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HALIFAX, May 13, 2013 /CNW/ - Holloway Lodging Corporation (TSX: HLC) ("Holloway") today announced financial results for the three months ended March 31, 2013. All amounts are in Canadian dollars unless otherwise indicated. Readers should refer to Holloway's unaudited interim consolidated condensed financial statements as at March 31, 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 - Q1, 2013
- Increased income before taxes and gains and losses on disposals by $0.3 million compared to the prior year.
- Increased cash generated from operating activities by $3.4 million compared to the prior year.
- Increased adjusted funds from operations ("AFFO") by 5.8% compared to the prior year.
- Completed the eight room expansion of the Super 8® hotel in Fort St. John, BC.
- Completed the guestroom refurbishment at the Super 8® hotel in Yellowknife, NWT.
Subsequent to March 31, 2013 Holloway:
- Internalized accounting functions previously performed by Holloway's external hotel manager, Pacrim Hospitality Services Inc. Holloway anticipates annual cost savings as a result of the internalization and greater control and operational flexibility over its business.
- Repurchased 678,800 shares under its normal course issuer bid at an average price of $3.55 per share.
- Extended the mortgage on the Holiday Inn Express® in Stellarton, NS for 5 years at a fixed rate of 4.80%.
On May 13, 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 June 17, 2013 to shareholders of record on May 31, 2013.
Holloway remains cautiously optimistic about the performance of its hotels in the coming quarters but expects revenue growth to moderate in several of its markets given the high level of operating results currently being generated in such markets. Holloway intends to generate revenue growth on a portfolio basis by pursuing select hotel expansions, upgrades and acquisitions. By continuing to focus on operational efficiencies through operating cost reductions and select capital projects, Holloway expects continued growth in net operating income.
While Holloway does not expect material improvement at its four Atlantic Canadian hotels, we expect further positive developments at our Western Canadian hotels should a number of the large-scale infrastructure projects proposed in Northern Alberta and British Columbia receive approval.
Holloway also intends to further reduce its mortgage debt and repurchase shares as opportunities arise.
The following table provides a summary of the operating results for the three months ended March 31, 2013 and 2012.
|Three months ended|
|(in $000's except number of shares and per share results)||March 31,2013||March 31, 2012|
|Hotel operating income before depreciation and amortization||5,135||5,587|
|Hotel depreciation and amortization||2,220||1,985|
|Provision for income taxes||147||-|
|Income for the periods||294||4,721|
|Weighted average basic shares outstanding||18,642,969||14,523,884|
|Weighted average diluted shares outstanding||18,642,969||14,523,884|
|Basic and diluted income per share||0.02||0.33|
|Reconciliation to funds from operations (FFO)|
|Add / (deduct):|
|Depreciation and amortization on real property||2,201||1,943|
|Provision for income taxes||147||-|
|Gain on disposal of hotel properties and equipment||(4)||(4,597)|
|Loss on disposal of minority interest investment in hotel properties||10||-|
|FFO - basic and diluted||2,648||2,067|
|Basic and diluted FFO per share||0.14||0.14|
| Reconciliation to adjusted funds from operations (AFFO)
|Depreciation and amortization - corporate and other assets||19||42|
|Accretion of mortgages, loan due to a related party, convertible debentures and deferred financing fees||44||602|
|Fair value adjustment on Class B LP units and derivative liability||(4)||13|
|AFFO - basic and diluted||2,360||2,230|
|Basic and diluted AFFO per share||0.13||0.15|
|Reconciliation of cash generated from operating activities to AFFO|
|Net cash generated from operating activities||1,963||(1,399)|
|Changes in items of working capital||845||4,131|
*Hotel revenues have been restated to account for IFRIC 13-Customer Loyalty Programmes which resulted in a reduction in revenues and operating expenses of $0.2 million for the three months ended March 31, 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:
please contact Michael Rapps, Chairman, at (416) 855-1925 or Jane Rafuse, Chief Financial Officer, at (902) 404-3499