Le Lézard
Classified in: Tourism and vacations, Business
Subjects: ERN, ERP

SUMMIT HOTEL PROPERTIES REPORTS THIRD QUARTER 2023 RESULTS


Operating Income of $16.5 Million

Adjusted EBITDAre Reaches $46.3 Million; Adjusted FFO Per Share of $0.22

Full Year 2023 Adjusted EBITDAre and Adjusted FFO Guidance Midpoint Increased

AUSTIN, Texas, Nov. 1, 2023 /PRNewswire/ -- Summit Hotel Properties, Inc. (NYSE: INN) (the "Company"), today announced results for the three and nine months ended September 30, 2023.

"We are pleased with our financial results for the third quarter as stable top-line trends accelerated in September driven by strong urban and midweek demand.  Operating expenses grew less than one percent on a per occupied room basis which enabled us to maintain gross operating profit margin compared to a year ago despite cost inflationary headwinds.  Given our strong third quarter financial results and the encouraging operating trends that have continued into October, we are increasing the midpoint of our adjusted EBITDA and adjusted FFO guidance range for the full year," said Jonathan P. Stanner, the Company's President and Chief Executive Officer.  "Furthermore, we are proud of the continued progress on our various balance sheet initiatives during the quarter, including the refinancing of our $200 million joint venture credit facility during the quarter which maintains existing pricing.  We now have no material debt maturities until 2025, a weighted average cost of debt less than 4.8 percent and, inclusive of preferred equity, approximately 80 percent of our balance sheet has fixed rate interest rates," commented Mr. Stanner.

Third Quarter 2023 Summary

The Company's results for the three and nine months ended September 30, 2023, are as follows (in thousands, except per share amounts):


For the Three Months Ended
September 30,


For the Nine Months Ended
September 30,


2023


2022


2023


2022


(unaudited)

Net loss attributable to common stockholders

$       (5,438)


$          (517)


$     (11,419)


$       (4,954)

Net loss per diluted share

$         (0.05)


$         (0.00)


$         (0.11)


$         (0.05)

Total revenues

$      181,816


$      178,252


$      558,692


$      503,369

EBITDAre (1)

$        55,359


$        54,935


$      172,301


$      156,111

Adjusted EBITDAre (1)

$        46,315


$        47,218


$      143,580


$      134,731

FFO (1)

$        22,669


$        28,085


$        72,592


$        69,711

Adjusted FFO (1)

$        26,546


$        30,867


$        85,891


$        83,630

FFO per diluted share and unit (1)

$            0.19


$            0.23


$            0.59


$            0.57

Adjusted FFO per diluted share and unit (1)

$            0.22


$            0.25


$            0.70


$            0.69









Pro Forma (2)








RevPAR

$        116.91


$        114.22


$        121.75


$        112.92

RevPAR Growth

2.4 %




7.8 %



Hotel EBITDA

$        62,300


$        60,715


$      198,540


$      183,277

Hotel EBITDA margin

34.3 %


34.5 %


35.5 %


35.7 %

Hotel EBITDA margin growth

-25 bps




-25 bps











Same Store (3)








RevPAR

$        117.85


$        115.14


$        120.99


$        112.29

RevPAR Growth

2.4 %




7.7 %



Hotel EBITDA

$        61,360


$        59,707


$      188,810


$      174,768

Hotel EBITDA margin

35.4 %


35.5 %


35.8 %


35.9 %

Hotel EBITDA margin growth

-12 bps




-10 bps





(1)

See tables later in this press release for a discussion and reconciliation of net loss 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 (loss) to hotel EBITDA.  See "Non-GAAP Financial Measures" at the end of this release.



(2)

Unless stated otherwise in this release, all pro forma information includes operating and financial results for 101 hotels owned as of September 30, 2023, as if each hotel had been owned by the Company since January 1, 2022, 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, 2022, which may include periods prior to the Company's ownership. Pro forma and non-GAAP financial measures are unaudited.



(3)

All same store information includes operating and financial results for 95 hotels owned as of September 30, 2023, and at all times during the three and nine months ended September 30, 2023, and 2022.

 

Year-to-Date 2023 Summary

Pending Transaction Activity

The Company has entered into a contract to sell the 123-guestroom Hyatt Place Baltimore / Owings Mills. The gross sales price for the pending disposition is $8.3 million and the transaction is expected to close in the fourth quarter of 2023. The sales price for the transaction represents a 4.6 percent capitalization rate based on net operating income after a 4 percent FF&E reserve for the trailing 12 months ended September 30, 2023. The Company expects to forego future near-term required capital expenditures at the hotel as a result of the sale, which would reduce the all-in capitalization rate to approximately 2.9 percent.

The buyer's earnest money is non-refundable as of November 1, 2023, however the Company can make no assurances that it will be able to complete the sale transaction based on the current contractual terms or at all.

