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Condor Hospitality Trust Reports Second Quarter 2018 Results

August 7, 2018

BETHESDA, Md.--(BUSINESS WIRE)--Aug 7, 2018--Condor Hospitality Trust, Inc. (NYSE American: CDOR) (the “Company”) today announced results for the second quarter ended June 30, 2018.

SECOND QUARTER RELEASE FINANCIAL HIGHLIGHTS

Revenue of $17.8 million a 25% Increase to Revenue of $14.3 million in Last Year’s Second Quarter Net Earnings Attributable to Common Shareholders of $2.7 million, or $0.23 per Diluted Share, compared to $4.7 million, or $0.37 per share in Last Year’s Second Quarter, which included an incremental $3.0 million Net Gain on Disposition of Assets; excluding Last Year’s additional Net Gain on Disposition of Assets, the increase in Net Earnings Attributable to Common Shareholders would have been 62% versus Last Year’s Second Quarter Adjusted Funds from Operations Increased to $4.2 million, or $0.34 per Diluted Share, a 48% increase from $2.8 million in Last Year’s Second Quarter Hotel EBITDA Increased to $8.0 million from $5.7 million, and Adjusted EBITDA re Increased 60% Over Last Year’s Second Quarter Achieved 4.6% Second Quarter Same-Store RevPAR Growth over Prior Year* Expanded Second Quarter Same-Store Hotel EBITDA Margin by 230 Basis Points to 39.4% over Prior Year*

SECOND QUARTER PORTFOLIO ACCOMPLISHMENTS

Sold One Legacy Asset Generating $7.1 million in Gross Proceeds Placed One Legacy Asset Under Contract for Sale with Expected Gross Proceeds of $5.1 million

*New investment platform hotels only; Includes results prior to our ownership to illustrate same-store performance

MANAGEMENT COMMENTARY

Bill Blackham, Condor’s Chief Executive Officer, commented:

“Condor continues to grow new investment platform hotel revenues, operating income, and financial metrics as we once again delivered robust operating results in the second quarter of 2018. Through our differentiated investment strategy, we achieved 4.6% same-store RevPAR growth and expanded hotel EBITDA margins by 230 bps on our new investment platform hotels. Our investment strategy and asset management efforts are responsible for another quarter of extremely favorable operating performance.

We also continued to push towards the complete transformation of the portfolio in the second quarter. We sold one legacy hotel asset for gross proceeds of $7.1 million and placed an additional legacy hotel under contract for sale with expected gross proceeds of $5.1 million. We now have only two legacy hotels remaining, one of which is under contract to be sold. Additionally, during the quarter we made significant progress towards making additional acquisitions that match our investment strategy. When the next acquisition is announced and subsequently completed, it would be the sixteenth new investment platform hotel in our portfolio of high-quality, select-service assets in attractive growth markets.”

FINANCIAL SUMMARY

At June 30, 2018, the Company’s total portfolio included 17 hotels, representing 2,088 rooms.

NEW INVESTMENT PLATFORM

At June 30, 2018, the Company’s new investment platform included 15 hotels, representing 1,908 rooms.

LEGACY PLATFORM

At June 30, 2018, the Company’s legacy platform included 2 hotels, representing 180 rooms.

PORTFOLIO ACTIVITY

The Company’s investment strategy is to assemble a portfolio of premium-branded, select-service hotels in the top 100 Metropolitan Statistical Areas (“MSAs”) with a particular focus on MSAs ranked between 20 to 60. Since restarting its portfolio transformation in 2015, the Company has acquired 14 high-quality select-service hotels representing 1,808 rooms in its target markets for a total purchase price of approximately $277 million. Additionally, during this time, the Company has sold 53 legacy assets for a total gross sales price of approximately $161 million.

Acquisitions

During the second quarter of 2018, the Company did not acquire any hotels. However, during the quarter we made significant progress towards making additional acquisitions that match our investment strategy.

Dispositions

During the second quarter of 2018, the Company sold the Comfort Suites in Fort Wayne, IN for $7.1 million. Net proceeds from the sales were applied to outstanding debt on the Company’s $150 million secured credit facility. The Company has only two legacy hotels remaining in the portfolio, and one of these hotels, the Super 8 in Creston, IA, is currently under contract for sale with expected gross proceeds of $5.1 million.

The Company continues to evaluate all capital raising alternatives and opportunities to grow through the continued acquisition of high-quality, select-service assets primarily in secondary markets

BALANCE SHEET AND CAPITAL MARKETS ACTIVITY

As of June 30, 2018, the Company had cash and cash equivalents (including restricted cash) of $11.3 million and available revolver borrowing capacity of $5.7 million. As of June 30, 2018, the Company had total outstanding long-term debt of $142.2 million associated with assets held for use with a weighted average maturity of 2.6 years and a weighted average interest rate of 4.76%.

During the second quarter of 2018, the Company sold 16,140 shares of common stock under the ATM program at an average sales price of $10.40 per share for net proceeds totaling approximately $0.2 million.

CAPITAL INVESTMENTS

The Company invested $1.2 million in capital improvements throughout the portfolio in the quarter ended June 30, 2018, to upgrade its properties and maintain brand standards.

DIVIDENDS

On May 23, 2018, the Board of Directors declared a quarterly cash common stock dividend of $0.195 per share for the second quarter of 2018. The common stock dividend represented an annualized yield of approximately 7.6% based on the closing price of the Company’s common shares on May 22, 2018. The second quarter dividend was paid on July 3, 2018 to shareholders of record as of June 15, 2018.

EARNINGS CALL

The Company will conduct its quarterly conference call on Wednesday, August 8, 2018, at 9:00 AM ET. To participate in the conference call, dial 1-877-425-9470 [International: 1-201-389-0878] approximately ten minutes before the call begins.

A live webcast of the Earnings Call will also be available through the Company’s website. To access, log on to http://condorhospitality.com ten minutes prior to the call. A replay of the conference call webcast will be archived and available online through the Investor Relations section of http://condorhospitality.com.

About Condor Hospitality Trust, Inc.

Condor Hospitality Trust, Inc. (NYSE American: CDOR) is a self-administered real estate investment trust that specializes in the investment and ownership of upper midscale and upscale, premium-branded, select-service, extended-stay, and limited-service hotels in the top 100 Metropolitan Statistical Areas (“MSAs”) with a particular focus on the top 20 to 60 MSAs. The Company currently owns 17 hotels in 9 states. Condor’s hotels are franchised by a number of the industry’s most well-regarded brand families including Hilton, Marriott, and InterContinental Hotels.

Forward-Looking Statement

Certain matters within this press release are discussed using forward-looking language as specified in the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual events, results or performance to differ from those projected presented in the forward-looking statement. These forward-looking statements are based on assumptions that management has made in light of experience in the business in which the Company operates, as well as other factors management believes to be appropriate under the circumstances. As you read and consider this release, you should understand that these statements are not guarantees of events, performance or results. They involve risks, uncertainties (some of which are beyond the Company’s control) and assumptions. Although management believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect events, performance or results and cause them to differ materially from those anticipated in the forward-looking statements. These factors include among other things, risk factors described from time to time in the Company’s filings with the Securities and Exchange Commission. The Company cautions that any forward-looking statement included in this press release is made as of the date of this press release and the Company does not undertake to update any forward-looking statement.

SELECTED FINANCIAL DATA:

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