Sotherly Hotels Inc. Reports Financial Results For The

WILLIAMSBURG, Va., Nov. 10, 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”), right this moment reported its consolidated outcomes for the third quarter ended September 30, 2022. The Company’s outcomes embrace the next*:

(*)         Earnings earlier than curiosity, taxes, depreciation and amortization (“EBITDA”), resort EBITDA, funds from operations (“FFO”) attributable to frequent stockholders and unitholders, adjusted FFO attributable to frequent stockholders and unitholders, FFO per frequent share and unit and adjusted FFO per frequent 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 revenue (loss) later on this press launch. The Company is the only real normal accomplice 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” confer 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. Room income per out there room (“RevPAR”) for the Company’s composite portfolio, which incorporates the rooms taking part in our rental applications on the Hyde Resort & Residences and the Hyde Beach House Resort & Residences, elevated to $104.19 for the three months ended September 30, 2022, from $90.16 within the comparable interval in 2021 and was 4.1% above RevPAR of $100.06 for the comparable interval in 2019. Changes in RevPAR have been pushed by a rise within the common day by day fee (“ADR”) to $168.03 for the three months ended September 30, 2022, from $160.13 for the comparable interval in 2021 and by a rise in occupancy to 62.0% from 56.3% within the comparable 2021 interval. However, whereas ADR for the three months ended September 30, 2022, was 15.5% increased than ADR for the comparable interval in 2019, occupancy for the three months ended September 30, 2022, was nonetheless 6.8% beneath the 68.8% occupancy achieved throughout the comparable 2019 interval.
• Revenue. Total income elevated to roughly $39.2 million for the three months ended September 30, 2022 from roughly $35.5 million throughout the comparable interval in 2021. Total income for the three months ended September 30, 2022 was 7.8% beneath complete income of roughly $42.5 million throughout the comparable 2019 interval.
• Hotel EBITDA. The Company elevated manufacturing of Hotel EBITDA to roughly $9.8 million for the three months ended September 30, 2022, from roughly $8.9 million throughout the comparable interval in 2021. Hotel EBITDA for the three months ended September 30, 2022, was roughly $0.9 million above the Hotel EBITDA generated within the comparable 2019 interval. For the nine-month interval ending September 30, 2022, Hotel EBITDA elevated 51.7% or roughly $11.8 million over the 9 months ended September 30, 2021. Hotel EBITDA for the 9 months ended September 30, 2022, was roughly $3.1 million beneath the roughly $37.7 million Hotel EBITDA produced throughout the comparable 2019 interval.
• Adjusted FFO attributable to frequent stockholders and unitholders. For the three-month interval ending September 30, 2022, adjusted FFO attributable to frequent stockholders and unitholders elevated 20,450.1%, or roughly $2.4 million, over the three months ended September 30, 2021, from roughly ($0.01) million to roughly $2.4 million. For the nine-month interval ending September 30, 2022, adjusted FFO attributable to frequent stockholders and unitholders elevated 376.4% or roughly $13.4 million over the 9 months ended September 30, 2021.
• Common Dividends. As authorised by its Board of Directors, the Company has suspended its common quarterly money dividend as a way to protect liquidity. Accordingly, the Company didn’t pay a dividend on its frequent inventory and customary items for the quarter ended September 30, 2022. The Board of Directors will proceed to observe the scenario and assess future quarterly frequent dividend declarations. Per the phrases of the Company’s most popular inventory, the Company can’t make any frequent dividend funds except full cumulative distributions have been declared and paid for previous distribution intervals for every collection of most popular inventory.

Dave Folsom, President and Chief Executive Officer of Sotherly Hotels Inc., commented, “The ongoing recovery in the lodging industry helped propel our portfolio’s third quarter results, which saw hotel EBITDA increase 10.0% over the third quarter of both 2021 and 2019. The Company’s Adjusted FFO of $0.12/share exceeded Adjusted FFO in the third quarter of 2019 by 71.0%. We continued to witness the incremental return of group demand and transient business travel at our hotels, a trend that we see continuing into the fourth quarter and into 2023. ADR continues to be a significant driver in our portfolio’s results. Third quarter ADR was up approximately 11.0% from 2019 and was the highest ADR we have seen in the quarter in the Company’s history. Lastly, we were spared any negative results from Hurricane Ian in September, as our portfolio experienced no physical damage and only nominal revenue impact from the storm.”

Estimated Change In Cash

The Company estimates the money used throughout its portfolio for the fourth quarter to be not more than $0.60 million based mostly on the next assumptions:

• Hotel-level constructive money flows of roughly $10.00 million to $10.25 million;
• Corporate-level G&A money use of $1.55 million;
• Capital expenditures of roughly $2.40 million to $2.65 million; and
• Scheduled mixture debt service of roughly $6.30 million.

