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 fourth quarter ended December 31, 2022.
Fourth Quarter 2022 Operating Results
- Portfolio Revenue Per Available Room (RevPAR) –
Increased 24 percent to $117 compared to the 2021 fourth quarter.
Average daily rate (ADR) accelerated 20 percent to $171, and
occupancy jumped 3 percent to 69 percent for the 38 comparable
hotels owned as of December 31, 2022 (excludes the Woodland Hills
hotel that opened in January 2022).
- Fourth quarter 2022 RevPAR of $117 compares to $122 in the 2019
fourth quarter.
- Excluding Silicon Valley and three hotels not open in 2019,
RevPAR was up 3 percent.
- Net Loss – Incurred a $4.0 million net loss applicable
to common shareholders compared to a net loss of $13.2 million in
the 2021 fourth quarter. Net loss per diluted common share was
$(0.08) versus net loss per diluted common share of $(0.27) for the
same period last year.
- Hotel EBITDA Margin – Raised margins to 33 percent in
the 2022 fourth quarter compared to 2021 fourth quarter margins of
31 percent.
- For the comparable hotels, hotel EBITDA margins were flat
compared to the 2019 fourth quarter at approximately 34
percent.
- Adjusted EBITDA – Jumped 34 percent to $20.4 million
from $15.2 million in the 2021 fourth quarter.
- Adjusted FFO – Advanced 68 percent from $6.1 million in
the 2021 fourth quarter to adjusted FFO of $10.2 million this year.
Adjusted FFO per diluted share was $0.20, compared to $0.12 in the
2021 fourth quarter.
- Cash Flow/Burn Before Capital Expenditures – Generated
fourth quarter 2022 cash flow before capital expenditures of $10.0
million which compares to $5.1 million in the 2021 fourth quarter.
Cash flow/burn includes $2.3 million of principal amortization per
quarter.
- Refinanced Credit Facility and Issued New Term Loan –
Closed on a new $260 million revolving credit facility as well as a
$90 million delayed-draw term loan during the fourth quarter,
allowing Chatham to draw down over the first six months of the
loan. Including extension options, both facilities mature in
October 2027.
The following chart summarizes the consolidated financial
results for the three months and year ended December 31, 2022, and
2021, based on all properties owned during those periods ($ in
millions, except margin percentages and per share data):
Three Months Ended
Year Ended
December 31,
December 31,
2022
2021
2022
2021
Net (loss) income
$(2.1)
$(11.4)
$9.9
$(18.8)
Diluted net (loss) income per common
share
$(0.08)
$(0.27)
$0.04
$(0.46)
GOP Margin
40%
41%
45%
41%
Hotel EBITDA Margin
33%
31%
38%
29%
Adjusted EBITDA
$20.4
$15.2
$99.8
$48.4
AFFO
$10.2
$6.1
$59.6
$14.3
AFFO per diluted share
$0.20
$0.12
$1.19
$0.29
Dividends per common share
$0.07
$—
$0.07
$—
Jeffrey H. Fisher, Chatham’s president and chief executive
officer, highlighted, “I am pleased with our portfolio’s overall
operating performance in the fourth quarter with RevPAR growth of
24 percent driving adjusted EBITDA and FFO per share growth of 34
percent and 68 percent, respectively. Hotel EBITDA margins were up
meaningfully over the 2021 fourth quarter and flat to 2019 as we
benefited from lower real estate taxes in the quarter.
“We were thrilled to reinstate a common dividend for the first
time since the 2020 first quarter, and we closed the fourth quarter
in excellent financial condition after refinancing our $250 million
revolving credit facility with $350 million of availability under a
$260 million revolving credit facility and a new $90 million term
loan."
Fisher emphasized, "As we turn the corner to 2023, we should
produce higher RevPAR growth than most given our exposure to the
steady recovery of the business traveler, especially in our tech
driven markets. We have the best operating platform to maximize
flow-through of those incremental dollars which is going to be
vital in an operating environment with gradual cost pressures in
many areas of our hotel operations.
