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 compensated for it, except from Seeking Alpha [2] Group 3 - Seeking Alpha clarifies that past performance does not guarantee future results and no 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 by any regulatory body [3]

Portfolio & Performance - RLJ's urban-centric portfolio is expected to outperform the industry, with urban markets representing over two-thirds of the portfolio[3, 91] - In Q4, RLJ achieved 2.2% RevPAR growth, placing it in the top quartile of its peers[5] - Urban hotels, comprising two-thirds of the portfolio, experienced 3.7% RevPAR growth[8] - January 2025 RevPAR increased 3.2%, and February RevPAR increased 3.9%, primarily driven by ADR growth[11] Growth Initiatives - Phase I and II initiatives are projected to generate $14 million to $18 million of incremental EBITDA[3, 91] - RLJ acquired Hotel Teatro in Denver for $35.5 million in June 2024, with stabilized margins of approximately 32%[3, 38, 41] - Phase 2 conversions are expected to generate +$5 million-$6 million in incremental EBITDA[55] Capital Allocation & Balance Sheet - RLJ has approximately $0.9 billion of liquidity, providing optionality for growth[3, 90, 91] - The company repurchased $12.0 million of shares YTD through February 2025 and increased the dividend by 50% in 2024[3, 8, 90, 91] - RLJ recycled $22 million of non-core disposition proceeds into share repurchases in 2024[90] ESG & Sustainability - RLJ is active in social contribution with over $4 million in donations[105] - 76% of RLJ's properties utilize an environmental management system[101] - 56% of trustees are ethnically diverse, with 33% female[105]

Core Insights - Pearl Gray is a proprietary investment fund and independent market research firm specializing in systematic analysis, focusing primarily on Bonds, Investment Funds, and REITs, with a primary emphasis on the Financials and Real Estate sectors [1] Group 1 - The mission of Pearl Gray is to discover actionable total return ideas that integrate rigorous academic theories, practical experience, and common sense [1] - The firm emphasizes that its published content is independent analysis and does not constitute financial advice [1][2] - Analysts at Pearl Gray disclose that they have no stock, option, or similar derivative positions in any of the companies mentioned, nor do they plan to initiate any such positions within the next 72 hours [1] Group 2 - The content provided by Pearl Gray on platforms like Seeking Alpha is intended to set the tone for discussions among subscribers rather than serve as financial advice [2] - Seeking Alpha clarifies that past performance is not indicative of future results and that no recommendations are made regarding the suitability of investments for particular investors [3]

I ventured into investing in high school in 2011, mainly in REITs, preferred stocks, and high-yield bonds, starting a fascination with markets and the economy that has not faded despite the years. More recently I have been combining long stock positions with covered calls and cash secured puts. I approach investing purely from a fundamental long-term point of view. On Seeking Alpha I mostly cover REITs and financials, with occasional articles on ETFs and other stocks driven by a macro trade idea.Analyst’s D ...

