EARNINGS SUPPLEMENTAL Q4 2024 FEBRUARY 2025 OVERVIEW | Key Statistics (1) (2) | | | --- | --- | | Properties | 95 | | Hotel Rooms | 21,156 | | Share Price | $10.21 | | Total Shares and Units Outstanding | 154.1 M | | Market Capitalization | $1.6 B | | Preferred Equity | $0.3 B | | Net Debt Outstanding | $1.8 B | | Total Enterprise Value (TEV) | $3.7 B | | Total Capitalization | $4.1 B | HOTEL TONNELLE NEW ORLEANS Debt Maturity Schedule (3) (1) For properties owned as of December 31, 2024; excludes Chateau L ...

RLJ Lodging Trust (NYSE:RLJ) Q4 2024 Earnings Conference Call February 26, 2025 10:00 AM ET Company Participants Nikhil Bhalla - Senior Vice President Finance and Treasurer Leslie Hale - President and CEO Sean Mahoney - Executive Vice President and CFO Tom Bardenett - Chief Operating Officer Conference Call Participants Michael Bellisario - Baird Jonathan Jenkins - Oppenheimer Austin Wurschmidt - KeyBanc Gregory Miller - Truist Dori Kesten - Wells Fargo Floris van Dijkum - Compass Point Chris Woronka - Deut ...

Core Insights - RLJ Lodging reported revenue of $329.99 million for Q4 2024, a year-over-year increase of 3.2% and exceeding the Zacks Consensus Estimate of $325.49 million by 1.38% [1] - The company achieved an EPS of $0.33, significantly up from $0.01 a year ago, with an EPS surprise of 13.79% compared to the consensus estimate of $0.29 [1] Revenue Breakdown - Other revenue was reported at $22.71 million, slightly below the average estimate of $23.05 million, reflecting a year-over-year increase of 2.9% [4] - Food and beverage revenue reached $39.59 million, surpassing the estimated $37.21 million, marking a 9.9% increase year-over-year [4] - Room revenue totaled $267.69 million, exceeding the average estimate of $264.21 million, with a year-over-year change of 2.3% [4] Stock Performance - RLJ Lodging's shares have declined by 7.9% over the past month, while the Zacks S&P 500 composite has decreased by 1.8% [3] - The stock currently holds a Zacks Rank of 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Performance - RLJ Lodging reported quarterly funds from operations (FFO) of $0.33 per share, exceeding the Zacks Consensus Estimate of $0.29 per share, but down from $0.34 per share a year ago, representing an FFO surprise of 13.79% [1] - The company posted revenues of $329.99 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.38%, compared to $319.71 million in the same quarter last year [2] Market Performance - RLJ Lodging shares have declined approximately 9.1% since the beginning of the year, while the S&P 500 has gained 1.7% [3] - The current consensus FFO estimate for the upcoming quarter is $0.32 on revenues of $333.17 million, and for the current fiscal year, it is $1.57 on revenues of $1.4 billion [7] Industry Outlook - The REIT and Equity Trust - Other industry, to which RLJ Lodging belongs, is currently ranked in the bottom 46% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of RLJ Lodging may be influenced by the overall outlook for the industry, as empirical research shows a strong correlation between near-term stock movements and trends in estimate revisions [5][8]

