Attached files
| file | filename |
|---|---|
| 8-K - CONDOR HOSPITALITY TRUST, INC. | sppr8k_aug14.htm |
For Immediate Release
Contact:
Ms. Krista Arkfeld
Director of Corporate Communications
karkfeld@supertelinc.com
Supertel Hospitality Reports 2013 Second Quarter Results
NORFOLK, NE., August 14, 2013 – Supertel Hospitality, Inc. (NASDAQ: SPPR), a real estate investment trust (REIT), today announced its results for the second quarter ended June 30, 2013.
2013 Second Quarter Highlights
|
·
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Sold eight non-core hotels in the second quarter and two non-core hotels following the close of the quarter.
|
|
·
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Signed purchase agreements to acquire six premium branded upscale and upper midscale hotels for $60.8 million in the second quarter, and two premium branded upper midscale hotels for $21.25 million following the close of the second quarter, which collectively encompass an aggregate of 744 rooms, subject to obtaining financing and completing due diligence.
|
|
·
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Strengthened management depth with the hiring of Jeffrey Dougan as Senior Vice President and Chief Operating Officer.
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·
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Reported a 3.4 percent decline in revenues from continuing operations to $16.7 million.
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|
·
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Recorded a 6.7 percent decline in same store revenue per available room (RevPAR) due primarily to disruption caused by brand changes at four core hotels. Excluding the four reflagged hotels and two hotels in Alexandria, VA that experienced management changes during the second quarter, RevPAR declined 0.3 percent over the prior year.
|
|
·
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Reported net earnings attributable to common shareholders of $0.07 per basic share, unchanged from the second quarter of 2012.
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·
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Recorded a 3.2 percent decline in FFO to $3.0 million in the 2013 second quarter from $3.1 million in the second quarter of 2012.
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·
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Filed a registration statement, which is currently under review, with the Securities and Exchange Commission (SEC) to raise up to $115 million in a follow-on common stock offering.
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Second Quarter Operating and Financial Results
Second quarter 2013 revenues from continuing operations declined 3.4 percent, to $16.7 million, compared to the same year-ago period.
The company reported net earnings attributable to common shareholders of $1.5 million, or $0.07 and $0.0 per basic and diluted share, respectively, for the 2013 second quarter, compared to net earnings of $1.6 million or $0.07 per basic and diluted share, for the same 2012 period.
Funds from operations (FFO) was $3.0 million for the 2013 second quarter, compared to $3.1 million in the same 2012 period. Adjusted funds from operations (AFFO), which is FFO adjusted to exclude gains and losses on derivative liabilities and acquisition expense, in the 2013 second quarter was $0.87 million, compared to $2.4 million in the same 2012 period.
Earnings before interest, taxes, depreciation and amortization (EBITDA) was $6.1 million for the 2013 second quarter, compared to $6.7 million in the same 2012 period. Adjusted EBITDA, which is EBITDA before noncontrolling interest, net gain/loss on disposition of assets, impairment, preferred stock dividends, unrealized gain/loss on derivatives and acquisition expense, declined to $4.4 million, compared to $6.2 million for the 2012 second quarter.
In the 2013 second quarter, the 56-hotel same store portfolio RevPAR declined 6.7 percent to $38.75, with a 0.1 percent improvement in ADR to $59.81 offset by a 6.8 percent decline in occupancy to 64.8 percent, compared to the 2012 second quarter. Excluding the four reflagged hotels and two hotels in Alexandria, VA that experienced management changes during the second quarter, RevPAR declined 0.3 percent to $38.94, with a 2.1 percent improvement in ADR to $58.41 offset by a 2.2 percent decline in occupancy to 66.7 percent.
“Our results continued to be significantly impacted in the East South Central and South Atlantic regions primarily by the rebranding of four hotels,” said Kelly Walters, Supertel’s President and Chief Executive Officer. “We are beginning to see positive up-trends at two of the reflagged hotels, but we realize the brand changes will impact us both in the short term and, to a lesser extent, in the long term.”
The South Atlantic region, which covers Florida, Georgia, Maryland, North Carolina, Virginia and West Virginia, experienced a 17.0 percent decline in RevPAR in the second quarter. Part of the decline was due to the transition and refurbishment-related disruption at the 76-room former Hampton Inn in Shelby, NC, that was reflagged as a Comfort Inn and the 120-room former Comfort Inn in Fayetteville, NC that was reflagged as a Rodeway Inn.
The 150-room Comfort Inn and 200-room Days Inn located in Alexandria, VA were impacted by management changes and a drop in occupancy in the Washington, D.C. market. Corrective steps have been taken and the two hotels showed marked improvement in July. “These hotels have historically been solid performers for us and we expect them to recover a significant share of their former occupancy,” said Walters. Excluding the four reflagged hotels and the two Alexandria hotels from the company’s results, second quarter RevPAR from the other 50 continuing operations hotels was $38.94, a decrease of 0.3 percent over the prior year.
“Overall, we saw a drop in occupancy this quarter, and we see the same effects within our markets’ competitive sets. Our hotels, primarily located in secondary and tertiary markets, aren’t seeing the demand like their larger market counterparts,” Walters said. “Demand has slowed and we continue to focus on balancing room rate against occupancy to optimize revenue and margins.”
Supertel’s second quarter results versus the industry:
(Includes Supertel’s 56 same store hotels.)