"We are excited for what 2023 will bring us and our
shareholders. We have the financial flexibility to enhance
shareholder value by executing acquisitions and refinancing
upcoming manageable maturities at the right time. We will continue
to opportunistically evaluate further asset recycling and
developments on a limited basis. We are confident in the trajectory
we are headed as evidenced by the common dividend reinstatement,
and we look forward to increased dividends in the coming years,
especially as we utilize all pandemic related net operating loss
deductions," Fisher added.
Hotel RevPAR Performance
The below chart summarizes key hotel financial statistics for
the 38 comparable hotels owned as of December 31, 2022, compared to
the 2021 and 2019 fourth quarters:
Q4 2022 RevPAR
Q4 2021 RevPAR
Q4 2019 RevPAR
Occupancy
69%
67%
76%
ADR
$171
$142
$160
RevPAR
$117
$95
$122
The below chart summarizes RevPAR statistics by month for the
company’s 38 comparable hotels:
October
November
December
January '23
Occupancy – 2022
78%
69%
59%
59%
ADR – 2022
$186
$166
$158
$156
RevPAR – 2022
$144
$114
$93
$92
RevPAR – 2021
$111
$92
$81
$68
% Change in RevPAR vs. prior year
30%
24%
15%
36%
% Change in RevPAR vs. 2019
(2)%
(6)%
(4)%
(12)%
Fisher continued, “Our fourth quarter RevPAR growth of 24
percent significantly outperformed the industry's 16 percent.
Relative to 2019, fourth quarter ADR was up 7 percent which bodes
well as we move ahead in 2023 and business travel demand
accelerates. Excluding our four Silicon Valley hotels, relative to
2019, RevPAR was up 3 percent.
"Weekday occupancy in the fourth quarter was down approximately
11 percent versus 2019, representing a decline from down
approximately 6 percent in the third quarter. On the flip side,
weekday ADR was up versus 2019 each of the last seven months in
2022 which bodes well as the business traveler continues its
recovery in 2023. Weekend RevPAR remained strong as it was up
approximately 9 percent in the quarter versus 2019."
RevPAR performance for Chatham’s largest markets (markets that
account for five percent of hotel EBITDA contribution over the last
twelve months) is presented below:
% OF LTM EBITDA
Q4 2022 RevPAR
Change vs. Q4 2021
Q4 2021 RevPAR
Q4 2019 RevPAR
38 - Hotel Portfolio
$117
24%
$95
$122
Silicon Valley
15%
$108
45%
$74
$158
Coastal Northeast
9%
$156
29%
$122
$135
Los Angeles
9%
$156
20%
$130
$149
Washington D.C.
7%
$119
44%
$83
$132
Greater New York
6%
$141
1%
$139
$138
San Diego
6%
$163
55%
$105
$148
Austin
5%
$124
20%
$103
$125
Dallas
5%
$97
34%
$73
$91
Seattle
5%
$87
24%
$70
$101
“'Our top markets, most of which are reliant on business travel,
produced strong RevPAR growth," stated Dennis Craven, Chatham's
chief operating officer. "As we look forward, four of our top
markets still have significant upside relative to 2019, and we
expect those markets to eventually reach 2019 levels. Our largest
market, Silicon Valley, was up $34 over the fourth quarter last
year, but remains below 2019 levels. International deplanements at
the surrounding San Francisco and San Jose airports are still well
below 2019 levels, off 22 percent and 37 percent, respectively.
With COVID travel restrictions easing, we expect international
travel to pick up steam as we move through 2023. We are confident
that performance at our tech driven hotels in Silicon Valley and
Seattle ultimately will recover to at least 2019 levels."
Craven commented further, "Our coastal northeast market continue
to generate premium RevPAR growth. Austin, Dallas and Bellevue are
our other markets, comprising more than five percent of our
trailing twelve-month hotel EBITDA. Performance at our two Austin
hotels remains strong as a result of strong leisure and business
travel demand. Combined, the nine markets comprise 67 percent of
our trailing twelve-month hotel EBITDA."
