Business Travel Strengthening, Asset Sales to
Enhance Value & Add Capacity for Growth
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 first quarter ended March 31, 2022.
First Quarter 2022 Operating Results
- Portfolio Revenue Per Available Room (RevPAR) –
Increased 56 percent to $88 compared to the 2021 first quarter.
Average daily rate (ADR) accelerated 36 percent to $146, and
occupancy jumped 15 percent to 60 percent for the 41 comparable
hotels owned as of March 31, 2022 (excludes one Austin hotel that
opened in June 2021 and the Woodland Hills hotel that opened in
January 2022).
- Net loss – Incurred a $9.7 million net loss compared to
net income of $2.7 million in the 2021 first quarter (2021 first
quarter net loss would have been $21.1 million excluding a $23.8
million gain on sale of investment related to a joint venture). Net
loss per diluted common share was $(0.23) versus net income per
diluted common share of $0.06 for the same period last year.
- GOP Margin – Grew margins a significant 27 percent to a
portfolio-wide GOP margin of 38 percent in the 2022 first quarter
compared to 30 percent in the 2021 first quarter. GOP flow-through,
measured as the increase in GOP compared to the increase in room
revenue, was 55 percent.
- Adjusted EBITDA – Jumped to $13.3 million from $1.2
million in the 2021 first quarter.
- Adjusted FFO – Swung significantly from negative FFO of
$7.1 million in the 2021 first quarter to positive adjusted FFO of
$3.5 million this year. Adjusted FFO per diluted share was $0.07,
compared to an FFO loss of $(0.15) in the 2021 first quarter.
- Cash Flow/Burn Before Capital Expenditures – Generated
first quarter 2022 cash flow before capital expenditures of $2.8
million in the 2022 first quarter compared to $5.1 million in the
2021 fourth quarter and cash burn of $7.6 million in the 2021 first
quarter. Cash flow/burn includes $2.3 million of principal
amortization per quarter.
- Opened First Ground-up Hotel Development and Acquired
Beachside Hotel –Opened the much-anticipated $71 million Home2
Suites by Hilton Woodland Hills Warner Center in January 2022, and
the company acquired the Hilton Garden Inn Destin Miramar Beach for
$31 million.
The following chart summarizes the consolidated financial
results for the three months ended March 31, 2022, and 2021, based
on all properties owned during those periods ($ in millions, except
margin percentages and per share data):
Three Months Ended
March 31,
2022
2021
Net (loss) income
$(9.7)
$2.7
Diluted net (loss) income per common
share
$(0.23)
$0.06
GOP Margin
38.3%
29.9%
Hotel EBITDA Margin
29.2%
11.1%
Adjusted EBITDA
$13.3
$1.2
AFFO
$3.5
$(7.1)
AFFO per diluted share
$0.07
$(0.15)
Jeffrey H. Fisher, Chatham’s president and chief executive
officer, highlighted, “Since getting past the impact from the
COVID-19 Omicron variant midway through the first quarter, we have
seen an acceleration in travel, especially business travel, across
many of our key markets. The outlook for business travel continued
to strengthen in April and early May, and we are positioned to
outperform our peers as the business traveler returns. Occupancy is
accelerating, and we are emphasizing the importance of pushing
rates to our operating team. As we mentioned on our last earnings
call, our technology markets are re-opened, and this summer’s
intern business will be our biggest intern program yet.
“Weekday occupancy is the best indicator of business travel, and
it rose significantly through the first four months of the year.
Weekday occupancy was 48 percent in January before jumping to 60
percent in February, 68 percent in March and 72 percent in April.
In fact, April weekday and full-month occupancy of 73 percent was
the second-best performance since the start of the pandemic,”
Fisher stated.
Hotel RevPAR Performance
The below chart summarizes key hotel financial statistics for
the 41 comparable hotels owned as of March 31, 2022, compared to
the 2021 fourth, first and 2019 first quarter:
Q1 2022
Q4 2021
Q1 2021
Q1 2019
Occupancy
60%
65%
53%
76%
ADR
$146
$140
$107
$161
RevPAR
$88
$92
$57
$121
% Change in RevPAR to Prior Year
56%
93%
(41)%
n/a
The below chart summarizes RevPAR statistics by month for the
company’s 41 comparable hotels:
January
February
March
April
Occupancy - 2022
50%
62%
69%
73%
ADR - 2022
$133
$144
$158
$162
RevPAR - 2022
$67
$89
$109
$119
RevPAR - 2021
$48
$54
$68
$78
% Change in RevPAR
40%
66%
61%
53%
Fisher continued, “First quarter RevPAR at our 41 comparable
hotels was $88, up 56 percent over the same period of 2021 and down
27 percent over the 2019 first quarter. Relative to 2019, our trend
is gaining momentum, and we expect this trend to continue. Compared
to 2019, January, February, March and April RevPAR were down 36,
27, 22 and 13 percent, respectively.”
