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].

Call Start: 13:00 January 1, 0000 1:42 PM ET Chatham Lodging Trust (NYSE:CLDT) Q4 2024 Earnings Conference Call February 26, 2025 1:00 PM ET Company Participants Chris Daly – President-DG Public Relations Jeff Fisher – Chairman, President and Chief Executive Officer Dennis Craven – Executive Vice President and Chief Operating Officer Jeremy Wegner – Senior Vice President and Chief Financial Officer Conference Call Participants Gaurav Mehta – Alliance Global Partners Ari Klein – BMO Capital Markets Jonathan ...

Financial Performance - Portfolio Revenue Per Available Room (RevPAR) increased 4% to $129 in Q4 2024 compared to Q4 2023, with occupancy rising 5% to 74%[3] - Net loss applicable to common shareholders was $1.9 million in Q4 2024, an improvement from a net loss of $9.3 million in Q4 2023, resulting in a net loss per diluted share of $(0.08) versus $(0.23) last year[4] - Adjusted EBITDA rose to $21.1 million in Q4 2024, up from $20.8 million in Q4 2023[3] - Gross operating profit (GOP) margins improved by 150 basis points to 41% in Q4 2024, compared to 39% in Q4 2023[4] - Total revenue for Q4 2024 was $75,111,000, an increase of 3.8% compared to $72,278,000 in Q4 2023[45] - Room revenue increased to $68,528,000 in Q4 2024, up from $65,980,000 in Q4 2023, reflecting a growth of 3.7%[45] - The company reported a net loss attributable to common shareholders of $3,695,000 for Q4 2024, compared to a net loss of $10,966,000 in Q4 2023, indicating an improvement of 66.4%[45] - The company reported a total operating loss of $(218,000) for Q4 2024, an improvement from a loss of $(2,743,000) in Q4 2023[45] - For the three months ended December 31, 2024, the net loss attributable to common shares was $3,841,000, compared to a loss of $11,320,000 for the same period in 2023[47] - Adjusted Funds From Operations (FFO) for the three months ended December 31, 2024, was $10,030,000, up from $9,826,000 in the prior year, representing a 2.1% increase[47] - For the year ended December 31, 2024, the net income was $4,035,000, compared to $2,488,000 in 2023, indicating a year-over-year increase of 62.3%[47] - Adjusted Hotel EBITDA for the year ended December 31, 2024, was $111,219,000, slightly up from $110,933,000 in 2023, showing a marginal increase of 0.3%[49] Capital Expenditures and Debt Management - In Q4 2024, the company incurred capital expenditures of approximately $6 million[22] - The 2025 capital expenditure budget is approximately $26 million, including $16 million for renovations at three hotels[23] - The company reduced net debt by $29 million in 2024, lowering the overall leverage ratio from 25% to 23%[7] - As of December 31, 2024, the company had net debt of $389 million, down $29 million from the previous year, with total debt outstanding at $409 million[24] - The leverage ratio was approximately 23%, down from 25% on December 31, 2023[24] - The company repaid a $16 million maturing mortgage, enhancing financial flexibility for acquisitions[25] - Mortgage debt was reduced significantly to $157,211,000 in 2024 from $394,544,000 in 2023, a decrease of 60.2%[43] - Total liabilities decreased to $462,684,000 in 2024, down from $539,554,000 in 2023, a reduction of 14.3%[43] Hotel Operations and Market Performance - RevPAR growth in Silicon Valley hotels was up 14% in Q4 2024, significantly contributing to overall portfolio performance[10] - Chatham's occupancy for Q4 2024 was 74%, just shy of the 76% occupancy in Q4 2019, indicating a recovery in business travel demand[11] - The company anticipates continued RevPAR growth in 2025, driven by strong performance in technology-dependent markets[6] - The company expects a $6.8 million impact on 2025 Hotel EBITDA from hotels sold in 2024 and 2025[30] - 2025 guidance includes RevPAR of $125-$127 for Q1 and $143-$147 for the full year, with total hotel revenue projected at $298-$305 million[27] - Adjusted FFO for FY 2025 is projected to be between $52 million and $57 million, with adjusted FFO per diluted share of $1.01-$1.11[27] Shareholder Returns - The preferred share dividend declared was $0.41406 per share, and the common share dividend was $0.07 per share[26] - The company declared distributions per common share of $0.07 for both Q4 2024 and Q4 2023[45] Asset Management - The company owns 36 hotels totaling 5,475 rooms/suites across 15 states and the District of Columbia[29] - Total assets decreased to $1,254,681,000 as of December 31, 2024, down from $1,343,930,000 in 2023, a decline of 6.6%[43] - The company’s accumulated deficit increased to $(289,130,000) in 2024 from $(271,651,000) in 2023[43] - The company reported an impairment loss of $4,256,000 for both the three months and the year ended December 31, 2024, consistent with the previous year's figures[47]