Capital Markets & Balance Sheet

On September 19, 2023, the Company's joint venture with GIC successfully completed the refinancing of its $200 million senior credit facility (the "Credit Facility"), which is comprised of a $125 million revolving credit facility (the "Revolver") and a $75 million term loan (the "Term Loan").  The new credit agreement provides for a fully extended maturity date of September 2028 for both the Revolver and Term Loan.  The interest rate pricing from the prior credit facility has been maintained at SOFR + 215 basis points for the Revolver and SOFR + 210 basis points for the Term Loan.  Other terms of the agreement are similar to the joint venture's previous credit facility agreement.  As a result of this refinancing, the Company has no material debt maturities until the first quarter of 2025 and its average length to maturity is over three years when including extension options.  Approximately 80 percent of the Company's pro rata debt and preferred equity capital has a fixed interest rate after giving effect to interest rate derivative agreements. 

On a pro rata basis, the Company currently has the following outstanding indebtedness and liquidity available:

Common and Preferred Dividend Declaration

On October 26, 2023, the Company declared a quarterly cash dividend of $0.06 per share on its common stock and per common unit of limited partnership interest in Summit Hotel OP, LP. The quarterly dividend of $0.06 per share represents an annualized dividend yield of 4.3 percent based on the closing price of shares of the common stock on October 31, 2023.

In addition, the Board of Directors declared a quarterly cash dividend of:

The dividends are payable on November 30, 2023, to holders of record as of November 16, 2023.

2023 Outlook

The Company is updating its previously provided outlook for the full year 2023 based on 101 lodging assets, 57 of which are wholly owned as of November 1, 2023. The updated outlook does not contemplate the pending disposition of the Hyatt Place Owings Mills expected to close late in the fourth quarter of 2023.  There are no additional acquisitions, dispositions, or capital markets activities assumed in the Company's full year 2023 outlook beyond the transactions already completed.



FYE 2023 Outlook



Low


High


Variance to
Prior Midpoint


% Change to
Prior Midpoint

Pro Forma RevPAR (1)


$        119.25


$        121.00


$                        -


-

Pro Forma RevPAR Growth (1)


6.25 %


7.75 %


-


-

Adjusted EBITDAre


$      186,500


$      191,600


$                1,050


0.6 %

Adjusted FFO


$      109,000


$      114,200


$                1,450


1.3 %

Adjusted FFO per Diluted Unit


$            0.89


$            0.93


$                  0.01


1.2 %

Capital Expenditures, Pro Rata


$        65,000


$        75,000


$                        -


-



(1)

All pro forma information includes operating and financial results for 101 lodging assets owned as of November 1, 2023, as if each property had been owned by the Company since January 1, 2022, and will continue to be owned through the entire year ending December 31, 2023. As a result, the pro forma information includes operating and financial results for lodging assets acquired since January 1, 2022, which may include periods prior to the Company's ownership. Pro forma and non-GAAP financial measures are unaudited.

 

Third Quarter 2023 Earnings Conference Call

The Company will conduct its quarterly conference call on Thursday, November 2, 2023, at 1:00 PM ET.

  1. To access the conference call, please pre-register using this link. Registrants will receive a confirmation with dial-in details.
  2. A live webcast of the conference call can be accessed using this link.  A replay of the webcast will be available in the Investors section of the Company's website, www.shpreit.com, until January 31, 2024.

Supplemental Disclosures

In conjunction with this press release, the Company has furnished a financial supplement with additional disclosures on its website. Visit www.shpreit.com for more information. The Company has no obligation to update any of the information provided to conform to actual results or changes in portfolio, capital structure or future expectations.

About Summit Hotel Properties

Summit Hotel Properties, Inc. is a publicly traded real estate investment trust focused on owning premium-branded lodging properties with efficient operating models primarily in the upscale segment of the lodging industry. As of November 1, 2023, the Company's portfolio consisted of 101 assets, 57 of which are wholly owned, with a total of 15,035 guestrooms located in 24 states.

For additional information, please visit the Company's website, www.shpreit.com, and follow on X, formerly Twitter, at @SummitHotel_INN and on Facebook at facebook.com/SummitHotelProperties.

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, 2022, 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.

Condensed Consolidated Balance Sheets

(In thousands)



September 30,
2023


December 31,
2022


(unaudited)



ASSETS




Investments in lodging property, net

$      2,831,247


$      2,841,856

Assets held for sale, net

9,163


29,166

Cash and cash equivalents

55,307


51,255

Restricted cash

11,268


10,553

Right-of-use assets, net

35,215


35,023

Trade receivables, net

24,209


21,015

Prepaid expenses and other

12,973


8,378

Deferred charges, net

7,066


7,074

Other assets

28,741


17,950

Total assets

$      3,015,189


$      3,022,270

LIABILITIES, REDEEMABLE
NON-CONTROLLING INTERESTS AND EQUITY




Liabilities:




Debt, net of debt issuance costs

$      1,444,637


$      1,451,796

Lease liabilities, net

26,102


25,484

Accounts payable

6,880


5,517

Accrued expenses and other

92,209


81,304

Total liabilities

1,569,828


1,564,101





Redeemable non-controlling interests

50,219


50,219

 Equity:




