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Sotherly Hotels Inc. Reports Financial Results for the First Quarter Ended March 31, 2024

Sotherly Hotels Inc.
Sotherly Hotels Inc.

WILLIAMSBURG, Va., May 09, 2024 (GLOBE NEWSWIRE) -- Sotherly Hotels Inc. (NASDAQ: SOHO), (“Sotherly” or the “Company”), a self-managed and self-administered lodging real estate investment trust (a “REIT”), today reported its consolidated results for the first quarter ended March 31, 2024. The Company’s results include the following*:

 

Three Months Ended

 

 

March 31, 2024

 

 

March 31, 2023

 

 

($ in thousands except per share data)

 

Total revenue

$

46,548

 

 

$

43,491

 

Net loss attributable to common stockholders

 

(659

)

 

 

(582

)

 

 

 

 

 

 

EBITDA

 

10,785

 

 

 

9,948

 

Hotel EBITDA

 

12,360

 

 

 

12,079

 

 

 

 

 

 

 

FFO attributable to common stockholders and unitholders

 

3,961

 

 

 

3,941

 

Adjusted FFO attributable to common stockholders and unitholders

 

5,178

 

 

 

4,658

 

 

 

 

 

 

 

Net loss per common share - diluted

$

(0.03

)

 

$

(0.03

)

FFO per common share and unit

$

0.20

 

 

$

0.20

 

Adjusted FFO per common share and unit

$

0.26

 

 

$

0.24

 


(*) 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.

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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 3.8% to $123.59, for the three months ended March 31, 2024, from $119.06 in the comparable period in 2023. Changes in RevPAR were driven by a 4.5% increase in occupancy to 64.9% from 60.4% in the comparable 2023 period, and a 3.3% decrease in the average daily rate (“ADR”) to $190.50 for the three months ended March 31, 2024, from $197.07 for the comparable period in 2023.

  • Revenue. Total revenue was approximately $46.5 million and $43.5 million, for the three month periods ended March 31, 2024 and 2023, respectively.

  • Net loss attributable to common stockholders. For the three-month period ending March 31, 2024, net loss attributable to common stockholders increased approximately $0.1 million, compared to the three months ended March 31, 2023, from a loss of approximately $0.6 million to a loss of approximately $0.7 million.

  • Hotel EBITDA. Hotel EBITDA increased to approximately $12.4 million for the three months ended March 31, 2024, from approximately $12.1 million for the comparable period in 2023.

  • Adjusted FFO attributable to common stockholders and unitholders. For the three-month period ending March 31, 2024, adjusted FFO attributable to common stockholders and unitholders increased 11.2%, or approximately $0.5 million, over the three months ended March 31, 2023, from approximately $4.7 million to approximately $5.2 million.

  • Preferred Dividends. On January 29, 2024 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 $0.492188 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, 2024 to shareholders of record as of February 29, 2024.

Dave Folsom, President and Chief Executive Officer of Sotherly Hotels Inc., commented, "We were pleased with our first quarter results. Total revenues exceeded prior year by 7.0%, while EBITDA exceeded prior year by over 8.0%. We continued to see improvements at the property level, with overall RevPAR increasing nearly 4.0% in the quarter as compared to the prior year, driven by a strong 4.5% pickup in occupancy. Hotel EBITDA also showed improvement over prior year. All of these results reflect both continued strength in our portfolio as well as the markets in which we own hotels. Booking of group business remains strong, with our full-year booking pace up 6.9% compared to prior year. Leisure and business travel continue to show sustainability and improvement, respectively. On the corporate front, the Company executed an important mortgage refinancing of its Hotel Alba in Tampa, Florida, in the first quarter, where we realized over $10.0 million in net cash proceeds from the new loan. The headwinds associated with commercial mortgage markets continue to present challenges to real estate borrowers, but we are confident that we will be able to navigate upcoming maturities by either extending existing mortgages or refinancing them on favorable terms with new or existing lenders. Looking forward to the remainder of the year, we are optimistic about demand trends and our portfolio’s profitability outlook."

Balance Sheet/Liquidity

As of March 31, 2024, the Company had approximately $39.6 million of available cash and cash equivalents, of which approximately $10.3 million was reserved for real estate taxes, insurance, capital improvements and certain other expenses or otherwise restricted. The Company had principal balances of approximately $328.0 million in outstanding debt, including mortgage and unsecured principal balances, at a weighted average interest rate of approximately 5.43%.