Balance Sheet/Liquidity

As of September 30, 2022, the Company had roughly $30.0 million of accessible money and money equivalents, of which roughly $7.0 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, internet of roughly $330.3 million in excellent debt, together with mortgage and unsecured principal balances, at a weighted common rate of interest of roughly 4.88%.

2022 Outlook

The desk beneath displays the Company’s projections, inside a spread, of assorted monetary measures for 2022, in 1000’s of {dollars}, besides per share and RevPAR knowledge:

Earnings Call/Webcast

The Company will conduct its third quarter 2022 convention name for buyers and different events at 10:00 a.m. Eastern Time on Thursday, November 10, 2022. The convention name shall be accessible by phone and thru the Internet. Interested people are invited to take heed to the decision by phone at 844-200-6205 (United States) or +1 929-526-1599 (International) and enter entry code 315887. To take part on the webcast, go surfing to www.sotherlyhotels.com no less than quarter-hour earlier than the decision to obtain the mandatory software program. For these unable to take heed to the decision dwell, a taped rebroadcast shall be out there starting one hour after completion of the dwell name on November 10, 2022 by November 22, 2022. To entry the rebroadcast, dial 866-813-9403 or +44 204-525-0658 and enter entry code 084313.

About Sotherly Hotels Inc.

Sotherly Hotels Inc. is a self-managed and self-administered lodging REIT targeted on the acquisition, renovation, upbranding and repositioning of upscale to upper-upscale full-service accommodations within the Southern United States. Sotherly might also opportunistically purchase accommodations all through the United States. Currently, the Company’s portfolio consists of investments in ten resort properties, comprising 2,786 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 impartial accommodations. Sotherly Hotels Inc. was organized in 2004 and is headquartered in Williamsburg, Virginia. For extra data, please go to www.sotherlyhotels.com.

Forward-Looking Statements

This information launch consists of “forward-looking statements” inside the that 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 might contain identified 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 usually recognized by our use of phrases, reminiscent of “intend,” “plan,” “may,” “should,” “will,” “project,” “estimate,” “anticipate,” “believe,” “expect,” “continue,” “potential,” “opportunity,” and comparable expressions, whether or not within the unfavourable or affirmative, however the absence of those phrases doesn’t essentially imply {that a} assertion shouldn’t be forward-looking. All statements relating to our anticipated monetary place, business and financing plans are forward-looking statements.

Factors which may have a cloth opposed impact on the Company’s future operations, outcomes, efficiency and prospects, embrace, however are usually not restricted to: nationwide and native financial and business circumstances that have an effect on occupancy charges and revenues at our accommodations and the demand for resort services; dangers related to the resort business, together with competitors and new provide of resort rooms, will increase in wages, vitality prices and different working prices; dangers related to the extent of our indebtedness and our skill to fulfill covenants in our debt agreements, together with our just lately negotiated forbearance agreements and mortgage modifications and, as vital, to refinance or search an extension of the maturity of such indebtedness or additional modification of such debt agreements; dangers related to opposed climate circumstances, together with hurricanes; impacts on the journey business from pandemic illnesses, together with COVID-19; the supply and phrases of financing and capital and the final 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 value overruns; provide and demand for resort rooms in our present and proposed market areas; dangers related to our skill to keep up our franchise agreements with our third occasion franchisors; our skill to accumulate further properties and the chance that potential acquisitions might not carry out in accordance with expectations; our skill 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 skill to keep up its qualification as a REIT; and our skill to keep up ample insurance protection. Although the Company believes that the assumptions underlying the forward-looking statements contained herein are cheap, any of the assumptions might be inaccurate, and due to this fact there could be no assurance that such statements included on this report will show to be correct. In mild of the numerous uncertainties inherent within the forward-looking statements included herein, the inclusion of such data shouldn’t be thought to be a illustration by the Company or every other individual that the outcomes or circumstances described in such statements or the goals and plans of the Company shall be achieved.

Additional components that might trigger precise outcomes to fluctuate 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 cheap 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 important thing working metrics for the three and 9 months ended September 30, 2022, 2021 and 2019, respectively, for the Company’s wholly-owned properties (“actual” portfolio metrics), accordingly, the precise knowledge doesn’t embrace the taking part condominium resort rooms of the Hyde Resort & Residences and the Hyde Beach House Resort & Residences. The ten wholly-owned properties within the portfolio that have been beneath the Company’s management throughout the three and 9 months ended September 30, 2022 and the corresponding intervals in 2021 and 2019 are thought of same-store properties (“same-store” portfolio metrics). Accordingly, the same-store knowledge doesn’t replicate the performances of the Sheraton Louisville Riverside which was bought in February 2022, or the DoubleTree by Hilton Raleigh-Brownstone University which was bought in June 2022. The composite portfolio metrics symbolize the Company’s wholly-owned properties and the taking part condominium resort rooms on the Hyde Resort & Residences and the Hyde Beach House Resort & Residences, throughout the three and 9 months ended September 30, 2022 and the corresponding intervals in 2021 and 2019. The same-store (composite) portfolio metrics consists of all properties with the exceptions of the Sheraton Louisville Riverside, DoubleTree by Hilton Raleigh-Brownstone University and the Hyde Beach House Resort & Residences, throughout the three and 9 months ended September 30, 2022 and the corresponding intervals in 2021 and 2019.

