Sotherly Hotels(US:SOHO)2024-11-12 14:37Revenue 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].