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Deutschland AUSTIN, Texas, Aug. 5, 2020 /PRNewswire/ -- Summit Hotel Properties, Inc. (NYSE: INN) (the "Company"), today announced results for the second quarter ended June 30, 2020.
"The lodging industry experienced an unprecedented decline in demand during the second quarter as the spread of COVID-19 forced widespread shutdowns and eliminated the majority of non-essential travel. We were pleased with our ability to quickly adapt and navigate through this very challenging operating environment, allowing us to keep nearly all of our hotels open and gain considerable market share during the quarter. Occupancy and RevPAR levels improved sequentially throughout the quarter driven predominately by weekend leisure demand, particularly outside of core urban markets," said Dan Hansen, the Company's Chairman, President and Chief Executive Officer. "As RevPAR trends have improved from trough levels in April, our monthly cash burn rate has been reduced by nearly 40%, and with approximately $270 million of liquidity, we have 38 months of runway at current RevPAR levels. Despite the effects of the current pandemic, we remain bullish on the prospects of our business and believe our actions in response to the crisis position us well to take advantage of opportunities as we enter the recovery," commented Mr. Hansen.
Second Quarter 2020 Summary
- Net Income: Net loss attributable to common stockholders was $54.1 million, or ($0.52) per diluted share, compared with net income of $45.2 million, or $0.43 per diluted share, in the same period of 2019.
- Pro Forma RevPAR: Pro forma revenue per available room ("RevPAR") decreased 83.0 percent to $23.20 from the same period in 2019. Pro forma average daily rate ("ADR") decreased 42.5 percent to $95.57 compared to the same period in 2019, and pro forma occupancy decreased 70.5 percent to 24.3 percent.
- Same-Store RevPAR: Same-store RevPAR decreased 83.3 percent to $22.44 from the same period in 2019. Same-store ADR decreased 42.6 percent to $94.30 compared to the same period in 2019, and same-store occupancy decreased 70.9 percent to 23.8 percent.
- Pro Forma Hotel EBITDA: Pro forma hotel EBITDA was ($10.0) million compared to $60.9 million in the same period in 2019.
- Adjusted EBITDAre: Adjusted EBITDAre was ($12.8) million compared to $52.4 million in the same period of 2019.
- Adjusted FFO: AFFO was ($25.9) million, or ($0.25) per diluted share, compared to $38.6 million, or $0.37 per diluted share, in the same period of 2019.
The Company's results for the three and six months ended June 30, 2020 and 2019 are as follows (in thousands, except per share amounts):
For the Three Months Ended | For the Six Months Ended | ||||||||
2020 | 2019 | 2020 | 2019 | ||||||
(unaudited) | |||||||||
Net (loss) income attributable to | $ | (54,126) | $ 45,248 | $ | (73,157) | $ 54,416 | |||
Net (loss) income per diluted share | $ | (0.52) | $ 0.43 | $ | (0.70) | $ 0.52 | |||
Total revenues | $ | 25,436 | $ 142,930 | $ | 133,821 | $ 281,882 | |||
EBITDAre (1) | $ | (14,503) | $ 49,409 | $ | 12,601 | $ 94,812 | |||
Adjusted EBITDAre (1) | $ | (12,791) | $ 52,420 | $ | 13,959 | $ 99,145 | |||
FFO (1) | $ | (28,273) | $ 35,202 | $ | (18,475) | $ 65,652 | |||
Adjusted FFO (1) | $ | (25,922) | $ 38,648 | $ | (12,653) | $ 70,912 | |||
FFO per diluted share and unit (1,2) | $ | (0.27) | $ 0.34 | $ | (0.18) | $ 0.63 | |||
Adjusted FFO per diluted share and unit (1,2) | $ | (0.25) | $ 0.37 | $ | (0.12) | $ 0.68 | |||
Pro Forma (3) | |||||||||
RevPAR | $ | 23.20 | $ 136.65 | $ | 59.59 | $ 132.59 | |||
RevPAR change | -83.0% | -55.1% | |||||||
Hotel EBITDA | $ | (10,009) | $ 60,905 | $ | 19,716 | $ 114,713 | |||
Hotel EBITDA margin | N/A | 40.0% | 14.7% | 39.0% | |||||
(1) | See tables later in this press release for a discussion and reconciliation of net income to non-GAAP financial measures, including earnings before interest, taxes, depreciation and amortization ("EBITDA"), EBITDAre, adjusted EBITDAre, funds from operations ("FFO"), FFO per diluted share and unit, adjusted FFO ("AFFO"), and AFFO per diluted share and unit, as well as a reconciliation of operating income to hotel EBITDA. See "Non-GAAP Financial Measures" at the end of this release. |
