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For Immediate Release
Condor Hospitality Trust Reports First Quarter 2018 Results
BETHESDA, MD, May 9, 2018 – Condor Hospitality Trust, Inc. (NYSE American: CDOR) (the “Company”) today announced results for the first quarter ended March 31, 2018.
FIRST QUARTER RELEASE FINANCIAL HIGHLIGHTS
· | Revenue of $16.7 million a 61% Increase to Revenue of $10.4 million in Last Year’s First Quarter |
· | Net Earnings Attributable to Common Shareholders of $0.6 million or $0.05 per Diluted Share |
· | Adjusted Funds from Operations Increased to $3.5 million, or $0.29 per Diluted Share, a 994% increase from $0.3 million in Last Year’s First Quarter |
· | Hotel EBITDA Increased to $7.4 million from $4.0 million, and Adjusted EBITDAre Increased 136% Over Last Year’s First Quarter |
· | Achieved 3.9% First Quarter Same-Store RevPAR Growth over Prior Year* |
· | Expanded First Quarter Same-Store Hotel EBITDA Margin by 60 Basis Points to 38.9% over Prior Year* |
FIRST QUARTER PORTFOLIO ACCOMPLISHMENTS
· | Acquired Two New Investment Platform Hotels for Approximately $36.1 million |
· | Sold Two Legacy Assets Generating $8.2 million in Gross Proceeds |
*New investment platform hotels only; Includes results prior to our ownership to illustrate same-store performance
MANAGEMENT COMMENTARY
Bill Blackham, Condor’s Chief Executive Officer, commented:
“With the transformation of Condor substantially complete, we continued to deliver strong operating results in the first quarter of 2018 due to our differentiated acquisition strategy of acquiring relatively new high-quality select-service hotels mostly in leading secondary markets. We achieved 3.9% same-store RevPAR growth and expanded hotel EBITDA margins by 60 bps on our new investment platform hotels. Our differentiated investment thesis and our intensive asset management efforts are responsible for our favorable operating performance in the quarter.
In addition to our strong operating results, we also achieved notable portfolio accomplishments. In the first quarter, we sold two legacy hotel assets generating gross proceeds of $8.2 million and acquired two new investment platform hotels, located in Austin and Charleston, for $36.1 million. We now have only three legacy hotels remaining, one of which is under contract to be sold. Additionally, with the acquisition of the two new investment platform hotels, we have now assembled a portfolio of 15 high-quality, select-service assets in attractive growth markets with an average age of less than 4 years.”
1
FINANCIAL SUMMARY
At March 31, 2018, the Company’s total portfolio included 18 hotels, representing 2,215 rooms.
Total Company Financial Results
($ in millions except per share amounts)
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| Three months ended March 31, | ||||||
| 2018 |
| 2017 |
| Change | ||
Revenue | $ | 16.7 |
| $ | 10.4 |
| 61.0% |
Net Earnings (Loss) Attributable to Common Shareholders | $ | 0.6 |
| $ | (14.0) |
| N/A |
Diluted Earnings (Loss) per Share | $ | 0.05 |
| $ | (4.75) |
| N/A |
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Funds from Operations (FFO)* | $ | 3.3 |
| $ | (0.7) |
| N/A |
FFO per Diluted Share* | $ | 0.26 |
| $ | (4.19) |
| N/A |
Adjusted FFO* | $ | 3.5 |
| $ | 0.3 |
| 994.4% |
Adjusted FFO per Diluted Share* | $ | 0.29 |
| $ | 0.10 |
| 190.0% |
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Hotel EBITDA* | $ | 7.4 |
| $ | 4.0 |
| 83.8% |
Adjusted EBITDAre* | $ | 5.8 |
| $ | 2.5 |
| 135.7% |
*Please see the Reg. G reconciliation tables at the end of this release.
The improvement in year-over-year financial performance was primarily driven by higher revenue and higher margins from the New Investment Platform hotels.
NEW INVESTMENT PLATFORM
At March 31, 2018, the Company’s new investment platform included 15 hotels, representing 1,908 rooms.
New Investment Platform Operational Results**
($ in millions except per share amounts and operating metrics)
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| Three months ended March 31, | ||||||
| 2018 |
| 2017 |
| Change | ||
Same-Store RevPAR | $ | 102.01 |
| $ | 98.16 |
| 3.9% |
Same-Store Occupancy |
| 79.74% |
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| 79.39% |
| 0.4% |
Same-Store ADR | $ | 127.93 |
| $ | 123.64 |
| 3.5% |
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Same-Store Hotel EBITDA*^ | $ | 6.2 |
| $ | 6.2 |
| 1.0% |
Same-Store Hotel EBITDA Margin* |
| 38.9% |
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| 38.3% |
| 0.6% |
*Please see the Reg. G reconciliation tables at the end of this release.
**Financial results presented above include results from prior to our ownership.
^Due to differences in the allocation of JV preferred returns, JV activity was 100% attributed to Condor in the first quarter of 2017 and 80% attributed to Condor in the first quarter of 2018
2
LEGACY PLATFORM
At March 31, 2018, the Company’s legacy platform included 3 hotels, representing 307 rooms.
Legacy Platform Operational Results*
($ in millions except per share amounts and operating metrics)
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| Three months ended March 31, | ||||||
| 2018 |
| 2017 |
| Change | ||
Same-Store RevPAR | $ | 49.91 |
| $ | 51.01 |
| -2.2% |
Same-Store Occupancy |
| 68.82% |
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| 74.69% |
| -7.9% |
Same-Store ADR | $ | 72.51 |
| $ | 68.29 |
| 6.2% |
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Same-Store Hotel EBITDA* | $ | 0.4 |
| $ | 0.4 |
| -1.8% |
Same-Store Hotel EBITDA Margin* |
| 25.9% |
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| 25.8% |
| 0.2% |
* Please see the Reg. G reconciliation tables at the end of this release.