Approximately 63 percent of Chatham’s hotel EBITDA over the last
twelve months was generated from its extended-stay hotels. Chatham
has the highest concentration of extended-stay rooms of any public
lodging REIT at 61 percent. Fourth quarter 2022 occupancy, ADR and
RevPAR for each of the company’s major brands, based on the 38
comparable hotels, is presented below (number of hotels in
parentheses):
Residence Inn (16)
Homewood Suites (6)
Courtyard (4)
Hilton Garden Inn (4)
Hampton Inn (3)
Occupancy - 2022
67%
75%
65%
63%
72%
ADR – 2022
$188
$148
$141
$184
$173
RevPAR – 2022
$126
$110
$92
$115
$125
RevPAR – 2021
$99
$88
$76
$98
$104
% Change in RevPAR
27%
26%
20%
18%
20%
Hotel Operations Performance
The below chart summarizes key hotel operating performance
measures for the three months ended December 31, 2022, 2021 and
2019. RevPAR is based on the 38 comparable hotels, and all other
data is based on all properties owned during that period. Gross
operating profit is calculated as Hotel EBITDA plus property taxes,
ground rent and insurance (in millions, except for RevPAR and
margin percentages):
Q4 2022
Q4 2021
Q4 2019
RevPAR
$117
$95
$122
Gross operating profit
$27.9
$23.4
$30.9
Hotel EBITDA
$23.3
$17.6
$24.8
GOP margin
40%
41%
42%
Hotel EBITDA margin
33%
31%
34%
Craven concluded, "Our hotel EBITDA margins rose as they
benefited from lower property taxes in the quarter and more than
offset the decline in gross operating profit margins. Increased
payroll and casual labor costs adversely impacted GOP margins by
approximately 80 basis points in the quarter, but the biggest
impact was a reduction in other department profit margins by
approximately 170 basis points due to one-time items that either
increased 2021 revenue or increased 2022 expenses.”
Corporate Update
The below chart summarizes key financial performance measures
for the three months ended December 31, 2022, 2021 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 is calculated
as Corporate EBITDA less debt service. Amounts are in millions,
except RevPAR.
Q4 2022
Q4 2021
Q4 2019
RevPAR
$117
$95
$122
Hotel EBITDA
$23.3
$17.6
$24.8
Corporate EBITDA
$20.4
$15.1
$22.6
Debt Service & Preferred
$(10.4)
$(10.0)
$(8.5)
Cash flow before CapEx
$10.0
$5.1
$14.1
Home2 Suites in California
In January 2022, Chatham opened the 170-suite Home2 Suites by
Hilton Woodland Hills Warner Center. The hotel is the only
premium-branded, extended-stay room product within an 11-mile
radius and will appeal to any traveler coming to the area for
business, leisure or both.
After opening in January, the hotel has ramped up quickly,
achieving third quarter occupancy of 86 percent. Fourth quarter
occupancy remained strong at 80 percent, and with ADR of $190,
generated RevPAR of $152, which would rank 8th of Chatham’s
hotels.
Destin Acquisition
During the first quarter in an off-market transaction, Chatham
acquired the beachside, 111-room Hilton Garden Inn Destin Miramar
Beach, Fla., for $31 million or approximately $279,000 per room.
Recently opened in 2020, the hotel is within walking distance of
the pristine white sands of the Gulf of Mexico. During the fourth
quarter, the hotel achieved RevPAR of $80, down slightly compared
to RevPAR of $83 in the 2021 fourth quarter.
Hotel Investments
During the 2022 fourth quarter, the company incurred capital
expenditures of $3.3 million ($4.1 million in the first quarter,
$5.3 million in the second quarter and $3.0 million in the third
quarter), excluding any spending related to the Warner Center
development.
Chatham commenced renovations on three hotels in the fourth
quarter that will be completed in the 2023 first quarter, including
the Residence Inns in Holtsville and White Plains, N.Y., and the
Residence Inn Washington, D.C.
Chatham’s 2023 capital expenditure budget is approximately $30.6
million, which includes renovations at five hotels that will occur
in the third and fourth quarters so that revenue displacement is
minimized.
