Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-34693 CHATHAM LODGING TRUST (Exact Name of Registrant as Specified in Its Charter) Maryland 27-1200777 (State or Other J ...

Financial Data and Key Metrics Changes - The company announced a share buyback plan of $25 million, indicating a strong position to enhance shareholder value after addressing $500 million of maturing debt [6][7] - The quarterly common dividend was increased by 29% to $0.09 per share, reflecting a yield of over 5% [7] - Q1 2025 hotel EBITDA was $20.8 million, adjusted EBITDA was $17.9 million, and adjusted FFO was $0.14 per share [24][25] - GOP margin for Q1 was 38.9%, up 30 basis points from Q1 2024, driven by 3.8% RevPAR growth and effective expense control [24][25] Business Line Data and Key Metrics Changes - RevPAR growth was strong in six of the top seven markets, with Silicon Valley hotels seeing an 8% increase [14] - The average age of the five sold hotels was 25 years, sold at an approximate 6% capitalization rate on 2024 NOI levels [8] - RevPAR at leisure hotels declined only 1%, while tech hotels showed significant growth [19][20] Market Data and Key Metrics Changes - RevPAR in LA increased by 14%, with specific hotels benefiting from fire-related demand [15] - New York, Dallas, and DC markets saw at least 6% growth in RevPAR [16] - Government-related room revenue accounted for approximately 5% of the overall portfolio, indicating limited impact from government travel [11][12] Company Strategy and Development Direction - The company is focusing on high-quality premium branded targets for acquisitions to diversify its portfolio [9] - The share repurchase plan and potential acquisitions are viewed as tools to enhance shareholder value [6][9] - The company aims to reduce volatility in cash flow by diversifying its asset base beyond tech-heavy markets [57] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future demand despite current economic uncertainties, projecting flat RevPAR growth for the year [12][13] - The company noted that the current environment has resulted in lower new supply, which could support future RevPAR growth [13] - Management highlighted the importance of adjusting sales efforts to attract leisure travelers in response to declining government-related demand [11][12] Other Important Information - The company completed renovations at several hotels, with a CapEx budget of approximately $26 million for 2025 [22][23] - The company has successfully reduced leverage through the sale of older hotels, with a net debt to LTM EBITDA ratio of 3.6x [25][26] Q&A Session Summary Question: Insights on capital allocation initiatives regarding buybacks and acquisitions - Management is looking at both buybacks and acquisitions opportunistically, with a focus on enhancing shareholder value [29][30] Question: Update on potential development in Portland, Maine - The development process is ongoing, with careful consideration of costs and approvals before proceeding [32][34] Question: Performance drivers for the Phoenix hotel - The Phoenix hotel has outperformed expectations due to strong management and market conditions [35][36] Question: Impact of government demand and international travel exposure - Government demand is minimal, and international travel exposure is light, with strong overall performance in key markets [52][53] Question: Guidance on RevPAR expectations for 2025 - The company expects flat RevPAR growth, with potential ADR growth offsetting occupancy changes [54][56] Question: Potential acquisition opportunities and market targeting - The company aims to diversify its asset base and is open to acquisitions in new markets to reduce cash flow volatility [57]

Financial Performance - Net loss applicable to common shareholders decreased to $1 million in Q1 2025 from $7 million in Q1 2024, with diluted net loss per share improving from $(0.15) to $(0.01) [4] - Total revenue for Q1 2025 was $68,635,000, a slight increase of 0.28% compared to $68,443,000 in Q1 2024 [45] - Operating income for Q1 2025 was $8,308,000, significantly up from $977,000 in Q1 2024 [45] - Net income attributable to Chatham Lodging Trust for Q1 2025 was $1,536,000, compared to a net loss of $5,225,000 in Q1 2024 [45] - Funds From Operations (FFO) attributable to common share and unit holders for Q1 2025 was $6,880,000, down from $7,877,000 in Q1 2024 [47] - Adjusted EBITDA for Q1 2025 was $17,899,000, a decrease from $18,884,000 in Q1 2024 [47] - Total assets decreased to $1,226,310,000 as of March 31, 2025, from $1,254,681,000 at the end of 2024 [43] - Total liabilities decreased to $437,430,000 as of March 31, 2025, from $462,684,000 at the end of 2024 [43] Revenue and Occupancy Metrics - RevPAR increased by 4% to $127 in Q1 2025 compared to $122 in Q1 2024, with