Total stockholders' equity

942,096


959,813

Non-controlling interests

453,046


448,137

Total equity

1,395,142


1,407,950

Total liabilities, redeemable non-controlling interests and equity

$      3,015,189


$      3,022,270

 

Summit Hotel Properties, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)



For the Three Months Ended
September 30,


For the Nine Months Ended
September 30,


2023


2022


2023


2022

Revenues:








Room

$      161,712


$      160,133


$      498,982


$      455,747

Food and beverage

9,949


8,854


30,848


22,180

Other

10,155


9,265


28,862


25,442

Total revenues

181,816


178,252


558,692


503,369

Expenses:








Room

37,510


37,525


112,207


101,718

Food and beverage

7,684


7,060


23,679


17,187

Other lodging property operating expenses

55,826


54,883


169,780


154,871

Property taxes, insurance and other

14,369


13,373


43,308


40,036

Management fees

4,177


4,308


13,974


13,145

Depreciation and amortization

37,882


38,130


112,300


112,462

Corporate general and administrative

8,126


6,532


25,225


23,743

Transaction costs

-


56


24


737

Recoveries of credit losses

(250)


(850)


(500)


(1,100)

Total expenses

165,324


161,017


499,997


462,799

(Loss) gain on disposal of assets, net

(16)


(5)


(336)


20,479

Operating income

16,476


17,230


58,359


61,049

Other income (expense):








Interest expense

(22,020)


(17,645)


(65,177)


(46,202)

Interest income

474


65


1,190


1,461

Other income (loss), net

661


(481)


458


1,638

Total other expense, net

(20,885)


(18,061)


(63,529)


(43,103)

(Loss) income from continuing operations before income taxes

(4,409)


(831)


(5,170)


17,946

Income tax expense

(1,360)


(210)


(1,679)


(4,647)

Net (loss) income

(5,769)


(1,041)


(6,849)


13,299

Loss (income) attributable to non-controlling interests

4,955


5,148


9,306


(4,481)

Net (loss) income attributable to Summit Hotel Properties, Inc. before preferred dividends and distributions

(814)


4,107


2,457


8,818

Distributions to and accretion of redeemable non-controlling interests

(656)


(656)


(1,970)


(1,866)

Preferred dividends

(3,968)


(3,968)


(11,906)


(11,906)

Net loss attributable to common stockholders

$       (5,438)


$          (517)


$     (11,419)


$       (4,954)

Loss per share:








Basic and Diluted

$         (0.05)


$         (0.00)


$         (0.11)


$         (0.05)

Weighted-average common shares outstanding:








Basic and Diluted

105,650


105,232


105,510


105,110

 

Summit Hotel Properties, Inc.

Reconciliation of Net Loss to Non-GAAP Measures ? Funds From Operations

(Unaudited) 

(In thousands, except per share and unit amounts)



For the Three Months Ended
September 30,


For the Nine Months Ended
September 30,


2023


2022


2023


2022

Net (loss) income

$       (5,769)


$       (1,041)


$       (6,849)


$        13,299

Preferred dividends

(3,968)


(3,968)


(11,906)


(11,906)

Distributions to and accretion of redeemable non-controlling interests

(656)


(656)


(1,970)


(1,866)

Loss (income) related to non-controlling interests in consolidated joint ventures

4,442


3,730


8,093


(5,219)

Net loss applicable to Common Stock and Common Units

$       (5,951)


$       (1,935)


$     (12,632)


$       (5,692)

Real estate-related depreciation

36,697


36,804


108,751


108,959

Loss (gain) on disposal of assets and other dispositions, net

16


5


384


(20,479)

Adjustments related to non-controlling interests in consolidated joint ventures

(8,093)


(6,789)


(23,911)


(13,077)

FFO applicable to Common Stock and Common Units

$        22,669


$        28,085


$        72,592


$        69,711

Recoveries of credit losses

(250)


(850)


(500)


(1,100)

Amortization of debt issuance costs

1,594


1,413


4,379


4,238

Amortization of franchise fees

153


167


439


504

Amortization of intangible assets, net

911


892


2,733


2,732

Equity-based compensation

1,867


1,231


5,913


7,070

Transaction costs and other

-


56


24


737

Debt transaction costs

90


1,131


352


1,166

Non-cash interest income, net (1)

(134)


-


(397)


(113)

Non-cash lease expense, net

106


115


368


374

Casualty losses, net

380


750


1,851


1,054

Other non-cash items, net

-


-


768


-

Adjustments related to non-controlling interests in consolidated joint ventures

(840)


(2,123)


(2,631)


(2,743)

AFFO applicable to Common Stock and Common Units

$        26,546


$        30,867


$        85,891


$        83,630

FFO per share of Common Stock and Common Units

$            0.19


$            0.23


$            0.59


$            0.57

AFFO per share of Common Stock and Common Units

$            0.22


$            0.25


$            0.70


$            0.69

Weighted-average diluted shares of Common Stock and Common Units








FFO and AFFO (2)

122,513


121,265


122,312


121,289



(1)

Non-cash interest income relates to the amortization of the discount on certain notes receivable. The discount on these notes receivable was recorded at inception of the related loans based on the estimated value of the embedded purchase options in the notes receivable.