Core Insights - Chatham Lodging (CLDT) reported quarterly funds from operations (FFO) of $0.20 per share, exceeding the Zacks Consensus Estimate of $0.18 per share, and showing an increase from $0.19 per share a year ago, resulting in an FFO surprise of 11.11% [1] - The company achieved revenues of $75.11 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.69% and increasing from $72.28 million year-over-year [2] - Chatham Lodging has outperformed consensus FFO estimates three times over the last four quarters and has topped consensus revenue estimates two times in the same period [2] Financial Performance - The current consensus FFO estimate for the upcoming quarter is $0.14 on revenues of $71.7 million, while the estimate for the current fiscal year is $1.12 on revenues of $329.39 million [7] - The stock has underperformed the market, losing approximately 9.6% since the beginning of the year compared to the S&P 500's gain of 1.3% [3] Market Outlook - The sustainability of Chatham Lodging's stock price movement will largely depend on management's commentary during the earnings call and future FFO expectations [3][4] - The Zacks Industry Rank indicates that the REIT and Equity Trust - Other sector is currently in the bottom 46% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Core Insights - Preferred shares issued by hospitality REITs have recently become significantly undervalued, presenting potential investment opportunities [1] Group 1: Investment Opportunities - The investment group European Small Cap Ideas focuses on high-quality small-cap investment opportunities in Europe, emphasizing capital gains and dividend income [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] Group 2: Analyst Position - The analyst has a beneficial long position in Chatham Lodging Trust's preferred shares, indicating confidence in the investment [1]

Financial Data and Key Metrics Changes - Chatham Lodging Trust reported Q3 2024 hotel EBITDA of $32.2 million and adjusted EBITDA of $29.6 million, with adjusted FFO of $0.35 per share [21] - RevPAR growth was 1.3% for Q3 2024, with GOP margin at 44.5% and hotel EBITDA margin at 37.1%, reflecting a decline of only 40 basis points from Q3 2023 [21] - The company ended the quarter with a net debt to LTM EBITDA ratio of 4.2x, significantly below pre-pandemic levels of 5.5x to 6x [22] Business Line Data and Key Metrics Changes - RevPAR in the seven predominantly leisure hotels rose 0.7%, with the Hampton Inn Portland, Maine, being the best performer at 8% growth [14] - The five tech-driven hotels in Silicon Valley and Bellevue achieved RevPAR growth of 8% in Q3, with ADR rising 5% to nearly $200 [9][16] - Overall, RevPAR for the portfolio exceeded 2019 levels for the second consecutive quarter, with a Q3 RevPAR of $150 [8] Market Data and Key Metrics Changes - Business travel showed steady growth across the country, with occupancy rates for key weekdays reaching 79% on Monday and 84% on Tuesday and Wednesday [12] - In October, RevPAR grew 6% with occupancy up 5% to 83% and ADR up 1% to $191 [15] - The company noted that 30 of its 38 comparable hotels produced positive RevPAR in October, indicating strong overall trends [15] Company Strategy and Development Direction - The company is focused on recycling capital by selling five hotels, expected to generate approximately $80 million, to pay down debt and invest in higher-quality assets [4][5] - Chatham aims to enhance internal growth by acquiring newer assets and reducing ongoing capital requirements, with a target leverage range of 4.75x to 5.25x [28][30] - The company is optimistic about the demand dynamics in Silicon Valley, driven by tech industry growth and corporate expansions [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of margins and overall performance, citing a shift in demand towards business travel post-summer [25] - The company anticipates RevPAR growth of 1% to 3% for Q4 2024, with adjusted EBITDA guidance of $19 million to $21 million [23] - Management noted that expense pressures have lessened, with labor costs returning to more historical increases [13] Other Important Information - The company has only $30 million of debt maturing over the next 12 months and $135 million available under its revolving credit facility [22] - Capital expenditures for 2024 are expected to be around $34 million, slightly below the budget of $37 million [20] Q&A Session Summary Question: Improvement in RevPAR in September and October - Management indicated that the improvement is likely due to a shift in demand towards corporate travel as leisure travel wanes post-summer [25] Question: Target leverage and asset sales - Management stated that a leverage target of 4.75x to 5.25x is reasonable, and they are actively pursuing asset sales to enhance growth [28][30] Question: Market conditions and pricing - Management noted that while there hasn't been dramatic movement in buyer-seller expectations, there is increased activity in the market [31]

