Group 1 - The article invites active investors to join a free trial and engage in discussions with sophisticated traders and investors [1] Group 2 - There are no stock, option, or similar derivative positions held by the analyst in any of the mentioned companies, nor plans to initiate such positions within the next 72 hours [2] - The article expresses the author's own opinions and is not influenced by compensation from any company [2] Group 3 - Seeking Alpha clarifies that past performance does not guarantee future results and that no specific investment recommendations are provided [3] - The views expressed may not reflect those of Seeking Alpha as a whole, and the analysts may not be licensed or certified [3]

Investor Presentation June 2025 Safe Harbor Disclosure We make forward-looking statements in this presentation that are subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, cash flow and plans and objectives. When we use the words "believe," "expect," "anticipate," "estimate," "plan," "continue," "intend," "should," "may" or similar expressions, we intend to id ...

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]

Financial Data and Key Metrics Changes - The company announced a share buyback plan of $25 million, 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 for Q1 was 38.9%, up 30 basis points from Q1 2024, driven by 3.8% RevPAR growth and effective expense control [24][25] Business Line Data and Key Metrics Changes - RevPAR growth was strong in six of the top seven markets, with Silicon Valley hotels seeing an 8% increase [14] - The average age of the five sold hotels was 25 years, sold at an approximate 6% capitalization rate on 2024 NOI levels [8] - RevPAR at leisure hotels declined only 1%, while tech hotels showed significant growth [19][20] Market Data and Key Metrics Changes - RevPAR in LA increased by 14%, with specific hotels benefiting from fire-related demand [15] - New York, Dallas, and DC markets saw at least 6% growth in RevPAR [16] - Government-related room revenue accounted for approximately 5% of the overall portfolio, indicating limited impact from government travel [11][12] Company Strategy and Development Direction - The company is focusing on high-quality premium branded targets for acquisitions to diversify its portfolio [9] - The share repurchase plan and potential acquisitions are viewed as tools to enhance shareholder value [6][9] - The company aims to reduce volatility in cash flow by diversifying its asset base beyond tech-heavy markets [57] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future demand despite current economic uncertainties, projecting flat RevPAR growth for the year [12][13] - The company noted that the current environment has resulted in lower new supply, which could support future RevPAR growth [13] - Management highlighted the importance of adjusting sales efforts to attract leisure travelers in response to declining government-related demand [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 through the sale of older hotels, with a net debt to LTM EBITDA ratio of 3.6x [25][26] 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 enhancing shareholder value [29][30] Question: Update on potential development in Portland, Maine - The development process is ongoing, with careful consideration of costs and approvals before proceeding [32][34] Question: Performance drivers for the Phoenix hotel - The Phoenix hotel has outperformed expectations due to strong management and market conditions [35][36] Question: Impact of government demand and international travel exposure - Government demand is minimal, and international travel exposure is light, with strong overall performance in key markets [52][53] Question: Guidance on RevPAR expectations for 2025 - The company expects flat RevPAR growth, with potential ADR growth offsetting occupancy changes [54][56] Question: Potential acquisition opportunities and market targeting - The company aims to diversify its asset base and is open to acquisitions in new markets to reduce cash flow volatility [57]