(2)

The Company includes the outstanding OP units issued by Summit Hotel OP, LP, the Company's operating partnership, held by limited partners other than the Company 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.

 

Summit Hotel Properties, Inc.

Reconciliation of Weighted Average Diluted Common Shares

(Unaudited)

(In thousands)



For the Three Months Ended
September 30,


For the Nine Months Ended
September 30,


2023


2022


2023


2022

Weighted-average shares of Common Stock outstanding

105,650


105,232


105,510


105,110

Dilutive effect of unvested restricted stock awards

44


49


187


195

Dilutive effect of Common Units of Operating Partnership

15,970


15,984


15,974


15,984

Dilutive effect of shares of Common Stock issuable upon conversion of convertible debt

24,801


24,086


24,557


24,086

Adjusted weighted diluted shares of Common Stock

146,465


145,351


146,228


145,375









Non-GAAP adjustment for dilutive effects of restricted stock awards

849


-


641


-

Non-GAAP adjustment for dilutive effect of shares of Common Stock issuable upon conversion of convertible debt

(24,801)


(24,086)


(24,557)


(24,086)

Non-GAAP weighted diluted share of Common Stock and Common Units

122,513


121,265


122,312


121,289

 

Summit Hotel Properties, Inc.

Reconciliation of Net Loss to Non-GAAP Measures ? EBITDAre

(Unaudited)

(In thousands)



For the Three Months Ended
September 30,


For the Nine Months Ended
September 30,


2023


2022


2023


2022

Net (loss) income

$       (5,769)


$       (1,041)


$       (6,849)


$        13,299

Depreciation and amortization

37,882


38,130


112,300


112,462

Interest expense

22,020


17,645


65,177


46,202

Interest income

(150)


(14)


(390)


(20)

Income tax expense

1,360


210


1,679


4,647

EBITDA

$        55,343


$        54,930


$      171,917


$      176,590

Loss (gain) on disposal of assets and other dispositions, net

16


5


384


(20,479)

EBITDAre

$        55,359


$        54,935


$      172,301


$      156,111

Recoveries of credit losses

(250)


(850)


(500)


(1,100)

Amortization of key money liabilities

(121)


(144)


(378)


(267)

Equity-based compensation

1,867


1,231


5,913


7,070

Transaction costs and other

-


56


24


737

Debt transaction costs

90


1,131


352


1,166

Non-cash interest income, net (1)

(134)


-


(397)


(113)

Non-cash lease expense, net

106


115


368


374

Casualty losses, net

380


750


1,851


1,054

Loss (income) related to non-controlling interests in consolidated joint ventures

4,442


3,730


8,093


(5,219)

Other non-cash items, net

-


-


713


-

Adjustments related to non-controlling interests in consolidated joint ventures

(15,424)


(13,736)


(44,760)


(25,082)

Adjusted EBITDAre

$        46,315


$        47,218


$      143,580


$      134,731



(1)

Non-cash interest income relates to the amortization of the discount on certain notes receivable. The discount on these notes receivable was recorded at inception of the related loans based on the estimated value of the embedded purchase options in the notes receivable.

 

Summit Hotel Properties, Inc.

Pro Forma Hotel Operating Data

(Unaudited)

(In thousands)



For the Three Months Ended
September 30,


For the Nine Months Ended
September 30,

Pro Forma Operating Data (1,2)

2023


2022


2023


2022

Pro forma room revenue

$         161,713


$         157,960


$         499,694


$         461,743

Pro forma other hotel operating revenue

20,104


17,964


59,602


51,016

Pro forma total revenues

181,817


175,924


559,296


512,759

Pro forma total hotel operating expenses

119,517


115,209


360,756


329,482

Pro forma hotel EBITDA

$         62,300


$         60,715


$      198,540


$      183,277

Pro forma hotel EBITDA Margin

34.3 %


34.5 %


35.5 %


35.7 %









Reconciliations of Non-GAAP financial measures to comparable GAAP financial measures










Revenue:








Total revenues

$         181,816


$         178,252


$         558,692


$         503,369

Total revenues - acquisitions (1)

(1)


1,934


4,715


21,091

Total revenues - dispositions (2)

2


(4,262)


(4,111)


(11,701)

Pro forma total revenues

181,817


175,924


559,296


512,759









Hotel Operating Expenses:








Total hotel operating expenses

119,566


117,149


362,948


326,957

Hotel operating expenses - acquisitions (1)

(2)


1,131


2,277


12,585

Hotel operating expenses - dispositions (2)

(47)


(3,071)


(4,469)


(10,060)

