CLDT Chatham Lodging Trust

RevPAR Growth Accelerates in September and October

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 third quarter ended September 30, 2024.

Third Quarter 2024 Operating Results

• Portfolio Revenue Per Available Room (RevPAR) – Generated RevPAR growth of 2.1 percent excluding hotels under renovation during the 2024 and 2023 third quarters, as well as the Home2 Phoenix Downtown that opened in January 2024.
  • RevPAR increased 1.3 percent to $150 compared to the 2023 third quarter for the 38 comparable hotels. Average daily rate (ADR) was up 1.3 percent to $188, and occupancy was flat at 80 percent.
  • RevPAR for the Silicon Valley and Bellevue hotels was up 8 percent over the 2023 third quarter.
  • October RevPAR accelerated 6 percent over 2023 to $158, the second highest October RevPAR since Chatham's inception.
• Net Income – Produced net income of $4.3 million compared to net income of $7.5 million in the 2023 third quarter. Net income per diluted common share was $0.05 versus $0.11 during the 2023 third quarter.
• Hotel EBITDA Margin – Generated margins of 37 percent in the 2024 third quarter compared to 2023 second quarter margins of 38 percent.
• Adjusted EBITDA – Produced third quarter adjusted EBITDA of $29.6 million versus $30.6 in 2023.
• Adjusted FFO – Earned adjusted FFO of $17.6 million in the 2024 third quarter compared to $20.2 million in the 2023 third quarter. Adjusted FFO per diluted share was $0.35 in 2024 and $0.40 in 2023.
• Asset Recycling – Entered into separate agreements to sell five hotels with an average age of 23 years, forecast 2024 RevPAR of $101 (among the six lowest RevPAR hotels in the portfolio) and due for renovation in the next 24 months. The transactions, if closed, will generate net proceeds of approximately $80 million, with funds being used initially to reduce debt.

The following chart summarizes the consolidated financial results for the three- and nine-months ended September 30, 2024, and 2023, based on all properties owned during those periods ($ in millions, except margin percentages and per share data):

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2024

 

2023

 

2024

 

2023

Net income (loss) to common shareholders

$2.3

 

$5.3

 

$(0.1)

 

$5.7

Diluted net income (loss) per common share

$0.05

 

$0.11

 

$—

 

$0.11

GOP Margin

44.5%

 

44.9%

 

43.4%

 

44.7%

Hotel EBITDA Margin

37.1%

 

37.9%

 

36.0%

 

37.1%

Adjusted EBITDA

$29.6

 

$30.6

 

$79.8

 

$80.2

AFFO

$17.6

 

$20.2

 

$45.5

 

$49.8

AFFO per diluted share

$0.35

 

$0.40

 

$0.89

 

$0.99

Dividends per common share

$0.07

 

$0.07

 

$0.21

 

$0.21

Jeffrey H. Fisher, Chatham's president and chief executive officer, commented, “It’s been a productive quarter delivering RevPAR growth of over 2 percent, meeting consensus estimates of $0.35 per share and progressing on our capital recycling initiative. We currently have five hotels under contract to be sold which would result in net proceeds of approximately $80 million if the transactions close.”

Hotel RevPAR Performance

The below chart summarizes key hotel financial statistics for the 38 comparable hotels owned as of September 30, 2024, compared to the 2023 and 2019 second quarters:

 

Q3 2024 RevPAR

 

Q3 2023 RevPAR

 

Q3 2019 RevPAR

Occupancy

80%

 

80%

 

85%

ADR

$188

 

$185

 

$176

RevPAR

$150

 

$148

 

$150

The below chart summarizes RevPAR statistics by month for Chatham's comparable hotels:

 

July

 

August

 

September

 

October

Occupancy – 2024

81%

 

79%

 

80%

 

83%

ADR – 2024

$192

 

$182

 

$189

 

$191

RevPAR – 2024

$155

 

$144

 

$151

 

$158

RevPAR – 2023

$154

 

$143

 

$146

 

$148

% Change in RevPAR vs. prior year

—%

 

—%

 

3%

 

6%

Fisher highlighted, “We were very pleased with our same-store RevPAR growth of 2.1 percent after excluding hotels under renovation, far surpassing industry wide RevPAR growth of less than 0.9 percent. Our five technology dependent hotels in Silicon Valley and Bellevue produced strong RevPAR growth of 8 percent in the quarter, and growth surged to 14 percent in October at these same five hotels as we continue to benefit from surging tech demand.

