| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change | | --- | --- | --- | --- | --- | | EPS (GAAP) | N/A | N/A | $0.10 | N/A | | Revenue | N/A | $79.68 million | $86.5 million | (7.2%) | | Adjusted EBITDA | $28.5 million | | $31.4 million | (9.2%) | | Adjusted FFO per diluted share | $0.36 | | $0.39 | (7.7%) | | RevPAR (Comparable Portfolio) | $155 | | $156 | (0.6%) | Chatham Lodging Trust (CLDT 2.83%), a real estate investment trust focused on upscale extended-stay and select-service hotels, annou ...

PART I. FINANCIAL INFORMATION This section presents the company's comprehensive financial statements and management's analysis of its financial condition and operational results [Item 1. Financial Statements.](index=3&type=section&id=Item%201.%20Financial%20Statements.) This section presents the unaudited consolidated financial statements, including balance sheets, statements of operations, statements of equity, and statements of cash flows, along with detailed notes explaining the company's organization, accounting policies, property transactions, debt, equity, and other financial commitments for the periods ended June 30, 2025 and 2024 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's assets, liabilities, and equity as of June 30, 2025, and December 31, 2024 Consolidated Balance Sheet Highlights (in thousands): | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Investment in hotel properties, net | $1,137,185 | $1,197,518 | | Cash and cash equivalents | $17,168 | $20,195 | | Total assets | $1,194,329 | $1,254,681 | | Mortgage debt, net | $141,363 | $157,211 | | Revolving credit facility | $70,000 | $110,000 | | Total liabilities | $405,360 | $462,684 | | Total equity | $788,969 | $791,997 | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) This section details the company's revenues, expenses, and net income for the three and six months ended June 30, 2025 and 2024 Consolidated Statements of Operations Highlights (in thousands, except per share data): **For the three months ended June 30,** | Metric | 2025 | 2024 | Change (YoY) | | :-------------------------------- | :----- | :----- | :----------- | | Total revenue | $80,294 | $86,479 | (7.2)% | | Total operating expenses | $68,790 | $72,401 | (5.0)% | | Operating income | $11,854 | $14,090 | (15.8)% | | Net income | $5,499 | $7,034 | (21.8)% | | Net income (loss) attributable to common shareholders | $3,389 | $4,861 | (30.3)% | | Diluted EPS | $0.07 | $0.10 | (30.0)% | | Distributions declared per common share | $0.09 | $0.07 | 28.6% | **For the six months ended June 30,** | Metric | 2025 | 2024 | Change (YoY) | | :-------------------------------- | :----- | :----- | :----------- | | Total revenue | $148,929 | $154,920 | (3.9)% | | Total operating expenses | $136,235 | $139,714 | (2.5)% | | Operating income | $20,162 | $15,066 | 33.8% | | Net income | $7,017 | $1,548 | 353.3% | | Net income (loss) attributable to common shareholders | $6,911 | $1,621 | 326.3% | | Diluted EPS | $0.06 | $(0.05) | N/A | | Distributions declared per common share | $0.18 | $0.14 | 28.6% | [Consolidated Statements of Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Equity) This section outlines changes in the company's equity, including common and preferred shares, and distributions for the periods presented Consolidated Statements of Equity Highlights (in thousands, except share data): | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Total shareholders' equity | $754,090 | $758,219 | | Total equity | $788,969 | $791,997 | | Common shares outstanding | 48,997,996 | 48,912,293 | | Preferred shares outstanding | 4,800,000 | 4,800,000 | - Repurchased **20,480 common shares** for approximately **$0.1 million** during the **three months ended June 30, 2025**[16](index=16&type=chunk)[59](index=59&type=chunk) - Dividends declared on common shares increased to **$0.09 per share** for the **three months ended June 30, 2025**, from **$0.07 per share** in the prior year[16](index=16&type=chunk)[54](index=54&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes the cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 Consolidated Statements of Cash Flows Highlights (in thousands): **For the six months ended June 30,** | Metric | 2025 | 2024 | Change (YoY) | | :-------------------------------- | :----- | :----- | :----------- | | Net cash provided by operating activities | $26,252 | $32,069 | $(5,817) | | Net cash provided by (used in) investing activities | $36,519 | $(46,008) | $82,527 | | Net cash used in financing activities | $(68,406) | $(46,114) | $(22,292) | | Net change in cash, cash equivalents and restricted cash | $(5,635) | $(60,053) | $54,418 | | Cash, cash equivalents and restricted cash, end of period | $24,209 | $25,696 | $(1,487) | [Notes to the Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the company's accounting policies, significant transactions, and financial commitments [Note 1. Organization](index=8&type=section&id=Note%201.%20Organization) This note provides details on organization - **Chatham Lodging Trust** is a Maryland real estate investment trust (REIT) focused on upscale extended-stay and premium-branded select-service hotels[27](index=27&type=chunk) - As of **June 30, 2025**, the Company owned **34 hotels** with **5,166 rooms** across **15 states** and the District of Columbia[29](index=29&type=chunk) - All hotels are managed by **Island Hospitality Management, LLC (IHM)**, which is **100%** owned by the Company's Chairman, President, and CEO[31](index=31&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=8&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note provides details on summary of significant accounting policies - The unaudited interim consolidated financial statements are prepared in accordance with U.S. GAAP and SEC rules, involving management estimates and assumptions[32](index=32&type=chunk)[34](index=34&type=chunk) - The Company adopted ASU **2023-07** (Segment Reporting) in **FY2024** and ASU **2023-09** (Income Tax Disclosures) on **January 1, 2025**[35](index=35&type=chunk)[36](index=36&type=chunk) - The Company is currently evaluating the potential impact of ASU **2024-03** (Expense Disaggregation Disclosures), effective for annual periods beginning after **December 15, 2026**[37](index=37&type=chunk) [Note 3. Acquisition of Hotel Properties](index=9&type=section&id=Note%203.%20Acquisition%20of%20Hotel%20Properties) This note provides details on acquisition of hotel properties - On **May 30, 2024**, the Company acquired the Home2 Suites Phoenix Downtown hotel property for **$43.3 million**[38](index=38&type=chunk) - The acquired hotel property is classified as a finance lease, with right-of-use (ROU) assets and a lease liability recorded[38](index=38&type=chunk) [Note 4. Disposition of Hotel Properties](index=9&type=section&id=Note%204.