Pro forma hotel operating expenses

119,517


115,209


360,756


329,482









Hotel EBITDA:








Operating income

16,476


17,230


58,359


61,049

Loss (gain) on disposal of assets, net

16


5


336


(20,479)

Recoveries of credit losses

(250)


(850)


(500)


(1,100)

Transaction costs

-


56


24


737

Corporate general and administrative

8,126


6,532


25,225


23,743

Depreciation and amortization

37,882


38,130


112,300


112,462

Hotel EBITDA

62,250


61,103


195,744


176,412

Hotel EBITDA - acquisitions (1)

(938)


(205)


(7,292)


(3)

Hotel EBITDA - dispositions (2)

49


(1,191)


358


(1,641)

Same store hotel EBITDA

$         61,361


$         59,707


$      188,810


$      174,768

Hotel EBITDA - acquisitions (3)

939


1,008


9,730


8,509

Pro forma hotel EBITDA

$         62,300


$         60,715


$      198,540


$      183,277










(1)

For any hotels acquired by the Company after January 1, 2022 (the "Acquired Hotels"), the Company has excluded the financial results of each of the Acquired Hotels for the period the Acquired Hotels were purchased by the Company to September 30, 2023 (the "Acquisition Period") in determining same-store hotel EBITDA.



(2)

For hotels sold by the Company between January 1, 2022, and September 30, 2023 (the "Disposed Hotels"), the Company has excluded the financial results of each of the Disposed Hotels for the period beginning on January 1, 2022, and ending on the date the Disposed Hotels were sold by the Company (the "Disposition Period") in determining same-store hotel EBITDA.



(3)

Unaudited pro forma information includes operating results for 101 hotels owned as of September 30, 2023, as if all such hotels had been owned by the Company since January 1, 2022. For hotels acquired by the Company after January 1, 2022 (the "Acquired Hotels"), the Company has included in the pro forma information the financial results of each of the Acquired Hotels for the period from January 1, 2022, to September 30, 2023. The financial results for the Acquired Hotels include information provided by the third-party owner of such Acquired Hotel prior to purchase by the Company and have not been audited or reviewed by our auditors or adjusted by us. The pro forma information is included to enable comparison of results for the current reporting period to results for the comparable period of the prior year and are not indicative of future results.

 

Summit Hotel Properties, Inc.

Pro Forma Hotel Operating Data

(Unaudited)

(In thousands, except operating statistics)



2022


2023


Trailing Twelve

Pro Forma Operating Data (1,2)

Q4


Q1


Q2


Q3


 Months Ended
Sept 30, 2023

Pro forma room revenue

$        152,776


$        164,144


$        173,837


$        161,713


$            652,470

Pro forma other hotel operating revenue

18,597


19,225


20,273


20,104


78,199

Pro forma total revenues

171,373


183,369


194,110


181,817


730,669

Pro forma total hotel operating expenses

108,447


118,246


122,993


119,517


469,203

Pro forma hotel EBITDA

$          62,926


$          65,123


$          71,117


$          62,300


$            261,466

Pro forma hotel EBITDA Margin

36.7 %


35.5 %


36.6 %


34.3 %


35.8 %











Pro Forma Statistics (1,2)










Rooms sold

948,793


940,790


1,032,690


1,014,851


3,937,124

Rooms available

1,382,983


1,353,060


1,368,094


1,383,189


5,487,326

Occupancy

68.6 %


69.5 %


75.5 %


73.4 %


71.7 %

ADR

$          161.02


$          174.47


$          168.33


$          159.35


$              165.72

RevPAR

$          110.47


$          121.31


$          127.06


$          116.91


$              118.90











Actual Statistics










Rooms sold

963,151


950,214


1,039,045


1,014,851


3,967,261

Rooms available

1,410,358


1,380,060


1,376,796


1,383,189


5,550,403

Occupancy

68.3 %


68.9 %


75.5 %


73.4 %


71.5 %

ADR

$          159.50


$          171.63


$          167.64


$          159.35


$              164.50

RevPAR

$          108.92


$          118.18


$          126.51


$          116.91


$              117.58











Reconciliations of Non-GAAP financial measures to comparable GAAP financial measures:

Revenue:










Total revenues

$        172,326


$        182,383


$        194,493


$        181,816


$           731,018

Total revenues from acquisitions (1)

2,090


3,438


1,278


(1)


6,805

Total revenues from dispositions (2)

(3,043)


(2,452)


(1,661)


2


(7,154)

Pro forma total revenues

171,373


183,369


194,110


181,817


730,669











Hotel Operating Expenses:










Total hotel operating expenses

110,277


119,518


123,864


119,566


473,225

Total hotel operating expenses from acquisitions (1)

900


1,489


790


(2)


3,177

Total hotel operating expenses from dispositions (2)

(2,730)


(2,761)


(1,661)


(47)


(7,199)

Pro forma total hotel operating expenses

108,447


118,246


122,993


119,517


469,203











Hotel EBITDA:










