Sotherly Hotels(US:SOHO)2024-11-18 21:57Revenue 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].