“Fundamentals in our markets remain strong, as July and August market RevPAR grew 2 percent, and we closed out the quarter with September RevPAR growth of 3 percent and strong growth of 6 percent in October. Monthly RevPAR in September and October of $151 and $158 represents the second highest monthly RevPAR since our inception for each of those respective months. Business travel demand, our most important segment, continues to gain momentum as we experienced broad gains across our portfolio. Within our leisure market hotels, RevPAR rose slightly when we exclude our Savannah hotel that was under renovation for a portion of August and September,” Fisher concluded.

RevPAR performance for Chatham’s largest markets comprise 71 percent of trailing twelve-month hotel EBITDA (based on EBITDA contribution over the last twelve months) is presented below:

 

% of LTM EBITDA

 

Q3 2024 RevPAR

 

Change vs. Q3 2023

 

Q3 2023 RevPAR

 

Q3 2019 RevPAR

38 - Hotel Portfolio

 

 

$150

 

1%

 

$148

 

$150

Silicon Valley

14%

 

$148

 

8%

 

$137

 

$205

Coastal Northeast

9%

 

$264

 

4%

 

$253

 

$225

Los Angeles

9%

 

$175

 

(4)%

 

$181

 

$174

Washington, D.C.

8%

 

$153

 

6%

 

$144

 

$152

Greater New York

8%

 

$182

 

2%

 

$178

 

$153

San Diego

7%

 

$216

 

5%

 

$206

 

$185

Dallas

6%

 

$86

 

(11)%

 

$97

 

$86

Austin

5%

 

$121

 

5%

 

$115

 

$125

Seattle

5%

 

$184

 

7%

 

$172

 

$188

Within Dallas, the Courtyard by Marriott Addison was under renovation for most of the quarter. “Continuing a noteworthy trend, our primarily tech-driven hotels in Silicon Valley and Bellevue led the way with combined RevPAR growth of 8 percent in the quarter, driven by a 3 percent gain in occupancy and a 5 percent gain in ADR. Occupancy reached 78 percent in the quarter, and ADR reached $199,” highlighted Dennis Craven, Chatham's chief operating officer. “Excluding Silicon Valley and Bellevue, second quarter RevPAR of $148 exceeds 2019 RevPAR of $138.

“A great indicator for our portfolio is that seven of our top nine markets produced RevPAR growth, highlighting the broad growth we are experiencing. Washington, D.C., Greater New York, San Diego, Austin and Seattle are benefitting from primarily business travel demand. Our Coastal Northeast primarily leisure portfolio bucked the trends of most leisure markets and continued to see RevPAR grow.”

Approximately 65 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. Third quarter 2024 occupancy, ADR and RevPAR for each of Chatham’s major brands is presented below (number of hotels in parentheses):

 

Residence Inn (16)

 

Homewood Suites (6)

 

Courtyard (4)

 

Hampton Inn (3)

 

HGI (3)

% of LTM EBITDA

49%

 

10%

 

9%

 

8%

 

6%

Occupancy – 2024

82%

 

78%

 

63%

 

93%

 

85%

ADR – 2024

$198

 

$149

 

$143

 

$238

 

$240

RevPAR – 2024

$163

 

$116

 

$90

 

$220

 

$204

RevPAR – 2023

$155

 

$122

 

$89

 

$205

 

$207

% Change in RevPAR

5%

 

(4)%

 

1%

 

8%

 

(2)%

Hotel Operations Performance

The below chart summarizes key hotel operating performance measures for the three-months ended September 30, 2024, and 2023. Gross operating profit is calculated as hotel EBITDA plus property taxes, ground rent and insurance (in millions, except for RevPAR and margin percentages):

 

 

Q3 2024

 

Q3 2023

RevPAR

 

$150

 

$148

Gross operating profit

 

$38.7

 

$38.8

Hotel EBITDA

 

$32.2

 

$32.8

GOP margin

 

44%

 

45%

Hotel EBITDA margin

 

37%

 

38%

Craven concluded, “For our 38 same-store hotels, our GOP margins only declined 40 basis points compared to the 2023 third quarter, encouraging given RevPAR growth of 1 percent. The main driver of this is moderating wage pressures and an efficient workforce. Our headcount is down approximately 1 percent from year-end. Reduced labor costs actually improved margins 10 basis points year-over-year, while increased benefits-related costs adversely impacted our margins by approximately 60 basis points. Encouragingly, we are hopeful based on preliminary estimates that employee benefits costs will be essentially flat next year for the first time in a long time.”