Operating income

6,733


18,202


23,681


16,476


65,092

Loss on disposal of assets and other dispositions, net

164


-


320


16


500

Loss on write down of assets

10,420


-


-


-


10,420

Recoveries of credit losses

-


(250)


-


(250)


(500)

Transaction costs

12


6


18


-


36

Corporate general and administrative

7,022


7,999


9,100


8,126


32,247

Depreciation and amortization

37,698


36,908


37,510


37,882


149,998

Hotel EBITDA

62,049


62,865


70,629


62,250


257,793

Hotel EBITDA from acquisitions (1)

(2,899)


(3,909)


(2,445)


(938)


(10,191)

Hotel EBITDA from dispositions (2)

(313)


309


-


49


45

Same store hotel EBITDA

$          58,837


$          59,265


$          68,184


$          61,361


$           247,647

Hotel EBITDA from acquisitions (3)

4,089


5,858


2,933


939


13,819

Pro forma hotel EBITDA

$          62,926


$          65,123


$          71,117


$          62,300


$           261,466














(1)

For any hotels acquired by the Company after October 1, 2022 (the "Acquired Hotels"), the Company has excluded the financial results of each of the Acquired Hotels for the period the Acquired Hotels were purchased by the Company to  September 30, 2023 (the "Acquisition Period") in determining same-store hotel EBITDA.



(2)

For hotels sold by the Company between October 1, 2022, and  September 30, 2023 (the "Disposed Hotels"), the Company has excluded the financial results of each of the Disposed Hotels for the period beginning on October 1, 2022, and ending on the date the Disposed Hotels were sold by the Company (the "Disposition Period") in determining same-store hotel EBITDA.



(3)

Unaudited pro forma information includes operating results for 101 hotels owned as of  September 30, 2023, as if all such hotels had been owned by the Company since October 1, 2022. For hotels acquired by the Company after October 1, 2022 (the "Acquired Hotels"), the Company has included in the pro forma information the financial results of each of the Acquired Hotels for the period from October 1, 2022, to September 30, 2023. The financial results for the Acquired Hotels include information provided by the third-party owner of such Acquired Hotel prior to purchase by the Company and have not been audited or reviewed by our auditors or adjusted by us. The pro forma information is included to enable comparison of results for the current reporting period to results for the comparable period of the prior year and are not indicative of future results.

 

Summit Hotel Properties, Inc.

Pro Forma and Same Store Data

(Unaudited)



For the Three Months Ended
September 30,


For the Nine Months Ended
September 30,


2023


2022


2023


2022

Pro Forma (101)








Rooms sold

1,014,851


989,042


2,988,331


2,871,416

Rooms available

1,383,189


1,382,944


4,104,343


4,089,153

Occupancy

73.4 %


71.5 %


72.8 %


70.2 %

ADR

$        159.35


$        159.71


$        167.22


$        160.81

RevPAR

$        116.91


$        114.22


$        121.75


$        112.92









Occupancy change

2.6 %




3.7 %



ADR change

-0.2 %




4.0 %



RevPAR change

2.4 %




7.8 %












For the Three Months Ended
September 30,


For the Nine Months Ended
September 30,


2023


2022


2023


2022

Same-Store (95)








Rooms sold

977,982


955,889


2,868,368


2,770,747

Rooms available

1,326,333


1,326,272


3,935,629


3,935,537

Occupancy

73.7 %


72.1 %


72.9 %


70.4 %

ADR

$        159.83


$        159.75


$        166.01


$        159.50

RevPAR

$        117.85


$        115.14


$        120.99


$        112.29









Occupancy change

2.3 %




3.5 %



ADR change

0.0 %




4.1 %



RevPAR change

2.4 %




7.7 %





(1)

Unaudited pro forma information includes operating results for 101 hotels owned as of  September 30, 2023, as if each hotel had been owned by the Company since January 1, 2022. As a result, these pro forma operating and financial measures include operating results for certain hotels for periods prior to the Company's ownership.



(2)

Same-store information includes operating results for 95 hotels owned by the Company as of January 1, 2022, and at all times during the three and nine months ended September 30, 2023, and 2022.

 

Summit Hotel Properties, Inc. 

Reconciliation of Net (Loss) Income to Non-GAAP Measures ? EBITDA for Financial Outlook

(in thousands)

(Unaudited)




FYE 2023 Outlook



Low


High

Net loss


$     (15,800)


$       (9,400)

Depreciation and amortization


150,900


150,900

Interest expense


86,400


86,300

Interest income


(400)


(400)

Income tax expense


2,900


2,900

EBITDA


$      224,000


$      230,300

Loss on disposal of assets and other dispositions, net


400


400

EBITDAre


$      224,400


$      230,700

Recoveries of credit losses


(500)


(500)

Amortization of key money liabilities


(400)


(400)

Equity-based compensation


7,700


7,700

Transaction costs and other


100


100

Debt transaction costs


400


400

Other non-cash items, net


2,500


2,500

Loss related to non-controlling interests in consolidated joint ventures


12,000


10,800

Adjustments related to non-controlling interests in consolidated joint ventures


(59,700)


(59,700)

Adjusted EBITDAre


$      186,500


$      191,600

 

Summit Hotel Properties, Inc. 

