Core Viewpoint - Sotherly Hotels Inc. will report its fourth quarter 2024 financial results on March 13, 2025, prior to market opening, followed by a conference call for discussion [1] Group 1: Financial Reporting - The financial results for the fourth quarter 2024 will be announced before the market opens on March 13, 2025 [1] - A conference call is scheduled for 10:00 a.m. Eastern Time on the same day to discuss the results [1] - The earnings release will be available on the Company's website in the Investors section [1] Group 2: Conference Call Details - The conference call can be accessed by telephone at 833-470-1428 with access code 538548 [2] - A webcast option is available, and participants should visit the Investor Relations section of the website at least 15 minutes prior to the call [2] - A taped rebroadcast will be available approximately one hour after the live call until March 20, 2025, accessible by dialing 866-813-9403 with access code 963139 [2] Group 3: Company Overview - Sotherly Hotels Inc. is a self-managed and self-administered lodging REIT focused on upscale to upper-upscale full-service hotels in the Southern United States [3] - The Company currently has a portfolio of ten hotel properties with a total of 2,786 rooms, along with interests in two condominium hotels [3] - Sotherly Hotels operates hotels under brands such as Hilton Worldwide and Hyatt Hotels Corporation, as well as independent hotels [3]

Core Viewpoint - Sotherly Hotels (SOHO) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system is based on changes in earnings estimates, which are crucial for predicting near-term stock price movements [2][4]. - An increase in earnings estimates typically leads to buying pressure and a potential rise in stock price [3][5]. Company-Specific Insights - Sotherly Hotels is projected to earn $0.69 per share for the fiscal year ending December 2024, reflecting a year-over-year increase of 1.5% [8]. - Over the past three months, the Zacks Consensus Estimate for Sotherly Hotels has risen by 7.8%, indicating a positive outlook from analysts [8]. Zacks Rank System - The Zacks Rank system categorizes stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks which have averaged a +25% annual return since 1988 [7]. - Sotherly Hotels' upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [10][11].