Other Events

On February 7, 2024, affiliates of the Company entered into loan documents to refinance its loan in the principal amount of $35.0 million on the Hotel Alba Tampa located in Tampa, FL with Citi Real Estate Funding Inc. The Company received approximately $10.25 million in net proceeds. Pursuant to the amended loan documents, the mortgage loan has a principal balance of $35.0 million; matures on March 6, 2029; carries a fixed interest rate of 8.49%; requires payments of interest only; is guaranteed by the Operating Partnership only for traditional “bad boy” acts; cannot be prepaid until the last four months of the term; and contains customary representations, warranties, covenants and events of default for a mortgage loan.

On April 29, 2024, the Company entered into a loan amendment to amend the existing mortgage on the DoubleTree by Hilton Philadelphia Airport hotel with the existing lender, TD Bank, N.A. Pursuant to the amended loan documents, the mortgage loan: (i) has a principal balance of approximately $35.9 million; (ii) extends the maturity date by two years to April 29, 2026; (iii) continues to carry a floating interest rate of SOFR plus 3.50%; (iv) requires payments of interest only; (v) continues to be guaranteed by the Operating Partnership; and (vi) contains customary representations, warranties, covenants and events of default for a mortgage loan. Concurrent with the execution of the loan amendment, the Company (i) made a principal payment of $3.0 million; (ii) funded $0.3 million to the interest reserve escrow, bringing the balance in the interest reserve escrow account to $1.3 million; and (iii) funded $5.0 million into a PIP reserve account, and (iv) provided $1.7 million in additional cash collateral, of which $1.2 million can be released into the PIP reserve account as early as June 30, 2025 assuming compliance with the financial covenants. On May 3, 2024, an affiliate of the Company entered into an interest rate cap with a notional amount of $26.0 million with Webster Bank, N.A. The cap has a strike rate of 3.0%, is indexed to SOFR, and expires on May 1, 2026.

2024 Outlook

Set forth below is the Company's previously issued guidance for 2024. The table below reflects the Company’s projections, within a range, of various financial measures for 2024, in thousands of dollars, except per share and RevPAR data:

 

2024 Guidance

 

 

Low Range

 

 

High Range

 

 

 

 

Total revenue

$

178,952

 

 

$

182,567

 

Net income

 

1,598

 

 

 

2,593

 

Net loss available to common stockholders and unitholders

 

(6,377

)

 

 

(5,382

)

 

 

 

 

 

 

EBITDA

 

39,858

 

 

 

40,853

 

Hotel EBITDA

 

46,103

 

 

 

46,898

 

 

 

 

 

 

 

FFO available to common stockholders and unitholders

 

12,373

 

 

 

13,368

 

Adjusted FFO available to common stockholders and unitholders

 

12,778

 

 

 

13,773

 

 

 

 

 

 

 

Net loss per share available to common stockholders

$

(0.32

)

 

$

(0.27

)

FFO per common share and unit

$

0.62

 

 

$

0.67

 

Adjusted FFO per common share and unit

$

0.64

 

 

$

0.69

 

Rev PAR

$

117.16

 

 

$

119.52

 

Hotel EBITDA margin

 

25.8

%

 

 

25.7

%


Earnings Call/Webcast

The Company will conduct its first quarter 2024 conference call for investors and other interested parties at 10:00 a.m. Eastern Time on Thursday, May 9, 2024. The conference call will be accessible by telephone and through the Internet. Interested individuals are invited to listen to the call by telephone at 833-470-1428 (United States) and enter access code 218035. To participate on the webcast, log on to www.sotherlyhotels.com at least 15 minutes before the call to download the necessary software. For those unable to listen to the call live, a taped rebroadcast will be available beginning one hour after completion of the live call on May 9, 2024 through May 23, 2024. To access the rebroadcast, dial 866-813-9403 and enter access code 940385.

