA was $53.7
million for the quarter.
- The Company ended the quarter with cash and cash equivalents of
$128.0 million and restricted cash of
$63.4 million. The vast majority of
the restricted cash is comprised of lender and manager-held
reserves. At the end of the quarter, there was also $15.4 million in due from third-party hotel
managers, which is primarily the Company's cash held by one of its
property managers and is also available to fund hotel operating
costs.
- Net debt to gross assets was 37.3% at the end of the second
quarter.
- Capex invested during the quarter was $17.5 million.
RECENT OPERATING HIGHLIGHTS
- During the quarter, the Company finalized an extension of its
$435 million mortgage loan secured by
four properties: The Notary Hotel, The Clancy, Sofitel Chicago
Magnificent Mile, and Marriott Seattle Waterfront. The loan was
paid down by $142 million and has a
current balance of $293.2
million.
- Subsequent to quarter end, the Company entered into a new
$200 million corporate financing that
includes a $150 million term loan and
a $50 million credit facility.
- Subsequent to quarter end, the Company announced the planned
conversion of its Mr. C Beverly Hills Hotel to Hilton's LXR
brand under the new name, Cameo Beverly Hills.
MR. C BRAND CONVERSION
Subsequent to quarter end, the Company announced
the rebranding and planned conversion of its Mr. C
Beverly Hills ("Mr. C") in
Los Angeles, California to the
Cameo Beverly Hills. Beginning August 4,
2023, Cameo Beverly Hills will be available for booking on
Hilton's website at hilton.com and join Hilton Honors,
Hilton's award-winning guest loyalty program. Following an
extensive renovation, which is expected to be completed by the end
of 2025, the hotel will join LXR Hotels & Resorts ("LXR"). One
of Hilton's iconic luxury brands, LXR is a collection of unique,
independent luxury properties around the world that focuses on
individualized service and one-of-a-kind stays.
The conversion of the hotel, which was built in 1965, will
reflect its unique history and distinctive location in the heart of
West Los Angeles near iconic
amenities and high-end shopping on Rodeo Drive. The Company is
planning an approximately $25 million
renovation to further elevate this distinctive hotel that will
enable a revitalized luxury guest experience when it is completed.
Added amenities and enhanced design elements will include upgrades
to the guestrooms, guest bathrooms, restaurant, lobby, pool,
fitness area, and meeting spaces. Remington will continue to manage
the property after the conversion under a management agreement.
CAPITAL STRUCTURE
As of June 30, 2023, the
Company had total assets of $2.3
billion and $1.1 billion of
loans of which $49 million related to
its joint venture partner's share of the mortgage loan on the
Capital Hilton and Hilton La Jolla Torrey Pines. The Company's total
combined loans had a blended average interest rate of 7.0%, taking
into account in-the-money interest rate caps. Based on the current
level of LIBOR and SOFR, and the
Company's corresponding interest rate caps, approximately 79% of
the Company's consolidated debt is effectively fixed and
approximately 21% is effectively floating.
During the quarter, the Company finalized an extension of its
$435 million mortgage loan secured by
four properties: The Notary Hotel, The Clancy, Sofitel Chicago
Magnificent Mile, and Marriott Seattle Waterfront. The loan was
extended until June 2024. In
conjunction with the extension, the Company paid down $142 million of the loan utilizing corporate cash
on hand, which reduced the loan balance to approximately
$293 million. As part of the
extension the Company also purchased an interest rate cap through
June 2024 with a strike rate of
4.69%.
Subsequent to quarter end, the Company completed a $200 million corporate financing. The financing
includes a $150 million term loan and
$50 million credit facility. The
corporate financing is secured by The Ritz-Carlton Sarasota,
Hotel Yountville, and Bardessono Hotel and Spa.
DIVIDENDS
On July 11, 2023, the Company
announced that its Board of Directors declared a quarterly cash
dividend of $0.05 per diluted share
for the Company's common stock for the third quarter ending
September 30, 2023. The dividend,
which equates to an annual rate of $0.20 per share, will be paid on October 16, 2023, to stockholders of record as of
September 29, 2023. The Board of
Directors will review its dividend policy on a quarter-to-quarter
basis, with a view to increasing it as financial performance
continues to improve. The adoption of a dividend policy does not
commit the Board of Directors to declare future dividends or the
amount thereof.
HOTEL EBITDA MARGINS AND QUARTERLY SEASONALITY TRENDS
The Company believes year-over-year Comparable Hotel EBITDA and
Comparable Hotel EBITDA Margin comparisons are more meaningful to
gauge the performance of the Company's hotels than sequential
quarter-over-quarter comparisons. To help investors better
understand the substantial seasonality in the Company's portfolio,
the Company provides quarterly detail on its Comparable Hotel
EBITDA and Comparable Hotel EBITDA Margin for the current and
certain prior-year periods based upon the number of hotels in the
Company's portfolio as of the end of the current period. As the
Company's portfolio mix changes from time to time, so will the
seasonality for Comparable Hotel EBITDA and Comparable Hotel EBITDA
Margin.
