Record Global Rooms Pipeline, up 10%
Sequentially including a 36% Increase for Conversion Hotels
Repurchases $196.6
Million of Common Stock Year-to-Date through April 30, 2024
Relaunches Park Inn by Radisson
NORTH BETHESDA, Md.,
May 8,
2024 /PRNewswire/ -- Choice Hotels
International, Inc. (NYSE: CHH), one of the world's leading lodging
franchisors, today reported its first quarter 2024 results.
Highlights include:
- Net income was $31.0 million for
first quarter of 2024, representing diluted earnings per share
(EPS) of $0.62. As a result of
one-time items, including due diligence and transaction pursuit
costs, and the timing of net reimbursable expenses, net income and
diluted EPS were 41% and 39% lower, respectively, for first quarter
2024 compared to the same period of 2023.
- First quarter 2024 adjusted net income, excluding certain items
described in Exhibit 7, increased 9% to $63.7 million compared to the same period of
2023, and adjusted diluted EPS increased 14% to a first quarter
record of $1.28 compared to the same
period of 2023.
- Adjusted earnings before interest, taxes, depreciation, and
amortization (EBITDA) for first quarter 2024 grew to $124.3 million, a first quarter record and a 17%
increase compared to the same period of 2023.
- Global pipeline as of March 31,
2024, increased 10% to a company record of over 115,000
rooms from December 31, 2023,
including a 36% increase in the global pipeline for conversion
rooms. Domestic rooms pipeline as of March
31, 2024, increased by 11% since December 31, 2023, highlighted by a 59% increase
for conversion rooms.
- In March 2024, the company's
Board of Directors approved an increase in the number of shares
authorized under its share repurchase program by 5 million shares.
The company has repurchased 1.5 million shares of common stock for
$196.6 million year-to-date through
April 30, 2024.
- In April 2024, the company
further strengthened its revenue-intense portfolio by relaunching
Park Inn by Radisson, a premium conversion brand for the
value-conscious traveler positioned just below the Quality Inn
brand, with the brand's first opening expected in third quarter
2024.
- The company increased its guidance for diluted EPS and
reiterated its guidance for net income, adjusted EBITDA, and
adjusted diluted EPS for full-year 2024.
"Building on our record 2023 financial results, we drove first
quarter performance to new levels, with adjusted EBITDA and EPS
increasing by 17% and 14%, year-over-year, respectively," said
Patrick Pacious, President and Chief
Executive Officer. "These impressive results demonstrate that we
are unlocking the revenue synergies from the Radisson Americas
acquisition, which has meaningfully enhanced our growth profile and
opened new incremental earnings streams. Looking ahead, we are
confident that our versatile business model with multiple drivers
positions us well to deliver continued earnings growth and create
shareholder value."
Financial Performance
- Total revenues were $331.9
million for first quarter of 2024, a 0.3% decrease compared
to the same period of 2023. For first quarter 2024, compared to the
same period of 2023, revenues, excluding reimbursable revenue from
franchised and managed properties, calculated as total revenues net
of reimbursable revenue of $129
million, increased 16% to $203
million.
- Royalty, licensing, and management fees totaled $105.5 million for first quarter 2024 compared to
$107.5 million for the same period of
2023.
- First quarter 2024 domestic effective royalty rate increased 4
basis points to 5.03% compared to the same period of 2023.
- Domestic revenue per available room (RevPAR) decreased 590
basis points for the three-month period ended March 31, 2024, compared to the same period of
2023, in part reflecting the timing of Easter weekend and tougher
year-over-year comparisons. Domestic RevPAR increased 8.2% for the
three month period ended March 31,
2024 compared to the same period of 2019.
Development
- The company's domestic upscale, extended stay, and midscale
portfolio reported a 1.2% increase for hotels and 0.9% increase for
rooms since March 31, 2023. The domestic extended stay hotels
portfolio grew by 17.4% since March 31,
2023, driven by increases in each of the segment's brands.
The company's total domestic system size increased to over 6,200
hotels and over 494,000 rooms as of March
31, 2024.
- The international portfolio, as of March
31, 2024, expanded by 1.3% in the number of hotels and by
2.3% in the number of rooms from March 31,
2023. As of March 31, 2024,
the international rooms pipeline increased by 3% from December 31, 2023, and the company more than
doubled the number of international rooms in the pipeline since
March 31, 2023.
- The company opened an average of over four hotels per week for
a total of 55 hotel openings in first quarter 2024, a 20% increase
compared to the same period of 2023. Of the domestic franchise
agreements executed for conversion hotels over the trailing twelve
months ending March 31, 2024, 113
opened in the same year, a 43% increase over the comparable period
of the prior year.
- Total domestic franchise agreements for the company's upscale,
extended stay, and midscale brands executed in first quarter
increased by 7% compared to the same period of 2023 and constituted
92% of total domestic franchise agreements awarded in 2024. Of the
total domestic franchise agreements awarded in first quarter 2024,
80% were for conversion hotels.