Revenue and Performance - Total revenue for the three months ended September 30, 2024, was $87.2 million, a 0.5% increase from $86.7 million in the same period of 2023, primarily driven by a 1.3% increase in same property RevPAR[100]. - Same property RevPAR increased 1.3% for the three months ended September 30, 2024, with an ADR of $187.52 and occupancy at 79.9%[106]. - Total revenue for the nine months ended September 30, 2024, was $242.1 million, a 1.4% increase from $238.8 million for the same period in 2023[121]. - Room revenue for the nine months ended September 30, 2024, was $221.8 million, a 1.3% increase from $219.0 million for the same period in 2023[121]. - Same property RevPAR increased by 2.1% for the nine months ended September 30, 2024, driven by a 0.5% increase in ADR and a 1.6% increase in occupancy[127]. - The U.S. lodging industry RevPAR increased by 0.9% for the three months ended September 30, 2024, with expectations for modest increases for the remainder of the year[98]. Expenses and Costs - Hotel operating expenses rose by $0.5 million, or 1.2%, to $48.2 million for the three months ended September 30, 2024, compared to $47.7 million in the same period of 2023[107]. - Hotel operating expenses rose to $136.7 million for the nine months ended September 30, 2024, a 3.9% increase from $131.5 million for the same period in 2023[128]. - Food and beverage revenue decreased to $1.8 million for the three months ended September 30, 2024, down from $2.0 million in the same period of 2023, attributed to the sale of one hotel[101]. - Food and beverage revenue decreased by 5.7% to $5.8 million for the nine months ended September 30, 2024, compared to $6.2 million for the same period in 2023[122]. - Depreciation and amortization expense increased to $15.3 million for the three months ended September 30, 2024, compared to $14.7 million in the same period of 2023[111]. Income and Profitability - Net income decreased to $4.3 million for the three months ended September 30, 2024, down from $7.5 million for the same period in 2023[118]. - Net income decreased from $11.8 million to $5.9 million, a decline of 50% for the nine months ended September 30, 2024[141]. - Funds From Operations (FFO) attributable to common share and unit holders decreased from $49.258 million to $44.792 million, a drop of 9.5% for the nine months ended September 30, 2024[148]. - Adjusted FFO attributable to common share and unit holders decreased from $49.834 million to $45.466 million, a decline of 8.5% for the nine months ended September 30, 2024[148]. - EBITDA for the nine months ended September 30, 2024 was $74.636 million, a slight decrease from $75.166 million for the same period in 2023[152]. - Adjusted EBITDA for the nine months ended September 30, 2024 was $79.795 million, down from $80.248 million in 2023, a decrease of 0.6%[152]. Debt and Financial Position - The company maintained a leverage ratio of 24.3% as of September 30, 2024, with total debt of $438.5 million at a weighted-average interest rate of approximately 6.8%[91]. - Total debt principal and interest obligations were $545.6 million as of September 30, 2024, with $59.3 million payable within the next 12 months[164]. - The leverage ratio was approximately 24.3% as of September 30, 2024, with total debt of $438.5 million at an average interest rate of 6.8%[166]. - As of September 30, 2024, the Company had $265.0 million in floating rate debt with an average interest rate of 6.91%[183]. - A hypothetical 100 basis points increase in SOFR would result in additional interest of approximately $2.7 million annually, assuming the floating rate debt remains at $265.0 million[183]. Investments and Strategic Initiatives - The company’s investment strategy focuses on upscale extended-stay and premium-branded select-service hotels in diverse markets with high barriers to entry[90]. - The company expects to invest approximately $11.9 million on renovations and improvements during the remainder of 2024[161]. - The company sold one hotel in Denver, CO, and acquired one hotel in Phoenix, AZ, impacting revenue and operational metrics[99]. - The company sold one hotel in January 2024 and acquired another in May 2024, impacting overall revenue and expenses[120]. Cash Flow and Liquidity - Cash, cash equivalents, and restricted cash totaled $28.8 million as of September 30, 2024, a decrease of $56.9 million from December 31, 2023[158]. - Net cash flows provided by operating activities decreased by $5.4 million to $60.9 million during the nine months ended September 30, 2024[159]. - Net cash flows used in investing activities increased by $30.7 million to $(52.1) million during the nine months ended September 30, 2024[160]. - The Company may utilize cash on hand or borrowings to cover expenses during quarters with insufficient cash flow from operations due to seasonal fluctuations[178]. Tax and Regulatory Matters - Income tax expense remained at $0 for both the nine months ended September 30, 2024 and 2023, with a combined federal and state tax rate of approximately 25% expected for TRS Lessees[140]. Dividends - The company declared total dividends of $0.21 per common share for the nine months ended September 30, 2024, consistent with the previous year[163]. - Chatham declared dividends of $1.24218 per share for the 6.625% Series A Cumulative Redeemable Preferred Shares during the nine months ended September 30, 2024[176]. Risk Management - The Company’s interest rate risk management objectives include limiting the impact of interest rate changes on earnings and cash flows[181]. - Management companies may face competitive pressures that limit their ability to raise room rates despite inflationary pressures[177]. - The Company evaluates its accounting estimates and judgments on an ongoing basis, with significant policies disclosed in the Annual Report on Form 10-K for the year ended December 31, 2023[179].

