CLDT Chatham Lodging Trust

RevPAR Beats Industry Performance for Fifth Consecutive Quarter

Chatham Lodging Trust (NYSE: CLDT), a lodging real estate investment trust (REIT) that invests in upscale, extended-stay hotels and premium-branded, select-service hotels, today announced results for the second quarter ended June 30, 2023.

Second Quarter 2023 Operating Results

• Portfolio Revenue Per Available Room (RevPAR) – Increased 5 percent to $144 compared to 2022 second quarter RevPAR of $138. Average daily rate (ADR) accelerated 2 percent to $182, and occupancy rose 2 percent to 79 percent for the 39 hotels owned as of June 30, 2023.
  • RevPAR of $144 compares to $146 in 2019. ADR was up 3 percent to 2019.
  • Excluding the five tech-driven hotels in Silicon Valley and Seattle, Wash., RevPAR was up 5 percent versus the 2019 second quarter. ADR was up 10 percent.
• Net Income – Earned net income of $9.4 million compared to net income of $9.3 million in the 2022 second quarter. Net income per diluted common share was $0.15 versus $0.15 during the 2022 second quarter.
• Hotel EBITDA Margin – Generated margins of 41.3 percent in the 2023 second quarter compared to 2022 second quarter margins of 41.9 percent.
• Adjusted EBITDA – Advanced 2 percent to $31.9 million from $31.1 million in the 2022 second quarter.
• Adjusted FFO – Jumped 5 percent from $20.7 million in the 2022 second quarter to adjusted FFO of $21.8 million this year. Adjusted FFO per diluted share was $0.43, compared to $0.41 in the 2022 second quarter.
• Debt Repayments – Repaid in full a $16.0 million mortgage on the Courtyard by Marriott Houston, Texas. During July, Chatham repaid a separate $19.7 million maturing mortgage.

The following chart summarizes the consolidated financial results for the three and six-months ended June 30, 2023, and 2022, based on all properties owned during those periods ($ in millions, except margin percentages and per share data):

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

2023

 

2022

 

2023

 

2022

Net income (loss)

$9.4

 

$9.3

 

$4.3

 

$(0.4)

Diluted net income (loss) per common share

$0.15

 

$0.15

 

$0.01

 

$(0.09)

GOP Margin

48.5%

 

49.2%

 

44.6%

 

44.8%

Hotel EBITDA Margin

41.3%

 

41.9%

 

36.6%

 

36.8%

Adjusted EBITDA

$31.9

 

$31.1

 

$49.6

 

$44.4

AFFO

$21.8

 

$20.7

 

$29.7

 

$24.2

AFFO per diluted share

$0.43

 

$0.41

 

$0.59

 

$0.48

Dividends per common share

$0.07

 

$0.00

 

$0.14

 

$0.00

Jeffrey H. Fisher, Chatham’s president and chief executive officer, highlighted, “It was a really good quarter with RevPAR, Adjusted EBITDA, FFO and FFO per share growing over last year and producing free cash flow that enabled us to repay a maturing loan in early July. With only $70 million of mortgages maturing through June 30, 2024, and having full availability on our $260 million credit facility, our balance sheet is in great shape, and we are in a strong position to address all maturities through the end of 2024.

“Our second quarter year-over-year RevPAR growth of five percent was strong given the loss of most intern business in Silicon Valley and Bellevue, Wash. Versus 2019, second quarter RevPAR was down less than two percent, and the trend to 2019 improved each month of 2023 through June,” Fisher continued. “Those five hotels adversely impacted RevPAR performance versus 2019 by approximately 700 basis points in the quarter. Excluding those five tech-driven hotels, second quarter RevPAR growth was up five percent versus the 2019 second quarter.”