Shareholder Returns
During the three months ended March 31,
2024, the company paid cash dividends totaling $14.7 million.
During the three months ended March 31,
2024, the company repurchased approximately 0.4 million
shares of common stock for $60.6
million under its stock repurchase program and through
repurchases from employees in connection with tax withholding and
option exercises relating to awards under the company's equity
incentive plans. An additional 1.1 million shares of common stock
have been repurchased year-to-date through April 30, 2024 for $136.0
million.
As of April 30, 2024, the company
had 5.3 million shares of common stock remaining under the current
share repurchase authorization.
Outlook
The outlook information below includes forward-looking non-GAAP
financial measures, which management uses in forecasting
performance. The adjusted numbers in the company's outlook below
exclude the net surplus or deficit generated from reimbursable
revenue from franchised and managed properties, due diligence and
transition costs, additional repurchases of company stock, and
other items:
|
Full-Year 2024
|
Prior Outlook
|
Net Income
|
$260 – $274
million
|
$260 – $274
million
|
Adjusted Net
Income
|
$306 – $320
million
|
$316 – $331
million
|
Adjusted
EBITDA
|
$580 – $600
million
|
$580 – $600
million
|
Diluted EPS
|
$5.35 –
$5.65
|
$5.19 –
$5.49
|
Adjusted Diluted
EPS
|
$6.30 –
$6.60
|
$6.30 –
$6.60
|
Effective Income Tax
Rate
|
24.5 %
|
24.5 %
|
|
|
|
|
Full-Year 2024
|
Prior Outlook
|
vs. Full-Year 2023
|
Domestic RevPAR
Growth
|
Flat to 2%
|
Flat to 2%
|
Domestic Effective
Royalty Rate Growth
|
Mid-single
digits
|
Mid-single
digits
|
Domestic Net Unit
Growth
|
Approximately
2%
|
Approximately
2%
|
(upscale, extended
stay, and midscale brands)
|
|
|
Webcast and Conference Call
Choice Hotels International will conduct a live webcast to
discuss the company's first quarter 2024 earnings results on
May 8, 2024, at 10:00 a.m. on the company's investor relations
website, www.investor.choicehotels.com, accessible via the Events
and Presentations tab.
A conference call will also be available. Participants may
listen to the call by dialing (800) 549-8228 domestically or (646)
564-2877 internationally using conference ID 32373.
A replay and transcript of the event will be available on the
company's investor relations website within 24 hours at
www.investor.choicehotels.com/events-and-presentations.
About Choice Hotels®
Choice Hotels International, Inc. (NYSE: CHH) is one of the
largest lodging franchisors in the world, with nearly 7,500 hotels,
representing more than 630,000 rooms, in 45 countries and
territories as of March 31, 2024. A
diverse portfolio of 22 brands that range from full-service upper
upscale properties to midscale, extended stay, and economy enables
Choice® to meet travelers' needs in more places and for more
occasions while driving more value for franchise owners and
shareholders. The award-winning Choice Privileges® rewards program
and co-brand credit card options provide members with a fast and
easy way to earn reward nights and personalized perks. For more
information, visit www.choicehotels.com.
Forward-Looking Statements
Information set forth herein includes "forward-looking
statements." Certain, but not necessarily all, of such
forward-looking statements can be identified by the use of
forward-looking terminology, such as "expect," "estimate,"
"believe," "anticipate," "should," "will," "forecast," "plan,"
"project," "assume," or similar words of futurity. All statements
other than historical facts are forward-looking statements. These
forward-looking statements are based on management's current
beliefs, assumptions, and expectations regarding future events,
which in turn are based on information currently available to
management. Such statements may relate to projections of Choice's
revenue, expenses, EBITDA, adjusted EBITDA, earnings, debt levels,
ability to repay outstanding indebtedness, payment of dividends,
repurchases of common stock and other financial and operational
measures, including occupancy and open hotels, RevPAR, and Choice's
liquidity, among other matters. We caution you not to place undue
reliance on any such forward-looking statements. Forward-looking
statements do not guarantee future performance and involve known
and unknown risks, uncertainties, and other factors.
Several factors could cause actual results, performance or
achievements of the company to differ materially from those
expressed in or contemplated by the forward-looking statements.