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Second Quarter 2013 vs Second Quarter 2012
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|||||||||
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Occupancy %
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ADR ($)
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RevPAR ($)
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|||||||
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2013
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2012
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Var.
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2013
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2012
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Var.
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2013
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2012
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Var.
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Industry – Total US
|
65.9%
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65.0%
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1.4%
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110.47
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106.65
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3.6%
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72.78
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69.33
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5.0%
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Supertel – Same Store 56 hotels (1)
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64.8%
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69.6%
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-6.9%
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59.81
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59.74
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0.1%
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38.75
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41.55
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-6.7%
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Chain Scale (2)
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|||||||||
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Industry – Upscale
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75.9%
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74.9%
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1.3%
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122.66
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117.87
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4.1%
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93.07
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88.29
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5.4%
|
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Supertel – Upscale hotels
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69.3%
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73.8%
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-6.1%
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126.71
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126.05
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0.5%
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87.85
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93.04
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-5.6%
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Industry – Upper Midscale
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68.4%
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67.6%
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1.2%
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101.20
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98.26
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3.0%
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69.26
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66.46
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4.2%
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Supertel – Upper Midscale 19 hotels
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64.7%
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71.8%
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-9.9%
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73.77
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73.88
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-0.1%
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47.70
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53.03
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-10.0%
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Industry – Midscale
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59.8%
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58.9%
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1.5%
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76.72
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75.11
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2.1%
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45.88
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44.23
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3.7%
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Supertel – Midscale 3 hotels
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50.2%
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55.8%
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-10.0%
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64.50
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65.03
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-0.8%
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32.37
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36.30
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-10.8%
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Industry – Economy
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58.1%
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57.3%
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1.4%
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54.56
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52.78
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3.4%
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31.69
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30.26
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4.7%
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Supertel – Economy 34 hotels
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65.8%
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69.4%
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-5.2%
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52.96
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52.39
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1.1%
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34.86
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36.36
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-4.1%
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Industry Source: STR Quarterly Review
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(1)
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The comparisons for same store operations are for 56 hotels in continuing operations as of June 30, 2013. Comparative operating results for the Hilton Garden Inn, which was acquired in the 2012 second quarter, are not reflected in the 56 same-store hotel operating results shown above.
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(2)
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Supertel’s chain scale classifications are as follows: Upscale hotel brands currently in the company’s portfolio include Hilton Garden Inn; Upper midscale hotel brands currently in the company’s portfolio include Comfort Inns, Comfort Suites, and Clarion; Midscale brands include Quality Inn, Rodeway Inn, Supertel Inn and Baymont Inn; and Economy brands include Days Inn, Super 8, and Key West Inns.
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Property operating income (POI), an important operating measurement, is the revenue from room rentals and other hotel services less hotel and property operating expenses. For the 2013 second quarter, POI from continuing operations declined 18.1 percent to $4.3 million, compared to $5.3 million for the same period a year earlier, led by the displacement caused by the reflagging in Tennessee, North Carolina and Kentucky, and the RevPAR decreases in the South Atlantic region.
See attached chart Property Operating Income (POI) Second Quarter 2013 versus Second Quarter 2012.
In July, the company announced that Jeffrey Dougan had joined Supertel as Senior Vice President and Chief Operating Officer. Mr. Dougan is a former Vice President of Operations for Stonebridge Hospitality where he oversaw a diverse hotel portfolio featuring eight different brands in a variety of segments. Mr. Dougan will be responsible for overseeing the company’s third party management companies and hotel operations, as well as maintaining relationships with current and future brand families. “Jeff brings a strong background in operations and has extensive experience and relationships with the leading hotel brand franchisors that will play an increasingly important role in our growth strategy,” Walters said. “His expertise adds depth and perspective in operations, asset management and evaluation of future acquisitions.”
Acquisitions
On May 2, 2013, the company entered into an agreement to acquire four hotels for an aggregate purchase price of $42.3 million. The hotels include the 89-room Home2 Suites by Hilton in Charlotte, North Carolina; the 100-room Hampton Inn and Suites in Columbia, South Carolina; the 109-room Hampton Inn and Suites in Pine Knoll Shores, North Carolina; and the 80-room Fairfield Inn and Suites in Wytheville, Virginia.
On May 15, 2013, the company entered into an agreement to acquire two hotels for an aggregate purchase price of $18.5 million. The hotels include the 85-room Courtyard Inn in Southaven, MS and a 78-room Residence Inn in Southaven, MS.
Following the close of the second quarter, on August 5, 2013, the company entered an agreement to acquire two additional hotels for an aggregate purchase price of $21.25 million. The hotels include the 87-room Hampton Inn and Suites in Clermont, FL and the 116-room Fairfield Inn and Suites in Orlando, FL.
The closing of the transactions is subject to customary closing conditions in addition to the due diligence and financing conditions.
“We now have eight hotels under contract,” Walters stated. “When combined with the Hilton Garden Inn we purchased last year, we will have a strong core portfolio that reflects our new strategic direction. We believe these properties will give us a more stable platform. We are well along in our due diligence process regarding the acquisition of these properties and are working to recapitalize our company to obtain the prudent financing necessary to execute this phase of our plan.”
Disposition Program
In the 2013 second quarter the company sold the following hotels:
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·
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The 40-room Super 8 hotel in Fort Madison, IA sold on April 18, 2013 for $1.1 million.
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·
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The 151-room Masters Inn in Tuscaloosa, AL sold on May 1, 2013 for $1.8 million.
