Workflow
Sotherly Hotels(SOHO) - 2024 Q3 - Quarterly Report
SOHOSotherly Hotels(SOHO)2024-11-18 21:57
Transcript

Revenue Performance - Total revenue for Q3 2024 increased by approximately 1.5million,or3.91.5 million, or 3.9%, to approximately 40.7 million compared to Q3 2023 revenue of approximately 39.2million[199].−RoomrevenueforQ32024increasedbyapproximately39.2 million[199]. - Room revenue for Q3 2024 increased by approximately 0.9 million, or 3.4%, to approximately 27.2millioncomparedtoQ32023roomrevenueofapproximately27.2 million compared to Q3 2023 room revenue of approximately 26.3 million[201]. - Food and beverage revenues increased by approximately 0.2million,or3.10.2 million, or 3.1%, to approximately 7.7 million for Q3 2024 compared to 7.5millioninQ32023[202].−Revenuefromotheroperatingdepartmentsincreasedbyapproximately7.5 million in Q3 2023[202]. - Revenue from other operating departments increased by approximately 0.4 million, or 7.0%, to approximately 5.8millionforQ32024comparedto5.8 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 6.2million,or4.76.2 million, or 4.7%, to approximately 137.9 million compared to 131.7millionforthesameperiodin2023[214].−Roomrevenueincreasedapproximately131.7 million for the same period in 2023[214]. - Room revenue increased approximately 3.6 million, or 4.1%, to approximately 91.5millionfortheninemonthsendedSeptember30,2024,comparedto91.5 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 1.6million,or6.41.6 million, or 6.4%, to approximately 27.4 million for the nine months ended September 30, 2024, compared to 25.8millionforthesameperiodin2023[216].OccupancyandRevPAR−RevPARforQ32024increasedby4.125.8 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 107.02in2024,drivenbya4.8107.02 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 102.82inQ32023[198].Expenses−Hoteloperatingexpensesincreasedbyapproximately102.82 in Q3 2023[198]. Expenses - Hotel operating expenses increased by approximately 1.0 million, or 3.2%, to approximately 32.6millionforQ32024comparedto32.6 million for Q3 2024 compared to 31.6 million in Q3 2023[204]. - Room expenses for Q3 2024 increased by approximately 0.2million,or2.50.2 million, or 2.5%, to approximately 6.6 million compared to 6.4millioninQ32023[205].−FoodandbeverageexpensesforthethreemonthsendedSeptember30,2024,increasedapproximately6.4 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 5.8millioncomparedto5.8 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 0.1million,or5.50.1 million, or 5.5%, to approximately 2.3 million compared to 2.2millionforthesameperiodin2023[207].−CorporategeneralandadministrativeexpensesforthethreemonthsendedSeptember30,2024,decreasedapproximately2.2 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 1.5millioncomparedto1.5 million compared to 1.7 million for the same period in 2023[208]. - Hotel operating expenses increased approximately 4.6million,or4.74.6 million, or 4.7%, to approximately 101.8 million for the nine months ended September 30, 2024, compared to 97.2millionforthesameperiodin2023[218].NetLossandFinancialMetrics−NetlossforthethreemonthsendedSeptember30,2024,wasapproximately97.2 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 2.1millionforthesameperiodin2023[213].−ForthethreemonthsendedSeptember30,2024,thenetlosswas2.1 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 2,065,826forthesameperiodin2023,indicatinganincreaseinlossesofapproximately78.52,065,826 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 2,079,893inthesameperiodof2023[235].−EBITDAforthethreemonthsendedSeptember30,2024,was2,079,893 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 6,538,547forthesameperiodin2023[239].−HotelEBITDAfortheninemonthsendedSeptember30,2024,was6,538,547 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 34,487,941forthesameperiodin2023[239].CashFlowandCapitalExpenditures−Thecompanyhadapproximately34,487,941 for the same period in 2023[239]. Cash Flow and Capital Expenditures - The company had approximately 14.0 million in unrestricted cash and 18.5millioninrestrictedcashasofSeptember30,2024[240].−NetcashflowprovidedbyoperatingactivitiesfortheninemonthsendedSeptember30,2024,wasapproximately18.5 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 9.8million,primarilyforcapitalexpendituresof9.8 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 7.2million,maintainingatargetof4.07.2 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 35.0millionmortgageontheHotelAlba,withafixedinterestrateof8.4935.0 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 26.25millionmortgageloanwassecuredfortheDoubleTreebyHiltonJacksonvilleRiverfront,withanadditional26.25 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 5.0millionsecondmortgageloanwassecuredontheDeSotohotelinSavannah,GA,withafixedinterestrateof7.505.0 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 12.5million[257].−AsofSeptember30,2024,thecompanywasincompliancewithalldebtcovenants,exceptforacovenantdefaultunderthemortgageontheDoubleTreebyHiltonJacksonvilleRiverfront,whichmayrequireaprepaymentofapproximately12.5 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 245.4millionoffixed−ratedebtwithaweighted−averageinterestrateof5.32245.4 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 0.6millionbasedonthevariable−ratedebt[280].−Thecompanyexpectstomeetlong−termliquidityrequirementsthroughvariousmeans,includingadditionalissuancesofcommonandpreferredshares,securedandunsecuredborrowings,andselectivedispositionofnon−coreassets[259].−AsofSeptember30,2024,cumulativeunpaiddividendsonoutstandingpreferredshareswereapproximately0.6 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].