[PART I — FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Presents the unaudited condensed consolidated financial statements for the quarter ended March 31, 2025 Condensed Consolidated Balance Sheet Highlights (As of March 31, 2025) | Metric | March 31, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $2,897,459 thousand | $2,896,230 thousand | | Total Liabilities | $1,529,622 thousand | $1,511,184 thousand | | Total Stockholders' Equity | $920,439 thousand | $909,545 thousand | Condensed Consolidated Statements of Operations Highlights (Three Months Ended March 31) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total Revenues | $184,478 thousand | $188,142 thousand | | Operating Income | $19,827 thousand | $23,489 thousand | | Net Income | $623 thousand | $2,833 thousand | | Net Loss Attributable to Common Stockholders | $(4,684) thousand | $(2,116) thousand | | Loss Per Share (Basic and Diluted) | $(0.04) | $(0.02) | Condensed Consolidated Statements of Cash Flows Highlights (Three Months Ended March 31) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $25,850 thousand | $28,150 thousand | | Net Cash Used in Investing Activities | $(16,872) thousand | $(9,986) thousand | | Net Cash (Used in) Provided by Financing Activities | $(1,004) thousand | $6,419 thousand | [Note 1 - Description of Business](index=10&type=section&id=NOTE%201%20-%20DESCRIPTION%20OF%20BUSINESS) Details the company's structure as a self-managed lodging REIT with a portfolio of 97 premium franchise hotels - As of March 31, 2025, the company's portfolio consisted of **97 lodging properties with 14,555 guestrooms** in 25 states[22](index=22&type=chunk) - The company owns a **51% controlling interest** in a 41-property joint venture with GIC and 90% equity interests in two other joint ventures[22](index=22&type=chunk) - The company has elected to be taxed as a REIT and leases all its properties to taxable REIT subsidiaries (TRSs)[24](index=24&type=chunk) [Note 3 - Investments in Lodging Property, Net](index=14&type=section&id=NOTE%203%20-%20INVESTMENTS%20IN%20LODGING%20PROPERTY%2C%20NET) Outlines the company's net investments in lodging properties, totaling $2.73 billion as of March 31, 2025 Investments in Lodging Property, net (in thousands) | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Lodging buildings and improvements | $2,875,145 | $2,867,256 | | Land | $415,574 | $415,574 | | Furniture, fixtures and equipment | $299,578 | $296,476 | | Less accumulated depreciation | $(941,731) | $(904,678) | | **Total Investments in lodging property, net** | **$2,727,510** | **$2,746,765** | - In February 2025, the company sold a parcel of undeveloped land in San Antonio, TX for **$1.3 million**[51](index=51&type=chunk) - In February 2024, the GIC Joint Venture sold the 127-guestroom Hyatt Place in Dallas (Plano), TX for **$10.3 million**[52](index=52&type=chunk) [Note 5 - Debt](index=16&type=section&id=NOTE%205%20-%20DEBT) Summarizes the company's total debt of $1.43 billion and recent refinancing activities Debt Summary (in thousands) | Debt Type | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Revolving debt | $155,000 | $135,000 | | Term loans | $921,037 | $921,037 | | Convertible notes | $287,500 | $287,500 | | Mortgage loans | $63,822 | $64,470 | | **Total Debt** | **$1,427,359** | **$1,408,007** | - In March 2025, the company entered into a **$275 million delayed draw term loan** to refinance its convertible notes maturing in February 2026[86](index=86&type=chunk) - After considering interest rate derivative agreements, **65% of the company's debt was fixed-rate** as of March 31, 2025[63](index=63&type=chunk) [Note 8 - Equity](index=25&type=section&id=NOTE%208%20-%20EQUITY) Details the company's equity structure, share count changes, and capital management programs Changes in Common Stock (Q1 2025) | Description | Shares | | :--- | :--- | | Beginning shares outstanding | 108,435,663 | | Common Unit redemptions | 2,923,797 | | Grants under Equity Plan | 1,253,885 | | Forfeitures & shares acquired | (401,577) | | **Ending shares outstanding** | **112,221,768** | - On April 29, 2025, the Board of Directors authorized a new share repurchase program for up to **$50.0 million** of the company's common stock[119](index=119&type=chunk) - The company has a **$200.0 million ATM program**, but no shares have been sold under it to date[114](index=114&type=chunk) [Note 16 - Subsequent Events](index=32&type=section&id=NOTE%2016%20-%20SUBSEQUENT%20EVENTS) Describes key capital allocation decisions made after the first quarter, including dividends and a share buyback - On April 24, 2025, the Board declared a quarterly cash dividend of **$0.08 per common share/unit**, along with dividends for its preferred stock[156](index=156&type=chunk) - On April 29, 2025, a new share repurchase program was authorized for up to **$50.0 million** of common stock, with no expiration date[157](index=157&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analyzes Q1 2025 financial results, portfolio performance, liquidity, and capital resources Key Operating Metrics (Q1 2025 vs Q1 2024) | Metric | Total Portfolio Change | Same-Store Portfolio Change | | :--- | :--- | :--- | | Total Revenues | -1.9% | +0.5% | | Occupancy | +0.7% | +0.8% | | ADR | +0.2% | +0.7% | | RevPAR | +0.9% | +1.5% | Non-GAAP Financial Performance (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | AFFO per share/unit | $0.22 | $0.24 | | Adjusted EBITDAre | $45.0 million | $48.8 million | - The company secured a **$275 million delayed draw term loan** to refinance convertible notes maturing in February 2026, enhancing its liquidity position[200](index=200&type=chunk) - Anticipated capital expenditures for 2025 are projected to be between **$60.0 million and $70.0 million** on a pro rata basis[209](index=209&type=chunk) [Results of Operations](index=39&type=section&id=Results%20of%20Operations) Compares Q1 2025 performance to Q1 2024, noting a total revenue decrease but same-store RevPAR growth - Total portfolio room revenue decreased by **$3.7 million**, reflecting a $4.3 million decline from property sales, offset by a $0.6 million increase in same-store revenues[177](index=177&type=chunk) - **Same-store RevPAR increased by 1.5% YoY**, driven by a 0.8% increase in occupancy and a 0.7% increase in ADR[178](index=178&type=chunk) - Interest expense decreased by **$1.6 million (7.5%)** due to lower average interest rates and a lower average outstanding debt balance[181](index=181&type=chunk)[183](index=183&type=chunk) [Non-GAAP Financial Measures](index=42&type=section&id=Non-GAAP%20Financial%20Measures) Provides reconciliations for key non-GAAP metrics, showing a year-over-year decline in FFO, AFFO, and Adjusted EBITDAre FFO and AFFO Reconciliation (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss applicable to common shares/units | $(5,287) | $(2,432) | | Real estate-related depreciation | $36,663 | $35,603 | | **FFO applicable to common shares/units** | **$23,196** | **$25,488** | | Adjustments for AFFO | $4,163 | $4,508 | | **AFFO applicable to common shares/units** | **$27,359** | **$29,996** | Adjusted EBITDAre Reconciliation (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income | $623 | $2,833 | | EBITDAre | $58,449 | $61,199 | | Adjustments | $(13,442) | $(12,398) | | **Adjusted EBITDAre** | **$45,007** | **$48,801** | [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) Details the company's $1.43 billion debt profile, proactive maturity management, and 2025 capital expenditure plans - Total debt outstanding as of March 31, 2025 was **$1.427 billion**, spread across Operating Partnership debt ($717.5 million) and Joint Venture debt ($709.9 million)[207](index=207&type=chunk) - The company has scheduled debt principal payments of $0.9 million in the next twelve months, plus a **$45.6 million loan maturing in June 2025** and **$287.5 million in convertible notes maturing in February 2026**[200](index=200&type=chunk) - Net cash from operating activities decreased to **$25.9 million** in Q1 2025 from $28.2 million in Q1 2024[210](index=210&type=chunk)[214](index=214&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Focuses on interest rate risk from variable-rate debt and mitigation strategies using derivative agreements - The company's main market risk is **interest rate risk** from variable-rate debt indexed to SOFR[215](index=215&type=chunk) - As of March 31, 2025, the company had six interest rate swap agreements with a total notional amount of **$625.0 million** to manage this risk[216](index=216&type=chunk) - After accounting for swaps, **65% of consolidated debt is fixed-rate**, and a 1.0% change in interest rates would affect annual cash flows by about $5.0 million[217](index=217&type=chunk)[218](index=218&type=chunk) [Item 4. Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms the effectiveness of disclosure controls and procedures as of March 31, 2025 - Management concluded that **disclosure controls and procedures were effective** as of the end of the quarter[220](index=220&type=chunk) - **No material changes** in internal control over financial reporting were identified during the quarter[221](index=221&type=chunk) [PART II — OTHER INFORMATION](index=51&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) States that no pending litigation is expected to have a material adverse effect on the company - There are currently **no pending legal actions** that the company believes would have a material adverse effect on its financial position or results of operations[223](index=223&type=chunk) [Item 1A. Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) Updates risk factors, adding a new disclosure regarding the discretionary nature of its share repurchase program - A new risk factor was added related to the April 2025 authorization of a **$50.0 million share repurchase program**[224](index=224&type=chunk) - The company states there is **no assurance it will repurchase shares**, as the program is discretionary and depends on multiple factors[224](index=224&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Reports no unregistered sales of equity securities during the quarter - None[225](index=225&type=chunk) [Item 3. Defaults Upon Senior Securities](index=51&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Reports no defaults upon senior securities during the quarter - None[226](index=226&type=chunk) [Item 4. Mine Safety Disclosures](index=51&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) States this item is not applicable to the company - Not applicable[227](index=227&type=chunk) [Item 5. Other Information](index=51&type=section&id=Item%205.%20Other%20Information) Discloses no adoption, modification, or termination of director or officer trading plans during the quarter - **No adoptions, modifications, or terminations** of director or officer trading plans under Rule 10b5-1 occurred during the quarter[228](index=228&type=chunk) [Item 6. Exhibits](index=52&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with the Form 10-Q, including a new term loan agreement and required CEO/CFO certifications - A key exhibit filed is the **Delayed Draw Term Loan Agreement** dated March 27, 2025[229](index=229&type=chunk) - Certifications from the CEO and CFO pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act are also included as exhibits[229](index=229&type=chunk)

Core Insights - The company reported a 1.5% increase in same-store RevPAR for Q1 2025, indicating effective expense management despite low revenue growth [1][5] - A $275 million term loan was secured to refinance convertible notes maturing in February 2026, eliminating debt maturity risk until 2027 [1][13] - The Board of Directors authorized a $50 million share repurchase program to return capital to shareholders [2][12] Financial Performance - The net loss attributable to common stockholders was $4.7 million, or $0.04 per diluted share, compared to a net loss of $2.1 million, or $0.02 per diluted share in Q1 2024 [4][28] - Total revenues decreased to $184.5 million from $188.1 million year-over-year [4][35] - Adjusted EBITDAre fell to $45.0 million from $48.8 million in the same period last year [5][33] Operational Metrics - Pro forma RevPAR increased by 0.9% to $124.99, with pro forma ADR rising by 0.8% to $173.06 and occupancy increasing by 0.1% to 72.2% [5][44] - Same-store RevPAR grew by 1.5% to $126.26, with same-store ADR up by 0.7% to $174.03 and occupancy increasing by 0.8% to 72.5% [5][44] - Hotel EBITDA margin contracted to 35.6%, down from 36.0% in the prior year [4][5] Capital Structure and Liquidity - The company has outstanding debt of $1.1 billion with a weighted average interest rate of 4.63%, and 71% of this debt is at a fixed rate [16] - Total liquidity available is approximately $310 million, including unrestricted cash and cash equivalents [16] - The average length to maturity of the company's debt will increase to nearly four years following the refinancing [15] Market Outlook - Despite near-term softness in lodging demand due to macroeconomic volatility, the company remains confident in long-term fundamentals and expects a multi-year growth cycle in the lodging industry [2][18] - Capital expenditure expectations for 2025 have been reduced to $60 million to $70 million [18]