Capital Markets & Capital Structure
During the fourth quarter, Chatham closed on a new $260 million
revolving credit facility, as well as a $90 million delayed-draw
term loan, which allows Chatham to draw down over the first six
months of the loan. Including extension options, both facilities
mature in October 2027. At Chatham’s current leverage level, the
borrowing cost under the credit facility is SOFR plus 1.65 percent,
and the borrowing cost under the term loan is SOFR plus 1.60
percent.
As of December 31, 2022, the company had net debt of $444.0
million (total consolidated debt less unrestricted cash), down
$81.8 million from December 31, 2021. Total debt outstanding as of
December 31, 2022, was $470.3 million at an average interest rate
of 5.0 percent, comprised of $430.9 million of fixed-rate mortgage
debt at an average interest rate of 4.6 percent, $39.3 million
outstanding on the Warner Center construction loan, which carried a
9.2 percent interest rate and nothing outstanding on the company's
$260 million senior unsecured revolving credit facility or $90
million term loan. During 2022, the company's net debt was reduced
by a meaningful $82 million.
Based on the ratio of the company’s net debt to hotel
investments at cost, Chatham’s leverage ratio was approximately
26.6 percent on December 31, 2022, down meaningfully from 30.6
percent on December 31, 2021. The weighted average maturity date
for Chatham’s fixed-rate debt is April 2024.
Subsequent to the end of the fourth quarter, the company
announced that it repaid in full three mortgages with outstanding
principal of $73.3 million and a weighted average interest rate of
8.0 percent with proceeds from its newly issued term loan,
currently carrying an interest rate of 6.1 percent.
“We greatly appreciate the support of our bank group, and with
our recently completed unsecured revolving credit facility and term
loan, we have the ability to smartly manage our maturing debt,”
highlighted Jeremy Wegner, Chatham’s chief financial officer. “We
are especially pleased to be able to refinance our high-rated
Woodland Hills mortgage, further solidify our balance sheet and
reduce our interest costs.”
Dividend
During the quarter, the Board of Trustees declared a preferred
share dividend of $0.41406 per share, payable on January 17, 2023,
to shareholders of record as of December 30, 2022.
Additionally, for the first time since the start of the
pandemic, the Board of Trustees declared a common share dividend of
$0.07 per share, payable on January 17, 2023, to shareholders of
record as of December 30, 2022.
“We felt it was appropriate to reinstate a dividend given our
belief in the continued recovery of business travel in 2023, as
well as the strength of our balance sheet and confidence that we
will be able to refinance our reasonable debt maturities in 2023
and 2024. We intend to pay a regular quarterly dividend for the
first three quarters of 2023 and a higher 2023 fourth quarter
dividend sufficient to distribute approximately 100 percent of
taxable income,” Fisher concluded.
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 fourth quarter 2022 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 www.streetevents.com, or may
participate in the conference call by dialing 1-877-407-0789 and
referencing Chatham Lodging Trust. A recording of the call will be
available by telephone until 11:59 p.m. ET on Thursday, March 2,
2023 by dialing 1-844-512-2921, reference number 13735590. 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 5,914 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 Fourth-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, 2021, 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)
December 31,
2022
