NexPoint Hospitality Trust Announces Second Quarter 2023 Financial Results, Update on Sale of DoubleTree Portfolio, the Sale Process of the HIX Nashville Portfolio and the Issuance of Deferred Units

DALLAS and TORONTO, Aug. 29, 2023 /CNW/ -- NexPoint Hospitality Trust ("NHT"¹), (TSX-V: NHT.U) announced the release of NHT's financial results for the three and six months ended June 30, 2023.  All amounts are expressed in U.S. dollars.

The table below presents net income from continuing operations, Funds from Operations ("FFO") and Adjusted Funds from Operations ("AFFO").

	For the Three Months Ended				For the Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Net Income	$              (1.1)		$           (1.7)		$              (4.8)		$           (0.8)
FFO²	0.8		0.4		(1.2)		5.9
AFFO²	1.1		(3.4)		(5.4)		2.0

The table below presents Occupancy, ADR and RevPAR.

	For the Three Months Ended				For the Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Occupancy	70.5 %		68.8 %		71.8 %		67.8 %
ADR	$             149.81		$          151.10		$             163.69		$          152.33
RevPAR	$             108.17		$          105.79		$             117.79		$          103.30

Additional information on 2023 financial and operational results can be found at www.sedarplus.ca in our 2023 interim consolidated financial statements and management discussion and analysis ("MD&A").

DoubleTree Portfolio

On March 8, 2022, the REIT began the marketing process to sell its DoubleTree Portfolio. As of March 31, 2023, the REIT has sold the Beaverton, Vancouver, and Bend properties for a combined purchase price of US$67.5 million. The REIT had executed purchase and sale agreements on the Tigard property for a purchase price of US$24.5 million. However, the buyer defaulted on the agreement and relinquished the escrow to the REIT. The REIT is still actively marketing the Tigard property and hopes to complete the sale of the property before year end. Additionally, the REIT has executed a purchase and sale agreement on the Olympia property for a purchase price of US$12.75 million and closed on the transaction on June 29, 2023. The REIT used the proceeds from the Beaverton, Bend, and Vancouver sales to pay off the DT Portfolio debt. The proceeds from the remaining sales will be used to pay down other outstanding debt the REIT holds.

HIX Nashville Portfolio

On February 6, 2023, the REIT entered into an agreement with a broker to actively start marketing the Holiday Inn Express Nashville property (the "Tennessee Property"). As previously disclosed, on August 11, 2023, the REIT's subsidiary NHT Nashville, LLC, entered into an agreement for purchase and sale of real property with NF V Acquisitions, LLC for the sale of the Tennessee Property for a purchase price of US$120 million. Proceeds of the transaction will be used to repay indebtedness related to the Tennessee Property and to potentially fund future acquisitions of real property.

Deferred Units

The REIT announced today the planned issuance of deferred units (the "Deferred Units") to certain independent trustees of the REIT, pursuant to the REIT's existing deferred unit plan (the "Deferred Unit Plan"). The Deferred Units will be granted in respect of accrued trustee fees up to the end of Q2 2023, in the aggregate amount of US$323,917. The Deferred Units will be granted and priced based upon the five-day volume-weighted average price of the REIT's units beginning on the first trading day after the issuance of this press release. Since the grant of Deferred Units will exceed the insider participation limits under the Deferred Unit Plan, the grant will be subject to the adoption of an amended and restated deferred unit plan,  which will be subject to approval by the TSX Venture Exchange ("TSXV") and an affirmative vote of a simple majority of the votes cast by disinterested unitholders of the REIT, excluding the votes cast by such unitholders that are required to be excluded pursuant to TSXV Policy 4.4 – Security Based Compensation at the REIT's upcoming annual and special meeting of unitholders (the "Meeting"). Additionally, the grant of Deferred Units will be subject to ratification by unitholders at the Meeting.

Non-IFRS Financial Measures

FFO and AFFO are key measures of performance commonly used by real estate operating companies and real estate investment trusts. They are not measures recognized under International Financial Reporting Standards ("IFRS") and do not have standardized meanings prescribed by IFRS. FFO and AFFO may not be comparable to similar measures presented by other issuers in the real estate or lodging industries. For complete definitions of these measures, as well as an explanation of their composition and how the measures provide useful information to investors, please refer to the section titled "Non-IFRS Financial Measures" in NHT's MD&A for the three and six months ended June 30, 2023, which section is hereby incorporated herein by reference.

The following is a reconciliation of our net income to FFO and AFFO for the three and six months ended June 30, 2023 and June 30, 2022:

		For the Three Months Ended				For the Six Months Ended
		June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Net income (loss) from continuing operations^1		$       (1,053)		$      (1,659)		$       (4,809)		$         (829)
Depreciation of property and equipment		1,859		2,716		3,706		5,510
Depreciation of right-of-use asset		40		84		87		167
Amortization of advanced bookings from acquisitions		9		122		9		218
Acquisition costs		—		86		—		364
Deferred income tax recovery		11		(151)		(9)		(272)
Fair value adjustment of Class B Units		(103)		(218)		(204)		(507)
Impairment (recovery)/loss		—		(570)		—		1,217
Funds from Operations		763		410		(1,220)		5,868
FFO per unit - basic		0.03		0.01		(0.04)		0.20
Income taxes		(196)		487		46		544
Core Funds from Operations		567		897		(1,174)		6,412
CFFO per unit - basic		0.02		0.03		(0.04)		0.21
FF&E reserve		288		(4,623)		(4,870)		(4,937)
Amortization of deferred financing costs		188		292		398		573
Stock Compensation		32		—		296		—
Adjusted Funds from Operations		1,075		(3,434)		(5,350)		2,048
AFFO per unit - basic		0.04		(0.11)		(0.18)		0.09
Weighted average units outstanding - basic		29,901,742		29,901,742		29,901,742		29,901,742

About NHT
NexPoint Hospitality Trust is a publicly traded real estate investment trust, with its Units listed on the TSXV under the ticker NHT.U. NHT is focused on acquiring, owning and operating well-located hospitality properties in the United States that offer a high current yield and in many cases are underperforming assets with the potential to increase in value through investments in capital improvements, a market-based recovery, brand repositioning, revenue enhancements, operational improvements, expense inefficiencies, and exploiting excess land or underutilized space. NHT owns 9 branded properties sponsored by Marriott, Hilton, Hyatt, and Intercontinental Hotels Group, located across the U.S. NHT is externally advised by NexPoint Real Estate Advisors VI, L.P.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact:
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^1In this release, "we," "us," "our," "NHT", and the "REIT" each refer to NexPoint Hospitality Trust. FFO and AFFO are non-IFRS measures. For a description of the basis of presentation and reconciliations of NHT's non-IFRS measures, see "Non-IFRS Financial Measures" in this release.

SOURCE NexPoint Hospitality Trust