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Seven Hotel Properties, Reports a Loss of $2.7 million for Period Ended December 31, 2003 |
MCLEAN, Va., Feb. 25, 2004 - Highland Hospitality
Corporation (NYSE: HIH), a newly formed lodging REIT, today reported its
consolidated results for the period ended December 31, 2003.
Fourth Quarter Highlights included:
Consolidated Financial Results Consolidated Total Revenue was $0.7 million and Consolidated Net Loss was $(2.7) million, or $(.07) per share, for the period ended December 31, 2003. The Consolidated Net Loss for the period resulted primarily from the following one-time charges relating to the Company's initial public offering, all of which were recorded as General and Administrative expenses: Stock-based compensation expense of $0.5 million and initial public offering related costs and reimbursements to our sponsor, Barcelo Crestline, of $2.0 million. Funds from operations, or FFO, which is defined as Consolidated Net Loss plus Depreciation and Amortization, was $(2.6) million, or $(.07) per share, and Earnings before Interest, Income Taxes, Depreciation, and Amortization, or EBITDA, was $(2.9) million, or $(.08) per share, for the period ended December 31, 2003. Both FFO and EBITDA are non-GAAP financial measures within the meaning of the rules of the Securities and Exchange Commission. Management believes both FFO and EBITDA to be key measures of a REIT's performance and should be considered along with, but not as an alternative to, net income and cash flow as a measure of our operating performance. A reconciliation of these non-GAAP financial measures is included in the accompanying financial tables. Balance Sheet/Liquidity On December 19, 2003, the Company completed its initial public offering of 30,000,000 shares of common stock. Together with the underwriters' full exercise of their over-allotment option to purchase 4,500,000 additional shares, the Company raised a total of $321 million in net offering proceeds from the initial public offering. In addition to the initial public offering, the Company completed private placement transactions on December 19, 2003 that raised an additional $42.3 million in cash proceeds. The Company used approximately $144 million of cash proceeds to acquire five of its initial seven hotel properties during the period ended December 31, 2003. At December 31, 2003, the Company had $225.6 million of cash on hand. Subsequent to December 31, 2003, the Company acquired the two remaining hotel properties of its initial portfolio by using approximately $36 million of cash proceeds and assuming $17 million of mortgage debt relating to one of the hotel properties. As of February 20, 2004, the Company had approximately $180 million of cash and approximately $17 million of debt on its balance sheet. The Company is currently in negotiations to obtain a corporate credit facility with several major financial institutions. The facility will be designed to provide the capacity and flexibility to meet its targeted leverage objectives of 40 - 50% debt to capitalization. The Company anticipates that this facility will be closed during the second quarter 2004. Acquisition Pipeline The Company acquired five of its initial acquisition properties in December
and acquired the remaining two hotel properties in January. The table
below lists the key data associated with each of the hotel transactions:
Portsmouth, VA Renaissance
250 16.8
12/19/2003
* Represents fair value of consideration paid in the form of cash, operating partnership units, and in the case of the Tampa, FL Hilton, the assumption of $17 million of debt James L. Francis, President and CEO of Highland Hospitality Corporation,
stated, "We are pleased to have successfully completed our initial public
offering. As evidenced by the seven hotel transactions announced
to date, our investment strategy has produced acquisitions that cover the
spectrum from full to limited service hotels, including properties which
will provide upside through upgrading and renovating, asset management
or through new management expertise. While there is a wealth of opportunities
available to us, we continue to carefully allocate our capital to those
investments that will maximize returns for our shareholders' over the long
term."
Highland Hospitality Corporation is a newly formed, self-advised lodging real estate investment trust, or REIT, focused on hotel investments primarily in the United States. The Company currently owns seven hotel properties with an aggregate of 1,725 rooms. Additional information can be found on the company's website at http://www.highlandhospitality.com. Certain statements and assumptions in this press release contain or are based upon "forward-looking" information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties. When we use the words "will likely result," "may," "anticipate," "estimate," "should," "expect," "believe," "intend," or similar expressions, we intend to identify forward-looking statements. Such forward-looking statements include, but are not limited to, the impact of the transaction on our business and future financial condition, our business and investment strategy, our understanding of our competition and current market trends and opportunities and projected capital expenditures. Such statements are subject to numerous assumptions and uncertainties, many of which are outside Highland's control. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances. |
Highland Hospitality Corporation http://www.highlandhospitality.com |