WILLIAMSBURG, Va., Aug. 13, 2024 (GLOBE NEWSWIRE) --  Sotherly Hotels Inc. (NASDAQ:SOHO), ("Sotherly" or the "Company"), a self-managed and self-administered lodging real estate investment trust (a "REIT"), today reported its consolidated results for the second quarter ended June 30, 2024. The Company's results include the following*:   Three Months Ended     Six Months Ended     June 30, 2024     June 30, 2023     June 30, 2024     June 30, 2023     ($ in thousands except per share data)     ($ in thousands except per share data)   Total revenue $ 50,694     $ 49,017     $ 97,243     $ 92,509   Net income attributable to common stockholders   2,622       3,133       1,962       2,551                           EBITDA   14,292       14,103       25,076       24,051   Hotel EBITDA   15,698       14,842       28,058       26,921                           FFO attributable to common stockholders and unitholders   7,356       7,251       11,317       11,192   Adjusted FFO attributable to common stockholders and unitholders   7,503       7,031       12,683       11,689                           Net income per common share - diluted $ 0.13     $ 0.16     $ 0.10     $ 0.13   FFO per common share and unit $ 0.37     $ 0.37     $ 0.57     $ 0.58   Adjusted FFO per common share and unit $ 0.38     $ 0.36     $ 0.64     $ 0.60   (*)           Earnings before interest, taxes, depreciation and amortization ("EBITDA"), Hotel EBITDA, Funds From Operations ("FFO") attributable to common stockholders and unitholders, Adjusted FFO attributable to common stockholders and unitholders, FFO per common share and unit and Adjusted FFO per common share and unit are non-GAAP financial measures. See further discussion of these non-GAAP measures, including definitions related thereto, and reconciliations to net income (loss) later in this press release. The Company is the sole general partner of Sotherly Hotels LP, a Delaware limited partnership (the "Operating Partnership"), and all references in this release to the "Company," "Sotherly," "we," "us," and "our" refer to Sotherly Hotels Inc., its Operating Partnership and its subsidiaries and predecessors, unless the context otherwise requires or it is otherwise indicated. HIGHLIGHTS RevPAR. Room revenue per available room ("RevPAR") for the Company's composite portfolio, which includes the rooms participating in our rental programs at the Lyfe Resort & Residences (f/k/a Hyde Resort & Residences) and the Hyde Beach House Resort & Residences, increased 4.3% to $137.67, for the three months ended June 30, 2024, from $131.94 in the comparable period in 2023. Changes in RevPAR were driven by a 5.8% increase in occupancy to 73.4% from 69.4% in the comparable 2023 period, and a 1.4% decrease in the average daily rate ("ADR") to $187.51 for the three months ended June 30, 2024, from $190.15 for the comparable period in 2023. For the six months ended June 30, 2024, RevPAR increased to $130.64, from $125.53 in the comparable period in 2023.  Changes in RevPAR were driven by an increase in the occupancy to 69.2% for the six months ended June 30, 2024, from 64.9% for the comparable period in 2023 and by a decrease in ADR to $188.91 from $193.35 in the comparable 2023 period. Revenue. Total revenue increased to approximately $50.7 million, from approximately $49.0 million, for the three month periods ended June 30, 2024 and 2023, respectively. For the six-month period ending June 30, 2024, total revenue increased to approximately $97.2 million, from approximately $92.5 million during the comparable period in 2023. Net income attributable to common stockholders. For the three-month period ending June 30, 2024, net income attributable to common stockholders decreased approximately $0.5 million, compared to the three months ended June 30, 2023, from an income of approximately $3.1 million to an income of approximately $2.6 million. For the six-month period ending June 30, 2024, net income attributable to common stockholders decreased 23.1%, or approximately $0.6 million, over the six months ended June 30, 2023, from an income of approximately $2.6 million to an income of approximately $2.0 million.  Hotel EBITDA. Hotel EBITDA increased to approximately $15.7 million for the three months ended June 30, 2024, from approximately $14.8 million for the comparable period in 2023. Hotel EBITDA for the six months ended June 30, 2024 increased approximately $1.2 million to approximately $28.1 million, from approximately $26.9 million generated in the comparable 2023 period. Adjusted FFO attributable to common stockholders and unitholders. For the three-month period ending June 30, 2024, Adjusted FFO attributable to common stockholders and unitholders increased 6.7%, or approximately $0.5 million, over the three months ended June 30, 2023, from approximately $7.0 million to approximately $7.5 million. For the six-month period ending June 30, 2024, adjusted FFO attributable to common stockholders and unitholders increased 8.5%, or by approximately $1.0 million, over the six months ended June 30, 2023, from approximately $11.7 million to approximately $12.7 million. Preferred Dividends. On July 30, 2024 the Company announced a quarterly cash dividend of $0.50 per share of beneficial interest of the Company's 8.0% Series B Cumulative Redeemable Perpetual Preferred Stock; a quarterly cash dividend of $0.492188 per share of beneficial interest of the Company's 7.875% Series C Cumulative Redeemable Perpetual Preferred Stock; and a quarterly cash dividend of $0.515625 per share of beneficial interest of the Company's 8.25% Series D Cumulative Redeemable Perpetual Preferred Stock. Each of the Series B, Series C and Series D preferred dividends will be paid on September 16, 2024 to shareholders of record as of August 30, 2024. Dave Folsom, President and Chief Executive Officer of Sotherly Hotels Inc., commented, "Second quarter results generally met our expectations, albeit we did see ADR soften slightly as the quarter progressed, mainly due to increased price sensitivity amongst transient leisure travelers. This was particularly evident in our Florida markets, which are heavily weighted to the leisure segment. Margins finished in line with our budgeted expectations, demonstrating solid expense controls and operating efficiencies, especially with respect to undistributed expenses, and the realization of significant insurance savings resulting from our April 1st renewal.  Group and corporate bookings continue to manifest to the upside, especially at the Hyatt Centric in Arlington, Virginia, the DeSoto in Savannah, Georgia, and the iconic Georgian Terrace in Atlanta, Georgia.  The quarter was capped off with the majority of our hotels capturing market share within their respective competitive sets. As we look at the second half of 2024, we are cautious, but nonetheless optimistic, regarding the balance of the year.  Economic concerns, interest rates, weather events, as well as the uncertainty of the impending election all present challenges which may continue the trends we witnessed toward the end of Q2, especially with respect to ADR. On the balance sheet front, by mid-year, we have successfully addressed nearly $100 million in mortgage refinancings, restructurings, and extensions, while concurrently meeting all our capital and funding needs for life cycle improvement plans at several of our hotels." Balance Sheet/Liquidity As of June 30, 2024, the Company had approximately $37.3 million of available cash and cash equivalents, of which approximately $18.4 million was reserved for real estate taxes, insurance, capital improvements and certain other expenses or otherwise restricted. The Company had principal balances of approximately $323.2 million in outstanding debt, including mortgage and unsecured principal balances, at a weighted average interest rate of approximately 5.68%. Other Events On April 29, 2024, the affiliates of the Company entered into a loan amendment to amend the existing mortgage on the DoubleTree by Hilton Philadelphia Airport hotel with the existing lender, TD Bank, N.A. Pursuant to the amended loan documents, the mortgage loan: (i) has a principal balance of approximately $35.9 million; (ii) extends the maturity date by two years to April 29, 2026; (iii) continues to carry a floating interest rate of SOFR plus 3.50%; (iv) requires payments of interest only; (v) continues to be guaranteed by the Operating Partnership; and (vi) contains customary representations, warranties, covenants and events of default for a mortgage loan. Concurrent with the execution of the loan amendment, the Company (i) made a principal payment of $3.0 million; (ii) funded $0.3 million to the interest reserve escrow, bringing the balance in the interest reserve escrow account to $1.3 million; (iii) funded $5.0 million into a PIP reserve account, and (iv) provided $1.7 million in additional cash collateral, of which $1.2 million can be released into the PIP reserve account as early as June 30, 2025 assuming compliance with the financial covenants. On May 3, 2024, an affiliate of the Company entered into an interest rate cap with a notional amount of $26.0 million with Webster Bank, N.A. The cap has a strike rate of 3.0%, is indexed to SOFR, and expires on May 1, 2026. On July 8, 2024, affiliates of the Company entered into loan documents to secure a mortgage loan on the DoubleTree by Hilton Jacksonville Riverfront hotel located in Jacksonville, FL with Fifth Third Bank, N.A. Pursuant to the loan documents, the mortgage loan: (i) has an initial principal balance of $26.25 million (the "Initial Tranche"), with an additional $9.49 million available to fund a product improvement plan at the hotel (the "Renovation Tranche"); (ii) has a 5-year term maturing on July 8, 2029; (iii) carries a floating interest rate of SOFR plus 3.00%; (iv) amortizes the Initial Tranche on a 25-year schedule at 7.0% interest rate and requires payments of interest only on the Renovation Tranche; (v) is guaranteed by the Operating Partnership, with the guarantee reducing to 25% upon achieving a 1.35x debt service coverage ratio (DSCR) for two consecutive quarters following