(2) | Amounts are based on 104,331,000 weighted average diluted common shares and units and 104,255,000 weighted average diluted common shares and units for the three months ended June 30, 2020, and 2019, respectively, and 104,265,000 weighted average diluted common shares and units and 104,261,000 weighted average diluted common shares and units for the six months ended June 30, 2020, and 2019, respectively. The Company includes the outstanding common units of limited partnership interests ("OP Units") in Summit Hotel OP, LP, the Company's operating partnership, held by limited partners other than the Company in the determination of weighted average diluted common shares and units because the OP Units are redeemable for cash or, at the Company's option, shares of the Company's common stock on a one-for-one basis. |
(3) | Unless stated otherwise in this release, all pro forma information includes operating and financial results for 72 hotels owned as of June 30, 2020, as if each hotel had been owned by the Company since January 1, 2019 and remained open for the entirety of the measurement period. As a result, all pro forma information includes operating and financial results for hotels acquired since January 1, 2019, which includes periods prior to the Company's ownership. Pro forma and non-GAAP financial measures are unaudited. |
Year-to-Date 2020 Summary
- Net Income: Net loss attributable to common stockholders was $73.2 million, or ($0.70) per diluted share, compared with net income of $54.4 million, or $0.52 per diluted share, in the same period of 2019.
- Pro Forma RevPAR: Pro forma revenue per available room ("RevPAR") decreased 55.1 percent to $59.59 from the same period in 2019. Pro forma average daily rate ("ADR") decreased 16.5 percent to $139.19 compared to the same period in 2019, and pro forma occupancy decreased 46.2 percent to 42.8 percent.
- Same-Store RevPAR: Same-store RevPAR decreased 54.9 percent to $58.75 from the same period in 2019. Same-store ADR decreased 16.0 percent to $138.06 compared to the same period in 2019, and same-store occupancy decreased 46.3 percent to 42.6 percent.
- Pro Forma Hotel EBITDA: Pro forma hotel EBITDA was $19.7 million, a decrease of 82.8 percent from the same period in 2019. Pro forma hotel EBITDA margin contracted to 14.7 percent from 39.0 percent in the same period of 2019.
- Adjusted EBITDAre: Adjusted EBITDAre decreased 85.9 percent to $14.0 million from $99.1 million in the same period of 2019.
- Adjusted FFO: AFFO was ($12.7) million, or ($0.12) per diluted share, compared to $70.9 million, or $0.68 per diluted share, in the same period of 2019.
Capital Improvements
The Company invested $4.8 million and $15.9 million in capital improvements during the three and six months ended June 30, 2020 and anticipates investing a total of approximately $25.0 million in capital improvements on a consolidated basis across its portfolio during 2020.
Capital Markets & Balance Sheet
At June 30, 2020, inclusive of its pro rata share of the Joint Venture credit facility, the Company had the following:
- Pro rata outstanding debt of $1.1 billion with a weighted average interest rate of 3.45 percent.
- After giving effect to interest rate derivative agreements, $547.5 million, or 50 percent, of our pro rata outstanding debt had fixed interest rates, and $550.5 million, or 50 percent, had variable interest rates.
- Pro rata unrestricted cash and cash equivalents of $123.7 million.
- Revolving credit facility availability of $100.0 million, plus an additional $50.0 million available to borrow subject to certain requirements.
At July 31, 2020, inclusive of its pro rata share of the Joint Venture credit facility, the Company had the following:
- Pro rata outstanding debt of $1.1 billion with a weighted average interest rate of 3.45 percent.
- After giving effect to interest rate derivative agreements, $547.2 million, or 50 percent, of our pro rata outstanding debt had fixed interest rates, and $550.5 million, or 50 percent had variable interest rates.
- Pro rata unrestricted cash and cash equivalents of $116.2 million.