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·
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The 128-room Masters Inn in Garden City, GA sold on May 21, 2013 for $1.5 million.
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·
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The 40-room Super 8 hotel in Pella, IA sold on May 23, 2013 for $0.7 million.
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·
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The 150-room Masters Inn in Charleston, SC sold on June 21, 2013 for $1.2 million.
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·
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The 112-room Masters Inn in Cayce (Columbia/I-26), SC sold on June 24, 2013 for $1.2 million.
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·
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The 63-room Super 8 hotel in Columbus, NE sold on June 24, 2013 for $1.2 million.
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·
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The 156-room Days Inn in Fredericksburg (South), VA sold on June 27, 2013 for $1.8 million.
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Following the close of the second quarter the company sold the following hotels:
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·
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The 117-room Masters Inn in Seffner (Tampa), FL sold on July 11, 2013 for $0.8 million.
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·
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The 51-room Quality Inn in Minocqua, WI sold on July 18, 2013 for $1.3 million.
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Proceeds from the sales were used primarily to improve the balance sheet by reducing debt and lowering debt service.
Capital Reinvestment
The company invested $1.5 million in property improvements in the 2013 second quarter, primarily for the rebranding of the Comfort Inn in Shelby, NC, and renovations at the Super 8 in Batesville, AR.
Balance Sheet
The company paid down the loan facility from GE Franchise Finance Commercial LLC by $5.3 million.
“We have reduced our overall debt by 7.0 percent from $132.8 million to $123.5 million in the past six months,” said Connie Scarpello, Supertel’s Senior Vice President and Chief Financial Officer. “Our weighted average annual interest rate of 5.6 percent at the close of the 2013 second quarter is more favorable than the 6.4 percent average the same period a year ago. The average term is 3.6 years, with no maturities coming due until 2014.”
Dividends
The company did not declare a dividend on common stock in the 2013 second quarter. Preferred dividends continued uninterrupted. The board of directors will continue to monitor the dividend policy on a quarterly basis.
Outlook 2013
“We are well along in the transition of our portfolio from an economy hotel-concentration to premium-branded, select-service upscale and upper midscale properties, which is the desired prototype for growing our company,” Walters said. “We have sold twelve non-core properties in the past seven months and plan to continue our disposition program by selling the hotels that do not meet our investment criteria. Concurrently, we have reshaped and strengthened our balance sheet through substantial debt reduction. We are well along in our due diligence process to acquire eight core hotels, which along with our previously acquired Hilton Garden Inn last year, will comprise the cornerstone of our new portfolio strategy. We still have important steps to complete in the third quarter.”
About Supertel Hospitality, Inc.
Supertel Hospitality, Inc. (NASDAQ: SPPR) is a self-administered real estate investment trust that specializes in the ownership of select-service hotels. The company currently owns 74 hotels comprising 6,422 rooms in 21 states. Supertel’s hotels are franchised by a number of the industry’s most well-regarded brand families including Hilton, Choice and Wyndham. For more information or to make a hotel reservation, visit www.supertelinc.com.
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 results or performance to differ from those projected in the forward-looking statement. These risks are discussed in the Company’s filings with the Securities and Exchange Commission.
SELECTED FINANCIAL DATA:
Supertel Hospitality, Inc.
Balance Sheet
As of June 30, 2013 and December 31, 2012
(Dollars in thousands, except share and per share data)
The company owned 76 hotels (including 19 hotels in discontinued operations) at June 30, 2013, and 86 hotels as of December 31, 2012, respectively.
|
As of
|
|||||
|
June 30,
2013
|
December 31, 2012
|
||||
|
(unaudited)
|
|||||
|
ASSETS
|
|||||
|
Investments in hotel properties
|
$
|
216,056
|
$
|
213,527
|
|
|
Less accumulated depreciation
|
72,893
|
70,027
|
|||
|
143,163
|
143,500
|
||||
|
Cash and cash equivalents
|
439
|
891
|
|||
|
Accounts receivable, net of allowance for doubtful accounts of $122 and $201
|
2,374
|
2,070
|
|||
|
Prepaid expenses and other assets
|
7,519
|
5,151
|
|||
|
Deferred financing costs, net
|
2,265
|
2,644
|
|||
|
Investment in hotel properties, held for sale, net
|
34,816
|
47,591
|
|||
|
$
|
190,576
|
$
|
201,847
|
||
|
LIABILITIES AND EQUITY
|
|||||
|
LIABILITIES
|
|||||
|
Accounts payable, accrued expenses and other liabilities
|
$
|
11,975
|
$
|
8,778
|
|
|
Derivative liabilities, at fair value
|
14,115
|
15,935
|
|||
|
Debt related to hotel properties held for sale
|
26,133
|
39,461
|
|||
|
Long-term debt
|
97,378
|
93,360
|
|||
|
149,601
|
157,534
|
||||
|
Redeemable preferred stock
|
|||||
|
10% Series B, 800,000 shares authorized; $.01 par value,
|
|||||
|
332,500 shares outstanding, liquidation preference of $8,312
|
7,662
|
7,662
|
|||
|
EQUITY
|
|||||
|
Shareholders' equity
|
|||||
|
Preferred stock, 40,000,000 shares authorized;
|
|||||
|
8% Series A, 2,500,000 shares authorized, $.01 par value, 803,270
|
|||||
|
shares outstanding, liquidation preference of $8,033
|
8
|
8
|
|||
|
6.25% Series C, 3,000,000 shares authorized, $.01 par value, 3,000,000
|
|||||
|
shares outstanding, liquidation preference of $30,000
|
30
|
30
|
|||
|
Common stock, $.01 par value, 200,000,000 shares authorized;
|
|||||
|
23,143,655 and 23,145,927 shares outstanding
|
231
|
231
|
|||
|
Common stock warrants
|
0
|
252
|
|||
|
Additional paid-in capital
|
135,067
|
134,792
|
|||
|
Distributions in excess of retained earnings
|
(102,135)
|
(98,777)
|
|||
|
Total shareholders' equity
|
33,201
|
36,536
|
|||
|
Noncontrolling interest
|
|||||
|
Noncontrolling interest in consolidated partnership,
|
|||||
|
redemption value $101 and $99
|
112
|
115
|
|||
|
Total equity
|
33,313
|
36,651
|
|||
|
COMMITMENTS AND CONTINGENCIES
|
|||||
|
$
|
190,576
|
$
|
201,847
|
||
Supertel Hospitality, Inc.