Hotel RevPAR Performance

The below chart summarizes key hotel financial statistics for the hotels owned as of June 30, 2023, compared to the 2022 and 2019 second quarter:

 

Q2 2023 RevPAR

 

Q2 2022 RevPAR

 

Q2 2019 RevPAR

Occupancy

79%

 

77%

 

83%

ADR

$182

 

$179

 

$176

RevPAR

$144

 

$138

 

$146

The below chart summarizes RevPAR statistics by month for the company’s hotels:

 

April

 

May

 

June

 

July

Occupancy – 2023

77%

 

78%

 

82%

 

81%

ADR – 2023

$179

 

$179

 

$189

 

$189

RevPAR – 2023

$138

 

$140

 

$155

 

$154

RevPAR – 2022

$123

 

$133

 

$157

 

$157

% Change in RevPAR vs. prior year

12%

 

5%

 

(1)%

 

(2)%

% Change in RevPAR vs. 2019

(3)%

 

(2)%

 

(1)%

 

(2)%

Fisher emphasized, "As we have pointed out previously, we knew our portfolio would recover after some of our peers due to our stronger reliance on the business traveler, and that pattern is proving true. For the fifth consecutive quarter, our RevPAR growth has outperformed industry RevPAR growth, and given the lack of intern business in all of our tech driven hotels, which includes two additional hotels in Austin, Texas, that were meaningfully impacted, our results have been particularly impressive and prove that business travel is picking up momentum across the country.

"Continuing the same trend from the first quarter, versus 2019, weekday occupancy in the second quarter improved each month of 2023 and was 78 percent for the entire second quarter. This is up approximately three percent over last year, again impressive given the adverse impact from the loss of most intern business year-over-year. Weekday ADR was up approximately three percent versus last year and, importantly, up slightly versus 2019. Weekend RevPAR remained strong as it was up approximately 15 percent in the quarter versus 2019, the highest quarterly levels since 2019," Fisher concluded.

RevPAR performance for Chatham’s largest markets comprise 68 percent of trailing twelve-month hotel EBITDA (based on EBITDA contribution over the last twelve months) is presented below:

 

% OF LTM EBITDA

 

Q2 2023 RevPAR

 

Change vs. Q2 2022

 

Q2 2022 RevPAR

 

Q2 2019 RevPAR

39 - Hotel Portfolio

 

 

$144

 

5%

 

$138

 

$146

Silicon Valley

15%

 

$139

 

(3)%

 

$142

 

$194

Coastal Northeast

9%

 

$174

 

10%

 

$158

 

$157

Los Angeles

9%

 

$170

 

7%

 

$158

 

$162

Washington, D.C.

8%

 

$174

 

11%

 

$156

 

$185

San Diego

6%

 

$191

 

2%

 

$187

 

$177

Greater New York

6%

 

$155

 

1%

 

$154

 

$153

Austin

6%

 

$135

 

(5)%

 

$142

 

$132

Dallas

5%

 

$109

 

3%

 

$107

 

$94

Seattle

4%

 

$137

 

(9)%

 

$150

 

$166

“Our Silicon Valley, Austin and Seattle markets were hit by the significant reduction in intern programs, while most of our other top markets produced solid RevPAR growth, and six of our top nine markets produced RevPAR higher than 2019," noted Dennis Craven, Chatham's chief operating officer. "On our first quarter earnings call, we estimated that demand was sufficient to make up 50 to 75 percent of the lost intern business in Silicon Valley and Seattle, and, in fact, we made up 63 percent of the lost revenue. As we look ahead to 2024, results at these hotels should outpace portfolio performance.

Craven added, "Traditional demand in Silicon Valley and Seattle continues to grow, driven by the steady return to office and increased demand from international travelers. International deplanements into San Francisco/San Jose, as well as Seattle, keep improving to their highest levels since the pandemic. Deplanements were off approximately 11 percent versus 2019 into San Francisco/San Jose and were up three percent versus 2019 into Seattle. Weekday occupancy at the four Silicon Valley hotels was approximately 77 percent in the second quarter, not far off our portfolio average of 78 percent.”

