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Summit Hotel Properties Reports Third Quarter 2013 Results

Stocks in this article: INN

“This follow-on offering positions us well for sustained growth, providing us with capital to acquire strategic hotels over the next several quarters,” said Dan Hansen, Summit’s President and CEO. “The short-term dilutive effect will resolve itself quickly as we execute on hotel acquisitions. Since the offering was completed, we have acquired two hotels and have three under purchase agreement, as well as a very active pipeline of both single assets and small portfolios.”

“Our results were within our expected range but several items affected them both on the positive and negative side,” he noted. “Our RevPAR growth was within our range when excluding the five recently acquired New Orleans properties. Adjusted FFO per diluted unit was aided by a tax benefit of approximately $0.02 per diluted unit. Several factors also influenced operating results at a small number of hotels in some markets during the quarter, including the sequestration, the uncertainty of a government shutdown and sub-par performance. We have addressed the operating shortcomings at those hotels with our third-party management companies and expect to see improvements. We remain positive about the Company’s 2014 outlook.”

The Company’s results included the following:

   
Three Months Ended September 30, Nine Months Ended September 30,
2013   2012 2013   2012
($ in thousands, except per unit and RevPAR data)
Total Revenues $ 82,174 $ 43,070 $ 221,002 $ 116,591

EBITDA 1

$ 17,990 $ 14,492 $ 60,911 $ 35,385

Adjusted EBITDA 1

$ 26,485 $ 15,245 $ 71,956 $ 40,691

FFO 1

$ 17,284 $ 9,001 $ 43,990 $ 22,468

Adjusted FFO 1

$ 17,847 $ 9,742 $ 47,269 $ 25,477

FFO per diluted unit 1

$ 0.24 $ 0.24 $ 0.64 $ 0.60

Adjusted FFO per diluted unit 1

$ 0.25 $ 0.26 $ 0.69 $ 0.68
 

Pro Forma 2

RevPAR $ 83.56 $ 80.88 $ 83.76 $ 79.62
RevPAR growth 3.3 % 5.2 %
Hotel EBITDA $ 28,596 $ 27,151 $ 87,183 $ 81,348
Hotel EBITDA margin 34.8 % 34.2 % 35.6 % 34.9 %
Hotel EBITDA margin growth 60 bps 67 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 (hotel revenues less hotel operating expenses), 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 82 hotels owned as of September 30, 2013 as if each hotel had been owned by the Company since January 1, 2012, which excludes the following ten hotels that were held for sale at September 30, 2013: the 63-guestroom Fairfield Inn, Boise, Id.; the 63-guestroom Hampton Inn, Boise, Id.; the 60-guestroom AmericInn Hotel & Suites, Salina, Kan.; the 63-guestroom Fairfield Inn, Salina, Kan.; the 89-guestroom AmericInn Hotel & Suites, Fort Smith, Ark.; the 57-guestroom Aspen Hotel & Suites, Fort Smith, Ark.; the 178-guestroom Hampton Inn, Fort Smith, Ark.; the 57-guestroom Fairfield Inn, Emporia, Kan.; the 58-guestroom Holiday Inn Express, Emporia, Kan.; and the 78-guestroom SpringHill Suites, Little Rock, Ark. As a result, these pro forma operating measures include operating results for certain hotels for periods prior to the Company’s ownership.

                   
      9/30/2013     9/30/2012     growth
Number of Hotels     92     73     26.0%
Number of Guestrooms 10,913 7,533 44.9%
Total Revenue (000’s) $82,174 $43,070 90.8%
Adjusted EBITDA (000’s)     $26,485     $15,245     73.7%
 

“Our acquisition activity in 2013, including the two recently acquired Southern California hotels, will help drive significant earnings per share growth in 2014,” Hansen said.

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