Such risks include, but are not limited to, changes to general,
domestic and foreign economic conditions, including access to
liquidity and capital; the ability to realize the anticipated
long-term benefits and synergies of the acquisition of Radisson
Hotels Americas as rapidly or to the extent anticipated; changes in
consumer demand and confidence, including consumer discretionary
spending and the demand for travel, transient and group business;
the timing and amount of future dividends and share repurchases;
future domestic or global outbreaks of epidemics, pandemics or
contagious diseases or fear of such outbreaks, and the related
impact on the global hospitality industry, particularly but not
exclusively the U.S. travel market; changes in law and regulation
applicable to the travel, lodging or franchising industries,
including with respect to the status of the company's relationship
with employees of our franchisees; foreign currency fluctuations;
impairments or declines in the value of the company's assets;
operating risks common in the travel, lodging or franchising
industries; changes to the desirability of our brands as viewed by
hotel operators and customers; changes to the terms or termination
of our contracts with franchisees and our relationships with our
franchisees; our ability to keep pace with improvements in
technology utilized for marketing and reservations systems and
other operating systems; our ability to grow our franchise system;
exposure to risks related to our hotel development, financing and
ownership activities; exposures to risks associated with our
investments in new businesses; fluctuations in the supply and
demand for hotel rooms; our ability to realize anticipated benefits
from acquired businesses; impairments or losses relating to
acquired businesses; the level of acceptance of alternative growth
strategies we may implement; the impact of inflation; cyber
security and data breach risks; climate change and sustainability
related concerns; ownership and financing activities; hotel
closures or financial difficulties of our franchisees; operating
risks associated with our international operations; labor
shortages; the outcome of litigation; and our ability to
effectively manage our indebtedness and secure our indebtedness,
including additional indebtedness incurred as a result of the
acquisition of Radisson Hotels Americas. These and other risk
factors are discussed in detail in the company's filings with the
U.S. Securities and Exchange Commission, including our Annual
Report on Form 10-K. We undertake no obligation to publicly update
or revise any forward-looking statement, whether as a result of new
information, future events or otherwise, except as required by
law.
Non-GAAP Financial Measurements and Other Definitions
The company evaluates its operations utilizing the performance
metrics of EBITDA, adjusted EBITDA, adjusted net income, and
adjusted EPS, which are all non-GAAP financial measurements. These
measures, which are reconciled to the comparable GAAP measures in
Exhibits 6 and 7, should not be considered as an alternative to any
measure of performance or liquidity as promulgated under or
authorized by GAAP, such as net income and EPS. The company's
calculation of these measurements may be different from the
calculations used by other companies and comparability may
therefore be limited. We discuss management's reasons for reporting
these non-GAAP measures and how each non-GAAP measure is calculated
below.
In addition to the specific adjustments noted below with respect
to each measure, the adjusted EBITDA, adjusted net income and
adjusted EPS presented herein also exclude restructuring of the
company's operations including employee severance benefit, income
taxes and legal costs, acquisition related to business combination,
due diligence and, transition costs, fluctuations in the market
value of equity securities purchased in contemplation of the
proposed acquisition of Wyndham Hotels, global ERP system
implementation, and related costs to allow for period-over-period
comparison of ongoing core operations before the impact of these
discrete and infrequent charges.
Earnings Before Interest, Taxes, Depreciation, and
Amortization and Adjusted Earnings Before Interest, Taxes,
Depreciation, and Amortization: EBITDA reflects net income
excluding the impact of interest expense, interest income,
provision for income taxes, depreciation and amortization,
impairments and gains on sale of business and assets, other (gains)
and losses, equity in net income (loss) of unconsolidated
affiliates and gain on extinguishment of debt. Adjusted EBITDA,
presented herein, is calculated as EBITDA, as previously defined,
further adjusted to exclude certain items, including,
mark-to-market adjustments on non-qualified retirement plan
investments, share based compensation expense (benefit) and surplus
or deficits generated by reimbursable revenue from franchised and
managed properties. We consider EBITDA and adjusted EBITDA to be an
indicator of operating performance because it measures our ability
to service debt, fund capital expenditures, and expand our
business. We also use these measures, as do analysts, lenders,
investors, and others, to evaluate companies because it excludes
certain items that can vary widely across industries or among
companies within the same industry. For example, interest expense
can be dependent on a company's capital structure, debt levels, and
credit ratings, and share based compensation expense (benefit) is
dependent on the design of compensation plans in place and the
usage of them. Accordingly, the impact of interest expense and
share based compensation expense (benefit) on earnings can vary
significantly among companies. The tax positions of companies can
also vary because of their differing abilities to take advantage of
tax benefits and because of the tax policies of the jurisdictions
in which they operate. As a result, effective tax rates and
provision for income taxes can vary considerably among companies.
These measures also exclude depreciation and amortization because
companies utilize productive assets of different ages and use
different methods of both acquiring and depreciating productive
assets or amortizing franchise-agreement acquisition costs. These
differences can result in considerable variability in the relative
asset costs and estimated lives and, therefore, the depreciation
and amortization expense among companies. Mark-to-market
adjustments on non-qualified retirement-plan investments recorded
in selling, general and administrative (SG&A) expenses are
excluded from adjusted EBITDA, as the company accounts for these
investments in accordance with accounting for deferred-compensation
arrangements when investments are held in a rabbi trust and
invested. Changes in the fair value of the investments are
recognized as both compensation expense in SG&A and other gains
and losses. As a result, the changes in the fair value of the
investments do not have a material impact on the company's net
income. Surpluses and deficits generated from reimbursable revenues
from franchised and managed properties are excluded, as the
company's franchise and management agreements require these
revenues to be used exclusively for expenses associated with
providing franchise and management services, such as central
reservation systems, hotel employee and operating costs,
reservation delivery and national marketing and media advertising.
Franchised and managed property owners are required to reimburse
the company for any deficits generated from these activities and
the company is required to spend any surpluses generated in future
periods. Since these activities will be managed to break-even over
time, quarterly or annual surpluses and deficits have been excluded
from the measurements utilized to assess the company's operating
performance.
Adjusted Net Income and Adjusted Earnings Per Share:
Adjusted net income and EPS exclude the impact of surpluses or
deficits generated from reimbursable revenue from franchised and
managed properties and gains on extinguishment of debt. Surpluses
and deficits generated from reimbursable revenue from franchised
and managed properties are excluded, as the company's franchise
agreements require these revenues to be used exclusively for
expenses associated with providing franchised and managed services,
such as central reservation systems, hotel employee and operating
costs, reservation delivery and national marketing and media
advertising. Franchised and managed property owners are required to
reimburse the company for any deficits generated from activities
and the company is required to spend any surpluses generated in
future periods. Since these activities will be managed to
break-even over time, quarterly or annual surpluses and deficits
have been excluded from the measurements utilized to assess the
company's operating performance. We consider adjusted net income
and adjusted EPS to be indicators of operating performance because
excluding these items allows for period-over-period comparisons of
our ongoing operations.
Occupancy: Occupancy represents the total number of room
nights sold divided by the total number of room nights available at
a hotel for a given period. Occupancy measures the utilization of
the hotels' available capacity. Management uses occupancy to gauge
demand at a specific hotel or group of hotels in a given period.
The company calculates occupancy based on information as reported
by its franchisees. To accurately reflect occupancy, the company
may revise its prior years' operating statistics for the most
current information provided.
Average Daily Rate (ADR): ADR represents hotel room
revenue divided by the total number of room nights sold for a given
period. ADR measures the average room price attained by a hotel and
ADR trends provide useful information concerning the pricing
environment and the nature of the customer base of a hotel or group
of hotels. ADR is a commonly used performance measure in the
industry, and management uses ADR to assess pricing levels that the
company is able to generate. The company calculates ADR based
on information as reported by its franchisees. To accurately
reflect ADR, the company may revise its prior years' operating
statistics for the most current information provided.
RevPAR: RevPAR is calculated by dividing hotel room
revenue by the total number of room nights available to guests for
a given period. Management considers RevPAR to be a meaningful
indicator of hotel performance and therefore company royalty and
system revenues as it provides a metric correlated to the two key
drivers of operations at a hotel: occupancy and ADR. The company
calculates RevPAR based on information as reported by its
franchisees. To accurately reflect RevPAR, the company may revise
its prior years' operating statistics for the most current
information provided. RevPAR is also a useful indicator in
measuring performance over comparable periods.
Pipeline: Pipeline is defined as hotels awaiting
conversion, under construction or approved for development, and
master development agreements committing owners to future franchise
development.
© 2024 Choice Hotels International, Inc. All rights
reserved.
Choice Hotels
International, Inc.
|
|
|
|
|
|
|
Exhibit
1
|
Condensed
Consolidated Statements of Income
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except
per share amounts)
|
Three Months ended
March 31,
|
|
|
|
|
|
Variance
|
|
2024
|
|
2023
|
|
$
|
|
%
|
REVENUES
|
|
|
|
|
|
|
|
Royalty, licensing and
management fees
|
$
105,467
|
|
$
107,492
|
|
$ (2,025)
|
|
(2) %
|
Initial franchise
fees
|
6,705
|
|
7,882
|
|
(1,177)
|
|
(15) %
|
Platform and
procurement services fees
|
13,756
|
|
13,843
|
|
(87)
|
|
(1) %
|
Owned hotels
|
24,991
|
|
22,332
|
|
2,659
|
|
12 %
|
Other
|
16,357
|
|
10,627
|
|
5,730
|
|
54 %
|
Other revenues from
franchised and managed properties
|
164,673
|
|
170,616
|
|
(5,943)
|
|
(3) %
|
Total
revenues
|
331,949
|
|
332,792
|
|
(843)
|
|
— %
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
48,625
|
|
48,921
|
|
(296)
|
|
(1) %
|
Business combination,
diligence and transition costs
|
15,844
|
|
10,362
|
|
5,482
|
|
53 %
|
Depreciation and
amortization
|
10,935
|
|
10,023
|
|
912
|
|
9 %
|
Owned hotels
|
19,323
|
|
17,146
|
|
2,177
|
|
13 %
|
Other expenses from
franchised and managed properties
|
177,073
|
|
168,489
|
|
8,584
|
|
5 %
|
Total
operating expenses
|
271,800
|
|
254,941
|
|
16,859
|
|
7 %
|
|
|
|
|
|
|
|
|
Operating
income
|
60,149
|
|
77,851
|
|
(17,702)
|
|
(23) %
|
|
|
|
|
|
|
|
|
OTHER EXPENSES AND
INCOME, NET
|
|
|
|
|
|
|
|
Interest
expense
|
20,181
|
|
14,084
|
|
6,097
|
|
43 %
|
Interest
income
|
(1,731)
|
|
(1,883)
|
|
152
|
|
(8) %
|
Other loss
(gain)
|
1,336
|
|
(1,908)
|
|
3,244
|
|
(170) %
|
Equity in net loss of
affiliates
|
155
|
|
63
|
|
92
|
|
146 %
|
Total other expenses
and income, net
|
19,941
|
|
10,356
|
|
9,585
|
|
93 %
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
40,208
|
|
67,495
|
|
(27,287)
|
|
(40) %
|
Income tax
expense
|
9,199
|
|
14,675
|
|
(5,476)
|
|
(37) %
|
Net
income
|
$
31,009
|
|
$ 52,820
|
|
$
(21,811)
|
|
(41) %
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
$
0.63
|
|
$
1.02
|
|
$
(0.39)
|
|
(38) %
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
$
0.62
|
|
$
1.02
|
|
$
(0.40)
|
|
(39) %
|
Choice Hotels
International, Inc.
|
|
|
|
Exhibit
2
|
Condensed
Consolidated Balance Sheets
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
|
March
31,
|
|
December 31,
|
|
|
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
|
$
42,111
|
|
$
26,754
|
Accounts receivable,
net
|
|
225,173
|
|
195,896
|
Other current
assets
|
|
71,217
|
|
73,880
|
|
Total current
assets
|
|
338,501
|
|
296,530
|
|
|
|
|
|
|
|
Property and equipment,
net
|
|
517,903
|
|
493,478
|
Operating lease
right-of-use assets
|
|
84,869
|
|
85,101
|
Goodwill
|
|
220,187
|
|
220,187
|
Intangible assets,
net
|
|
821,029
|
|
811,075
|
Notes receivable, net
of allowances
|
|
77,336
|
|
78,900
|
Investments in equity
securities, at fair value
|
|
109,861
|
|
116,374
|
Investments in
affiliates
|
|
78,782
|
|
70,579
|
Investments, employee
benefit plans, at fair value
|
|
43,747
|
|
39,751
|
Other assets
|
|
182,863
|
|
182,824
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
2,475,078
|
|
$
2,394,799
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Accounts
payable
|
|
$
135,297
|
|
$
131,284
|
Accrued expenses and
other current liabilities
|
|
70,164
|
|
109,248
|
Deferred
revenue
|
|
116,003
|
|
108,316
|
Current portion of
long-term debt
|
|
499,471
|
|
499,268
|
Liability for guest
loyalty program
|
|
98,577
|
|
94,574
|
|
Total current
liabilities
|
|
919,512
|
|
942,690
|
|
|
|
|
|
Long-term
debt
|
|
1,195,730
|
|
1,068,751
|
Deferred
revenue
|
|
132,274
|
|
133,501
|
Deferred compensation
& retirement plan obligations
|
|
49,021
|
|
45,657
|
Operating lease
liabilities
|
|
110,529
|
|
109,483
|
Liability for guest
loyalty program
|
|
45,292
|
|
43,266
|
Other
liabilities
|
|
15,993
|
|
15,853
|
|
|
|
|
|
|
|
Total
liabilities
|
|
2,468,351
|
|
2,359,201
|
|
|
|
|
|
|
|
|
Total shareholders'
equity
|
|
6,727
|
|
35,598
|
|
|
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
|
$
2,475,078
|
|
$
2,394,799
|
|
|
|
|
|
|
|
Choice Hotels
International, Inc.
|
|
|
Exhibit
3
|
Condensed
Consolidated Statements of Cash Flows
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
(In
thousands)
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
Net income
|
$
31,009
|
|
$
52,820
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
10,935
|
|
10,023
|
Depreciation and
amortization – other expenses from franchised and managed
properties
|
7,028
|
|
9,276
|
Franchise agreement
acquisition cost amortization
|
6,185
|
|
4,637
|
Non-cash share-based
compensation and other charges
|
10,597
|
|
10,630
|
Non-cash interest,
investments, and affiliate loss (income), net
|
2,510
|
|
(1,442)
|
Deferred income
taxes
|
(736)
|
|
7,566
|
Equity in net loss of
affiliates, less distributions received
|
1,200
|
|
421
|
Franchise agreement
acquisition costs, net of reimbursements
|
(33,486)
|
|
(28,092)
|
Change in working
capital and other
|
(33,501)
|
|
(53,806)
|
Net cash provided
by operating activities
|
1,741
|
|
12,033
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
Investments in property
and equipment
|
(32,777)
|
|
(19,566)
|
Investments in
intangible assets
|
(1,439)
|
|
(1,097)
|
Contributions to
investments in affiliates
|
(9,317)
|
|
(3,620)
|
Proceeds from the sale
of affiliates
|
—
|
|
868
|
Purchases of
investments for employee benefit plans
|
(1,633)
|
|
(2,670)
|
Proceeds from sales of
investments for employee benefit plans
|
1,591
|
|
716
|
Proceeds from sales of
equity securities
|
1,230
|
|
—
|
Issuances of notes
receivable
|
(1,042)
|
|
(3,660)
|
Collections of notes
receivable
|
884
|
|
337
|
Other items,
net
|
(233)
|
|
(771)
|
Net cash used in
investing activities
|
(42,736)
|
|
(29,463)
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
Net borrowings pursuant
to revolving credit facilities
|
126,500
|
|
176,000
|
Debt issuance
costs
|
—
|
|
(755)
|
Purchases of treasury
stock
|
(59,459)
|
|
(160,488)
|
Dividends
paid
|
(14,728)
|
|
(12,821)
|
Proceeds from the
exercise of stock options
|
4,160
|
|
5,504
|
Net cash provided
by financing activities
|
56,473
|
|
7,440
|
Net change in cash
and cash equivalents
|
15,478
|
|
(9,990)
|
Effect of foreign
exchange rate changes on cash and cash equivalents
|
(121)
|
|
103
|
Cash and cash
equivalents, beginning of period
|
26,754
|
|
41,566
|
Cash and cash
equivalents, end of period
|
$
42,111
|
|
$
31,679
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit
4
|
CHOICE HOTELS
INTERNATIONAL, INC.
|
SUPPLEMENTAL
OPERATING INFORMATION
|
DOMESTIC HOTEL
SYSTEM
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended March 31, 2024
|
|
For the Three Months
Ended March 31, 2023
|
|
Change
|
|
|
Average
Daily
|
|
|
|
|
|
Average
Daily
|
|
|
|
|
|
Average
Daily
|
|
|
|
|
|
|
|
Rate
|
|
Occupancy
|
|
RevPAR
|
|
Rate
|
|
Occupancy
|
|
RevPAR
|
|
Rate
|
|
Occupancy
|
|
RevPAR
|
Upscale & Above
(1)
|
|
$
142.90
|
|
51.0 %
|
|
$
72.93
|
|
$
139.70
|
|
51.5 %
|
|
$
71.99
|
|
2.3 %
|
|
(50)
|
bps
|
|
1.3 %
|
Midscale & Upper
Midscale (2)
|
|
93.13
|
|
49.6 %
|
|
46.19
|
|
95.15
|
|
52.2 %
|
|
49.66
|
|
(2.1) %
|
|
(260)
|
bps
|
|
(7.0) %
|
Extended Stay
(3)
|
|
60.48
|
|
69.4 %
|
|
41.97
|
|
62.79
|
|
71.3 %
|
|
44.74
|
|
(3.7) %
|
|
(190)
|
bps
|
|
(6.2) %
|
Economy (4)
|
|
66.64
|
|
42.9 %
|
|
28.59
|
|
67.71
|
|
44.8 %
|
|
30.34
|
|
(1.6) %
|
|
(190)
|
bps
|
|
(5.8) %
|
Total
|
|
$
89.23
|
|
50.7 %
|
|
$
45.24
|
|
$
91.18
|
|
52.7 %
|
|
$
48.06
|
|
(2.1) %
|
|
(200)
|
bps
|
|
(5.9) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Royalty
Rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2024
|
|
March 31,
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
System-wide
|
|
5.03 %
|
|
4.99 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes
Ascend Hotel Collection, Cambria, Park Plaza, Radisson, Radisson
Blu, Radisson Individuals, and Radisson RED brands.
|
(2) Includes
Clarion, Comfort Inn, Country Inn, Park Inn, Quality Inn, Radisson
Inn, and Sleep Inn brands.
|
(3) Includes
Everhome Suites, Mainstay Suites, Suburban Studios, and WoodSpring
Suites brands.
|
(4) Includes
Econo Lodge and Rodeway brands.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit
5
|
CHOICE HOTELS
INTERNATIONAL, INC.