Approximately 62 percent of Chatham’s hotel EBITDA over the last twelve months was generated from its extended-stay hotels, the highest concentration of extended-stay rooms of any public lodging REIT. Second quarter 2023 occupancy, ADR and RevPAR for each of the company’s major brands is presented below (number of hotels in parentheses):

 

Residence Inn (16)

 

Homewood Suites (6)

 

HGI (4)

 

Courtyard (4)

 

Hampton Inn (3)

% of LTM EBITDA

46%

 

11%

 

9%

 

9%

 

7%

Occupancy – 2023

80%

 

80%

 

78%

 

71%

 

84%

ADR – 2023

$191

 

$153

 

$203

 

$153

 

$179

RevPAR – 2023

$152

 

$122

 

$158

 

$109

 

$150

RevPAR – 2022

$152

 

$118

 

$144

 

$102

 

$138

% Change in RevPAR

--%

 

4%

 

10%

 

7%

 

8%

Hotel Operations Performance

The below chart summarizes key hotel operating performance measures for the three months ended June 30, 2023, 2022 and 2019. Gross operating profit is calculated as Hotel EBITDA plus property taxes, ground rent and insurance (in millions, except for RevPAR and margin percentages):

 

 

Q2 2023

 

Q2 2022

 

Q2 2019

RevPAR

 

$144

 

$138

 

$146

Gross operating profit

 

$40.8

 

$40.1

 

$42.3

Hotel EBITDA

 

$34.7

 

$34.1

 

$36.1

GOP margin

 

49%

 

49%

 

49%

Hotel EBITDA margin

 

41%

 

42%

 

42%

Craven concluded, "We have absorbed hourly pay increases of approximately 24 percent since 2019 and despite that, our second quarter margins operating profit margins were essentially flat and hotel EBITDA margins were slightly down. Versus last year, hourly wages were also essentially flat. We continue to benefit from lower headcounts versus pre-pandemic levels. Compared to the 2019 second quarter, headcount is down approximately 17 percent. Against the 2022 second quarter, headcount is up approximately 10 percent as we added employees to our tech-driven hotels as housekeeping services are more frequent without the interns, and filled open positions, especially in our maintenance department.”

Corporate Update

The below chart summarizes key financial performance measures for the three months ended June 30, 2023, 2022 and 2019. Corporate EBITDA is calculated as hotel EBITDA minus cash corporate general and administrative expenses and is before debt service and capital expenditures. Debt service includes interest expense and principal amortization on its secured debt (approximately $2.2 million per quarter), as well as dividends on its preferred shares of $2.0 million per quarter. Cash flow before CapEx and common dividends is calculated as Corporate EBITDA less debt service and preferred share dividends. Amounts are in millions, except RevPAR.

 

 

Q2 2023

 

Q2 2022

 

Q2 2019

RevPAR

 

$144

 

$138

 

$146

Hotel EBITDA

 

$34.7

 

$34.1

 

$36.1

Corporate EBITDA

 

$31.9

 

$31.1

 

$33.8

Debt Service & Preferred

 

$(9.9)

 

$(10.8)

 

$(8.2)

Cash flow before CapEx and Common

 

$22.0

 

$20.3

 

$25.6

Hotel Investments

During the 2023 second quarter, the company incurred capital expenditures of $7.5 million. Chatham’s 2023 capital expenditure budget is approximately $30.6 million. Only one renovation is planned for the 2023 third quarter, the Courtyard by Marriott Charleston Summerville, S.C.

Capital Markets & Capital Structure

During the second quarter, Chatham repaid maturing debt of approximately $16.0 million using available cash and proceeds under its term loan and repaid a separate $19.7 million maturing mortgage during July 2023. Chatham currently has $41 million of debt maturing in the next six months and $70 million maturing through June 30, 2024.

As of June 30, 2023, the company had net debt of $433.8 million (total consolidated debt less unrestricted cash). Total debt outstanding as of June 30, 2023, was $466.7 million at an average interest rate of 5.0 percent, comprised of $376.7 million of fixed-rate mortgage debt at an average interest rate of 4.7 percent, $90 million outstanding on its term loan at a rate of 6.4% and nothing outstanding on the company's $260 million senior unsecured revolving credit facility. Based on the ratio of the company’s net debt to hotel investments at cost, Chatham’s leverage ratio was approximately 26 percent on June 30, 2023, down from 27 percent as of December 31, 2022.

"We have reduced our net debt by approximately $10 million in 2023 and have manageable maturing debt for the balance of the year. We funded the maturing July mortgage as well as the second quarter common dividends from second quarter cash flow of $22 million. Our forecast corporate cash flow and well capitalized balance sheet provide us the flexibility to acquire hotels and refinance upcoming maturities," commented Jeremy Wegner, Chatham's chief financial officer.

