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WILLIAMSBURG, Va. - Sotherly Hotels Inc. (NASDAQ: NASDAQ:SOHO), a lodging real estate investment trust (REIT), has been notified by Nasdaq's Listing Qualifications Department of its non-compliance with listing rules due to the delayed filing of its quarterly financial report. The company was unable to file its Form 10-Q for the quarter ended June 30, 2024, on time due to the ongoing evaluation of certain accounting presentations.
The company had previously filed a Form 12b-25 with the Securities and Exchange Commission (SEC) on August 12, 2024, indicating that it could not file the required report without unreasonable effort or expense. The evaluation in question involves the classification of preferred units on the balance sheet of its operating partnership and the accounting for other items.
Nasdaq had already granted Sotherly Hotels an exception to file its delinquent Form 10-Q for the period ended March 31, 2024, by November 18, 2024. Any further extension for the latest filing will be limited to 180 calendar days from the initial delinquent filing's due date.
The company must submit an updated plan to regain compliance with Nasdaq's listing rules by September 4, 2024. Sotherly Hotels is working to complete its Form 10-Q and intends to file as soon as possible to regain compliance. However, there is no guarantee that the company will regain or maintain compliance with the Nasdaq Listing Rules.
This notice does not immediately affect the listing of Sotherly Hotels' common or preferred stock on the Nasdaq Global Market. The company's portfolio includes investments in ten hotel properties and interests in two condominium hotels with associated rental programs. It operates under the Hilton Worldwide and Hyatt Hotels (NYSE:H) Corporation brands, as well as independent hotels.
The information in this article is based on a press release statement from Sotherly Hotels Inc.
In other recent news, Sotherly Hotels Inc. revealed steady growth in its Q2 2024 financial results, with a notable uptick in revenue per available room (RevPAR) and hotel earnings before interest, taxes, depreciation, and amortization (EBITDA). The company's RevPAR increased by 4.3% compared to the same quarter in 2023, while total revenue for the quarter reached $50.7 million, marking a 3.4% increase from the previous year. Hotel EBITDA also saw improvement, rising by 5.8% to $15.7 million.
Sotherly Hotels has confidently reaffirmed its full-year guidance, projecting total revenue of between $179 million and $182.6 million. The company also completed significant refinancing activities, addressing nearly $100 million in mortgage debt. Despite a slight decrease in average daily rates (ADR), the company's group business revenue grew by 3.8% over the prior year.
These recent developments reflect Sotherly Hotels' financial resilience and strategic management. However, the company remains cautious with its balance sheet due to mortgage market conditions and the need for capital improvements. Over $21 million in unpaid cumulative preferred dividends remain, with no clear timeline for repayment. Despite this, Sotherly Hotels maintains an optimistic outlook for the upcoming fall travel months and the performance of urban hotels in Atlanta and Houston.
InvestingPro Insights
As Sotherly Hotels Inc. navigates its current compliance challenges with Nasdaq, a closer look at the company's financial metrics provides a broader context for investors. According to real-time data on InvestingPro, Sotherly Hotels Inc. has a market capitalization of $24.83 million, reflecting the company's size and market value. Despite the challenges, the company is trading at a low EBITDA valuation multiple, which may suggest an undervaluation compared to its earnings before interest, taxes, depreciation, and amortization, as per one of the InvestingPro Tips. This could be a point of interest for value investors seeking opportunities in the lodging real estate investment trust sector.
Additionally, Sotherly Hotels Inc. has been trading at a low revenue valuation multiple, indicating that the company's sales are not being highly valued at its current stock price. This could potentially signal an attractive entry point for investors who believe in the company's ability to grow its top-line revenue. It's important to note, however, that the company's stock price movements have been quite volatile, which is a critical factor for risk assessment.
For those investors looking for more in-depth analysis, there are additional InvestingPro Tips available that delve deeper into Sotherly Hotels Inc.'s financial health and prospects. With six more tips listed on the InvestingPro platform, investors can gain a better understanding of the company's performance and make more informed investment decisions.
The InvestingPro platform also provides a fair value estimate for Sotherly Hotels Inc. of $1.82, which is based on various financial metrics and may serve as a reference point for investors considering the stock's potential value. As the company works towards regaining compliance with Nasdaq's listing rules, these insights could be particularly valuable for stakeholders monitoring SOHO's financial trajectory.
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