"Braemar's urban hotels delivered solid second quarter operating
performance," noted Richard J.
Stockton, Braemar's President and Chief Executive Officer.
"We remain extremely pleased with the continued momentum of these
hotels which has been driven by strong corporate and group demand.
Further, despite challenging year-over-year comparisons, our
resorts continued to perform well with strong margins. We also
continue to make solid progress addressing loan maturities and look
forward to making additional announcements related to our liability
management program," he added. "We couldn't be more excited about
the conversion of our Mr. C Beverly
Hills to Hilton's LXR brand and expect the strength of
Hilton's reservation system to have a significant positive impact
on the demand at that property. Looking ahead to the second half of
2023, we believe our portfolio is well-positioned for continued
strong performance."
INVESTOR CONFERENCE CALL AND SIMULCAST
Braemar will conduct a conference call on Wednesday, August 2, 2023, at 12:00 p.m. ET. The number to call for this
interactive teleconference is (201) 389-0920. A replay of the
conference call will be available through Wednesday, August 9, 2023, by dialing (412)
317-6671 and entering the confirmation number, 13739430.
The Company will also provide an online simulcast and
rebroadcast of its second quarter 2023 earnings release conference
call. The live broadcast of Braemar's quarterly conference call
will be available online at the Company's
website, www.bhrreit.com, on Wednesday,
August 2, 2023, beginning at 12:00
p.m. ET. The online replay will follow shortly after the
call and continue for approximately one year.
We use certain non-GAAP measures, in addition to the required
GAAP presentations, as we believe these measures improve the
understanding of our operational results and make comparisons of
operating results among peer real estate investment trusts more
meaningful. Non-GAAP financial measures, which should not be relied
upon as a substitute for GAAP measures, used in this press release
are FFO, AFFO, EBITDA, EBITDAre, Adjusted EBITDAre, and Hotel
EBITDA. Please refer to our most recently filed Annual Report on
Form 10-K for a more detailed description of how these non-GAAP
measures are calculated. The reconciliations of non-GAAP
measures to the closest GAAP measures are provided below and
provide further details of our results for the period being
reported. Effective beginning with the third quarter of 2022 we
will no longer include the effect of the Series B Cumulative
Convertible Preferred Stock and convertible notes on an
"as-converted" basis in AFFO. For comparative purposes the change
has been applied retrospectively.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy any securities. Securities will be
offered only by means of a registration statement and prospectus
which can be found at www.sec.gov.
* * * * *
Braemar Hotels & Resorts is a real estate investment trust
(REIT) focused on investing in luxury hotels and resorts.
Certain statements and assumptions in this press release
contain or are based upon "forward-looking" information and are
being made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements in this press release include, among others, statements
about the Company's strategy and future plans. These
forward-looking statements are subject to risks and uncertainties.
When we use the words "will likely result," "may," "anticipate,"
"estimate," "should," "expect," "believe," "intend," or similar
expressions, we intend to identify forward-looking statements. Such
statements are subject to numerous assumptions and uncertainties,
many of which are outside Braemar's control.
These forward-looking statements are subject to known and
unknown risks and uncertainties, which could cause actual results
to differ materially from those anticipated, including, without
limitation: our ability to repay, refinance or restructure our debt
and the debt of certain of our subsidiaries; anticipated or
expected purchases or sales of assets; our projected operating
results; completion of any pending transactions; risks associated
with our ability to effectuate our dividend policy, including
factors such as operating results and the economic outlook
influencing our board's decision whether to pay further dividends
at levels previously disclosed or to use available cash to pay
dividends; our understanding of our competition; market trends;
projected capital expenditures; the impact of technology on our
operations and business; general volatility of the capital markets
and the market price of our common stock and preferred stock;
availability, terms and deployment of capital; availability of
qualified personnel; changes in our industry and the markets in
which we operate, interest rates or the general economy; and the
degree and nature of our competition. These and other risk factors
are more fully discussed in Braemar's filings with the Securities
and Exchange Commission.
The forward-looking statements included in this press release
are only made as of the date of this press release. Such
forward-looking statements are based on our beliefs, assumptions,
and expectations of our future performance taking into account all
information currently known to us. These beliefs, assumptions, and
expectations can change as a result of many potential events or
factors, not all of which are known to us. If a change occurs, our
business, financial condition, liquidity, results of operations,
plans, and other objectives may vary materially from those
expressed in our forward-looking statements. You should carefully
consider this risk when you make an investment decision concerning
our securities. Investors should not place undue reliance on these
forward-looking statements. The Company can give no assurance that
these forward-looking statements will be attained or that any
deviation will not occur. We are not obligated to publicly update
or revise any forward-looking statements, whether as a result of
new information, future events or circumstances, changes in
expectations, or otherwise, except to the extent required by
law.
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SOURCE Braemar Hotels & Resorts Inc.