RevPAR performance for Chatham’s six largest markets based on
hotel EBITDA contribution over the last twelve months is presented
below:
Q1 2022 RevPAR
Change vs. Q1 2021
Q4 2021 RevPAR
Q1 2021 RevPAR
Q1 2019 RevPAR
41 - Hotel Portfolio
$88
56%
$92
$57
$121
Silicon Valley
$71
33%
$74
$54
$183
Coastal Northeast
$72
51%
$122
$48
$88
Greater New York
$109
25%
$139
$87
$125
Dallas
$86
97%
$74
$44
$97
Houston
$81
55%
$70
$52
$112
Los Angeles
$128
57%
$130
$82
$161
“Since the start of the pandemic, our largest market, Silicon
Valley, and other technology dependent markets, such as Bellevue,
Washington, have been laggards with little business travel.
However, trends are improving quickly and are poised to
significantly outperform and deliver outsized earnings growth as
the business traveler returns, international travel opens up,
technology related training and product development resumes and,
importantly, the intern programs return,” commented Dennis Craven,
Chatham’s chief operating officer.
“April RevPAR at our four Silicon Valley hotels accelerated to
$103, a significant gain of 45 percent above its first quarter
RevPAR. At our Bellevue Residence Inn, April RevPAR was $92, a
strong improvement of 44 percent over first quarter RevPAR of $64.
Demand is accelerating quickly in these tech driven markets with
April occupancy at these five hotels jumping from 53 percent in the
first quarter to 68 percent in April,” Craven noted.
Approximately 59 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 60 percent. First quarter 2022 occupancy, ADR and
RevPAR for each of the company’s major brands, based on the 41
comparable hotels, is presented below (number of hotels in
parentheses):
Residence Inn (17)
Homewood Suites (7)
Courtyard (5)
Hilton Garden Inn (5)
Hampton Inns (3)
Occupancy - 2022
62%
68%
63%
44%
58%
ADR – 2022
$154
$133
$134
$157
$132
RevPAR – 2022
$96
$91
$85
$70
$77
RevPAR – 2021
$71
$53
$41
$40
$54
% Change in RevPAR
36%
70%
109%
75%
44%
Hotel Operations Performance
The below chart summarizes key hotel operating performance
measures per month during the 2022 first quarter, compared to the
2021 fourth, first and 2019 first quarter. RevPAR is based on the
41 comparable hotels. Gross operating profit is calculated as Hotel
EBITDA plus property taxes, ground rent and insurance (in millions,
except for RevPAR and margin percentages):
Jan. 2022
Feb. 2022
Mar. 2022
Q1 2022
Q4 2021
Q1 2021
Q1 2019
RevPAR
$67
$89
$109
$88
$92
$55
$121
Gross operating profit
$4.2
$6.2
$10.5
$20.9
$23.4
$9.4
$32.4
Hotel EBITDA
$2.4
$4.6
$8.9
$15.9
$17.6
$3.5
$26.2
GOP margin
30%
36%
44%
38%
41%
30%
44%
Hotel EBITDA margin
17%
27%
38%
29%
31%
11%
35%
“Though the results within the quarter were erratic due to the
Omicron effect in January and February, March was a stable month. A
key takeaway is that we delivered an operating margin of 44 percent
on RevPAR of $109, the same margin as the 2019 first quarter when
RevPAR was $12 or 11 percent higher.
“On a per occupied room basis, our wage and benefit costs were
$36 in the quarter, down from $37 during the 2019 first quarter,
which is particularly impressive when you consider how much wages
have increased over the past three years, as well as how quickly we
had to pivot to account for the Omicron impact on
lower-than-expected labor needs. Our operating model is going to
produce meaningful margin gains above pre-pandemic levels as we
continue to drive occupancy and ADR gains. This bodes well for our
ability to generate distributable cash flow,” Craven concluded.
Corporate Update
The below chart summarizes key financial performance measures
during the first quarter, compared to the 2021 fourth, first and
2019 first quarter. 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 $2.3 million per quarter), as well as dividends on
its preferred shares of $2.0 million per quarter. Cash flow/(burn)
before CAPEX is calculated as Corporate EBITDA less debt service.