Reconciliation of Net (Loss) Income to Non-GAAP Measures ? Funds From Operations for Financial Outlook

(In thousands except per share and unit)

(Unaudited)




FYE 2023 Outlook



Low


High

Net loss


$     (15,800)


$       (9,400)

Preferred dividends


(15,900)


(15,900)

Distributions to and accretion of redeemable non-controlling interests


(2,600)


(2,600)

Loss related to non-controlling interests in consolidated joint ventures


12,000


10,800

Net loss applicable to Common Stock and Common Units


$     (22,300)


$     (17,100)

Real estate-related depreciation


149,200


149,200

Loss on disposal of assets and other dispositions, net


400


400

Adjustments related to non-controlling interests in consolidated joint ventures


(32,600)


(32,600)

FFO applicable to Common Stock and Common Units


$        94,700


$        99,900

Recoveries of credit losses


(500)


(500)

Amortization of debt issuance costs


5,300


5,300

Amortization of franchise fees


600


600

Amortization of intangible assets, net


2,700


2,700

Equity-based compensation


7,700


7,700

Transaction costs and other


100


100

Debt transaction costs


400


400

Other non-cash items, net


600


600

Adjustments related to non-controlling interests in consolidated joint ventures


(2,600)


(2,600)

AFFO applicable to Common Stock and Common Units


$      109,000


$      114,200

Wtd avg diluted shares of Common Stock and Common Units for FFO and AFFO


122,500


122,500

FFO per share of Common Stock and Common Units


$            0.77


$            0.82

AFFO per share of Common Stock and Common Units


$            0.89


$            0.93

 

Non-GAAP Financial Measures

We disclose certain "non-GAAP financial measures," which are measures of our historical financial performance. Non-GAAP financial measures are financial measures not prescribed by Generally Accepted Accounting Principles ("GAAP"). These measures are as follows: (i) Funds From Operations ("FFO") and Adjusted Funds from Operations ("AFFO"), (ii) Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA"), Earnings before Interest, Taxes, Depreciation and Amortization for Real Estate ("EBITDAre") and Adjusted EBITDAre, and Hotel EBITDA (as described below). We caution investors that amounts presented in accordance with our definitions of non-GAAP financial measures may not be comparable to similar measures disclosed by other companies, since not all companies calculate these non-GAAP financial measures in the same manner. Our non-GAAP financial measures should be considered along with, but not as alternatives to, net income (loss) as a measure of our operating performance. Our non-GAAP financial measures may include funds that may not be available for our discretionary use due to functional requirements to conserve funds for capital expenditures, property acquisitions, debt service obligations and other commitments and uncertainties. Although we believe that our non-GAAP financial measures can enhance the understanding of our financial condition and results of operations, these non-GAAP financial measures are not necessarily better indicators of any trend as compared to a comparable measure prescribed by GAAP such as net income (loss).

Funds From Operations ("FFO") and Adjusted FFO ("AFFO")

As defined by Nareit, FFO represents net income or loss (computed in accordance with GAAP), excluding preferred dividends, gains (or losses) from sales of real property, impairment losses on real estate assets, items classified by GAAP as extraordinary, the cumulative effect of changes in accounting principles, plus depreciation and amortization related to real estate assets, and adjustments for unconsolidated partnerships, and joint ventures. AFFO represents FFO excluding amortization of deferred financing costs, franchise fees, equity-based compensation expense, transaction costs, debt transaction costs, premiums on redemption of preferred shares, losses from net casualties, non-cash interest income and non-cash income tax related adjustments to our deferred tax asset. Unless otherwise indicated, we present FFO and AFFO applicable to our common shares and common units. We present FFO and AFFO because we consider FFO and AFFO an important supplemental measure of our operational performance and believe it is frequently used by securities analysts, investors, and other interested parties in the evaluation of REITs, many of which present FFO and AFFO when reporting their results. FFO and AFFO are intended to exclude GAAP historical cost depreciation and amortization, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO and AFFO exclude depreciation and amortization related to real estate assets, gains and losses from real property dispositions and impairment losses on real estate assets, and certain transaction costs related to lodging property acquisition activities and debt, FFO and AFFO provide performance measures that, when compared year over year, reflect the effect to operations from trends in occupancy, guestroom rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income. Our computation of FFO differs slightly from the computation of Nareit-defined FFO related to the reporting of depreciation and amortization expense on assets at our corporate offices, which is de minimus. Our computation of FFO may also differ from the methodology for calculating FFO used by other equity REITs and, accordingly, may not be comparable to such other REITs. FFO and AFFO should not be considered as an alternative to net income (loss) (computed in accordance with GAAP) as an indicator of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions. Where indicated in this release, FFO is based on our computation of FFO and not the computation of Nareit-defined FFO unless otherwise noted.