Corporate Update

The below chart summarizes key financial performance measures for the three months ended September 30, 2024, and 2023. 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, 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.

 

 

Q3 2024

 

Q3 2023

RevPAR

 

$150

 

$148

Hotel EBITDA

 

$32.2

 

$32.8

Corporate EBITDA

 

$29.6

 

$30.6

Debt Service & Preferred dividends

 

$(10.2)

 

$(10.1)

Cash flow before CapEx and Common dividends

 

$19.4

 

$20.5

Capital Markets & Capital Structure

As of September 30, 2024, Chatham had net debt of $419 million (total consolidated debt less unrestricted cash). Total debt outstanding as of September 30, 2024, was $439 million at an average interest rate of 6.8 percent, comprised of $174 million of fixed-rate mortgage debt at an average interest rate of 6.7 percent, $140 million outstanding on its term loan at a rate of 6.9 percent and $125 million outstanding on the company's $260 million senior unsecured revolving credit facility at a rate of 6.9 percent. Based on the ratio of Chatham’s net debt to hotel investments at cost, the company's leverage ratio was approximately 24 percent.

“With only $30 million of maturing debt over the next year, leverage at our lowest levels in over a decade and proceeds from the sale of five hotels of approximately $80 million, we are well-positioned to capitalize on any meaningful opportunities that will add hotel EBITDA and FFO,” stated Jeremy Wegner, Chatham’s chief financial officer. “Additionally, with $265 million of floating rate debt, we will benefit from an expected declining interest rate environment. Based on outstanding debt as of September 30, 2024, for every 100 basis point decline in SOFR, our AFFO per share will increase $2.6 million or $0.05 per share.”

Hotel Investments

During the third quarter, the company invested capital expenditures of $6 million and approximately $25 million year-to-date. Chatham’s 2024 budget is approximately $37 million. A renovation of the Courtyard Dallas Addison commenced in July and was completed in the third quarter. A renovation of the SpringHill Suites Savannah commenced in August and will be completed in the fourth quarter. A renovation of the Residence Inn Bellevue, Wash., will commence in the fourth quarter and be completed in the 2025 first quarter. Additionally, the renovation of the Hilton Garden Inn Portsmouth, N.H., scheduled for early 2025, will commence in the 2024 fourth quarter.

Dividend

The Board of Trustees declared a preferred dividend of $0.41406 per share and a common dividend of $0.07 per share, payable October 15, 2024, to shareholders of record on September 30, 2024.

2024 Fourth Quarter Guidance

Chatham’s 2024 fourth quarter guidance reflects the following assumptions:

1. Renovations of three hotels
2. Repayment of a $14 million maturing mortgage in December
3. No additional acquisitions, dispositions, debt or equity issuance

 

Q4 2024

RevPAR

$124 - $127

RevPAR growth

1% to 3%

Total hotel revenue

$74-$75 M

Net income (loss)

$(6)-$(4) M

Net income (loss) per diluted common share

$(0.15-$(0.11)

Adjusted EBITDA

$19-$21 M

Adjusted FFO

$7-$9 M

Adjusted FFO per diluted share

$0.15-$0.18

Hotel EBITDA margins

30%-32%

Corporate cash administrative expenses

$3.3 M

Corporate non-cash administrative expenses

$1.5 M

Interest income

$0.0 M

Interest expense (excluding fee amortization)

$7.4 M

Non-cash amortization of deferred fees

$0.4 M

Weighted average shares/units outstanding

51.3 M

Chatham provides guidance but does not undertake to update it for any developments in its business. Achievement of the results is subject to the risks disclosed in its filings with the Securities and Exchange Commission.

Earnings Call

Chatham will hold its third quarter 2024 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 website, www.chathamlodgingtrust.com, or may participate in the conference call by dialing 1-877-407-0789 or 1-201-689-8562 and referencing Chatham Lodging Trust. A recording of the call will be available by telephone until Thursday, November 14, 2024, at 11:59 PM ET, by dialing 1-844-512-2921 or 1-412-317-6671, access ID 13748789. 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 5,883 rooms/suites in 17 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, (4) EBITDAre, (5) Adjusted EBITDA, (6) Adjusted Hotel EBITDA, (7) Hotel EBITDA, (8) Hotel EBITDA Margin, (9) Corporate EBITDA and (10) Cash flow before CapEx and common dividends. 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

Chatham 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. Chatham 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. Chatham 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.