%20Disposition%20of%20Hotel%20Properties) This note provides details on disposition of hotel properties Hotel Dispositions (2025): | Hotel Property | Sale Date | Sale Price (millions) | Gain on Sale (millions) | | :----------------------------------- | :---------- | :-------------------- | :-------------------- | | Courtyard Houston-Medical Center | April 22, 2025 | $23.5 | $0.1 | | Hampton Inn & Suites Houston-Medical Center | March 17, 2025 | $15.5 | $1.8 | | Homewood Suites by Hilton Nashville-Brentwood | January 30, 2025 | $15.0 | $5.5 | Hotel Dispositions (2024): | Hotel Property | Sale Date | Sale Price (millions) | Gain (Loss) on Sale (millions) | | :----------------------------------- | :---------- | :-------------------- | :----------------------------- | | Homewood Suites by Hilton Minneapolis-Mall of America | December 16, 2024 | $13.8 | $(0.8) | | Homewood Suites by Hilton Orlando-Maitland | December 6, 2024 | $15.5 | $6.7 | | Hilton Garden Inn Denver Tech Center | January 9, 2024 | $18.0 | $(0.2) | - The sales did not represent a strategic shift or qualify to be reported as discontinued operations[42](index=42&type=chunk) [Note 5. Investment in Hotel Properties](index=9&type=section&id=Note%205.%20Investment%20in%20Hotel%20Properties) This note provides details on investment in hotel properties Investment in Hotel Properties, Net (in thousands): | Asset Category | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Land and improvements | $270,046 | $280,415 | | Building and improvements | $1,185,836 | $1,232,438 | | Furniture, fixtures and equipment | $87,561 | $107,947 | | Finance lease assets | $43,798 | $43,760 | | Renovations in progress | $8,624 | $17,232 | | Less accumulated depreciation and amortization | $(458,680) | $(484,274) | | **Investment in hotel properties, net** | **$1,137,185** | **$1,197,518** | [Note 6. Debt](index=10&type=section&id=Note%206.%20Debt) This note provides details on debt Debt Outstanding (in thousands): | Debt Type | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Revolving Credit Facility | $70,000 | $110,000 | | Unsecured Term Loan | $140,000 | $140,000 | | Total debt before unamortized debt issue costs | $353,225 | $409,182 | | Unamortized term loan and mortgage debt issue costs | $(2,006) | $(2,332) | | **Total debt outstanding** | **$351,219** | **$406,850** | - During the **six months ended June 30, 2025**, the Company repaid a **$16.0 million mortgage loan** on the Hampton Inn Houston hotel property[47](index=47&type=chunk) - New mortgage loans obtained in **2024** include a **$23.3 million loan** for Hyatt Place Pittsburgh (**7.29% fixed**) and two loans totaling **$37.0 million** for SpringHill Suites Savannah and Hampton Inn & Suites Exeter (**6.70% fixed**)[50](index=50&type=chunk) Future Scheduled Principal Payments of Debt Obligations (in thousands): | Year | Amount | | :-------------------------------- | :----- | | 2025 (remaining six months) | $140,000 | | 2026 | $70,000 | | 2027 | $— | | 2028 | $24,590 | | 2029 | $23,681 | | Thereafter | $94,954 | | **Total debt before unamortized debt issue costs** | **$353,225** | [Note 7. Income Taxes](index=11&type=section&id=Note%207.%20Income%20Taxes) This note provides details on income taxes - Income tax expense was **zero** for the **three and six months ended June 30, 2025 and 2024**[52](index=52&type=chunk) - The Company's Taxable REIT Subsidiary (TRS) continues to recognize a full valuation allowance (**100%**) on net deferred tax assets due to cumulative three-year taxable losses[53](index=53&type=chunk) [Note 8. Dividends Declared and Paid](index=11&type=section&id=Note%208.%20Dividends%20Declared%20and%20Paid) This note provides details on dividends declared and paid Common Share and LTIP Unit Distributions Declared: **For the six months ended June 30,** | Year | Common Share Distribution Amount | LTIP Unit Distribution Amount | | :--- | :----------------------------- | :-------------------------- | | 2025 | $0.18 | $0.18 | | 2024 | $0.14 | $0.14 | Preferred Share Dividends Declared: **For the six months ended June 30,** | Year | Dividend per Preferred Share | | :--- | :------------------------- | | 2025 | $0.82812 | | 2024 | $0.82812 | [Note 9. Shareholders' Equity](index=12&type=section&id=Note%209.%20Shareholders%27%20Equity) This note provides details on shareholders' equity - As of **June 30, 2025**, **48,997,996 common shares** were outstanding[56](index=56&type=chunk) - Approximately **$77.5 million** in common shares remained available for issuance under the At-The-Market (ATM) Program as of **June 30, 2025**, with **no shares issued** during **Q2 2025**[57](index=57&type=chunk) - A **$25.0 million Share Repurchase Program** was authorized in **May 2025**; **20,480 common shares** were repurchased for approximately **$0.1 million** during **Q2 2025**, with **$24.9 million** remaining available[59](index=59&type=chunk) - As of **June 30, 2025**, there were **2,191,510 vested Long-Term Incentive Plan (LTIP) units** held by current and former employees[62](index=62&type=chunk) [Note 10. Earnings Per Share](index=13&type=section&id=Note%2010.%20Earnings%20Per%20Share) This note provides details on earnings per share - The Company uses the two-class method for earnings per share (EPS) calculation, treating unvested restricted shares and LTIP units as participating shares[63](index=63&type=chunk) Diluted Net Income (Loss) Per Common Share: **For the three months ended June 30,** | Year | Diluted EPS | | :--- | :---------- | | 2025 | $0.07 | | 2024 | $0.10 | **For the six months ended June 30,** | Year | Diluted EPS | | :--- | :---------- | | 2025 | $0.06 | | 2024 | $(0.05) | [Note 11. Equity Incentive Plan](index=14&type=section&id=Note%2011.%20Equity%20Incentive%20Plan) This note provides details on equity incentive plan - The **Equity Incentive Plan** was amended on **May 6, 2025**, to increase the maximum number of shares available by **2,150,000** and to increase individual grant limits for performance units[65](index=65&type=chunk) - As of **June 30, 2025**, there were **2,271,462 common shares** available for issuance under the **Equity Incentive Plan**[65](index=65&type=chunk) Unrecognized Compensation Costs Related to Equity Awards (in thousands): | Award Type | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Restricted share awards | $81 | $33 | | LTIP units | $9,300 | $6,800 | *Weighted-average recognition period for restricted share awards: ~**2.3 years** (**June 30, 2025**).* *Weighted-average remaining vesting period for LTIP units: ~**2.1 years** (**June 30, 2025**).* - On **March 1, 2025**, **380,571 performance-based LTIP unit awards** were granted, with vesting contingent on the Company's relative Total Shareholder Return (TSR) performance over a **three-year period**[72](index=72&type=chunk)[73](index=73&type=chunk) [Note 12. Leases](index=16&type=section&id=Note%2012.%20Leases) This note provides details on leases ROU Assets and Lease Liabilities (in thousands): | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Total ROU asset, net | $59,054 | $60,297 | | Total lease liability | $20,349 | $20,634 | *Weighted-average remaining lease term: **41.74 years** (**June 30, 2025**).* *Weighted-average discount rate: **6.86%** (**June 30, 2025**).* - The Home2 Phoenix hotel property is subject to a finance lease under a **Government Property Lease Excise Tax (GPLET)** agreement with the City of Phoenix[86](index=86&type=chunk) - A new **10-year corporate office lease** was entered into in **May 2024**, commencing by **September 1, 2026**, with annual base rent ranging from **$0.6 million to $0.7 million**[84](index=84&type=chunk) [Note 13. Commitments and Contingencies](index=17&type=section&id=Note%2013.