Financial Performance - Net loss applicable to common shareholders decreased to $1 million in Q1 2025 from $7 million in Q1 2024, with diluted net loss per share improving from $(0.15) to $(0.01) [4] - Total revenue for Q1 2025 was $68,635,000, a slight increase of 0.28% compared to $68,443,000 in Q1 2024 [45] - Operating income for Q1 2025 was $8,308,000, significantly up from $977,000 in Q1 2024 [45] - Net income attributable to Chatham Lodging Trust for Q1 2025 was $1,536,000, compared to a net loss of $5,225,000 in Q1 2024 [45] - Funds From Operations (FFO) attributable to common share and unit holders for Q1 2025 was $6,880,000, down from $7,877,000 in Q1 2024 [47] - Adjusted EBITDA for Q1 2025 was $17,899,000, a decrease from $18,884,000 in Q1 2024 [47] - Total assets decreased to $1,226,310,000 as of March 31, 2025, from $1,254,681,000 at the end of 2024 [43] - Total liabilities decreased to $437,430,000 as of March 31, 2025, from $462,684,000 at the end of 2024 [43] Revenue and Occupancy Metrics - RevPAR increased by 4% to $127 in Q1 2025 compared to $122 in Q1 2024, with occupancy rising to 72% from 69% [4] - RevPAR for Silicon Valley hotels increased by 8% in Q1 2025, while Los Angeles hotels saw a 14% increase [11] - April's RevPAR declined by 4% due to slowing demand and holiday impacts, but May is forecasted to trend positively [7] - For Q2 2025, RevPAR is projected to decline by 0.5% to 2%, with total hotel revenue expected between $79.0 million and $80.2 million [27][28] Dividends and Shareholder Returns - The quarterly common dividend was raised by 29% to $0.09 per share, up from $0.07 per share [4] - The board raised its quarterly common dividend by 29 percent to $0.09 per share, payable on April 15, 2025 [24] - The company declared distributions of $0.09 per common share in Q1 2025, up from $0.07 in Q1 2024 [45] Capital Expenditures and Investments - Capital expenditures in Q1 2025 were approximately $7 million, with a total capital expenditure budget of $26 million for 2025 [20] - The company completed the sale of five hotels for total proceeds of $83 million, with an average age of 23 years [4] - The sale of the Courtyard Houston, Texas, in April contributed to paying down borrowings on the credit facility [28] - The company completed renovations at the Residence Inn Bellevue and Hilton Garden Inn Portsmouth in April [28] Debt and Financial Ratios - As of March 31, 2025, the company had net debt of $365 million, down from $389 million as of December 31, 2024 [22] - The leverage ratio was approximately 22 percent, down from 23 percent on December 31, 2024 [23] - The average interest rate on total debt outstanding as of March 31, 2025, was 6.4 percent [22] Future Projections - Adjusted EBITDA for 2025 is projected to be between $89 million and $93 million, with Adjusted FFO expected between $49 million and $53 million [27] - For the three months ended June 30, 2025, net income was between $3,802 million and $5,818 million, while for the year ended December 31, 2025, it ranged from $4,634 million to $8,521 million [51] - Adjusted FFO attributable to common share and unit holders for the three months ended June 30, 2025, was between $16,643 million and $18,659 million, and for the year ended December 31, 2025, it was between $49,023 million and $52,910 million [51] - Total revenue for the three months was between $79,378 million and $80,478 million, and for the year, it ranged from $296,461 million to $299,129 million [52] - Hotel EBITDA margin for the three months ended June 30, 2025, was between 37.5% and 39.5%, while for the year, it was between 34.0% and 35.0% [52] - EBITDA for the three months ended June 30, 2025, was between $25,164 million and $27,180 million, and for the year, it ranged from $89,734 million to $93,621 million [51] - Adjusted EBITDA for the three months ended June 30, 2025, was between $26,764 million and $28,780 million, and for the year, it was between $88,923 million and $92,810 million [51] Other Information - Approximately 65% of the company's hotel EBITDA over the last twelve months was generated from extended-stay hotels, which represent 61% of its portfolio [12] - The company owns 34 hotels totaling 5,164 rooms/suites across 14 states and the District of Columbia [31] - The weighted average number of common shares outstanding for Q1 2025 was 48,960,924, compared to 48,891,994 in Q1 2024 [45] - The company reported a loss per common share of $0.01 in Q1 2025, an improvement from a loss of $0.15 in Q1 2024 [45] - The company does not anticipate any additional acquisitions, dispositions, or debt or equity issuance in the near term [28] - Interest expense, including amortization of deferred fees, was $6,469 million for the three months ended June 30, 2025, and $25,400 million for the year ended December 31, 2025 [51] - Depreciation and amortization for the three months ended June 30, 2025, was $14,893 million, and for the year, it was $59,700 million [51] - Preferred dividends for the three months and the year were consistently $2,000 million and $8,000 million, respectively [51] - Gain on sale of hotel properties was $0 for the three months ended June 30, 2025, and a loss of $7,118 million for the year ended December 31, 2025 [51]