PORTFOLIO ACTIVITY
The Company’s investment strategy is to assemble a portfolio of premium-branded, select-service hotels in the top 100 Metropolitan Statistical Areas (“MSAs”) with a particular focus on MSAs ranked between 20 to 60. Since restarting its portfolio transformation in 2015, the Company has acquired 14 high-quality select-service hotels representing 1,808 rooms in its target markets for a total purchase price of approximately $277 million. Additionally, during this time, the Company has sold 52 legacy assets for a total gross sales price of approximately $153 million.
Acquisitions
During the first quarter of 2018, the Company acquired the TownePlace Suites Austin North Tech Ridge and the Home2 Suites Summerville-Charleston in South Carolina for a combined purchase price of $36.1 million. Aimbridge Hospitality was retained as the manager of the TownePlace Suites while Inn Ventures is the manager of our new Home2 Suites.
Dispositions
During the first quarter of 2018, the Company sold the Supertel Inn in Creston, IA for $2.1 million and the Comfort Suites in South Bend, IN for $6.1 million. Net proceeds from the sales were applied to outstanding debt on the Company’s $150 million secured credit facility. The Company has only three legacy hotels remaining in the portfolio, and one of these hotels is currently under contract for sale while another is being marketed for sale.
BALANCE SHEET AND CAPITAL MARKETS ACTIVITY
As of March 31, 2018, the Company had cash and cash equivalents (including restricted cash) of $9.6 million and available revolver lending capacity of $3.3 million. As of March 31, 2018, the Company had total outstanding long-term debt of $145.0 million associated with assets held for use with a weighted average maturity of 2.8 years and a weighted average interest rate of 4.29%.
During the first quarter of 2018, the Company sold 12,334 shares of common stock under the ATM program at an average sales price of $10.40 per share for net proceeds totaling approximately $103,000.
CAPITAL INVESTMENTS
The Company invested $0.7 million in capital improvements throughout the portfolio in the quarter ended March 31, 2018, to upgrade its properties and maintain brand standards.
OUTLOOK AND GUIDANCE
The Company reiterates its previously announced 2018 Outlook Forecast as included below. Condor plans to reexamine full year 2018 guidance following the end of the second quarter of 2018.
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2018 Outlook ($ in millions except per share amounts) |
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| Low |
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| High |
RevPAR growth (13 new investment platform hotels owned as of December 31, 2017) |
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| 3.0% |
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| 4.5% |
2018 Outlook for 17-Hotel Portfolio |
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Forecast hotel revenue |
| $ | 74.0 |
| $ | 75.4 |
Forecast net earnings |
| $ | 1.7 |
| $ | 2.5 |
Forecast earnings per share - Diluted |
| $ | 0.09 |
| $ | 0.16 |
Forecast Hotel EBITDA* |
| $ | 28.8 |
| $ | 29.7 |
Forecast AFFO per common share and common unit - Diluted* |
| $ | 1.13 |
| $ | 1.19 |
*Please see the Reg. G reconciliation tables at the end of this release.
3
DIVIDENDS
On March 22, 2018, the Board of Directors declared a quarterly cash common stock dividend of $0.195 per share for the first quarter of 2018. The common stock dividend represented an annualized yield of approximately 7.6% based on the closing price of the Company’s common shares on March 21, 2018. The first quarter dividend was paid on April 9, 2018 to shareholders of record as of April 2, 2018.
EARNINGS CALL
The Company will conduct its quarterly conference call on Thursday, May 10, 2018, at 9:30 AM ET. To participate in the conference call, dial 1-877-425-9470 [International: 1-201-389-0878] approximately ten minutes before the call begins.
A live webcast of the Earnings Call will also be available through the Company's website. To access, log on to http://condorhospitality.com ten minutes prior to the call. A replay of the conference call webcast will be archived and available online through the Investor Relations section of http://condorhospitality.com.
About Condor Hospitality Trust, Inc.
Condor Hospitality Trust, Inc. (NYSE American: CDOR) is a self-administered real estate investment trust that specializes in the investment and ownership of upper midscale and upscale, premium-branded, select-service, extended-stay, and limited-service hotels in the top 100 Metropolitan Statistical Areas (“MSAs”) with a particular focus on the top 20 to 60 MSAs. The Company currently owns 18 hotels in 10 states. Condor’s hotels are franchised by a number of the industry’s most well-regarded brand families including Hilton, Marriott, and InterContinental Hotels.
Forward-Looking Statement
Certain matters within this press release are discussed using forward-looking language as specified in the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual events, results or performance to differ from those projected presented in the forward-looking statement. These forward-looking statements are based on assumptions that management has made in light of experience in the business in which the Company operates, as well as other factors management believes to be appropriate under the circumstances. As you read and consider this release, you should understand that these statements are not guarantees of events, performance or results. They involve risks, uncertainties (some of which are beyond the Company’s control) and assumptions. Although management believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect events, performance or results and cause them to differ materially from those anticipated in the forward-looking statements. These factors include among other things, risk factors described from time to time in the Company’s filings with the Securities and Exchange Commission. The Company cautions that any forward-looking statement included in this press release is made as of the date of this press release and the Company does not undertake to update any forward-looking statement.
