Provides Portfolio and Dividend Update WILLIAMSBURG, Va., Feb. 25
/PRNewswire-FirstCall/ -- MHI Hospitality Corporation (NASDAQ:MDH)
("the Company"), a self-advised lodging real estate investment
trust (REIT), today reported consolidated results for the fourth
quarter and year ended December 31, 2008. HIGHLIGHTS: * 4.8 percent
increase in consolidated total revenue over fourth quarter 2007 *
7.4 percent increase in consolidated room revenue over fourth
quarter 2007 * Funds from Operations ("FFO") of approximately $0.04
per share for fourth quarter and $0.59 per share for full year *
Total assets of approximately $211.2 million at year-end 2008
versus approximately $160.0 million at year-end 2007 * Renovations
substantially completed at Savannah, Hampton and Tampa hotels
Andrew M. Sims, President and CEO of MHI Hospitality Corporation,
commented, "A deeply troubled economy had a direct impact on
consumer travel and spending in 2008 which, in turn, affected the
hospitality industry. In the fourth quarter, our hotel operating
results were directly affected by the continued acceleration of
negative economic conditions. Throughout this time, we focused on
the fundamentals of our business: the value enhancement of our real
estate platform. I am pleased to report that we have substantially
completed major renovations and upbranding across the portfolio."
Continued Sims, "With this extensive asset repositioning program
now almost complete, we believe the Company is well positioned to
benefit when market conditions improve. And with all travel
segments increasingly focused on value, we are confident that our
portfolio of convenient, full-service and modernized hotels should
take increasing market share from our competitors." Operating
Results The Company reported consolidated total revenue of
approximately $17.6 million for the three-month period ended
December 31, 2008. This compares to consolidated total revenue of
approximately $16.8 million for the three-month period ended
December 31, 2007. For the fourth quarter, the Company also
reported a consolidated net loss of approximately $0.9 million, or
$0.13 per share, as compared to consolidated net income of
approximately $7,000, or $0.00 per share, for the comparable 2007
period. Operating income for the quarter decreased to approximately
$1.3 million, as compared to approximately $2.1 million for the
fourth quarter 2007. For the fourth quarter 2008, FFO was
approximately $0.5 million, or $0.04 per share, compared to
approximately $1.7 million, or $0.16 per share, for the fourth
quarter 2007. During the quarter, the Company reported an
unrealized loss of approximately $0.8 million on the value of its
interest rate swap. The interest rate swap is required by the
Company's lenders on its revolving credit facility. For the year
ended December 31, 2008, the Company reported consolidated total
revenue of approximately $70.8 million and a consolidated net loss
of approximately $0.6 million, or $0.09 per share. For the
comparable period of 2007, consolidated total revenue was
approximately $69.8 million and consolidated net income was
approximately $2.5 million, or $0.36 per share. FFO for the full
year was approximately $6.3 million, or $0.59 per share, as
compared to approximately $9.3 million, or $0.87 per share, for the
full year 2007, representing a 32.0 percent decrease in FFO over
the prior year. FFO for both periods reflected non-cash charges of
approximately $0.7 million in 2008 and approximately $0.8 million
in 2007 related to the interest rate swap required by lenders on
the Company's revolving line of credit. FFO is a non-GAAP financial
measure within the meaning of the rules of the Securities and
Exchange Commission. The Company defines FFO as net income
excluding extraordinary items, depreciation and minority interest.
Management believes FFO is a key measure of a REIT's performance
and should be considered along with, but not as an alternative to,
net income and cash flow as a measure of the Company's operating
performance. A reconciliation of this non- GAAP financial measure
is included in the accompanying financial tables. Portfolio
Operating Performance "Same-store" key operating statistics for six
of the Company's properties for the quarters ended December 31,
2008 and 2007 are presented in the following table. These
statistics do not include the Sheraton Louisville Riverside, which
opened in May 2008, the Crowne Plaza Hollywood Beach Resort, which
was acquired through a joint venture in August 2007 and opened in
September 2007, the Company's property in Tampa, Florida, which was
acquired in October 2007, has undergone extensive renovations and
is scheduled to re- open in March 2009, or the Crowne Plaza Hampton
Marina, which was acquired in April 2008. Quarter Ended Quarter
Ended Dec. 31, 2008 Dec. 31, 2007 Variance Occupancy % 62.3% 63.5%
-2.0% Average Daily Rate ("ADR") $119.42 $118.28 1.0% Revenue per
Available Room ("RevPAR") $74.37 $75.14 -1.0% For the quarter ended
December 31, 2008, the same-store portfolio realized a 1.0 percent
decrease in RevPAR versus the same period in 2007. The RevPAR
decrease was the result of a 1.0 percent increase in ADR offset by
a 2.0 percent decrease in occupancy. For the same three-month
period, same-store revenue decreased to approximately $16.0 million
versus approximately $16.6 million for the same period in 2007.