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. We also sometimes refer to our booking pace. Booking pace is an industry term that we define as the estimated value of committed future bookings at a given point in time. Booking pace can be further separated into various segments, including group booking pace or business travel booking pace. All statements regarding our expected financial position, booking pace, 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

 

 

 

 

March 31, 2024

 

 

December 31, 2023

 

 

 

(unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

Investment in hotel properties, net

 

$

352,455,889

 

 

$

354,919,106

 

Cash and cash equivalents

 

 

29,285,600

 

 

 

17,101,993

 

Restricted cash

 

 

10,341,209

 

 

 

9,134,347

 

Accounts receivable, net

 

 

6,968,335

 

 

 

5,945,724

 

Prepaid expenses, inventory and other assets

 

 

5,637,355

 

 

 

6,342,310

 

TOTAL ASSETS

 

$

404,688,388

 

 

$

393,443,480

 

LIABILITIES

 

 

 

 

 

 

Mortgage loans, net

 

$

325,106,994

 

 

$

315,989,194

 

Unsecured notes

 

 

1,347,998

 

 

 

1,536,809

 

Accounts payable and accrued liabilities

 

 

25,782,354

 

 

 

23,315,677

 

Advance deposits

 

 

2,879,763

 

 

 

2,614,981

 

Dividends and distributions payable

 

 

2,088,160

 

 

 

2,088,160

 

TOTAL LIABILITIES

 

$

357,205,269

 

 

$

345,544,821

 

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 1,464,100 shares issued and outstanding; aggregate liquidation preference each $44,655,050, at March 31, 2024 and December 31, 2023, respectively.

 

 

14,641

 

 

 

14,641

 

7.875% Series C cumulative redeemable perpetual preferred stock, 1,346,110 and 1,346,110 shares issued and outstanding; aggregate liquidation preference each $40,940,681, at March 31, 2024 and December 31, 2023, respectively.

 

 

13,461

 

 

 

13,461

 

8.25% Series D cumulative redeemable perpetual preferred stock, 1,163,100 and 1,163,100 shares issued and outstanding; aggregate liquidation preference each $35,674,458, at March 31, 2024 and December 31, 2023, respectively.

 

 

11,631

 

 

 

11,631

 

Common stock, par value $0.01, 69,000,000 shares authorized, 19,849,165 shares issued and outstanding at March 31, 2024 and 19,696,805 shares issued and outstanding at December 31, 2023.

 

 

198,492

 

 

 

196,968

 

Additional paid-in capital

 

 

176,000,351

 

 

 

175,779,222

 

Unearned ESOP shares

 

 

(1,731,209

)

 

 

(1,764,507

)

Distributions in excess of retained earnings

 

 

(125,680,386

)

 

 

(125,021,013

)

Total Sotherly Hotels Inc. stockholders’ equity

 

 

48,826,981

 

 

 

49,230,403

 

Noncontrolling interest

 

 

(1,343,862

)

 

 

(1,331,744

)

TOTAL EQUITY

 

 

47,483,119

 

 

 

47,898,659

 

TOTAL LIABILITIES AND EQUITY

 

$

404,688,388

 

 

$

393,443,480

 


SOTHERLY HOTELS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

March 31, 2024

 

 

March 31, 2023

 

 

 

(unaudited)

 

 

(unaudited)

 

REVENUE

 

 

 

 

 

 

Rooms department

 

$

29,739,657

 

 

$

28,401,688

 

Food and beverage department

 

 

9,752,449

 

 

 

8,748,726

 

Other operating departments

 

 

7,056,326

 

 

 

6,340,863

 

Total revenue

 

 

46,548,432

 

 

 

43,491,277

 

EXPENSES

 

 

 

 

 

 

Hotel operating expenses

 

 

 

 

 

 

Rooms department

 

 

6,552,184

 

 

 

6,413,094

 

Food and beverage department

 

 

6,464,855

 

 

 

5,935,560

 

Other operating departments

 

 

2,686,142

 

 

 

2,315,848

 

Indirect

 

 

18,484,896

 

 

 

16,747,577

 

Total hotel operating expenses

 

 

34,188,077

 

 

 

31,412,079

 

Depreciation and amortization

 

 

4,769,717

 

 

 

4,578,311

 

Corporate general and administrative

 

 

1,916,526

 

 

 

1,980,765

 

Total hotel operating expenses

 

 

40,874,320

 

 

 

37,971,155

 

NET OPERATING INCOME

 

 

5,674,112

 

 

 

5,520,122

 

Other income (expense)

 

 

 

 

 

 

Interest expense

 

 

(4,888,806

)

 

 

(4,113,597

)

Interest income

 

 

214,772

 

 

 

146,665

 

Other income

 

 

124,877

 

 

 

 

Loss on early extinguishment of debt

 

 

(241,878

)

 

 

 

Realized gain and unrealized (loss) on hedging activities

 

 

335,446

 

 

 

(442,464

)

PPP debt forgiveness

 