Dividend

During the quarter, the Board of Trustees declared a preferred share dividend of $0.41406 per share, as well as a common share dividend of $0.07 per share, payable on July 17, 2023, to shareholders of record as of June 30, 2023.

2023 Guidance

Due to uncertainty surrounding the hotel industry, the company is not providing guidance at this time.

Earnings Call

The company will hold its second quarter 2023 conference call later today at 10:00 a.m. Eastern Time. Shareholders and other interested parties may listen to a simultaneous webcast of the conference call on the Internet by logging onto Chatham’s Web site, www.chathamlodgingtrust.com or may participate in the conference call by dialing 1-844-826-3035 or 1-412-317-5195 and referencing Chatham Lodging Trust. A recording of the call will be available by telephone until Wednesday, August 09, 2023, at 11:59 PM ET, by dialing 1-844-512-2921 or 1-412-317-6671, access number 10179996. A replay of the conference call will be posted on Chatham’s website.

About Chatham Lodging Trust

Chatham Lodging Trust is a self-advised, publicly traded real estate investment trust (REIT) focused primarily on investing in upscale, extended-stay hotels and premium-branded, select-service hotels. The company owns 39 hotels totaling 5,915 rooms/suites in 16 states and the District of Columbia. Additional information about Chatham may be found at chathamlodgingtrust.com.

Non-GAAP Financial Measures

Included in this press release are certain “non-GAAP financial measures,” within the meaning of Securities and Exchange Commission (SEC) rules and regulations, that are different from measures calculated and presented in accordance with GAAP (generally accepted accounting principles). The company considers the following non-GAAP financial measures useful to investors as key supplemental measures of its operating performance: (1) FFO, (2) Adjusted FFO, (3) EBITDA, (5) EBITDAre (6) Adjusted EBITDA and (7) Adjusted Hotel EBITDA. These non-GAAP financial measures should be considered along with, but not as alternatives to, net income or loss as prescribed by GAAP as a measure of its operating performance.

FFO As Defined by Nareit and Adjusted FFO

The company calculates FFO in accordance with standards established by the Nareit, which defines FFO as net income or loss (calculated in accordance with GAAP), excluding gains or losses from sales of real estate, impairment write-downs, the cumulative effect of changes in accounting principles, plus depreciation and amortization (excluding amortization of deferred financing costs), and after adjustments for unconsolidated partnerships and joint ventures following the same approach. The company believes that the presentation of FFO provides useful information to investors regarding its operating performance because it measures its performance without regard to specified non-cash items such as real estate depreciation and amortization, gain or loss on sale of real estate assets and certain other items that the company believes are not indicative of the property level performance of its hotel properties. The company believes that these items reflect historical cost of its asset base and its acquisition and disposition activities and are less reflective of its ongoing operations, and that by adjusting to exclude the effects of these items, FFO is useful to investors in comparing its operating performance between periods and between REITs that also report using the Nareit definition.

The company calculates Adjusted FFO by further adjusting FFO for certain additional items that are not addressed in Nareit’s definition of FFO, including other charges, losses on the early extinguishment of debt and similar items related to its unconsolidated real estate entities that it believes do not represent costs related to hotel operations. The company believes that Adjusted FFO provides investors with another financial measure that may facilitate comparisons of operating performance between periods and between REITs that make similar adjustments to FFO.

EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA

The company calculates EBITDA for purposes of the credit facility debt as net income or loss excluding: (1) interest expense; (2) provision for income taxes, including income taxes applicable to sale of assets; (3) depreciation and amortization; and (4) unconsolidated real estate entity items including interest, depreciation and amortization excluding gains and losses from sales of real estate. The company believes EBITDA is useful to investors in evaluating and facilitating comparisons of its operating performance because it helps investors compare the company’s operating performance between periods and between REITs by removing the impact of its capital structure (primarily interest expense) and asset base (primarily depreciation and amortization) from its operating results. In addition, the company uses EBITDA as one measure in determining the value of hotel acquisitions and dispositions.