occupancy rising to 72% from 69% [4] - RevPAR for Silicon Valley hotels increased by 8% in Q1 2025, while Los Angeles hotels saw a 14% increase [11] - April's RevPAR declined by 4% due to slowing demand and holiday impacts, but May is forecasted to trend positively [7] - For Q2 2025, RevPAR is projected to decline by 0.5% to 2%, with total hotel revenue expected between $79.0 million and $80.2 million [27][28] Dividends and Shareholder Returns - The quarterly common dividend was raised by 29% to $0.09 per share, up from $0.07 per share [4] - The board raised its quarterly common dividend by 29 percent to $0.09 per share, payable on April 15, 2025 [24] - The company declared distributions of $0.09 per common share in Q1 2025, up from $0.07 in Q1 2024 [45] Capital Expenditures and Investments - Capital expenditures in Q1 2025 were approximately $7 million, with a total capital expenditure budget of $26 million for 2025 [20] - The company completed the sale of five hotels for total proceeds of $83 million, with an average age of 23 years [4] - The sale of the Courtyard Houston, Texas, in April contributed to paying down borrowings on the credit facility [28] - The company completed renovations at the Residence Inn Bellevue and Hilton Garden Inn Portsmouth in April [28] Debt and Financial Ratios - As of March 31, 2025, the company had net debt of $365 million, down from $389 million as of December 31, 2024 [22] - The leverage ratio was approximately 22 percent, down from 23 percent on December 31, 2024 [23] - The average interest rate on total debt outstanding as of March 31, 2025, was 6.4 percent [22] Future Projections - Adjusted EBITDA for 2025 is projected to be between $89 million and $93 million, with Adjusted FFO expected between $49 million and $53 million [27] - For the three months ended June 30, 2025, net income was between $3,802 million and $5,818 million, while for the year ended December 31, 2025, it ranged from $4,634 million to $8,521 million [51] - Adjusted FFO attributable to common share and unit holders for the three months ended June 30, 2025, was between $16,643 million and $18,659 million, and for the year ended December 31, 2025, it was between $49,023 million and $52,910 million [51] - Total revenue for the three months was between $79,378 million and $80,478 million, and for the year, it ranged from $296,461 million to $299,129 million [52] - Hotel EBITDA margin for the three months ended June 30, 2025, was between 37.5% and 39.5%, while for the year, it was between 34.0% and 35.0% [52] - EBITDA for the three months ended June 30, 2025, was between $25,164 million and $27,180 million, and for the year, it ranged from $89,734 million to $93,621 million [51] - Adjusted EBITDA for the three months ended June 30, 2025, was between $26,764 million and $28,780 million, and for the year, it was between $88,923 million and $92,810 million [51] Other Information - Approximately 65% of the company's hotel EBITDA over the last twelve months was generated from extended-stay hotels, which represent 61% of its portfolio [12] - The company owns 34 hotels totaling 5,164 rooms/suites across 14 states and the District of Columbia [31] - The weighted average number of common shares outstanding for Q1 2025 was 48,960,924, compared to 48,891,994 in Q1 2024 [45] - The company reported a loss per common share of $0.01 in Q1 2025, an improvement from a loss of $0.15 in Q1 2024 [45] - The company does not anticipate any additional acquisitions, dispositions, or debt or equity issuance in the near term [28] - Interest expense, including amortization of deferred fees, was $6,469 million for the three months ended June 30, 2025, and $25,400 million for the year ended December 31, 2025 [51] - Depreciation and amortization for the three months ended June 30, 2025, was $14,893 million, and for the year, it was $59,700 million [51] - Preferred dividends for the three months and the year were consistently $2,000 million and $8,000 million, respectively [51] - Gain on sale of hotel properties was $0 for the three months ended June 30, 2025, and a loss of $7,118 million for the year ended December 31, 2025 [51]