%20Commitments%20and%20Contingencies) This note provides details on commitments and contingencies - The Company is subject to various claims and lawsuits, but the aggregate identifiable liabilities are not expected to have a material adverse impact on its financial condition or results of operations[89](index=89&type=chunk) - Management agreements with IHM provide for base management fees (percentage of gross room revenue) and incentive management fees (capped at **1%** of gross hotel revenues)[90](index=90&type=chunk) Management Fees Paid to Related Parties (in thousands): | Period | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Three months ended June 30 | $2,685 | $2,850 | | Six months ended June 30 | $4,975 | $5,159 | Franchise and Marketing Fees (in thousands): | Period | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Three months ended June 30 | $6,435 | $6,936 | | Six months ended June 30 | $11,866 | $12,425 | [Note 14. Related Party Transactions](index=19&type=section&id=Note%2014.%20Related%20Party%20Transactions) This note provides details on related party transactions - **Island Hospitality Management, LLC (IHM)**, **100%** owned by the Company's CEO, manages all **34** of the Company's hotels[93](index=93&type=chunk) Hotel Management Fees Accrued or Paid to IHM (in thousands): | Period | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Three months ended June 30 | $2,700 | $2,900 | | Six months ended June 30 | $5,000 | $5,200 | - Cost reimbursements from related parties, primarily for shared office expenses, are recorded without markup and have **no** impact on operating or net income[94](index=94&type=chunk) [Note 15. Segment Information](index=19&type=section&id=Note%2015.%20Segment%20Information) This note provides details on segment information - The Company evaluates its hotels as a single reportable segment due to similar economic characteristics and services[95](index=95&type=chunk) - Operating performance is assessed based on Adjusted Hotel EBITDA[95](index=95&type=chunk) Adjusted Hotel EBITDA (in thousands): | Period | 2025 | 2024 | Change (YoY) | | :-------------------------------- | :----- | :----- | :----------- | | Three months ended June 30 | $30,891 | $33,652 | (8.2)% | | Six months ended June 30 | $51,726 | $54,679 | (5.4)% | [Note 16. Subsequent Events](index=20&type=section&id=Note%2016.%20Subsequent%20Events) This note provides details on subsequent events - In **July 2025**, the Company repurchased **20,559 common shares** for approximately **$0.1 million** under its **Share Repurchase Program**[97](index=97&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) This section provides an overview of the Company's business, key performance indicators, and a detailed comparison of financial results for the three and six months ended June 30, 2025, against the prior year, highlighting the impact of hotel dispositions, acquisitions, and market conditions. It also discusses liquidity, capital resources, and non-GAAP financial measures [Statement Regarding Forward-Looking Information](index=21&type=section&id=Statement%20Regarding%20Forward-Looking%20Information) This statement highlights that the report contains forward-looking information subject to various known and unknown risks and uncertainties - The report contains forward-looking statements about future results, financial condition, liquidity, and plans, which are subject to known and unknown risks[99](index=99&type=chunk) - Important risk factors include economic conditions, competition, government regulations, lodging industry fundamentals, operating costs, financing ability, and asset dispositions[99](index=99&type=chunk) [Overview](index=21&type=section&id=Overview) This section provides a high-level description of Chatham Lodging Trust as a REIT focused on upscale hotels, including its leverage and debt profile - **Chatham Lodging Trust** is a self-advised hotel investment company, organized as a REIT, focused on upscale extended-stay and premium-branded select-service hotels[100](index=100&type=chunk)[103](index=103&type=chunk) - As of **June 30, 2025**, the Company's leverage ratio was **21.1%** (net debt to hotel investments at cost)[102](index=102&type=chunk) - Total debt as of **June 30, 2025**, was **$353.2 million** at a weighted-average interest rate of approximately **6.46%**[102](index=102&type=chunk) [Key Indicators of Operating Performance and Financial Condition](index=21&type=section&id=Key%20Indicators%20of%20Operating%20Performance%20and%20Financial%20Condition) This section identifies the non-financial and financial metrics used by the company to evaluate its operating performance and financial health - The Company evaluates performance using non-financial metrics such as Average Daily Rate (ADR), Occupancy, and Revenue Per Available Room (RevPAR)[106](index=106&type=chunk) - Financial metrics used include Funds From Operations (FFO), Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA, and Adjusted Hotel EBITDA[106](index=106&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) This section analyzes the company's operational performance, including industry outlook and detailed comparisons of financial results for the periods presented [Industry Outlook](index=22&type=section&id=Industry%20Outlook) This section discusses the U.S. lodging industry's RevPAR trends, noting a decrease and slowed growth in 2025 - U.S. lodging industry RevPAR **decreased 0.5%** for the **three months ended June 30, 2025**[107](index=107&type=chunk) - RevPAR growth slowed starting in **March 2025**, with limited visibility for the remainder of **2025**[107](index=107&type=chunk) [Comparison of the three months ended June 30, 2025 to the three months ended June 30, 2024](index=22&type=section&id=Comparison%20of%20the%20three%20months%20ended%20June%2030%2C%202025%20to%20the%20three%20months%20ended%20June%2030%2C%202024) This section provides a detailed comparative analysis of the company's financial performance for the three months ended June 30, 2025, versus the prior year [Revenues (Three Months)](index=22&type=section&id=Revenues%20%28Three%20Months%29) This section analyzes the total revenue and same-property room revenue metrics for the three months ended June 30, highlighting the impact of hotel sales and acquisitions Total Revenue (in thousands): | Period | 2025 | 2024 | % Change | | :-------------------------------- | :----- | :----- | :------- | | Three months ended June 30 | $80,294 | $86,479 | (7.2)% | Same Property Room Revenue Metrics (34 hotels): | Metric | June 30, 2025 | June 30, 2024 | % Change | | :-------------------------------- | :------------ | :------------ | :------- | | Occupancy | 81.5% | 81.8% | (0.4)% | | ADR | $190.63 | $190.68 | (0.0)% | | RevPAR | $155.37 | $155.96 | (0.4)% | - The decrease in total revenue was primarily due to a **(0.4)% decrease** in same property RevPAR and the sales of **five hotels**, partially offset by the acquisition of **one hotel**[109](index=109&type=chunk) [Hotel Operating Expenses (Three Months)](index=23&type=section&id=Hotel%20Operating%20Expenses%20%28Three%20Months%29) This section details the changes in total hotel operating expenses, primarily influenced by hotel dispositions and acquisitions Total Hotel Operating Expenses (in thousands): | Period | 2025 | 2024 | % Change | | :-------------------------------- | :----- | :----- | :------- | | Three months ended June 30 | $43,020 | $46,571 | (7.6)% | - The decrease was driven by the sales of **five hotels**, partially offset by the acquisition of **one hotel** and inflationary cost pressures[114](index=114&type=chunk) - Room expenses, the most significant component, **decreased by $(2.0) million** to **$15.0 million**[115](index=115&type=chunk) [Depreciation and Amortization (Three Months)](index=23&type=section&id=Depreciation%20and%20Amortization%20%28Three%20Months%29) This section presents the depreciation and amortization expense for the three months ended June 30 Depreciation and Amortization Expense (in thousands): | Period | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Three months ended June 30 | $15,395 | $14,914 | [Property Taxes, Ground Rent and Insurance (Three Months)](index=23&type=section&id=Property%20Taxes%2C%20Ground%20Rent%20and%20Insurance%20%28Three%20Months%29) This section outlines the property taxes, ground rent, and insurance expenses, noting increases due to higher assessments Property Taxes, Ground Rent and Insurance Expenses (in thousands): | Period | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Three months ended June 30 | $6,134 | $5,981 | - The increase was primarily due to higher property tax assessments, partially offset by hotel sales[118](index=118&type=chunk) [General and Administrative (Three Months)](index=23&type=section&id=General%20and%20Administrative%20%28Three%20Months%29) This section reports the general and administrative expenses, excluding share-based compensation, for the three months ended June 30 General and Administrative Expenses (excluding share-based compensation, in thousands): | Period | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Three months ended June 30 | $2,400 | $3,000 | [Reimbursable Costs from Related Parties (Three Months)](index=23&type=section&id=Reimbursable%20Costs%20from%20Related%20Parties%20%28Three%20Months%29) This section details reimbursable costs from related parties, which offset operating expenses without impacting net income Reimbursable Costs from Related Parties (in thousands): | Period | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Three months ended June 30 | $249 | $275 | - These costs offset related operating expenses and had **no** impact on operating or net income[120](index=120&type=chunk) [Interest and Other Income (Three Months)](index=23&type=section&id=Interest%20and%20Other%20Income%20%28Three%20Months%29) This section presents interest and other income, noting a decrease primarily due to lower cash balances Interest and Other Income (in thousands): | Period | 2025 | 2024 | Change (YoY) | | :-------------------------------- | :----- | :----- | :----------- | | Three months ended June 30 | $59 | $684 | $(625) | - The decrease was due to **lower cash balances**[121](index=121&type=chunk) [Interest Expense, Including Amortization of Deferred Fees (Three Months)](index=24&type=section&id=Interest%20Expense%2C%20Including%20Amortization%20of%20Deferred%20Fees%20%28Three%20Months%29) This section analyzes interest expense, including amortization of deferred fees, highlighting the impact of lower debt balances Interest Expense (in thousands): | Component | 2025 | 2024 | % Change | | :-------------------------------- | :----- | :----- | :------- | | Mortgage debt interest | $2,619 | $4,946 | (47.0)% | | Credit facility and term loan interest and unused fees | $3,455 | $2,421 | 42.7% | | Total Interest Expense | $6,414 | $7,723 | (16.9)% | - The overall decrease in interest expense was due to **lower debt balances**[122](index=122&type=chunk) [Income Tax Expense (Three Months)](index=24&type=section&id=Income%20Tax%20Expense%20%28Three%20Months%29) This section reports the income tax expense, which remained zero due to a full valuation allowance on deferred tax assets - Income tax expense remained **zero** for both periods due to a full valuation allowance on deferred tax assets of the TRS[123](index=123&type=chunk) [Net Income (Loss) (Three Months)](index=24&type=section&id=Net%20Income%20%28Loss%29%20%28Three%20Months%29) This section presents the net income for the three months ended June 30 Net Income (in thousands): | Period | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Three months ended June 30 | $5,499 | $7,034 | [Comparison of the six months ended June 30, 2025 to the six months ended June 30, 2024](index=24&type=section&id=Comparison%20of%20the%20six%20months%20ended%20June%2030%2C%202025%20to%20the%20six%20months%20ended%20June%2030%2C%202024) This section provides a detailed comparative analysis of the company's financial performance for the six months ended June 30, 2025, versus the prior year [Revenues (Six Months)](index=24&type=section&id=Revenues%20%28Six%20Months%29) This section analyzes the total revenue and same-property room revenue metrics for the six months ended June 30, highlighting the impact of hotel sales and acquisitions Total Revenue (in thousands): | Period | 2025 | 2024 | % Change | | :-------------------------------- | :----- | :----- | :------- | | Six months ended June 30 | $148,929 | $154,920 | (3.9)% | Same Property Room Revenue Metrics (34 hotels): | Metric | June 30, 2025 | June 30, 2024 | % Change | | :-------------------------------- | :------------ | :------------ | :------- | | Occupancy | 76.9% | 75.5% | 1.9% | | ADR | $184.45 | $184.62 | (0.1)% | | RevPAR | $141.80 | $139.37 | 1.7% | - The decrease in total revenue was primarily due to the sales of **six hotels**, partially offset by a **1.7% increase** in same property RevPAR and the acquisition of **one hotel**[126](index=126&type=chunk) [Hotel Operating Expenses (Six Months)](index=25&type=section&id=Hotel%20Operating%20Expenses%20%28Six%20Months%29) This section details the changes in total hotel operating expenses, primarily influenced by hotel dispositions and acquisitions Total Hotel Operating Expenses (in thousands): | Period | 2025 | 2024 | % Change | | :-------------------------------- | :----- | :----- | :------- | | Six months ended June 30 | $84,800 | $88,413 | (4.1)% | - The decrease was driven by the sales of **six hotels**, partially offset by the acquisition of **one hotel** and increased staffing/wage costs[131](index=131&type=chunk) - Room expenses **decreased by $(2.3) million** to **$29.8 million**[132](index=132&type=chunk) [Depreciation and Amortization (Six Months)](index=25&type=section&id=Depreciation%20and%20Amortization%20%28Six%20Months%29) This section presents the depreciation and amortization expense for the six months ended June 30 Depreciation and Amortization Expense (in thousands): | Period | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Six months ended June 30 | $30,426 | $30,169 | [Property Taxes, Ground Rent and Insurance (Six Months)](index=25&type=section&id=Property%20Taxes%2C%20Ground%20Rent%20and%20Insurance%20%28Six%20Months%29) This section outlines the property taxes, ground rent, and insurance expenses, noting increases due to higher assessments Property Taxes, Ground Rent and Insurance Expenses (in thousands): | Period | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Six months ended June 30 | $11,877 | $11,275 | - The increase was primarily due to higher property tax assessments, partially offset by hotel sales[135](index=135&type=chunk) [General and Administrative (Six