|
SUPPLEMENTAL HOTEL
AND ROOM SUPPLY DATA
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2024
|
|
March 31,
2023
|
|
Variance
|
|
|
Hotels
|
|
Rooms
|
|
Hotels
|
|
Rooms
|
|
Hotels
|
|
%
|
|
Rooms
|
|
%
|
Ascend Hotel
Collection
|
|
202
|
|
22,833
|
|
210
|
|
23,552
|
|
(8)
|
|
(3.8) %
|
|
(719)
|
|
(3.1) %
|
Cambria
Hotels
|
|
73
|
|
10,094
|
|
66
|
|
9,000
|
|
7
|
|
10.6 %
|
|
1,094
|
|
12.2 %
|
Radisson(1)
|
|
60
|
|
14,154
|
|
68
|
|
15,887
|
|
(8)
|
|
(11.8) %
|
|
(1,733)
|
|
(10.9) %
|
Comfort(2)
|
|
1,672
|
|
131,285
|
|
1,657
|
|
130,116
|
|
15
|
|
0.9 %
|
|
1,169
|
|
0.9 %
|
Quality
|
|
1,622
|
|
119,219
|
|
1,624
|
|
120,268
|
|
(2)
|
|
(0.1) %
|
|
(1,049)
|
|
(0.9) %
|
Country
|
|
426
|
|
33,990
|
|
432
|
|
34,494
|
|
(6)
|
|
(1.4) %
|
|
(504)
|
|
(1.5) %
|
Sleep
|
|
424
|
|
29,775
|
|
431
|
|
30,427
|
|
(7)
|
|
(1.6) %
|
|
(652)
|
|
(2.1) %
|
Clarion(3)
|
|
183
|
|
19,561
|
|
184
|
|
20,137
|
|
(1)
|
|
(0.5) %
|
|
(576)
|
|
(2.9) %
|
Park
Inn
|
|
4
|
|
363
|
|
4
|
|
363
|
|
—
|
|
— %
|
|
—
|
|
— %
|
WoodSpring
|
|
240
|
|
28,960
|
|
214
|
|
25,834
|
|
26
|
|
12.1 %
|
|
3,126
|
|
12.1 %
|
MainStay
|
|
127
|
|
8,918
|
|
117
|
|
8,006
|
|
10
|
|
8.5 %
|
|
912
|
|
11.4 %
|
Suburban
|
|
108
|
|
9,226
|
|
75
|
|
6,700
|
|
33
|
|
44.0 %
|
|
2,526
|
|
37.7 %
|
Everhome
|
|
3
|
|
335
|
|
1
|
|
98
|
|
2
|
|
200.0 %
|
|
237
|
|
241.8 %
|
Econo
Lodge
|
|
665
|
|
39,243
|
|
690
|
|
41,157
|
|
(25)
|
|
(3.6) %
|
|
(1,914)
|
|
(4.7) %
|
Rodeway
|
|
464
|
|
26,140
|
|
495
|
|
27,840
|
|
(31)
|
|
(6.3) %
|
|
(1,700)
|
|
(6.1) %
|
Domestic
Franchises
|
|
6,273
|
|
494,096
|
|
6,268
|
|
493,879
|
|
5
|
|
0.1 %
|
|
217
|
|
— %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
Franchises
|
|
1,215
|
|
136,032
|
|
1,199
|
|
132,945
|
|
16
|
|
1.3 %
|
|
3,087
|
|
2.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Franchises
|
|
7,488
|
|
630,128
|
|
7,467
|
|
626,824
|
|
21
|
|
1.4 %
|
|
3,304
|
|
0.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Includes Radisson, Radisson Blu, Radisson
Individuals, and Radisson Red brands.
|
|
|
|
|
|
|
|
|
(2)
Includes Comfort family of brand
extensions including Comfort Inn and Comfort Suites.
|
|
|
|
|
|
|
|
|
(3)
Includes Clarion family of brand
extensions including Clarion and Clarion Pointe.
|
|
|
|
|
|
Exhibit
6
|
CHOICE HOTELS
INTERNATIONAL, INC.
|
SUPPLEMENTAL
NON-GAAP FINANCIAL INFORMATION
|
(UNAUDITED)
|
|
|
|
|
|
|
EARNINGS BEFORE
INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA") AND
ADJUSTED EBITDA
|
(dollar amounts in
thousands)
|
|
Three months ended
March 31,
|
|
|
|
2024
|
|
2023
|
|
|
|
|
|
|
Net income
|
|
$
31,009
|
|
$
52,820
|
|
Income tax
expense
|
|
9,199
|
|
14,675
|
|
Interest
expense
|
|
20,181
|
|
14,084
|
|
Interest
income
|
|
(1,731)
|
|
(1,883)
|
|
Other loss
(gain)
|
|
1,336
|
|
(1,908)
|
|
Equity in net loss of
affiliates
|
|
155
|
|
63
|
|
Depreciation and
amortization
|
|
10,935
|
|
10,023
|
EBITDA
|
|
$
71,084
|
|
$
87,874
|
|
Share-based
compensation
|
|
4,933
|
|
4,606
|
|
Mark to market
adjustments on non-qualified retirement plan investments
|
|
3,719
|
|
1,817
|
|
Franchise agreement
acquisition costs amortization and charges
|
|
3,527
|
|
2,661
|
|
Net reimbursable
deficit (surplus) from franchised and managed properties
|
|
24,443
|
|
(874)
|
|
Business combination,
diligence and transition costs
|
|
15,844
|
|
10,362
|
|
Operational
restructuring charges
|
|
791
|
|
—
|
Adjusted
EBITDA
|
|
$
124,341
|
|
$
106,446
|
|
|
|
|
|
|
ADJUSTED NET INCOME
AND ADJUSTED DILUTED EARNINGS PER SHARE (EPS)
|