The company calculates EBITDAre in accordance with Nareit guidelines, which defines EBITDAre as net income or loss excluding interest expense, income tax expense, depreciation and amortization expense, gains or losses from sales of real estate, impairment, and adjustments for unconsolidated joint ventures. We believe that the presentation of EBITDAre provides useful information to investors regarding the Company's operating performance and can facilitate comparisons of operating performance between periods and between REITs.

The company calculates Adjusted EBITDA by further adjusting EBITDA for certain additional items, including other charges, losses on the early extinguishment of debt, amortization of non-cash share-based compensation and similar items related to its unconsolidated real estate entities, which it believes are not indicative of the performance of its underlying hotel properties entities. The company believes that Adjusted EBITDA provides investors with another financial measure that may facilitate comparisons of operating performance between periods and between REITs that report similar measures.

Adjusted Hotel EBITDA is defined as net income before interest, income taxes, depreciation and amortization, corporate general and administrative, impairment loss, loss on early extinguishment of debt, interest and other income and income or loss from unconsolidated real estate entities. The Company presents Adjusted Hotel EBITDA because the Company believes it is useful to investors in comparing its hotel operating performance between periods and comparing its Adjusted Hotel EBITDA margins to those of our peer companies. Adjusted Hotel EBITDA represents the results of operations for its wholly owned hotels only.

Although the company presents FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA because it believes they are useful to investors in comparing the company’s operating performance between periods and between REITs that report similar measures, these measures have limitations as analytical tools. Some of these limitations are:

• FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect the company’s cash expenditures, or future requirements, for capital expenditures or contractual commitments;
• FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect changes in, or cash requirements for, the company’s working capital needs;
• FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect funds available to make cash distributions;
• EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on the company’s debts;
• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may need to be replaced in the future, and FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect any cash requirements for such replacements;
• Non-cash compensation is and will remain a key element of the company’s overall long-term incentive compensation package, although the company excludes it as an expense when evaluating its ongoing operating performance for a particular period using adjusted EBITDA;
• Adjusted FFO, Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect the impact of certain cash charges (including acquisition transaction costs) that result from matters the company considers not to be indicative of the underlying performance of its hotel properties; and
• Other companies in the company’s industry may calculate FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA differently than the company does, limiting their usefulness as a comparative measure.

In addition, FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA do not represent cash generated from operating activities as determined by GAAP and should not be considered as alternatives to net income or loss, cash flows from operations or any other operating performance measure prescribed by GAAP. FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA are not measures of the Company’s liquidity. Because of these limitations, FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. The Company compensates for these limitations by relying primarily on its GAAP results and using FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA only supplementally. The Company’s consolidated financial statements and the notes to those statements included elsewhere are prepared in accordance with GAAP. The company’s reconciliation of FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA to net income attributable to common shareholders, as determined under GAAP, is set forth below.

Forward-Looking Statement Safe Harbor

Note: This press release contains forward-looking statements within the meaning of federal securities regulations. These forward-looking statements include those with regard to the potential future impact of the COVID-19 pandemic, within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements include information about possible or assumed future results of the lodging industry and our business, financial condition, liquidity, results of operations, cash flow and plans and objectives. These statements generally are characterized by the use of the words “believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue,” “intend,” “should,” “may” or similar expressions. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, our actual results could differ materially from those set forth in the forward-looking statements. Important factors that we think could cause our actual results to differ materially from expected results are summarized below.

Other risks include, but are not limited to: national and local economic and business conditions, including the effect on travel of potential terrorist attacks, that will affect occupancy rates at the company’s hotels and the demand for hotel products and services; operating risks associated with the hotel business; risks associated with the level of the company’s indebtedness and its ability to meet covenants in its debt agreements; relationships with property managers; the company’s ability to maintain its properties in a First-class manner, including meeting capital expenditure requirements; the company’s ability to compete effectively in areas such as access, location, quality of accommodations and room rate structures; changes in travel patterns, taxes and government regulations which influence or determine wages, prices, construction procedures and costs; the company’s ability to complete acquisitions and dispositions; and the company’s ability to continue to satisfy complex rules in order for the company to remain a REIT for federal income tax purposes and other risks and uncertainties associated with the company’s business described in the company's filings with the SEC; inaccuracies of our accounting estimates and the uncertainty and economic impact of pandemics, epidemics or other public health emergencies of fear of such events, such as the recent COVID-19 pandemic. Given these uncertainties, undue reliance should not be placed on such statements. We undertake no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect future events or circumstances or to reflect the occurrence of unanticipated events. The forward-looking statements should also be read in light of the risk factors identified in the “Risk Factors” section in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as updated by the Company's subsequent filings with the SEC under the Exchange Act.

