SUMMIT HOTEL PROPERTIES REPORTS SECOND QUARTER 2024 RESULTS

FREE Breaking News Alerts from StreetInsider.com!

E-mail Address

StreetInsider.com Top Tickers, 6/27/2026

1. SYNA
2. ON
3. SPY
4. MU
5. AAPL
6. VEON
7. DRI
8. NKE
9. USO
10. NVDA

July 29, 2024 4:30 PM EDT

Net Income Increases to $30.8 Million for Second Quarter 2024

Adjusted EBITDAre Grows 6% to Reach All-Time Quarterly Record High of $55.9 Million

Adjusted FFO Increases 10% to $0.29 per Share

AUSTIN, Texas, July 29, 2024 /PRNewswire/ -- Summit Hotel Properties, Inc. (NYSE: INN) (the "Company"), today announced results for the three and six months ended June 30, 2024.

"We are pleased with our strong second quarter financial results as year-over-year RevPAR growth of 3.4% in our pro forma portfolio exceeded the national average for the thirteenth consecutive quarter.  Our top line results were driven by strong group demand growth, the continued recovery of business transient travel and our outsized exposure to urban markets.  Continued successful expense management drove pro forma hotel EBITDA margin expansion of 120 basis points and Adjusted EBITDAre and Adjusted FFO grew 6% and 10%, respectively year-over-year," said Jonathan P. Stanner, the Company's President and Chief Executive Officer.   "During the quarter we closed on the previously announced sale of three hotels for $84 million, a continuation of our balance sheet deleveraging efforts which have improved the overall quality of our portfolio, eliminated significant near-term capital needs, and better positioned the Company for future growth," continued Mr. Stanner.

Second Quarter 2024 Summary

  • Net Income:  Net income attributable to common stockholders was $30.8 million, or $0.23 per diluted share, compared to a net loss of $0.8 million, or $0.01 per diluted share, for the second quarter of 2023.

  • Pro forma RevPAR:  Pro forma RevPAR increased 3.4 percent to $132.41 compared to the second quarter of 2023. Pro forma ADR increased 0.9 percent to $170.46 compared to the same period in 2023, and pro forma occupancy increased 2.4 percent to 77.7 percent.

  • Same Store RevPAR:  Same Store RevPAR increased 3.3 percent to $132.59 compared to the second quarter of 2023. Same store ADR increased 0.9 percent to $170.53 and same store occupancy increased 2.4 percent to 77.8 percent.

  • Pro Forma Hotel EBITDA(1):  Pro forma hotel EBITDA increased 7.0 percent to $73.1 million from $68.3 million in the same period in 2023. Pro forma hotel EBITDA margin expanded approximately 120 basis points to 38.0 percent.

  • Same Store Hotel EBITDA(1):  Same store hotel EBITDA increased 6.9 percent to $72.4 million from $67.7 million in the same period in 2023. Same store hotel EBITDA margin expanded approximately 118 basis points to 38.0 percent.

  • Adjusted EBITDAre(1):  Adjusted EBITDAre increased 5.7 percent to $55.9 million from $52.9 million in the second quarter of 2023.

  • Adjusted FFO(1):  Adjusted FFO increased 9.7 percent to $36.4 million, or $0.29 per diluted share, compared to $33.2 million, or $0.27 per diluted share, in the second quarter of 2023.

Year-to-Date 2024 Summary

  • Net Income:  Net income attributable to common stockholders was $28.7 million, or $0.21 per diluted share, compared to a net loss of $6.0 million, or $0.06 per diluted share, in the same period of 2023.

  • Pro forma RevPAR:  Pro forma RevPAR increased 2.3 percent to $128.14 compared to the same period of 2023. Pro forma ADR decreased 0.2 percent to $171.52, and pro forma occupancy increased 2.5 percent to 74.7 percent.

  • Same Store RevPAR:  Same Store RevPAR increased 2.3 percent to $127.72 compared to the same period of 2023. Same store ADR decreased 0.2 percent to $170.99, and same store occupancy increased 2.5 percent to 74.7 percent.