Financial Performance - Fourth Quarter Comparable RevPAR increased by 2.2% to $137.53, while Total Revenues rose by 3.2% to $330.0 million[4] - Full Year Comparable RevPAR increased by 2.0% to $144.72, with Total Revenues reaching $1.4 billion, a 3.3% increase[4] - Adjusted EBITDA for the fourth quarter was $81.1 million, reflecting a 2.4% increase year-over-year[4] - For the three months ended December 31, 2024, total revenues increased to $329,989,000 from $319,708,000 in the same period of 2023, representing a growth of approximately 0.4%[36] - Room revenue for the year ended December 31, 2024, was $1,121,586,000, up from $1,095,028,000 in 2023, indicating an increase of about 2.4%[36] - Net income for the three months ended December 31, 2024, was $5,511,000, a decrease of 31.5% from $8,040,000 in the same period of 2023[43] - EBITDA for the year ended December 31, 2024, was $344,655,000, up 2.4% from $337,414,000 in 2023[43] - Total revenue for the three months ended December 31, 2024, was $329,989,000, an increase of 3.99% compared to $319,708,000 in 2023[47] - Comparable Hotel EBITDA Margin for the year ended December 31, 2024, was 29.1%, down from 30.3% in 2023[47] Net Income and Loss - The Company reported a net loss attributable to common shareholders of $0.9 million for the fourth quarter, compared to a net income of $1.7 million in the prior year[6] - Net income attributable to common shareholders for the year ended December 31, 2024, was $42,906,000, down from $51,290,000 in 2023, a decline of about 16.3%[36] - The Company reported a net loss attributable to common shareholders of $903,000 for the three months ended December 31, 2024, compared to a net income of $1,656,000 in the same period of 2023[36] Shareholder Returns - The Board declared a quarterly cash dividend of $0.15 per common share for the fourth quarter, payable on January 15, 2025[12] - The Company repurchased 2.3 million shares for $22.0 million at an average price of $9.39 per share during 2024[10] - The Company has approximately $217.3 million remaining capacity in its share buyback program[10] Liquidity and Debt - The Company ended the year with $0.9 billion in liquidity, including approximately $409.8 million in unrestricted cash[11] - The company reported a consolidated debt balance of $2,231,000,000 as of December 31, 2024, with a weighted average interest rate of 4.58%[52] - The company has a borrowing capacity of $500,000,000 on its Revolver, with an unused commitment fee of 0.25% annually[53] Acquisitions and Market Strategy - The Company completed two acquisitions in 2024, including the Hotel Teatro for $35.5 million and the Wyndham Boston Beacon Hill for $125.0 million[7] - The company plans to continue its market expansion and new product development strategies in 2025[48] Future Projections - The Company expects Comparable RevPAR growth of 1.0% to 3.0% and Adjusted EBITDA between $345.0 million and $375.0 million for FY 2025[14] - Adjusted EBITDA for the year ended December 31, 2025, is projected to be between $345,000,000 and $375,000,000[48] - Funds from Operations (FFO) for the year ended December 31, 2025, is expected to range from $206,000,000 to $234,000,000[49] - Adjustments related to joint ventures for the year ended December 31, 2025, are estimated at $1,400,000[48] Asset and Liability Changes - Total assets decreased to $4,883,879,000 as of December 31, 2024, from $4,919,295,000 in 2023, a reduction of approximately 0.7%[34] - The Company’s total liabilities increased slightly to $2,585,602,000 as of December 31, 2024, compared to $2,568,505,000 in 2023, an increase of about 0.7%[34] - The Company’s cash and cash equivalents decreased to $409,809,000 as of December 31, 2024, from $516,675,000 in 2023, a decline of approximately 20.7%[34] Impact of Sales - The Company sold the Residence Inn Merrillville in May 2024 and the Fairfield Inn & Suites Denver Cherry Creek in September 2024, impacting comparable hotel adjustments[32] - The Company acquired Hotel Teatro in June 2024, which is included in the comparable adjustments for the three and twelve months ended December 31, 2024[30]

Core Viewpoint - RLJ Lodging Trust is identified as a strong value stock, currently undervalued based on various financial metrics, and holds a favorable earnings outlook [3][7]. Valuation Metrics - RLJ Lodging Trust has a P/E ratio of 6.21, significantly lower than the industry average of 14.85 [3]. - The company has a PEG ratio of 1.98, compared to the industry average of 2.05, indicating a favorable earnings growth outlook [4]. - RLJ's P/B ratio stands at 0.78, which is attractive against the industry's average P/B of 1.75 [5]. - The P/CF ratio for RLJ is 5.34, well below the industry average of 15.74, suggesting it is undervalued based on cash flow [6]. Investment Outlook - The combination of RLJ's strong valuation metrics and positive earnings outlook positions it as one of the market's strongest value stocks [7].