CHATHAM LODGING TRUST

Consolidated Balance Sheets

(In thousands, except share and per share data)

 

 

June 30, 2023

 

December 31, 2022

 

(unaudited)

 

 

Assets:

 

 

 

Investment in hotel properties, net

$

1,250,259

 

 

$

1,264,252

 

Cash and cash equivalents

 

32,900

 

 

 

26,274

 

Restricted cash

 

14,799

 

 

 

18,879

 

Right of use asset, net

 

18,424

 

 

 

19,297

 

Hotel receivables (net of allowance for doubtful accounts of $408 and $344, respectively)

 

5,705

 

 

 

5,178

 

Deferred costs, net

 

4,965

 

 

 

6,428

 

Prepaid expenses and other assets

 

9,604

 

 

 

3,430

 

Total assets

$

1,336,656

 

 

$

1,343,738

 

Liabilities and Equity:

 

 

 

Mortgage debt, net

$

376,454

 

 

$

430,553

 

Revolving credit facility

 

—

 

 

 

—

 

Construction loan

 

—

 

 

 

39,331

 

Unsecured term loan, net

 

89,405

 

 

 

—

 

Accounts payable and accrued expenses

 

29,964

 

 

 

28,528

 

Lease liability, net

 

21,019

 

 

 

22,108

 

Distributions payable

 

5,327

 

 

 

5,221

 

Total liabilities

 

522,169

 

 

 

525,741

 

Commitments and contingencies

 

 

 

Equity:

 

 

 

Shareholders’ Equity:

 

 

 

Preferred shares, $0.01 par value, 100,000,000 shares authorized; 4,800,000 and 4,800,000 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively

 

48

 

 

 

48

 

Common shares, $0.01 par value, 500,000,000 shares authorized; 48,856,806 and 48,808,105 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively

 

488

 

 

 

488

 

Additional paid-in capital

 

1,047,124

 

 

 

1,047,023

 

Accumulated deficit

 

(259,184

)

 

 

(252,665

)

Total shareholders’ equity

 

788,476

 

 

 

794,894

 

Noncontrolling interests:

 

 

 

Noncontrolling interest in Operating Partnership

 

26,011

 

 

 

23,103

 

Total equity

 

814,487

 

 

 

817,997

 

Total liabilities and equity

$

1,336,656

 

 

$

1,343,738

 

CHATHAM LODGING TRUST

Consolidated Statements of Operations

(In thousands, except share and per share data)

(unaudited)

 

 

For the three months ended

 

For the six months ended

 

June 30,

 

June 30,

 

2023

 

2022

 

2023

 

2022

Revenue:

 

 

 

 

 

 

 

Room

$

77,486

 

 

$

75,761

 

 

$

139,157

 

 

$

125,926

 

Food and beverage

 

2,094

 

 

 

1,968

 

 

 

4,182

 

 

 

3,382

 

Other

 

4,531

 

 

 

3,674

 

 

 

8,022

 

 

 

6,654

 

Reimbursable costs from related parties

 

365

 

 

 

358

 

 

 

730

 

 

 

684

 

Total revenue

 

84,476

 

 

 

81,761

 

 

 

152,091

 

 

 

136,646

 

Expenses:

 

 

 

 

 

 

 

Hotel operating expenses:

 

 

 

 

 

 

 

Room

 

14,578

 

 

 

14,480

 

 

 

28,694

 

 

 

26,074

 

Food and beverage

 

1,584

 

 

 

1,429

 

 

 

3,141

 

 

 

2,476

 

Telephone

 

360

 

 

 

359

 

 

 

722

 

 

 

760

 

Other hotel operating

 

950

 

 

 

879

 

 

 

1,863

 

 

 