  • Pro Forma Hotel EBITDA(1):  Pro forma hotel EBITDA increased 5.9 percent to $138.8 million from $131.0 million, and pro formal hotel EBITDA margin expanded 93 basis points to 37.2 percent.

  • Same Store Hotel EBITDA(1):  Same store hotel EBITDA increased 6.0 percent to $136.2 million from $128.5 million, and same store hotel EBITDA margin expanded 94 basis points to 37.0 percent.

  • Adjusted EBITDAre(1):  Adjusted EBITDAre increased 7.6 percent to $104.7 million from $97.3 million in the same period of 2023.

  • Adjusted FFO(1):  Adjusted FFO increased 11.7 percent to $66.4 million, or $0.54 per diluted share, compared to $59.4 million, or $0.49 per diluted share, in the same period of 2023.

The Company's results for the three and six months ended June 30, 2024 and 2023 are as follows (in thousands, except per share amounts and metrics):


For the Three Months Ended

June 30,


For the Six Months Ended
June 30,


2024


2023


2024


2023



Net income (loss) attributable to common stockholders

$            30,849


$              (753)


$         28,733


$        (5,981)

Net income (loss) per diluted share

$                 0.23


$             (0.01)


$             0.21


$          (0.06)

Total revenues

$          193,903


$          194,493


$       382,045


$       376,876

EBITDAre (1)

$            69,755


$            61,602


$       130,954


$       116,942

Adjusted EBITDAre (1)

$            55,920


$            52,896


$       104,721


$         97,323

FFO (1)

$            34,934


$            27,847


$         60,422


$         49,923

Adjusted FFO (1)

$            36,370


$            33,151


$         66,366


$         59,411

FFO per diluted share and unit (1) (2)

$                 0.28


$                 0.23


$             0.49


$             0.41

Adjusted FFO per diluted share and unit (1) (2)

$                 0.29


$                 0.27


$             0.54


$             0.49









Pro Forma (2)








RevPAR

$            132.41


$            128.10


$         128.14


$         125.28

RevPAR Growth

3.4 %




2.3 %



Hotel EBITDA

$            73,095


$            68,303


$       138,752


$       131,015

Hotel EBITDA Margin

38.0 %


36.8 %


37.2 %


36.2 %

Hotel EBITDA Margin Growth

             120 bps




            93 bps











Same Store (3)








RevPAR

$            132.59


$            128.38


$         127.72


$         124.82

RevPAR Growth

3.3 %




2.3 %



Hotel EBITDA

$            72,387


$            67,746


$       136,205


$       128,509

Hotel EBITDA Margin

38.0 %


36.8 %


37.0 %


36.0 %

Hotel EBITDA Margin Growth

             118 bps




            94 bps




(1) See tables later in this press release for a discussion and reconciliation of net income (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 96 hotels owned as of June 30, 2024, as if each hotel had been owned by the Company since January 1, 2023 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, 2023, 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 94 hotels owned as of June 30, 2024, and at all times during the three and six months ended June 30, 2024, and 2023.

Transaction Activity

During the quarter, the Company completed the sale of three hotels containing 529 guestrooms for a gross sales price of $84 million. The aggregate sales price for the transactions represented a blended 6.8 percent capitalization rate based on the estimated net operating income after a FF&E reserve for the full year 2024 and after consideration of approximately $13 million of foregone near-term required capital expenditures. Net proceeds from the transaction, which generated a net gain on sale of approximately $28.0 million, were used to repay debt and for other general corporate purposes.

Sold Hotels

Keys

Date

Price

Capex (1)

RevPAR

Courtyard & SpringHill Suites New Orleans Warehouse Arts District

410

April 2024

73,000

10,250

114

Hilton Garden Inn College Station

119

April 2024

11,000

2,975

86

Total

529


$ 84,000

$ 13,225

$          108


(1) Reflects estimated near-term foregone capital expenditures for dispositions and near-term capital requirements for acquisitions.

