Chatham Lodging Trust(US:CLDT)2025-11-05 19:29Revenue Performance - Total revenue for the three months ended September 30, 2025, was $78.4 million, a decrease of 10.1% compared to $87.2 million for the same period in 2024[118] - Total revenue for the nine months ended September 30, 2025, was $227.3 million, a decrease of $14.8 million or 6.1% compared to $242.1 million for the same period in 2024[137] - Five hotels were sold during the reporting period, contributing zero revenue in 2025, which impacted overall revenue figures[117] Room Revenue - Room revenue comprised 91.7% of total revenue for the three months ended September 30, 2025, down from 92.0% in 2024[118] - Room revenue comprised 91.4% of total revenue for the nine months ended September 30, 2025, down from 91.6% in 2024[138] Operating Expenses - Hotel operating expenses decreased by $4.2 million, or 8.7%, to $44.0 million for the three months ended September 30, 2025, from $48.2 million in 2024[124] - Hotel operating expenses decreased by $7.9 million, or 5.7%, to $128.8 million for the nine months ended September 30, 2025, from $136.7 million in 2024[144] - Total property taxes, ground rent, and insurance expenses decreased from $6.5 million in 2024 to $5.3 million in 2025, attributed to hotel sales and successful property tax appeals[128] Net Income - Net income for the three months ended September 30, 2025, was $3.6 million, compared to $4.3 million for the same period in 2024, reflecting a decrease of 16.3%[135] - Net income for the nine months ended September 30, 2025, was $10.6 million, an increase of 79.7% compared to $5.9 million for the same period in 2024[156] Debt and Leverage - The leverage ratio as of September 30, 2025, was 20.6%, with total debt of $343.2 million at a weighted-average interest rate of approximately 6.29%[111] - Total debt principal and interest obligations amounted to $455.9 million as of September 30, 2025, with $21.6 million payable within the next 12 months[180] - The leverage ratio was approximately 20.6% as of September 30, 2025, with total debt of $343.2 million at an average interest rate of 6.29%[181] Interest Expense - Interest expense decreased by $3.8 million, or 16.2%, from $23.3 million for the nine months ended September 30, 2024, to $19.5 million for the same period in 2025[153] - Interest on cash and cash equivalents and other income decreased from $1.6 million for the nine months ended September 30, 2024, to $0.2 million in 2025, a decline of 87.5%[152] Cash Flow - Net cash flows provided by operating activities decreased by $9.1 million to $51.8 million for the nine months ended September 30, 2025, compared to $60.9 million in 2024[175] - Net cash flows provided by investing activities increased by $84.5 million to $32.4 million during the nine months ended September 30, 2025, compared to $(52.1) million in 2024[176] Asset Management - The company intends to acquire quality assets at attractive prices while remaining prudently leveraged, utilizing various funding sources[110] - The company expects to invest approximately $5.7 million on renovations and improvements for existing hotels during the remainder of 2025[177] - The company sold six hotels and acquired one hotel during the nine months ended September 30, 2025, impacting revenue and operating expenses significantly[136] Tax and Valuation - Income tax expense remained unchanged at zero for the nine months ended September 30, 2025, and 2024, due to cumulative three-year taxable losses[155] - The company continues to recognize a full valuation allowance equal to 100% of the gross deferred tax assets due to uncertainty in utilizing these assets[155] Market Conditions - The U.S. lodging industry RevPAR decreased by 1.4% for the three months ended September 30, 2025, indicating a slowdown in industry performance[116] - Same property RevPAR decreased 2.5% for the three months ended September 30, 2025, driven by a 0.6% decrease in occupancy and a 1.8% decrease in ADR[123] - Same property RevPAR increased by 0.2% for the nine months ended September 30, 2025, driven by a 1.0% increase in occupancy[142] Shareholder Returns - The company declared total dividends of $0.27 per common share for the nine months ended September 30, 2025, compared to $0.21 in 2024[179] - During the nine months ended September 30, 2025, the company repurchased 275,693 common shares at a weighted-average price of $7.17, totaling approximately $2.0 million[186] - As of September 30, 2025, there was approximately $49.9 million in common shares available for issuance under the Dividend Reinvestment and Stock Purchase Plan[184] Financial Estimates and Risks - Management estimates and assumptions in financial statements are based on reasonable circumstances, but actual results could differ from these estimates[195] - The company aims to limit the impact of interest rate changes on earnings and cash flows by primarily borrowing at fixed rates or the lowest variable rates available[197] - Inflation may affect the company's expenses and costs of capital investments, including construction, labor, and materials[193] - The company evaluates its estimates and judgments on an ongoing basis, with significant accounting policies disclosed in the Annual Report[195] - The company may utilize cash on hand or borrowings to cover expenses during quarters with insufficient cash flow from operations due to seasonal fluctuations[194]