Holloway Lodging Real Estate Investment Trust Reports Third Quarter Results


    HALIFAX, Nov. 13 /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 nine months ended
September 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 on the REIT's website at www.hlreit.com and on
the Sedar website at www.sedar.com.

    Highlights - Third Quarter

    The following summarizes the key highlights that occurred during the 
three months ended September 30, 2007:

        - Distributable income increase of over 310% - distributable income
          has increased to $5.2 million ($0.13 per unit) from $1.2 million
          for the three month periods ended September 30, 2007 and 2006,

        - Hotel revenues increase of over 270% - hotel revenues have grown to
          $24.9 million for the quarter ended September 30, 2007 from
          $6.7 million for the same quarter in 2006;

        - Graduated to TSX - on July 17, 2007, the REIT graduated from the
          TSX Venture Exchange to the TSX;

        - Exercise of over allotment option - on July 18, 2007, the REIT
          issued 580,000 units at $5.35 per unit for gross proceeds of
          $3.1 million and $6.8 million of 6.5% convertible debentures in
          connection with the exercise of an over allotment option that had
          been granted to the underwriters of the REIT's June 2007 public
          offering of units and debentures. This brought the total gross
          proceeds of the offering, including the units and debentures issued
          pursuant to the exercise of the over-allotment option to
          $150 million;

        - Increased distributions by 20% - the REIT instituted a 20%
          distribution increase from $0.0375 to $0.045 per unit per month
          (from $0.45 per unit per year to $0.54 per unit per year) effective
          with the August distribution to unitholders of record as of
          July 31, 2007;

        - Acquired one hotel property - on September 12, 2007, the REIT
          purchased the Holiday Inn Express in Kamloops, BC for
          $11.3 million; and

        - Executive appointment - on September 15, 2007 Michael Jackson
          joined Holloway as President and Chief Operating Officer.

    "We are very pleased to have achieved such significant growth in our
results this quarter, demonstrating significant progress in realization of our
overall strategy", said Glenn Squires, CEO of Holloway Lodging REIT.

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

    (in 000's except  Three months  Three months   Nine months   Nine months
     per unit                ended         ended         ended         ended
     results)         September 30, September 30, September 30, September 30,
                              2007          2006          2007          2006
    Hotel revenues          24,858         6,693        47,493         6,782

    Hotel expenses          21,200         5,191        42,032         5,259
    Income from hotel
     operations              3,658         1,502         5,461         1,523
    Net trust expenses       1,448           730         3,244         1,459

    Future income tax
     (expense) recovery       (933)            -         1,355             -
    Net income for the
     period - basic and
     diluted                 1,277           772         3,572            64
    Reconciliation to
     distributable income
    Depreciation and
     amortization            3,043           480         5,293           493
    Future income tax
     expense (recovery)        933             -        (1,355)            -
    Reorganization expenses
     - one time item             -             -             -           419
    Accretion on mortgages
     and convertible
     debentures(1)             562           156           881           156
    Unit-based compensation     91             -           286            80
    FF&E reserve              (746)         (186)       (1,425)         (189)
    Distributable income -
     basic and diluted       5,160         1,222         7,252         1,023
    Weighted average basic
     units outstanding      39,046         9,639        25,101         4,215
    Weighted average
     diluted units
     outstanding            39,236        12,243        25,253         5,171
    Basic income per unit     0.03          0.08          0.14          0.02
    Diluted income per unit   0.03          0.06          0.14          0.01
    Basic distributable
     income per unit          0.13          0.13          0.29          0.24
    Diluted distributable
     income per unit          0.13          0.10          0.29          0.20
    (1) Includes the amortization of deferred finance fees which is included
        in interest expense in the financial statements.

    Three Months Ended September 30, 2007 and 2006

    Results of Operations

    The results of operations for the three months ended September 30, 2007
include the operation of twenty hotels for the full quarter and the Holiday
Inn Express in Kamloops, BC since September 12, 2007. Because the REIT only
owned one hotel for the full quarter in 2006 and acquired seven hotels during
August and September, 2006, the dollar value of revenues, expenses and income
from the hotels has increased substantially when comparing the third quarter
results for 2007 to 2006.

    Hotel Operations

    The hotel properties generated revenue of approximately $24.9 million
compared to $6.7 million for the three months ended September 30, 2007 and
2006, respectively. Income from hotel operations has increased from          
$1.5 million for the three months ended September 30, 2006 to $3.7 million for
the three months ended September 30, 2007. Three of the properties acquired in
the third quarter of 2006 did not have mortgages on them until the fourth
quarter of 2006.

    Corporate Operations

    Corporate net trust expenses have increased from $0.7 million for the
three months ended September 30, 2006 to $1.4 million for the three months
ended September 30, 2007. Debenture interest expense and the non-cash
accretion of the discount on the debentures has increased from $0.5 million to
$1.8 million. In the third quarter of 2006, the REIT had $20 million in
debentures outstanding for two months, whereas in the third quarter of 2007,
the REIT had $65 million in debentures outstanding for the entire quarter and
an additional approximately $7 million in debentures outstanding since
mid-July. In the three months ended September 30, 2007, the REIT generated
interest income of $0.9 million from mezzanine loans and the investment of
cash balances. The credit or recovery of expenditures related to abandoned
property acquisitions represents costs related to the Holiday Inn Express
hotel in Myrtle Beach, South Carolina which were reversed when concerns
related to this property were addressed and the REIT decided to purchase this
hotel. The general and administrative expenses include a one-time expense of
$150,000 to graduate to the TSX from the TSXV.

    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; Mr. Michael Jackson, President of the REIT, (902)
457-1907; Ms. Tracy Sherren, Chief Financial Officer of the REIT, (902)

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Holloway Lodging Real Estate Investment Trust

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