Chatham Lodging (CLDT) reported $87.18 million in revenue for the quarter ended September 2024, representing a year-over-year increase of 0.5%. EPS of $0.35 for the same period compares to $0.11 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $87.63 million, representing a surprise of -0.52%. The company has not delivered EPS surprise, with the consensus EPS estimate being $0.35.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall ...

Financial Performance - Net income for Q3 2024 was $4.3 million, down from $7.5 million in Q3 2023, resulting in diluted net income per share of $0.05 versus $0.11 in the prior year[2]. - Adjusted EBITDA for Q3 2024 was $29.6 million, a decrease from $30.6 million in Q3 2023[2]. - The company reported a GOP margin of 44.5% in Q3 2024, compared to 44.9% in Q3 2023[3]. - Total revenue for the three months ended September 30, 2024, was $87,177 million, a 0.5% increase from $86,741 million in 2023[37]. - Net income for the three months ended September 30, 2024, was $4,339 million, down 42.9% from $7,499 million in 2023[39]. - EBITDA for the three months ended September 30, 2024, was $27,888 million, a decrease of 3.9% compared to $29,035 million in 2023[39]. - Total operating expenses for the three months ended September 30, 2024, were $74,659 million, an increase of 2.5% from $72,868 million in 2023[37]. - Funds From Operations (FFO) attributable to common share and unit holders for the three months ended September 30, 2024, was $17,169 million, down from $20,145 million in 2023[38]. - Adjusted FFO attributable to common share and unit holders for the three months ended September 30, 2024, was $17,599 million, compared to $20,156 million in 2023[38]. Revenue and Growth - RevPAR growth of 2.1% was achieved in Q3 2024, with a RevPAR of $150 for comparable hotels, compared to $148 in Q3 2023[2]. - October RevPAR accelerated to $158, marking a 6% increase compared to October 2023, representing the second highest October RevPAR since the company's inception[2]. - Q4 2024 revenue guidance is projected to be between $124 million and $127 million, reflecting a growth of 1% to 3% year-over-year[19]. - Total revenue for the nine months ended September 30, 2023, was $242,099,000, an increase from $238,832,000 in the prior year, reflecting a growth of about 1.1%[40]. - Hotel revenue for the three months ended September 30, 2023, was $86,894,000, compared to $86,460,000 in the same period last year, indicating a slight increase of 0.5%[40]. Debt and Assets - Total debt outstanding as of September 30, 2024, was $439 million, with a leverage ratio of approximately 24%[14]. - As of September 30, 2024, total assets amount to $1.295 billion, while total liabilities stand at $496.9 million[35]. - Mortgage debt decreased significantly to $171.5 million from $394.5 million[35]. - Cash and cash equivalents decreased to $19.3 million from $68.1 million as of December 31, 2023[35]. - The company reported an accumulated deficit of $(282.0) million as of September 30, 2024[36]. Hotel Operations - Hotel EBITDA margin for Q3 2024 was 37%, slightly down from 38% in Q3 2023[2]. - The company experienced an increase in hotel operating expenses, totaling $48,241 million for the three months ended September 30, 2024, compared to $47,668 million in 2023[37]. - Hotel EBITDA margin for the nine months ended September 30, 2023, was 36.0%, consistent with the margin of 37.1% from the previous year[40]. Capital Expenditures and Dividends - The company invested $6 million in capital expenditures during Q3 2024, with a year-to-date total of approximately $25 million[16]. - A common dividend of $0.07 per share was declared, payable on October 15, 2024[17]. - Distributions declared per common share remained stable at $0.07 for both the three months ended September 30, 2024, and 2023[37]. Future Projections - The company expects a net loss in Q4 2024 between $(6) million and $(4) million, translating to a loss per share of $(0.15) to $(0.11)[19]. - Adjusted EBITDA is anticipated to be in the range of $19 million to $21 million, with an Adjusted Hotel EBITDA margin of 30% to 32%[19]. - Funds From Operations (FFO) attributable to common share and unit holders for the three months ended December 31, 2024, is projected to be between $7,051,000 and $8,943,000[42]. - Adjusted FFO per diluted share is expected to range from $0.15 to $0.18 for the three months ended December 31, 2024[42]. - Total revenue for the three months ended December 31, 2024, is anticipated to be between $74,075,000 and $75,375,000[44]. - Adjusted Hotel EBITDA for the three months ended December 31, 2024, is forecasted to be between $22,140,000 and $24,032,000[44]. - Hotel EBITDA margin for the three months ended December 31, 2024, is expected to be between 30.0% and 32.0%[44].