Chatham 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. Chatham 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

Chatham 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. Chatham believes EBITDA is useful to investors in evaluating and facilitating comparisons of its operating performance because it helps investors compare Chatham'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, Chatham uses EBITDA as one measure in determining the value of hotel acquisitions and dispositions. Chatham 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 performance between periods and between REITs.

Chatham 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. Chatham 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. Chatham presents Adjusted Hotel EBITDA because Chatham believes it is useful to investors in comparing its hotel operating performance between periods and comparing its Adjusted Hotel EBITDA to those of our peer companies. Adjusted Hotel EBITDA represents the results of operations for its wholly owned hotels only.

Although Chatham presents FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA because it believes they are useful to investors in comparing Chatham'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, Chatham’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 interest expense, or the cash requirements to service interest or principal payments, on Chatham’s debts;
• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may need future replacement, 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 Chatham’s overall long-term incentive compensation package, although Chatham 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 Chatham considers not to be indicative of the underlying performance of its hotel properties; and
• Other companies in Chatham’s industry may calculate FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA differently than Chatham 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 Chatham’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. Chatham 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. Chatham’s consolidated financial statements and the notes to those statements included elsewhere are prepared in accordance with GAAP. Chatham’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 Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements generally are characterized by the use of the words “believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue,” “intend,” “should,” “may” or similar expressions. 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. 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 could cause our actual results to differ materially from expected results 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 our hotels and the demand for hotel products and services; operating risks associated with the hotel business; risks associated with the level of our indebtedness and its ability to meet covenants in its debt agreements; relationships with property managers; our ability to maintain its properties in a first-class manner, including meeting capital expenditure requirements; our 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; our ability to complete acquisitions and dispositions; and our ability to continue to satisfy complex rules in order for us to remain a REIT for federal income tax purposes; and 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 our Annual Report on Form 10-K for the year ended December 31, 2023, as updated by our subsequent filings with the SEC under the Exchange Act.

CHATHAM LODGING TRUST

Consolidated Balance Sheets

(In thousands, except share and per share data)

 

 

September 30, 2024

 

December 31, 2023

 

(unaudited)

 

 

Assets:

 

 

 

Investment in hotel properties, net

$

1,233,361

 

 

$

1,227,633

 

Cash and cash equivalents

 

19,349

 

 

 

68,130

 

Restricted cash

 

9,496

 

 

 

17,619

 

Right of use asset, net

 

17,699

 

 

 

18,141

 

Hotel receivables (net of allowance for doubtful accounts of $210 and $280, respectively)

 

4,357

 

 

 

4,375

 

Deferred costs, net

 

4,482

 

 

 

4,246

 

Prepaid expenses and other assets

 

6,237

 

 

 

3,786

 

Total assets

$

1,294,981

 

 

$

1,343,930

 

Liabilities and Equity:

 

 

 

Mortgage debt, net

$

171,463

 

 

$

394,544

 

Revolving credit facility

 

125,000

 

 

 

—

 

Unsecured term loan, net

 

139,528

 

 

 

89,533

 

Accounts payable and accrued expenses (including $681 and $399 due to related parties, respectively)

 

34,594

 

 

 

29,255

 

Lease liability

 

20,749

 

 

 

20,808

 

Distributions payable

 

5,531

 

 

 

5,414

 

Total liabilities

 

496,865

 

 

 

539,554

 

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 September 30, 2024 and December 31, 2023, respectively

 

48

 

 

 

48

 

Common shares, $0.01 par value, 500,000,000 shares authorized; 48,910,841 and 48,859,836 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

 

489

 

 

 

488

 

Additional paid-in capital

 

1,046,795

 

 

 

1,047,176

 

Accumulated deficit

 

(282,011

)

 

 

(271,651

)

Total shareholders’ equity

 

765,321

 

 

 

776,061

 

Noncontrolling interests:

 

 

 

Noncontrolling interest in Operating Partnership

 

32,795

 

 

 

28,315

 

Total equity

 

798,116

 

 

 

804,376

 

Total liabilities and equity

$

1,294,981

 

 

$

1,343,930

 

CHATHAM LODGING TRUST

Consolidated Statements of Operations

(In thousands, except share and per share data)

