Condor Hospitality Trust Reports Fourth Quarter and Fiscal Year 2018 Results

3/11/19

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BETHESDA, Md.--(BUSINESS WIRE)--Condor Hospitality Trust, Inc. (NYSE American:CDOR)  today announced results for the fourth quarter ended December 31, 2018.

FOURTH QUARTER AND FISCAL YEAR 2018 RELEASE FINANCIAL HIGHLIGHTS

  • Revenue of $65.1 million in Fiscal Year 2018, a 17.3% Increase Over $55.5 million of Revenue in Fiscal Year 2017
  • Revenue of $15.1 million, Comprised of $14.9 million from New Investment Platform Hotels and $0.2 million from Legacy Hotels, a 1% Decrease to Revenue of $15.3 million, Comprised of $12.8 million from New Investment Platform Hotels and $2.5 million from Legacy Hotels, in Last Year’s Fourth Quarter
  • Same-Store RevPAR for the New Investment Platform Hotels Increased 1.9% and 2.6% in the Fourth Quarter and Full Year 2018, Respectively
  • Net Earnings Attributable to Common Shareholders of $4.8 million, or $0.40 per Diluted Share, as Compared to a Net Loss of ($9.4) million, or ($1.00) per share, in Last Fiscal Year
  • Adjusted Funds from Operations Increased to $12.2 million, or $1.02 per Diluted Share, a 4.1% per share Increase from $9.8 million, or $0.98 per Diluted Share, as Compared to Last Fiscal Year
  • Hotel EBITDA Increased to $27.6 million from $22.0 million, a 25.9% Increase Over Last Fiscal Year
  • Adjusted EBITDAre Increased to $21.9 million from $16.2 million, a 35.7% Over Last Fiscal Year

MANAGEMENT COMMENTARY

Bill Blackham, Condor’s Chief Executive Officer, commented:

“On September 27, 2018, Condor initiated a process to evaluate strategic alternatives to enhance shareholder value. Until the conclusion of this process, Condor is suspending the issuance of earnings guidance and the holding of earnings conference calls. The Quality Inn Solomons Island remains under contract for sale and has an expected closing in the first quarter of 2019; there can be no guarantee that this planned disposition will close. This final legacy asset sale will bring the total number of legacy assets sold to 55 since Condor launched the strategic repositioning of its portfolio in 2015. The New Investment Platform continued to perform well relative to our competitive sets and our publicly traded select-service peer group in terms of RevPAR change and operating margins.”

PORTFOLIO ACTIVITY
The Company’s investment strategy is to assemble a portfolio of premium-branded, select-service hotels in the top 100 Metropolitan Statistical Areas (“MSAs”) with a particular focus on MSAs ranked between 20 to 60. Since restarting its portfolio transformation in 2015, the Company has acquired 14 high-quality select-service hotels representing 1,808 rooms in its target markets for a total purchase price of approximately $277 million. Additionally, during this time, the Company has sold 54 legacy assets for a total gross sales price of approximately $166 million.

Acquisitions
During the fourth quarter of 2018, the Company did not acquire any hotels.

Dispositions
The Company’s final legacy hotel is currently under contract for sale.

BALANCE SHEET AND CAPITAL MARKETS ACTIVITY
As of December 31, 2018, the Company had cash and cash equivalents (including restricted cash) of $9.2 million and available revolver borrowing capacity of $7.4 million. As of December 31, 2018, the Company had total outstanding long-term debt of $138 million associated with assets held for use with a weighted average maturity of 2.1 years and a weighted average interest rate of 5.15%.

During the fourth quarter of 2018, the Company did not sell any shares of common stock under the ATM program.

CAPITAL INVESTMENTS
The Company invested $2.0 million in capital improvements throughout the portfolio in the twelve months ended December 31, 2018, to upgrade its properties and maintain brand standards.

OUTLOOK AND GUIDANCE
Due to the pursuit of Strategic Alternatives, the Company has suspended guidance until further notice.

DIVIDENDS
On December 11, 2018, the Board of Directors declared a quarterly cash common stock dividend of $0.195 per share for the fourth quarter of 2018. The common stock dividend represented an annualized yield of approximately 9.7% based on the closing price of the Company’s common shares on December 12, 2018. The fourth quarter dividend was paid on January 3, 2019 to shareholders of record as of December 26, 2018.

About Condor Hospitality Trust, Inc.
Condor Hospitality Trust, Inc. (NYSE American:CDOR) is a self-administered real estate investment trust that specializes in the investment and ownership of upper midscale and upscale, premium-branded, select-service, extended-stay, and limited-service hotels in the top 100 Metropolitan Statistical Areas (“MSAs”) with a particular focus on the top 20 to 60 MSAs. The Company currently owns 16 hotels in 8 states. Condor’s hotels are franchised by a number of the industry’s most well-regarded brand families including Hilton, Marriott, and InterContinental Hotels.