Revenue Performance - Total revenues increased by $3.7 million to $328.1 million for the three months ended March 31, 2025, compared to $324.4 million for the same period in 2024[119]. - Room revenue rose by $1.0 million to $267.7 million, driven by increased ADR from corporate and group travel[120]. - Average Daily Rate (ADR) increased to $204.38 in Q1 2025 from $200.17 in Q1 2024, while RevPAR rose to $141.39 from $139.13[121]. - Food and beverage revenue increased by $1.8 million to $37.5 million, primarily due to higher outlet and banquet revenue[122]. - Other revenue grew by $0.9 million to $23.0 million, mainly from increased parking, resort, and cancellation fees[123]. Expenses and Losses - Property operating expenses increased by $3.6 million to $217.1 million, attributed to a $3.9 million rise in expenses from comparable properties[124]. - Net income attributable to common shareholders was a loss of $2.9 million for Q1 2025, compared to a loss of $1.3 million in Q1 2024[118]. - Property operating expenses increased by $3.9 million to $215.1 million for the three months ended March 31, 2025, compared to $211.2 million in the same period of 2024, primarily due to higher wages and benefits, and increased sales and marketing expenses[125]. - Depreciation and amortization expense rose by $1.1 million to $45.8 million for the three months ended March 31, 2025, from $44.7 million in the same period of 2024, mainly due to recently renovated hotels[126]. - General and administrative expenses decreased by $2.5 million to $12.6 million for the three months ended March 31, 2025, compared to $15.1 million in the same period of 2024, primarily due to lower non-cash compensation expenses[128]. - Interest expense increased by $1.1 million to $27.6 million for the three months ended March 31, 2025, from $26.5 million in the same period of 2024, attributed to higher unhedged debt and the expiration of certain swaps[131]. Asset Management and Transactions - The company sold one hotel property for $24.3 million and refinanced a term loan to increase it to $300.0 million[112]. - The company recorded a net gain of $1.3 million from the sale of a hotel property for $24.3 million during the three months ended March 31, 2025, with no hotel sales in the same period of 2024[132]. - As of March 31, 2025, the company owned 95 hotel properties with approximately 21,200 rooms across 23 states and the District of Columbia[105]. Cash Flow and Financial Position - Funds from operations (FFO) decreased by $1.8 million to $41.7 million for the three months ended March 31, 2025, compared to $43.5 million in the same period of 2024[136]. - Adjusted FFO fell by $4.9 million to $46.9 million for the three months ended March 31, 2025, from $51.9 million in the same period of 2024[136]. - EBITDA increased by $2.1 million to $73.9 million for the three months ended March 31, 2025, compared to $71.7 million in the same period of 2024[141]. - Cash flow from operating activities totaled $16.3 million for the three months ended March 31, 2025, down from $20.8 million in the same period of 2024[144]. - As of March 31, 2025, the company had $372.4 million in cash, cash equivalents, and restricted cash reserves, a decrease from $433.3 million at December 31, 2024[143]. Debt and Interest Rate Management - As of March 31, 2025, the company had approximately $1.2 billion in total variable rate debt, representing 54.1% of total indebtedness, with a weighted-average interest rate of 5.09% per annum[153]. - The company held approximately $24.9 million in FF&E reserve accounts for future capital expenditures as of March 31, 2025[152]. - If market interest rates on variable rate debt increase by 1.00%, interest expense would decrease future earnings and cash flows by approximately $6.1 million annually[153]. - The estimated fair value of the company's fixed rate debt was $963.3 million as of March 31, 2025, with a potential decrease of approximately $25.1 million if interest rates rise by 1.00%[157]. - The company manages interest rate risk through fixed rate debt instruments and derivative financial instruments such as interest rate swaps[154]. - The total principal repayments for fixed rate debt as of March 31, 2025, amounted to $1,025 million, with a weighted-average interest rate of 3.90%[155]. - The total principal repayments for variable rate debt as of March 31, 2025, amounted to $1,206 million, with a weighted-average interest rate of 5.09%[155]. - The company aims to limit the impact of interest rate fluctuations on earnings and cash flows while lowering overall borrowing costs[154]. - The principal repayments for 2026 include a $300 million term loan, which was amended in April 2025[158]. - The company does not engage in derivative or interest rate transactions for speculative purposes[154].

RLJ Lodging Trust (RLJ) Q1 2025 Earnings Call May 05, 2025 11:00 AM ET Company Participants Nikhil Bhalla - SVP - Finance & TreasurerLeslie D. Hale - President & CEOSean Mahoney - Executive VP & CFOTyler Batory - Executive DirectorTom Bardenett - EVP & COOFloris van Dijkum - Managing Director Conference Call Participants Michael Bellisario - Senior Research AnalystAustin Wurschmidt - Senior Equity Research AnalystChris Woronka - AnalystChris Darling - Senior Analyst Operator Welcome to the RLJ Lodging Trust ...

Financial Data and Key Metrics Changes - The company achieved RevPAR growth of 1.6% in Q1 2025, driven by a 2.1% increase in ADR, slightly offset by a 0.5% decline in occupancy [5][17] - First quarter occupancy was 69.1%, average daily rate was $204.31, and RevPAR was $141.23 [17] - Total revenue growth was 1.2%, benefiting from a 3.8% increase in out-of-room spend [18][20] - Adjusted EBITDA for Q1 was $77.6 million, and adjusted FFO per diluted share was $0.31 [20][22] Business Line Data and Key Metrics Changes - Group segment was the best performing, with revenue growth of 10% driven by strong citywide events [8][18] - Urban hotels achieved RevPAR growth of 3.6%, with weekday urban RevPAR growing by 4.9% [7][8] - The leisure segment saw a 2% increase in revenues, with urban leisure outperforming at 3% growth [9] Market Data and Key Metrics Changes - Strong RevPAR growth was noted in urban markets such as San Jose (14.1%), Houston CBD (9.9%), Philadelphia (26.4%), Pittsburgh (12.6%), and Louisville (10.3%) [18] - International demand remains soft, representing less than 3% of revenues, primarily in markets like New York and South Florida [13] Company Strategy and Development Direction - The company is focused on capital recycling and strengthening its balance sheet, including opportunistic asset sales and share repurchases [6][10] - The company is optimistic about the long-term outlook for lodging fundamentals, supported by consumer preferences for experiences and a favorable operating environment for urban markets [14][15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that fundamentals have moderated and uncertainty persists due to macroeconomic risks, leading to an adjustment in full-year guidance [11][12] - The company expects RevPAR growth for 2025 to range between negative 1% and positive 1% [25] - The booking window has shortened, with a noted increase in cancellations primarily in the government segment [47][48] Other Important Information - The company ended Q1 with over $800 million in liquidity and $2.2 billion in debt, maintaining a strong balance sheet [22] - The company has a new $250 million share repurchase program approved by the Board [22] Q&A Session Summary Question: Can you provide insights on April's performance and how it compared to expectations? - Management indicated that April was expected to be slightly positive but came in lower than anticipated due to elongated spring break and softening government demand [30][31] Question: What is the current state of the balance sheet and capital markets? - The bank group market remains strong, with capacity for top-quality sponsors, while high-yield issuance has seen some widening in spreads [34][35] Question: What are the trends in the group segment and future bookings? - The group segment is performing well, with a healthy booking pace for the year, although cancellations were noted primarily in the government sector [78] Question: How is the company addressing the uncertainty in the transaction market? - The company is taking an opportunistic approach to asset sales, with one additional asset currently under consideration [92]

Core Insights - RLJ Lodging reported revenue of $328.12 million for the quarter ended March 2025, reflecting a 1.1% increase year-over-year, but a slight miss of 0.34% against the Zacks Consensus Estimate of $329.24 million [1] - The company achieved an EPS of $0.31, a significant improvement from -$0.01 in the same quarter last year, resulting in a positive surprise of 3.33% compared to the consensus estimate of $0.30 [1] Revenue Breakdown - Other revenue was reported at $22.95 million, slightly below the estimated $23.07 million, but showing a year-over-year increase of 3.9% [4] - Food and beverage revenue reached $37.51 million, exceeding the average estimate of $37.03 million, with a year-over-year growth of 5.1% [4] - Room revenue was $267.65 million, marginally below the estimated $268.06 million, but still reflecting a 0.4% increase compared to the previous year [4] Stock Performance - RLJ Lodging's shares have returned 6.6% over the past month, outperforming the Zacks S&P 500 composite, which saw a 0.4% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Financial Performance - RLJ Lodging reported quarterly funds from operations (FFO) of $0.31 per share, exceeding the Zacks Consensus Estimate of $0.30 per share, but down from $0.33 per share a year ago, indicating a 6.06% year-over-year decline [1] - The company achieved an FFO surprise of 3.33% for the quarter, following a previous surprise of 13.79% when it reported $0.33 per share against an expectation of $0.29 [1][2] - RLJ Lodging's revenues for the quarter were $328.12 million, slightly missing the Zacks Consensus Estimate by 0.34%, but up from $324.41 million year-over-year, reflecting a 2.21% increase [2] Market Performance - RLJ Lodging shares have declined approximately 28.9% since the beginning of the year, contrasting with the S&P 500's decline of 3.3% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating it is expected to perform in line with the market in the near future [6] Future Outlook - The current consensus FFO estimate for the upcoming quarter is $0.51 on revenues of $374.31 million, and for the current fiscal year, it is $1.52 on revenues of $1.39 billion [7] - The outlook for the REIT and Equity Trust - Other industry, to which RLJ Lodging belongs, is currently in the bottom 37% of Zacks industries, suggesting potential challenges ahead [8]