Amounts are in millions, except RevPAR.
Jan. 2022
Feb. 2022
Mar. 2022
Q1 2022
Q4 2021
Q1 2021
Q1 2019
RevPAR – 2022
$67
$89
$109
$88
$92
$56
$121
Hotel EBITDA
$2.4
$4.6
$8.9
$15.9
$17.6
$3.5
$26.2
Corporate EBITDA
$1.5
$3.7
$8.1
$13.3
$15.0
1.1
23.7
Debt Service & Preferred
$(3.4)
$(3.5)
$(3.6)
$(10.5)
$(9.9)
$(8.7)
$(8.3)
Cash flow/(burn) before CAPEX
$(1.9)
$0.2
$4.5
$2.8
$5.1
$(7.6)
$15.4
Opening of Home2 Suites in California
In January 2022, Chatham announced the opening of the 170-suite
Home2 Suites by Hilton Woodland Hills Warner Center. The opening
adds another high-quality, extended-stay hotel to the portfolio.
The hotel was constructed to the highest building standards in the
country. The hotel will generate one of the highest RevPAR’s in
Chatham’s portfolio. The hotel is the only premium-branded,
extended-stay room product within an 11-mile radius of the hotel
and will appeal to any traveler coming to the area for business,
leisure or both.
“This beautiful asset is an ideal addition to our industry
leading portfolio of premium-branded, extended-stay hotels. We know
that this hotel provides the best all-around lodging experience in
the market with an awesome public space that includes a
full-service, indoor/outdoor bar and restaurant along with large
rooms equipped with kitchens,” Fisher emphasized. “The Warner
Center market is poised to boom over the next decade, and we are
delivering a quick ramp-up with April occupancy of 63 percent, ADR
of $184 and over 90 percent on some nights.”
Hotel Acquisitions
During the first quarter in an off-market transaction, Chatham
acquired the beachside 111-room Hilton Garden Inn Destin Miramar
Beach, Fl., 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.
Fisher commented, “This hotel represents our third youngest
hotel and will generate a significant RevPAR premium over our
current portfolio. Additionally, the hotel diversifies further
Chatham’s portfolio by adding a predominantly leisure hotel and
should benefit from the Sunbelt population growth that we expect
will continue. Three out of every four travelers to the Destin area
come from the Sunbelt, and many of Destin’s feeder markets, such as
Atlanta, Dallas, Nashville and Houston, are experiencing strong
population growth.”
Hotel Recycling and Pending Asset Sales
The opening of Home2 Suites Woodland Hills concludes the
successful recycling of the proceeds from the sale of an older
hotel in San Diego for $67 million into the Woodland Hills hotel
with an investment of $71 million, and Chatham expects the
reinvestment will contribute incremental stabilized EBITDA of over
$1 million compared to the sold hotel.
Additionally, Chatham expects to close on the sale of four
hotels comprising 537 rooms for aggregate proceeds of approximately
$80 million within the next week. Including near term capital
expenditure requirements, the aggregate sales proceeds would equate
to an approximate two and six percent capitalization rate on net
operating income for 2021 and 2019, respectively. Chatham cannot
assure that these transactions will be complete on the terms
described above or at all.
Three of the hotels are among Chatham’s six lowest RevPAR
hotels, and all four hotels are among the fifteen lowest RevPAR
hotels in the portfolio (based on 2019 RevPAR). Additionally, the
four hotels generated 2021 Hotel EBITDA of $2.2 million. The
recently acquired Destin hotel is the third youngest hotel in the
portfolio, generated 2021 Hotel EBITDA of $2.3 million and is
expected to be in the top 10 in RevPAR for 2022.
Hotel Investments
During the 2022 first quarter, the company incurred capital
expenditures of $4.1 million, excluding any spending related to the
Warner Center development. Chatham’s 2022 capital expenditure
budget was approximately $23.7 million, but after the sale of the
four hotels, total budgeted spend will be reduced to approximately
$19.1 million, which includes renovations at five hotels and
excludes any spending related to the Warner Center development.
Capital Markets & Capital Structure
As of March 31, 2022, the company had net debt of $567.9 million
(total consolidated debt less unrestricted cash). Total debt
outstanding as of March 31, 2022, was $586.1 million at an average
interest rate of 4.6 percent, comprised of $437.6 million of
fixed-rate mortgage debt at an average interest rate of 4.6
percent, $110.0 million outstanding on the company’s $250 million
senior unsecured revolving credit facility, which currently carries
a 3.3 percent interest rate, and $38.5 million outstanding on the
Warner Center construction loan, which carries a 7.95 percent
interest rate.
