Braemar Hotels & Resorts(BHR) - 2025 Q1 - Quarterly Results

First Quarter 2025 Results Braemar Hotels & Resorts reported its Q1 2025 results, highlighting RevPAR growth, strategic capital management, and operational transitions, alongside a declared dividend First Quarter 2025 Financial and Operating Highlights In the first quarter of 2025, Braemar Hotels & Resorts reported a 4.2% increase in Comparable RevPAR to $404, driven by a 4.5% rise in ADR, despite a slight 0.3% dip in occupancy. The company posted a net loss of $(2.5) million, or $(0.04) per share, while Adjusted FFO was $0.40 per share. Key operational activities included extending a mortgage loan for the Ritz-Carlton Lake Tahoe and redeeming $26.2 million of non-traded preferred stock Q1 2025 Key Financial Metrics (in millions, except per share and percentage data) | Metric | Value | Change (YoY) | | :--- | :--- | :--- | | Comparable RevPAR | $404 | ▲ 4.2% | | Comparable ADR | $626 | ▲ 4.5% | | Comparable Occupancy | 64.6% | ▼ 0.3% | | Net Loss (to common stockholders) | $(2.5) million | - | | Net Loss per Diluted Share | $(0.04) | - | | Adjusted FFO per Diluted Share | $0.40 | - | | Adjusted EBITDAre | $63.0 million | - | | Comparable Hotel EBITDA | $70.8 million | ▲ 5.3% | - The company ended the quarter with $81.7 million in cash and cash equivalents and $54.5 million in restricted cash[5] - During the quarter, the company extended its mortgage loan for the 170-room Ritz-Carlton Lake Tahoe[4] - Approximately $26.2 million of non-traded preferred stock was redeemed in cash during the quarter[5] Operational Updates The company transitioned the 415-room Sofitel Chicago Magnificent Mile to a franchise structure in May 2025. Under this new arrangement, the hotel will continue to operate under the Sofitel brand but will be managed by Remington Hospitality. This move does not require an immediate property improvement plan, though renovations to the lobby, restaurant, and meeting spaces are planned over the next two years - The Sofitel Chicago Magnificent Mile was converted to a franchise structure, managed by Remington Hospitality, effective early May 2025[6] - The conversion is expected to increase the property's value as the management agreement with Remington is terminable on sale[13] Capital Structure and Debt Management As of March 31, 2025, Braemar had total assets of $2.1 billion and $1.2 billion in loans with a blended average interest rate of 7.1%. Approximately 77% of the debt is effectively floating. The company successfully extended the mortgage for the Ritz-Carlton Lake Tahoe and refinanced loans for five hotels, totaling $363 million, which addressed its final 2025 debt maturity and lowered interest costs - Total assets were $2.1 billion and total loans were $1.2 billion as of March 31, 2025[7] - The blended average interest rate on total loans is 7.1%, with 23% of debt effectively fixed and 77% effectively floating[7] - A $363 million refinancing was completed for five hotels, addressing the final 2025 debt maturity. The new loan has a floating rate of SOFR + 2.52%[9] - The mortgage loan for the Ritz-Carlton Lake Tahoe was extended with a $10 million paydown, and the new spread is SOFR + 3.25%[8] Dividends The Board of Directors declared a quarterly cash dividend of $0.05 per common share for the second quarter of 2025. This dividend, equating to an annual rate of $0.20 per share, is payable on July 15, 2025, to stockholders of record as of June 30, 2025. The dividend policy will be reviewed quarterly - A quarterly cash dividend of $0.05 per share was declared for Q2 2025[10] - The dividend will be paid on July 15, 2025, to stockholders of record as of June 30, 2025[10] Management Commentary CEO Richard J. Stockton expressed satisfaction with the solid Q1 performance, highlighting the 4.2% RevPAR growth as an important inflection point. He noted strong performance in the urban portfolio, with 11.3% RevPAR growth, boosted by the presidential inauguration, while the resort portfolio saw nearly 2% RevPAR growth. Stockton emphasized progress on the shareholder value creation plan, including the redemption of approximately $90 million in non-traded preferred stock and the value-enhancing conversion of the Sofitel Chicago - CEO highlighted the 4.2% RevPAR growth as the second consecutive quarter of growth, signaling an 'important inflection point'[13] - The urban hotel portfolio delivered 11.3% RevPAR growth, benefiting from the presidential inauguration in Washington, D.C.[13] - Resort properties continued their recovery with nearly 2% RevPAR growth[13] Consolidated Financial Statements This section presents Braemar Hotels & Resorts' consolidated financial statements, including balance sheets and statements of operations, detailing asset, liability, equity, revenue, and expense figures for the reported periods Consolidated Balance Sheets As of March 31, 2025, Braemar's total assets stood at $2.10 billion, a slight decrease from $2.14 billion at year-end 2024. Total liabilities also decreased marginally to $1.40 billion from $1.41 billion. Cash and cash equivalents decreased to $81.7 million from $135.5 million over the same period Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $2,098,029 | $2,136,059 | | Cash and cash equivalents | $81,689 | $135,465 | | Investments in hotel properties, net | $1,769,945 | $1,778,686 | | Total Liabilities | $1,402,332 | $1,413,889 | | Indebtedness, net | $1,202,668 | $1,210,018 | | Total Equity | $235,477 | $237,362 | Consolidated Statements of Operations For the first quarter of 2025, total hotel revenue was $215.8 million, down from $219.1 million in Q1 2024. Operating income decreased to $36.7 million from $42.5 million year-over-year. The company reported a net loss attributable to common stockholders of $(2.5) million, or $(0.04) per share, compared to a net income of $3.5 million, or $0.05 per share, in the prior-year quarter Q1 Statement of Operations Highlights (in thousands, except per share data) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total hotel revenue | $215,820 | $219,079 | | Total operating expenses | $179,080 | $176,612 | | Operating Income | $36,740 | $42,467 | | Net Income (Loss) | $10,672 | $15,482 | | Net (Loss) Income to Common Stockholders | $(2,547) | $3,524 | | (Loss) Income Per Share - Diluted | $(0.04) | $0.05 | Non-GAAP Financial Measures and Reconciliations This section provides reconciliations of the company's non-GAAP financial measures, including EBITDA, EBITDAre, Adjusted EBITDAre, FFO, and Adjusted FFO, to their most directly comparable GAAP measures Reconciliation to EBITDA, EBITDAre, and Adjusted EBITDAre In Q1 2025, the company's Adjusted EBITDAre was $63.0 million, a decrease from $66.2 million in Q1 2024. The reconciliation from net income of $10.7 million includes adjustments for interest, depreciation, taxes, and other items such as transaction costs and unrealized losses on derivatives EBITDAre Reconciliation (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income (loss) | $10,672 | $15,482 | | EBITDAre | $60,361 | $68,837 | | Adjusted EBITDAre | $63,003 | $66,192 | Reconciliation to FFO and Adjusted FFO For Q1 2025, Adjusted Funds From Operations (AFFO) available to common stockholders was $29.1 million, or $0.40 per diluted share. This is a slight decrease from $30.3 million, or $0.42 per diluted share, in the same period last year. The calculation starts with net income and adjusts for non-cash items like depreciation and other specific charges FFO and Adjusted FFO (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income (loss) attributable to common stockholders | $(2,547) | $3,524 | | FFO available to common stockholders | $19,867 | $27,982 | | Adjusted FFO available to common stockholders | $29,114 | $30,260 | | Adjusted FFO per diluted share | $0.40 | $0.42 | Debt and Capital Structure Details This section details the company's debt profile, including its composition by rate type, maturity schedule, and the calculation of its total enterprise value Summary of Indebtedness As of March 31, 2025, Braemar's total debt was approximately $1.22 billion. The majority of the debt (92.9%) is floating-rate, with a weighted average interest rate of 7.27%, while 7.1% is fixed-rate at 4.50%. The overall weighted average interest rate, adjusted for caps, is 7.07% Indebtedness Summary (as of March 31, 2025, in thousands) | Debt Type | Amount (in thousands) | Percentage | Weighted Avg. Interest Rate | | :--- | :--- | :--- | :--- | | Fixed-Rate Debt | $86,250 | 7.1% | 4.50% | | Floating-Rate Debt | $1,134,513 | 92.9% | 7.27% | | Total Debt | $1,220,763 | 100.0% | 7.07% | Indebtedness by Maturity Assuming all extension options are exercised, the company has no debt maturing in 2025. Maturities are scheduled for 2026 ($129.7 million), 2027 ($74.5 