Year-Ended Year-Ended Dec. 31, 2008 Dec. 31, 2007 Variance
Occupancy % 66.6% 69.8% -4.6% Average Daily Rate ("ADR") $120.06
$118.86 1.0% Revenue per Available Room ("RevPAR") $79.93 $82.97
-3.7% For the year ended December 31, 2008, the same-store
portfolio generated a 1.0 percent increase in ADR over the year
ended December 31, 2007. For the year ended December 31, 2008,
same-store revenue decreased 5.4 percent to approximately $65.3
million versus approximately $69.0 million in 2007. Balance
Sheet/Liquidity At December 31, 2008, the Company had approximately
$4.3 million of available cash and cash equivalents, approximately
$2.6 million of which is reserved for capital improvements and
certain other expenses. The Company has approximately $73.2 million
outstanding on its $80.0 million revolving line of credit, which
has been deployed to fund the acquisition and renovation of the
Sheraton Louisville Riverside, as well as the Company's equity
contribution to its joint venture with The Carlyle Group for the
purchase of the Crowne Plaza Hollywood Beach Resort and junior
participation in the repurchase of a portion of the mortgage loan,
as well as the Company's acquisition of its Tampa, Florida and
Hampton, Virginia properties and renovations at both these assets.
Dividend As previously announced, the Company declared a quarterly
dividend of $0.01 per share of common stock payable to shareholders
of record on the close of business Friday, March 20, 2009. The
dividend will be paid on Monday, March 30, 2009. The Company
previously announced that in the interest of capital preservation
within the current economic environment and upon the recommendation
of senior management, the Company's board of directors approved an
amendment to the dividend policy. The Company subsequently entered
into an amendment to its credit agreement which imposes additional
restrictions on the timing of the payment and the amount of cash
dividends but permits the Company to pay by the end of the
Company's fiscal year that amount of cash dividends necessary to
maintain REIT status as long as no Default or Event of Default (as
such terms are defined in the credit agreement) then exists under
the credit agreement and as long as the Company does not borrow to
pay cash dividends. Accordingly, the Company currently intends to
maintain its annual dividend distribution level at 90 percent of
taxable income, consistent with maintaining its REIT status.
Management estimates that the annualized dividend payout for 2009
will be approximately $0.18 per share. Any future changes to the
Company's current dividend policy will also need to comply with
additional restrictions on the payment of cash dividends set forth
in the amendment to the credit agreement. Portfolio Update As of
December 31, 2008, the Company's total assets were approximately
$211.2 million, including approximately $154.3 million of net
investment in hotel properties, approximately $33.1 million in
property under development plus approximately $10.3 million for the
Company's joint venture investment in the Crowne Plaza Hollywood
Beach Resort. The Company also reported the following portfolio
developments: > At the Crowne Plaza Tampa Westshore, the
18-month deep turn renovation is near completion, with opening
occurring in March 2009. The reconfigured 225-room hotel will
feature a new 10,000 square foot ballroom and pre-function
structure, 6,500 square foot semi-free standing restaurant tenant
space, an outdoor pool and approximately 250 surface parking
spaces. As of December 31, 2008, the Company incurred costs
totaling approximately $33.1 million toward this renovation. >
At the Hilton Savannah DeSoto, an $11.0 million renovation and
product improvement plan was completed in February 2009. As of
December 31, 2008, the Company incurred costs totaling
approximately $9.8 million toward this renovation. > At the
Company's newest property in Hampton, Virginia, an upbranding to
the Crowne Plaza flag was completed in October 2008. A $4.5 million
renovation of the Crowne Plaza Hampton Marina also has just been
completed. As of December 31, 2008, the Company incurred costs
totaling approximately $4.3 million toward this renovation.
Subsequent Events On February 9, 2009, the indirect subsidiary of
the Company, which is a member of the joint venture entity which
owns the Hollywood asset, for the purpose of improving the
Company's liquidity, borrowed $4.75 million from the Carlyle entity
that is the other member of such joint venture entity. The interest
rate and maturity date of the loan are tied to a note that is
secured by a mortgage on the Company's Hollywood property. In 2008,
the joint venture that owns the Hollywood property purchased a
portion of the mortgage loan originally placed on the property from
the initial lender. The amount of the loan from Carlyle is equal to
the amount the Company contributed to the joint venture to enable
the joint venture to purchase its interest in the mortgage loan.