Results of Operations
For the three and six months ended June 30, 2013 and 2012, respectively
(Dollars in thousands, except per share data)
|
Three Months Ended
|
Six Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||
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REVENUES
|
|||||||||||
|
Room rentals and other hotel services
|
$
|
16,715
|
$
|
17,296
|
$
|
29,488
|
$
|
30,015
|
|||
|
EXPENSES
|
|||||||||||
|
Hotel and property operations
|
12,384
|
12,011
|
23,548
|
22,371
|
|||||||
|
Depreciation and amortization
|
1,730
|
1,750
|
3,523
|
3,415
|
|||||||
|
General and administrative
|
980
|
921
|
2,039
|
2,014
|
|||||||
|
Acquisition and termination expense
|
28
|
162
|
49
|
162
|
|||||||
|
15,122
|
14,844
|
29,159
|
27,962
|
||||||||
|
EARNINGS BEFORE NET LOSS
|
|||||||||||
|
ON DISPOSITIONS OF
|
|||||||||||
|
ASSETS, OTHER INCOME, INTEREST EXPENSE
|
|||||||||||
|
AND INCOME TAXES
|
1,593
|
2,452
|
329
|
2,053
|
|||||||
|
Net loss on dispositions of assets
|
(8)
|
(2)
|
(37)
|
(5)
|
|||||||
|
Other income (loss)
|
2,131
|
872
|
1,834
|
(341)
|
|||||||
|
Interest expense
|
(1,509)
|
(1,443)
|
(3,018)
|
(2,959)
|
|||||||
|
Loss on debt extinguishment
|
(117)
|
(38)
|
(208)
|
(50)
|
|||||||
|
Impairment
|
0
|
(2,735)
|
0
|
(2,470)
|
|||||||
|
EARNINGS (LOSS) FROM CONTINUING
|
|||||||||||
|
OPERATIONS BEFORE INCOME TAXES
|
2,090
|
(894)
|
(1,100)
|
(3,772)
|
|||||||
|
Income tax expense
|
0
|
398
|
0
|
34
|
|||||||
|
EARNINGS (LOSS) FROM
|
|||||||||||
|
CONTINUING OPERATIONS
|
2,090
|
(1,292)
|
(1,100)
|
(3,806)
|
|||||||
|
Gain (loss) from discontinued operations, net of tax
|
288
|
3,732
|
(587)
|
2,275
|
|||||||
|
NET EARNINGS (LOSS)
|
2,378
|
2,440
|
(1,687)
|
(1,531)
|
|||||||
|
Earnings (loss) attributable to noncontrolling interest
|
(4)
|
(8)
|
3
|
(2)
|
|||||||
|
NET EARNINGS (LOSS) ATTRIBUTABLE
|
|||||||||||
|
TO CONTROLLING INTERESTS
|
2,374
|
2,432
|
(1,684)
|
(1,533)
|
|||||||
|
Preferred stock dividends
|
(837)
|
(837)
|
(1,674)
|
(1,494)
|
|||||||
|
NET EARNINGS (LOSS) ATTRIBUTABLE
|
|||||||||||
|
TO COMMON SHAREHOLDERS
|
$
|
1,537
|
$
|
1,595
|
$
|
(3,358)
|
$
|
(3,027)
|
|||
|
NET EARNINGS (LOSS) PER COMMON SHARE
|
|||||||||||
|
- BASIC AND DILUTED
|
|||||||||||
|
EPS from continuing operations - Basic
|
$
|
0.06
|
$
|
(0.09)
|
$
|
(0.12)
|
$
|
(0.23)
|
|||
|
EPS from discontinued operations - Basic
|
$
|
0.01
|
$
|
0.16
|
$
|
(0.03)
|
$
|
0.10
|
|||
|
EPS Basic
|
$
|
0.07
|
$
|
0.07
|
$
|
(0.15)
|
$
|
(0.13)
|
|||
|
EPS Diluted
|
$
|
0.00
|
$
|
0.07
|
$
|
(0.15)
|
$
|
(0.13)
|
|||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited - In thousands, except per share data)
|
Three months
ended June 30,
|
Six months
ended June 30,
|
||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||
|
RECONCILIATION OF NET EARNINGS
|
|||||||||||
|
(LOSS) TO FFO
|
|||||||||||
|
Net earnings (loss) attributable
|
|||||||||||
|
to common shareholders
|
$
|
1,537
|
$
|
1,595
|
$
|
(3,358)
|
$
|
(3,027)
|
|||
|
Depreciation and amortization
|
1,842
|
2,226
|
3,802
|
4,396
|
|||||||
|
Net gain on disposition of assets
|
(1,350)
|
(4,772)
|
(1,297)
|
(5,263)
|
|||||||
|
Impairment
|
954
|
4,083
|
1,461
|
5,517
|
|||||||
|
FFO available to common shareholders
|
$
|
2,983
|
$
|
3,132
|
$
|
608
|
$
|
1,623
|
|||
|
Unrealized (gain) loss on derivatives
|
(2,137)
|
(867)
|
(1,820)
|
346
|
|||||||
|
Acquisition expense
|
28
|
162
|
49
|
162
|
|||||||
|
Adjusted FFO
|
$
|
874
|
$
|
2,427
|
$
|
(1,163)
|
$
|
2,131
|
|||
|
Weighted average number of shares outstanding for:
|
|||||||||||
|
calculation of FFO per share - basic
|
23,113
|
23,075
|
23,107
|
23,073
|
|||||||
|
calculation of FFO per share - diluted
|
53,115
|
53,075
|
23,120
|
47,271
|
|||||||
|
FFO per share - basic
|
$
|
0.13
|
$
|
0.14
|
$
|
0.03
|
$
|
0.07
|
|||
|
Adjusted FFO per share - basic
|
$
|
0.04
|
$
|
0.11
|
$
|
(0.05)
|
$
|
0.09
|
|||
|
FFO per share - diluted
|
$
|
0.06
|
$
|
0.07
|
$
|
0.03
|
$
|
0.05
|
|||
|
Adjusted FFO per share - diluted
|
$
|
0.03
|
$
|
0.05
|
$
|
(0.05)
|
$
|
0.06
|
|||
