Chatham Lodging Trust Reinstates Common Dividend, Declares Preferred Dividend

Rhea-AI Summary

Chatham Lodging Trust (NYSE: CLDT) has announced the reinstatement of its common dividend, declaring $0.07 per share for Q4 2022, marking the first dividend since early 2020. The dividend is payable on January 17, 2023, to shareholders of record as of December 30, 2022. The company highlighted its strong recovery, achieving approximately $32 million in free cash flow since April 2020 and reducing net debt by $323 million or 42% since March 31, 2020. Chatham aims to pay regular quarterly dividends in 2023, confident in the recovery of business travel.

Positive

• Reinstatement of common dividend at $0.07 per share, first since early 2020.
• Generated approximately $32 million of free cash flow from April 2020 to September 2022.
• Achieved the highest operating margins among lodging REITs in 2022.
• Reduced net debt by $323 million (42%) since March 31, 2020.

Negative

• None.

Performance Leadership Positions Chatham to Reward Shareholders

WEST PALM BEACH, Fla.--(BUSINESS WIRE)-- Chatham Lodging Trust (NYSE: CLDT), a lodging real estate investment trust (REIT) that invests in upscale, extended-stay hotels and premium-branded, select-service hotels and owns 39 hotels, today announced that it has reinstated a fourth quarter common dividend, its first since early 2020. Chatham announced that its board of trustees declared a common share dividend of $0.07 per common share, as well as a preferred share dividend of $0.41406 per share, payable on January 17, 2023, to shareholders of record as of December 30, 2022.

“Nothing in history compares to the sharp downturn that occurred during the pandemic, but using experience gained through several down-cycles, we worked diligently to maintain liquidity, protect our balance sheet and position Chatham for success coming out of the pandemic,” commented Jeffrey H. Fisher, Chatham’s president and chief executive officer. “With assuredness, I can say we accomplished much.”

Highlights include:

• Produced superior operating performance during the pandemic that resulted in Chatham being the second fastest hotel REIT to be corporate cash flow positive and have generated approximately $32 million of free cash flow from April 2020 to September 2022.
  • Producing in 2022 the highest operating margins of all lodging REITs.
• Successfully recycled hotels to enhance its portfolio quality that will increase returns and drive future earnings growth.
  • Sold five hotels with an average age of 26 years, yielding 6 percent for $147 million, and avoided near-term capital spend of $12 million on those hotels.
  • Acquired three hotels and built one hotel for total investment of $173 million with no near-term capital needs and an expected yield of 8 percent.
• Strengthened the company’s balance sheet by reducing net debt by $323 million or 42 percent since March 31, 2020, the second highest reduction of all hotel REITs.
  • Currently have zero borrowings outstanding on the recently completed $215 million revolving credit facility and $90 million term loan.

“Given all of the above, as well as the belief that our high-quality portfolio will generate strong cash flow returns as business travel continues its recovery in 2023, we are confident in our business and feel it is the appropriate time to reinstate a common dividend to our shareholders. In addition to this 2022 fourth quarter dividend, we intend to pay a regular quarterly dividend for the first three quarters of 2023 and a higher 2023 fourth quarter dividend sufficient to distribute approximately 100 percent of taxable income. I thank our employees for their great efforts and each of our shareholders for your support during the most trying times in the history of our industry,” Fisher concluded.

About Chatham Lodging Trust

Chatham Lodging Trust is a self-advised, publicly traded real estate investment trust (REIT) focused primarily on investing in upscale, extended-stay hotels and premium-branded, select-service hotels. The company owns 39 hotels totaling 5,914 rooms/suites in 16 states and the District of Columbia. Additional information about Chatham may be found at chathamlodgingtrust.com.

Forward-Looking Statement Safe Harbor

Note: This press release contains forward-looking statements within the meaning of federal securities regulations. These forward-looking statements are identified by their use of terms and phrases such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "plan," "predict," "project," "will," "continue" and other similar terms and phrases, including references to assumption and forecasts of future results. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks include, but are not limited to: national and local economic and business conditions, including the effect on travel of potential terrorist attacks, that will affect occupancy rates at the company’s hotels and the demand for hotel products and services; operating risks associated with the hotel business; risks associated with the level of the company’s indebtedness and its ability to meet covenants in its debt agreements; relationships with property managers; the company’s ability to maintain its properties in a Fourth-class manner, including meeting capital expenditure requirements; the company’s ability to compete effectively in areas such as access, location, quality of accommodations and room rate structures; changes in travel patterns, taxes and government regulations which influence or determine wages, prices, construction procedures and costs; the company’s ability to complete acquisitions and dispositions; and the company’s ability to continue to satisfy complex rules in order for the company to remain a REIT for federal income tax purposes and other risks and uncertainties associated with the company’s business described in the company's filings with the SEC. Although the company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this release is as of the date hereof, and the company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221208005152/en/

Dennis Craven (Company)

Chief Operating Officer

(561) 227-1386

Source: Chatham Lodging Trust

FAQ

What is the dividend amount announced by Chatham Lodging Trust?

Chatham Lodging Trust declared a common share dividend of $0.07 per share.

When will the dividend be paid to shareholders?

The dividend is payable on January 17, 2023, to shareholders of record as of December 30, 2022.

How much free cash flow did Chatham Lodging Trust generate since April 2020?

Chatham Lodging Trust generated approximately $32 million of free cash flow from April 2020 to September 2022.

What is the plan for dividends in 2023 for Chatham Lodging Trust?

Chatham intends to pay regular quarterly dividends for the first three quarters of 2023 and a higher dividend for Q4 2023.