(unaudited)

 

 

For the three months ended

 

For the nine months ended

 

September 30,

 

September 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Revenue:

 

 

 

 

 

 

 

Room

$

80,236

 

 

$

79,862

 

 

$

221,762

 

 

$

219,019

 

Food and beverage

 

1,832

 

 

 

1,975

 

 

 

5,806

 

 

 

6,156

 

Other

 

4,826

 

 

 

4,623

 

 

 

13,695

 

 

 

12,646

 

Reimbursable costs from related parties

 

283

 

 

 

281

 

 

 

836

 

 

 

1,011

 

Total revenue

 

87,177

 

 

 

86,741

 

 

 

242,099

 

 

 

238,832

 

Expenses:

 

 

 

 

 

 

 

Hotel operating expenses:

 

 

 

 

 

 

 

Room

 

17,011

 

 

 

17,223

 

 

 

49,110

 

 

 

45,918

 

Food and beverage

 

1,592

 

 

 

1,510

 

 

 

4,683

 

 

 

4,651

 

Telephone

 

343

 

 

 

385

 

 

 

991

 

 

 

1,106

 

Other hotel operating

 

1,188

 

 

 

949

 

 

 

3,031

 

 

 

2,812

 

General and administrative

 

7,506

 

 

 

7,503

 

 

 

21,903

 

 

 

21,616

 

Franchise and marketing fees

 

6,990

 

 

 

6,980

 

 

 

19,415

 

 

 

19,121

 

Advertising and promotions

 

1,677

 

 

 

1,538

 

 

 

4,604

 

 

 

4,513

 

Utilities

 

3,946

 

 

 

3,758

 

 

 

10,061

 

 

 

9,807

 

Repairs and maintenance

 

4,178

 

 

 

4,111

 

 

 

12,235

 

 

 

11,735

 

Management fees paid to related parties

 

2,959

 

 

 

2,994

 

 

 

8,118

 

 

 

8,073

 

Insurance

 

851

 

 

 

717

 

 

 

2,504

 

 

 

2,117

 

Total hotel operating expenses

 

48,241

 

 

 

47,668

 

 

 

136,655

 

 

 

131,469

 

Depreciation and amortization

 

15,287

 

 

 

14,687

 

 

 

45,455

 

 

 

43,615

 

Property taxes, ground rent and insurance

 

6,453

 

 

 

6,008

 

 

 

17,728

 

 

 

18,182

 

General and administrative

 

4,395

 

 

 

4,218

 

 

 

13,623

 

 

 

13,172

 

Other charges

 

—

 

 

 

6

 

 

 

77

 

 

 

44

 

Reimbursable costs from related parties

 

283

 

 

 

281

 

 

 

836

 

 

 

1,011

 

Total operating expenses

 

74,659

 

 

 

72,868

 

 

 

214,374

 

 

 

207,493

 

Operating income before loss on sale of hotel properties

 

12,518

 

 

 

13,873

 

 

 

27,725

 

 

 

31,339

 

(Loss) gain on sale of hotel properties

 

(14

)

 

 

1

 

 

 

(154

)

 

 

56

 

Operating income

 

12,504

 

 

 

13,874

 

 

 

27,571

 

 

 

31,395

 

Interest and other income

 

97

 

 

 

479

 

 

 

1627

 

 

 

688

 

Interest expense, including amortization of deferred fees

 

(8,262

)

 

 

(6,849

)

 

 

(23,292

)

 

 

(19,729

)

Loss on early extinguishment of debt

 

—

 

 

 

(5

)

 

 

(17

)

 

 

(696

)

Gain from partial lease termination

 

—

 

 

 

—

 

 

 

—

 

 

 

164

 

Income before income tax expense

 

4,339

 

 

 

7,499

 

 

 

5,889

 

 

 

11,822

 

Income tax expense

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Net income

 

4,339

 

 

 

7,499

 

 

 

5,889

 

 

 

11,822

 

Net income attributable to noncontrolling interests

 

(88

)

 

 

(170

)

 

 

(15

)

 

 

(198

)

Net income attributable to Chatham Lodging Trust

 

4,251

 

 

 

7,329

 

 

 

5,874

 

 

 

11,624

 

Preferred dividends

 

(1,987

)

 

 

(1,987

)

 

 

(5,962

)

 

 

(5,962

)

