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HALIFAX, Nov. 13, 2007 (Canada NewsWire via COMTEX News Network) -- /NOT FOR DISTRIBUTION ON U.S. WIRE SERVICES/
Holloway Lodging Real Estate Investment Trust (TSX: HLR.UN, HLR.DB and HLR.DB.A) ("Holloway" or the "REIT") today announced its unaudited financial results for the three and nine months ended September 30, 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 on the REIT's website at www.hlreit.com and on the Sedar website at www.sedar.com.
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Highlights - Third Quarter
The following summarizes the key highlights that occurred during the
three months ended September 30, 2007:
- Distributable income increase of over 310% - distributable income
has increased to $5.2 million ($0.13 per unit) from $1.2 million
for the three month periods ended September 30, 2007 and 2006,
respectively;
- Hotel revenues increase of over 270% - hotel revenues have grown to
$24.9 million for the quarter ended September 30, 2007 from
$6.7 million for the same quarter in 2006;
- Graduated to TSX - on July 17, 2007, the REIT graduated from the
TSX Venture Exchange to the TSX;
- Exercise of over allotment option - on July 18, 2007, the REIT
issued 580,000 units at $5.35 per unit for gross proceeds of
$3.1 million and $6.8 million of 6.5% convertible debentures in
connection with the exercise of an over allotment option that had
been granted to the underwriters of the REIT's June 2007 public
offering of units and debentures. This brought the total gross
proceeds of the offering, including the units and debentures issued
pursuant to the exercise of the over-allotment option to
$150 million;
- Increased distributions by 20% - the REIT instituted a 20%
distribution increase from $0.0375 to $0.045 per unit per month
(from $0.45 per unit per year to $0.54 per unit per year) effective
with the August distribution to unitholders of record as of
July 31, 2007;
- Acquired one hotel property - on September 12, 2007, the REIT
purchased the Holiday Inn Express in Kamloops, BC for
$11.3 million; and
- Executive appointment - on September 15, 2007 Michael Jackson
joined Holloway as President and Chief Operating Officer.
"We are very pleased to have achieved such significant growth in our
results this quarter, demonstrating significant progress in realization of our
overall strategy", said Glenn Squires, CEO of Holloway Lodging REIT.
RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30,
2007 AND 2006
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The following table provides a summary of the operating results for the
three and nine months ended September 30, 2007 and 2006.
(in 000's except Three months Three months Nine months Nine months
per unit ended ended ended ended
results) September 30, September 30, September 30, September 30,
2007 2006 2007 2006
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Hotel revenues 24,858 6,693 47,493 6,782
Hotel expenses 21,200 5,191 42,032 5,259
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Income from hotel
operations 3,658 1,502 5,461 1,523
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Net trust expenses 1,448 730 3,244 1,459
Future income tax
(expense) recovery (933) - 1,355 -
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Net income for the
period - basic and
diluted 1,277 772 3,572 64
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Reconciliation to
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distributable income
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Add/(deduct):
Depreciation and
amortization 3,043 480 5,293 493
Future income tax
expense (recovery) 933 - (1,355) -
Reorganization expenses
- one time item - - - 419
Accretion on mortgages
and convertible
debentures(1) 562 156 881 156
Unit-based compensation 91 - 286 80
FF&E reserve (746) (186) (1,425) (189)
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Distributable income -
basic and diluted 5,160 1,222 7,252 1,023
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Weighted average basic
units outstanding 39,046 9,639 25,101 4,215
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Weighted average
diluted units
outstanding 39,236 12,243 25,253 5,171
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Basic income per unit 0.03 0.08 0.14 0.02
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Diluted income per unit 0.03 0.06 0.14 0.01
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Basic distributable
income per unit 0.13 0.13 0.29 0.24
Diluted distributable
income per unit 0.13 0.10 0.29 0.20
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(1) Includes the amortization of deferred finance fees which is included
in interest expense in the financial statements.
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Three Months Ended September 30, 2007 and 2006
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Results of Operations
The results of operations for the three months ended September 30, 2007 include the operation of twenty hotels for the full quarter and the Holiday Inn Express in Kamloops, BC since September 12, 2007. Because the REIT only owned one hotel for the full quarter in 2006 and acquired seven hotels during August and September, 2006, the dollar value of revenues, expenses and income from the hotels has increased substantially when comparing the third quarter results for 2007 to 2006.
Hotel Operations
The hotel properties generated revenue of approximately $24.9 million compared to $6.7 million for the three months ended September 30, 2007 and 2006, respectively. Income from hotel operations has increased from $1.5 million for the three months ended September 30, 2006 to $3.7 million for the three months ended September 30, 2007. Three of the properties acquired in the third quarter of 2006 did not have mortgages on them until the fourth quarter of 2006.
Corporate Operations
Corporate net trust expenses have increased from $0.7 million for the three months ended September 30, 2006 to $1.4 million for the three months ended September 30, 2007. Debenture interest expense and the non-cash accretion of the discount on the debentures has increased from $0.5 million to $1.8 million. In the third quarter of 2006, the REIT had $20 million in debentures outstanding for two months, whereas in the third quarter of 2007, the REIT had $65 million in debentures outstanding for the entire quarter and an additional approximately $7 million in debentures outstanding since mid-July. In the three months ended September 30, 2007, the REIT generated interest income of $0.9 million from mezzanine loans and the investment of cash balances. The credit or recovery of expenditures related to abandoned property acquisitions represents costs related to the Holiday Inn Express hotel in Myrtle Beach, South Carolina which were reversed when concerns related to this property were addressed and the REIT decided to purchase this hotel. The general and administrative expenses include a one-time expense of $150,000 to graduate to the TSX from the TSXV.
Holloway Lodging Real Estate Investment Trust
Holloway is a real estate investment trust listed on the Toronto Stock 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.
%SEDAR: 00023845E
SOURCE: Holloway Lodging Real Estate Investment Trust
Mr. Glenn Squires, Chief Executive Officer of the REIT, (902) 457-1907;
Mr. Michael
Jackson, President of the REIT, (902) 457-1907;
Ms. Tracy Sherren, Chief Financial
Officer of the REIT, (902) 457-1907
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