Over the last fifteen months, the Company and its affiliates have sold nine hotels for a combined sales price of $131 million at a blended capitalization rate of approximately 5%, inclusive of an estimated $44 million of foregone capital needs, based on the trailing twelve month net operating income at the time of each sale.  The combined RevPAR for the sold hotels was $87 which is a nearly 30% discount to the current pro forma portfolio.  The Company's disposition activity has facilitated nearly a full turn reduction in its Net Debt : Adjusted EBITDAre leverage ratio, enhanced the quality and growth profile of the portfolio, and significantly reduced near-term capital requirements.

Capital Markets and Balance Sheet

During the second quarter, the Company further deleveraged its balance sheet by repaying over $105 million of pro rata indebtedness with proceeds from asset sales and available cash on hand.

On a pro rata basis as of June 30, 2024, the Company had the following outstanding indebtedness and liquidity available:

  • Outstanding debt of $1.1 billion with a weighted average interest rate of 4.73 percent. After giving effect to interest rate derivative agreements, $799.0 million, or 76 percent, of our outstanding debt had a fixed interest rate, and $254.3 million, or 24 percent, had a variable interest rate.

  • Unrestricted cash and cash equivalents of $37.7 million.

  • Total liquidity of $328.1 million, including unrestricted cash and cash equivalents and revolving credit facility availability.

Common and Preferred Dividend Declaration

On July 25, 2024, the Company declared a quarterly cash dividend of $0.08 per share on its common stock and per common unit of limited partnership interest in Summit Hotel OP, LP. The quarterly dividend of $0.08 per share represents an annualized dividend yield of 5.2 percent, based on the closing price of shares of the common stock on July 26, 2024.

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

  • $0.390625 per share on its 6.25% Series E Cumulative Redeemable Preferred Stock
  • $0.3671875 per share on its 5.875% Series F Cumulative Redeemable Preferred Stock.
  • $0.328125 per unit on its 5.25% Series Z Cumulative Perpetual Preferred Units

The dividends are payable on August 30, 2024, to holders of record as of August 16, 2024.

2024 Outlook

The Company is revising its full year 2024 outlook to reflect a moderating RevPAR growth environment, particularly around peak summer travel periods as leisure trends continue to normalize.  The revised Adjusted EBITDAre range incorporates a high-end that has been tightened and a slight decrease to the midpoint of the range as continued successful profitability initiatives and reduced expense growth have helped offset lower revenue growth expectations.  The Adjusted FFO and Adjusted FFO per share ranges have been tightened with midpoints maintained.

The full year 2024 outlook is based on 96 lodging assets currently owned, 54 of which were wholly owned as of July 29, 2024. The updated outlook incorporates all transaction activity closed to date and there are no additional acquisitions, dispositions, or capital markets activities assumed in the Company's full year 2024 outlook beyond the transactions already completed.



FYE 2024 Outlook



Low


High


Variance to
Prior
Midpoint


% Change to
Prior
Midpoint

Pro Forma RevPAR Growth (1)


1.00 %


2.50 %


(1.25) %


— %

Adjusted EBITDAre


$        188,000


$        196,000


$          (2,000)


(1.0) %

Adjusted FFO


$        112,000


$        122,000


$                  —


— %

Adjusted FFO per Diluted Unit


$              0.91


$              0.99


$                  —


— %

Capital Expenditures, Pro Rata


$          65,000


$          85,000


$                  —


— %


(1) All pro forma information includes operating and financial results for 96 lodging assets owned as of July 29, 2024, as if each property had been owned by the Company since January 1, 2023 and will continue to be owned through the entire year ending December 31, 2024. As a result, the pro forma information includes operating and financial results for lodging assets acquired since January 1, 2023, which may include periods prior to the Company's ownership. Pro forma and non-GAAP financial measures are unaudited.

Second Quarter 2024 Earnings Conference Call

The Company will conduct its quarterly conference call on July 30, 2024, at 9:00 AM 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 October 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 facilities with efficient operating models primarily in the upscale segment of the lodging industry. As of July 29, 2024, the Company's portfolio consisted of 96 assets, 54 of which are wholly owned, with a total of 14,256 guestrooms located in 24 states.