December 31,
2021
Assets:
Investment in hotel properties, net
$
1,264,252
$
1,282,870
Investment in hotel properties under
development
—
67,554
Cash and cash equivalents
26,274
19,188
Restricted cash
18,879
10,681
Right of use asset, net
19,297
19,985
Hotel receivables (net of allowance for
doubtful accounts of $344 and $382, respectively)
5,178
3,003
Deferred costs, net
6,428
4,627
Prepaid expenses and other assets
3,430
2,791
Total assets
$
1,343,738
$
1,410,699
Liabilities and Equity:
Mortgage debt, net
$
430,553
$
439,282
Revolving credit facility
—
70,000
Construction loan
39,331
35,007
Accounts payable and accrued expenses
28,528
27,718
Distributions and losses in excess of
investments in unconsolidated real estate entities
—
—
Lease liability, net
22,108
22,696
Distributions payable
5,221
1,803
Total liabilities
525,741
596,506
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 December 31, 2022 and 2021,
respectively
48
48
Common shares, $0.01 par value,
500,000,000 shares authorized; 48,808,105 and 48,768,890 shares
issued and outstanding at December 31, 2022 and 2021,
respectively
488
487
Additional paid-in capital
1,047,023
1,048,070
Accumulated deficit
(252,665
)
(251,103
)
Total shareholders’ equity
794,894
797,502
Noncontrolling Interests:
Noncontrolling Interest in Operating
Partnership
23,103
16,691
Total equity
817,997
814,193
Total liabilities and equity
$
1,343,738
$
1,410,699
CHATHAM LODGING TRUST
Consolidated Statements of
Operations
(In thousands, except share and
per share data)
For the three months
ended
For the years ended
December 31,
December 31,
2022
2021
2022
2021
Revenue:
Room
$
64,369
$
52,159
$
272,265
$
187,369
Food and beverage
2,105
1,380
7,303
3,525
Other
3,517
3,452
13,958
11,350
Reimbursable costs from unconsolidated
entities
329
331
1,325
1,731
Total revenue
70,320
57,322
294,851
203,975
Expenses:
Hotel operating expenses:
Room
15,107
11,859
56,073
40,396
Food and beverage
1,608
911
5,520
2,404
Telephone
343
388
1,449
1,502
Other hotel operating
994
647
3,488
2,299
General and administrative
7,051
5,473
26,085
20,424
Franchise and marketing fees
5,601
4,577
23,674
16,560
Advertising and promotions
1,479
1,051
5,397
3,721
Utilities
2,957
2,557
12,048
10,255
Repairs and maintenance
3,753
3,351
14,145
11,784
Management fees
2,502
2,015
10,133
7,156
Insurance
651
721
2,746
2,792
Total hotel operating expenses
42,046
33,550
160,758
119,293
Depreciation and amortization
14,379
13,860
59,350
54,215
Impairment loss
—
5,640
—
5,640
Property taxes, ground rent and
insurance
4,651
5,879
21,210
23,826
General and administrative
4,341
3,759
17,339
15,752
Other charges
(21
)
78
683
711
Reimbursable costs from unconsolidated
entities
329
331
1,326
1,731
Total operating expenses
65,725
63,097
260,666
221,168
Operating income (loss) before gain (loss)
on sale of hotel property
4,595
(5,775
)
34,185
(17,193
)
Gain (loss) on sale of hotel property
139
—
2,268
(21
)
Operating income (loss)
4,734
(5,775
)
36,453
(17,214
)
Interest and other income
1
140
10
243
Interest expense net of amounts
capitalized, including amortization of deferred fees
(6,726
)
(5,811
)
(26,454
)
(24,460
)
Loss on early extinguishment of debt
(138
)
—
(138
)
—
Loss from unconsolidated real estate
entities
—
—
—
(1,231
)
Gain on sale of investment in
unconsolidated real estate entities
—
—
—
23,817
(Loss) income before income tax
expense
(2,129
)
(11,446
)
9,871
(18,845
)
Income tax expense
—
—
—
—
Net (loss) income
(2,129
)
(11,446
)
9,871
(18,845
)
Net loss (income) attributable to
non-controlling interest
99
257
(66
)
435
Net (loss) income attributable to Chatham
Lodging Trust
(2,030
)
(11,189
)
9,805
(18,410
)
Preferred dividends
(1,987
)
(1,987
)
(7,950
)
(3,975
)