Months)](index=25&type=section&id=General%20and%20Administrative%20%28Six%20Months%29) This section reports the general and administrative expenses, excluding share-based compensation, for the six months ended June 30 General and Administrative Expenses (excluding share-based compensation, in thousands): | Period | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Six months ended June 30 | $5,400 | $6,000 | [Reimbursable Costs from Related Parties (Six Months)](index=26&type=section&id=Reimbursable%20Costs%20from%20Related%20Parties%20%28Six%20Months%29) This section details reimbursable costs from related parties, which offset operating expenses without impacting net income Reimbursable Costs from Related Parties (in thousands): | Period | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Six months ended June 30 | $526 | $553 | - These costs offset related operating expenses and had **no** impact on operating or net income[137](index=137&type=chunk) [Interest and Other Income (Six Months)](index=26&type=section&id=Interest%20and%20Other%20Income%20%28Six%20Months%29) This section presents interest and other income, noting a decrease primarily due to lower cash balances Interest and Other Income (in thousands): | Period | 2025 | 2024 | Change (YoY) | | :-------------------------------- | :----- | :----- | :----------- | | Six months ended June 30 | $121 | $1,529 | $(1,408) | - The decrease was due to **lower cash balances**[138](index=138&type=chunk) [Interest Expense, Including Amortization of Deferred Fees (Six Months)](index=26&type=section&id=Interest%20Expense%2C%20Including%20Amortization%20of%20Deferred%20Fees%20%28Six%20Months%29) This section analyzes interest expense, including amortization of deferred fees, highlighting the impact of lower debt balances Interest Expense (in thousands): | Component | 2025 | 2024 | % Change | | :-------------------------------- | :----- | :----- | :------- | | Mortgage debt interest | $5,220 | $10,154 | (48.6)% | | Credit facility and term loan interest and unused fees | $7,361 | $4,209 | 74.9% | | Total Interest Expense | $13,266 | $15,030 | (11.7)% | - The overall decrease in interest expense was due to **lower debt balances**[139](index=139&type=chunk) [Income Tax Expense (Six Months)](index=26&type=section&id=Income%20Tax%20Expense%20%28Six%20Months%29) This section reports the income tax expense, which remained zero due to a full valuation allowance on deferred tax assets - Income tax expense remained **zero** for both periods due to a full valuation allowance on deferred tax assets of the TRS[140](index=140&type=chunk) [Net Income (Loss) (Six Months)](index=26&type=section&id=Net%20Income%20%28Loss%29%20%28Six%20Months%29) This section presents the net income for the six months ended June 30 Net Income (in thousands): | Period | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Six months ended June 30 | $7,017 | $1,548 | [Non-GAAP Financial Measures](index=27&type=section&id=Non-GAAP%20Financial%20Measures) This section discusses the company's use of non-GAAP financial measures like FFO, EBITDA, and Adjusted Hotel EBITDA as supplemental performance indicators - The Company uses non-GAAP financial measures including FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA, and Adjusted Hotel EBITDA as supplemental indicators of operating performance[142](index=142&type=chunk) - These measures are not GAAP alternatives for net income or cash flows from operations and have limitations, such as not reflecting cash expenditures for capital or working capital needs[143](index=143&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) Reconciliation of Net Income (Loss) to FFO and Adjusted FFO (in thousands): **For the six months ended June 30,** | Metric | 2025 | 2024 | | :--------------------------------------- | :----- | :----- | | Net income | $7,017 | $1,548 | | FFO attributable to common share and unit holders | $24,929 | $27,621 | | Adjusted FFO attributable to common share and unit holders | $25,906 | $27,865 | Reconciliation of Net Income (Loss) to EBITDA, EBITDAre, and Adjusted EBITDA (in thousands): **For the six months ended June 30,** | Metric | 2025 | 2024 | | :--------------------------------------- | :----- | :----- | | Net income | $7,017 | $1,548 | | EBITDA | $50,709 | $46,747 | | EBITDAre | $43,241 | $46,887 | | Adjusted EBITDA | $46,412 | $50,241 | Reconciliation of Net Income (Loss) to Adjusted Hotel EBITDA (in thousands): **For the six months ended June 30,** | Metric | 2025 | 2024 | | :--------------------------------------- | :----- | :----- | | Net income | $7,017 | $1,548 | | Adjusted Hotel EBITDA | $51,726 | $54,679 | [Sources and Uses of Cash](index=30&type=section&id=Sources%20and%20Uses%20of%20Cash) This section summarizes the company's cash flow activities from operations, investing, and financing, and projected capital expenditures - Cash, cash equivalents, and restricted cash **decreased by $(5.6) million** to **$24.2 million** as of **June 30, 2025**[157](index=157&type=chunk) Cash Flow Activities (in thousands, six months ended June 30): | Activity | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Net cash provided by operating activities | $26,252 | $32,069 | | Net cash provided by (used in) investing activities | $36,519 | $(46,008) | | Net cash used in financing activities | $(68,406) | $(46,114) | - The Company expects to invest approximately **$9.3 million** in renovations and capital expenditures on existing hotels during the remainder of **2025**[160](index=160&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) This section details the company's leverage ratio, total debt, borrowing availability, and compliance with financial covenants - As of **June 30, 2025**, the Company's leverage ratio was **21.1%**, with total debt of **$353.2 million** at an average interest rate of **6.46%**[165](index=165&type=chunk) - The Company had **$180.0 million** in aggregate maximum remaining borrowing availability under its revolving credit facility and unsecured term loan as of **June 30, 2025**[46](index=46&type=chunk) - The Company was in compliance with all financial covenants of its credit facilities at **June 30, 2025**[167](index=167&type=chunk) - Available capital for issuance/repurchase includes approximately **$49.9 million** under the DRSPP, **$77.5 million** under the ATM Program, and **$24.9 million** under the **Share Repurchase Program**[168](index=168&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk) [Dividend Policy](index=31&type=section&id=Dividend%20Policy) This section outlines the company's common share dividend policy and declared distributions for common and preferred shares - The common share dividend policy is to distribute approximately **100%** of annual taxable income[174](index=174&type=chunk) - For the **six months ended June 30, 2025**, total dividends of **$0.18 per common share/LTIP unit** and **$0.82812 per Series A preferred share** were declared[174](index=174&type=chunk)[175](index=175&type=chunk) [Inflation](index=31&type=section&id=Inflation) This section discusses the potential impact of inflation on room rates, operating costs, and capital investment costs - Operators can adjust room rates daily to reflect inflation, but competitive pressures may limit this ability[176](index=176&type=chunk) - Inflation may increase operating costs (e.g., labor, food, utilities) and capital investment costs[176](index=176&type=chunk) [Seasonality](index=32&type=section&id=Seasonality) This section explains the seasonal patterns in the company's hotel operations, affecting revenue, operating income, and cash flow - The Company's hotels experience seasonal patterns, with **lower revenue**, **operating income**, and **cash flow** in the first and fourth quarters, and higher in the second and third quarters[177](index=177&type=chunk) - Cash on hand or credit facility borrowings are used to manage cash flow fluctuations during seasonal downturns[177](index=177&type=chunk) [Critical Accounting Estimates](index=32&type=section&id=Critical%20Accounting%20Estimates) This section emphasizes that financial statement preparation involves management estimates and assumptions, which may differ from actual results - The preparation of financial statements requires management to make estimates and assumptions, which are evaluated on an ongoing basis[178](index=178&type=chunk) - Actual results could differ from these estimates, and all significant accounting policies are disclosed in the Annual Report on Form **10-K**[178](index=178&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk.](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk.) The Company is exposed to interest rate risk primarily from its floating rate debt. It manages this risk by seeking fixed rates or variable rates with low margins and evaluating hedging opportunities. A hypothetical 100 basis point increase in SOFR would result in approximately $2.1 million in additional annual interest - The Company is exposed to interest rate changes primarily due to floating rate borrowings under its revolving credit facility and term loan[179](index=179&type=chunk) - Interest rate risk management objectives include limiting the impact of interest rate changes and lowering borrowing costs, achieved by borrowing at fixed or lowest variable rates and evaluating hedging opportunities[179](index=179&type=chunk) Debt Sensitive to Interest Rate Changes (in thousands, as of June 30, 2025): | Debt Type | Total | Average Interest Rate | | :-------------------------------- | :------ | :-------------------- | | Floating rate debt | $210,000 | 5.93% | | Fixed rate debt | $143,225 | 7.23% | - A hypothetical **100 basis points increase** in SOFR would result in approximately **$2.1 million** in additional annual interest[181](index=181&type=chunk) [Item 4. Controls and Procedures.](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures.) The Company's management, including the Chief Executive Officer and Chief Financial Officer, concluded that disclosure controls and procedures were effective as of June 30, 2025. There have been no material changes in internal control over financial reporting during the last fiscal quarter [Disclosure Controls and Procedures](index=33&type=section&id=Disclosure%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures as evaluated by senior management - The Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of disclosure controls and procedures[182](index=182&type=chunk) - They concluded that these controls and procedures were effective as of **June 30, 2025**, providing reasonable assurance for timely and accurate reporting[182](index=182&type=chunk) [Changes in Internal Control over Financial Reporting](index=33&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section states that there were no material changes in internal control over financial reporting during the last fiscal quarter - There have been **no** material changes in the Company's internal control over financial reporting during the last fiscal quarter[183](index=183&type=chunk) PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, equity transactions, and other relevant disclosures [Item 1. Legal Proceedings.](index=34&type=section&id=Item%201.%20Legal%20Proceedings.) The Company is involved in various routine legal proceedings arising in the ordinary course of business, but the aggregate identifiable liabilities from these matters are not expected to have a material adverse impact on its financial condition or results of operations - The Company is subject to various claims, lawsuits, and legal proceedings in the ordinary course of business[185](index=185&type=chunk) - The aggregate identifiable amount of such liabilities is not expected to have a material adverse impact on the Company's financial condition or results of operations[185](index=185&type=chunk) [Item 1A. Risk Factors.](index=34&type=section&id=Item%201A.%20Risk%20Factors.) There have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 - **No** material changes to the Risk Factors previously disclosed in the Company's Annual Report on Form **10-K** for the **year ended December 31, 2024**[186](index=186&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) During the second quarter of 2025, the Company repurchased 20,480 common shares for approximately $0.1 million under its $25.0 million Share Repurchase Program, with $24.9 million remaining available for repurchase Issuer Purchases of Equity Securities (Q2 2025): | Period | Total Number of Shares Purchased | Average Price Paid per Share | Dollar Value of Shares that May Yet Be Purchased (in thousands) | | :-------------------------------- | :----------------------------- | :--------------------------- | :------------------------------------------------------------ | | June 1, 2025 - June 30, 2025 | 20,480 | $7.02 | $24,856 | | **Total** | **20,480** | **$7.02** | **$24,856** | - The repurchases were made under a **$25.0 million Share Repurchase Program** authorized in **May 2025**, which has **no** time limit[187](index=187&type=chunk) [Item 3. Defaults Upon Senior Securities.](index=34&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities.) The Company reported no defaults upon senior securities during the period - **No** defaults upon senior securities were reported[188](index=188&type=chunk) [Item 4. Mine Safety Disclosures.](index=34&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This item is not applicable to the Company - This item is **not applicable** to the Company[189](index=189&type=chunk) [Item 5. Other Information.](index=34&type=section&id=Item%205.%20Other%20Information.) During the three months ended June 30, 2025, none of the Company's trustees or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - **No** Rule **10b5-1** or non-Rule **10b5-1** trading arrangements were adopted or terminated by the Company's trustees or officers during the **three months ended June 30, 2025**[190](index=190&type=chunk) [Item 6. Exhibits.](index=35&type=section&id=Item%206.%20Exhibits.) This section lists all exhibits filed as part of the report, including corporate governance documents, equity incentive plan amendments, and required certifications - Exhibits include Articles of Amendment and Restatement, Articles Supplementary for Preferred Shares, and the Fourth Amended and Restated Bylaws[191](index=191&type=chunk)[193](index=193&type=chunk) - The **Chatham Lodging Trust Equity Incentive Plan**, Amended and Restated as of **May 22, 2022**, was further amended on **May 6, 2025**[191](index=191&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer pursuant to Sections **302** and **906** of the Sarbanes-Oxley Act of **2002** are filed/furnished[191](index=191&type=chunk) [SIGNATURE](index=36&type=section&id=SIGNATURE) The report is officially signed on behalf of Chatham Lodging Trust by Jeremy B. Wegner, Senior Vice President and Chief Financial Officer, on August 6, 2025 - The report was signed by **Jeremy B. Wegner**, Senior Vice President and Chief Financial Officer[197](index=197&type=chunk) - The signing date was **August 6, 2025**[197](index=197&type=chunk)

Financial Data and Key Metrics Changes - The company reported Q2 2025 hotel EBITDA of $30.9 million and adjusted EBITDA of $28.5 million, with adjusted FFO of $0.36 per share [24] - The GOP margin for the quarter was 46.3%, up 30 basis points from Q2 2024, attributed to strong expense control and moderating inflationary pressures [24] - Leverage was reduced to 3.5 times net debt to EBITDA as of June 30, enhancing financial flexibility [25] Business Line Data and Key Metrics Changes - The core business segment, Business Traveler, showed healthy growth with the highest occupancies during the week, outperforming industry RevPAR growth for 14 consecutive quarters [9] - RevPAR growth at the four Silicon Valley hotels was up 3%, with hotel EBITDA increasing by 3% to nearly $5 million [17] - The six predominantly leisure hotels accounted for about 20% of EBITDA, with RevPAR surging 4% when excluding the Portsmouth Hilton Garden Inn under renovation [19] Market Data and Key Metrics Changes - Silicon Valley's recovery to pre-pandemic levels was noted, with occupancy reaching 80% across four hotels [9] - The Sunbelt markets performed well, particularly Charleston and Florida, which experienced RevPAR growth after previous declines [11] - The Austin market faced challenges with RevPAR down 6% year-to-date and 14% in the quarter due to convention center closures [11] Company Strategy and Development Direction - The company completed the sale of five hotels for proceeds of $83 million, using the funds for development, acquisitions, and share repurchases [5] - A $25 million share buyback plan was approved, with approximately 20,000 shares repurchased at a weighted average price of $7.2 [5] - The company plans to launch an upsized syndication of its credit facility and term loan to enhance financial conditions and lower borrowing costs [6] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about future performance, citing strong GDP growth rates and significant investments in technology and AI as positive indicators [14][15] - The company anticipates continued demand growth in Silicon Valley, supported by tech company investments and expansion [10] - Despite challenges in certain markets, management believes the overall industry is poised for better performance in the coming years [13] Other Important Information - The company spent approximately $9 million on CapEx in the quarter, adding eight rooms to the existing portfolio [22][23] - The company highlighted the importance of monitoring productivity closely, especially in labor and benefits, which are the largest expenses [21] Q&A Session Summary Question: Regarding asset recycling and the two additional hotels for sale - Management confirmed that one hotel is an older lower RevPAR asset, while the other is an opportunistic transaction to minimize capital requirements [28][29] Question: Timeline for development in Portland and acquisition opportunities - The development in Portland is expected to have a construction timeline of around 21 to 24 months, with a potential start within the next six months [30] - Management noted ongoing discussions in the acquisition market, with a wide bid-ask scenario but confidence that the gap will lessen over time [31]

For Immediate Release Exhibit 99.1 Contact: Dennis Craven (Company) Chris Daly (Media) Chief Operating Officer DG Public Relations (561) 227-1386 (703) 864-5553 Chatham Lodging Announces Second Quarter 2025 Results WEST PALM BEACH, Fla., August 6, 2025 — Chatham Lodging Trust (NYSE: CLDT), a lodging real estate investment trust (REIT) that invests in upscale, extended-stay hotels and premium-branded, select- service hotels, today announced results for the second quarter ended June 30, 2025. Second Quarter 2 ...

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Operating Performance and Market Position - Chatham's RevPAR exceeded industry growth for three consecutive years, with FY 2024 up by 2.8% compared to the industry's 1.8%, and Q1 2025 up by 3.8% versus the industry's 2.2%[6] - RevPAR for Chatham's tech-driven hotels increased by 10.4% in 2024 and 3.2% in Q1 2025, despite renovation impacts[6] - Chatham's Silicon Valley and Bellevue properties are showing strong RevPAR growth[29] - Chatham has the highest RevPAR among lodging REITs focused on the limited-service segment[73] Financial Highlights and Capital Allocation - Recovery of Silicon Valley/Bellevue properties to 2019 levels could add $14 million to LTM EBITDA and $0.27 per share of FFO, representing increases of approximately 15% and 27% relative to 2025 guidance midpoint[6,28] - The company sold six hotels for $101 million since the start of 2024 at a cap rate of 6%, including $28 million of forgone capital expenditures[6] - Chatham acquired a newly built Home2 Phoenix in May 2024 for $43 million, with an expected cap rate of 9%[6] - Chatham reduced its net debt by 40% since 3/31/20[57] Portfolio and Strategy - Weighted average supply growth of 0.3% in Chatham's sub-markets indicates limited new supply[6] - 65% of Chatham's LTM EBITDA was generated by extended stay hotels[71] - Chatham had $192 million of liquidity as of 4/30/25[53]

Group 1 - Lodging REITs are influenced by cyclical factors due to short-term market-to-market leasing and seasonal consumer behavior [1] - Current economic uncertainty raises concerns about the viability of lodging REITs, leading to a cautious stance on investment in this sector [1] Group 2 - Pearl Gray is an independent market research firm that specializes in systematic analysis, focusing on Bonds, Preferreds, and REITs [1] - The primary sectors of interest for Pearl Gray include Financials and Real Estate, with a mission to identify actionable total return ideas [1]

Group 1 - The investment group European Small Cap Ideas focuses on high-quality small-cap investment opportunities in Europe, emphasizing capital gains and dividend income for continuous cash flow [1] - The group offers two model portfolios: the European Small Cap Ideas portfolio and the European REIT Portfolio, along with weekly updates and educational content [1] - The analyst has a beneficial long position in the preferred shares of Chatham Lodging Trust (NYSE: CLDT.PR.A), indicating confidence in the company's performance [1]

