Summit Hotel Properties Reports Third Quarter 2020 Results

AUSTIN, Texas, Nov. 3, 2020 /PRNewswire/ -- Summit Hotel Properties, Inc. (NYSE: INN) (the "Company"), today announced results for the third quarter ended September 30, 2020.

"We were encouraged by the significant improvement in demand during the third quarter as our portfolio RevPAR more than doubled from the second quarter driven by improved short-term leisure demand and significant market share gains.  Our monthly corporate cash burn rate has been reduced by nearly 70% which has significantly extended our liquidity runway as our disciplined focus on cost controls and refining of an already efficient operating model lead to improved hotel-level profitability," said Dan Hansen, the Company's Chairman, President and Chief Executive Officer.  "We remain confident that the quality of our portfolio, the strength of our team, and the actions we are taking today position us well to resume our place as an industry leader as the headwinds related to the COVID-19 pandemic begin to abate," commented Mr. Hansen.

Third Quarter 2020 Summary

• Net Income:  Net loss attributable to common stockholders was $38.3 million, or ($0.37) per diluted share, compared with net income of $7.8 million, or $0.07 per diluted share, in the same period of 2019.
• Pro Forma RevPAR:  Pro forma revenue per available room ("RevPAR") decreased 63.5 percent to $46.83 from the same period in 2019.  Pro forma average daily rate ("ADR") decreased 34.6 percent to $103.98 compared to the same period in 2019, and pro forma occupancy decreased 44.2 percent to 45.0 percent.
• Same-Store RevPAR:  Same-store RevPAR decreased 63.9 percent to $45.17 from the same period in 2019.  Same-store ADR decreased 34.7 percent to $101.83 compared to the same period in 2019, and same-store occupancy decreased 44.6 percent to 44.4 percent.
• Pro Forma Hotel EBITDA:  Pro forma hotel EBITDA was $5.7 million, a decrease of 89.6 percent from the same period in 2019.  Pro forma hotel EBITDA margin contracted to 10.8 percent from 37.6 percent in the same period of 2019.
• Adjusted EBITDAre:  Adjusted EBITDAre decreased 94.4 percent to $2.5 million from $45.2 million in the same period of 2019.
• Adjusted FFO:  Adjusted FFO was ($10.8) million, or ($0.10) per diluted share, compared to $32.5 million, or $0.31 per diluted share, in the same period of 2019.
• Cash Burn Rate and Liquidity:  Monthly cash burn run-rate was $4.5 million in September and liquidity was $262.5 million at the end of the third quarter, including cash on hand.

The Company's results for the three and nine months ended September 30, 2020 and 2019 are as follows (in thousands, except per share amounts):

Year-to-Date 2020 Summary

• Net Income:  Net loss attributable to common stockholders was $111.4 million, or ($1.07) per diluted share, compared with net income of $62.2 million, or $0.60 per diluted share, in the same period of 2019.
• Pro Forma RevPAR:  Pro forma revenue per available room ("RevPAR") decreased 57.8 percent to $55.31 from the same period in 2019.  Pro forma average daily rate ("ADR") decreased 22.6 percent to $126.97 compared to the same period in 2019, and pro forma occupancy decreased 45.5 percent to 43.6 percent.
• Same-Store RevPAR:  Same-store RevPAR decreased 57.8 percent to $54.19 from the same period in 2019.  Same-store ADR decreased 22.3 percent to $125.56 compared to the same period in 2019, and same-store occupancy decreased 45.7 percent to 43.2 percent.
• Pro Forma Hotel EBITDA:  Pro forma hotel EBITDA was $25.4 million, a decrease of 85.0 percent from the same period in 2019.  Pro forma hotel EBITDA margin contracted to 13.6 percent from 38.5 percent in the same period of 2019.
• Adjusted EBITDAre:  Adjusted EBITDAre decreased 88.6 percent to $16.5 million from $144.3 million in the same period of 2019.
• Adjusted FFO:  AFFO was ($23.5) million, or ($0.22) per diluted share, compared to $103.4 million, or $0.99 per diluted share, in the same period of 2019.

Capital Improvements

The Company invested $3.3 million and $19.2 million in capital improvements during the three and nine months ended September 30, 2020, respectively, and anticipates investing a total of approximately $23 million to $25 million in capital improvements on a consolidated basis across its portfolio during 2020.

Capital Markets & Balance Sheet

On September 30, 2020, inclusive of its pro rata share of the Joint Venture credit facility, the Company had the following:

• Pro rata outstanding debt of $1.0 billion with a weighted average interest rate of 3.51 percent.
• After giving effect to interest rate derivative agreements, $546.6 million, or 53 percent, of our pro rata outstanding debt had fixed interest rates, and $475.5 million, or 47 percent, had variable interest rates.
• Pro rata unrestricted cash and cash equivalents of $37.5 million.
• Revolving credit facility availability of $175.0 million, plus an additional $50.0 million available to borrow subject to certain requirements.

On October 23, 2020, inclusive of its pro rata share of the Joint Venture credit facility, the Company had the following:

• Pro rata outstanding debt of $1.0 billion with a weighted average interest rate of 3.51 percent.
• After giving effect to interest rate derivative agreements, $546.3 million, or 53 percent, of our pro rata outstanding debt had fixed interest rates, and $475.4 million, or 47 percent, had variable interest rates. 
• Pro rata unrestricted cash and cash equivalents of $33.6 million.
• Revolving credit facility availability of $175.0 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 3.3 years.

Dividends

On October 30, 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 November 30, 2020, to holders of record as of November 16, 2020.

Third Quarter 2020 Earnings Conference Call

The Company will conduct its quarterly conference call on Wednesday, November 4, 2020, at 9:00 AM ET.  To participate in the conference call, dial 877-930-8101 approximately ten minutes before the call begins (8:50 AM ET).  The conference identification code for the call is 9188292.  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 Wednesday, November 11, 2020, by dialing 855-859-2056, conference identification code 9188292.  A replay will also be available in the Investor Relations section of the Company's website until January 31, 2021.

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 November 3, 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.