million), 2028 ($246.6 million), 2029 ($407.0 million), and thereafter ($363.0 million) Debt Maturity Schedule (in thousands) | Maturity Year | Principal Due | | :--- | :--- | | 2025 | $0 | | 2026 | $129,663 | | 2027 | $74,500 | | 2028 | $246,600 | | 2029 | $407,000 | | Thereafter | $363,000 | | Total | $1,220,763 | Total Enterprise Value As of March 31, 2025, Braemar's Total Enterprise Value (TEV) was calculated at approximately $1.78 billion. This value is derived from its market capitalization of $184.1 million, preferred stock, total indebtedness, and net working capital Total Enterprise Value Calculation (in thousands) | Component | Value | | :--- | :--- | | Market capitalization | $184,076 | | Preferred stock (All Series) | $501,167 | | Indebtedness | $1,220,763 | | Joint venture partner's share of debt | $(27,650) | | Net working capital | $(99,530) | | Total Enterprise Value (TEV) | $1,778,826 | Hotel Portfolio Performance This section analyzes the performance of the company's hotel portfolio, detailing key performance indicators, EBITDA, and performance segmented by property type and trailing twelve months Key Performance Indicators (KPIs) For the first quarter of 2025, the company's entire portfolio of 15 hotels achieved a comparable RevPAR of $404, a 4.2% increase year-over-year. This was driven by a 4.5% increase in ADR to $626, while occupancy saw a minor decrease of 0.3% to 64.6%. Hotels not under renovation showed slightly stronger performance with a 4.5% RevPAR increase Comparable KPIs for All Hotels (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | % Variance | | :--- | :--- | :--- | :--- | | RevPAR | $403.99 | $387.90 | 4.15% | | Occupancy | 64.58% | 64.80% | (0.34)% | | ADR | $625.59 | $598.60 | 4.51% | - The 13 hotels not under renovation during the quarter reported a comparable RevPAR increase of 4.49% year-over-year[41] Hotel Net Income & EBITDA In Q1 2025, comparable Hotel EBITDA for all properties increased by 5.3% to $70.8 million compared to the prior year. The comparable Hotel EBITDA margin improved slightly to 32.42%. For hotels not under renovation, the comparable Hotel EBITDA grew by 6.0% to $71.2 million, with a margin of 32.92% Comparable Hotel EBITDA for All Hotels (Q1 2025 vs Q1 2024, in thousands) | Metric | Q1 2025 | Q1 2024 | % Variance | | :--- | :--- | :--- | :--- | | Comparable total hotel revenue | $218,409 | $209,698 | 4.15% | | Comparable hotel EBITDA | $70,799 | $67,208 | 5.34% | | Comparable hotel EBITDA margin | 32.42% | 32.05% | 0.37% | Performance by Property Type (Resort vs. Urban) In Q1 2025, the Urban properties portfolio significantly outperformed the Resort portfolio in terms of growth. Urban properties saw a 38.9% increase in Hotel EBITDA and an 11.3% increase in RevPAR. In contrast, Resort properties had a more modest 2.0% increase in Hotel EBITDA and a 1.9% increase in RevPAR Comparable Performance by Property Type (Q1 2025 vs Q1 2024, in thousands, except RevPAR) | Property Type | Metric | Q1 2025 | % Variance (YoY) | | :--- | :--- | :--- | :--- | | Resort Properties | RevPAR | $800.22 | ▲ 1.92% | | | Hotel EBITDA | $62,392K | ▲ 2.02% | | Urban Properties | RevPAR | $166.59 | ▲ 11.25% | | | Hotel EBITDA | $8,407K | ▲ 38.94% | Trailing Twelve Months (TTM) Performance For the trailing twelve months ending March 31, 2025, the company's comparable portfolio generated $715.0 million in total revenue and $182.6 million in Hotel EBITDA, resulting in a Hotel EBITDA margin of 25.54%. The comparable RevPAR for the period was $320.53 Comparable TTM Performance (ended March 31, 2025, in thousands, except RevPAR) | Metric | Value (in thousands, except RevPAR) | | :--- | :--- | | Total hotel revenue | $715,027 | | Hotel net income | $33,388 | | Hotel EBITDA | $182,624 | | Hotel EBITDA margin | 25.54% | | RevPAR | $320.53 | Other Disclosures This section outlines anticipated capital expenditures for various properties, which may lead to operational displacement Anticipated Capital Expenditures The company has planned significant capital expenditures for 2025 that may cause displacement at several properties. Projects are scheduled for Hotel Yountville throughout the year, Park Hyatt Beaver Creek from Q2 to Q4, and Cameo Beverly Hills in Q3 and Q4 - Significant capital expenditures are planned for 2025 at Hotel Yountville, Park Hyatt Beaver Creek, and Cameo Beverly Hills, which could lead to displacement[75]