Revenue and Income - Total revenue for the three months ended March 31, 2025, was $68.6 million, a 0.3% increase from $68.4 million in the same period of 2024[109] - Net income for the three months ended March 31, 2025, was $1.5 million, a significant improvement from a net loss of $(5.5) million for the same period in 2024[126] - Funds From Operations (FFO) attributable to common share and unit holders was $6.88 million for Q1 2025, compared to $7.88 million in Q1 2024[132] - Adjusted FFO for the three months ended March 31, 2025, was $7.40 million, slightly down from $7.93 million in the same period of 2024[132] - EBITDA for the three months ended March 31, 2025, increased to $23.40 million from $17.08 million in Q1 2024[136] - Adjusted Hotel EBITDA for Q1 2025 was $20.84 million, compared to $21.03 million in Q1 2024, indicating a slight decline[139] Revenue Breakdown - Room revenue comprised 90.9% of total revenue for the three months ended March 31, 2025[109] - Food and beverage revenue decreased by 10.1% to $1.7 million for the three months ended March 31, 2025[110] - The company sold five hotels during the reporting period, which contributed $1.3 million in room revenue for the three months ended March 31, 2025[108] - The company acquired one hotel in Phoenix, AZ, on May 30, 2024, contributing $2.8 million in revenue during the three months ended March 31, 2025[108] Expenses and Financial Metrics - Hotel operating expenses remained flat at $41.8 million for the three months ended March 31, 2025, compared to the same period in 2024[116] - Total general and administrative expenses remained stable at $3.0 million for both the three months ended March 31, 2025, and 2024, excluding stock-based compensation[121] - Interest expense decreased by $0.4 million, from $7.3 million in Q1 2024 to $6.9 million in Q1 2025, primarily due to lower debt balances[124] - Depreciation and amortization expense was $15.0 million for Q1 2025, compared to $15.3 million in Q1 2024[119] - Total property taxes, ground rent, and insurance expenses increased by $0.4 million, from $5.3 million in Q1 2024 to $5.7 million in Q1 2025[120] Cash Flow and Investments - Net cash flows provided by operating activities decreased by $2.7 million to $4.2 million for the three months ended March 31, 2025, compared to $6.9 million for the same period in 2024, primarily due to the sale of five hotels[145] - Net cash flows provided by investing activities increased by $16.5 million to $22.8 million for the three months ended March 31, 2025, compared to $6.3 million for the same period in 2024[146] - The company expects to invest approximately $18.6 million on renovations and emergency expenditures on existing hotels during the remainder of 2025[147] - Net cash flows used in financing activities increased by $24.1 million to $(31.6) million for the three months ended March 31, 2025, compared to $(7.5) million for the same period in 2024[148] Debt and Leverage - Total debt as of March 31, 2025, was $383.2 million, with a weighted-average interest rate of approximately 6.43%[101] - The leverage ratio was 22.3% as of March 31, 2025, consistent with the company's historical range of low 20s to low 50s[101] - Total debt principal and interest obligations amounted to $470.5 million as of March 31, 2025, with $161.2 million payable within the next 12 months[150] - The company had approximately $77.5 million in common shares available for issuance under the ATM Program as of March 31, 2025[155] Interest Rate Sensitivity - The company has a total floating rate debt of $240 million with an average interest rate of 5.95%[168] - The fixed rate debt amounts to $143.225 million, with an average interest rate of 7.12%[168] - A hypothetical 100 basis points increase in SOFR would lead to an additional interest expense of approximately $2.4 million annually[168] - The fixed rate debt includes $24,590 maturing in 2028, $23,681 in 2029, and $94,954 thereafter[168] - The fair value of the fixed rate debt is estimated at $146.782 million[168] - The company’s financial instruments are sensitive to changes in interest rates, impacting future cash flows[168] - The average interest rate for fixed rate debt maturing in 2029 is 7.29%[168] - The company’s financial strategy includes managing interest rate exposure through a mix of floating and fixed rate debt[168]

Financial Data and Key Metrics Changes - The company announced a $25 million share buyback plan, indicating a strong position to enhance shareholder value after addressing $500 million of maturing debt [6][7] - The quarterly common dividend was increased by 29% to $0.09 per share, reflecting a yield of over 5% [7] - Q1 2025 hotel EBITDA was $20.8 million, adjusted EBITDA was $17.9 million, and adjusted FFO was $0.14 per share [24][25] - GOP margin was 38.9%, with a hotel EBITDA margin of 30.5%, showing a 30 basis point increase from Q1 2024 [24][25] Business Line Data and Key Metrics Changes - RevPAR growth was noted across the portfolio, with significant increases in technology-dependent markets, particularly an 8% growth in Silicon Valley hotels [14][15] - The average age of sold hotels was 25 years, with proceeds of approximately $83 million from the sale of five hotels [8][25] - RevPAR at leisure hotels declined only 1%, indicating resilience in that segment [19] Market Data and Key Metrics Changes - RevPAR in LA increased by 14%, with specific hotels benefiting from fire-related demand [16] - New York, Dallas, and DC markets saw at least a 6% increase in RevPAR [17] - Government-related room revenue constituted approximately 5% of the overall portfolio, with a shift towards leisure travelers noted [11][12] Company Strategy and Development Direction - The company is actively seeking external growth acquisitions, focusing on high-quality premium branded targets to diversify its portfolio [9] - The strategy includes opportunistically recycling assets to enhance shareholder value through either hotel acquisitions or share repurchases [8][9] - The company aims to reduce volatility in cash flow by diversifying its asset base beyond tech-heavy markets [59] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future RevPAR growth despite current economic uncertainties, projecting flat RevPAR for the year [12][13] - The company noted that the current environment has resulted in lower new supply, which could support future growth [13] - Management highlighted strong demand trends and the ability to pivot sales efforts to capture leisure travel [11][12] Other Important Information - The company completed renovations at several hotels, with a CapEx budget of approximately $26 million for 2025 [22][23] - The company has successfully reduced leverage, with a net debt to LTM EBITDA ratio of 3.6x, significantly below historical levels [25] Q&A Session Summary Question: Insights on capital allocation initiatives regarding buybacks and acquisitions - Management is looking at both buybacks and acquisitions opportunistically, with a focus on achieving yields over 9% for acquisitions [29][30] Question: Update on potential development in Portland, Maine - The development process is ongoing, with careful consideration of costs and approvals due to tariff uncertainties [34][35] Question: Performance drivers for the Phoenix hotel - The Phoenix hotel has outperformed expectations due to strong management and market conditions, contributing to its top RevPAR ranking [36][39] Question: Impact of government demand and international travel exposure - Government demand is minimal, constituting less than 5% of the portfolio, and international travel exposure is also limited [54][55] Question: Guidance on RevPAR expectations for 2025 - The company anticipates flat RevPAR growth, with potential ADR growth offsetting occupancy changes [56][58] Question: Potential acquisition markets and asset types - The company is considering diversifying its asset base beyond current tech-heavy markets to reduce cash flow volatility [59]