Revenue Performance - Total revenue for Q3 2024 increased by approximately $1.5 million, or 3.9%, to approximately $40.7 million compared to Q3 2023 revenue of approximately $39.2 million[199]. - Room revenue for Q3 2024 increased by approximately $0.9 million, or 3.4%, to approximately $27.2 million compared to Q3 2023 room revenue of approximately $26.3 million[201]. - Food and beverage revenues increased by approximately $0.2 million, or 3.1%, to approximately $7.7 million for Q3 2024 compared to $7.5 million in Q3 2023[202]. - Revenue from other operating departments increased by approximately $0.4 million, or 7.0%, to approximately $5.8 million for Q3 2024 compared to $5.4 million in Q3 2023[203]. - Total revenue for the nine months ended September 30, 2024, increased by approximately $6.2 million, or 4.7%, to approximately $137.9 million compared to $131.7 million for the same period in 2023[214]. - Room revenue increased approximately $3.6 million, or 4.1%, to approximately $91.5 million for the nine months ended September 30, 2024, compared to $87.9 million for the same period in 2023[215]. - Food and beverage revenues increased approximately $1.6 million, or 6.4%, to approximately $27.4 million for the nine months ended September 30, 2024, compared to $25.8 million for the same period in 2023[216]. Occupancy and RevPAR - RevPAR for Q3 2024 increased by 4.1% from $102.82 in 2023 to $107.02 in 2024, driven by a 4.8% increase in occupancy[201]. - Occupancy rate for Q3 2024 was 66.9%, up from 62.4% in Q3 2023[198]. - Composite portfolio occupancy rate for Q3 2024 was 66.3%, up from 61.5% in Q3 2023[198]. - Composite portfolio RevPAR for Q3 2024 was $107.02, compared to $102.82 in Q3 2023[198]. Expenses - Hotel operating expenses increased by approximately $1.0 million, or 3.2%, to approximately $32.6 million for Q3 2024 compared to $31.6 million in Q3 2023[204]. - Room expenses for Q3 2024 increased by approximately $0.2 million, or 2.5%, to approximately $6.6 million compared to $6.4 million in Q3 2023[205]. - Food and beverage expenses for the three months ended September 30, 2024, increased approximately $0.2 million, or 3.3%, to approximately $5.8 million compared to $5.6 million for the same period in 2023[206]. - Other operating department expenses for the three months ended September 30, 2024, increased approximately $0.1 million, or 5.5%, to approximately $2.3 million compared to $2.2 million for the same period in 2023[207]. - Corporate general and administrative expenses for the three months ended September 30, 2024, decreased approximately $0.2 million, or 12.8%, to approximately $1.5 million compared to $1.7 million for the same period in 2023[208]. - Hotel operating expenses increased approximately $4.6 million, or 4.7%, to approximately $101.8 million for the nine months ended September 30, 2024, compared to $97.2 million for the same period in 2023[218]. Net Loss and Financial Metrics - Net loss for the three months ended September 30, 2024, was approximately $3.7 million compared to a net loss of approximately $2.1 million for the same period in 2023[213]. - For the three months ended September 30, 2024, the net loss was $3,689,621 compared to a net loss of $2,065,826 for the same period in 2023, indicating an increase in losses of approximately 78.5%[235]. - FFO (Funds From Operations) for the three months ended September 30, 2024, was $1,123,585, down 46.0% from $2,079,893 in the same period of 2023[235]. - EBITDA for the three months ended September 30, 2024, was $6,424,154, a decrease of 1.7% compared to $6,538,547 for the same period in 2023[239]. - Hotel EBITDA for the nine months ended September 30, 2024, was $36,145,082, an increase of 4.8% from $34,487,941 for the same period in 2023[239]. Cash Flow and Capital Expenditures - The company had approximately $14.0 million in unrestricted cash and $18.5 million in restricted cash as of September 30, 2024[240]. - Net cash flow provided by operating activities for the nine months ended September 30, 2024, was approximately $21.4 million, attributed to increased occupancy rates[241]. - Cash used in investing activities for the nine months ended September 30, 2024, was approximately $9.8 million, primarily for capital expenditures of $10.1 million related to hotel improvements[243]. - The company expects total capital expenditures for 2024 to be approximately $7.2 million, maintaining a target of 4.0% of gross revenue[246]. - Total capital expenditures related to the renovation of the Philadelphia property are expected to be approximately $11.5 million over fiscal years 2024, 2025, and 2026[249]. Debt and Financing - As of September 30, 2024, the company secured a $35.0 million mortgage on the Hotel Alba, with a fixed interest rate of 8.49% and a maturity date of March 6, 2029[252]. - The company amended the mortgage loan agreement on the DoubleTree by Hilton Philadelphia Airport, extending the maturity to April 29, 2026, requiring interest-only payments at a floating rate of SOFR plus 3.50%, and a principal reduction of $3.0 million[253]. - A $26.25 million mortgage loan was secured for the DoubleTree by Hilton Jacksonville Riverfront, with an additional $9.49 million available for a product improvement plan, maturing on July 8, 2029[254]. - A $5.0 million second mortgage loan was secured on the DeSoto hotel in Savannah, GA, with a fixed interest rate of 7.50% and a maturity date of July 1, 2026[255]. - The company plans to refinance the mortgage on The Georgian Terrace, which matures in June 2025, potentially requiring a reduction of up to $5.25 million in indebtedness[256]. - The mortgage on the DoubleTree Resort by Hilton Hollywood Beach matures in October 2025, with a potential requirement to reduce indebtedness by up to $12.5 million[257]. - As of September 30, 2024, the company was in compliance with all debt covenants, except for a covenant default under the mortgage on the DoubleTree by Hilton Jacksonville Riverfront, which may require a prepayment of approximately $1.2 million[261]. - As of September 30, 2024, the company had approximately $245.4 million of fixed-rate debt with a weighted-average interest rate of 5.32% and $75.9 million of variable-rate debt[280]. - A one percent increase in SOFR and the Prime Rate would impact annual interest incurred and cash flows by approximately $0.6 million based on the variable-rate debt[280]. - The company expects to meet long-term liquidity requirements through various means, including additional issuances of common and preferred shares, secured and unsecured borrowings, and selective disposition of non-core assets[259]. - As of September 30, 2024, cumulative unpaid dividends on outstanding preferred shares were approximately $21.9 million, with expectations for "catch-up" distributions[269].

