Skyline Investments Inc · TASE:SKLN
Skyline Investments — Q2 2020 Earnings Presentation
44 slides from Skyline Investments's earnings presentation, Jun 30, 2020
Slide 1: Corporate Presentation
Corporate June 30, 2020 Presentation
Slide 2: Cautionary Statement
Cautionary Statement General This presentation has been prepared by Skyline Investments Inc. (the "Company") as a general presentation about the Company. This presentation is not intended to replace the need to review the formal reports published by the Company to the public on the Tel-Aviv Stock Ex
Slide 3: Skyline's Vision & Mission
Skyline’s Vision & Mission We’re creating one of North America’s leading hospitality real estate investment companies, with a focus on income producing properties. Skyline seeks to create shareholder value and deliver superior risk adjusted returns through the acquisition of income producing propert
Slide 4: Corporate Profile
Corporate Profile 18 Income Producing Assets 3,301 Guestrooms $666m/$251m Total Assets/Equity 37.6% Equity to Total Assets Ratio Baa1.il Bond Rating 2,315 Units Available for Development
Slide 5: COVID-19
COVID-19 ▪ In March 2020, the World Health Organization declared COVID-19 to be a pandemic. In an effort to contain and mitigate the spread of COVID-19, many countries, including Canada and the United States, imposed unprecedented restrictions on travel, group gatherings and non-essential activities
Slide 6: Well Positioned to Manage Through COVID-19
Well Positioned to Manage Through COVID-19 Strong Liquidity Position Government Support Paying our Debt ▪ CAD $41M unrestricted cash in Bank ▪ CAD $9.3M (US $6.7M) low interest rate ▪ Current on all scheduled interest and (Most cash the Company has ever had in and partially forgivable loans received
Slide 7: Skyline's Immediate Response to Reduce COVID-19 Impact
Skyline’s Immediate Response to Reduce COVID-19 Impact In response to the COVID-19 crisis, the Company implemented immediate countermeasures, including: ▪ Significant staffing reduction ▪ Reduction of operational costs ▪ Enhanced payment and cash-flow control ▪ Request from existing vendors and part
Slide 8: Occupancy Levels Before and During COVID-19
Occupancy Levels Before and During COVID-19 Began to see impact from COVID-19 in March and occupancy appears to have bottomed out in April Canadian Resorts US Hotels Deerhurst and Horseshoe Resorts Select-Service Courtyard 13 Portfolio ▪ Canadian Resorts saw an increase in occupancy since ▪ Strong i
Slide 9: Canadian and US Government Stimulus Programs
Canadian and US Government Stimulus Programs Canada US Canada Employment Wage Subsidy (“CEWS”) Paycheque Protection Program (“PPP”) ▪ CEWS covers up to 75% of the first CAD $58.7K ▪ CAD $9.3M (US $6.7M) in funds were received normally paid to eligible employees, representing a during Q2 2020 and hav
Slide 10: Debt Composition and Maturities
Debt Composition and Maturities ▪ Bond A and B – Payments are current. As of June 30, 2020 (CAD’000) ▪ Bond A matures January 2023, can be repaid through obtaining a new property level Weighted Average Term Maturity – 2.38 years mortgage or sale of the asset in advance of 4% 6% 15% Weighted Average
Slide 11: Expected Net Cash Flow from Vendor Take-Back Mortgages (VTB)
Expected Net Cash Flow from Vendor Take-Back Mortgages (VTB) VTB Loans (CAD’000) Q3-Q4 2020 2021 2022 2023 Total Blue Mountain1 10 - - 12,832 12,842 Port McNicoll2 4,506 7,207 4,379 17,107 33,199 Total VTB Net Cash Flow 4,516 7,207 4,379 29,939 46,041 Note 1: A portion of the Blue Mountain forecast