For additional information, please visit the Company's website, www.shpreit.com, and follow on 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, 2023, 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)



June 30, 2024


December 31, 2023



(Unaudited)



ASSETS





Investments in lodging property, net


$            2,702,038


$                   2,729,049

Investment in lodging property under development


3,955


1,451

Assets held for sale, net


9,715


73,740

Cash and cash equivalents


45,873


37,837

Restricted cash


6,766


9,931

Right-of-use assets, net


33,851


34,814

Trade receivables, net


27,967


21,348

Prepaid expenses and other


14,142


8,865

Deferred charges, net


6,357


6,659

Other assets


20,571


15,554

Total assets


$            2,871,235


$                   2,939,248






LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY





Liabilities:





Debt, net of debt issuance costs


$            1,345,492


$                   1,430,668

Lease liabilities, net


25,158


25,842

Accounts payable


6,637


4,827

Accrued expenses and other


84,412


81,215

Total liabilities


1,461,699


1,542,552






Redeemable non-controlling interests


50,219


50,219






Total stockholders' equity


931,947


911,195

Non-controlling interests


427,370


435,282

Total equity


1,359,317


1,346,477

Total liabilities, redeemable non-controlling interests and equity


$            2,871,235


$                   2,939,248

 

Summit Hotel Properties, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)



For the Three Months Ended

June 30,


For the Six Months Ended
June 30,



2024


2023


2024


2023

Revenues:









Room


$           173,025


$           174,181


$       340,456


$       337,270

Food and beverage


10,069


10,269


20,902


20,899

Other


10,809


10,043


20,687


18,707

Total revenues


193,903


194,493


382,045


376,876










Expenses:









Room


38,044


38,788


74,017


74,697

Food and beverage


7,639


8,040


15,841


15,995

Other lodging property operating expenses


57,470


57,829


113,731


113,954

Property taxes, insurance and other


13,287


14,215


27,572


28,939

Management fees


4,434


4,992


9,331


9,797

Depreciation and amortization


36,458


37,510


73,257


74,418

Corporate general and administrative


8,704


9,100


17,015


17,099

Transaction costs


—


260


—


266

Recovery of credit losses


—


—


—


(250)

Total expenses


166,036


170,734


330,764


334,915

Gain (loss) on disposal of assets, net


28,342


(320)


28,417


(320)

Operating income


56,209


23,439


79,698


41,641










Other income (expense):









Interest expense


(20,830)


(22,248)


(42,412)


(43,157)

Interest income


565


411


1,023


717

Gain on extinguishment of debt


3,000


—


3,000


—

Other income, net


2,129


79


2,814


38

Total other expense, net


(15,136)


(21,758)


(35,575)


(42,402)

Income (loss) from continuing operations before income taxes


41,073


1,681


44,123


(761)

Income tax (expense) benefit


(2,375)


(791)


(2,592)


(319)

Net income (loss)


38,698


890


41,531


(1,080)

Less - (income) loss attributable to non-controlling interests


(3,224)


2,982


(3,546)


4,351

Net income attributable to Summit Hotel Properties, Inc. before preferred dividends


35,474


3,872


37,985


3,271

Less - Distributions to and accretion of redeemable non-controlling interests


(657)


(657)


(1,314)


(1,314)

Less - Preferred dividends


(3,968)


(3,968)


(7,938)


(7,938)

Net income (loss) attributable to common stockholders


$             30,849


$                 (753)


28,733


(5,981)










Income (loss) per common share:









Basic


$                  0.29


$                (0.01)


$              0.27


$            (0.06)

Diluted


$                  0.23


$                (0.01)


$              0.21


$            (0.06)

Weighted-average common shares outstanding:









Basic


105,918


105,562


105,819


105,438

Diluted


149,451


105,562


149,112


105,438

 

Summit Hotel Properties, Inc.

