Choice Hotels(US:CHH)2025-05-08 15:15Financial Performance - Net income for the three months ended March 31, 2025, was $44,534 thousand, a significant increase of 43% compared to $31,009 thousand for the same period in 2024[70] - Basic earnings per share increased to $0.95 for the three months ended March 31, 2025, compared to $0.63 in the prior year, representing a growth of approximately 51%[70] - For the three months ended March 31, 2025, consolidated revenues were $332.86 million, a slight increase from $331.95 million in the same period of 2024, representing a growth of 0.27%[75] - Operating income for the Hotel Franchising & Management segment was $103.39 million for Q1 2025, compared to $94.85 million in Q1 2024, reflecting an increase of 9.4%[75] - The Company reported income before income taxes of $59.76 million for Q1 2025, up from $40.21 million in Q1 2024, indicating a year-over-year increase of 48.5%[75] Debt and Financing - Total long-term debt increased to $1,874,821 thousand as of March 31, 2025, compared to $1,768,526 thousand at December 31, 2024, reflecting a growth of approximately 6%[56] - As of March 31, 2025, the Company had $445.5 million in variable interest rate debt instruments with an effective interest rate of 5.73%[148] - A hypothetical 10% change in the effective interest rate would result in an annual interest expense variation of $2.6 million[148] - The maximum unrecorded exposure related to limited payment guarantees was $38.2 million as of March 31, 2025[77] - The Company managed seven hotels under a long-term management arrangement as of March 31, 2025, with a maximum guarantee of $22 million for shortfalls in payments[79] - The Company has committed to provide financing of up to $5.8 million to franchisees for brand development efforts, contingent on certain conditions being met[79] Taxation - The effective income tax rate rose to 25.5% for the three months ended March 31, 2025, up from 22.9% in the same period of 2024, primarily due to state income taxes[65] Compensation and Expenses - Total share-based compensation expense rose to $10,415 thousand for the three months ended March 31, 2025, compared to $9,094 thousand in 2024, indicating an increase of about 14.5%[66] Assets and Investments - The Company held mutual funds valued at $43,434 thousand and money market funds valued at $4,945 thousand as of March 31, 2025, totaling $48,379 thousand in fair value measurements[62] - The Company’s investments in debt securities and common stock had a carrying value of $48.4 million and $49.3 million as of March 31, 2025, and December 31, 2024, respectively[147] - The fair value of the 2019 Senior Notes due 2029 was $377,460 thousand as of March 31, 2025, down from $371,600 thousand at December 31, 2024[64] - The Company reported an accumulated other comprehensive loss of $(6,130) thousand as of March 31, 2025, a slight improvement from $(6,193) thousand at December 31, 2024[57] - The Company’s Level 2 assets included money market funds valued at $4,945 thousand as of March 31, 2025, reflecting observable inputs in an active market[60] Shareholder Information - The weighted average shares of common stock outstanding for diluted earnings per share was 47,123 thousand for the three months ended March 31, 2025, compared to 49,640 thousand in 2024[70]