false0001476045 0001476045 2019-10-31 2019-10-31

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): October 31, 2019

 

CHATHAM LODGING TRUST

(Exact name of Registrant as specified in its charter)

Maryland	001-34693	27-1200777
(State or Other Jurisdiction of Incorporation or Organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

222 Lakeview Avenue, Suite 200
West Palm Beach,	Florida	33401
(Address of principal executive offices)		(Zip Code)

(561) 802-4477

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed from last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of Exchange On Which Registered
Common Shares of Beneficial Interest, $0.01 par value	CLDT	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b.2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

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Item 2.02 Results of Operations and Financial Condition.

On October 31, 2019, Chatham Lodging Trust issued a press release announcing its results of operations for the three and nine months ended September 30, 2019. A copy of the press release is attached hereto as Exhibit 99.1 to this report and is incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K, the information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section.

Furthermore, the information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

Item 9.01 Financial Statements and Exhibits.

Press Release Dated October 31, 2019 Announcing Third Quarter 2019 Results

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		CHATHAM LODGING TRUST
October 31, 2019		By:		/s/ Jeremy B. Wegner
				Name: Jeremy B. Wegner
				Title: Senior Vice President and Chief Financial Officer

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Exhibit Index

Exhibit No.		Description
99.1		Press Release Dated October 31, 2019 Announcing Third Quarter 2019 Results
101		Cover page Interactive Date File - the cover page XBRL tags are embedded within the Inline XBRL document
104		The cover page from this Current Report on Form 8-K, formatted as Inline XBRL

•	Portfolio Revenue per Available Room (RevPAR) - Declined 0.3 percent to $148, compared to the 2018 third quarter, for Chatham’s 40 comparable wholly owned hotels. Average daily rate (ADR) rose 0.5 percent to $173.4, and occupancy lessened 0.8 percent to 85.2 percent.

•	Net Income - Declined $4.6 million to $10.1 million, compared to the 2018 third quarter, driven by the company’s proportionate share of impairment losses in its unconsolidated joint ventures. Net income per diluted share was $0.21 versus $0.31 for the same period a year earlier.

•	Adjusted EBITDA - Rose $0.8 million, or 2.0 percent higher than the 2018 third quarter, to $39.4 million, above the company’s guidance of $37.1-$39.1 million.

•	Adjusted FFO - Improved $0.2 million, to $28.6 million, versus $28.4 million in the 2018 third quarter. Adjusted FFO per diluted share was $0.60, exceeding the upper end of the company’s guidance of $0.55-$0.59 per share.

•	Operating Margins -For its 40 comparable hotels, despite a RevPAR decline, comparable gross operating profit margins increased 10 basis points to 48.2 percent versus the 2018 third quarter. Hotel EBITDA margins declined 10 basis points to 41.2 percent over the same period last year.

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•	Silicon Valley RevPAR advanced 4.6 percent excluding the San Mateo hotel which was under renovation.

•	RevPAR at its two San Diego properties increased 0.9 percent to $180.

•	Washington, D.C. RevPAR improved 5.4 percent to $152 at its three hotels.

•	RevPAR at its three coastal hotels in Maine and New Hampshire advanced 3.8 percent, driven by strong leisure demand.

•	At its four Houston hotels, RevPAR decreased 16.8 percent to $84.

•	The two Los Angeles-area hotels experienced a 4.9 percent RevPAR decline to $174.

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•	Fourth quarter RevPAR is expected to be adversely impacted by significant one-time events that occurred in certain of its markets during the 2018 fourth quarter:

◦	Approximately 330 basis points due to non-recurring demand at four of its hotels related to the Boston area gas explosions in the 2018 fourth quarter resulting in RevPAR growth of 36 percent at those hotels.

◦	70 basis points related to renovation delays at its San Mateo, Calif. Residence Inn that was expected to be completed by the end of the 2019 third quarter.

◦	70 basis points due to a very tough comp at its two San Diego hotels that benefitted from one-time border patrol business. RevPAR at those two hotels was up 34 percent in the 2018 fourth quarter.

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•	The loss in hotel operating income from the sale of the Courtyard by Marriott Altoona, Pa., and the SpringHill Suites by Marriott Washington, Pa. during the second quarter.

•	Renovations commencing or ongoing at the following hotels during the 2019 fourth quarter:

◦	Residence Inn San Mateo, Calif. and the Residence Inn Sunnyvale, Calif., #2, in the fourth quarter

•	No additional acquisitions, dispositions, debt or equity issuance

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•	FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect the company’s cash expenditures, or future requirements, for capital expenditures or contractual commitments;

•	FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect changes in, or cash requirements for, the company’s working capital needs;

•	FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect funds available to make cash distributions;

•	EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on the company’s debts;

•	Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may need to be replaced in the future, and FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect any cash requirements for such replacements;

•	Non-cash compensation is and will remain a key element of the company’s overall long-term incentive compensation package, although the company excludes it as an expense when evaluating its ongoing operating performance for a particular period using adjusted EBITDA;

•	Adjusted FFO, Adjusted EBITDA and Adjusted Hotel EBITDA do not reflect the impact of certain cash charges (including acquisition transaction costs) that result from matters the company considers not to be indicative of the underlying performance of its hotel properties; and

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•	Other companies in the company’s industry may calculate FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA and Adjusted Hotel EBITDA differently than the company does, limiting their usefulness as a comparative measure.

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