FFO and Adjusted FFO (“AFFO”) are non-GAAP financial measures. We consider FFO and AFFO to be market accepted measures of an equity REIT's operating performance, which are necessary, along with net earnings (loss), for an understanding of our operating results. FFO, as defined under the National Association of Real Estate Investment Trusts (NAREIT) standards, consists of net income computed in accordance with GAAP, excluding gains (or losses) from sales of real estate assets, plus depreciation, amortization and impairment of real estate assets. We believe our method of calculating FFO complies with the NAREIT definition. AFFO is FFO adjusted to exclude gains or losses on derivative liabilities, which are non-cash charges against income and which do not represent results from our core operations. AFFO also adds back acquisition costs. FFO and AFFO do not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations, or other commitments and uncertainties. FFO and AFFO should not be considered as alternatives to net income (loss) (computed in accordance with GAAP) as an indicator of our liquidity, nor are they indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions. 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.
Diluted FFO per share and diluted Adjusted FFO per share are computed after adjusting the numerator and denominator of the basic computation for the effects of any dilutive potential common shares outstanding during the period. The Company’s outstanding warrants to purchase common stock Series C convertible preferred stock, preferred operating units, unvested stock awards and stock options would be antidilutive and are not included in the dilution computation.
We use FFO and AFFO as performance measures to facilitate a periodic evaluation of our operating results relative to those of our peers. We consider FFO and AFFO to be useful additional measures 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 assume 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 and AFFO provide a meaningful indication of our performance.
EBITDA and Adjusted EBITDA
(Unaudited - In thousands)
|
Three months
ended June 30,
|
Six months
ended June 30,
|
||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||
|
RECONCILIATION OF NET EARNINGS
|
|||||||||||
|
(LOSS) TO ADJUSTED EBITDA
|
|||||||||||
|
Net earnings (loss)
|
|||||||||||
|
attributable to common shareholders
|
$
|
1,537
|
$
|
1,595
|
$
|
(3,358)
|
$
|
(3,027)
|
|||
|
Interest expense,
|
|||||||||||
|
including discontinued operations
|
2,097
|
2,458
|
4,327
|
5,124
|
|||||||
|
Loss on debt extinguishment
|
608
|
91
|
891
|
103
|
|||||||
|
Income tax expense (benefit),
|
|||||||||||
|
including discontinued operations
|
0
|
354
|
0
|
(308)
|
|||||||
|
Depreciation and amortization,
|
|||||||||||
|
including discontinued operations
|
1,842
|
2,226
|
3,802
|
4,396
|
|||||||
|
EBITDA
|
6,084
|
6,724
|
5,662
|
6,288
|
|||||||
|
Noncontrolling interest
|
4
|
8
|
(3)
|
2
|
|||||||
|
Net gain on disposition of assets
|
(1,350)
|
(4,772)
|
(1,297)
|
(5,263)
|
|||||||
|
Impairment
|
954
|
4,083
|
1,461
|
5,517
|
|||||||
|
Preferred stock dividend
|
837
|
837
|
1,674
|
1,494
|
|||||||
|
Unrealized (gain) loss on derivatives
|
(2,137)
|
(867)
|
(1,820)
|
346
|
|||||||
|
Acquisition expense
|
28
|
162
|
49
|
162
|
|||||||
|
ADJUSTED EBITDA
|
$
|
4,420
|
$
|
6,175
|
$
|
5,726
|
$
|
8,546
|
|||
EBITDA and Adjusted EBITDA are financial measures that are not calculated in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We calculate EBITDA and Adjusted EBITDA by adding back to net earnings (loss) available to common shareholders certain non-operating expenses and non-cash charges which are based on historical cost accounting and 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, even though EBITDA and Adjusted EBITDA also do not represent an amount that accrues directly to common shareholders. In calculating Adjusted EBITDA, we add back noncontrolling interest, net (gain) loss on disposition of assets, impairment, preferred stock dividends and acquisition expenses which are cash charges. We also add back impairment and unrealized gain or loss on derivatives, which are non-cash charges.