Financial Data and Key Metrics Changes - For Q3 2024, total revenue was approximately $40.7 million, representing a 3.9% increase over the same quarter in 2023 [19] - Year-to-date total revenue was approximately $137.9 million, reflecting a 4.7% increase over the same period last year [19] - Hotel EBITDA for the quarter was approximately $8.1 million, a 6.8% increase from the same quarter in 2023 [20] - Year-to-date hotel EBITDA was approximately $36.1 million, representing a 4.8% increase over the same period last year [20] - Adjusted FFO for the quarter was a deficit of approximately $350,000, a decrease of approximately $400,000 from the same quarter last year [21] - Year-to-date adjusted FFO was approximately $12.3 million, reflecting a 5% increase over the same period in 2023 [21] Business Line Data and Key Metrics Changes - RevPAR for the Composite portfolio increased 4.1% in Q3 2024, driven by a 7.8% increase in occupancy and a 3.4% decrease in ADR [4] - Year-to-date RevPAR performance represents an increase of 4.6% over the same period in 2023, driven by a 6.9% increase in occupancy and a 2.2% decrease in rate [5] - Hotel Alba in Tampa grew RevPAR by 13.6%, fueled by a 14.5% occupancy gain over the prior year [9] - The Whitehall in Houston grew occupancy by 60.4%, resulting in a 51.9% growth in RevPAR over the prior year [11] Market Data and Key Metrics Changes - The portfolio's occupancy growth was highlighted by slower-to-recover urban markets, indicating stabilization in lodging fundamentals [6] - Preliminary October RevPAR shows a 6.1% improvement over the prior year, driven by continued improvement at urban hotels [38] - Full year 2024 RevPAR for the portfolio is forecasted to range between 102% and 104% of full year 2023 RevPAR [38] Company Strategy and Development Direction - The company is focusing on a repositioning strategy to lifestyle hotels to enhance competitiveness in dynamic markets [37] - A secured loan was executed for the DoubleTree by Hilton Jacksonville Riverfront hotel to fund a product improvement plan [17] - The company plans to undertake a complete renovation of the Jacksonville hotel with an estimated cost of approximately $14.6 million [18] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding operating fundamentals for the balance of the year, with upscale hotels expected to outperform the broader lodging market [38] - The occupancy improvement at urban locations is seen as an encouraging sign of nearing stabilization following an uneven recovery [28] - Despite challenges from major storms, the company expects to recover lost revenues through business interruption insurance [30] Other Important Information - Two major storms impacted operations, with Hurricane Helene causing significant operational challenges and damage to the Tampa asset [8][14] - The company anticipates routine capital expenditures for the replacement and refurbishment of furniture, fixtures, and equipment to be approximately $7.2 million for 2024 [24] Q&A Session Summary Question: Is the portfolio overall back to 2019 performance levels? - Management indicated that there is still room for growth in occupancy, suggesting that the portfolio has not fully returned to 2019 levels [40] Question: Can you explain the hurricane damage impact on earnings? - Management clarified that there will be some impairment at the hotel due to the casualty, but they expect to recover this through business interruption insurance [41][45] Question: What is the rationale behind the second mortgage on the DeSoto? - The second mortgage is directly related to funding an exterior restoration project at the property [49][50]