a renovation period; and (vi) contains customary representations, warranties, covenants and events of default for a mortgage loan. 2024 Outlook Set forth below is the Company's previously issued guidance for 2024. The table below reflects the Company's projections, within a range, of various financial measures for 2024, in thousands of dollars, except per share and RevPAR data:   2024 Guidance     Low Range     High Range         Total revenue $ 178,952       $ 182,567   Net income   1,598         2,593   Net loss attributable to common stockholders and unitholders   (6,377 )     (5,382 )                   EBITDA   39,858         40,853   Hotel EBITDA   46,103         46,898                     FFO attributable to common stockholders and unitholders   12,373         13,368   Adjusted FFO attributable to common stockholders and unitholders   12,778         13,773               Net loss per share attributable to common stockholders $ (0.32 )     $ (0.27 ) FFO per common share and unit $ 0.62     $ 0.67   Adjusted FFO per common share and unit $ 0.64     $ 0.69   Rev PAR $ 117.16     $ 119.52   Hotel EBITDA margin   25.8 %     25.7 % Earnings Call/Webcast The Company will conduct its second quarter 2024 conference call for investors and other interested parties at 10:00 a.m. Eastern Time on Tuesday, August 13, 2024. The conference call will be accessible by telephone and through the Internet. Interested individuals are invited to listen to the call by telephone at 833-470-1428 (United States) and enter access code 441747. To participate on the webcast, log on to www.sotherlyhotels.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 one hour after completion of the live call on August 13, 2024 through August 27, 2024. To access the rebroadcast, dial 866-813-9403 and enter access code 636280. About Sotherly Hotels Inc. Sotherly Hotels Inc. is a self-managed and self-administered lodging REIT focused on the acquisition, renovation, upbranding and repositioning of upscale to upper-upscale full-service hotels in the Southern United States. Sotherly may also opportunistically acquire hotels throughout the United States. Currently, the Company's portfolio consists of investments in ten hotel properties, comprising 2,786 rooms, as well as interests in two condominium hotels and their associated rental programs. The Company owns hotels that operate under the Hilton Worldwide and Hyatt Hotels Corporation brands, as well as independent hotels. Sotherly Hotels Inc. was organized in 2004 and is headquartered in Williamsburg, Virginia. For more information, please visit www.sotherlyhotels.com. Forward-Looking Statements This news release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as such may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements, which are based on certain assumptions and describe our current strategies, expectations, and future plans are generally identified by our use of words, such as "intend," "plan," "may," "should," "will," "project," "estimate," "anticipate," "believe," "expect," "continue," "potential," "opportunity," and similar expressions, whether in the negative or affirmative, but the absence of these words does not necessarily mean that a statement is not forward-looking. We also sometimes refer to our booking pace. Booking pace is an industry term that we define as the estimated value of committed future bookings at a given point in time. Booking pace can be further separated into various segments, including group booking pace or business travel booking pace. All statements regarding our expected financial position, booking pace, business and financing plans are forward-looking statements. Factors which could have a material adverse effect on the Company's future operations, results, performance and prospects, include, but are not limited to: national and local economic and business conditions that affect occupancy rates and revenues at our hotels and the demand for hotel products and services; risks associated with the hotel industry, including competition and new supply of hotel rooms, increases in wages, energy costs and other operating costs; risks associated with the level of our indebtedness and our ability to meet covenants in our debt agreements, including loan modifications and, as necessary, to refinance or seek an extension of the maturity of such indebtedness or further modification of such debt agreements; risks associated with adverse weather conditions, including hurricanes; impacts on the travel industry from pandemic diseases, including COVID-19; the availability and terms of financing and capital and the general volatility of the securities markets; management and performance of our hotels; risks associated with maintaining our system of internal controls; risks associated with the conflicts of interest of the Company's officers and directors; risks associated with redevelopment and repositioning projects, including delays and cost overruns; supply and demand for hotel rooms in our current and proposed market areas; risks associated with our ability to maintain our franchise agreements with our third party franchisors; our ability to acquire additional properties and the risk that potential acquisitions may not perform in accordance with expectations; our ability to successfully expand into new markets; legislative/regulatory changes, including changes to laws governing taxation of real estate investment trusts ("REITs"); the Company's ability to maintain its qualification as a REIT; and our ability to maintain adequate insurance coverage. Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore there can be no assurance that such statements included in this report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the results or conditions described in such statements or the objectives and plans of the Company will be achieved. Additional factors that could cause actual results to vary from our forward-looking statements are set forth under the section titled "Risk Factors" in our Annual Report on Form 10-K, in this press release and subsequent reports filed with the Securities and Exchange Commission. Except as required by law, the Company undertakes no obligation to 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 the Company believes its current expectations to be based upon reasonable assumptions, it can give no assurance that its expectations will be attained or that actual results will not differ materially. Financial Tables Follow… SOTHERLY HOTELS INC.CONSOLIDATED BALANCE SHEETS     June 30, 2024     December 31, 2023       (unaudited)         ASSETS             Investment in hotel properties, net   $ 351,187,539     $ 354,919,106   Cash and cash equivalents     18,904,793       17,101,993   Restricted cash     18,411,015       9,134,347   Accounts receivable, net     5,612,961       5,945,724   Prepaid expenses, inventory and other assets     7,614,368       6,342,310   TOTAL ASSETS   $ 401,730,676     $ 393,443,480   LIABILITIES             Mortgage loans, net   $ 320,244,252     $ 315,989,194   Unsecured notes     1,141,763       1,536,809   Accounts payable and accrued liabilities     25,831,481       23,315,677   Advance deposits     2,224,149       2,614,981   Dividends and distributions payable     2,088,160       2,088,160   TOTAL LIABILITIES   $ 351,529,805     $ 345,544,821   Commitments and contingencies     —       —   EQUITY             Sotherly Hotels Inc. stockholders' equity             Preferred stock, $0.01 par value, 11,000,000 shares authorized:             8.0% Series B cumulative redeemable perpetual preferred stock, 1,464,100 and 1,464,100 shares issued and outstanding; aggregate liquidation preference each $44,655,050, at June 30, 2024 and December 31, 2023, respectively.     14,641       14,641   7.875% Series C cumulative redeemable perpetual preferred stock, 1,346,110 and 1,346,110 shares issued and outstanding; aggregate liquidation preference each $40,940,681, at June 30, 2024 and December 31, 2023, respectively.     13,461       13,461   8.25% Series D cumulative redeemable perpetual preferred stock, 1,163,100 and 1,163,100 shares issued and outstanding; aggregate liquidation preference each $35,674,458, at June 30, 2024 and December 31, 2023, respectively.     11,631       11,631   Common stock, par value $0.01, 69,000,000 shares authorized, 19,849,165 shares issued and outstanding at June 30, 2024 and 19,696,805 shares issued and outstanding at December 31, 2023.     198,492       196,968   Additional paid-in capital     176,014,888       175,779,222   Unearned ESOP shares     (1,697,916 )     (1,764,507 ) Distributions in excess of retained earnings     (123,058,615 )     (125,021,013 ) Total Sotherly Hotels Inc. stockholders' equity     51,496,582       49,230,403   Noncontrolling interest     (1,295,711 )     (1,331,744 ) TOTAL EQUITY     50,200,871       47,898,659   TOTAL LIABILITIES AND EQUITY   $ 401,730,676     $ 393,443,480   SOTHERLY HOTELS INC.CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited)     Three Months Ended     Three Months Ended     Six Months Ended     Six Months Ended       June 30, 2024     June 30, 2023     June 30, 2024     June 30, 2023       (unaudited)     (unaudited)     (unaudited)     (unaudited)   REVENUE                         Rooms department   $ 34,575,890     $ 33,253,523     $ 64,315,546     $ 61,655,211   Food and beverage department     9,901,554       9,500,974       19,654,003       18,249,700   Other operating departments     6,216,923       6,262,836       13,273,249       12,603,699   Total revenue     50,694,367       49,017,333       97,242,798       92,508,610   EXPENSES                         Hotel operating expenses                         Rooms department     7,452,407       7,016,339       14,004,590       13,429,434   Food and beverage department     6,541,720       6,390,867       13,006,575       12,326,427   Other operating departments     2,505,721       2,305,755       5,191,863       4,621,603   Indirect     18,496,840       18,462,336       36,981,736       35,209,913   Total hotel operating expenses     34,996,688       34,175,297       69,184,764       65,587,377