EBITDA and Adjusted EBITDA do not represent cash generated from operating activities determined by GAAP and should not be considered as alternatives to net income, cash flow from operations or any other operating performance measure prescribed by GAAP. EBITDA and Adjusted EBITDA are not measures of our liquidity, nor are they indicative of funds available to fund our cash needs, including our ability to make cash distributions. Neither do the measurements reflect cash expenditures for long-term assets and other items that have been and will be incurred. EBITDA and Adjusted EBITDA may include funds that may not be available for management’s discretionary use due to functional requirements to conserve funds for capital expenditures, property acquisitions, and other commitments and uncertainties. To compensate for this, management considers the impact of these excluded items to the extent they are material to operating decisions or the evaluation of our operating performance. EBITDA and Adjusted EBITDA, as presented, may not be comparable to similarly titled measures of other companies.
Property Operating Income (POI) – Continuing and Discontinued Operations
This presentation includes non-GAAP financial measures. The company believes that the presentation of hotel property operating income (POI) is helpful to investors, and represents a more useful description of its core operations, as it better communicates the comparability of its hotels’ operating results.
|
Unaudited-in thousands, except statistical data:
|
Three months
|
Six months
|
|||||
|
ended June 30,
|
ended June 30,
|
||||||
|
2013
|
2012
|
2013
|
2012
|
||||
|
Total Same Store Hotels:
|
|||||||
|
Revenue per available room (RevPAR):
|
$ 38.75
|
$ 41.55
|
$ 34.25
|
$ 36.34
|
|||
|
Average daily room rate (ADR):
|
$ 59.81
|
$ 59.74
|
$ 58.52
|
$ 57.92
|
|||
|
Occupancy percentage:
|
64.8%
|
69.6%
|
58.5%
|
62.7%
|
|||
|
Revenue from room rentals and other hotel services consists of:
|
|||||||
|
Room rental revenue
|
$ 16,160
|
$ 16,830
|
$ 28,486
|
$ 29,183
|
|||
|
Telephone revenue
|
3
|
3
|
6
|
9
|
|||
|
Other hotel service revenues
|
552
|
463
|
996
|
823
|
|||
|
Total revenue from room rentals and other hotel services
|
$ 16,715
|
$ 17,296
|
$ 29,488
|
$ 30,015
|
|||
|
Hotel and property operations expense
|
|||||||
|
Total hotel and property operations expense
|
$ 12,384
|
$ 12,011
|
$ 23,548
|
$ 22,371
|
|||
|
Property Operating Income ("POI")
|
|||||||
|
Total property operating income
|
$ 4,331
|
$ 5,285
|
$ 5,940
|
$ 7,644
|
|||
|
POI as a percentage of revenue from room rentals
|
|||||||
|
and other hotel services
|
|||||||
|
Total POI as a percentage of revenue
|
25.9%
|
30.6%
|
20.1%
|
25.5%
|
|||
|
Discontinued Operations
|
|||||||
|
Room rentals and other hotel services
|
|||||||
|
Total room rental and other hotel services
|
$ 5,688
|
$ 9,113
|
$ 11,093
|
$ 17,264
|
|||
|
Hotel and property operations expense
|
|||||||
|
Total hotel and property operations expense
|
$ 4,613
|
$ 7,307
|
$ 9,282
|
$ 14,353
|
|||
|
Property Operating Income ("POI")
|
|||||||
|
Total property operating income
|
$ 1,075
|
$ 1,806
|
$ 1,811
|
$ 2,911
|
|||
|
POI as a percentage of revenue from room rentals
|
|||||||
|
and other hotel services
|
|||||||
|
Total POI as a percentage of revenue
|
18.9%
|
19.8%
|
16.3%
|
16.9%
|
|||
(Unaudited - In thousands, except statistical data)
|
Three months
ended June 30,
|
Six months
ended June 30,
|
||||||||||
|
RECONCILIATION OF NET LOSS FROM
|
2013
|
2012
|
2013
|
2012
|
|||||||
|
CONTINUING OPERATIONS TO POI
|
|||||||||||
|
Net earnings (loss)
|
|||||||||||
|
from continuing operations
|
$
|
2,090
|
$
|
(1,292)
|
$
|
(1,100)
|
$
|
(3,806)
|
|||
|
Depreciation and amortization
|
1,730
|
1,750
|
3,523
|
3,415
|
|||||||
|
Net loss on disposition of assets.