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Company Overview - As of December 31, 2024, the company owned 37 hotels with a total of 5,596 rooms located in 16 states and the District of Columbia[25]. - The company primarily invests in upscale extended-stay hotels and premium-branded select-service hotels, focusing on the 25 largest metropolitan markets in the U.S.[34]. - The company is managed by Island Hospitality Management, LLC, which is 100% owned by the company's Chairman, President, and CEO[27]. - The company is internally managed and primarily invests in upscale extended-stay and premium-branded select-service hotels[203]. Financial Performance - Total revenue for the year ended December 31, 2024, was $317.2 million, a 2.0% increase from $311.1 million in 2023[212]. - Room revenue increased to $290.3 million in 2024, representing 91.5% of total revenue, compared to $285.0 million in 2023[212]. - Same property RevPAR increased by 2.8% during the year ended December 31, 2024[212]. - Food and beverage revenue decreased by 4.8% to $7.7 million in 2024 from $8.1 million in 2023[212]. - Other operating revenue increased by 8.2% to $18.1 million in 2024 compared to $16.7 million in 2023[212]. Capital Structure and Financing - The company's leverage ratio was approximately 23.1% as of December 31, 2024, down from 24.8% at December 31, 2023[31]. - The company aims to maintain a prudent capital structure with a long-term leverage ratio similar to historical levels, typically between the mid 20s and low 50s[31]. - The company plans to finance growth through free cash flow, debt, and issuances of common or preferred shares[31]. - The company has a mortgage debt balance of $159.2 million across its properties[185]. REIT Compliance and Distributions - The Company is required to distribute at least 90% of its REIT taxable income to maintain its REIT status[43]. - The company must make distributions to shareholders each year to maintain its REIT qualification, with future distributions dependent on financial performance and other factors[196]. - The company is required to distribute at least 90% of its REIT taxable income each year to shareholders, which may be impacted by downturns in operating results or unexpected capital improvements[84]. - The company must ensure that at least 75% of the value of gross assets consists of cash, government securities, and qualified real estate assets at the end of each calendar quarter[161]. Management and Operational Risks - The company cannot operate its hotels directly to maintain its qualification as a REIT, leasing them to taxable REIT subsidiary lessees[26]. - The company faces risks related to potential cancellations or non-renewals of franchise licenses, which could materially affect operations and financial condition[83]. - Increased operating expenses and capital expenditure requirements could adversely affect the company's ability to make distributions to shareholders[85]. - The company executed an amendment to its corporate office lease on June 1, 2023, resulting in an early termination payment of $0.1 million for vacating 7,374 rentable square feet[55]. Market and Economic Conditions - The COVID-19 pandemic has had a significant adverse impact on the lodging industry, affecting the Company's financial condition and performance[75]. - The lodging industry is sensitive to economic conditions, and declines in corporate budgets or consumer demand could lower revenues and profitability[101]. - Inflation and price volatility could increase operating and borrowing costs, negatively impacting financial condition and cash available for distribution[100]. - The cyclical nature of the lodging industry can lead to returns that are substantially below expectations, particularly during economic downturns[107]. Cybersecurity and Compliance - The company has not experienced any material information security breach incidents in the last three fiscal years, indicating a strong cybersecurity posture[181]. - The company has established a comprehensive cybersecurity framework aligned with the National Institute of Standards and Technology Cybersecurity Framework to manage risks[174]. - The company has implemented risk-based controls to prevent, detect, and respond to information security threats, relying on third-party tools and services[175]. - The Audit Committee is responsible for oversight of cybersecurity risks, with periodic reviews and assessments conducted by the Executive Leadership Team[182]. Community and Environmental Responsibility - The Company published its annual Corporate Responsibility Report in December 2024, adhering to standards from GRI, SASB, and TCFD[64]. - The Company is committed to improving energy efficiency through initiatives such as installing energy-efficient lighting and smart thermostats[65]. - The Company prioritizes community investment and has engaged in charitable activities in the West Palm Beach area[66].

Call Start: 13:00 January 1, 0000 1:42 PM ET Chatham Lodging Trust (NYSE:CLDT) Q4 2024 Earnings Conference Call February 26, 2025 1:00 PM ET Company Participants Chris Daly – President-DG Public Relations Jeff Fisher – Chairman, President and Chief Executive Officer Dennis Craven – Executive Vice President and Chief Operating Officer Jeremy Wegner – Senior Vice President and Chief Financial Officer Conference Call Participants Gaurav Mehta – Alliance Global Partners Ari Klein – BMO Capital Markets Jonathan ...