Based on the ratio of the company’s net debt to hotel
investments at cost, Chatham’s leverage ratio was approximately
32.4 percent on March 31, 2022. The weighted average maturity date
for Chatham’s fixed-rate debt is April 2024. Chatham has $34.8
million maturing in the 2023 first quarter, $16.6 million in the
2023 second quarter, $20.4 million in the 2023 third quarter and
$41.8 million maturing in the 2023 fourth quarter.
Chatham expects to exit the waiver period on its credit facility
after reporting 2022 second quarter results. After using proceeds
from the pending hotel sales to reduce borrowings on its credit
facility, Chatham will have $30 million outstanding on its $250
million credit facility.
“Our balance sheet is strong. We have no debt maturities in
2022, and 2023 maturities aggregating $114 million are very
manageable. Once we exit the waiver period, we will only have
encumbrances on 15 of our 43 hotels which provides us the
flexibility to appropriately address our maturities at the right
time and also invest meaningful dollars to acquire assets,” stated
Jeremy Wegner, Chatham’s chief financial officer.
Dividend
The Board of Trustees will regularly evaluate its common
dividend moving forward.
During the quarter, the Board of Trustees declared a preferred
share dividend of $0.41406 per share, payable on April 18, 2022, to
shareholders of record as of March 31, 2022.
2022 Guidance
Due to uncertainty surrounding the hotel industry, the company
is not providing guidance at this time.
Earnings Call
The company will hold its first 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 Wednesday, May 11,
2022, by dialing 1-844-512-2921, reference number 13728686. 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 43 hotels totaling 6,451 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.
One of the most significant factors, however, is the ongoing
impact of the current outbreak of the COVID-19 pandemic on the
United States, regional and global economies, the broader financial
markets, our customers and employees, governmental responses
thereto and the operation changes we have and may implement in
response thereto. The current outbreak of the COVID-19 pandemic has
also impacted, and is likely to continue to impact, directly or
indirectly, many of the other important factors below. New factors
emerge from time to time, and it is not possible for us to predict
which factors will arise. In addition, we cannot assess the impact
of each factor on our business or the extent to which any factor,
or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements.
In particular, it is difficult to fully assess the impact of the
COVID-19 pandemic at this time due to, among other factors,
uncertainty regarding the severity and duration of the outbreak
domestically and internationally and the effectiveness of federal,
state and local governments' efforts to contain the spread of
COVID-19 and respond to its direct and indirect impact on the U.S.
economy and economic activity.
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, 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)
March 31, 2022
December 31,
2021
(unaudited)
Assets:
Investment in hotel properties, net
$
1,373,643
$
1,282,870
Investment in hotel properties under
development
—
67,554
Cash and cash equivalents
18,149
19,188
Restricted cash
8,296
10,681
Right of use asset, net
19,816
19,985
Hotel receivables (net of allowance for
doubtful accounts of $288 and $382, respectively)
3,628
3,003
Deferred costs, net
4,646
4,627
Prepaid expenses and other assets
9,530
2,791
Total assets
$
1,437,708
$
1,410,699
Liabilities and Equity:
Mortgage debt, net
$
437,067
$
439,282
Revolving credit facility
110,000
70,000
Construction loan
38,450
35,007
Accounts payable and accrued expenses
23,842
27,718
Lease liability, net
22,554
22,696
Distributions payable
1,656
1,803
Total liabilities
633,569
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 March 31, 2022 and December 31, 2021,
respectively
48
48
Common shares, $0.01 par value,
500,000,000 shares authorized; 48,804,585 and 48,768,890 shares
issued and outstanding at March 31, 2022 and December 31, 2021,
respectively
488
487
Additional paid-in capital
1,047,031
1,048,070
Accumulated deficit
(262,536
)
(251,103
)
Total shareholders’ equity
785,031
797,502
Noncontrolling interests:
Noncontrolling interest in Operating
Partnership
19,108
16,691
Total equity
804,139
814,193
Total liabilities and equity
$
1,437,708
$
1,410,699
CHATHAM LODGING TRUST
Consolidated Statements of
Operations
(In thousands, except share and
per share data)
(unaudited)
For the three months
ended
March 31,
2022
2021
Revenue:
Room
$
50,164
$
29,390
Food and beverage
1,415
363
Other
2,980
1,574
Reimbursable costs from unconsolidated
entities
326
787
Total revenue
54,885
32,114
Expenses:
Hotel operating expenses:
Room
11,594
7,166
Food and beverage
1,047
284
Telephone
402
400
Other hotel operating
732
365
General and administrative
5,350
3,812
Franchise and marketing fees
4,408
2,598
Advertising and promotions
1,189
757
Utilities
2,888
2,287
Repairs and maintenance
3,445
2,461
Management fees
1,918
1,196
Insurance
710
648
Total hotel operating expenses
33,683
21,974
Depreciation and amortization
15,036
13,334
Property taxes, ground rent and
insurance
4,958
5,879
General and administrative
3,942
3,530
Other charges
250
55
Reimbursable costs from unconsolidated
entities
326
787
Total operating expenses
58,195
45,559
Operating loss before loss on sale of
hotel property
(3,310
)
(13,445
)
Loss on sale of hotel property
—
(43
)
Operating loss
(3,310
)
(13,488
)
Interest and other income
—
74
Interest expense, including amortization
of deferred fees
(6,389
)
(6,470
)
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
(9,699
)
2,702
Income tax expense
—
—
Net (loss) income
(9,699
)
2,702
Net loss (income) attributable to
noncontrolling interests
253
(46
)
Net (loss) income attributable to Chatham
Lodging Trust
(9,446
)
2,656
Preferred dividends
(1,987
)
—
Net (loss) income attributable to common
shareholders
$
(11,433
)
$
2,656
(Loss) Income per Common Share -
Basic:
Net (loss) income attributable to common
shareholders
$
(0.23
)
$
0.06
(Loss) Income per Common Share -
Diluted:
Net (loss) income attributable to common
shareholders
$
(0.23
)
$
0.06
Weighted average number of common
shares outstanding:
Basic
48,787,519
47,224,972
Diluted
48,787,519
47,368,518
Distributions declared per common
share:
$
—
$
—
CHATHAM LODGING TRUST
FFO and EBITDA
(In thousands, except share and
per share data)
For the three months
ended
March 31,
2022
2021
Funds From Operations (“FFO”):
Net (loss) income
$
(9,699
)
$
2,702
Preferred dividends
(1,987
)
—
Net (loss) income attributable to common
shares and common units
(11,686
)
2,702
Loss on sale of hotel property
—
43
Gain on sale of investment in
unconsolidated real estate entities
—
(23,817
)
Depreciation
14,970
13,274
Adjustments for unconsolidated real estate
entity items
—
568
FFO attributable to common share and unit
holders
3,284
(7,230
)
Other charges
250
55
Adjustments for unconsolidated real estate
entity items
—
46
Adjusted FFO attributable to common share
and unit holders
$
3,534
$
(7,129
)
Weighted average number of common shares
and units
Basic
49,845,825
48,019,747
Diluted
50,042,723
48,019,747
For the three months
ended
March 31,
2022
2021
Earnings Before Interest, Taxes,
Depreciation and Amortization (“EBITDA”):
Net (loss) income
$
(9,699
)
$
2,702
Interest expense
6,389
6,470
Depreciation and amortization
15,036
13,334
Adjustments for unconsolidated real estate
entity items
—
1,184
EBITDA
11,726
23,690
Loss on sale of hotel property
—
43
Gain on sale of investment in
unconsolidated real estate entities
—
(23,817
)
EBITDAre
11,726
(84
)
Other charges
250
55
Adjustments for unconsolidated real estate
entity items
—
46
Share based compensation
1,294
1,156
Adjusted EBITDA
$
13,270
$
1,173
CHATHAM LODGING TRUST
ADJUSTED HOTEL EBITDA
(In thousands, except share and
per share data)
For the three months
ended
March 31,
2022
2021
Net (loss) income
$
(9,699
)
$
2,702
Add: Interest expense
6,389
6,470
Depreciation and amortization
15,036
13,334
Corporate general and administrative
3,942
3,530
Other charges
250
55
Loss from unconsolidated real estate
entities
—
1,231
Loss on sale of hotel property
—
43
Less: Interest and other income
—
(74
)
Gain on sale of investment in
unconsolidated real estate entities
—
(23,817
)
Adjusted Hotel EBITDA
$
15,918
$
3,474
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220504005245/en/
Dennis Craven (Company) Chief Operating Officer (561)
227-1386
Chris Daly (Media) DG Public Relations (703) 864-5553
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