Group 1 - The article discusses the features of the investing group Trade With Beta, which includes frequent picks for mispriced preferred stocks and baby bonds, weekly reviews of over 1200 equities, IPO previews, hedging strategies, and an actively managed portfolio [1] - The service offers a chat room for discussion among sophisticated traders and investors, allowing for real-time engagement and idea sharing [1] - The analyst has a beneficial long position in the shares of CLDT.PR.A, indicating a personal investment interest in the discussed stock [1]

Company Overview - As of December 31, 2024, the company owned 37 hotels with a total of 5,596 rooms located in 16 states and the District of Columbia[25]. - The company primarily invests in upscale extended-stay hotels and premium-branded select-service hotels, focusing on the 25 largest metropolitan markets in the U.S.[34]. - The company is managed by Island Hospitality Management, LLC, which is 100% owned by the company's Chairman, President, and CEO[27]. - The company is internally managed and primarily invests in upscale extended-stay and premium-branded select-service hotels[203]. Financial Performance - Total revenue for the year ended December 31, 2024, was $317.2 million, a 2.0% increase from $311.1 million in 2023[212]. - Room revenue increased to $290.3 million in 2024, representing 91.5% of total revenue, compared to $285.0 million in 2023[212]. - Same property RevPAR increased by 2.8% during the year ended December 31, 2024[212]. - Food and beverage revenue decreased by 4.8% to $7.7 million in 2024 from $8.1 million in 2023[212]. - Other operating revenue increased by 8.2% to $18.1 million in 2024 compared to $16.7 million in 2023[212]. Capital Structure and Financing - The company's leverage ratio was approximately 23.1% as of December 31, 2024, down from 24.8% at December 31, 2023[31]. - The company aims to maintain a prudent capital structure with a long-term leverage ratio similar to historical levels, typically between the mid 20s and low 50s[31]. - The company plans to finance growth through free cash flow, debt, and issuances of common or preferred shares[31]. - The company has a mortgage debt balance of $159.2 million across its properties[185]. REIT Compliance and Distributions - The Company is required to distribute at least 90% of its REIT taxable income to maintain its REIT status[43]. - The company must make distributions to shareholders each year to maintain its REIT qualification, with future distributions dependent on financial performance and other factors[196]. - The company is required to distribute at least 90% of its REIT taxable income each year to shareholders, which may be impacted by downturns in operating results or unexpected capital improvements[84]. - The company must ensure that at least 75% of the value of gross assets consists of cash, government securities, and qualified real estate assets at the end of each calendar quarter[161]. Management and Operational Risks - The company cannot operate its hotels directly to maintain its qualification as a REIT, leasing them to taxable REIT subsidiary lessees[26]. - The company faces risks related to potential cancellations or non-renewals of franchise licenses, which could materially affect operations and financial condition[83]. - Increased operating expenses and capital expenditure requirements could adversely affect the company's ability to make distributions to shareholders[85]. - The company executed an amendment to its corporate office lease on June 1, 2023, resulting in an early termination payment of $0.1 million for vacating 7,374 rentable square feet[55]. Market and Economic Conditions - The COVID-19 pandemic has had a significant adverse impact on the lodging industry, affecting the Company's financial condition and performance[75]. - The lodging industry is sensitive to economic conditions, and declines in corporate budgets or consumer demand could lower revenues and profitability[101]. - Inflation and price volatility could increase operating and borrowing costs, negatively impacting financial condition and cash available for distribution[100]. - The cyclical nature of the lodging industry can lead to returns that are substantially below expectations, particularly during economic downturns[107]. Cybersecurity and Compliance - The company has not experienced any material information security breach incidents in the last three fiscal years, indicating a strong cybersecurity posture[181]. - The company has established a comprehensive cybersecurity framework aligned with the National Institute of Standards and Technology Cybersecurity Framework to manage risks[174]. - The company has implemented risk-based controls to prevent, detect, and respond to information security threats, relying on third-party tools and services[175]. - The Audit Committee is responsible for oversight of cybersecurity risks, with periodic reviews and assessments conducted by the Executive Leadership Team[182]. Community and Environmental Responsibility - The Company published its annual Corporate Responsibility Report in December 2024, adhering to standards from GRI, SASB, and TCFD[64]. - The Company is committed to improving energy efficiency through initiatives such as installing energy-efficient lighting and smart thermostats[65]. - The Company prioritizes community investment and has engaged in charitable activities in the West Palm Beach area[66].