 

 

 

 

275,494

 

Gain on involuntary conversion of assets

 

 

122,391

 

 

 

16,476

 

Net income before income taxes

 

 

1,340,914

 

 

 

1,402,696

 

Income tax provision

 

 

(18,093

)

 

 

(15,182

)

Net income

 

 

1,322,821

 

 

 

1,387,514

 

Add: Net loss attributable to noncontrolling interest

 

 

12,118

 

 

 

24,960

 

Net income attributable to the Company

 

 

1,334,939

 

 

 

1,412,474

 

Undeclared distributions to preferred stockholders

 

 

(1,994,312

)

 

 

(1,994,312

)

Net loss attributable to common stockholders

 

$

(659,373

)

 

$

(581,838

)

Net loss per share attributable to common stockholders:

 

 

 

 

 

 

Basic

 

$

(0.03

)

 

$

(0.03

)

Diluted

 

$

(0.03

)

 

$

(0.03

)

Weighted average number of common shares outstanding

 

 

 

 

 

 

Basic

 

 

19,359,151

 

 

 

18,635,004

 

Diluted

 

 

19,359,151

 

 

 

18,635,004

 


SOTHERLY HOTELS INC.

KEY OPERATING METRICS
(unaudited)

The following tables illustrate the key operating metrics for the three months ended March 31, 2024 and 2023, 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 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 months ended March 31, 2024 and the corresponding period in 2023.

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

March 31, 2024

 

 

March 31, 2023

 

Actual Portfolio Metrics

 

 

 

 

 

 

Occupancy %

 

 

64.2

%

 

 

60.5

%

ADR

 

$

182.75

 

 

$

187.19

 

RevPAR

 

$

117.30

 

 

$

113.27

 

Composite Portfolio Metrics

 

 

 

 

 

 

Occupancy %

 

 

64.9

%

 

 

60.4

%

ADR

 

$

190.50

 

 

$

197.07

 

RevPAR

 

$

123.59

 

 

$

119.06

 


SOTHERLY HOTELS INC.

SUPPLEMENTAL DATA
(unaudited)

The following tables illustrate the key operating metrics for the three months ended March 31, 2024, 2023, and 2022, respectively, for each of the Company’s wholly-owned properties during each respective reporting period, irrespective of ownership percentage during any period.

Occupancy

 

Q1 2024

 

 

Q1 2023

 

 

Q1 2022

 

The DeSoto
Savannah, Georgia

 

70.9

%

 

 

64.4

%

 

 

62.0

%

DoubleTree by Hilton Jacksonville Riverfront
Jacksonville, Florida

 

70.2

%

 

 

71.0

%

 

 

64.5

%

DoubleTree by Hilton Laurel
Laurel, Maryland

 

47.2

%

 

 

47.2

%

 

 

47.8

%

DoubleTree by Hilton Philadelphia Airport
Philadelphia, Pennsylvania

 

45.2

%

 

 

54.5

%

 

 

56.0

%

DoubleTree Resort by Hilton Hollywood Beach
Hollywood, Florida

 

75.5

%

 

 

64.9

%

 

 

63.4

%

Georgian Terrace
Atlanta, Georgia

 

58.5

%

 

 

46.7

%

 

 

48.9

%

Hotel Alba Tampa, Tapestry Collection by Hilton
Tampa, Florida

 

83.8

%

 

 

83.4

%

 

 

81.1

%

Hotel Ballast Wilmington, Tapestry Collection by Hilton
Wilmington, North Carolina

 

60.2

%

 

 

55.8

%

 

 

43.1

%

Hyatt Centric Arlington
Arlington, Virginia

 

73.0

%

 

 

70.3

%

 

 

43.8

%

The Whitehall
Houston, Texas

 

59.1

%

 

 

48.6

%

 

 

36.3

%

Hyde Resort & Residences (1)
Hollywood Beach, Florida

 

78.7

%

 

 

60.5

%

 

 

62.2

%

Hyde Beach House Resort & Residences (1)
Hollywood Beach, Florida

 

82.7

%

 

 

56.6

%

 

 

51.3

%

All properties weighted average

 

64.9

%

 

 

60.4

%

 

 

53.9

%


(1

)

Reflects only those condominium units participating in our rental program for the period.