Financial Performance - Portfolio Revenue Per Available Room (RevPAR) increased 4% to $129 in Q4 2024 compared to Q4 2023, with occupancy rising 5% to 74%[3] - Net loss applicable to common shareholders was $1.9 million in Q4 2024, an improvement from a net loss of $9.3 million in Q4 2023, resulting in a net loss per diluted share of $(0.08) versus $(0.23) last year[4] - Adjusted EBITDA rose to $21.1 million in Q4 2024, up from $20.8 million in Q4 2023[3] - Gross operating profit (GOP) margins improved by 150 basis points to 41% in Q4 2024, compared to 39% in Q4 2023[4] - Total revenue for Q4 2024 was $75,111,000, an increase of 3.8% compared to $72,278,000 in Q4 2023[45] - Room revenue increased to $68,528,000 in Q4 2024, up from $65,980,000 in Q4 2023, reflecting a growth of 3.7%[45] - The company reported a net loss attributable to common shareholders of $3,695,000 for Q4 2024, compared to a net loss of $10,966,000 in Q4 2023, indicating an improvement of 66.4%[45] - The company reported a total operating loss of $(218,000) for Q4 2024, an improvement from a loss of $(2,743,000) in Q4 2023[45] - For the three months ended December 31, 2024, the net loss attributable to common shares was $3,841,000, compared to a loss of $11,320,000 for the same period in 2023[47] - Adjusted Funds From Operations (FFO) for the three months ended December 31, 2024, was $10,030,000, up from $9,826,000 in the prior year, representing a 2.1% increase[47] - For the year ended December 31, 2024, the net income was $4,035,000, compared to $2,488,000 in 2023, indicating a year-over-year increase of 62.3%[47] - Adjusted Hotel EBITDA for the year ended December 31, 2024, was $111,219,000, slightly up from $110,933,000 in 2023, showing a marginal increase of 0.3%[49] Capital Expenditures and Debt Management - In Q4 2024, the company incurred capital expenditures of approximately $6 million[22] - The 2025 capital expenditure budget is approximately $26 million, including $16 million for renovations at three hotels[23] - The company reduced net debt by $29 million in 2024, lowering the overall leverage ratio from 25% to 23%[7] - As of December 31, 2024, the company had net debt of $389 million, down $29 million from the previous year, with total debt outstanding at $409 million[24] - The leverage ratio was approximately 23%, down from 25% on December 31, 2023[24] - The company repaid a $16 million maturing mortgage, enhancing financial flexibility for acquisitions[25] - Mortgage debt was reduced significantly to $157,211,000 in 2024 from $394,544,000 in 2023, a decrease of 60.2%[43] - Total liabilities decreased to $462,684,000 in 2024, down from $539,554,000 in 2023, a reduction of 14.3%[43] Hotel Operations and Market Performance - RevPAR growth in Silicon Valley hotels was up 14% in Q4 2024, significantly contributing to overall portfolio performance[10] - Chatham's occupancy for Q4 2024 was 74%, just shy of the 76% occupancy in Q4 2019, indicating a recovery in business travel demand[11] - The company anticipates continued RevPAR growth in 2025, driven by strong performance in technology-dependent markets[6] - The company expects a $6.8 million impact on 2025 Hotel EBITDA from hotels sold in 2024 and 2025[30] - 2025 guidance includes RevPAR of $125-$127 for Q1 and $143-$147 for the full year, with total hotel revenue projected at $298-$305 million[27] - Adjusted FFO for FY 2025 is projected to be between $52 million and $57 million, with adjusted FFO per diluted share of $1.01-$1.11[27] Shareholder Returns - The preferred share dividend declared was $0.41406 per share, and the common share dividend was $0.07 per share[26] - The company declared distributions per common share of $0.07 for both Q4 2024 and Q4 2023[45] Asset Management - The company owns 36 hotels totaling 5,475 rooms/suites across 15 states and the District of Columbia[29] - Total assets decreased to $1,254,681,000 as of December 31, 2024, down from $1,343,930,000 in 2023, a decline of 6.6%[43] - The company’s accumulated deficit increased to $(289,130,000) in 2024 from $(271,651,000) in 2023[43] - The company reported an impairment loss of $4,256,000 for both the three months and the year ended December 31, 2024, consistent with the previous year's figures[47]