EBITDA, EBITDAre, Adjusted EBITDAre, and Hotel EBITDA

In September 2017, Nareit proposed a standardized performance measure, called EBITDAre, which is based on EBITDA and is expected to provide additional relevant information about REITs as real estate companies in support of growing interest among generalist investors. The conclusion was reached that, while dedicated REIT investors have long been accustomed to utilizing the industry's supplemental measures such as FFO and net operating income ("NOI") to evaluate the investment quality of REITs as real estate companies, it would be helpful to generalist investors for REITs as real estate companies to also present EBITDAre as a more widely known and understood supplemental measure of performance. EBITDAre is intended to be a supplemental non-GAAP performance measure that is independent of a company's capital structure and will provide a uniform basis for one measurement of the enterprise value of a company compared to other REITs.

EBITDAre, as defined by Nareit, is calculated as EBITDA, excluding: (i) loss and gains on disposition of property and (ii) asset impairments, if any. We believe EBITDAre is useful to an investor in evaluating our operating performance because it provides investors with an indication of our ability to incur and service debt, to satisfy general operating expenses, to make capital expenditures and to fund other cash needs or reinvest cash into our business. We also believe it helps investors meaningfully evaluate and compare the results of our operations from period to period by removing the effect of our asset base (primarily depreciation and amortization) from our operating results.

We make additional adjustments to EBITDAre when evaluating our performance because we believe that the exclusion of certain additional non-recurring or unusual items described below provides useful supplemental information to investors regarding our ongoing operating performance. We believe that the presentation of Adjusted EBITDAre, when combined with the primary GAAP presentation of net income, is useful to an investor in evaluating our operating performance because it provides investors with an indication of our ability to incur and service debt, to satisfy general operating expenses, to make capital expenditures and to fund other cash needs or reinvest cash into our business. We also believe it helps investors meaningfully evaluate and compare the results of our operations from period to period by removing the effect of our asset base (primarily depreciation and amortization) from our operating results.

With respect to hotel EBITDA, we believe that excluding the effect of corporate-level expenses and non-cash items provides a more complete understanding of the operating results over which individual hotels and operators have direct control. We believe the property-level results provide investors with supplemental information on the ongoing operational performance of our hotels and effectiveness of the third-party management companies operating our business on a property-level basis.

We caution investors that amounts presented in accordance with our definitions of EBITDA, EBITDAre, adjusted EBITDAre, and hotel EBITDA may not be comparable to similar measures disclosed by other companies, since not all companies calculate these non-GAAP measures in the same manner. EBITDA, EBITDAre, adjusted EBITDAre, and hotel EBITDA should not be considered as an alternative measure of our net income (loss) or operating performance. EBITDA, EBITDAre, adjusted EBITDAre, and hotel EBITDA may include funds that may not be available for our discretionary use due to functional requirements to conserve funds for capital expenditures and property acquisitions and other commitments and uncertainties. Although we believe that EBITDA, EBITDAre, adjusted EBITDAre, and hotel EBITDA can enhance your understanding of our financial condition and results of operations, these non-GAAP financial measures are not necessarily a better indicator of any trend as compared to a comparable GAAP measure such as net income (loss). Above, we include a quantitative reconciliation of EBITDA, EBITDAre, adjusted EBITDAre and hotel EBITDA to the most directly comparable GAAP financial performance measure, which is net income (loss) and operating income (loss).

SOURCE SUMMIT HOTEL PROPERTIES, INC.


These press releases may also interest you

at 08:30
The Hyatt Regency Atlanta proudly celebrated the legacy of financial literacy advocate John Hope Bryant at its annual 'Heritage Celebration' on February 15th. The special event, held at the historic hotel renowned for its pivotal role in civil rights...

at 08:30
Sabre Corporation , a leading software and technology provider powering the global travel industry, today announced a new multi-year agreement with Duluth Travel, a Service Disabled Veteran Owned travel management company and a leader in the...

at 08:24
Royal Caribbean Cruises Ltd. (the "Company") today announced that it has commenced a private offering of $1.0 billion aggregate principal amount of senior unsecured notes due 2032 (the "Notes")....

at 08:15
Pilot project in Ontario, links Hamilton International Airport (YHM) and Region of Waterloo International Airport (YKF) with Air Canada's Toronto Pearson gateway (6x daily each)Luxury motorcoach connections offer customers the ability to avoid...

at 08:05
Innisfree Hotels (innisfreehotels.com) proudly announces the completion of an ambitious solar power project at its Surf & Sand Hotel in Pensacola Beach. SunFarm Energy, Northwest Florida's local solar experts, recently installed a 330-panel...

at 08:00
Ampaire Inc., a global leader in hybrid electric aircraft systems, has achieved a significant milestone in sustainable aviation by completing its first ground test utilizing pure 100 percent ASTM D7566 Sustainable Aviation Fuel (SAF) produced by...



News published on and distributed by: