BETHESDA, Md.—RLJ Lodging Trust (the “Company”) (NYSE: RLJ) today reported results for the three months ended March 31, 2017.
Highlights
- Net income decreased 14.1% to $21.8 million
- Pro forma RevPAR decreased 0.6%, Pro forma ADR increased 0.1%, and Pro forma Occupancy decreased 0.8%
- Pro forma Hotel EBITDA Margin of 32.9%
- Pro forma Consolidated Hotel EBITDA of $85.6 million
- Adjusted FFO of $64.4 million
“Our results this quarter were slightly better than our initial expectations and highlight the advantages of a diversified portfolio. Strong performance in markets such as Washington, D.C. and Southern California and growth in Houston, partially offset short-term softness in markets like Louisville and Northern California,” commented Ross H. Bierkan, President and Chief Executive Officer. “We consistently generate one of the highest margins in the industry. Our ability to continue to drive strong profitability demonstrates the benefits of owning a high-quality portfolio of premium focused-service and compact full-service hotels.”
Financial and Operating Results
Performance metrics such as Occupancy, Average Daily Rate (“ADR”), Revenue Per Available Room (“RevPAR”), Hotel EBITDA, and Hotel EBITDA Margin are Pro forma. The prefix “Pro forma” as defined by the Company, denotes operating results which include results for periods prior to its ownership. Pro forma RevPAR and Pro forma Hotel EBITDA Margin are reported on a comparable basis and therefore exclude any hotels sold during the period and non-comparable hotels that were not open for operation or were closed for renovation for comparable periods. Explanations of EBITDA, Adjusted EBITDA, Hotel EBITDA, Hotel EBITDA Margin, FFO, and Adjusted FFO, as well as reconciliations of those measures to net income or loss, if applicable, are included within this release.
Net income for the three months ended March 31, 2017, decreased $3.6 million to $21.8 million, representing a 14.1% decrease over the comparable period in 2016.
Pro forma RevPAR for the three months ended March 31, 2017, decreased 0.6% over the comparable period in 2016, driven by a Pro forma Occupancy decrease of 0.8%, partially offset by a Pro forma ADR increase of 0.1%. Some of the Company’s top performing markets were Washington, D.C., Atlanta, and Tampa, with RevPAR growth of 14.3%, 12.5%, and 9.3%, respectively. Excluding Louisville and Northern California, which experienced softness in the quarter, Pro forma RevPAR growth was 1.6%
Pro forma Hotel EBITDA Margin for the three months ended March 31, 2017, decreased 142 basis points over the comparable period in 2016 to 32.9%.
Pro forma Consolidated Hotel EBITDA includes the results of non-comparable hotels. For the three months ended March 31, 2017, Pro forma Consolidated Hotel EBITDA was $85.6 million, representing a 5.6% decrease over the comparable period in 2016.
Adjusted FFO for the three months ended March 31, 2017, decreased $6.3 million to $64.4 million, representing a 9.0% decrease over the comparable period in 2016.
Adjusted FFO per common share and unit-diluted for the three months ended March 31, 2017, was $0.52, representing a decrease of 8.8% over the comparable period in 2016.
Adjusted EBITDA for the three months ended March 31, 2017, decreased $7.0 million to $79.0 million, representing an 8.2% decrease over the comparable period in 2016. Adjusted EBITDA for the comparable period in 2016 included approximately $2.0 million of Hotel EBITDA from sold hotels.
Net cash flow from operating activities for the three months ended March 31, 2017, totaled $49.9 million, compared to $55.2 million for the comparable period in 2016.
Balance Sheet
As of March 31, 2017, the Company had $451.0 million of unrestricted cash on its balance sheet, $400.0 million available on its revolving credit facility, and $1.6 billion of debt outstanding. The Company’s ratio of net debt to Adjusted EBITDA, pro forma for dispositions, for the trailing twelve month period ended March 31, 2017, was 3.1 times.
Dividends
The Company’s Board of Trustees declared a cash dividend of $0.33 per common share of beneficial interest in the first quarter. The dividend was paid on April 14, 2017, to shareholders of record as of March 31, 2017.
Subsequent Events
On April 23, 2017, the Company and FelCor Lodging Trust Incorporated (“FelCor”) entered into a definitive Agreement and Plan of Merger under which FelCor will merge with and into an indirect subsidiary of the Company in a stock-for-stock merger transaction. The transaction is expected to close by the end of 2017 and is subject to customary closing conditions, including the approval of certain aspects of the transaction by both the Company’s and FelCor’s shareholders.
To view full financial release and corresponding tables please click the PDF icon or visit: http://investor.rljlodgingtrust.com/phoenix.zhtml?c=243028&p=irol-irhome