|
8
|
2
|
37
|
5
|
|||||||
|
Other (income) expense
|
(2,131)
|
(872)
|
(1,834)
|
341
|
|||||||
|
Interest expense
|
1,509
|
1,443
|
3,018
|
2,959
|
|||||||
|
Loss on debt extinguishment
|
117
|
38
|
208
|
50
|
|||||||
|
General and administrative expense
|
980
|
921
|
2,039
|
2,014
|
|||||||
|
Acquisition and termination expense
|
28
|
162
|
49
|
162
|
|||||||
|
Income tax expense
|
0
|
398
|
0
|
34
|
|||||||
|
Impairment expense
|
0
|
2,735
|
0
|
2,470
|
|||||||
|
POI - continuing operations
|
$
|
4,331
|
$
|
5,285
|
$
|
5,940
|
$
|
7,644
|
|||
|
Three months
ended June 30,
|
Six months
ended June 30,
|
||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||
|
Gain (loss) from discontinued operations
|
$
|
288
|
$
|
3,732
|
$
|
(587)
|
$
|
2,275
|
|||
|
Depreciation and amortization
|
|||||||||||
|
from discontinued operations
|
112
|
476
|
279
|
981
|
|||||||
|
Net gain on disposition of assets
|
|||||||||||
|
from discontinued operations
|
(1,358)
|
(4,774)
|
(1,334)
|
(5,268)
|
|||||||
|
Interest expense from discontinued operations
|
588
|
1,015
|
1,309
|
2,165
|
|||||||
|
Loss on debt extinguishment
|
491
|
53
|
683
|
53
|
|||||||
|
Impairment losses
|
|||||||||||
|
from discontinued operations
|
954
|
1,348
|
1,461
|
3,047
|
|||||||
|
Income tax benefit
|
|||||||||||
|
from discontinued operations
|
0
|
(44)
|
0
|
(342)
|
|||||||
|
POI - discontinued operations
|
$
|
1,075
|
$
|
1,806
|
$
|
1,811
|
$
|
2,911
|
|||
|
Three months
ended June 30,
|
Six months
ended June 30,
|
||||||||
|
2013
|
2012
|
2012
|
2011
|
||||||
|
POI--continuing operations
|
4,331
|
5,285
|
5,940
|
7,644
|
|||||
|
POI--discontinued operations
|
1,075
|
1,806
|
1,811
|
2,911
|
|||||
|
Total - POI
|
$ 5,406
|
$ 7,091
|
$ 7,751
|
$ 10,555
|
|||||
|
Total POI as a percentage of revenues
|
24.1%
|
26.9%
|
19.1%
|
22.3%
|
|||||
Same Store reflects 56 hotels in continuing operations owned as of January 1, 2012 and excludes one property acquired during the second quarter of 2012.
Supertel Hospitality, Inc.
Operating Statistics by Region
For three and six months ended June 30, 2013 and 2012, respectively
(Unaudited - except per share data)
|
Three months ended June 30, 2013
|
Three months ended June 30, 2012
|
||||||||||||||||||||
|
Region
|
Room Count
|
RevPAR
|
Occupancy
|
ADR
|
Room Count
|
RevPAR
|
Occupancy
|
ADR
|
|||||||||||||
|
Mountain
|
214
|
$
|
38.27
|
74.21
|
%
|
$
|
51.57
|
214
|
$
|
40.06
|
77.83
|
%
|
$
|
51.47
|
|||||||
|
West North Central
|
1,352
|
36.78
|
69.47
|
%
|
52.95
|
1,352
|
36.48
|
71.49
|
%
|
51.02
|
|||||||||||
|
East North Central
|
923
|
41.72
|
65.74
|
%
|
63.45
|
923
|
38.75
|
62.34
|
%
|
62.16
|
|||||||||||
|
Middle Atlantic
|
142
|
46.54
|
74.32
|
%
|
62.61
|
142
|
51.10
|
81.98
|
%
|
62.33
|
|||||||||||
|
South Atlantic
|
1,071
|
41.82
|
59.83
|
%
|
69.90
|
1,071
|
50.38
|
73.08
|
%
|
68.93
|
|||||||||||
|
East South Central
|
430
|
37.58
|
58.98
|
%
|
63.72
|
430
|
47.76
|
70.46
|
%
|
67.79
|
|||||||||||
|
West South Central
|
225
|
21.58
|
52.39
|
%
|
41.18
|
225
|
24.94
|
53.18
|
%
|
46.91
|
|||||||||||
|
Total Same Store
|
4,357
|
$
|
38.75
|
64.79
|
%
|
$
|
59.81
|
4,357
|
$
|
41.55
|
69.55
|
%
|
$
|
59.74
|
|||||||
|
South Atlantic Acquisitions
|
100
|
$
|
87.85
|
69.33
|
%
|
$
|
126.71
|
100
|
$
|
93.04
|
73.81
|
%
|
$
|
126.05
|
|||||||
|
Total Acquisitions
|
100
|
$
|
87.85
|
69.33
|
%
|
$
|
126.71
|
100
|
$
|
93.04
|
73.81
|
%
|
$
|
126.05
|
|||||||
|
Total Continuing Operations
|
4,457
|
$
|
39.85
|
64.89
|
%
|
$
|
61.42
|
4,457
|
$
|
42.03
|
69.60
|
%
|
$
|
60.39
|
|||||||
|
States included in the Regions
|
|
|
Mountain
|