Net income (loss) attributable to common shareholders

$

2,264

 

 

$

5,342

 

 

$

(88

)

 

$

5,662

 

Income per common share - basic:

 

 

 

 

 

 

 

Net income attributable to common shareholders

$

0.05

 

 

$

0.11

 

 

$

—

 

 

$

0.11

 

Income per common share - diluted:

 

 

 

 

 

 

 

Net income attributable to common shareholders

$

0.05

 

 

$

0.11

 

 

$

—

 

 

$

0.11

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

Basic

 

48,904,179

 

 

 

48,850,339

 

 

 

48,898,947

 

 

 

48,845,374

 

Diluted

 

49,066,464

 

 

 

49,004,084

 

 

 

48,898,947

 

 

 

48,976,085

 

Distributions declared per common share:

$

0.07

 

 

$

0.07

 

 

$

0.21

 

 

$

0.21

 

CHATHAM LODGING TRUST

Reconciliation of Net Income to Adjusted FFO, EBITDA, EBITDAre and Adjusted EBITDA

(In thousands, except share and per share data)

 

 

For the three months ended

 

For the nine months ended

 

September 30,

 

September 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Funds From Operations (“FFO”):

 

 

 

 

 

 

 

Net income

$

4,339

 

 

$

7,499

 

 

$

5,889

 

 

$

11,822

 

Preferred dividends

 

(1,987

)

 

 

(1,987

)

 

 

(5,962

)

 

 

(5,962

)

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

 

2,352

 

 

 

5,512

 

 

 

(73

)

 

 

5,860

 

Loss (gain) on sale of hotel properties

 

14

 

 

 

(1

)

 

 

154

 

 

 

(56

)

Depreciation of hotel properties owned

 

14,803

 

 

 

14,634

 

 

 

44,711

 

 

 

43,454

 

FFO attributable to common share and unit holders

 

17,169

 

 

 

20,145

 

 

 

44,792

 

 

 

49,258

 

Amortization of finance lease assets

 

430

 

 

 

—

 

 

 

580

 

 

 

—

 

Other charges

 

—

 

 

 

6

 

 

 

77

 

 

 

44

 

Loss on early extinguishment of debt

 

—

 

 

 

5

 

 

 

17

 

 

 

696

 

Gain from partial lease termination

 

—

 

 

 

—

 

 

 

—

 

 

 

(164

)

Adjusted FFO attributable to common share and unit holders

$

17,599

 

 

$

20,156

 

 

$

45,466

 

 

$

49,834

 

Weighted average number of common shares and units

 

 

 

 

 

 

 

Basic

 

50,813,521

 

 

 

50,437,656

 

 

 

50,737,772

 

 

 

50,352,175

 

Diluted

 

50,975,806

 

 

 

50,591,401

 

 

 

51,110,972

 

 

 

50,482,886

 

 

For the three months ended

 

For the nine months ended

 

September 30,

 

September 30,

 

2024

 

 

2023

 

 

2024

 

 

2023

 

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

 

 

 

 

 

 

 

Net income

$

4,339

 

$

7,499

 

 

$

5,889

 

$

11,822

 

Interest expense, including amortization of deferred fees

 

8,262

 

 

6,849

 

 

 

23,292

 

 

19,729

 

Depreciation and amortization

 

15,287

 

 

14,687

 

 

 

45,455

 

 

43,615

 

EBITDA

 

27,888

 

 

29,035

 

 

 

74,636

 

 

75,166

 

Loss (gain) on sale of hotel properties

 

14

 

 

(1

)

 

 

154

 

 

(56

)

EBITDAre

 

27,902

 

 

29,034

 

 

 

74,790

 

 

75,110

 

Other charges

 

—

 

 

6

 

 

 

77

 

 

44

 

Loss on early extinguishment of debt

 

—

 

 

5

 

 

 

17

 

 

696

 

Gain from partial lease termination

 

—

 

 

—

 

 

 

—

 

 

(164

)

Share based compensation

 

1,651

 

 

1,555

 

 

 

4,911

 

 

4,562

 

Adjusted EBITDA

$

29,553

 

$

30,600

 

 

$

79,795

 

$

80,248

 

CHATHAM LODGING TRUST

Reconciliation of Net Income to Adjusted Hotel EBITDA

(In thousands, except share and per share data)

 

 

 

For the three months ended

 

For the nine months ended

 

 

September 30,

 

September 30,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

 

