Choice Hotels Reports Quarterly Record for Total Revenues for Q2 2023
Choice Hotels International, Inc. (NYSE: CHH) today reported its second quarter 2023 results.
Highlights of second quarter 2023 results include:
- Total revenues reached $427.4 million for second quarter 2023, a quarterly record and a 16% increase compared to the same period of 2022.
- Net income reached $84.7 million for second quarter 2023, representing diluted earnings per share (EPS) of $1.65. As a result of one-time items, including Radisson Hotels Americas integration costs and the timing of net reimbursable expenses, net income and diluted EPS were 20% and 13% lower, respectively, for second quarter 2023 compared to the same period of 2022.
- Second quarter 2023 adjusted net income, excluding certain items described in Exhibit 6, increased 12% to $89.1 million compared to the same period of 2022 and the company’s adjusted diluted EPS increased 22% to $1.75 compared to the same period of 2022.
- Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for second quarter 2023 reached $153.1 million, a quarterly record and an 18% increase compared to the same period of 2022.
- The company further refined its financial guidance for full-year 2023, as described in the outlook section below.
- The company’s domestic effective royalty rate for both the three-month and six-month periods ended June 30, 2023 increased 6 basis points to 4.99% compared to the respective 2022 periods.
- The company’s Cambria Hotels and WoodSpring Suites brands were ranked number one in guest satisfaction among upscale and economy extended stay hotel brands, respectively, in the J.D. Power 2023 North America Hotel Guest Satisfaction Index Study.2
- The company’s global pipeline as of June 30, 2023 increased 10% to over 93,000 rooms. The company’s global rooms pipeline for conversion hotels as of June 30, 2023 increased 14% from June 30, 2022 and 25% from March 31, 2023. The company’s domestic rooms pipeline for conversion hotels as of June 30, 2023 increased 10% from June 30, 2022 and 28% from March 31, 2023.
- The company achieved $80 million of annual recurring synergies through the Radisson Hotels Americas integration, exceeding the company’s original synergy target ahead of schedule. In July 2023, the company onboarded the nearly 600 Radisson Hotels Americas hotels onto its world-class reservation delivery engine and integrated the two award-winning loyalty programs.
- During the first six months of 2023, the company returned approximately $264 million to shareholders in the form of cash dividends and share repurchases. Over the trailing twelve months ended June 30, 2023, the company repurchased 5.6 million shares of common stock totaling over $655 million, representing 10% of the shares outstanding as of June 30, 2022.
“Choice Hotels generated record revenues, fueled by our best-in-class hotel conversion and reservation-delivery capabilities as well as our success in integrating Radisson Hotels Americas ahead of schedule,” said Patrick Pacious, president and chief executive officer. “The exceptional speed with which we are able to move conversion projects through the pipeline has driven impressive revenue-intense hotel openings in the first half of 2023 and further strengthened our award-winning brand portfolio, reinforcing our confidence in the company’s ability to drive significant growth in 2023 and beyond.”
Financial Performance
- Total revenues, excluding reimbursable revenue from franchised and managed properties, increased 28% to $227.8 million for second quarter 2023 compared to the same period of 2022.
- Platform and procurement services fees increased 32% to $28.8 million for second quarter 2023 compared to the same period of 2022.
- Royalty, licensing, and management fees increased 16% to $140.5 million for second quarter 2023 compared to the same period of 2022.
- Domestic royalties increased 7% to $125.1 million for second quarter 2023 compared to the same period of 2022.
- Domestic revenue per available room (RevPAR) increased 50 basis points for second quarter 2023 compared to the same period of 2022, driven by a 2.8% increase in average daily rate. The company’s second quarter 2023 occupancy levels exceeded 60%.
Development
- The company’s upscale, extended-stay, and midscale segments reported a 10.0% increase in hotels and an 11.7% increase in rooms since June 30, 2022. The company’s total number of domestic hotels and rooms as of June 30, 2023 increased 6.9% and 8.8%, respectively, from June 30, 2022.