Reconciliation of Net Income (Loss) to Non-GAAP Measures - Funds From Operations

(Unaudited)

(In thousands, except per share and unit amounts)



For the Three Months
Ended June 30,


For the Six Months
Ended June 30,



2024


2023


2024


2023

Net income (loss)


$       38,698


$             890


$       41,531


$        (1,080)

Preferred dividends


(3,968)


(3,968)


(7,938)


(7,938)

Distributions to and accretion of redeemable non-controlling interests


(657)


(657)


(1,314)


(1,314)

Loss related to non-controlling interest in consolidated joint ventures


1,375


2,971


737


3,651

Net income (loss) applicable to Common Stock and Common Units


35,448


(764)


33,016


(6,681)

Real estate-related depreciation


35,266


36,327


70,869


72,054

(Gain) loss on disposal of assets and other dispositions, net


(28,342)


320


(28,417)


368

Adjustments related to non-controlling interests in consolidated joint ventures


(7,438)


(8,036)


(15,046)


(15,818)

FFO applicable to Common Stock and Common Units


34,934


27,847


60,422


49,923

Recoveries of credit losses


—


—


—


(250)

Amortization of debt issuance costs


1,621


1,386


3,240


2,785

Amortization of franchise fees


161


144


325


286

Amortization of intangible assets, net


911


919


1,822


1,822

Equity-based compensation


2,635


2,578


4,483


4,046

Transaction costs and other


—


18


—


24

Debt transaction costs


17


241


581


328

Gain on extinguishment of debt


(3,000)


—


(3,000)


—

Non-cash interest income, net (1)


(133)


(133)


(266)


(263)

Non-cash lease expense, net


149


129


222


262

Casualty (gain) loss


(607)


935


(881)


1,471

Other non-cash items, net


50


—


359


768

Adjustments related to non-controlling interests in consolidated joint ventures


(368)


(913)


(941)


(1,791)

AFFO applicable to Common Stock and Common Units


$       36,370


$       33,151


$       66,366


$       59,411

FFO per share of Common Stock and Common Units


$            0.28


$            0.23


$            0.49


$            0.41

AFFO per share of Common Stock and Common Units


$            0.29


$            0.27


$            0.54


$            0.49

Weighted-average diluted shares of Common Stock and Common Units:









FFO and AFFO (2)


123,834


122,432


123,664


122,223


(1) Non-cash interest income relates to the amortization of the discount on a note receivable. The discount on the note receivable was recorded at inception of the related loan based on the estimated value of the embedded purchase option in the note 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 June 30,


For the Six Months
Ended June 30,



2024


2023


2024


2023

Weighted-average shares of Common Stock outstanding


105,918


105,562


105,819


105,438

Dilutive effect of unvested restricted stock awards


1,072


29


1,000


122

Dilutive effect of performance stock awards


896


—


896


—

Dilutive effect of Common Units of Operating Partnership


15,948


15,977


15,949


15,977

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


25,617


24,540


25,448


24,433

Adjusted weighted diluted shares of Common Stock


149,451


146,108


149,112


145,970










Non-GAAP adjustment for dilutive effects of restricted stock awards


—


864


—


686

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


(25,617)


(24,540)


(25,448)


(24,433)

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


123,834


122,432


123,664


122,223

 

Summit Hotel Properties, Inc.

Reconciliation of Net Income (Loss) to Non-GAAP Measures - EBITDAre

(Unaudited)

(In thousands)



 For the Three Months
Ended June 30,


For the Six Months
Ended June 30,



2024


2023


2024


2023

Net income (loss)


$       38,698


$             890


$       41,531


$        (1,080)

Depreciation and amortization


36,458


37,510


73,257


74,418

Interest expense


20,830


22,248


42,412


43,157

Interest income on cash deposits


(264)


(157)


(421)


(240)

Income tax expense


2,375


791


2,592


319

EBITDA


98,097


61,282


159,371


116,574

(Gain) loss on disposal of assets and other dispositions, net


(28,342)


320


(28,417)


368

EBITDAre


69,755


61,602


130,954


116,942

Recoveries of credit losses


—


—


—


(250)

Amortization of key money liabilities


(121)


(121)


(242)


(257)

Equity-based compensation


2,635


2,578


4,483


4,046

Transaction costs and other


—


18


—


24

Debt transaction costs


17


241


581


328

Gain on extinguishment of debt


(3,000)


