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Summit Hotel Properties Reports 2012 Results

Summit Hotel Properties, Inc. (NYSE: INN) (the “Company”) today announced results for the fourth quarter and full year 2012. The Company’s results included the following:

  Fourth Quarter   Full Year
2012   2011 2012   2011
($ in thousands, except per unit and RevPAR data)
Total Revenue $ 51,423 $ 33,568 $ 189,542 $ 142,663

EBITDA 1

$ 11,298 $ 7,008 $ 47,041 $ 35,273

Adjusted EBITDA 1

$ 11,064 $ 7,080 $ 52,113 $ 37,229

FFO 1

$ 5,002 $ 4,118 $ 27,470 $ 19,048

Adjusted FFO 1

$ 7,571 $ 4,190 $ 33,570 $ 26,907

FFO per diluted unit 1

$ 0.10 $ 0.11 $ 0.67 $ 0.51

Adjusted FFO per diluted unit 1

$ 0.15 $ 0.11 $ 0.82 $ 0.72
 

Pro Forma 2

RevPAR $ 64.58 $ 57.45 $ 69.22 $ 63.09
RevPAR growth 12.4% 9.7%
Hotel EBITDA $ 15,359 $ 11,799 $ 73,851 $ 61,984
Hotel EBITDA margin 27.6% 23.7% 31.1% 28.6%
Hotel EBITDA margin growth 388 bps 249 bps
 

1 See tables later in this press release for a reconciliation of net income (loss) to earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted EBITDA, funds from operations (“FFO”), FFO per diluted unit, adjusted FFO and adjusted FFO per diluted unit. EBITDA, adjusted EBITDA, FFO, FFO per diluted unit, adjusted FFO and adjusted FFO per diluted unit, as well as hotel EBITDA, are non-GAAP financial measures. See further discussions of these non-GAAP measures later in this press release.

2 Pro forma information includes operating results for the Company’s 83 hotels owned as of December 31, 2012, which excludes the AmericInn Hotel & Suites in Golden, CO that was held for sale at year end, as if such hotels had been owned by the Company since January 1, 2011. As a result, these pro forma operating measures include operating results for certain hotels for periods prior to the Company’s ownership.

2012 Highlights

  • Pro Forma RevPAR: 2012 pro forma room revenue per available room (“RevPAR”) grew to $69.22, an increase of 9.7 percent over 2011. Pro forma average daily rate (“ADR”) grew to $97.90, a 3.9 percent increase over 2011, and pro forma occupancy improved 380 basis points to 70.7 percent.
  • Pro Forma Hotel EBITDA: 2012 pro forma hotel EBITDA was $73.9 million, an increase of 19.2 percent over 2011.
  • Pro Forma Hotel EBITDA Margin: 2012 pro forma hotel EBITDA margin was 31.1 percent, an improvement of 249 basis points over 2011. Pro forma hotel EBITDA margin is defined as pro forma hotel EBITDA as a percentage of pro forma total revenue.
  • Adjusted EBITDA: 2012 adjusted EBITDA was $52.1 million, an increase of 40.0 percent over 2011. Adjusted EBITDA reflects $0.2 million of charges associated with the consolidation of the Company’s corporate offices to Austin, TX.
  • Adjusted FFO: 2012 adjusted FFO was $33.6 million or $0.82 per diluted unit.
  • Acquisitions: The Company acquired 19 hotels, 2,348 guestrooms, in 2012 for a total purchase price of $265.4 million.
  • Dividends: During 2012, the Company declared dividends of $0.45 per common share, representing an annualized yield of approximately 4.9 percent based on the closing price of the Company’s common stock on the NYSE on February 25, 2013 and $2.3125 per share on the Company’s 9.25% Series A Cumulative Redeemable Preferred Shares.

Fourth Quarter Highlights

  • Pro Forma RevPAR: Pro forma RevPAR in the fourth quarter of 2012 grew to $64.58, an increase of 12.4 percent over the same period in 2011. Pro forma ADR grew to $96.47, an increase of 4.5 percent from the fourth quarter of 2011. Pro forma occupancy grew by 470 basis points to 66.9 percent.
  • Pro Forma Hotel EBITDA: The hotels generated $15.4 million of pro forma hotel EBITDA for the fourth quarter 2012, an increase of 30.2 percent over the same period of 2011.
  • Pro Forma Hotel EBITDA Margin: Pro forma hotel EBITDA margin grew 388 basis points compared with the same period in 2011. The Company’s pro forma hotel EBITDA margin expansion was 275 basis points after adjusting for the $0.6 million one-time hotel management incentive fee paid to Interstate Hotels and Resorts during fourth quarter 2011.
  • Adjusted EBITDA: The Company’s adjusted EBITDA increased to $11.1 million from $7.1 million in the same period in 2011, an increase of $4.0 million or 56.3 percent. Adjusted EBITDA for the quarter reflects $0.2 million of charges associated with the consolidation of the Company’s corporate offices to Austin, TX.
  • Adjusted FFO: The Company’s Adjusted FFO for the quarter was $7.6 million or $0.15 per diluted unit.
  • Acquisitions: During the fourth quarter, the Company acquired 12 hotels, 962 guestrooms, for a total purchase price of $166.4 million.
  • Dividends: On January 31, 2013, the Company declared an $0.1125 per share quarterly dividend on its common shares, a $0.5781 per share quarterly dividend on its 9.25% Series A Cumulative Redeemable Preferred Shares, and a $0.432 per share quarterly dividend on its 7.875% Series B Cumulative Redeemable Preferred Shares.
             
    2012   2011   growth
Number of Hotels   84   70   20.0 %
Number of Guestrooms 9,019 7,095 27.1 %
Total Revenue (000’s) $ 189,542 $ 142,663 32.9 %
Adjusted EBITDA (000’s)   $ 52,113   $ 37,229   40.0 %

 

“We had a terrific year,” said Dan Hansen, President and CEO. “We acquired 19 hotels, sold 5 hotels, raised both common and preferred equity, and renovated 13 hotels. Through this tremendous amount of activity, our asset management team performed brilliantly by minimizing disruption and maximizing both rate and occupancy. They further showed their strength by continuing to implement revenue and cost management strategies that benefitted the entire portfolio. We continue to remain focused on realizing our embedded growth and balancing that with new acquisitions in markets that are accretive to our portfolio. We anticipate opportunities to be just as plentiful in 2013.”

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