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Summit Hotel Properties Reports Third Quarter 2017 Results

Column: industry Tag: Summit Hotel Properties,Summit Hotel, Third Quarter Published: 2017-11-01 11:51 Source: Author:

Summit Hotel Properties, Inc. (NYSE: INN) today announced results for the third quarter of 2017.

"In the third quarter, both our top and bottom line results came in at or above the high end of our expectations going in to the quarter despite what was generally a challenging operating environment. Pro forma RevPAR growth of 1.2 percent in the quarter further validates our diverse and well-positioned portfolio as 60 percent of our markets exceeded the STR Upscale average and our portfolio once again gained market share against our respective competitive sets," said Dan Hansen, the Company's Chairman, President and Chief Executive Officer. "We continued to enhance the flexibility of our balance sheet during the quarter with the closing of a $225 million unsecured term loan. As a result, we finished the quarter with over?$400 million of liquidity to pursue value creation opportunities," commented Mr. Hansen.

Third Quarter 2017 Summary

Net Income: Net income attributable to common stockholders decreased to $18.2 million, or $0.17 per diluted share, compared with $22.1 million, or?$0.25?per diluted share, in the same period of 2016. When excluding the $7.7 million and $10.5 million pretax gain on disposal of assets during the three months ended?September 30, 2017?and 2016, respectively, net income attributable to common stockholders decreased by $1.1 million as compared to the same period in 2016.

Pro Forma RevPAR: Pro forma revenue per available room ("RevPAR") increased 1.2 percent to $119.13 from the same period in 2016. Pro forma occupancy increased 2.4 percent to 80.5 percent, which was partially offset by a 1.1 percent decrease in average daily rate ("ADR") to $148.05.

Same-Store RevPAR: Same-store RevPAR grew to $115.04, an increase of 0.6 percent from the same period in 2016. Same-store occupancy increased by 2.0 percent to 80.6 percent, which was partially offset by a 1.4 percent decrease in ADR to $142.80 compared to the same period in 2016.

Pro Forma Hotel EBITDA: Pro forma hotel EBITDA was $50.5 million, a decrease of 3.4 percent over the same period in 2016. Pro forma hotel EBITDA margin contracted by 160 basis points to 37.0 percent from 38.6 percent in the same period of 2016. Excluding the effect of property tax increases, pro forma hotel EBITDA margin contracted by 41 basis points to 38.2 percent.

Adjusted EBITDA: Adjusted EBITDA increased 13.6 percent to $47.8 million from $42.1 million in the same period of 2016.

Adjusted FFO: Adjusted Funds from Operations ("AFFO") increased 13.6 percent to $36.7 million, or $0.35 per diluted share, from $32.3 million in the same period of 2016.

Acquisitions: The Company acquired the 255-guestroom AC Hotel by Marriott Atlanta Downtown for an aggregate purchase price of $57.5 million, or $225,500 per key.

Dispositions: The Company sold three hotels containing a total of 273 guestrooms for an aggregate sales price of $27.8 million, or an average of $101,600 per key. The hotels had a combined RevPAR of $85.03 for the twelve months ended June 30, 2017 which is a 26.3% discount to the pro forma portfolio's RevPAR for the same period.

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