The Company expects that the mortgage will be refinanced and the
proceeds of such refinancing will allow it to repay the Carlyle
loan. On February 19, 2009, the Company entered into a third
amendment to its May 8, 2006 credit agreement with Branch Banking
& Trust Company ("BB&T"), as administrative agent and
lender, to address certain financial covenants including the
Company's total leverage ratio. Upon re-examination of the
Company's compliance with its financial covenants under the credit
agreement for the third quarter 2008, BB&T assessed whether,
based on the valuation metrics utilized to calculate the total
leverage ratio for the Company, the value of one of the Company's
hotel properties, which was under extensive renovation during 2008,
had decreased, and therefore questioned whether the Company
maintained technical compliance under the credit agreement's total
leverage test. As the existing financial covenants did not
appropriately reflect the effect on valuation that a major
renovation at the Company's existing portfolio properties could
have, the Company, BB&T, the lenders and the other parties to
the credit agreement have entered into an amendment to the credit
agreement. The amendment establishes new methodologies for
valuation of the Company's existing hotel properties under
renovation and corrects previous oversights in the original credit
agreement. As a result, in addition to waiving potential technical
financial covenant defaults for 2008, the amendment establishes a
new valuation category and methodology for those Company assets
under renovation. Among other things, the amendment also increases
the Company's interest rate spread for its variable LIBOR based
interest rate by 1.125% establishing a new spread range from 2.75%
to 3.25% based on the Company's total leverage ratio, adds a new
one hundred basis point spread to the prime rate charged by the
lenders, eases the Company's total leverage ratio test by
increasing the Company's total maximum permitted leverage from 55%
to 62.5% of the total value of the Company's assets, and
establishes new limitations on cash distributions that the Company
may pay to shareholders to a level necessary to maintain the
Company's REIT qualification until such time as the Company meets
certain liquidity and other tests, requires the Company to add the
Company's hotel property in Laurel, Maryland to the credit
agreement's borrowing base and provides for fixed valuations of
certain of the Company's hotel properties through April, 2010.
Outlook The Company has decided to suspend guidance for the near
term due to ongoing unpredictable macro-economic conditions and
their potential impact on the Company's markets and customer base.
Management remains confident in the underlying strength of its
business and, with a substantially repositioned portfolio in place,
expects to compete effectively over the longer term. Earnings
Call/Webcast The Company will conduct its fourth quarter and year
2008 conference call for investors and other interested parties at
10:00 a.m. Eastern Time (ET) on Wednesday, February 25, 2009. The
conference call will be accessible by telephone and through the
Internet. Interested individuals are invited to listen to the call
by telephone at 800-860-2442. To participate on the webcast, log on
to http://www.mhihospitality.com/ at least 15 minutes before the
call to download the necessary software. For those unable to listen
to the call live, a taped rebroadcast will be available beginning
two hours after completion of the live call on February 25, 2009
through March 12, 2009 at 9 a.m. ET. To access the rebroadcast,
dial 877-344-7529, enter passcode number 426819#. A replay of the
call will also be available on the Internet at
http://www.mhihospitality.com/ until May 28, 2009. About MHI
Hospitality Corporation MHI Hospitality Corporation is a
self-advised lodging REIT focused on the acquisition, redevelopment
and management of mid-scale, upscale and upper- upscale
full-service hotels in the Mid-Atlantic, Midwest and Southeastern
United States. Currently, the Company's portfolio consists of nine
properties comprising 2,113 rooms, all of which operate under the
Hilton, InterContinental Hotels Group and Starwood Hotels and
Resorts brands. In addition, the Company has a 25 percent interest
in the Crowne Plaza Hollywood Beach Resort and a leasehold interest
in the common area of Shell Island Resort, a resort condominium
property. MHI Hospitality Corporation was organized in 2004 and is
listed on the Russell Microcap(TM) Index. The Company is
headquartered in Williamsburg, Virginia. For more information
please visit http://www.mhihospitality.com/. Forward-Looking
Statements This news release includes "forward-looking statements"
within the meaning of Section 21E of the Securities Exchange Act of
