Sotherly Hotels Inc. Reports Financial Results for the

WILLIAMSBURG, Va., March 03, 2022 (GLOBE NEWSWIRE) — Sotherly Hotels Inc. (NASDAQ: SOHO), (“Sotherly” or the “Company”), a self-managed and self-administered lodging actual property funding belief (a “REIT”), immediately reported its consolidated outcomes for the fourth quarter and yr ended December 31, 2021. The Company’s outcomes embody the following*:

(*)     Earnings earlier than curiosity, taxes, depreciation and amortization (“EBITDA”), resort EBITDA, funds from operations (“FFO”) accessible to widespread stockholders and unitholders, adjusted FFO accessible to widespread stockholders and unitholders, FFO per widespread share and unit and adjusted FFO per widespread share and unit are non-GAAP monetary measures. See additional dialogue of those non-GAAP measures, together with definitions associated thereto, and reconciliations to internet earnings (loss) later on this press launch. The Company is the sole normal companion of Sotherly Hotels LP, a Delaware restricted partnership (the “Operating Partnership”), and all references on this launch to the “Company”, “Sotherly”, “we”, “us” and “our” discuss with Sotherly Hotels Inc., its Operating Partnership and its subsidiaries and predecessors, except the context in any other case requires or it’s in any other case indicated.

HIGHLIGHTS

• RevPAR. While room income per accessible room (“RevPAR”) for the Company’s composite portfolio, which incorporates the rooms collaborating in our rental applications at the Hyde Resort & Residences and the Hyde Beach House Resort & Residences, elevated to $85.80 for the three months ended December 31, 2021, from $38.54 in the comparable interval in 2020, it was 16.1% beneath RevPAR of $102.27 for the comparable interval in 2019.  Changes in RevPAR had been pushed by a rise in the common every day charge (“ADR”) to $162.00 for the three months ended December 31, 2021, from $123.89 for the comparable interval in 2020.  ADR for the three months ended December 31, 2021, was 4.1% larger than ADR for the comparable interval in 2019.  RevPAR for the three months ended December 31, 2021, was additionally pushed by a rise in occupancy to 53.0% from 31.1% in the comparable 2020 interval.  However, occupancy for the three months ended December 31, 2021, was nonetheless 12.7% beneath the 65.7% occupancy achieved throughout the comparable 2019 interval.
• Revenue. Total income elevated to roughly $35.1 million for the three months ended December 31, 2021 from roughly $14.6 million throughout the comparable interval in 2020.  Total income for the three months ended December 31, 2021 was 20.8% beneath whole income of roughly $44.3 million throughout the comparable 2019 interval.
• Common Dividends. As authorised by its Board of Directors, the Company has suspended its common quarterly money dividend to be able to protect liquidity. Accordingly, the Company didn’t pay a dividend on its widespread inventory and customary items for the quarter ended December 31, 2021. The Board of Directors will proceed to watch the scenario and assess future quarterly widespread dividend declarations. Per the phrases of the Company’s most well-liked inventory, the Company can’t make any widespread dividend funds except full cumulative distributions have been declared and paid for previous distribution durations for every sequence of most well-liked inventory.
• Hotel EBITDA. The Company elevated manufacturing of Hotel EBITDA to roughly $8.1 million for the three months ended December 31, 2021, from a deficit of roughly $1.9 million throughout the comparable interval in 2020.  Hotel EBITDA for the three months ended December 31, 2021, was roughly $1.2 million beneath the Hotel EBITDA generated in the comparable 2019 interval.
• Adjusted FFO attributable to widespread stockholders and unitholders. For the three-month interval ending December 31, 2021, adjusted FFO attributable to widespread stockholders and unitholders improved 85.4%, or roughly $8.7 million, over the three months ended December 31, 2020, from a deficit of roughly $10.2 million to a deficit of roughly $1.5 million. For the twelve-month interval ending December 31, 2021, adjusted FFO accessible to widespread stockholders and unitholders improved 85.8% or roughly $30.4 million over the twelve months ended December 31, 2020, from a deficit of roughly $35.5 million to a deficit of roughly $5.0 million.

