Chatham Lodging Trust(CLDT) - 2024 Q2 - Quarterly Results

Financial Performance - Net income for Q2 2024 was $7.0 million, down from $9.4 million in Q2 2023, with diluted net income per share at $0.10 compared to $0.15[2] - Adjusted FFO for Q2 2024 was $19.9 million, down from $21.8 million in Q2 2023, with adjusted FFO per diluted share at $0.39 versus $0.43[2] - Total revenue for Q2 2024 was $86.479 million, an increase of 2.4% compared to $84.476 million in Q2 2023[35] - Room revenue reached $79.044 million in Q2 2024, up from $77.486 million in Q2 2023, reflecting a growth of 2.0%[35] - Net income attributable to Chatham Lodging Trust for Q2 2024 was $6.848 million, down from $9.144 million in Q2 2023, representing a decrease of 25.1%[35] - Adjusted FFO attributable to common share and unit holders for Q2 2024 was $19.941 million, compared to $21.813 million in Q2 2023, a decrease of 8.6%[36] - Basic income per common share for Q2 2024 was $0.10, down from $0.15 in Q2 2023, a decline of 33.3%[35] - For the three months ended June 30, 2024, net income was $7,034,000 compared to $9,365,000 for the same period in 2023, representing a decrease of approximately 25%[37] - Adjusted EBITDA for the three months ended June 30, 2024, was $31,359,000, slightly down from $31,851,000 in the same period of 2023, indicating a decrease of about 1.5%[38] Revenue and Occupancy Trends - Portfolio Revenue Per Available Room (RevPAR) increased 4% to $151 compared to Q2 2023, exceeding 2019 levels for the first time since the pandemic[2] - Business travel demand is gaining momentum, contributing to a portfolio-wide occupancy rate of 82%, the highest since Q3 2019[7] - RevPAR for Silicon Valley and Bellevue hotels increased 10% over Q2 2023, reaching a post-pandemic high of $152[2] - Portfolio-wide occupancy was up every week in Q2 2024 compared to the previous year, indicating strong demand trends[7] - For Q3 2024, Chatham expects RevPAR to be between $148 and $152, with a growth rate of 0% to 2.5%[19] - Total hotel revenue guidance for Q3 2024 is projected to be between $86 million and $88 million[19] - Hotel revenue for the three months ended September 30, 2024, is anticipated to be between $85,900,000 and $87,800,000, reflecting a slight increase compared to previous periods[41] Debt and Financial Position - The company repaid $261 million of maturing debt in Q2 2024, enhancing its balance sheet for future growth opportunities[2] - Chatham's net debt as of June 30, 2024, was $442 million, with total debt outstanding at $452 million and an average interest rate of 6.8%[16] - The company repaid $169 million in mortgages during the second quarter, including three mortgages on Residence Inn properties in Silicon Valley[15] - Chatham's leverage ratio was approximately 26%, based on net debt to hotel investments at cost[16] - Mortgage debt was reduced to $190.373 million in Q2 2024, down from $394.544 million at the end of 2023, a decrease of 51.8%[33] - Total liabilities decreased to $504.585 million as of June 30, 2024, compared to $539.554 million at the end of 2023, a reduction of 6.5%[34] - Cash and cash equivalents decreased to $10.595 million as of June 30, 2024, from $68.130 million at the end of 2023, a decline of 84.4%[33] Capital Expenditures and Future Plans - The company incurred capital expenditures of $8 million in Q2 2024, with a year-to-date total of approximately $19 million[17] - Chatham has 29 unencumbered properties available for future growth opportunities[17] - The company plans to opportunistically sell assets in 2024 to reinvest proceeds into additional hotel investments[4] - The company is positioned to benefit from a declining interest rate environment, with nearly 60% of its debt based on floating rates[17] - For the three months ended September 30, 2024, net income is projected to be between $2,600,000 and $5,100,000, with a significant variance expected in performance[39] - Adjusted FFO attributable to common share and unit holders is expected to range from $15,900,000 to $18,400,000 for the three months ended September 30, 2024[39] Dividends - A preferred dividend of $0.41406 per share and a common dividend of $0.07 per share were declared for payment on July 15, 2024[18] - The company declared distributions of $0.07 per common share for Q2 2024, consistent with Q2 2023[35] Operational Efficiency - Hotel EBITDA margin for Q2 2024 was 39%, down from 41% in Q2 2023, while gross operating profit margin decreased to 46% from 48%[3] - The company plans to maintain a focus on operational efficiency and cost management to improve margins in the upcoming quarters[39] - Interest expense, including amortization of deferred fees, was $7,723,000 for the three months ended June 30, 2024, compared to $6,442,000 in the same period of 2023, marking an increase of approximately 19.9%[38]