Core Insights - Chatham Lodging (CLDT) reported quarterly funds from operations (FFO) of $0.20 per share, exceeding the Zacks Consensus Estimate of $0.18 per share, and showing an increase from $0.19 per share a year ago, resulting in an FFO surprise of 11.11% [1] - The company achieved revenues of $75.11 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.69% and increasing from $72.28 million year-over-year [2] - Chatham Lodging has outperformed consensus FFO estimates three times over the last four quarters and has topped consensus revenue estimates two times in the same period [2] Financial Performance - The current consensus FFO estimate for the upcoming quarter is $0.14 on revenues of $71.7 million, while the estimate for the current fiscal year is $1.12 on revenues of $329.39 million [7] - The stock has underperformed the market, losing approximately 9.6% since the beginning of the year compared to the S&P 500's gain of 1.3% [3] Market Outlook - The sustainability of Chatham Lodging's stock price movement will largely depend on management's commentary during the earnings call and future FFO expectations [3][4] - The Zacks Industry Rank indicates that the REIT and Equity Trust - Other sector is currently in the bottom 46% of over 250 Zacks industries, suggesting potential challenges ahead [8]

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Financial Data and Key Metrics Changes - Chatham Lodging Trust reported Q3 2024 hotel EBITDA of $32.2 million and adjusted EBITDA of $29.6 million, with adjusted FFO of $0.35 per share [21] - RevPAR growth was 1.3% for Q3 2024, with GOP margin at 44.5% and hotel EBITDA margin at 37.1%, reflecting a decline of only 40 basis points from Q3 2023 [21] - The company ended the quarter with a net debt to LTM EBITDA ratio of 4.2x, significantly below pre-pandemic levels of 5.5x to 6x [22] Business Line Data and Key Metrics Changes - RevPAR in the seven predominantly leisure hotels rose 0.7%, with the Hampton Inn Portland, Maine, being the best performer at 8% growth [14] - The five tech-driven hotels in Silicon Valley and Bellevue achieved RevPAR growth of 8% in Q3, with ADR rising 5% to nearly $200 [9][16] - Overall, RevPAR for the portfolio exceeded 2019 levels for the second consecutive quarter, with a Q3 RevPAR of $150 [8] Market Data and Key Metrics Changes - Business travel showed steady growth across the country, with occupancy rates for key weekdays reaching 79% on Monday and 84% on Tuesday and Wednesday [12] - In October, RevPAR grew 6% with occupancy up 5% to 83% and ADR up 1% to $191 [15] - The company noted that 30 of its 38 comparable hotels produced positive RevPAR in October, indicating strong overall trends [15] Company Strategy and Development Direction - The company is focused on recycling capital by selling five hotels, expected to generate approximately $80 million, to pay down debt and invest in higher-quality assets [4][5] - Chatham aims to enhance internal growth by acquiring newer assets and reducing ongoing capital requirements, with a target leverage range of 4.75x to 5.25x [28][30] - The company is optimistic about the demand dynamics in Silicon Valley, driven by tech industry growth and corporate expansions [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of margins and overall performance, citing a shift in demand towards business travel post-summer [25] - The company anticipates RevPAR growth of 1% to 3% for Q4 2024, with adjusted EBITDA guidance of $19 million to $21 million [23] - Management noted that expense pressures have lessened, with labor costs returning to more historical increases [13] Other Important Information - The company has only $30 million of debt maturing over the next 12 months and $135 million available under its revolving credit facility [22] - Capital expenditures for 2024 are expected to be around $34 million, slightly below the budget of $37 million [20] Q&A Session Summary Question: Improvement in RevPAR in September and October - Management indicated that the improvement is likely due to a shift in demand towards corporate travel as leisure travel wanes post-summer [25] Question: Target leverage and asset sales - Management stated that a leverage target of 4.75x to 5.25x is reasonable, and they are actively pursuing asset sales to enhance growth [28][30] Question: Market conditions and pricing - Management noted that while there hasn't been dramatic movement in buyer-seller expectations, there is increased activity in the market [31]