Revenue Performance - Total revenue for Q2 2024 increased by approximately $1.7 million, or 3.4%, to approximately $50.7 million compared to Q2 2023 revenue of approximately $49.0 million[170]. - Room revenue for Q2 2024 increased by approximately $1.3 million, or 4.0%, to approximately $34.6 million compared to Q2 2023 room revenue of approximately $33.3 million[171]. - RevPAR for Q2 2024 increased by 4.3% to $137.67, driven by a 4.0% increase in occupancy[171]. - Food and beverage revenues for Q2 2024 increased by approximately $0.4 million, or 4.2%, to approximately $9.9 million compared to Q2 2023 revenues of approximately $9.5 million[172]. - Total revenue for the six months ended June 30, 2024, increased by approximately $4.7 million, or 5.1%, to approximately $97.2 million compared to $92.5 million for the same period in 2023[184]. - Room revenue increased by approximately $2.6 million, or 4.3%, to approximately $64.3 million for the six months ended June 30, 2024, compared to $61.7 million for the same period in 2023[185]. - Food and beverage revenues increased by approximately $1.4 million, or 7.7%, to approximately $19.6 million for the six months ended June 30, 2024, compared to $18.2 million for the same period in 2023[186]. Operating Expenses - Hotel operating expenses for Q2 2024 increased by approximately $0.8 million, or 2.4%, to approximately $35.0 million compared to Q2 2023 expenses of approximately $34.2 million[174]. - Room expenses for Q2 2024 increased by approximately $0.4 million, or 6.2%, to approximately $7.4 million compared to Q2 2023 room expenses of approximately $7.0 million[175]. - Food and beverage expenses for the three months ended June 30, 2024, increased by approximately $0.1 million, or 2.4%, to approximately $6.5 million compared to $6.4 million for the same period in 2023[176]. - Expenses from other operating departments for the three months ended June 30, 2024, increased by approximately $0.2 million, or 8.7%, to approximately $2.5 million compared to $2.3 million for the same period in 2023[177]. - Hotel operating expenses increased by approximately $3.6 million, or 5.5%, to approximately $69.2 million for the six months ended June 30, 2024, compared to $65.6 million for the same period in 2023[188]. Interest and Income - Interest expense for the three months ended June 30, 2024, increased by approximately $0.7 million, or 16.6%, to approximately $5.0 million compared to $4.3 million for the same period in 2023[180]. - Interest expense for the six months ended June 30, 2024, increased by approximately $1.5 million, or 17.7%, to approximately $9.9 million compared to $8.4 million for the same period in 2023[195]. - Net income for the six months ended June 30, 2024, was approximately $6.0 million, compared to approximately $6.6 million for the same period in 2023[199]. - Net income for the three months ended June 30, 2024, was $4,664,232, a decrease of 11.3% compared to $5,257,670 for the same period in 2023[206]. - FFO (Funds From Operations) for the three months ended June 30, 2024, was $9,349,904, slightly up from $9,244,823 in 2023, indicating a 1.1% increase[206]. - Adjusted FFO attributable to common stockholders for the three months ended June 30, 2024, was $7,503,096, compared to $7,031,038 in 2023, reflecting a 6.7% increase[206]. - Hotel EBITDA for the three months ended June 30, 2024, was $15,697,679, an increase of 5.8% from $14,842,036 in the same period of 2023[210]. Cash Flow and Capital Expenditures - Cash flow from operating activities for the six months ended June 30, 2024, was approximately $16.7 million, attributed to increased occupancy rates[212]. - Total capital expenditures for 2024 are expected to be approximately $7.0 million, maintaining a historical target of 4.0% of gross revenue[216]. - Cash used in investing activities for the six months ended June 30, 2024, was approximately $5.0 million, primarily for capital improvements[213]. - The company expects to incur approximately $11.5 million in capital expenditures for renovations in Philadelphia, funded through reserve accounts and working capital[219]. Debt and Liquidity - As of June 30, 2024, the company had approximately $18.9 million in unrestricted cash and $18.4 million in restricted cash, ensuring adequate liquidity for operations[221]. - The company secured a $35.0 million mortgage on the Hotel Alba in Tampa, Florida, with a fixed interest rate of 8.49%[222]. - The company amended the mortgage loan agreement on the DoubleTree by Hilton Philadelphia Airport, extending the maturity to April 29, 2026, requiring interest-only payments at a floating rate of SOFR plus 3.50%, and a principal reduction of $3.0 million[223]. - A $26.25 million mortgage loan was secured for the DoubleTree by Hilton Jacksonville Riverfront, with an additional $9.49 million available for a product improvement plan, maturing on July 8, 2029[224][225]. - A $5.0 million second mortgage loan was secured on the DeSoto hotel in Savannah, GA, with a fixed interest rate of 7.50% and a maturity date of July 1, 2026[226]. - As of June 30, 2024, the company was in compliance with all debt covenants except for a covenant default under the mortgage on the DoubleTree by Hilton Philadelphia Airport, for which waivers were obtained[232]. - As of September 30, 2024, the company failed to maintain compliance with financial covenants under the mortgage on the DoubleTree by Hilton Jacksonville Riverfront, potentially requiring a prepayment of approximately $1.2 million[233]. - The company plans to continue investing in hotel properties as opportunities arise, but access to additional capital may be limited due to economic changes in the travel industry post-COVID-19[229]. - The company expects to meet long-term liquidity requirements through various means, including additional issuances of common and preferred shares, secured and unsecured borrowings, and selective disposition of non-core assets[230]. - As of June 30, 2024, cumulative unpaid dividends on outstanding preferred shares were approximately $21.9 million, with future distributions subject to board approval[240]. - The company had approximately $273.4 million of fixed-rate debt as of June 30, 2024, with a weighted-average interest rate of 5.28%[251]. - A one percent increase in SOFR and the Prime Rate would impact annual interest incurred and cash flows by approximately $0.3 million based on the variable-rate debt outstanding[251].