—


(3,000)


—

Non-cash interest income, net (1)


(133)


(133)


(266)


(263)

Non-cash lease expense, net


149


129


222


262

Casualty (gain) loss


(607)


935


(881)


1,471

Loss related to non-controlling interest in consolidated joint ventures


1,375


2,971


737


3,651

Other non-cash items, net


50


—


362


705

Adjustments related to non-controlling interests in consolidated joint ventures


(14,200)


(15,324)


(28,229)


(29,336)

Adjusted EBITDAre


$       55,920


$       52,896


$     104,721


$       97,323


(1) Non-cash interest income relates to the amortization of the discount on a note receivable. The discount on the note receivable was recorded at inception of the related loan based on the estimated value of the embedded purchase option in the note receivable.

 

Summit Hotel Properties, Inc.

Pro Forma Hotel Operating Data

(Unaudited)

(Dollars in thousands)



For the Three Months Ended

June 30,


For the Six Months Ended

June 30,

Pro Forma Operating Data


2024


2023


2024


2023

Pro forma room revenue


$       171,776


$       166,170


$       332,481


$       323,245

Pro forma other hotel operations revenue


$         20,739


$         19,619


$         40,927


$         38,366

Pro forma total revenues


192,515


185,789


373,408


361,611

Pro forma total hotel operating expenses


$       119,420


$       117,486


$       234,656


$       230,596

Pro forma hotel EBITDA


73,095


68,303


138,752


131,015

Pro forma hotel EBITDA Margin


38.0 %


36.8 %


37.2 %


36.2 %










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


















Revenue:









Total revenues


$       193,903


$       194,493


$       382,045


$       376,876

Total revenues - acquisitions (1)


—


1,278


—


4,716

Total revenues - dispositions (2)


(1,388)


(9,982)


(8,637)


(19,981)

Pro forma total revenues


192,515


185,789


373,408


361,611










Hotel Operating Expenses:









Hotel operating expenses


$       120,874


$       123,864


$       240,492


$       243,382

Hotel operating expenses - acquisitions (1)


1


790


1


2,279

Hotel operating expenses - dispositions (2)


(1,455)


(7,168)


(5,837)


(15,065)

Pro forma hotel operating expense


119,420


117,486


234,656


230,596










Hotel EBITDA:









Operating income


56,209


23,439


79,698


41,641

(Gain) loss on disposal of assets and other dispositions, net


(28,342)


320


(28,417)


320

Recoveries of credit losses


—


—


—


(250)

Transaction costs


—


260


—


266

Corporate general and administrative


8,704


9,100


17,015


17,099

Depreciation and amortization


36,458


37,510


73,257


74,418

Hotel EBITDA


73,029


70,629


141,553


133,494

Hotel EBITDA - acquisitions (1)


(709)


(69)


(2,547)


(69)

Hotel EBITDA - dispositions (2)


67


(2,814)


(2,801)


(4,916)

Same Store hotel EBITDA


$         72,387


$         67,746


$       136,205


$       128,509

Hotel EBITDA - acquisitions (3)


708


557


2,547


2,506

Pro forma hotel EBITDA


$         73,095


$         68,303


$       138,752


$       131,015


(1) For any hotels acquired by the Company after July 1, 2023 (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 June 30, 2024 (the "Acquisition Period") in determining same-store hotel EBITDA.


(2) For hotels sold by the Company between July 1, 2023, and June 30, 2024 (the "Disposed Hotels"), the Company has excluded the financial results of each of the Disposed Hotels for the period beginning on January 1, 2023, 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 96 hotels owned as of June 30, 2024, as if all such hotels had been owned by the Company since January 1, 2023. For hotels acquired by the Company after January 1, 2023 (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, 2023, to June 30, 2024. 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)











Trailing Twelve



2023


2024


Months Ended

Pro Forma Operating Data (1)