4
SELECTED FINANCIAL DATA:
Condor Hospitality Trust, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited - In thousands, except share and per share data)
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| As of | |||
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| March 31, 2018 |
| December 31, 2017 | ||
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Assets |
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Investment in hotel properties, net |
| $ | 240,307 |
| $ | 205,730 |
Investment in unconsolidated joint venture |
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| 7,616 |
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| 7,747 |
Cash and cash equivalents |
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| 4,609 |
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| 5,441 |
Restricted cash, property escrows |
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| 4,983 |
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| 4,894 |
Accounts receivable, net |
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| 1,995 |
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| 1,707 |
Prepaid expenses and other assets |
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| 2,274 |
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| 3,220 |
Derivative assets, at fair value |
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| 818 |
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| 391 |
Investment in hotel properties held for sale, net |
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| 6,115 |
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| 13,850 |
Total Assets |
| $ | 268,717 |
| $ | 242,980 |
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Liabilities and Equity |
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Liabilities |
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Accounts payable, accrued expenses, and other liabilities |
| $ | 6,835 |
| $ | 7,046 |
Dividends and distributions payable |
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| 2,479 |
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| 2,470 |
Convertible debt, at fair value |
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| 1,049 |
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| 1,069 |
Long-term debt, net of deferred financing costs |
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| 141,825 |
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| 112,621 |
Long-term debt related to hotel properties held for sale, net of deferred financing costs |
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| 6,007 |
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| 7,960 |
Total Liabilities |
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| 158,195 |
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| 131,166 |
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Equity |
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Shareholders' Equity |
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Preferred stock, 40,000,000 shares authorized: |
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6.25% Series E, 925,000 shares authorized, $.01 par value, 925,000 shares outstanding, liquidation preference of $9,395 |
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| 10,050 |
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| 10,050 |
Common stock, $.01 par value, 200,000,000 shares authorized; 11,873,139 and 11,833,573 shares outstanding |
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| 119 |
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| 118 |
Additional paid-in capital |
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| 231,071 |
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| 230,727 |
Accumulated deficit |
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| (132,164) |
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| (130,489) |
Total Shareholders' Equity |
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| 109,076 |
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| 110,406 |
Noncontrolling interest in consolidated partnership (Condor Hospitality Limited Partnership), redemption value of $925 and $871 |
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| 1,446 |
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| 1,408 |
Total Equity |
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| 110,522 |
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| 111,814 |
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Total Liabilities and Equity |
| $ | 268,717 |
| $ | 242,980 |
5
Condor Hospitality Trust, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited - In thousands, except per share data)
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| Three months ended March 31, | ||||
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| 2018 |
| 2017 | ||
Revenue |
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Room rentals and other hotel services |
| $ | 16,679 |
| $ | 10,361 |
Operating Expenses |
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Hotel and property operations |
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| 10,414 |
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| 7,613 |
Depreciation and amortization |
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| 2,259 |
|
| 1,051 |
General and administrative |
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| 1,869 |
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| 1,492 |
Acquisition and terminated transactions |
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| 19 |
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| 502 |
Equity transactions |
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| - |
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| 343 |
Total operating expenses |
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| 14,561 |
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| 11,001 |
Operating income (loss) |
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| 2,118 |
|
| (640) |
Net loss on disposition of assets |
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| (24) |
|
| (3) |
Equity in earnings of joint venture |
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| 229 |
|
| 111 |
Net gain on derivatives and convertible debt |
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| 447 |
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| 175 |
Other expense, net |
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| (14) |
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| (1) |
Interest expense |
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| (1,928) |
|
| (971) |
Loss on debt extinguishment |
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| - |
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| (800) |
Impairment (loss) recovery, net |
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| 93 |
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| (271) |
Earnings (loss) from continuing operations before income taxes |
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| 921 |
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| (2,400) |
Income tax expense |
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| (129) |
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| - |
Net earnings (loss) |
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| 792 |
|
| (2,400) |
(Earnings) loss attributable to noncontrolling interest |
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| (6) |
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| 50 |
Net earnings (loss) attributable to controlling interests |
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| 786 |
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| (2,350) |
Dividends declared and in kind dividends deemed on preferred stock |
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| (144) |
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| (11,603) |
Net earnings (loss) attributable to common shareholders |
| $ | 642 |
| $ | (13,953) |
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Earnings per Share |
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Total - Basic Earnings (Loss) per Share |
| $ | 0.05 |
| $ | (4.75) |
Total - Diluted Earnings (Loss) per Share |
| $ | 0.05 |
| $ | (4.75) |
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6
Reconciliation of Non-GAAP Financial Measures (Unaudited)
Non-GAAP financial measures are measures of our historical financial performance that are different from measures calculated and presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We report Funds from Operations (“FFO”), Adjusted FFO (“AFFO”), Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”), EBITDA for real estate (“EBITDAre”), Adjusted EBITDAre, and Hotel EBITDA as non-GAAP measures that we believe are useful to investors as key measures of our operating results and which management uses to facilitate a periodic evaluation of our operating results relative to those of our peers. Our non-GAAP measures should not be considered as an alternative to U.S. GAAP net earnings as an indication of financial performance or to U.S. GAAP cash flows from operating activities as a measure of liquidity. Additionally, these measures are not indicative of funds available to fund cash needs or our ability to make cash distributions as they have not been adjusted to consider cash requirements for capital expenditures, property acquisitions, debt service obligations, or other commitments.
FFO and AFFO
The following table reconciles net earnings (loss) to FFO and AFFO for the three months ended March 31, 2018 and 2017 (in thousands). All amounts presented include our portion of the results of our unconsolidated Atlanta JV.