ADR

 

Q1 2024

 

 

Q1 2023

 

 

Q1 2022

 

The DeSoto
Savannah, Georgia

$

213.38

 

 

$

211.97

 

 

$

200.95

 

DoubleTree by Hilton Jacksonville Riverfront
Jacksonville, Florida

$

148.38

 

 

$

160.63

 

 

$

148.26

 

DoubleTree by Hilton Laurel
Laurel, Maryland

$

124.42

 

 

$

120.26

 

 

$

105.50

 

DoubleTree by Hilton Philadelphia Airport
Philadelphia, Pennsylvania

$

123.62

 

 

$

127.52

 

 

$

114.79

 

DoubleTree Resort by Hilton Hollywood Beach
Hollywood, Florida

$

230.67

 

 

$

265.97

 

 

$

253.85

 

Georgian Terrace
Atlanta, Georgia

$

188.60

 

 

$

206.82

 

 

$

191.54

 

Hotel Alba Tampa, Tapestry Collection by Hilton
Tampa, Florida

$

215.30

 

 

$

214.33

 

 

$

187.56

 

Hotel Ballast Wilmington, Tapestry Collection by Hilton
Wilmington, North Carolina

$

164.87

 

 

$

163.84

 

 

$

165.53

 

Hyatt Centric Arlington
Arlington, Virginia

$

198.85

 

 

$

193.53

 

 

$

158.05

 

The Whitehall
Houston, Texas

$

163.57

 

 

$

164.55

 

 

$

145.64

 

Hyde Resort & Residences (1)
Hollywood Beach, Florida

$

368.11

 

 

$

443.65

 

 

$

505.41

 

Hyde Beach House Resort & Residences (1)
Hollywood Beach, Florida

$

307.82

 

 

$

368.33

 

 

$

455.52

 

All properties weighted average

$

190.50

 

 

$

197.07

 

 

$

187.23

 


(1

)

Reflects only those condominium units participating in our rental program for the period.


RevPAR

 

Q1 2024

 

 

Q1 2023

 

 

Q1 2022

 

The DeSoto
Savannah, Georgia

$

151.37

 

 

$

136.43

 

 

$

124.54

 

DoubleTree by Hilton Jacksonville Riverfront
Jacksonville, Florida

$

104.15

 

 

$

114.05

 

 

$

95.60

 

DoubleTree by Hilton Laurel
Laurel, Maryland

$

58.67

 

 

$

56.71

 

 

$

50.46

 

DoubleTree by Hilton Philadelphia Airport
Philadelphia, Pennsylvania

$

55.92

 

 

$

69.51

 

 

$

64.31

 

DoubleTree Resort by Hilton Hollywood Beach
Hollywood, Florida

$

174.07

 

 

$

172.66

 

 

$

160.95

 

Georgian Terrace
Atlanta, Georgia

$

110.35

 

 

$

96.65

 

 

$

93.64

 

Hotel Alba Tampa, Tapestry Collection by Hilton
Tampa, Florida

$

180.37

 

 

$

178.83

 

 

$

152.11

 

Hotel Ballast Wilmington, Tapestry Collection by Hilton
Wilmington, North Carolina

$

99.25

 

 

$

91.46

 

 

$

71.35

 

Hyatt Centric Arlington
Arlington, Virginia

$

145.21

 

 

$

136.11

 

 

$

69.27

 

The Whitehall
Houston, Texas

$

96.60

 

 

$

80.03

 

 

$

52.88

 

Hyde Resort & Residences (1)
Hollywood Beach, Florida

$

289.74

 

 

$

268.51

 

 

$

314.39

 

Hyde Beach House Resort & Residences (1)
Hollywood Beach, Florida

$

254.59

 

 

$

208.53

 

 

$

233.50

 

All properties weighted average

$

123.59

 

 

$

119.06

 

 

$

100.89

 


(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

 

 

 

March 31, 2024

 

 

March 31, 2023

 

Net income

 

$

1,322,821

 

 

$

1,387,514

 

Depreciation and amortization - real estate

 

 

4,754,911

 

 

 

4,564,625

 

Gain on involuntary conversion of assets

 

 

(122,391

)

 

 

(16,476

)

FFO

 

 

5,955,341

 

 

 

5,935,663

 

Distributions to preferred stockholders

 

 

(1,994,312

)

 

 

(1,994,312

)

FFO attributable to common stockholders and unitholders

 

 

3,961,029

 

 

 

3,941,351

 

Amortization

 

 

14,806

 

 

 

13,686

 

ESOP and stock - based compensation

 

 