Dave Folsom, President and Chief Executive Officer of Sotherly Hotels Inc., commented, “Fourth quarter performance for our portfolio was tempered by renewed concerns over the Delta and Omicron COVID variants, influencing hotel demand in our markets.  Even with the overhang from COVID, total revenues in the quarter exceeded the same period in the prior year by 140.5%. Hotel EBITDA increased approximately $10 million over Q4 2020 and only trailed Q4 2019 Hotel EBITDA results by 12.7%.  As we exited the fourth quarter of 2021 and moved into the new year, we have seen positive trends resume in the lodging markets as booking trends, along with rising average daily rates, provide for a positive outlook for 2022.  Most markets where we operate have seen the elimination of most COVID restrictions, which bodes well for travel in 2022, as pent-up leisure demand and returning group and business travel is evident in forward bookings.”

ESTIMATED MONTHLY CASH USE

The Company estimates the common month-to-month money use throughout its portfolio for the first quarter to be roughly $0.45 million to $0.65 million based mostly on the following assumptions:

• Average hotel-level month-to-month constructive money circulation of roughly $2.70 million to $2.90 million;
• Monthly corporate-level G&A money use of $0.50 million;
• Capital expenditures of roughly $0.50 million per 30 days; and
• Corporate finance-related month-to-month money use of $2.35 million per 30 days, which incorporates principal and curiosity funds on the Company’s excellent mortgage debt.

Balance Sheet/Liquidity

As of December 31, 2021, the Company had roughly $25.6 million of accessible money and money equivalents, of which roughly $12.4 million was reserved for actual property taxes, insurance, capital enhancements and sure different bills or in any other case restricted. The Company had principal balances of roughly $380.2 million in excellent debt, together with mortgage and secured and unsecured principal balances, at a weighted common rate of interest of roughly 4.69%.

2022 Outlook

For the first quarter of 2022, the Company expects Composite RevPAR to be down roughly 20% in comparison with the first quarter 2019, a lot improved from the first and second quarters of 2021. Due to the uncertainties associated to the COVID-19 pandemic and its influence on journey, the Company is unable to supply extra steerage for 2022.

Portfolio Update

On November 30, 2021, Raleigh Hotel Associates, LLC, a Delaware restricted legal responsibility firm and an affiliate of the Company, entered into an actual property sale settlement to promote the DoubleTree by Hilton Raleigh-Brownstone University resort positioned in Raleigh, North Carolina to CS Acquisition Vehicle, LLC, a Delaware restricted legal responsibility firm, for a purchase order value of $42.0 million.  The Company intends to make use of any internet money proceeds from the sale of the resort to repay the current mortgage on the property, repay a portion of the secured notes with Kemmons Wilson, to make any required distribution on the Company’s most well-liked inventory associated to sustaining the Company’s REIT standing, and for normal company functions. The closing of the sale of the resort is topic to numerous customary closing situations, together with the passable completion of a diligence evaluate of the resort, the accuracy of representations and warranties by means of closing, and situations associated to the termination of resort agreements and leases. On February 28, 2022, we entered into an modification to the actual property sale settlement whereby: (i) the due diligence interval expired efficient upon the execution of the modification; (ii) the purchaser’s earnest cash deposit in the quantity of $800,000 in money was required to be deposited with the escrow agent no later than March 2, 2022; and (iii) the deadline is ready for May 2, 2022, topic to extension by the purchaser for as much as 30 days in trade for an extra money deposit of $800,000.

On December 13, 2021, Louisville Hotel Associates, LLC, a Delaware restricted legal responsibility firm and an affiliate of the Company, entered into a purchase order and sale settlement to promote the Sheraton Louisville Riverside resort positioned in Jeffersonville, Indiana to Riverside Hotel, LLC, an Indiana restricted legal responsibility firm, for a purchase order value of $11.5 million, together with the assumption by the Buyer of the mortgage mortgage on the resort. On February 10, 2022, the Company closed the sale of the Sheraton Louisville Riverside resort. There had been no internet proceeds from the sale.