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| Three months ended March 31, | ||||
Reconciliation of Net earnings (loss) to FFO and AFFO | 2018 |
| 2017 | ||
Net earnings (loss) | $ | 792 |
| $ | (2,400) |
Depreciation and amortization expense |
| 2,259 |
|
| 1,051 |
Depreciation and amortization expense from JV |
| 285 |
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| 354 |
Net loss on disposition of assets |
| 24 |
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| 3 |
Net loss on disposition of assets from JV |
| 7 |
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| 1 |
Impairment loss (recovery), net |
| (93) |
|
| 271 |
FFO |
| 3,274 |
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| (720) |
Dividends declared and in kind dividends deemed on preferred stock |
| (144) |
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| (11,603) |
FFO attributable to common shares and common units |
| 3,130 |
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| (12,323) |
Net gain on derivatives and convertible debt |
| (447) |
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| (175) |
Acquisition and terminated transactions expense |
| 19 |
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| 502 |
Equity transactions expense |
| - |
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| 343 |
Loss on debt extinguishment |
| - |
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| 800 |
Stock-based compensation and LTIP expense |
| 402 |
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| 77 |
Amortization of deferred financing fees |
| 353 |
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| 136 |
Amortization of deferred financing fees from JV |
| 45 |
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| 57 |
Non-recurring dividends above stated rates declared and in kind dividends deemed on preferred stock |
| - |
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| 10,903 |
AFFO attributable to common shares and common units | $ | 3,502 |
| $ | 320 |
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FFO attributable to common shares and common units - Basic Shares | $ | 3,130 |
| $ | (12,323) |
Preferred dividends and fair value adjustments |
| 111 |
|
| - |
FFO attributable to common shares and common units - Diluted Shares | $ | 3,241 |
| $ | (12,323) |
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FFO per common share and common unit - Basic | $ | 0.26 |
| $ | (4.19) |
FFO per common share and common unit - Diluted | $ | 0.26 |
| $ | (4.19) |
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Weighted average common shares and common units - Basic FFO |
| 11,835,279 |
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| 3,089,987 |
Weighted average common shares and common units - Diluted FFO |
| 12,536,203 |
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| 3,089,987 |
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AFFO attributable to common shares and common units - Basic Shares | $ | 3,502 |
| $ | 320 |
Convertible note interest |
| 16 |
|
| - |
Preferred dividends at stated rates |
| 144 |
|
| - |
AFFO attributable to common shares and common units - Diluted Shares | $ | 3,662 |
| $ | 320 |
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AFFO per common share and common unit - Basic | $ | 0.30 |
| $ | 0.10 |
AFFO per common share and common unit - Diluted | $ | 0.29 |
| $ | 0.10 |
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Weighted average common shares and common units - Basic |
| 11,835,279 |
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| 3,089,987 |
Weighted average common shares and common units - Diluted |
| 12,633,472 |
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| 3,106,961 |
7
We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (“NAREIT”), which defines FFO as net earnings or loss computed in accordance with GAAP, excluding gains or losses from sales of real estate assets, impairment, and the depreciation and amortization of real estate assets. FFO is calculated both for the Company in total and as FFO attributable to common shares and common units, which is FFO reduced by preferred stock dividends. AFFO is FFO attributable to common shares and common units adjusted to exclude items we do not believe are representative of the results from our core operations, including non-cash gains or losses on derivatives and convertible debt, stock-based compensation expense, amortization of certain fees, losses on debt extinguishment, and in-kind dividends above stated rates, and cash charges for acquisition and equity transaction costs. All REITs do not calculate FFO and AFFO in the same manner; therefore, our calculation may not be the same as the calculation of FFO and AFFO for similar REITs.
We consider FFO to be a useful additional measure of performance for an equity REIT because it facilitates an understanding of the operating performance of our properties without giving effect to real estate depreciation and amortization, which assumes that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, we believe that FFO provides a meaningful indication of our performance. We believe that AFFO provides useful supplemental information to investors regarding our ongoing operating performance that, when considered with net income and FFO, is beneficial to an investor’s understanding of our operating performance. We present FFO and AFFO per common share and common unit because our common units are redeemable for common shares. We believe it is meaningful for the investor to understand FFO and AFFO applicable to common shares and common units.
8
EBITDA, EBITDAre, Adjusted EBITDAre, and Hotel EBITDA
The following table reconciles net earnings (loss) to EBITDA, EBITDAre, Adjusted EBITDAre, and Hotel EBITDA for the three months ended March 31, 2018 and 2017 (in thousands). All amounts presented our portion of the results of our unconsolidated Atlanta JV.
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| Three months ended March 31, | ||||
Reconciliation of Net earnings (loss) to EBITDA, EBITDAre, Adjusted EBITDAre, and Hotel EBITDA | 2018 |
| 2017 | ||
Net earnings (loss) | $ | 792 |
| $ | (2,400) |
Interest expense |
| 1,928 |
|
| 971 |
Interest expense from JV |
| 492 |
|
| 662 |
Loss on debt extinguishment |
| - |
|
| 800 |
Income tax expense |
| 129 |
|
| - |
Depreciation and amortization expense |
| 2,259 |
|
| 1,051 |
Depreciation and amortization expense from JV |
| 285 |
|
| 354 |
EBITDA |
| 5,885 |
|
| 1,438 |
Net loss on disposition of assets |
| 24 |
|
| 3 |
Net loss on disposition of assets from JV |
| 7 |
|
| 1 |
Impairment loss (recovery), net |
| (93) |
|
| 271 |
EBITDAre |
| 5,823 |
|
| 1,713 |
Net gain on derivatives and convertible debt |
| (447) |
|
| (175) |
Stock-based compensation and LTIP expense |
| 402 |
|
| 77 |
Acquisition and terminated transactions expense |
| 19 |
|
| 502 |
Equity transactions expense |
| - |
|
| 343 |
Adjusted EBITDAre |
| 5,797 |
|
| 2,460 |
General and administrative expense, excluding stock compensation and LTIP expense |
| 1,467 |
|
| 1,415 |
Other expense, net |
| 14 |
|
| 1 |
Unallocated hotel and property operations expense |
| 89 |
|
| 132 |
Hotel EBITDA | $ | 7,367 |
| $ | 4,008 |
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Revenue | $ | 16,679 |
| $ | 10,361 |
JV revenue |
| 2,618 |
|
| 2,989 |
Condor and JV revenue | $ | 19,297 |
| $ | 13,350 |
Hotel EBITDA as a percentage of revenue |
| 38.2% |
|
| 30.0% |
We calculate EBITDA, EBITDAre, and Adjusted EBITDAre by adding back to net earnings or loss certain non-operating expenses and certain non-cash charges which are based on historical cost accounting that we believe may be of limited significance in evaluating current performance. We believe these adjustments can help eliminate the accounting effects of depreciation and amortization and financing decisions and facilitate comparisons of core operating profitability between periods. In calculating EBITDA, we add back to net earnings or loss interest expense, loss on debt extinguishment, income tax expense, and depreciation and amortization expense. NAREIT adopted EBITDAre in order to promote an industry-wide measure of REIT operating performance. We adjust EBITDA by adding back net gain/loss on disposition of assets and impairment charges to calculate EBITDAre. To calculate Adjusted EBITDAre, we adjust EBITDAre to add back acquisition and terminated transactions expense and equity transactions expense, which are cash charges. We also add back stock –based compensation expense and gain/loss on derivatives and convertible debt, which are non-cash charges. EBITDA, EBITDAre, and Adjusted EBITDAre, as presented, may not be comparable to similarly titled measures of other companies.