Idaho and Montana
|
|
West North Central
|
Iowa, Kansas, Missouri, Nebraska and South Dakota
|
|
East North Central
|
Indiana and Wisconsin
|
|
Middle Atlantic
|
Pennsylvania
|
|
South Atlantic
|
Florida, Georgia, Maryland, North Carolina, Virginia and West Virginia
|
|
East South Central
|
Kentucky and Tennessee
|
|
West South Central
|
Arkansas and Louisiana
|
|
Six months ended June 30, 2013
|
Six months ended June 30, 2012
|
||||||||||||||||||||
|
Region
|
Room Count
|
RevPAR
|
Occupancy
|
ADR
|
Room Count
|
RevPAR
|
Occupancy
|
ADR
|
|||||||||||||
|
Mountain
|
214
|
$
|
31.70
|
63.06
|
%
|
$
|
50.27
|
214
|
$
|
32.78
|
65.84
|
%
|
$
|
49.79
|
|||||||
|
West North Central
|
1,352
|
31.21
|
60.57
|
%
|
51.52
|
1,352
|
30.71
|
61.67
|
%
|
49.79
|
|||||||||||
|
East North Central
|
923
|
35.77
|
58.09
|
%
|
61.58
|
923
|
34.28
|
56.85
|
%
|
60.29
|
|||||||||||
|
Middle Atlantic
|
142
|
40.72
|
67.55
|
%
|
60.28
|
142
|
42.86
|
71.89
|
%
|
59.62
|
|||||||||||
|
South Atlantic
|
1,071
|
39.60
|
58.38
|
%
|
67.83
|
1,071
|
45.51
|
69.64
|
%
|
65.35
|
|||||||||||
|
East South Central
|
430
|
33.33
|
52.98
|
%
|
62.90
|
430
|
41.20
|
61.84
|
%
|
66.62
|
|||||||||||
|
West South Central
|
225
|
20.97
|
49.40
|
%
|
42.45
|
225
|
24.97
|
53.62
|
%
|
46.57
|
|||||||||||
|
Total Same Store
|
4,357
|
$
|
34.25
|
58.53
|
%
|
$
|
58.52
|
4,357
|
$
|
36.34
|
62.75
|
%
|
$
|
57.92
|
|||||||
|
South Atlantic Acquisitions
|
100
|
$
|
81.83
|
64.64
|
%
|
$
|
126.61
|
100
|
$
|
93.04
|
73.81
|
%
|
$
|
126.05
|
|||||||
|
Total Acquisitions
|
100
|
$
|
81.83
|
64.64
|
%
|
$
|
126.61
|
100
|
$
|
93.04
|
73.81
|
%
|
$
|
126.05
|
|||||||
|
Total Continuing Operations
|
4,457
|
$
|
35.32
|
58.67
|
%
|
$
|
60.20
|
4,457
|
$
|
36.61
|
62.80
|
%
|
$
|
58.29
|
|||||||
|
States included in the Regions
|
|
|
Mountain
|
Idaho and Montana
|
|
West North Central
|
Iowa, Kansas, Missouri, Nebraska and South Dakota
|
|
East North Central
|
Indiana and Wisconsin
|
|
Middle Atlantic
|
Pennsylvania
|
|
South Atlantic
|
Florida, Georgia, Maryland, North Carolina, Virginia and West Virginia
|
|
East South Central
|
Kentucky and Tennessee
|
| West South Central | Arkansas and Louisiana |
Operating Statistics by Chain Scale Classification
For three and six months ended June 30, 2013 and 2012, respectively
The comparisons of same store operations are for 56 hotels in continuing operations as of April 1, 2012.
(Unaudited - except per share data)
|
Three months ended June 30, 2013
|
Three months ended June 30, 2012
|
Percent of Change
|
|||||||||
|
Same Store:
|
RevPar
|
Occupancy
|
ADR
|
RevPar
|
Occupancy
|
ADR
|
RevPAR
|
Occupancy
|
ADR
|
||
|
Upper Midscale
|
$ 47.70
|
64.7%
|
$ 73.77
|
$ 53.03
|
71.8%
|
$ 73.88
|
-10.1%
|
-9.9%
|
-0.1%
|
||
|
Midscale
|
32.37
|
50.2%
|
64.50
|
36.30
|
55.8%
|
65.03
|
-10.8%
|
-10.0%
|
-0.8%
|
||
|
Economy
|
34.86
|
65.8%
|
52.96
|
36.36
|
69.4%
|
52.39
|
-4.1%
|
-5.2%
|
1.1%
|
||
|
Total
|
$ 38.75
|
64.8%
|
$ 59.81
|
$ 41.55
|
69.6%
|
$ 59.74
|
-6.7%
|
-6.9%
|
0.1%
|
||
|
Six months ended June 30, 2013
|
Six months ended June 30, 2012
|
Percent of Change
|
|||||||||
|
Same Store:
|
RevPar
|
Occupancy
|
ADR
|
RevPar
|
Occupancy
|
ADR
|
RevPAR
|
Occupancy
|
ADR
|
||
|
Upper Midscale
|
$ 42.37
|
59.8%
|
$ 70.82
|
$ 46.86
|
66.6%
|
$ 70.39
|
-9.6%
|
-10.2%
|
0.6%
|
||
|
Midscale
|
26.53
|
42.7%
|
62.18
|
28.60
|
46.0%
|
62.18
|
-7.2%
|
-7.2%
|
0.0%
|
||
|
Economy
|
30.84
|
59.0%
|
52.32
|
31.78
|
62.0%
|
51.24
|
-3.0%
|
-4.8%
|
2.1%
|
||
|
Total
|
$ 34.25
|
58.5%
|
$ 58.52
|
$ 36.34
|
62.7%
|
$ 57.92
|
-5.8%
|
-6.7%
|
1.0%
|
||
Same store reflects 56 hotels.