 

 

 

 

 

 

 

Net income

$

4,339

 

 

$

7,499

 

 

$

5,889

 

 

$

11,822

 

Add:

Interest expense, including amortization of deferred fees

 

8,262

 

 

 

6,849

 

 

 

23,292

 

 

 

19,729

 

 

Depreciation and amortization

 

15,287

 

 

 

14,687

 

 

 

45,455

 

 

 

43,615

 

 

Corporate general and administrative

 

4,395

 

 

 

4,218

 

 

 

13,623

 

 

 

13,172

 

 

Other charges

 

—

 

 

 

6

 

 

 

77

 

 

 

44

 

 

Loss on early extinguishment of debt

 

—

 

 

 

5

 

 

 

17

 

 

 

696

 

 

Loss on sale of hotel properties

 

14

 

 

 

—

 

 

 

154

 

 

 

—

 

Less:

Interest and other income

 

(97

)

 

 

(479

)

 

 

(1,627

)

 

 

(688

)

 

Gain on sale of hotel properties

 

—

 

 

 

(1

)

 

 

—

 

 

 

(56

)

 

Gain from partial lease termination

 

—

 

 

 

—

 

 

 

—

 

 

 

(164

)

 

Adjusted Hotel EBITDA

$

32,200

 

 

$

32,784

 

 

$

86,880

 

 

$

88,170

 

 

 

 

 

 

 

 

 

 

 

Total revenue

$

87,177

 

 

$

86,741

 

 

$

242,099

 

 

$

238,832

 

 

Reimbursable costs from related parties

 

(283

)

 

 

(281

)

 

 

(836

)

 

 

(1,011

)

 

Hotel revenue

$

86,894

 

 

$

86,460

 

 

$

241,263

 

 

$

237,821

 

 

Hotel EBITDA margin

 

37.1

%

 

 

37.9

%

 

 

36.0

%

 

 

37.1

%

CHATHAM LODGING TRUST

Reconciliations of Guidance Net Income to FFO, Adjusted FFO,

EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA

(In thousands, except share and per share data)

 

 

For the three months ended

 

December 31, 2024

 

Low-End

 

High-End

Funds From Operations (“FFO”):

 

 

 

Net loss

$

(5,844

)

 

$

(3,952

)

Preferred dividends

 

(2,000

)

 

 

(2,000

)

Net loss attributable to common shares and common units

 

(7,844

)

 

 

(5,952

)

Depreciation of hotel properties owned

 

14,895

 

 

 

14,895

 

FFO attributable to common share and unit holders

 

7,051

 

 

 

8,943

 

Amortization of finance lease assets

 

430

 

 

 

430

 

Adjusted FFO attributable to common share and unit holders

$

7,481

 

 

$

9,373

 

Weighted average number of common shares and units

 

 

 

Diluted

 

51,337,000

 

 

 

51,337,000

 

Adjusted FFO per diluted share

$

0.15

 

 

$

0.18

 

 

For the three months ended

 

December 31, 2024

 

Low-End

 

High-End

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

 

 

 

Net loss

$

(5,844

)

 

$

(3,952

)

Interest expense, including amortization of deferred fees

 

7,805

 

 

 

7,805

 

Depreciation and amortization

 

15,379

 

 

 

15,379

 

EBITDA

 

17,340

 

 

 

19,232

 

EBITDAre

 

17,340

 

 

 

19,232

 

Share based compensation

 

1,500

 

 

 

1,500

 

Adjusted EBITDA

$

18,840

 

 

$

20,732

 

 

 

For the three months ended

 

 

December 31, 2024

 

 

Low-End

 

High-End

 

 

 

 

 

Net loss

$

(5,844

)

 

$

(3,952

)

Add:

Interest expense, including amortization of deferred fees

 

7,805

 

 

 

7,805

 

 

Depreciation and amortization

 

15,379

 

 

 

15,379

 

 

Corporate general and administrative

 

4,800

 

 

 

4,800

 

 

Adjusted Hotel EBITDA

$

22,140

 

 

$

24,032

 

 

 

 

 

 

 

Total revenue

$

74,075

 

 

$

75,375

 

 

Reimbursable costs from related parties

 

(275

)

 

 

(275

)

 

Hotel revenue

$

73,800

 

 

$

75,100

 

 

Hotel EBITDA margin

 

30.0

%

 

 

32.0

%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241107425970/en/

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

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