1934 and Section 27A of the Securities Act of 1933. Although the
Company believes that the expectations and assumptions reflected in
the forward-looking statements are reasonable, these statements are
not guarantees of future performance and involve certain risks,
uncertainties and assumptions, which are difficult to predict and
many of which are beyond the Company's control. Therefore, actual
outcomes and results may differ materially from what is expressed,
forecasted or implied in such forward-looking statements. Factors
which could have a material adverse effect on the Company's future
results, performance and achievements, include, but are not limited
to: national and local economic and business conditions, including
the current economic downturn, that will affect occupancy rates at
the Company's hotels and the demand for hotel products and
services; risks associated with the hotel industry, including
competition, increases in wages, energy costs and other operating
costs; the availability and terms of financing and capital and the
general volatility of the securities markets, specifically, the
current credit crisis; risks associated with the level of the
Company's indebtedness and its ability to meet covenants in its
debt agreements; management and performance of the Company's
hotels; risks associated with redevelopment and repositioning
projects, including delays and cost overruns; supply and demand for
hotel rooms in the Company's current and proposed market areas; the
Company's ability to acquire additional properties and the risk
that potential acquisitions may not perform in accordance with
expectations; and legislative/regulatory changes, including changes
to laws governing taxation of real estate investment trusts. These
risks and uncertainties are described in greater detail under "Risk
Factors" in the Company's Annual Report on Form 10-K and subsequent
reports filed with the Securities and Exchange Commission. The
Company undertakes no obligation and does not intend to publicly
update or revise any forward-looking statement, whether as a result
of new information, future events or otherwise. Although we believe
our current expectations to be based upon reasonable assumptions,
we can give no assurance that our expectations will be attained or
that actual results will not differ materially. Financial Tables
Follow ... MHI HOSPITALITY CORPORATION CONSOLIDATED BALANCE SHEETS
December 31, December 31, 2008 2007 (unaudited) ASSETS Investment
in hotel properties, net $154,295,611 $109,430,559 Property under
development 33,101,773 31,237,237 Investment in joint venture
10,253,732 5,583,072 Cash and cash equivalents 1,719,147 3,988,700
Restricted cash 2,573,444 1,750,029 Accounts receivable 1,352,203
1,666,417 Accounts receivable-affiliate 53,795 11,814 Prepaid
expenses, inventory and other assets 4,603,118 2,550,112 Notes
receivable 100,000 400,000 Shell Island lease purchase, net
1,852,941 2,264,705 Deferred financing costs, net 1,312,670
1,076,345 TOTAL ASSETS $211,218,434 $159,958,990 LIABILITIES Line
of credit $73,187,858 $34,387,858 Mortgage loans 72,256,168
55,000,000 Accounts payable and accrued expenses 11,451,976
8,478,441 Dividends and distributions payable - 1,807,883 Advance
deposits 546,236 408,912 TOTAL LIABILITIES 157,442,238 100,083,094
Minority interest in Operating Partnership 17,461,147 19,689,453
Commitments and contingencies STOCKHOLDERS' EQUITY Preferred stock
, par value $0.01, 1,000,000 shares authorized, 0 shares issued and
outstanding - - Common stock , par value $0.01, 49,000,000 shares
authorized, 6,939,613 shares and 6,897,000 shares issued and
outstanding at December 31, 2008 and December 31, 2007 69,396
68,970 Additional paid in capital 48,586,775 48,321,505
Distributions in excess of retained earnings (12,341,122)
(8,204,032) TOTAL STOCKHOLDERS' EQUITY 36,315,049 40,186,443 TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY $211,218,434 $159,958,990 MHI
HOSPITALITY CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS Three
Three months ended months ended Year ended Year ended December 31,
December 31, December 31, December 31, 2008 2007 2008 2007
(unaudited) (unaudited) (unaudited) REVENUE Rooms department
$11,408,458 $10,624,976 $48,088,703 $46,544,928 Food and beverage
department 5,097,779 5,238,137 18,417,430 19,549,325 Other
operating departments 1,102,196 931,388 4,256,599 3,720,126 Total
revenue 17,608,433 16,794,501 70,762,732 69,814,379 EXPENSES Hotel
operating expenses Rooms department 3,369,153 2,909,082 13,588,565
12,265,770 Food and beverage department 3,463,367 3,549,007
13,426,296 13,661,511 Other operating departments 187,250 193,493
837,751 865,256 Indirect 7,120,528 5,886,108 28,016,410 25,084,554
Total hotel operating expenses 14,140,298 12,537,690 55,869,022
51,877,091 Depreciation and amortization 1,568,541 1,372,472