255,956

 

 

 

260,463

 

Loss on early debt extinguishment

 

 

241,878

 

 

 

 

Unrealized loss on hedging activities

 

 

704,671

 

 

 

442,464

 

Adjusted FFO attributable to common stockholders and
unitholders

 

$

5,178,340

 

 

$

4,657,964

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding, basic

 

 

19,359,151

 

 

 

18,635,004

 

 

 

 

 

 

 

 

Weighted average number of non-controlling units

 

 

364,186

 

 

 

825,188

 

 

 

 

 

 

 

 

Weighted average number of shares and units outstanding,
basic

 

 

19,723,337

 

 

 

19,460,192

 

 

 

 

 

 

 

 

FFO per common share and unit

 

$

0.20

 

 

$

0.20

 

 

 

 

 

 

 

 

Adjusted FFO per common share and unit

 

$

0.26

 

 

$

0.24

 


 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

March 31, 2024

 

 

March 31, 2023

 

Net income

 

$

1,322,821

 

 

$

1,387,514

 

Interest expense

 

 

4,888,806

 

 

 

4,113,597

 

Interest income

 

 

(214,772

)

 

 

(146,665

)

Income tax provision

 

 

18,093

 

 

 

15,182

 

Depreciation and amortization

 

 

4,769,717

 

 

 

4,578,311

 

EBITDA

 

 

10,784,665

 

 

 

9,947,939

 

PPP loan forgiveness

 

 

 

 

 

(275,494

)

Other income

 

 

(124,877

)

 

 

 

Loss on early debt extinguishment

 

 

241,878

 

 

 

 

Gain on involuntary conversion of assets

 

 

(122,391

)

 

 

(16,476

)

Subtotal

 

 

10,779,275

 

 

 

9,655,969

 

Corporate general and administrative

 

 

1,916,526

 

 

 

1,980,765

 

Realized (gain) and unrealized loss on hedging activities

 

 

(335,446

)

 

 

442,464

 

Hotel EBITDA

 

$

12,360,355

 

 

$

12,079,198

 


Tables below are reflected in thousands of dollars:

Reconciliation of Outlook of Net Loss to EBITDA and Hotel EBITDA

 

 

 

 

 

 

 

 

2024 Guidance

 

 

Low Range

 

 

High Range

 

 

 

 

 

 

 

Net income

$

1,598

 

 

$

2,593

 

Interest expense

 

19,885

 

 

 

19,885

 

Interest income

 

(550

)

 

 

(550

)

Income tax provision

 

120

 

 

 

120

 

Depreciation and amortization

 

18,805

 

 

 

18,805

 

 

 

 

 

 

 

EBITDA

 

39,858

 

 

 

40,853

 

Loss on early extinguishment of debt

 

165

 

 

 

165

 

Other income

 

(445

)

 

 

(445

)

Realized and unrealized gain on hedging activities

 

(250

)

 

 

(250

)

Corporate general and administrative

 

6,775

 

 

 

6,575

 

 

 

 

 

 

 

Hotel EBITDA

$

46,103

 

 

$

46,898

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Outlook of Net Loss to FFO and Adjusted FFO

 

 

 

 

 

 

 

 

2024 Guidance

 

 

Low Range

 

 

High Range

 

 

 

 

 

 

 

Net income

$

1,598

 

 

$

2,593

 

Depreciation and amortization

 

18,750

 

 

 

18,750

 

 

 

 

 

 

 

FFO

 

20,348

 

 

 

21,343

 

Distributions to preferred stockholders

 

(7,975

)

 

 

(7,975

)

 

 

 

 

 

 

FFO attributable to common stockholders and unitholders

 

12,373

 

 

 

13,368

 

Amortization

 

55

 

 

 

55

 

Realized and unrealized gain on hedging activities

 

(250

)

 

 

(250

)

Loss on early extinguishment of debt

 

165

 

 

 

165

 

ESOP stock based compensation

 

435

 

 

 

435

 

Adjusted FFO attributable to common stockholders and unitholders

$

12,778

 

 

$

13,773

 

 

 

 

 

 

 

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 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, 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, and 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) realized or unrealized gains and losses on derivative instruments not included in other comprehensive income, (9) other income at the properties (10) loss on early debt extinguishment, (11) Paycheck Protection Program (PPP) debt forgiveness, (12) gain on exercise of development right, (13) corporate general and administrative expense, and (14) other income 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: 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