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HALIFAX, May 15, 2007 (Canada NewsWire via COMTEX News Network) -- /NOT FOR DISTRIBUTION ON U.S. WIRE SERVICES/
Holloway Lodging Real Estate Investment Trust (TSXV: HLR.UN and HLR.DB) ("Holloway" or the "REIT") today announced its unaudited financial results for the three months ended March 31, 2007. All amounts are in Canadian dollars unless otherwise indicated. This press release should be read in conjunction with the REIT's unaudited financial statements and management's discussion and analysis, copies of which are available at www.sedar.com.
Highlights - First Quarter
The key highlights included:
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- Acquired Alberta property - On January 31, 2007, the REIT acquired the
Radisson Hotel and Suites in Fort McMurray, Alberta, for an aggregate
purchase price of $22.75 million. The REIT obtained mortgage financing
of $11.00 million on this property.
- Deployed mezzanine loans - On January 19, 2007, the REIT made mezzanine
loans on two development properties of approximately $4.91 million.
- Continued product improvement - For the three months, the REIT had
approximately $1.79 million in additions to property and equipment,
primarily at the Holiday Inn Express in Halifax, Nova Scotia and at the
Holiday Inn Express and Suites in Moncton, New Brunswick.
Results of Operations
The following table provides a summary of the operating results for the
three months ended March 31, 2007 and 2006.
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Three months ended Three months ended
March 31, 2007 March 31, 2006
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Hotel revenues $ 9,646,951 $ -
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Hotel expenses 9,159,690 -
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Hotel operating income 487,261 -
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Net trust expenses 885,873 90,221
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Net loss for the period $ (398,612) $ (90,221)
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Per Unit Results:
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Basic and diluted loss per unit $ (0.02) $ (0.08)
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Three Months ended March 31, 2007
Holloway owned nine hotel properties during the three months ended
March 31, 2007. The results include the operations of the eight hotel
properties acquired during 2006 and the operations of the Radisson Hotel and
Suites in Fort McMurray, Alberta from January 31, 2007, the date of
acquisition. These properties generated revenue of approximately $9.65 million
and income from hotel operations of approximately $0.49 million for the three
months ended March 31, 2007. The REIT did not own any properties during the
three months ended March 31, 2006. With the exception of the Holiday Inn
Express and Suites in Moncton, New Brunswick which was undergoing renovations
during the quarter, the hotels produced a solid first quarter and managed
their expenses in line with expectations.
The major trust revenues and expenses for the three months ended March 31,
2007 included the following:
- interest income of over $0.44 million from mezzanine loans on
development properties and short-term investing of excess cash;
- general and administrative expenses of approximately $0.43 million,
which include salaries and benefits of employees of the REIT,
professional fees, travel and other expenses. These expenses included
some non-recurring professional fees related to initial securities
filings including the annual information form;
- expenses of $0.21 million related to the investigation and analysis of
additional property acquisitions which did not occur. One of these
potential acquisitions was a hotel in Myrtle Beach, South Carolina,
which the REIT announced its intention to purchase at the end of 2006.
Issues discovered during due diligence caused this potential
acquisition not to proceed at this time;
- interest expense of approximately $0.44 million on the convertible
debentures;
- non-cash accretion of the discount on the convertible debentures of
$0.15 million; and
- non-cash unit-based compensation expense of $0.09 million for options
granted in 2006 which will vest in November, 2007 and 2008 and are
being expensed on a straight-line basis.
Distributable Income
Distributable income is a non-GAAP financial measure commonly used by real
estate investment trusts as an indication of financial performance. It should
not be seen as a measurement of liquidity or a substitute for comparable
metrics prepared in accordance with GAAP. Distributable income may differ from
similar calculations reported by other entities and accordingly may not be
comparable to similar measures presented by other issuers. Please refer to the
REIT's management's discussion and analysis for the three months ended March
31, 2007 for a description of how the REIT calculates distributable income.
Reconciliation of the net loss to distributable income is presented in the
table below.
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Three months ended Three months ended
March 31, 2007 March 31, 2006
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Net loss $ (398,612) $ (90,221)
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Add (deduct):
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Depreciation and amortization 960,507 -
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Accretion on mortgages
and convertible debentures 145,262 -
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Unit based compensation 87,500 80,000
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FF&E reserve (289,409) -
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Distributable income (loss) - basic 505,248 (10,221)
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Add: Interest on convertible
debentures Not dilutive -
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Distributable income - diluted $ 505,248 $ (10,221)
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Weighted average basic units
outstanding 16,668,808 1,077,778
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Weighted average diluted units
outstanding 20,791,586 1,154,222
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Basic and diluted distributable
income (loss) per unit $ 0.030 $ (0.009)
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Per unit distributions declared $ 0.1125 $ -
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The REIT generated approximately $0.51 million in distributable income for the three months ended March 31, 2007. Monthly distributions of $0.0375 per unit were declared for each of the three months. Due to the seasonality in the hospitality industry, it would be expected the distributable income per unit would be lower than the declared distributions in the first quarter of the year.
Holloway Lodging Real Estate Investment Trust
Holloway is a real estate investment trust listed as a Tier 2 issuer on the TSX Venture Exchange. Our goal is to be one of the top-performing lodging REITs and to grow our distributions to our unitholders. We will continuously seek to improve our operating results by focusing on dominating the market segments in which we operate and maximizing product quality through a prudent capital reinvestment program.
This press release contains forward-looking information within the meaning of applicable securities laws. Forward-looking information may relate to the REIT's future outlook and anticipated events or results and may include statements regarding the future financial position, property acquisition strategies and opportunities, business strategy, financial results and plans and objectives of the REIT. Particularly, statements regarding the REIT's future operating results, property acquisition strategies and opportunities and economic performance are forward-looking statements. In some cases, forward-looking information can be identified by terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. Forward looking-information is subject to certain factors, including risks and uncertainties, that could cause actual results to differ materially from what the REIT currently expects and there can be no assurance that such statements will prove to be accurate. Some of these risks and uncertainties are described under "Risk Factors" in Holloway's Annual Information Form ("AIF"), dated May 1, 2007 which is available at www.sedar.com. The REIT does not intend to update or revise any such forward-looking information should its assumptions and estimates change.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this press release.
%SEDAR: 00023845E
SOURCE: Holloway Lodging Real Estate Investment Trust
Mr. Glenn Squires, Chief Executive Officer of the REIT, (902) 457-1907
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