Q3


Q4


Q1


Q2


June 30, 2024

Pro forma room revenue


$          157,247


$          150,382


$          160,705


$          171,776


$                   640,110

Pro forma other hotel operations revenue


19,617


19,861


20,188


20,739


80,405

Pro forma total revenues


176,864


170,243


180,893


192,515


720,515

Pro forma total hotel operating expenses


115,348


110,014


115,236


119,420


460,018

Pro forma hotel EBITDA


61,516


60,229


65,657


73,095


260,497

Pro forma hotel EBITDA Margin


34.8 %


35.4 %


36.3 %


38.0 %


36.2 %












Pro Forma Statistics (1)











Rooms sold


977,432


926,797


930,768


1,007,709


3,842,706

Rooms available


1,311,521


1,311,552


1,297,296


1,297,296


5,217,665

Occupancy


74.5 %


70.7 %


71.7 %


77.7 %


73.6 %

ADR


$             160.88


$             162.26


$             172.66


$             170.46


$                     166.58

RevPAR


$             119.90


$             114.66


$             123.88


$             132.41


$                     122.68












Actual Statistics











Rooms sold


1,014,851


970,959


969,479


1,014,864


3,970,153

Rooms available


1,383,189


1,381,867


1,351,150


1,306,712


5,422,918

Occupancy


73.4 %


70.3 %


71.8 %


77.7 %


73.2 %

ADR


$             159.35


$             161.78


$             172.70


$             170.49


$                     166.05

RevPAR


$             116.91


$             113.67


$             123.92


$             132.41


$                     121.57












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
















Revenue:











Total revenues


$          181,816


$          177,435


$          188,142


$          193,903


$                   741,296

Total revenues - acquisitions (1)


—


—


—


—


—

Total revenues - dispositions (2)


(4,952)


(7,192)


(7,249)


(1,388)


(20,781)

Pro forma total revenues


176,864


170,243


180,893


192,515


720,515












Hotel Operating Expenses:











Hotel operating expenses


119,566


115,157


119,618


120,874


475,215

Hotel operating expenses - acquisitions (1)


—


—


—


1


1

Hotel operating expenses - dispositions (2)


(4,218)


(5,143)


(4,382)


(1,455)


(15,198)

Pro forma hotel operating expenses


115,348


110,014


115,236


119,420


460,018












Hotel EBITDA:











Operating income


16,476


428


23,489


56,209


96,602

Loss (gain) on disposal of assets, net


16


1


(75)


(28,342)


(28,400)

Loss on impairment and write-off of assets


—


16,661


—


—


16,661

Recoveries of credit losses


(250)


(730)


—


—


(980)

Hotel acquisition and transition costs


—


(11)


—


—


(11)

Corporate general and administrative


8,126


7,305


8,311


8,704


32,446

Depreciation and amortization


37,882


38,624


36,799


36,458


149,763

Hotel EBITDA


62,250


62,278


68,524


73,029


266,081

Hotel EBITDA - acquisitions (1)


(505)


(876)


(1,838)


(709)


(3,928)

Hotel EBITDA - dispositions (2)


(734)


(2,049)


(2,868)


67


(5,584)

Same store hotel EBITDA


61,011


59,353


63,818


72,387


256,569

Hotel EBITDA - acquisitions (3)


505


876


1,839


708


3,928

Pro forma hotel EBITDA


$             61,516


$             60,229


$             65,657


$             73,095


$                   260,497


(1) For any hotels acquired by the Company after January 1, 2024 (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 June 30, 2024 (the "Acquisition Period") in determining same-store hotel EBITDA.


(2) For hotels sold by the Company between  January 1, 2024, and June 30, 2024 (the "Disposed Hotels"), the Company has excluded the financial results of each of the Disposed Hotels for the period beginning on July 1, 2023 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 96 hotels owned as of June 30, 2024, as if all such hotels had been owned by the Company since January 1, 2024. For hotels acquired by the Company after October 1, 2023 (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, 2023, to June 30, 2024. 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

June 30,


For the Six Months Ended

June 30,



2024


2023


2024


2023

Pro Forma (1)