1,611

 

General and administrative

 

7,305

 

 

 

6,804

 

 

 

14,112

 

 

 

12,153

 

Franchise and marketing fees

 

6,801

 

 

 

6,559

 

 

 

12,141

 

 

 

10,966

 

Advertising and promotions

 

1,460

 

 

 

1,230

 

 

 

2,975

 

 

 

2,419

 

Utilities

 

2,899

 

 

 

2,784

 

 

 

6,050

 

 

 

5,673

 

Repairs and maintenance

 

3,894

 

 

 

3,347

 

 

 

7,623

 

 

 

6,792

 

Management fees

 

2,791

 

 

 

2,727

 

 

 

5,079

 

 

 

4,645

 

Insurance

 

701

 

 

 

747

 

 

 

1,400

 

 

 

1,457

 

Total hotel operating expenses

 

43,323

 

 

 

41,345

 

 

 

83,800

 

 

 

75,026

 

Depreciation and amortization

 

14,670

 

 

 

15,277

 

 

 

28,928

 

 

 

30,313

 

Property taxes, ground rent and insurance

 

6,069

 

 

 

5,932

 

 

 

12,174

 

 

 

10,890

 

General and administrative

 

4,612

 

 

 

4,462

 

 

 

8,954

 

 

 

8,405

 

Other charges

 

38

 

 

 

150

 

 

 

38

 

 

 

400

 

Reimbursable costs from related parties

 

365

 

 

 

358

 

 

 

730

 

 

 

684

 

Total operating expenses

 

69,077

 

 

 

67,524

 

 

 

134,624

 

 

 

125,718

 

Operating income

 

15,454

 

 

 

16,257

 

 

 

17,522

 

 

 

12,948

 

Interest and other income

 

189

 

 

 

1

 

 

 

209

 

 

 

1

 

Interest expense, including amortization of deferred fees

 

(6,442

)

 

 

(6,936

)

 

 

(12,880

)

 

 

(13,325

)

Loss on early extinguishment of debt

 

—

 

 

 

—

 

 

 

(691

)

 

 

—

 

Gain from partial lease termination

 

164

 

 

 

—

 

 

 

164

 

 

 

—

 

Income (loss) before income tax expense

 

9,365

 

 

 

9,322

 

 

 

4,324

 

 

 

(376

)

Income tax expense

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Net income (loss)

 

9,365

 

 

 

9,322

 

 

 

4,324

 

 

 

(376

)

Net (income) loss attributable to noncontrolling interests

 

(221

)

 

 

(171

)

 

 

(28

)

 

 

82

 

Net income (loss) attributable to Chatham Lodging Trust

 

9,144

 

 

 

9,151

 

 

 

4,296

 

 

 

(294

)

Preferred dividends

 

(1,987

)

 

 

(1,987

)

 

 

(3,975

)

 

 

(3,975

)

Net income (loss) attributable to common shareholders

$

7,157

 

 

$

7,164

 

 

$

321

 

 

$

(4,269

)

Income (loss) per common share - basic:

 

 

 

 

 

 

 

Net loss attributable to common shareholders

$

0.15

 

 

$

0.15

 

 

$

0.01

 

 

$

(0.09

)

Income (loss) per common share - diluted:

 

 

 

 

 

 

 

Net loss attributable to common shareholders

$

0.15

 

 

$

0.15

 

 

$

0.01

 

 

$

(0.09

)

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

Basic

 

48,846,913

 

 

 

48,795,348

 

 

 

48,842,850

 

 

 

48,791,455

 

Diluted

 

48,962,842

 

 

 

49,017,184

 

 

 

48,964,908

 

 

 

48,791,455

 

Distributions declared per common share:

$

0.07

 

 

$

—

 

 

$

0.14

 

 

$

—

 

CHATHAM LODGING TRUST

FFO and EBITDA

(In thousands, except share and per share data)

 

 

For the three months ended

 

For the six months ended

 

June 30,

 

June 30,

 

2023

 

2022

 

2023

 

2022

Funds From Operations (“FFO”):

 

 

 

 

 

 

 

Net income (loss)

$

9,365

 

 

$

9,322

 

 

$

4,324

 

 