- Revolving credit facility availability of $100.0 million, plus an additional $50.0 million available to borrow subject to certain requirements.
The Company's balance sheet continues to be well-positioned with no debt maturities until November 2022 and an average length to maturity of approximately 3.5 years.
On June 18, 2020, the joint venture, in which the Company is a 51 percent owner and general partner, completed an amendment of its existing $200 million credit facility that provides for a temporary waiver of financial covenants through the first quarter 2021, and modifies certain financial covenant measures through the second quarter 2022. The amendment also provides for additional credit availability for capital expenditures and other general joint venture purposes and has certain restrictions and limitations related to distributions, investments, and dispositions.
Dividends
On July 29, 2020, the Company declared a quarterly cash preferred dividend of $0.403125 per share on its 6.45% Series D Cumulative Redeemable Preferred Stock and $0.390625 per share on its 6.25% Series E Cumulative Redeemable Preferred Stock. The preferred dividends are payable on August 31, 2020, to holders of record as of August 17, 2020.
Second Quarter 2020 Earnings Conference Call
The Company will conduct its quarterly conference call on Thursday, August 6, 2020, at 10:00 AM ET. To participate in the conference call dial 877-930-8101 approximately ten minutes before the call begins (9:50 AM ET). The conference identification code for the call is 3577425. Additionally, a live webcast of the quarterly conference call will be available through the Company's website, www.shpreit.com. A replay of the quarterly conference call webcast will be available until 12:00 PM ET Thursday, August 13, 2020, by dialing 855-859-2056, conference identification code 3577425. A replay will also be available in the Investor Relations section of the Company's website until October 31, 2020.
About Summit Hotel Properties
Summit Hotel Properties, Inc. is a publicly traded real estate investment trust focused on owning premium-branded hotels with efficient operating models primarily in the Upscale segment of the lodging industry. As of August 5, 2020, the Company's portfolio consisted of 72 hotels, 67 of which are wholly owned, with a total of 11,288 guestrooms located in 23 states.
For additional information, please visit the Company's website, www.shpreit.com, and follow on Twitter at @SummitHotel_INN.
Forward-Looking Statements
This press release contains statements that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "will," "should," "potential," "intend," "expect," "seek," "anticipate," "estimate," "approximately," "believe," "could," "project," "predict," "forecast," "continue," "plan," "likely," "would" or other similar words or expressions. Forward-looking statements are based on certain assumptions and can include future expectations, future plans and strategies, financial and operating projections or other forward-looking information. Examples of forward-looking statements include the following: the Company's ability to realize growth from the deployment of renovation capital; projections of the Company's revenues and expenses, capital expenditures or other financial items; descriptions of the Company's plans or objectives for future operations, acquisitions, dispositions, financings, redemptions or services; forecasts of the Company's future financial performance and potential increases in average daily rate, occupancy, RevPAR, room supply and demand, EBITDAre, Adjusted EBITDAre, FFO and AFFO; the Company's outlook with respect to pro forma RevPAR, pro forma RevPAR growth, RevPAR, RevPAR growth, AFFO, AFFO per diluted share and unit and renovation capital deployed; and descriptions of assumptions underlying or relating to any of the foregoing expectations regarding the timing of their occurrence. These forward-looking statements are subject to various risks and uncertainties, not all of which are known to the Company and many of which are beyond the Company's control, which could cause actual results to differ materially from such statements. These risks and uncertainties include, but are not limited to, the state of the U.S. economy, supply and demand in the hotel industry, and other factors as are described in greater detail in the Company's filings with the Securities and Exchange Commission ("SEC"). Unless legally required, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.
For information about the Company's business and financial results, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of the Company's Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC, and its quarterly and other periodic filings with the SEC. The Company undertakes no duty to update the statements in this release to conform the statements to actual results or changes in the Company's expectations.