Rooms sold


1,007,709


983,908


1,938,477


1,880,927

Rooms available


1,297,296


1,297,205


2,594,592


2,580,155

Occupancy


77.7 %


75.8 %


74.7 %


72.9 %

ADR


$          170.46


$          168.89


$     171.52


$     171.85

RevPAR


$          132.41


$          128.10


$     128.14


$     125.28










Occupancy change


2.4 %




2.5 %



ADR change


0.9 %




(0.2) %



RevPAR change


3.4 %




2.3 %























For the Three Months Ended

June 30,


For the Six Months Ended

June 30,



2024


2023


2024


2023

Same-Store (2)









Rooms sold


996,856


973,841


1,915,240


1,858,252

Rooms available


1,282,099


1,282,008


2,564,198


2,549,928

Occupancy


77.8 %


76.0 %


74.7 %


72.9 %

ADR


$          170.53


$          169.01


$     170.99


$     171.27

RevPAR


$          132.59


$          128.38


$     127.72


$     124.82










Occupancy change


2.4 %




2.5 %



ADR change


0.9 %




(0.2) %



RevPAR change


3.3 %




2.3 %




(1) Unaudited pro forma information includes operating results for 96 hotels owned as of June 30, 2024, as if each hotel had been owned by the Company since January 1, 2023. 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 94 hotels owned by the Company as of January 1, 2023, and at all times during the three and six months ended June 30, 2024, and 2023.

 

Summit Hotel Properties, Inc.

Reconciliation of Net Income to Non-GAAP Measures - EBITDA for Financial Outlook

(in thousands)

(Unaudited)








Low


High

Net income


$             33,800


$             46,100

Depreciation and amortization


147,900


147,900

Interest expense


83,000


82,800

Interest income


(400)


(400)

Income tax expense


2,800


2,800

EBITDA


$           267,100


$           279,200

Gain on disposal of assets and other dispositions, net


(28,400)


(28,400)

EBITDAre


$           238,700


$           250,800

Equity-based compensation


8,300


8,300

Debt transaction costs


(2,200)


(2,200)

Other non-cash items, net


(10,800)


(10,800)

Loss related to non-controlling interests in consolidated joint ventures


3,700


1,400

Adjustments related to non-controlling interests in consolidated joint ventures


(49,700)


(51,500)

Adjusted EBITDAre


$           188,000


$           196,000

 

Summit Hotel Properties, Inc.

Reconciliation of Net Income to Non-GAAP Measures – Funds From Operations for Financial Outlook

(in thousands except per share and unit)

(Unaudited)








FYE 2024 Outlook



Low


High

Net income


$             33,800


$             46,100

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


3,700


1,400

Net income applicable to Common Stock and Common Units


$             19,000


$             29,000

Real estate-related depreciation


145,200


145,200

Gain on disposal of assets and other dispositions, net


(28,400)


(28,400)

Adjustments related to non-controlling interests in consolidated joint ventures


(31,600)


(31,600)

FFO applicable to Common Stock and Common Units


$           104,200


$           114,200

Amortization of debt issuance costs


6,500


6,500

Amortization of franchise fees


600


600

Equity-based compensation


8,300


8,300

Debt transaction costs


(2,200)


(2,200)

Other non-cash items, net


(8,800)


(8,800)

Adjustments related to non-controlling interests in consolidated joint ventures


3,400


3,400

AFFO applicable to Common Stock and Common Units


$           112,000


$           122,000

Weighted average diluted shares of Common Stock and Common Units for FFO and AFFO


122,900


122,900

FFO per Common Stock and Common Units


$                  0.85


$                  0.93

AFFO per Common Stock and Common Units


$                  0.91


$                  0.99

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"), 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, debt transaction costs, premiums on redemption of preferred shares, losses from net casualties, non-cash lease expense, non-cash interest income and non-cash income tax related adjustments to our deferred tax assets. 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, 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 corporate depreciation and amortization expense. 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).

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/summit-hotel-properties-reports-second-quarter-2024-results-302208975.html

SOURCE Summit Hotel Properties, Inc.


Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

PRNewswire, Press Releases

Related Entities

Twitter, Dividend, Earnings, Definitive Agreement