Ashford Trust Reports 4Q, Year End 2020 Results

DALLAS–Ashford Hospitality Trust, Inc. (NYSE: AHT) (“Ashford Trust” or the “Company”) today reported financial results and performance measures for the fourth quarter and full year ended December 31, 2020. The comparable performance measurements for Occupancy, Average Daily Rate (ADR), Revenue Per Available Room (RevPAR), and Hotel EBITDA assume each of the hotel properties in the Company’s hotel portfolio as of December 31, 2020 was owned as of the beginning of each of the periods presented.  Unless otherwise stated, all reported results compare the fourth quarter and year ended December 31, 2020 with the fourth quarter and year ended December 31, 2019 (see discussion below). All data presented in this press release gives effect to the 1-for-10 reverse stock split with regard to share counts and per share data. The reconciliation of non-GAAP financial measures is included in the financial tables accompanying this press release.

FINANCIAL AND OPERATING HIGHLIGHTS

• Net loss attributable to common stockholders was $70.5 million or $2.29 per diluted share for the quarter.  For the full year of 2020, net loss attributable to common stockholders was $520.5 million or $33.00 per diluted share.
• Comparable RevPAR for all hotels decreased 70.1% to $35.70 during the quarter.
• Adjusted EBITDAre was $(23.1) million for the quarter.  Adjusted EBITDAre for the full year of 2020 was $(54.9) million.
• Adjusted funds from operations (AFFO) was $(1.67) per diluted share for the quarter. For the full year of 2020, AFFO per diluted share was $(17.93).
• The Company ended the quarter with cash and cash equivalents of $92.9 million and restricted cash of $74.4 million.  The vast majority of the restricted cash is comprised of lender and manager held reserves.  At the end of the quarter, there was also $9.4 million in due from third-party hotel managers, which is primarily the Company’s cash held by one of its property managers and is also available to fund hotel operating costs.
• During the quarter, the Company announced that it signed forbearance agreements on its KEYS Loan Pools, representing 34 hotels and approximately $1.2 billion of debt.
• During the quarter, the Company signed a forbearance agreement on its $98 million Hilton Boston Back Bay mortgage loan.
• During the quarter, the Company extended its $85 million loan on the Marriott Gateway.  The final maturity date is now November 2021.
• During the quarter, the Company signed forbearance agreements on four mortgage loans representing 7 hotels and approximately $52 million of debt.
• Subsequent to quarter end, the Company closed on a $200 million corporate financing with the ability to upsize to $450 million.
• Subsequent to quarter end, the Company announced that it signed a modification agreement on its JP Morgan 8 Loan Pool representing 8 hotels and $395 million of debt.
• Subsequent to quarter end, the Company announced that it signed a modification agreement on its MS 17 Loan Pool representing 17 hotels and $419 million of debt.
• Capex invested during the quarter was $4.6 million.

STRATEGIC FINANCING

On January 15, 2021, the Company announced that it closed on the previously announced strategic financing (“Loan”).  The Company drew down $200 million on the Loan at closing and has the option to draw down an additional $250 million, if needed.

The Loan has a 3-year term with two, 1-year extension options subject to certain fees and tests.   The Loan also allows the Company the option to accrue (and not pay in cash) the interest expense for up to two years, and the lender will be eligible to receive an exit fee that may be paid by the Company in either cash or warrants.

CAPITAL STRUCTURE

At December 31, 2020, the Company had total mortgage loans of $3.7 billion with a blended average interest rate of 3.5%.  This average interest rate does not take into account any default rates.

During the quarter, the Company announced the closing of its previously commenced offers to exchange shares of common stock for all outstanding shares of each series of its preferred stock. Approximately 30% of the Preferred Stock participated in the exchange offers and the transaction resulted in the issuance of approximately 38,388,760 new shares of the Company’s Common Stock. Each holder of Preferred Stock who tendered their shares into the Exchange Offers received 5.58 shares of newly issued Common Stock for each share of Preferred Stock. Additionally, from December 8, 2020 through February 23, 2021, the Company entered into privately negotiated exchange agreements with certain holders of its preferred stock and has issued 13,104,032 new shares of the Company’s Common Stock in exchange for 2,318,413 shares of Preferred Stock.

During the quarter, the Company entered into an Equity Line with Lincoln Park Capital.  During the quarter and subsequent to the end of the quarter, the Company issued Lincoln Park Capital 10,598,099 shares of common stock raising approximately $25.1 million in net proceeds.

Subsequent to quarter end, on January 22, 2021, the Company entered into a Standby Equity Distribution Agreement (“SEDA”) with Yorkville Advisors, pursuant to which the Company will be able to sell up to 13,718,319 shares of its common stock at the Company’s request any time during a 36-month commitment period. The Company intends to use the net proceeds from any sale of the shares for working capital purposes, including the repayment of outstanding debt.  Since entering into the SEDA, the company has issued 7,470,000 shares of common stock for net proceeds of approximately $22.0 million.

In light of the economic uncertainty arising from the COVID-19 pandemic and to protect liquidity, the Company and its Board of Directors announced a suspension of its previously announced 2020 common stock dividend policy.  Accordingly, the Company did not pay a dividend on its common stock and common units for the fourth quarter ending December 31, 2020. The Board of Directors will continue to monitor the situation and assess future quarterly common dividend declarations.  The Company also did not pay a dividend on its preferred stock for the fourth quarter ending December 31, 2020.

PORTFOLIO REVPAR

As of December 31, 2020, the portfolio consisted of 103 hotels.

• Comparable RevPAR decreased 70.1% to $35.70 for all hotels on a 33.2% decrease in ADR and a 55.3% decrease in occupancy.

“While the COVID-19 pandemic continues to impact the economy and the hospitality industry, we are encouraged by the progress regarding vaccine rollout and the gradual easing of COVID-related restrictions,” commented J. Robison Hays, Ashford Trust’s President and Chief Executive Officer. “We continue to take decisive actions to enhance our operational and financial flexibility by focusing on strengthening our balance sheet, reducing our cash utilization and continuing to have success in our forbearance efforts. To that end, our strategic financing provides the Company with substantial access to capital and ample liquidity to position our Company to capitalize on the anticipated recovery in the hospitality industry.”