(dollar amounts in
thousands, except per share amounts)
|
|
Three months ended
March 31,
|
|
|
|
2024
|
|
2023
|
|
|
|
|
|
|
Net income
|
|
$
31,009
|
|
$
52,820
|
|
Loss on investments in
equity securities, net of dividend income
|
|
3,187
|
|
—
|
|
Net reimbursable
deficit (surplus) from franchised and managed properties
|
|
16,922
|
|
(2,500)
|
|
Business combination,
diligence and transition costs
|
|
11,947
|
|
7,854
|
|
Operational
restructuring charges
|
|
596
|
|
—
|
Adjusted Net
Income
|
|
$
63,661
|
|
$
58,174
|
|
|
|
|
|
|
Diluted Earnings Per
Share
|
|
$
0.62
|
|
$
1.02
|
|
Loss on investments in
equity securities, net of dividend income
|
|
0.06
|
|
—
|
|
Net reimbursable
deficit (surplus) from franchised and managed properties
|
|
0.35
|
|
(0.05)
|
|
Business combination,
diligence and transition costs
|
|
0.24
|
|
0.15
|
|
Operational
restructuring charges
|
|
0.01
|
|
—
|
Adjusted Diluted
Earnings Per Share (EPS)
|
|
$
1.28
|
|
$
1.12
|
|
|
|
|
|
Exhibit 7
|
CHOICE HOTELS INTERNATIONAL,
INC.
|
SUPPLEMENTAL INFORMATION - 2024
OUTLOOK
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
Guidance represents the company's range of estimated
outcomes for the full year ended December 31,
2024
|
|
|
|
|
|
|
EBITDA AND ADJUSTED EBITDA
|
|
|
|
|
(in
thousands)
|
|
Full Year
|
|
Full Year
|
|
|
|
Lower Range
|
|
Upper Range
|
|
|
|
|
|
|
Net income
|
|
$
260,000
|
|
$
274,000
|
|
Income tax
expense
|
|
84,200
|
|
88,800
|
|
Interest
expense
|
|
92,800
|
|
93,900
|
|
Interest
income
|
|
(6,100)
|
|
(6,100)
|
|
Other loss
|
|
300
|
|
300
|
|
Equity in net gain of
affiliates
|
|
(700)
|
|
(400)
|
|
Depreciation and
amortization
|
|
51,000
|
|
51,000
|
EBITDA
|
|
$
481,500
|
|
$
501,500
|
|
Mark to market
adjustments on non-qualified retirement plan investments
|
|
3,700
|
|
3,700
|
|
Share-based
compensation
|
|
20,500
|
|
20,500
|
|
Franchise agreement
acquisition costs amortization
|
|
16,900
|
|
16,900
|
|
Net reimbursable
deficit from franchised and managed properties
|
|
35,000
|
|
35,000
|
|
Business combination,
diligence and transition costs
|
|
18,300
|
|
18,300
|
|
Operational
restructuring charges
|
|
800
|
|
800
|
|
Global ERP system
implementation and related costs
|
|
3,300
|
|
3,300
|
Adjusted
EBITDA
|
|
$
580,000
|
|
$
600,000
|
|
|
|
|
|
|
ADJUSTED NET INCOME & DILUTED EARNINGS PER SHARE
(EPS)
|
|
|
|
|
(in thousands, except
per share amounts)
|
|
Full Year
|
|
Full Year
|
|
|
|
Lower Range
|
|
Upper Range
|
|
|
|
|
|
|
Net income
|
|
$
260,000
|
|
$
274,000
|
|
Loss on investments in
equity securities, net of dividend income
|
|
3,200
|
|
3,200
|
|
Net reimbursable
deficit from franchised and managed properties
|
|
25,900
|
|
25,900
|
|
Business combination,
diligence and transition costs
|
|
13,800
|
|
13,800
|
|
Operational
restructuring charges
|
|
600
|
|
600
|
|
Global ERP system
implementation and related costs
|
|
2,500
|
|
2,500
|
Adjusted Net
Income
|
|
$
306,000
|
|
$
320,000
|
|
|
|
|
|
|
Diluted Earnings Per
Share
|
|
$
5.35
|
|
$
5.65
|
|
Loss on investments in
equity securities, net of dividend income
|
|
0.07
|
|
0.07
|
|
Net reimbursable
deficit from franchised and managed properties
|
|
0.53
|
|
0.53
|
|
Business combination,
diligence and transition costs
|
|
0.29
|
|
0.29
|
|
Operational
restructuring charges
|
|
0.01
|
|
0.01
|
|
Global ERP system
implementation and related costs
|
|
0.05
|
|
0.05
|
Adjusted Diluted
Earnings Per Share (EPS)
|
|
$
6.30
|
|
$
6.60
|
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SOURCE Choice Hotels International, Inc.