Financial Performance - Comparable RevPAR increased by 1.6% to $141.23 compared to the prior year[4] - Total revenues for Q1 2025 were $328.1 million, reflecting a 1.1% increase from $324.4 million in Q1 2024[5] - Net income decreased by 33.2% to $3.2 million from $4.7 million in the same period last year[5] - Comparable Hotel EBITDA was $85.3 million, down 3.4% from $88.3 million in Q1 2024[5] - Adjusted EBITDA for Q1 2025 was $77.6 million, a decrease of 2.5% compared to $79.6 million in Q1 2024[5] - Funds from Operations (FFO) attributable to common shareholders for Q1 2025 was $41.7 million, down from $43.5 million in Q1 2024, a decrease of 4.1%[38] - Adjusted FFO for Q1 2025 was $46.9 million, compared to $51.9 million in Q1 2024, a decline of 9.6%[38] - Comparable Hotel EBITDA margin for Q1 2025 was 26.1%, down from 27.3% in Q1 2024[45] - The company reported a net loss attributable to common shareholders of $2.9 million for Q1 2025, compared to a loss of $1.3 million in Q1 2024[37] Revenue Outlook - The updated full-year 2025 outlook projects Comparable RevPAR growth between -1.0% to +1.0%[13] - The forecast for Comparable Hotel EBITDA is between $365.5 million to $395.5 million for FY 2025[13] - The company expects full-year 2025 EBITDA to range between $316.3 million and $346.3 million[46] - The projected Adjusted FFO per common share for full-year 2025 is estimated to be between $1.38 and $1.58[47] Liquidity and Debt - The company had approximately $847.5 million in total liquidity as of March 31, 2025[9] - Total assets as of March 31, 2025, were $4.8 billion, a slight decrease from $4.9 billion as of December 31, 2024[34] - Total liabilities decreased to $2.57 billion as of March 31, 2025, from $2.59 billion as of December 31, 2024[34] - Total mortgage debt amounts to $206 million with a weighted average interest rate of 4.74%[49] - Corporate debt totals $2.025 billion with a weighted average interest rate of 4.52%[49] - The company has a $500 million borrowing capacity on the Revolver, with an unused commitment fee of 0.25% annually[51] - In April 2025, the company repaid the $100 million outstanding balance on the Revolver using proceeds from upsizing the $200 million term loan to $300 million[51] - The $200 million term loan maturing in 2026 was refinanced to $300 million, extending the maturity to April 2030[52] - The weighted average interest rate for total debt is 4.54%[49] - The company has fixed-rate senior notes due 2026 and 2029, each totaling $500 million with interest rates of 3.75% and 4.00% respectively[49] - The floating interest rates are hedged with interest rate swaps[50] - The company has a total of $1.5 billion in term loans maturing in 2026 and 2027[49] - The company has two one-year extension options for the refinanced term loan, subject to certain conditions[52] Shareholder Actions - The company repurchased 2.7 million shares for approximately $24.3 million year-to-date[4] - The company sold a non-core hotel for $24.3 million, achieving an 18.0x multiple based on projected 2025 Hotel EBITDA[7]