Earnings Call/Webcast

The Company will conduct its fourth quarter 2021 convention name for traders and different events at 10:00 a.m. Eastern Time on Thursday, March 3, 2022. The convention name shall be accessible by phone and thru the Internet. Interested people are invited to hearken to the name by phone at 844-200-6205 (United States) or +1 929-526-1599 (International). To take part on the webcast, go browsing to www.sotherlyhotels.com at the least quarter-hour earlier than the name to obtain the crucial software program. For these unable to hearken to the name reside, a taped rebroadcast shall be accessible starting one hour after completion of the reside name on March 3, 2022 by means of March 31, 2023. To entry the rebroadcast, dial 866-813-9403 or +44 204-525-0658 and enter entry code 510051.

About Sotherly Hotels Inc.

Sotherly Hotels Inc. is a self-managed and self-administered lodging REIT centered on the acquisition, renovation, upbranding and repositioning of upscale to upper-upscale full-service accommodations in the Southern United States. Sotherly can also opportunistically purchase accommodations all through the United States. Currently, the Company’s portfolio consists of investments in eleven resort properties, comprising 2,976 rooms, in addition to pursuits in two condominium accommodations and their related rental applications. The Company owns accommodations that function beneath the Hilton Worldwide and Hyatt Hotels Corporation manufacturers, in addition to unbiased accommodations. Sotherly Hotels Inc. was organized in 2004 and is headquartered in Williamsburg, Virginia. For extra data, please go to www.sotherlyhotels.com.

Contact at the Company:

Mack Sims
Vice President – Operations & Investor Relations
Sotherly Hotels Inc.
306 South Henry Street, Suite 100
Williamsburg, Virginia 23185
757.229.5648

Forward-Looking Statements

This information launch consists of “forward-looking statements” inside the which means of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as such could contain recognized and unknown dangers, uncertainties and different components which can trigger our precise outcomes, efficiency or achievements to be materially totally different from future outcomes, efficiency or achievements expressed or implied by such forward-looking statements. Forward-looking statements, that are based mostly on sure assumptions and describe our present methods, expectations, and future plans are typically recognized by our use of phrases, comparable to “intend,” “plan,” “may,” “should,” “will,” “project,” “estimate,” “anticipate,” “believe,” “expect,” “continue,” “potential,” “opportunity,” and related expressions, whether or not in the detrimental or affirmative, however the absence of those phrases doesn’t essentially imply {that a} assertion is just not forward-looking. All statements concerning our anticipated monetary place, business and financing plans are forward-looking statements.