Slide 12: Q2-2020 Cash Movement Summary
Q2-2020 Cash Movement Summary Q2-2020 Cash Movement Summary (CAD’000) Opening Cash Balance 37,770 Operating Cash Flow (3,070) Capital Improvements (1,988) Proceeds from US Government Grants 9,264 Foreign Exchange & Other (981) Ending Cash Balance 40,995 ▪ CAD $41M in unrestricted cash as at June 30,
Slide 13: Share Price Discount to NAV
Share Price Discount to NAV ▪ Skyline's share price was trading at 64% discount to its NAV as of June 30, 2020 (Skyline uses fair value accounting, therefore NAV is equal to its Book Value at June 30, 2020) ▪ The company received independent, third-party appraisals for 73% of its US hotels and Canad
Slide 14: Financial Strength and Flexibility
Financial Strength and Flexibility ▪ Total equity to total assets ratio of 37.6% ▪ Net debt to Net CAP1 ratio of 54.1% ▪ Cash balance of $41M; approximately $14M in additional restricted bank deposits and other deposits that can be accessed in certain circumstances ▪ Significant cash-flow of CAD $46
Slide 15: Business Strategy
Business Strategy Skyline’s Strategy Acquisition Targets Acquisition of hospitality properties to Focus on the US and Canada further decrease seasonality and diversify our geographic presence Stabilized in-place income Continued monetization of land assets to Strong potential growth less than 10% of
Slide 16: Portfolio Map
Portfolio Map 18 INCOME PRODUCING ASSETS | 3,301 HOTEL ROOMS | 18 CITIES IN THE US AND CANADA 16
Slide 17: Select Senior Management
Select Senior Management Blake Lyon CA, CPA Robert Waxman CEO, Board Director CFO Blake Lyon has an extensive experience Robert Waxman has over 20 years of in hotel and resort asset management in experience in accounting, finance, and Canada and Internationally. Before real estate. Prior to this app
Slide 18: Current Ownership Structure
Current Ownership Structure 49.37% Alex Shnaider 1.53% 27.66% Public Blake Lyon 1.19% 20.25% ILDC 18
Slide 19: Summary of Periodic Results
Summary of Periodic Results CAD ‘000 1H 2020 1H 2019 FY 2019 Income from Hotels and Resorts 48,539 96,665 193,585 Sale of Residential Real Estate 30,408 33,919 41,658 Total Revenue 78,947 130,584 235,243 NOI from Hotels and Resorts 2,732 22,007 42,214 Total Adjusted EBITDA 2,283 23,667 40,849 FFO (4
Slide 20: Balance Sheet Highlights
Balance Sheet Highlights CAD ‘000, except where noted June 30, 2020 December 31, 2019 Total Assets 665,755 675,846 Gross Debt1 336,201 302,814 Cash and Equivalents 40,995 26,874 Net Debt 295,206 275,940 Shareholders’ Equity 226,261 252,374 Non-Controlling Interest 24,392 24,467 Total Equity 250,653
Slide 21: Net Asset Value (in 000's CAD)
Net Asset Value (in 000’s CAD) Loan Balance June 30, Ownership BV NOI 2019 TTM Q2 ‘20 NOI LTV Equity 2020 Hotels and Resorts Deerhurst Resort (1) 100% 74,440 6,106 4,594 49,266 66% 25,174 Horseshoe Resort 100% 39,500 2,854 2,469 18,270 46% 21,230 Hyatt Regency Arcade 100% 69,428 5,736 2,081 25,538 3
Slide 22: Appendix
Appendix
Slide 23: Main Operating Assets in the United States
Main Operating Assets in the United States The Hyatt Regency Arcade, Cleveland, OH
Slide 24: Courtyard by Marriott Hotels
13 Courtyard by Marriott Hotels Courtyard Birmingham Hoover, Courtyard Manassas Battlefield Park Hoover, AL Manassas, Virginia Courtyard Toledo Airport Courtyard Fort Myers Cape Coral Courtyard Deerfield Arlington Heights Toledo, OH Fort Myers, FL Deerfield, IL
Slide 25: Courtyard by Marriott Hotels Properties Overview