We believe EBITDA, EBITDAre, and Adjusted EBITDAre to be useful additional measures of our operating performance, excluding the impact of our capital structure (primarily interest expense), our asset base (primarily depreciation and amortization expense), and other items we do not believe are representative of the results from our core operations.
The Company further excludes general and administrative expenses, other non-operating income or expense, and certain hotel and property operations expenses that are not allocated to individual properties in assessing hotel performance (primarily certain general liability and other insurance costs, land lease costs, and office and banking fees) from Adjusted EBITDAre to calculate Hotel EBITDA. Hotel EBITDA, as presented, may not be comparable to similarly titled measures of other companies.
Hotel EBITDA is intended to isolate property level operational performance over which the Company’s hotel operators have direct control. We believe Hotel EBITDA is helpful to investors as it better communicates the comparability of our hotels’ operating results for all of the Company’s hotel properties and is used by management to measure the performance of the Company’s hotels and the effectiveness of the operators of the hotels.
9
Same-Store Revenue and Hotel EBITDA
The following tables present our same-store revenue, Hotel EBITDA, and Hotel EBITDA margin broken down by property type for the three months ended March 31, 2018 and 2017 (in thousands) and reconcile these same-store measures to total revenue and Hotel EBITDA as presented above. Same-store results include all our hotels owned at March 31, 2018, with the exception of the Austin TownePlace Suites, opened on January 3, 2017, and the Summerville Home2 Suites, opened on July 18, 2017 (no prior period results available) and reflect the performance of these hotels during the entire period, regardless of our ownership during the period presented. Results for the hotels for periods prior to our ownership were provided to us by prior owners and have not been adjusted by us or audited or reviewed by our independent auditors. All amounts presented operations as well as our portion of the results of our unconsolidated Atlanta Aloft JV. Results for periods prior to the Company’s ownership have not been included in the Company’s actual consolidated financial statements and are included here only for comparison purposes.
|
|
|
|
|
|
|
|
| Revenue - Reconciliation of Same-Store to Actual | ||||
|
| Three months ended March 31, | ||||
|
| 2018 |
| 2017 | ||
Condor and JV Revenue – Actual* |
| $ | 19,297 |
| $ | 13,350 |
Revenue earned on properties owned at March 31, 2018 prior to the Company’s ownership, excluding the Austin TownePlace Suites and the Summerville Home2 Suites |
|
| - |
|
| 7,094 |
Revenue earned on properties disposed of prior to March 31, 2018 during the period of ownership |
|
| (397) |
|
| (2,818) |
Revenue earned on Austin TownePlace Suites and Summerville Home2 Suites subsequent to ownership |
|
| (1,413) |
|
| - |
Total Revenue – Same-Store* |
| $ | 17,487 |
| $ | 17,626 |
|
|
|
|
|
|
|
|
| Revenue – Same-Store by Type | ||||
|
| Three months ended March 31, | ||||
|
| 2018 |
| 2017 | ||
New investment platform* |
| $ | 16,015 |
| $ | 16,119 |
Legacy held for use |
|
| 265 |
|
| 379 |
Legacy held for sale |
|
| 1,207 |
|
| 1,128 |
Total Revenue – Same-Store* |
| $ | 17,487 |
| $ | 17,626 |
|
|
|
|
|
|
|
|
| Hotel EBITDA – Reconciliation of Same-Store to Actual | ||||
|
| Three months ended March 31, | ||||
|
| 2018 |
| 2017 | ||
Condor and JV Hotel EBITDA – Actual* |
| $ | 7,367 |
| $ | 4,008 |
Hotel EBITDA earned on properties owned at March 31, 2018 prior to the Company’s ownership, excluding the Austin TownePlace Suites and the Summerville Home2 Suites |
|
| - |
|
| 2,993 |
Hotel EBITDA earned on properties disposed of prior to March 31, 2018 during the period of ownership |
|
| (42) |
|
| (436) |
Hotel EBITDA earned on Austin TownePlace Suites and Summerville Home2 Suites subsequent to ownership |
|
| (707) |
|
| - |
Total Hotel EBITDA – Same-Store* |
| $ | 6,618 |
| $ | 6,565 |
10
|
|
|
|
|
|
|
|
| Hotel EBITDA – Same-Store by Type | ||||
|
| Three months ended March 31, | ||||
|
| 2018 |
| 2017 | ||
New investment platform* |
| $ | 6,237 |
| $ | 6,177 |
Legacy held for use |
|
| 43 |
|
| 77 |
Legacy held for sale |
|
| 338 |
|
| 311 |
Total Hotel EBITDA – Same-Store* |
| $ | 6,618 |
| $ | 6,565 |
|
|
|
|
|
|
|
|
| Hotel EBITDA Margin by Property Type | ||||
|
| Three months ended March 31, | ||||
|
| 2018 |
| 2017 | ||
New investment platform |
|
| 38.9% |
|
| 38.3% |
Legacy held for use |
|
| 16.2% |
|
| 20.3% |
Legacy held for sale |
|
| 28.0% |
|
| 27.6% |
Total Portfolio – Same-Store |
|
| 37.8% |
|
| 37.2% |
*Due to differences in the allocation of JV preferred returns, JV activity was 100% attributed to Condor in the first quarter of 2017 and 80% attributed to Condor in the first quarter of 2018
11
Non-GAAP Measures Included in 2018 Guidance and Outlook
The following tables reconcile forecast net earnings to forecast FFO and AFFO and forecast EBITDA, EBITDAre, Adjusted EBITDAre, and Hotel EBITDA for the year ending December 31, 2018 (in millions, except per share amounts) using the definitions of these non-GAAP measures as discussed above.