Currently, considered one of the most important components that might trigger precise outcomes to vary materially from the Company’s forward-looking statements is the adversarial impact of the novel coronavirus (COVID-19) on the Company’s business, monetary efficiency and situation, working outcomes and money flows, the actual property market and the hospitality trade particularly, and the world economy and monetary markets. The significance, extent and period of the impacts attributable to the COVID-19 outbreak on the Company will rely upon future developments, that are unsure and can’t be predicted with confidence presently, together with the scope, severity and period of the pandemic, the extent and effectiveness of the actions mandated and brought to comprise the pandemic or mitigate its influence, the Company’s capacity to barter forbearance and/or modifications agreements with its lenders on acceptable phrases, or in any respect, and the direct and oblique financial results of the pandemic and containment measures, amongst others. Moreover, traders are cautioned to interpret a lot of the dangers recognized beneath the part titled “Risk Factors” in the Company’s Annual Report on Form 10-Okay for the fiscal yr ended December 31, 2020, as being heightened because of the ongoing and quite a few adversarial impacts of COVID-19. Such extra components embody, however usually are not restricted to, the capacity of the Company to successfully purchase and get rid of properties; the capacity of the Company to implement its working technique; adjustments on the whole political, financial and aggressive situations and particular market situations; lowered business and leisure journey because of travel-related well being issues, together with the widespread outbreak of COVID-19 or every other infectious or contagious ailments in the U.S. or overseas; adversarial adjustments in the actual property and actual property capital markets; financing dangers; litigation dangers; regulatory proceedings or inquiries; and adjustments in legal guidelines or laws or interpretations of present legal guidelines and laws that influence the Company’s business, property or classification as a REIT. Although the Company believes that the assumptions underlying the forward-looking statements contained herein are affordable, any of the assumptions could possibly be inaccurate, and due to this fact there will be no assurance that such statements included on this report will show to be correct. In gentle of the vital uncertainties inherent in the forward-looking statements included herein, the inclusion of such data shouldn’t be considered a illustration by the Company or every other individual that the outcomes or situations described in such statements or the aims and plans of the Company shall be achieved. Additional components which may have a fabric adversarial impact on our operations and future prospects embody, however usually are not restricted to: nationwide and native financial and business situations that have an effect on occupancy charges and revenues at our accommodations and the demand for resort services and products; dangers related to the resort trade, together with competitors and new provide of resort rooms, will increase in wages, vitality prices and different working prices; dangers related to the degree of our indebtedness and our capacity to satisfy covenants in our debt agreements, together with our lately negotiated forbearance agreements and mortgage modifications and, as crucial, to refinance or search an extension of the maturity of such indebtedness or additional modification of such debt agreements; dangers related to adversarial climate situations, together with hurricanes; impacts on the journey trade from pandemic ailments, together with COVID-19; the availability and phrases of financing and capital and the normal volatility of the securities markets; administration and efficiency of our accommodations; dangers related to sustaining our system of inner controls; dangers related to the conflicts of curiosity of the Company’s officers and administrators; dangers related to redevelopment and repositioning initiatives, together with delays and price overruns; provide and demand for resort rooms in our present and proposed market areas; dangers related to our capacity to keep up our franchise agreements with our third celebration franchisors; our capacity to amass extra properties and the threat that potential acquisitions could not carry out in accordance with expectations; our capacity to efficiently develop into new markets; legislative/regulatory adjustments, together with adjustments to legal guidelines governing taxation of actual property funding trusts (“REITs”); the Company’s capacity to keep up its qualification as a REIT; and our capacity to keep up enough insurance protection.

Additional components that might trigger precise outcomes to differ from our forward-looking statements are set forth beneath the part titled “Risk Factors” in our Annual Report on Form 10-Okay, on this report and subsequent studies filed with the Securities and Exchange Commission.   The Company undertakes no obligation to and doesn’t intend to publicly replace or revise any forward-looking assertion, whether or not because of new data, future occasions or in any other case. Although the Company believes its present expectations to be based mostly upon affordable assumptions, it can provide no assurance that its expectations shall be attained or that precise outcomes won’t differ materially.

Financial Tables Follow…

SOTHERLY HOTELS INC.
CONSOLIDATED BALANCE SHEETS

SOTHERLY HOTELS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

SOTHERLY HOTELS INC.
KEY OPERATING METRICS
(unaudited)

The following tables illustrate the key working metrics for the three and twelve months ended December 31, 2021, 2020 and 2019, respectively, for the Company’s twelve wholly-owned properties (“actual” portfolio metrics). Accordingly, the precise information doesn’t embody the collaborating condominium resort rooms of the Hyde Resort & Residences and the Hyde Beach House Resort & Residences. The composite portfolio metrics signify the Company’s twelve wholly-owned properties and the collaborating condominium resort rooms at the Hyde Resort & Residences and the Hyde Beach House Resort & Residences throughout the three and twelve months ended December 31, 2021 and the corresponding durations in 2020 and 2019.  

SOTHERLY HOTELS INC.
SUPPLEMENTAL DATA
(unaudited)

The following tables illustrate the key working metrics for the three and twelve months ended December 31, 2021, 2020 and 2019, respectively, for every of the Company’s wholly-owned properties throughout every respective reporting interval, no matter possession proportion throughout any interval.

Occupancy

ADR

RevPAR

SOTHERLY HOTELS INC.
RECONCILIATION OF NET LOSS TO
FFO, Adjusted FFO, EBITDA and Hotel EBITDA
(unaudited)

Non-GAAP Financial Measures

The Company considers the non-GAAP monetary measures of FFO (together with FFO per share), Adjusted FFO, EBITDA and resort EBITDA to be key supplemental measures of the Company’s efficiency and could possibly be thought of together with, not options to, internet earnings (loss) as a measure of the Company’s efficiency. These measures don’t signify money generated from working actions decided by typically accepted accounting ideas (“GAAP”) or quantities accessible for the Company’s discretionary use and shouldn’t be thought of different measures of internet earnings, money flows from operations or every other working efficiency measure prescribed by GAAP.  