Core Insights - The article compares Summit Hotel Properties (INN) and Omega Healthcare Investors (OHI) to determine which stock is more attractive to value investors [1] Valuation Metrics - Both INN and OHI currently hold a Zacks Rank of 2 (Buy), indicating a positive earnings outlook due to favorable analyst estimate revisions [3] - INN has a forward P/E ratio of 4.59, significantly lower than OHI's forward P/E of 12.66 [5] - INN's PEG ratio is 0.98, while OHI's PEG ratio is 2.11, suggesting INN is more favorably valued in terms of expected earnings growth [5] - INN's P/B ratio is 0.33, compared to OHI's P/B of 2.17, indicating that INN is trading at a lower market value relative to its book value [6] - These valuation metrics contribute to INN receiving a Value grade of A, while OHI has a Value grade of C [6] Conclusion - Based on the valuation figures, INN is considered the superior value option compared to OHI [7]

Core Viewpoint - Summit Hotel Properties, Inc. has declared cash dividends for both common and preferred stock, reflecting a strong commitment to returning value to shareholders [1][2][3]. Dividend Announcements - The Company declared a cash dividend of $0.08 per share for the first quarter ended March 31, 2025, which translates to an annualized dividend yield of 8.2% based on the closing stock price on April 23, 2025 [1]. - A cash dividend of $0.390625 per share for the 6.25% Series E Cumulative Redeemable Preferred Stock and $0.3671875 per share for the 5.875% Series F Cumulative Redeemable Preferred Stock has been authorized for the dividend period ending on May 31, 2025 [2]. - Additionally, a cash distribution of $0.328125 per unit for the unregistered 5.25% Series Z Cumulative Perpetual Preferred Units has been declared for the distribution period ending on May 31, 2025 [3]. Company Overview - Summit Hotel Properties, Inc. is a publicly-traded real estate investment trust focused on owning premium-branded lodging properties, primarily in the Upscale segment of the lodging industry [4]. - As of April 24, 2025, the Company's portfolio includes 97 assets, with 53 wholly owned properties and a total of 14,555 guestrooms located across 25 states [4].

Group 1 - The stock of Summit Hotel Properties, Inc. (INN) is experiencing significant attention due to high implied volatility in the options market, particularly for the Jun 20, 2025 $7.50 Call option [1] - Implied volatility indicates the market's expectation of future price movement, suggesting that investors anticipate a significant change in the stock's price, potentially due to an upcoming event [2] - Summit Hotel Properties currently holds a Zacks Rank 3 (Hold) in the REIT and Equity Trust - Other industry, which is in the bottom 37% of the Zacks Industry Rank, with recent downward revisions in earnings estimates from analysts [3] Group 2 - The high implied volatility surrounding Summit Hotel Properties may indicate a developing trading opportunity, as options traders often seek to sell premium on such options to capture decay [4]

AUSTIN, Texas, March 31, 2025 /PRNewswire/ -- Summit Hotel Properties, Inc. (NYSE: INN) (the "Company") today announced that it has successfully closed on a new $275 million senior unsecured term loan (the "Term Loan"). The Company expects to utilize future proceeds from the Term Loan to repay the majority of the Company's outstanding $287.5 million 1.50% Convertible Senior Notes maturing in February 2026. The Term Loan includes a delayed draw feature available to the Company through March 1, 2026, that wil ...

Company Overview - Summit Hotel Properties, Inc. is a publicly traded real estate investment trust focused on owning premium-branded lodging facilities with efficient operating models primarily in the upscale segment of the lodging industry [2] - As of March 26, 2025, the Company's portfolio consisted of 97 assets, 53 of which are wholly owned, with a total of 14,554 guestrooms located in 25 states [2] Financial Reporting - The Company will report financial results for the first quarter of 2025 on Wednesday, April 30, 2025, after the market closes [1] - A quarterly conference call will be conducted on Thursday, May 1, 2025, at 9:00 AM ET [1] Conference Call Access - To access the conference call, pre-registration is required, and registrants will receive a confirmation with dial-in details [4] - A live webcast of the conference call will be available, with a replay accessible in the Investors section of the Company's website until July 31, 2025 [4]

Core Viewpoint - The comparison between Summit Hotel Properties (INN) and National Health Investors (NHI) indicates that INN currently offers better value for investors based on various financial metrics and rankings [1][3][6]. Valuation Metrics - Summit Hotel Properties has a Zacks Rank of 2 (Buy), while National Health Investors has a Zacks Rank of 3 (Hold), suggesting a more favorable earnings outlook for INN [3]. - INN has a forward P/E ratio of 6.19, significantly lower than NHI's forward P/E of 15.80, indicating that INN may be undervalued [5]. - The PEG ratio for INN is 1.32, while NHI's PEG ratio is 4.67, further supporting the notion that INN is a better value option considering expected earnings growth [5]. - INN's P/B ratio stands at 0.45, compared to NHI's P/B of 2.42, reinforcing the assessment of INN as undervalued relative to its book value [6]. - Based on these valuation metrics, INN holds a Value grade of A, while NHI has a Value grade of D, highlighting INN's superior position in terms of value investment [6].