Group 1: Financial Performance - Sotherly Hotels reported a quarterly loss of $0.04 per share, missing the Zacks Consensus Estimate of $0.01, compared to break-even FFO per share a year ago, representing an FFO surprise of -500% [1] - The company posted revenues of $40.7 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 3.10%, and showing an increase from year-ago revenues of $39.18 million [2] - The current consensus FFO estimate for the coming quarter is $0.10 on $44.4 million in revenues, and for the current fiscal year, it is $0.69 on $183.7 million in revenues [7] Group 2: Market Performance - Sotherly Hotels shares have lost about 18.1% since the beginning of the year, while the S&P 500 has gained 25.8% [3] - The company has surpassed consensus FFO estimates two times over the last four quarters [2] Group 3: Future Outlook - The sustainability of the stock's immediate price movement will depend on management's commentary on the earnings call [3] - The estimate revisions trend for Sotherly Hotels is currently mixed, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] - The outlook for the REIT and Equity Trust - Other industry is currently in the top 27% of the Zacks industries, suggesting potential for outperformance [8]

Core Insights - Sotherly Hotels Inc. reported a net loss attributable to common stockholders of approximately $5.6 million for Q3 2024, an increase from a loss of approximately $3.9 million in Q3 2023, reflecting a year-over-year decline in profitability [1][3] - Total revenue for Q3 2024 was approximately $40.7 million, up from approximately $39.2 million in Q3 2023, indicating a positive trend in revenue generation [2][3] - The company experienced a 4.1% increase in RevPAR to $107.02 for Q3 2024, driven by a 7.8% increase in occupancy [2][19] Financial Performance - For the three months ended September 30, 2024, total revenue was $40.7 million compared to $39.2 million for the same period in 2023 [1][2] - Net loss attributable to common stockholders for the nine months ended September 30, 2024, was approximately $3.6 million, a significant increase of 169.2% from a loss of approximately $1.4 million in the same period of 2023 [3] - Hotel EBITDA increased to approximately $8.1 million for Q3 2024, up from approximately $7.6 million in Q3 2023 [3][4] Operational Metrics - The company's composite portfolio achieved a RevPAR of $107.02 for Q3 2024, up from $102.82 in Q3 2023, with occupancy rising to 66.3% from 61.5% [2][19] - Average daily rate (ADR) decreased by 3.4% to $161.37 for Q3 2024, down from $167.10 in Q3 2023 [2][19] - For the nine months ended September 30, 2024, RevPAR increased to $122.71 from $117.89 in the comparable period of 2023 [2][19] Balance Sheet and Liquidity - As of September 30, 2024, the company had approximately $32.5 million in available cash, with $18.5 million reserved for various expenses [5] - The company reported outstanding debt of approximately $321.3 million at a weighted average interest rate of 5.95% [5] Future Outlook - The company updated its 2024 guidance, projecting total revenue between $177.8 million and $180.1 million, with a net loss attributable to common stockholders expected to range from approximately $8.5 million to $7.9 million [8][9] - The updated guidance reflects current market conditions and the impact of refinancing activities and weather-related events [8][9] Recent Developments - The company successfully refinanced the mortgage on its Jacksonville Doubletree location, securing nearly $9.5 million for capital improvements [4] - Hurricane Helene impacted the Hotel Alba in Tampa, but the hotel remained operational and is expected to recover lost revenues through business interruption insurance [4]

Momentum investors typically don't time the market or "buy low and sell high." In other words, they avoid betting on cheap stocks and waiting long for them to recover. Instead, they believe that "buying high and selling higher" is the way to make far more money in lesser time.Everyone likes betting on fast-moving trending stocks, but it isn't easy to determine the right entry point. These stocks often lose momentum when their future growth potential fails to justify their swelled-up valuation. In that phase ...

Momentum investors typically don't time the market or "buy low and sell high." In other words, they avoid betting on cheap stocks and waiting long for them to recover. Instead, they believe that "buying high and selling higher" is the way to make far more money in lesser time. Everyone likes betting on fast-moving trending stocks, but it isn't easy to determine the right entry point. These stocks often lose momentum when their future growth potential fails to justify their swelled-up valuation. In that phas ...

Core Viewpoint - Sotherly Hotels (SOHO) has experienced a downtrend recently, losing 6.4% over the past two weeks, but a hammer chart pattern suggests a potential trend reversal due to increased buying interest and optimism among analysts regarding future earnings [1]. Group 1: Technical Analysis - The formation of a hammer chart pattern indicates a possible bottoming out, suggesting that selling pressure may be exhausting [1]. - A hammer pattern occurs when a stock opens lower, makes a new low, but then closes near or above its opening price, signaling a potential loss of control by bears [2]. - Hammer candles can appear on various timeframes and should be used alongside other bullish indicators for confirmation [2]. Group 2: Fundamental Analysis - There has been a positive trend in earnings estimate revisions for SOHO, with a 7.8% increase in the consensus EPS estimate over the last 30 days, indicating expected better earnings [3]. - SOHO holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which typically outperform the market [3]. - The Zacks Rank serves as a timing indicator, suggesting that SOHO's prospects are improving, reinforcing the potential for a turnaround [3].