FFO

Industry analysts and traders use Funds from Operations (“FFO”), as a supplemental working efficiency measure of an fairness REIT. FFO is calculated in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”). FFO, as outlined by NAREIT, represents internet earnings or loss decided in accordance with GAAP, excluding extraordinary gadgets as outlined beneath GAAP and good points or losses from gross sales of beforehand depreciated working actual property property, plus sure non-cash gadgets comparable to actual property asset depreciation and amortization or impairment, inventory compensation prices and after adjustment for any noncontrolling curiosity from unconsolidated partnerships and joint ventures. Historical value accounting for actual property property in accordance with GAAP implicitly assumes that the worth of actual property property diminishes predictably over time. Since actual property values as an alternative have traditionally risen or fallen with market situations, many traders and analysts have thought of the presentation of working outcomes for actual property firms that use historic value accounting to be inadequate by itself.

The Company considers FFO to be a helpful measure of adjusted internet earnings (loss) for reviewing comparative working and monetary efficiency as a result of we imagine FFO is most immediately similar to internet earnings (loss), which stays the major measure of efficiency, as a result of by excluding good points or losses associated to gross sales of beforehand depreciated working actual property property and excluding actual property asset depreciation and amortization, FFO assists in evaluating the working efficiency of an organization’s actual property between durations or as in comparison with totally different firms. Although FFO is meant to be a REIT trade commonplace, different firms could not calculate FFO in the similar method as we do, and traders shouldn’t assume that FFO as reported by us is similar to FFO as reported by different REITs.

Adjusted FFO

The Company presents adjusted FFO, together with adjusted FFO per share and unit, which adjusts for sure extra gadgets that aren’t in NAREIT’s definition of FFO together with adjustments in deferred earnings taxes, any unrealized achieve (loss) on hedging devices or warrant spinoff, mortgage impairment losses, losses on early extinguishment of debt, good points on extinguishment of most well-liked inventory, aborted providing prices, mortgage modification charges, franchise termination prices, prices related to the departure of government officers, litigation settlement, over-assessed actual property taxes on enchantment, administration contract termination prices, working asset depreciation and amortization, change in management good points or losses, ESOP and inventory compensation bills and acquisition transaction prices. We exclude these things as we imagine it permits for significant comparisons between durations and amongst different REITs and is extra indicative than FFO of the on-going efficiency of our business and property. Our calculation of adjusted FFO could also be totally different from related measures calculated by different REITs.

EBITDA

The Company believes that excluding the impact of non-operating bills and non-cash costs, and the portion of these gadgets associated to unconsolidated entities, all of that are additionally based mostly on historic value accounting and could also be of restricted significance in evaluating present efficiency, may help get rid of the accounting results of depreciation and financing choices and facilitate comparisons of core working profitability between durations and between REITs, though EBITDA additionally doesn’t signify an quantity that accrued on to shareholders.

Hotel EBITDA

The Company defines resort EBITDA as internet earnings or loss excluding: (1) curiosity expense, (2) curiosity earnings, (3) earnings tax provision or profit, (4) depreciation and amortization, (5) impairment of long-lived property or investments, (6) good points and losses on disposal of property, (7) good points and losses on involuntary conversions of property, (8) unrealized good points and losses on spinoff devices not included in different complete earnings, (9) loss on early debt extinguishment, (10) achieve on train of improvement proper, (11) company normal and administrative expense, and (12) different working income not associated to our wholly-owned portfolio. We imagine this gives a extra full understanding of the working outcomes over which our wholly-owned accommodations and its operators have direct management. We imagine resort EBITDA gives traders with supplemental data on the on-going operational efficiency of our accommodations and the effectiveness of third-party administration firms working our business on a property-level foundation. The Company’s calculation of resort EBITDA could also be totally different from related measures calculated by different REITs.