Summit Hotel Properties, Inc.
| |||
June 30, 2020 | December 31, 2019 | ||
(unaudited) | |||
ASSETS | |||
Investment in hotel properties, net | $ 2,145,912 | $ 2,184,232 | |
Undeveloped land | 1,500 | 1,500 | |
Assets held for sale, net | 425 | 425 | |
Cash and cash equivalents | 124,554 | 42,238 | |
Restricted cash | 18,658 | 27,595 | |
Investment in real estate loans, net | 29,173 | 30,936 | |
Right-of-use assets, net | 29,181 | 29,884 | |
Trade receivables, net | 10,507 | 13,281 | |
Prepaid expenses and other | 7,249 | 8,844 | |
Deferred charges, net | 4,479 | 4,709 | |
Other assets | 9,237 | 12,039 | |
Total assets | $ 2,380,875 | $ 2,355,683 | |
LIABILITIES AND EQUITY | |||
Liabilities: | |||
Debt, net of debt issuance costs | $ 1,159,399 | $ 1,016,163 | |
Lease liabilities | 19,069 | 19,604 | |
Accounts payable | 2,672 | 4,767 | |
Accrued expenses and other | 68,199 | 71,759 | |
Total liabilities | 1,249,339 | 1,112,293 | |
Total stockholders' equity | 1,065,249 | 1,173,778 | |
Non-controlling interests in operating partnership | 1,332 | 1,809 | |
Non-controlling interests in joint venture | 64,955 | 67,803 | |
Total equity | 1,131,536 | 1,243,390 | |
Total liabilities and equity | $ 2,380,875 | $ 2,355,683 | |
Summit Hotel Properties, Inc.
| ||||||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||
Revenues: | ||||||||||||
Room | $ 23,828 | $ 131,656 | $ 122,431 | $ 259,756 | ||||||||
Food and beverage | 248 | 6,134 | 5,132 | 12,154 | ||||||||
Other | 1,360 | 5,140 | 6,258 | 9,972 | ||||||||
Total revenues | 25,436 | 142,930 | 133,821 | 281,882 | ||||||||
Expenses: | ||||||||||||
Room | 6,415 | 28,413 | 30,988 | 56,253 | ||||||||
Food and beverage | 333 | 4,621 | 4,370 | 9,159 | ||||||||
Other hotel operating expenses | 16,588 | 39,489 | 51,871 | 79,348 | ||||||||
Property taxes, insurance and other | 11,466 | 10,695 | 23,164 | 22,103 | ||||||||
Management fees | 644 | 4,458 | 3,716 | 9,604 | ||||||||
Depreciation and amortization | 27,565 | 23,779 | 54,644 | 49,315 | ||||||||
Corporate general and administrative | 5,315 | 5,920 | 9,983 | 11,910 | ||||||||
Provision for credit losses | - | - | 2,530 | - | ||||||||
Loss on impairment of assets | - | 1,685 | 782 | 1,685 | ||||||||
Total expenses | 68,326 | 119,060 | 182,048 | 239,377 | ||||||||
(Loss) gain on disposal of assets, net | (32) | 35,520 | (35) | 39,686 | ||||||||
Operating (loss) income | (42,922) | 59,390 | (48,262) | 82,191 | ||||||||
Other income (expense): | ||||||||||||
Interest expense | (10,749) | (9,766) | (21,761) | (20,618) | ||||||||
Other income, net | 876 | 146 | 2,982 | 1,447 | ||||||||
Total other income (expense) | (9,873) | (9,620) | (18,779) | (19,171) | ||||||||
(Loss) income from continuing operations before income taxes | (52,795) | 49,770 | (67,041) | 63,020 | ||||||||
Income tax benefit (expense) | 247 | (701) | (1,721) | (1,051) | ||||||||
Net (loss) income | (52,548) | 49,069 | (68,762) | 61,969 | ||||||||
Less - Loss (income) attributable to non-controlling interests: | ||||||||||||
Operating Partnership | 96 | (112) | 133 | (135) | ||||||||
Joint venture | 2,035 | - | 2,890 | - | ||||||||
Net (loss) income attributable to Summit Hotel Properties, Inc. | (50,417) | 48,957 | (65,739) | 61,834 | ||||||||
Preferred dividends | (3,709) | (3,709) | (7,418) | (7,418) | ||||||||
Net (loss) income attributable to common stockholders | $ (54,126) | $ 45,248 | $ (73,157) | $ 54,416 | ||||||||
(Loss) earnings per share: | ||||||||||||
Basic and diluted | $ (0.52) | $ 0.43 | $ (0.70) | $ 0.52 | ||||||||
Weighted average common shares outstanding: | ||||||||||||
Basic | 104,154 | 103,896 |
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