Net (loss) income attributable to common
shareholders
$
(4,017
)
$
(13,176
)
$
1,855
$
(22,385
)
(Loss) income per common share -
basic:
Net (loss) income attributable to common
shareholders
$
(0.08
)
$
(0.27
)
$
0.04
$
(0.46
)
(Loss) income per common share -
diluted:
Net (loss) income attributable to common
shareholders
$
(0.08
)
$
(0.27
)
$
0.04
$
(0.46
)
Weighted average number of common
shares outstanding:
Basic
48,800,992
48,756,792
48,795,642
48,349,027
Diluted
48,800,992
48,756,792
49,058,722
48,349,027
Distributions per common share:
$
0.07
$
—
$
0.07
$
—
CHATHAM LODGING TRUST
FFO and EBITDA
(In thousands, except share and
per share data)
For the three months
ended
For the years ended
December 31,
December 31,
2022
2021
2022
2021
Funds From Operations (“FFO”):
Net (loss) income
$
(2,129
)
$
(11,446
)
$
9,871
$
(18,845
)
Preferred dividends
(1,987
)
(1,987
)
(7,950
)
(3,975
)
Net (loss) income attributable to common
shares and common units
(4,116
)
(13,433
)
1,921
(22,820
)
(Gain) loss on sale of hotel property
(139
)
—
(2,268
)
21
Gain on sale of investment in
unconsolidated real estate entities
—
—
—
(23,817
)
Depreciation
14,326
13,795
59,123
53,967
Impairment loss
—
5,640
—
5,640
Adjustments for unconsolidated real estate
entity items
—
—
—
568
FFO attributed to common share and unit
holders
10,071
6,002
58,776
13,559
Other charges
(21
)
78
683
711
Loss on early extinguishment of debt
138
—
138
—
Adjustments for unconsolidated real estate
entity items
—
—
—
46
Adjusted FFO attributed to common share
and unit holders
$
10,188
$
6,080
$
59,597
$
14,316
Weighted average number of common shares
and units
Basic
50,015,751
49,732,894
49,971,823
49,281,763
Diluted
50,376,373
50,038,285
50,234,903
49,490,938
For the three months
ended
For the years ended
December 31,
December 31,
2022
2021
2022
2021
Earnings Before Interest, Taxes,
Depreciation and Amortization (“EBITDA”):
Net (loss) income
$
(2,129
)
$
(11,446
)
$
9,871
$
(18,845
)
Interest expense
6,726
5,811
26,454
24,460
Depreciation and amortization
14,379
13,860
59,350
54,215
Adjustments for unconsolidated real estate
entity items
—
—
—
1,184
EBITDA
18,976
8,225
95,675
61,014
Impairment loss
—
5,640
—
5,640
(Gain) loss on sale of hotel property
(139
)
—
(2,268
)
21
Gain on sale of investment in
unconsolidated real estate entities
—
—
—
(23,817
)
EBITDAre
18,837
13,865
93,407
42,858
Other charges
(21
)
78
683
711
Loss on early extinguishment of debt
138
—
138
—
Adjustments for unconsolidated real estate
entity items
—
—
—
46
Share based compensation
1,419
1,238
5,551
4,823
Adjusted EBITDA
$
20,373
$
15,181
$
99,779
$
48,438
CHATHAM LODGING TRUST
ADJUSTED HOTEL EBITDA
(In thousands, except share and
per share data)
For the three months
ended
For the years ended
December 31,
December 31,
2022
2021
2022
2021
Net (loss) income
$
(2,129
)
$
(11,446
)
$
9,871
$
(18,845
)
Add:
Interest expense
6,726
5,811
26,454
24,460
Depreciation and amortization
14,379
13,860
59,350
54,215
Corporate general and administrative
4,341
3,759
17,339
15,752
Other charges
—
78
683
711
Impairment loss
—
5,640
—
5,640
Loss on early extinguishment of debt
138
—
138
—
Loss from unconsolidated real estate
entities
—
—
—
1,231
Loss on sale of hotel property
—
—
—
21
Less:
Interest and other income
(1
)
(140
)
(10
)
(243
)
Other charges
(21
)
—
—
—
Gain on sale of hotel property
(139
)
—
(2,268
)
—
Gain on sale of investment in
unconsolidated real estate entities
—
—
—
(23,817
)
Adjusted Hotel EBITDA
$
23,294
$
17,562
$
111,557
$
59,125
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230223005268/en/
Dennis Craven (Company) Chief Operating Officer (561)
227-1386
Chris Daly (Media) DG Public Relations (703) 864-5553
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