6,346,222 5,050,234 Corporate general and administrative 622,151
774,470 2,940,979 3,137,348 Total operating expenses 16,330,990
14,684,632 65,156,223 60,064,673 NET OPERATING INCOME 1,277,443
2,109,869 5,606,509 9,749,706 Other income (expense) Interest
expense (2,001,229) (1,094,488) (6,811,460) (4,211,785) Interest
income 15,406 33,310 72,547 132,714 Impairment of note receivable -
- (300,000) - Equity income (loss) in joint venture (213,125)
(399,044) 48,496 (1,023,083) Unrealized (loss) on hedging
activities (778,010) (715,679) (691,268) (771,792) Loss on sale of
assets (205,571) (230,260) (320,533) (239,664) Net income (loss)
before minority interest in operating partnership and income taxes
(1,905,086) (296,292) (2,395,709) 3,636,096 Minority interest in
operating partnership 504,060 6,300 322,127 (1,362,967) Income tax
benefit (provision) 465,500 296,581 1,475,695 187,888 Net income
(loss) $(935,526) $6,589 $(597,887) $2,461,017 Net income (loss)
per share Basic $(0.13) $0.00 $(0.09) $0.36 Diluted $(0.13) $0.00
$(0.09) $0.36 Weighted average number of shares outstanding Basic
6,939,613 6,897,000 6,937,234 6,843,736 Diluted 6,975,613 6,957,000
6,973,731 6,903,736 MHI HOSPITALITY CORPORATION RECONCILIATION OF
NET INCOME TO FUNDS FROM OPERATIONS (FFO) (unaudited) Three Three
months ended months ended Year ended Year ended December 31,
December 31, December 31, December 31, 2008 2007 2008 2007 Net
income (loss) $(935,526) $6,589 $(597,887) $2,461,017 Add minority
interest (504,060) (6,300) (322,127) 1,362,967 Add depreciation and
amortization 1,568,541 1,372,472 6,346,222 5,050,234 Add equity in
depreciation of joint venture 136,415 121,551 545,659 135,445 Add
loss (subtract gain) on sale of assets 205,571 230,260 320,533
239,664 FFO $470,941 $1,724,572 $6,292,400 $9,249,327 Weighted
average shares outstanding 6,939,613 6,897,000 6,937,234 6,843,736
Weighted average units outstanding 3,737,607 3,737,607 3,737,607
3,790,210 Weighted average shares and units 10,677,220 10,634,607
10,674,841 10,633,946 FFO per share and unit $0.04 $0.16 $0.59
$0.87 Industry analysts and investors use Funds from Operations,
FFO, as a supplemental operating performance measure of an equity
REIT. FFO is calculated in accordance with the definition that was
adopted by the Board of Governors of the National Association of
Real Estate Investment Trusts, NAREIT. FFO, as defined by NAREIT,
represents net income or loss determined in accordance with GAAP,
excluding extraordinary items as defined under GAAP and gains or
losses from sales of previously depreciated operating real estate
assets, plus certain non-cash items such as real estate asset
depreciation and amortization, and after adjustment for any
minority interest from unconsolidated partnerships and joint
ventures. Historical cost accounting for real estate assets in
accordance with GAAP implicitly assumes that the value of real
estate assets diminishes predictably over time. Since real estate
values instead have historically risen or fallen with market
conditions, many investors and analysts have considered the
presentation of operating results for real estate companies that
use historical cost accounting to be insufficient by itself. Thus,
NAREIT created FFO as a supplemental measure of REIT operating
performance that excludes historical cost depreciation, among other
items, from GAAP net income. Management believes that the use of
FFO, combined with the required GAAP presentations, has improved
the understanding of the operating results of REITs among the
investing public and made comparisons of REIT operating results
more meaningful. Management considers FFO to be a useful measure of
adjusted net income (loss) for reviewing comparative operating and
financial performance because we believe FFO is most directly
comparable to net income (loss), which remains the primary measure
of performance, because by excluding gains or losses related to
sales of previously depreciated operating real estate assets and
excluding real estate asset depreciation and amortization, FFO
assists in comparing the operating performance of a company's real
estate between periods or as compared to different companies.
Although FFO is intended to be a REIT industry standard, other
companies may not calculate FFO in the same manner as we do, and
investors should not assume that FFO as reported by us is
comparable to FFO as reported by other REITs. DATASOURCE: MHI
Hospitality Corporation CONTACT: Bill Zaiser, Chief Financial
Officer of MHI Hospitality Corporation, +1-301-220-5405; or Vicki
Baker of Financial Relations Board, +1-703-796-1798, for MHI
Hospitality Corporation Web site: http://www.mhihospitality.com/
Copyright
Grafico Azioni Mhi Hospitality Corp. (MM) (NASDAQ:MDH)
Storico
Da Giu 2024 a Lug 2024
Grafico Azioni Mhi Hospitality Corp. (MM) (NASDAQ:MDH)
Storico
Da Lug 2023 a Lug 2024