|
|
|
|
|
|
|
2018 Outlook ($ in millions except per share amounts) |
| Low |
| High | ||
RevPAR growth (13 new investment platform hotels owned as of December 31, 2017) |
|
| 3.0% |
|
| 4.5% |
2018 Outlook for 17-Hotel Portfolio |
|
|
|
|
|
|
Forecast hotel revenue |
| $ | 74.0 |
| $ | 75.4 |
Forecast net earnings |
| $ | 1.7 |
| $ | 2.5 |
Forecast earnings per share - Diluted |
| $ | 0.09 |
| $ | 0.16 |
Forecast Hotel EBITDA* |
| $ | 28.8 |
| $ | 29.7 |
Forecast AFFO per common share and common unit - Diluted* |
| $ | 1.13 |
| $ | 1.19 |
|
|
|
|
|
|
|
|
| Low |
| High | ||
Forecast net earnings |
| $ | 1.7 |
| $ | 2.5 |
Interest expense |
|
| 8.5 |
|
| 8.5 |
Depreciation and amortization expense |
|
| 11.4 |
|
| 11.4 |
Forecast EBITDA |
|
| 21.5 |
|
| 22.4 |
Net gain on disposition of assets |
|
| - |
|
| - |
Forecast EBITDAre |
|
| 21.5 |
|
| 22.4 |
Acquisitions and terminated transactions expense |
|
| - |
|
| - |
Stock-based compensation and LTIP expense |
|
| 1.0 |
|
| 1.0 |
Forecast Adjusted EBITDAre |
|
| 22.5 |
|
| 23.4 |
Cash general and administrative expense and other expenses |
|
| 6.3 |
|
| 6.3 |
Forecast Hotel EBITDA (17 Hotels) |
| $ | 28.8 |
| $ | 29.7 |
|
|
|
|
|
|
|
|
| Low |
| High | ||
Forecast net earnings |
| $ | 1.7 |
| $ | 2.5 |
Depreciation and amortization expense |
|
| 11.4 |
|
| 11.4 |
Net gain on disposition of assets |
|
| - |
|
| - |
Forecast FFO |
|
| 13.1 |
|
| 13.9 |
Preferred dividends |
|
| (0.6) |
|
| (0.6) |
Forecast FFO attributable to common shares and common units |
|
| 12.5 |
|
| 13.3 |
Acquisitions and terminated transactions expense |
|
| - |
|
| - |
Stock-based compensation and LTIP expense |
|
| 1.0 |
|
| 1.0 |
Amortization of deferred financing fees |
|
| 0.2 |
|
| 0.2 |
Forecast AFFO attributable to common shares and common units - Basic |
| $ | 13.7 |
| $ | 14.5 |
|
|
|
|
|
|
|
Forecast AFFO attributable to common shares and common units - Diluted |
| $ | 14.3 |
| $ | 15.1 |
Forecast AFFO per common share and common unit - Diluted |
| $ | 1.13 |
| $ | 1.19 |
Diluted common shares and common units |
|
| 12.7 |
|
| 12.7 |
12
Condor Hospitality Trust, Inc. Operating Statistics
The following tables present our same-store occupancy, ADR, and RevPAR for all our hotels owned at March 31, 2018, with the exception of the Austin TownePlace Suites, which was opened on January 3, 2017, and Summerville, SC Home2 Suites which was opened on July 18, 2017 (no prior period results available). Same-store occupancy, ADR, and RevPAR reflect the performance of hotels during the entire period, regardless of our ownership during the period presented. Results for the hotels for periods prior to our ownership were provided to us by prior owners and have not been adjusted by us or audited or reviewed by our independent auditors. The performance metrics for the hotel acquired through our Atlanta JV, also presented below, reflect 100% of the operating results of the property, including our interest and the interest of our partner.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three months ended March 31, | ||||||||||||||
| 2018 |
| 2017 | ||||||||||||
| Occupancy |
| ADR |
| RevPAR |
| Occupancy |
| ADR |
| RevPAR | ||||
Solomons Hilton Garden Inn | 73.41% |
| $ | 125.74 |
| $ | 92.30 |
| 73.58% |
| $ | 118.70 |
| $ | 87.33 |
Atlanta Hotel Indigo | 81.13% |
| $ | 108.30 |
| $ | 87.87 |
| 74.07% |
| $ | 104.45 |
| $ | 77.37 |
Jacksonville Courtyard by Marriott | 85.04% |
| $ | 113.26 |
| $ | 96.31 |
| 76.02% |
| $ | 114.83 |
| $ | 87.29 |
San Antonio SpringHill Suites | 86.36% |
| $ | 143.28 |
| $ | 123.74 |
| 81.49% |
| $ | 140.69 |
| $ | 114.66 |
Leawood Aloft | 63.41% |
| $ | 127.49 |
| $ | 80.84 |
| 74.00% |
| $ | 126.10 |
| $ | 93.31 |
Lexington Home2 Suites | 74.51% |
| $ | 103.30 |
| $ | 76.97 |
| 74.23% |
| $ | 105.56 |
| $ | 78.35 |
Round Rock Home2 Suites | 86.48% |
| $ | 120.15 |
| $ | 103.91 |
| 85.37% |
| $ | 123.17 |
| $ | 105.16 |
Tallahassee Home2 Suites | 84.23% |
| $ | 130.54 |
| $ | 109.95 |
| 80.79% |
| $ | 124.91 |
| $ | 100.92 |
South Haven Home2 Suites | 81.26% |