$

(376

)

Preferred dividends

 

(1,987

)

 

 

(1,987

)

 

 

(3,975

)

 

 

(3,975

)

Net income (loss) attributable to common shares and common units

 

7,378

 

 

 

7,335

 

 

 

349

 

 

 

(4,351

)

Gain on sale of hotel properties

 

(55

)

 

 

(2,020

)

 

 

(55

)

 

 

(2,020

)

Depreciation

 

14,616

 

 

 

15,223

 

 

 

28,821

 

 

 

30,193

 

FFO attributable to common share and unit holders

 

21,939

 

 

 

20,538

 

 

 

29,115

 

 

 

23,822

 

Other charges

 

38

 

 

 

150

 

 

 

38

 

 

 

400

 

Loss on early extinguishment of debt

 

—

 

 

 

—

 

 

 

691

 

 

 

—

 

Gain from partial lease termination

 

(164

)

 

 

—

 

 

 

(164

)

 

 

—

 

Adjusted FFO attributable to common share and unit holders

$

21,813

 

 

$

20,688

 

 

$

29,680

 

 

$

24,222

 

Weighted average number of common shares and units

 

 

 

 

 

 

 

Basic

 

50,434,230

 

 

 

50,010,107

 

 

 

50,308,726

 

 

 

49,928,420

 

Diluted

 

50,550,159

 

 

 

50,231,943

 

 

 

50,430,784

 

 

 

50,139,358

 

 

For the three months ended

 

For the six months ended

 

June 30,

 

June 30,

 

2023

 

2022

 

2023

 

2022

Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”):

 

 

 

 

 

 

 

Net income (loss)

$

9,365

 

 

$

9,322

 

 

$

4,324

 

 

$

(376

)

Interest expense, including amortization of deferred fees

 

6,442

 

 

 

6,936

 

 

 

12,880

 

 

 

13,325

 

Depreciation and amortization

 

14,670

 

 

 

15,277

 

 

 

28,928

 

 

 

30,313

 

EBITDA

 

30,477

 

 

 

31,535

 

 

 

46,132

 

 

 

43,262

 

Gain on sale of hotel properties

 

(55

)

 

 

(2,020

)

 

 

(55

)

 

 

(2,020

)

EBITDAre

 

30,422

 

 

 

29,515

 

 

 

46,077

 

 

 

41,242

 

Other charges

 

38

 

 

 

150

 

 

 

38

 

 

 

400

 

Loss on early extinguishment of debt

 

—

 

 

 

—

 

 

 

691

 

 

 

—

 

Gain from partial lease termination

 

(164

)

 

 

—

 

 

 

(164

)

 

 

—

 

Share based compensation

 

1,555

 

 

 

1,419

 

 

 

3,007

 

 

 

2,713

 

Adjusted EBITDA

$

31,851

 

 

$

31,084

 

 

$

49,649

 

 

$

44,355

 

CHATHAM LODGING TRUST

ADJUSTED HOTEL EBITDA

(In thousands, except share and per share data)

 

 

 

For the three months ended

 

For the six months ended

 

 

June 30,

 

June 30,

 

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

 

Net income (loss)

$ 9,365

 

$ 9,322

 

$ 4,324

 

$ (376)

Add:

Interest expense, including amortization of deferred fees

6,442

 

6,936

 

12,880

 

13,325

 

Depreciation and amortization

14,670

 

15,277

 

28,928

 

30,313

 

Corporate general and administrative

4,612

 

4,462

 

8,954

 

8,405

 

Other charges

38

 

150

 

38

 

400

 

Loss on early extinguishment of debt

—

 

—

 

691

 

—

Less:

Interest and other income

(189)

 

(1)

 

(209)

 

(1)

 

Gain on sale of hotel properties

(55)

 

(2,020)

 

(55)

 

(2,020)

 

Gain from partial lease termination

(164)

 

—

 

(164)

 

—

 

Adjusted Hotel EBITDA

$ 34,719

 

$ 34,126

 

$ 55,387

 

$ 50,046

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230802614334/en/

Dennis Craven (Company) Chief Operating Officer (561) 227-1386

Chris Daly (Media) DG Public Relations (703) 864-5553