Courtyard by Marriott Hotels Date of PROPERTIES Location Brand Management Service Level Acquisition OVERVIEW 9 States Courtyard by Aimbridge Select Service November (USD) Marriott 14th, 2017 Number of Number of Acquisition Price Per Five Year Capital Credit Hotels Rooms Price Room Mortgage Line 13 1
Slide 26: Courtyard by Marriott: Ft. Myers Renovations
Courtyard by Marriott Active Asset Management – Ft. Myers Courtyard Renovations Before Renovation After Renovation 26
Slide 27: Hyatt Regency Arcade
HYATT REGENCY ENE, i) me) oO O — <x > Oo c i) 0 (3) [aa oa) Y oO > a5
Slide 28: Hyatt Regency Arcade
Hyatt Regency Arcade Improvements Overview ▪ Recently completed renovations of all rooms and meeting The historical Cleveland Arcade was built by John D. spaces. The renovation has improved the hotel’s Rockefeller in 1890 competitive advantage The hotel is an attractive event destination and hosts 6
Slide 29: Hyatt Regency Arcade: Room Renovations
Hyatt Regency Arcade Active Asset Management – Hyatt Room Renovations Before Renovation After Renovation 29
Slide 30: Renaissance Cleveland Hotel
Renaissance Cleveland Hotel
Slide 31: Renaissance Cleveland Hotel
Renaissance Cleveland Hotel Overview Improvements Historical Heritage asset established in 1918 as The Cleveland Hotel ▪ Skyline completed the full HVAC replacement. This was Notable visitors in the hotel’s history: Dwight D. Eisenhower, Gerald the top complaint from hotel guests and is also expecte
Slide 32: Bear Valley
Bear Valley SKYLINE BEAR VALLEY YLINE RESORT
Slide 33: Bear Valley
Bear Valley Overview Improvements A ski resort in Southern California, three and a half hours from ▪ Since the acquisition invested USD $3.2M in equipment and San Francisco improvements Acquired on December 2014 for US $3.7M from the Company’s ▪ In 2017 Skyline invested USD $5.5M on a new ski lift w
Slide 34: Main Operating Assets in Canada
Main Operating Assets in Canada
Slide 35: Deerhurst
Deerhurst SKYLINE
Slide 36: Deerhurst
Deerhurst Overview Future Potential World-class four-season resort located in Muskoka near ▪ Increasing NOI by streamlining operations Toronto, Canada. ▪ Sold 147 of 150 units at Lakeside Lodge. 87 units have joined the The new 150-room Lakeside Lodge was completed during hotel’s rental program 2019
Slide 37: Horseshoe Resort
Horseshoe Resort SKYLINE HORSESHOE A SKYLINE RESOR BARRIE
Slide 38: Horseshoe Resort
Horseshoe Resort Overview Improvements An all-season resort based around the Horseshoe Ski Mountain, ▪ Sold 42 of 44 units at Slopeside Lodge. All sold units have been delivered one of the closest Ski Resort to Toronto, Canada ▪ Officially opened the new Horseshoe Lake in August 2017, The Horseshoe
Slide 39: Land Sales and Development
Land Sales and Development
Slide 40: Lakeside Lodge
Lakeside Lodge SKYLINE
Slide 41: Slopeside Lodge
Slopeside Lodge 41
Slide 42: Blue Mountain Development Lands
Blue Mountain Development Lands Second Nature Phase 3/4 Second Nature Phase 1 Snowbridge Townhomes 42
Slide 43: Asset Ownership Breakdown
Asset Ownership Breakdown Property Property Owner Manager Brand/Franchise Leased Deerhurst Skyline Skyline Independent None Horseshoe Valley Skyline Skyline Independent None Bear Valley Skyline Skyline Independent None Hyatt Regency Skyline Hyatt Hyatt Regency None Cleveland Marriott Renaissance Sky
Slide 44: Thank You!
Thank You! Questions? Please contact Rob Waxman | Chief Financial Officer 647-207-5312 | robw@skylineinvestments.com WWW.SKYLINEINVESTMENTS.COM