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.
MHI Hospitality Corporation (NASDAQ:MDH), 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%
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%
