Holloway Lodging Real Estate Investment Trust reports second quarter results


    HALIFAX, Aug. 20 /CNW/ - 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 six months ended June 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 at www.sedar.com.

    Highlights - Second Quarter

    The second quarter of 2007 has been one of unprecedented growth for
Holloway. Total assets have increased by over $273.5 million since
December 31, 2006. The key highlights included:

    - Raised $140.0 million in the capital markets - on June 21, 2007, the
      REIT issued 17,758,000 units at a price of $5.35 per unit and
      45.0 million aggregate principal amount of 6.5% convertible debentures
      in a "bought deal" public offering for total gross proceeds of
      $140.0 million;

    - Acquired 11 hotel properties -

         - on April 13, 2007, the REIT purchased the Super 8 Motel in
           Three Hills, AB for $10.0 million and obtained mortgage financing
           of $5.0 million on this hotel; and

         - on June 22, 2007, the REIT purchased ten hotels (the
           "Pomeroy hotels") located in northern Alberta and British Columbia
           from the Pomeroy Group for $215.3 million and in addition,
           purchased parking lots located adjacent to two of the hotels and a
           restaurant for $2.9 million. The REIT obtained mortgage financing
           of $100.0 million on these hotels;

    - Announced a 20% increase in distributions - the REIT announced a
      20% increase in distributions ($0.54 annually from $0.45 annually)
      starting with its July, 2007 distributions (payable August 15th).

    Subsequent to the end of the quarter, the REIT graduated from the TSX
Venture Exchange to the TSX.

    Results of Operations

    The following table provides a summary of the operating results for the
three and six months ended June 30, 2007 and 2006.

                      Three months  Three months    Six months    Six months
                             ended         ended         ended         ended
    (in 000's except       June 30,      June 30,      June 30,      June 30,
     per unit results)        2007          2006          2007          2006
    Hotel revenues        $ 12,987          $ 89      $ 22,634          $ 89
    Hotel expenses          11,672            69        20,832            69
    Income from hotel
     operations              1,315            20         1,802            20
    Net trust expenses         910           638         1,796           728
    Future income tax
     recovery                2,288             -         2,288             -
    Net income (loss)
     for the period
     - basic                 2,693          (618)        2,294          (708)
    Add: interest on
     convertible debentures
     (that are dilutive)        94             -  Not dilutive             -
    Net income (loss) for
     the period - diluted    2,787          (618)        2,294          (708)

    Weighted average basic
     units outstanding      19,432         1,835        18,013         1,458
    Weighted average
     diluted units
     outstanding            20,299         1,835        18,168         1,458
    Basic income (loss)
     per unit                 0.14         (0.34)         0.13         (0.49)
    Diluted income (loss)
     per unit                 0.14         (0.34)         0.13         (0.49)

    Reconciliation to funds
     from operations
    Depreciation and
     amortization on
     real property           1,272            13         2,217            13
    Future income tax
     recovery               (2,288)            -        (2,288)            -
    Funds from operations -
     basic and diluted       1,677          (605)        2,223          (695)
    Basic FFO per unit        0.09         (0.33)         0.12         (0.48)
    Diluted FFO per unit      0.08         (0.33)         0.12         (0.48)

    Reconciliation to
     distributable income
    Depreciation and
     amortization - trust
     and other assets           18             -            33             -
    Reorganization expenses -
     one time item               -           419             -           419
    Accretion on mortgages
     and convertible
     debentures(1)             174             -           319             -
    Unit-based compensation    107             -           195            80
    FF&E reserve              (390)           (3)         (679)           (3)
     income (loss)
     - basic and
     diluted                 1,586          (189)        2,091          (199)
    Basic and diluted
     income (loss)
     per unit                 0.08         (0.10)         0.12         (0.14)

    Reconciliation of cash
     flow from operating
     activities to
     distributable income
    Cash flow from
     operating activities    1,993          (401)        2,446          (473)
    Changes in non-cash
     working capital
     balances                  (17)         (204)          324          (142)
    FF&E reserve              (390)           (3)         (679)           (3)
     - one-time item             -           419             -           419
     income (loss)           1,586          (189)        2,091          (199)

    (1) Includes the amortization of deferred finance fees which is included
        in interest expense in the financial statements.

    Three Months and Six Months ended June 30, 2007

    Holloway owned twenty hotel properties for varying lengths of time during
the three and six months ended June 30, 2007. The results include the
operations of the hotel properties during the quarter or from the date of
acquisition during the quarter. The ten hotels purchased from the Pomeroy
Group were acquired on June 22, 2007 so the results for the quarter only
include their operations for nine days. The properties generated revenue of
approximately $13.0 and $22.6 million and income from hotel operations of
approximately $1.3 and $1.8 million for the three and six months ended
June 30, 2007, respectively.

    The major trust revenues and expenses for the three and six months ended
June 30, 2007 included the following:

    - interest income of $0.4 and $0.9 million from mezzanine loans on
      development properties and short-term investing of excess cash;
    - general and administrative expenses of approximately $0.5 and
      $0.9 million, which include salaries and benefits of employees of the
      REIT, professional fees, travel and other expenses;
    - interest expense of approximately $0.5 and $1.0 million on the
      convertible debentures;
    - non-cash accretion of the discount on the convertible debentures of
      $0.2 and $0.3 million; and
    - non-cash unit-based compensation expense of $0.1 and $0.2 million for
      options granted in 2006 and 2007 which will vest in 2007, 2008 and 2009
      and are being expensed on a straight-line basis.

    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

For further information:

For further information: Mr. Glenn Squires, Chief Executive Officer of
the REIT, (902) 457-1907; Tracy Sherren, Chief Financial Officer of the REIT,
(902) 457-1907

Organization Profile

Holloway Lodging Real Estate Investment Trust

More on this organization

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890