Group 1 - The article discusses the investment potential of preferred shares in hotel REITs, specifically highlighting RLJ Lodging Trust as an interesting option [1] - RLJ Lodging Trust is identified as a US-based hotel REIT, with a focus on capital gains and dividend income for continuous cash flow [1] - The investment group European Small Cap Ideas offers exclusive research on appealing Europe-focused investment opportunities, emphasizing high-quality small-cap ideas [1] Group 2 - The article mentions the existence of two model portfolios: the European Small Cap Ideas portfolio and the European REIT Portfolio, along with weekly updates and educational content [1] - An active chat room is available for discussions on the latest developments of the portfolio holdings [1]

Core Viewpoint - The upgrade of RLJ Lodging to a Zacks Rank 2 (Buy) reflects a positive outlook on its earnings potential, which could lead to an increase in its stock price [2][5]. Earnings Estimates and Revisions - For the fiscal year ending December 2024, RLJ Lodging is expected to earn $1.53 per share, representing a decrease of 7.8% from the previous year [11]. - Over the past three months, the Zacks Consensus Estimate for RLJ Lodging has increased by 2%, indicating a trend of rising earnings estimates [11]. Zacks Rating System - The Zacks Rank stock-rating system classifies stocks based on earnings estimate revisions, with RLJ Lodging positioned in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns [12][13]. - The Zacks rating system has a strong track record, with Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [7]. Market Impact - The correlation between earnings estimate revisions and stock price movements is significant, as institutional investors often adjust their valuations based on these estimates, leading to stock price fluctuations [3][9]. - The upgrade in RLJ Lodging's rating is indicative of an improvement in its underlying business, which is expected to be recognized by investors through increased stock prices [4].

Core Viewpoint - RLJ Lodging (RLJ) is currently viewed as a better value opportunity compared to National Health Investors (NHI) based on various financial metrics and analyst outlooks [1] Valuation Metrics - RLJ Lodging has a Zacks Rank of 2 (Buy), indicating a strong earnings estimate revision trend, while National Health Investors has a Zacks Rank of 3 (Hold) [3] - RLJ's forward P/E ratio is 6.76, significantly lower than NHI's forward P/E of 15.72, suggesting RLJ may be undervalued [5] - RLJ has a PEG ratio of 2.02, while NHI's PEG ratio is 4.64, indicating RLJ's expected EPS growth rate is more favorable [5] - RLJ's P/B ratio is 0.82, compared to NHI's P/B of 2.43, further supporting RLJ's valuation advantage [6] Value Grades - RLJ holds a Value grade of A, while NHI has a Value grade of D, highlighting RLJ's superior valuation metrics [7] - The improving earnings outlook for RLJ enhances its attractiveness as a value investment [7]

Core Viewpoint - Value investing remains a preferred strategy for identifying strong stocks across various market conditions, focusing on traditional valuation metrics to uncover undervalued stocks with profit potential [1] Company Summary: RLJ Lodging Trust (RLJ) - RLJ Lodging Trust is currently under observation by investors, holding a Zacks Rank of 2 (Buy) and a Value grade of A, with a P/E ratio of 6.60 compared to the industry average of 14.98 [2] - The stock's Forward P/E has fluctuated between 5.54 and 7.21 over the past year, with a median of 6.28 [2] - RLJ's P/B ratio stands at 0.82, significantly lower than the industry's average P/B of 1.71, with a 52-week range of 0.70 to 0.96 and a median of 0.80 [3] - The stock is considered undervalued based on its metrics and strong earnings outlook, making it an attractive value stock at present [4] - RLJ has a PEG ratio of 1.97, which is close to the industry average of 2.14, with a 12-month range of 0.70 to 2.03 and a median of 0.80 [7] - The P/CF ratio for RLJ is 5.56, which is appealing compared to the industry's average P/CF of 15.39, with a 52-week range of 4.74 to 6.48 and a median of 5.44 [8]