SOTHERLY HOTELS INC.
SUPPLEMENTAL DATA
(unaudited)

The following tables illustrate the important thing working metrics for the three and 9 months ended September 30, 2022, 2021 and 2019, respectively, for every of the Company’s wholly-owned properties throughout every respective reporting interval, regardless of possession proportion throughout any interval.

Occupancy

ADR

RevPAR

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

Tables beneath are mirrored in 1000’s of {dollars}:

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 might be thought of together with, not alternate options to, internet revenue (loss) as a measure of the Company’s efficiency. These measures don’t symbolize money generated from working actions decided by usually accepted accounting rules (“GAAP”) or quantities out there for the Company’s discretionary use and shouldn’t be thought of different measures of internet revenue, money flows from operations or every other working efficiency measure prescribed by GAAP.

FFO

Industry analysts and buyers 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 revenue or loss decided in accordance with GAAP, excluding extraordinary objects as outlined beneath GAAP and beneficial properties or losses from gross sales of beforehand depreciated working actual property belongings, beneficial properties or losses from involuntary conversions of belongings, plus sure non-cash objects reminiscent of 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 price accounting for actual property belongings in accordance with GAAP implicitly assumes that the worth of actual property belongings diminishes predictably over time. Since actual property values as an alternative have traditionally risen or fallen with market circumstances, many buyers and analysts have thought of the presentation of working outcomes for actual property firms that use historic price accounting to be inadequate by itself.

The Company considers FFO to be a helpful measure of adjusted internet revenue (loss) for reviewing comparative working and monetary efficiency as a result of we consider FFO is most straight akin to internet revenue (loss), which stays the first measure of efficiency, as a result of by excluding beneficial properties or losses associated to gross sales of beforehand depreciated working actual property belongings and excluding actual property asset depreciation and amortization, FFO assists in evaluating the working efficiency of an organization’s actual property between intervals or as in comparison with totally different firms. Although FFO is meant to be a REIT business customary, different firms might not calculate FFO in the identical method as we do, and buyers mustn’t assume that FFO as reported by us is akin 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 further objects that aren’t in NAREIT’s definition of FFO together with adjustments in deferred revenue taxes, any unrealized acquire (loss) on hedging devices or warrant by-product, mortgage impairment losses, losses on early extinguishment of debt, beneficial properties on extinguishment of most popular inventory, aborted providing prices, mortgage modification charges, franchise termination prices, prices related to the departure of govt officers, litigation settlement, over-assessed actual property taxes on enchantment, administration contract termination prices, working asset depreciation and amortization, change in management beneficial properties or losses, ESOP and inventory compensation bills and acquisition transaction prices. We exclude these things as we consider it permits for significant comparisons between intervals and amongst different REITs and is extra indicative than FFO of the on-going efficiency of our business and belongings. Our calculation of adjusted FFO could also be totally different from comparable measures calculated by different REITs.

EBITDA

The Company believes that excluding the impact of non-operating bills and non-cash fees, and the portion of these objects associated to unconsolidated entities, all of that are additionally based mostly on historic price accounting and could also be of restricted significance in evaluating present efficiency, can assist get rid of the accounting results of depreciation and financing selections and facilitate comparisons of core working profitability between intervals and between REITs, although EBITDA additionally doesn’t symbolize an quantity that accrued on to shareholders.

Hotel EBITDA

The Company defines resort EBITDA as internet revenue or loss excluding: (1) curiosity expense, (2) curiosity revenue, (3) revenue tax provision or profit, (4) depreciation and amortization, (5) impairment of long-lived belongings or investments, (6) beneficial properties and losses on disposal and/or sale of belongings, (7) beneficial properties and losses on involuntary conversions of belongings, (8) unrealized beneficial properties and losses on by-product devices not included in different complete revenue, (9) loss on early debt extinguishment, (10) acquire on train of improvement proper, (11) company normal and administrative expense, and (12) different working income not associated to our wholly-owned portfolio. We consider this supplies a extra full understanding of the working outcomes over which our wholly-owned accommodations and its operators have direct management. We consider resort EBITDA supplies buyers 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 comparable measures calculated by different REITs.