| $ | 110.84 |
| $ | 90.07 |
| 89.22% |
| $ | 111.59 |
| $ | 99.56 |
Lake Mary Hampton Inn & Suites | 86.22% |
| $ | 154.76 |
| $ | 133.44 |
| 84.89% |
| $ | 132.62 |
| $ | 112.58 |
Austin Residence Inn | 83.43% |
| $ | 135.16 |
| $ | 112.76 |
| 77.57% |
| $ | 141.54 |
| $ | 109.80 |
El Paso Fairfield Inn | 75.92% |
| $ | 99.69 |
| $ | 75.69 |
| 77.89% |
| $ | 109.61 |
| $ | 85.38 |
Wholly owned new investment platform properties | 79.78% |
| $ | 123.56 |
| $ | 98.57 |
| 78.84% |
| $ | 121.52 |
| $ | 95.80 |
Atlanta Aloft JV | 79.49% |
| $ | 152.80 |
| $ | 121.46 |
| 82.52% |
| $ | 135.12 |
| $ | 111.50 |
Total new investment platform | 79.74% |
| $ | 127.93 |
| $ | 102.01 |
| 79.39% |
| $ | 123.64 |
| $ | 98.16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Legacy hotels held for sale | 74.44% |
| $ | 71.43 |
| $ | 53.17 |
| 72.78% |
| $ | 67.84 |
| $ | 49.38 |
Legacy hotels held for use | 45.61% |
| $ | 79.81 |
| $ | 36.40 |
| 82.59% |
| $ | 69.93 |
| $ | 57.76 |
Total legacy | 68.82% |
| $ | 72.51 |
| $ | 49.91 |
| 74.69% |
| $ | 68.29 |
| $ | 51.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total portfolio | 78.06% |
| $ | 120.41 |
| $ | 93.99 |
| 78.67% |
| $ | 115.55 |
| $ | 90.90 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Austin TownePlace Suites (1) | 82.56% |
| $ | 126.63 |
| $ | 104.55 |
| 59.71% |
| $ | 108.42 |
| $ | 64.73 |
Summerville Home2 Suites (1) | 87.28% |
| $ | 119.94 |
| $ | 104.68 |
| - |
| $ | - |
| $ | - |
1 | Excluded from the Total new investment platform calculation because the hotel was not operational for the entirety of the three months ended March 31, 2017
13
|
|
|
|
|
|
|
Condor Hospitality Trust, Inc. |
| |||||
Property List | As of the Date of this Release |
| |||||
|
|
|
|
|
|
|
New Investment Platform | Acquired from January 1, 2012 - May 9, 2018 | ||||||
| Hotel Name | City | State | Rooms | Acquisition Date | Purchase Price (in millions) |
1 | Hilton Garden Inn | Dowell/Solomons | MD | 100 | 05/25/2012 | $11.5 |
2 | SpringHill Suites | San Antonio | TX | 116 | 10/01/2015 | $17.5 |
3 | Courtyard by Marriott | Jacksonville | FL | 120 | 10/02/2015 | $14.0 |
4 | Hotel Indigo | College Park | GA | 142 | 10/02/2015 | $11.0 |
5 | Aloft1 | Atlanta | GA | 254 | 08/22/2016 | $43.6 |
6 | Aloft | Leawood | KS | 156 | 12/14/2016 | $22.5 |
7 | Home2 Suites | Lexington | KY | 103 | 03/24/2017 | $16.5 |
8 | Home2 Suites | Round Rock | TX | 91 | 03/24/2017 | $16.8 |
9 | Home2 Suites | Tallahassee | FL | 132 | 03/24/2017 | $21.5 |
10 | Home2 Suites | Southaven | MS | 105 | 04/14/2017 | $19.0 |
11 | Hampton Inn & Suites | Lake Mary | FL | 130 | 06/19/2017 | $19.3 |
12 | Fairfield Inn & Suites | El Paso | TX | 124 | 08/31/2017 | $16.4 |
13 | Residence Inn | Austin | TX | 120 | 08/31/2017 | $22.4 |
14 | TownePlace Suites | Austin | TX | 122 | 01/18/2018 | $19.8 |
15 | Home2 Suites | Summerville | SC | 93 | 02/21/2018 | $16.3 |
| Total New Investment Platform |
|
| 1,908 |
| $288.1 |
|
|
|
|
|
|
|
Current Legacy Hotel Portfolio |
|
|
| |||
| Hotel Name | City | State | Rooms | Acquisition Date | Status (2) |
16 | Super 8 | Creston | IA | 121 | 09/19/1978 | HFS |
17 | Quality Inn | Solomons | MD | 59 | 06/01/1986 | Hold |
18 | Comfort Suites | Ft. Wayne | IN | 127 | 11/07/2005 | HFS |
| Total |
|
| 307 |
|
|
|
|
|
|
|
|
|
| Total Portfolio | As of May 9, 2018 |
|
| 2,215 |
|
|
|
|
|
|
|
|
|
1 | Owned 80% by Condor | ||||||
2| HFS indicates the asset was marketed as held for sale at March 31, 2018 |
14
|
|
|
|
|
|
|
52 Dispositions | For Period January 1, 2015 - May 9, 2018 | ||||||
| Hotel Name | City | State | Rooms | Disposition Date | Gross Proceeds |
1 | Super 8 | West Plains | MO | 49 | 01/15/2015 | $1.5 |
2 | Super 8 | Green Bay | WI | 83 | 01/29/2015 | $2.2 |
3 | Super 8 | Columbus | GA | 74 | 03/16/2015 | $0.9 |
4 | Sleep Inn & Suites | Omaha | NE | 90 | 03/19/2015 | $2.9 |
5 | Savannah Suites | Chamblee | GA | 120 | 04/01/2015 | $4.4 |
6 | Savannah Suites | Augusta | GA | 172 | 04/01/2015 | $3.4 |
7 | Super 8 | Batesville | AR | 49 | 04/30/2015 | $1.5 |
