Holloway Lodging Corporation Reports 2013 Third Quarter Results and Declares Quarterly Dividend


HALIFAX, Nov. 12, 2013 /CNW/ - Holloway Lodging Corporation (TSX: HLC) ("Holloway") today announced financial results for the three months ended September 30, 2013.  All amounts are in Canadian dollars unless otherwise indicated.  Readers should refer to Holloway's unaudited interim consolidated condensed financial statements as at September 30, 2013 and its management discussion and analysis which are available on Holloway's website at www.hlreit.com and on SEDAR at www.sedar.com.

Key Events - Q3, 2013

  • Recorded increased same-store revenue, revenue per available room, operating income per available room, operating income margin, funds from operations and adjusted funds from operations for the three months ended September 30, 2013 compared to the three months ended September 30, 2012:
(in millions where indicated
except percentages and per room measures)
Q3, 2013   Q3, 2012   $ INCREASE   % INCREASE
Hotel revenues - same store $15.6 M   $15.3 M   $0.3 M   2.0%
Revenue per available room - same store $95.17   $93.60   $1.57   1.7%
Hotel operating income per available room before depreciation - same store $40.40   $38.63   $1.77   4.6%
Hotel operating income margin - same store 39.9%   38.7%   -   1.2 ppt
Funds from operations $4.0 M   $3.3 M   $0.7 M   21.2%
Adjusted funds from operations $3.7 M   $3.3 M   $0.4 M   12.1%

  • Refinanced the mortgage on the Super 8® in Drayton Valley, AB at the lender's floating base interest rate, currently 4.35% for a 15 year term.
  • Made a $0.5 million penalty-free payment on the mortgage on the Super 8® in Truro, NS.
  • Commenced the rebranding of the Northwest Inn in Slave Lake, AB to a Travelodge® hotel.

Dividend Declaration
On November 12, 2013, the Board of Directors declared a quarterly dividend of $0.035 per share, representing an annual dividend of $0.14 per share.  The dividend will be payable on December 13, 2013 to shareholders of record on November 29, 2013.

Holloway expects revenue growth at its Western Canadian hotels to moderate in coming quarters given the high level of operating results currently being generated.  Holloway expects modest revenue growth at its Atlantic Canadian hotels.

Holloway will continue to seek operational efficiencies, pursue select capital projects to generate increased revenues and will opportunistically reduce debt and repurchase shares.  Holloway also intends to pursue select acquisitions as opportunities arise.

Operating Results
The following table provides a summary of the operating results for the three and nine months ended September 30, 2013 and 2012.

  Three months ended   Nine months ended
(in $000's except number of shares and per share results) Sept. 30, 2013   Sept. 30, 2012   Sept. 30, 2013   Sept. 30, 2012
Hotel revenues* 16,638   15,299   45,620   45,097
Hotel expenses 10,028   9,367   28,989   29,446
Hotel operating income before depreciation and amortization 6,610   5,932   16,631   15,651
Hotel depreciation and amortization 2,301   1,926   6,782   5,888
Other expenses 2,561   2,778   7,567   3,144
Provision for income taxes 497   -   674   -
Income for the periods 1,251   1,228   1,608   6,619
Weighted average basic shares outstanding 17,938,002   18,812,681   18,206,418   17,397,509
Weighted average diluted shares outstanding 17,938,002   18,812,681   18,206,418   17,397,509
Basic and diluted income per share 0.07   0.06   0.09   0.38
Reconciliation to funds from operations (FFO)              
Add / (deduct):              
Depreciation and amortization on real property 2,259   1,908   6,695   5,783
Provision for income taxes 497   -   674   -
Loss (gain)  on disposal of hotel properties and equipment -   64   (4)   (5,593)
Loss (gain) on disposal of minority interest investments in hotel properties -   101   (96)   101
FFO - basic and diluted 4,007   3,301   8,877   6,910
Basic and diluted FFO per share 0.22   0.18   0.49   0.40
Reconciliation to adjusted funds from operations (AFFO)              
Depreciation and amortization - corporate and other assets 42   18   87   105
Accretion of mortgages, loan due to a related party, convertible debentures and deferred financing fees 77   44   165   698
Fair value adjustment on Class B LP units and derivative liability 14   (8)   -   26
Share-based compensation 99   385   303   400
FF&E reserve (508)   (467)   (1,393)   (1,375)
AFFO - basic and diluted 3,731   3,273   8,039   6,764
Basic and diluted AFFO per share 0.21   0.17   0.44   0.39
Dividends declared 0.035   0.035   0.105   0.065

*Hotel revenues have been restated to account for IFRIC 13-Customer Loyalty Programmes which resulted in a reduction in revenues and operating expenses of $0.3 million for the three months ended September 30, 2012 and $0.7 million for the nine months ended September 30, 2012.  This reclassification has no impact on hotel operating income, net income, or other measures of hotel performance. IFRIC 13-Customer Loyalty Programmes requires the costs of loyalty points programs to be recorded as a reduction in hotel revenues.

Holloway Lodging Corporation
Holloway is a real estate corporation focused on acquiring, owning and operating select and limited service lodging properties and a small complement of full service hotels primarily in secondary, tertiary and suburban markets.  Holloway currently owns 18 hotels with 1,798 rooms.  Holloway's shares trade on the Toronto Stock Exchange under the symbol HLC.

This press release contains forward-looking information within the meaning of applicable securities laws. Forward-looking information may relate to Holloway's future outlook and anticipated events or results and may include statements regarding Holloway's future financial position, business strategy, financial results, plans and objectives 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 Holloway 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 March 11, 2013 which is available at www.sedar.com.  Holloway does not intend to update or revise any such forward-looking information should its assumptions and estimates change. 

SOURCE: Holloway Lodging Corporation

For further information:

Michael Rapps, Chairman, at (416) 855-1925 or Jane Rafuse, Chief Financial Officer, at (902) 404-3499


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