Core Viewpoint - Summit Hotel Properties (INN) and Gaming and Leisure Properties (GLPI) are being compared to determine which stock offers better value for investors at the current time [1] Group 1: Valuation Metrics - INN has a forward P/E ratio of 6.77, while GLPI has a forward P/E of 12.71 [5] - INN's PEG ratio is 1.44, indicating a more favorable valuation compared to GLPI's PEG ratio of 3.31 [5] - INN's P/B ratio is 0.51, significantly lower than GLPI's P/B of 2.92, suggesting that INN is undervalued relative to its book value [6] Group 2: Investment Ratings - Both INN and GLPI currently hold a Zacks Rank of 2 (Buy), indicating a positive earnings outlook for both stocks [3] - INN has been assigned a Value grade of A, while GLPI has a Value grade of C, highlighting INN's superior valuation metrics [6][7]

Financial Data and Key Metrics Changes - In 2024, the company achieved a full year AFFO per share growth of nearly 6% [5] - Pro forma RevPAR growth increased by 1.8% for the year, surpassing the industry average for the third consecutive year [6][24] - Pro forma hotel EBITDA increased by 2% year-over-year, despite a low RevPAR growth environment [6] - Adjusted FFO for full year 2024 was $119.2 million, an increase of nearly 6% versus 2023, with AFFO rising to $0.96 per share from $0.92 per share [28] Business Line Data and Key Metrics Changes - Urban and suburban portfolios saw RevPAR increases of nearly 3% and 4% respectively, outpacing the total industry by 100 and 220 basis points [24] - Resort and small-town metro assets experienced a modest decline in RevPAR, primarily due to Hurricane Helene and ongoing renovations [26] - Pro forma hotel EBITDA for the fourth quarter was $60.4 million, representing a modest decline compared to the previous year [32] Market Data and Key Metrics Changes - Key markets such as New Orleans, Indianapolis, Chicago, Houston, Minneapolis, and Tampa significantly outpaced the pro forma portfolio in the fourth quarter [29] - The company identified six markets poised for outsized growth, including Baltimore, Louisville, Minneapolis, New Orleans, San Francisco, and San Jose, with five markets achieving over 13% RevPAR growth [9][10] Company Strategy and Development Direction - The company continues to focus on disciplined acquisitions and dispositions, acquiring two hotels for $96 million with an attractive capitalization rate of 8.8% [11][12] - A strategic capital investment approach has improved the overall quality of the portfolio, with a RevPAR market share index increasing nearly 300 basis points over the last three years [14] - The company anticipates continued top-line growth in 2025, driven by robust group demand and the recovery of business transient travel [18][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in controlling operating expenses despite more challenging year-over-year comparisons in 2025 [21] - The lodging sector is expected to benefit from a long-term consumer shift towards experiences over material goods, reinforcing a stable demand outlook [22] - The company expects RevPAR growth of 1% to 3% for 2025, with adjusted EBITDA projected between $184 million and $198 million [39] Other Important Information - The company has a total liquidity of approximately $350 million and a leverage ratio nearly a full turn lower than when it initiated its disposition activity [36] - A quarterly common dividend of $0.08 per share was declared, representing a yield of approximately 5% [37] Q&A Session Summary Question: Booking pace and business-oriented demand outlook - Management noted that January was impacted by weather disruptions, but February showed strong RevPAR growth due to Super Bowl demand and catch-up bookings [44][46] Question: Future acquisition strategy - The company plans to remain active in transactions, focusing on high-quality assets and being opportunistic in capital recycling [49][51] Question: RevPAR guidance for 2025 - Management expects continued strength in urban and suburban markets, with a more balanced growth profile compared to 2024 [55] Question: Management company changes and expense management - Changes were made to improve operational efficiency, and management is pleased with the current performance of management companies [60][61] Question: Acquisitions and underwriting returns - The company is excited about recent acquisitions, expecting higher unlevered IRRs compared to pre-pandemic levels [64] Question: Corporate customer trends - Gradual changes in business travel patterns were noted, with a return of larger national accounts [70] Question: Labor market stability - Management indicated that labor markets remain stable, with expectations for continued effective expense management [76][77] Question: Disposition strategy - The company balances capital needs and brand considerations when deciding on asset sales [79][81] Question: GIC joint venture growth - The joint venture continues to perform well, with an appetite for further growth in 2025 [85] Question: Capital markets environment for transactions - The capital markets are improving, making financing accessible for acquisitions [88]