8 | Days Inn | Ashland | KY | 63 | 07/01/2015 | $2.2 |
9 | Comfort Inn | Alexandria | VA | 150 | 07/13/2015 | $12.0 |
10 | Days Inn | Alexandria | VA | 200 | 07/13/2015 | $6.5 |
11 | Super 8 | Manhattan | KS | 85 | 08/28/2015 | $3.2 |
12 | Quality Inn | Sheboygan | WI | 59 | 10/06/2015 | $2.3 |
13 | Super 8 | Hays | KS | 76 | 10/14/2015 | $1.9 |
14 | Days Inn | Glasgow | KY | 58 | 10/16/2015 | $1.8 |
15 | Super 8 | Tomah | WI | 65 | 10/21/2015 | $1.4 |
16 | Rodeway Inn | Fayetteville | NC | 120 | 11/03/2015 | $2.6 |
17 | Savannah Suites | Savannah | GA | 160 | 12/22/2015 | $4.0 |
| Total 2015 |
|
| 1,673 |
| $54.7 |
18 | Super 8 | Kirksville | MO | 61 | 01/04/2016 | $1.5 |
19 | Super 8 | Lincoln | NE | 133 | 01/07/2016 | $2.8 |
20 | Savannah Suites | Greenville | SC | 170 | 01/08/2016 | $2.7 |
21 | Super 8 | Portage | WI | 61 | 03/30/2016 | $2.4 |
22 | Super 8 | O'Neill | NE | 72 | 04/25/2016 | $1.7 |
23 | Quality Inn | Culpeper | VA | 49 | 05/10/2016 | $2.2 |
24 | Super 8 | Storm Lake | IA | 59 | 05/19/2016 | $2.8 |
25 | Clarion Inn | Cleveland | TN | 59 | 05/24/2016 | $2.2 |
26 | Super 8 | Coralville | IA | 84 | 05/26/2016 | $3.4 |
27 | Super 8 | Keokuk | IA | 61 | 05/27/2016 | $2.2 |
28 | Comfort Inn | Chambersburg | PA | 63 | 06/06/2016 | $2.1 |
29 | Super 8 | Pittsburg | KS | 64 | 08/08/2016 | $1.6 |
30 | Super 8 | Mount Pleasant | IA | 54 | 09/09/2016 | $1.9 |
31 | Quality Inn | Danville | KY | 63 | 09/19/2016 | $2.3 |
32 | Super 8 | Menomonie | WI | 81 | 09/26/2016 | $3.0 |
33 | Comfort Inn | Glasgow | KY | 60 | 10/14/2016 | $2.4 |
34 | Days Inn | Sioux Falls | SD | 86 | 11/04/2016 | $2.1 |
35 | Comfort Inn | Shelby | NC | 76 | 11/07/2016 | $4.1 |
36 | Comfort Inn | Rocky Mount | VA | 61 | 11/17/2016 | $2.2 |
37 | Days Inn | Farmville | VA | 59 | 11/17/2016 | $2.4 |
38 | Comfort Suites | Marion | IN | 62 | 11/18/2016 | $3.0 |
39 | Comfort Inn | Farmville | VA | 50 | 11/30/2016 | $2.6 |
40 | Quality Inn | Princeton | WV | 50 | 12/05/2016 | $2.1 |
41 | Super 8 | Burlington | IA | 62 | 12/21/2016 | $2.8 |
42 | Savannah Suites | Atlanta | GA | 164 | 12/22/2016 | $2.9 |
| Total 2016 |
|
| 1,864 |
| $61.4 |
43 | Comfort Inn | New Castle | PA | 79 | 03/27/2017 | $2.5 |
44 | Super 8 | Billings | MT | 106 | 03/28/2017 | $4.2 |
45 | Comfort Inn | Harlan | KY | 61 | 04/03/2017 | $1.9 |
46 | Comfort Suites | Lafayette | IN | 62 | 04/18/2017 | $3.9 |
47 | Key West Inn | Key Largo | FL | 40 | 05/17/2017 | $7.6 |
48 | Quality Inn | Morgantown | WV | 81 | 08/30/2017 | $2.6 |
49 | Days Inn | Bossier City | LA | 176 | 09/13/2017 | $1.4 |
50 | Comfort Inn & Suites | Warsaw | IN | 71 | 12/20/2017 | $5.0 |
| Total 2017 |
|
| 676 |
| $29.1 |
51 | Supertel Inn/Conference Center | Creston | IA | 41 | 01/25/2018 | $2.1 |
52 | Comfort Suites | South Bend | IN | 135 | 03/15/2018 | $6.1 |
| Total 2018 |
|
| 176 |
| $8.2 |
|
|
|
|
|
|
|
| Total Dispositions |
|
| 4,389 |
| $153.4 |
15
|
|
|
|
|
|
|
14 Acquisitions | For Period January 1, 2015 - May 9, 2018 | ||||||
| Hotel Name | City | State | Rooms | Acquisition Date | Purchase Price (in millions) |
1 | SpringHill Suites | San Antonio | TX | 116 | 10/01/2015 | $17.5 |
2 | Courtyard by Marriott | Jacksonville | FL | 120 | 10/02/2015 | $14.0 |
3 | Hotel Indigo | College Park | GA | 142 | 10/02/2015 | $11.0 |
4 | Aloft1 | Atlanta | GA | 254 | 08/22/2016 | $43.6 |
5 | Aloft | Leawood | KS | 156 | 12/14/2016 | $22.5 |
6 | Home2 Suites | Lexington | KY | 103 | 03/24/2017 | $16.5 |
7 | Home2 Suites | Round Rock | TX | 91 | 03/24/2017 | $16.8 |
8 | Home2 Suites | Tallahassee | FL | 132 | 03/24/2017 | $21.5 |
9 | Home2 Suites | Southaven | MS | 105 | 04/14/2017 | $19.0 |
10 | Hampton Inn & Suites | Lake Mary | FL | 130 | 06/19/2017 | $19.3 |
11 | Fairfield Inn & Suites | El Paso | TX | 124 | 08/31/2017 | $16.4 |
12 | Residence Inn | Austin | TX | 120 | 08/31/2017 | $22.4 |
13 | TownePlace Suites | Austin | TX | 122 | 01/18/2018 | $19.8 |
14 | Home2 Suites | Summerville | SC | 93 | 02/21/2018 | $16.3 |
| Total Acquisitions |
|
| 1,808 |
| $276.6 |
1 | Owned 80% by Condor
16