- The total number of international hotels and rooms, as of June 30, 2023 increased 9.0% and 11.8%, respectively, from June 30, 2022.
- As of June 30, 2023, the domestic system size for the company’s upscale and upper-midscale segments grew by approximately 32% and 24%, respectively, since June 30, 2022, driven by an increase in the number of Radisson Hotels Americas units and the growth of the Ascend Hotel Collection, Cambria Hotels, and the Comfort family of brands.
- The company executed an average of more than four hotel openings per week, for a total of 107 hotel openings year-to-date through June 30, 2023, a 39% increase compared to the same period of 2022. For the first half of 2023, the company grew hotel openings across all segments, increasing openings in the upscale segment by 83%, the midscale segment by 42%, the extended stay segment by 50%, and the economy segment by 11% compared to the same period of 2022.
- Of the total domestic franchise agreements awarded in the six months ended June 30, 2023, 85% were for the company’s upscale, extended-stay, and midscale brands and 77% were for conversion hotels. Of the 126 franchise agreements awarded for conversion hotels in the six months ended June 30, 2023, 65% have already opened or are expected to open by December 31, 2023.
- The company’s domestic pipeline increased 9% to over 87,000 rooms, representing 899 hotels, and the international pipeline increased 29% to over 6,300 rooms, representing 61 hotels. The company’s extended stay and upscale domestic pipelines increased 17% to 450 hotels and 27% to 127 hotels, respectively.
Shareholder Returns
During the six months ended June 30, 2023, the company paid cash dividends totaling approximately $28 million.
During the six months ended June 30, 2023, the company repurchased 1.8 million shares of common stock for $236.3 million under its stock repurchase program as well as through repurchases from employees in connection with tax withholding and option exercises relating to awards under the company’s equity incentive plans. Over the trailing twelve months ended June 30, 2023, the company repurchased 5.6 million shares of common stock totaling over $655 million, representing 10% of the shares outstanding as of June 30, 2022.
As of June 30, 2023, the company had 2.8 million shares of common stock remaining under the current share repurchase authorization.
Outlook
The outlook information provided below is inclusive of the Radisson Hotels Americas acquisition unless otherwise noted and includes forward-looking non-GAAP financial measures, which management uses in measuring 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, and other items:
|
Full-Year 2023 |
Prior Outlook |
|
|
Net Income |
$251 – $259 million |
$255 – $265 million |
|
Adjusted Net Income |
$298 – $306 million |
$292 – $302 million |
|
Adjusted EBITDA |
$530 – $540 million |
$525 – $540 million |
|
Adjusted Diluted EPS |
$5.86 – $6.01 |
$5.70 – $5.90 |
|
Effective Income Tax Rate |
24 % |
24 % |
|
Full-Year 2023 |
Prior Outlook |
|
|
vs. Full-Year 2022 |
||
|
Domestic RevPAR Growth3 |
Approximately 2% |
Approximately 2% |
|
Domestic Effective Royalty Rate Growth4 |
Mid-single digits |
Mid-single digits |
|
Domestic Net Unit Growth |
Approximately 1% |
Approximately 1% |
|
(upscale, extended-stay, and midscale segments) |
About Choice Hotels
Choice Hotels International, Inc. (NYSE: CHH) is one of the largest lodging franchisors in the world, with approximately 7,500 hotels, representing nearly 630,000 rooms, in 46 countries and territories as of June 30, 2023.
|
1 All figures are inclusive of Radisson Hotels Americas, except where otherwise noted. For comparative purposes, domestic RevPAR and the effective royalty rate assume the Radisson Hotels Americas brands were acquired on January 1, 2022. |
|||
|
Choice Hotels International, Inc. and Subsidiaries |
Exhibit 1 |
|||||||||||||||
|
Condensed Consolidated Statements of Income |
||||||||||||||||
|
(Unaudited) |
||||||||||||||||
|
(In thousands, except per share amounts) |
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||
|
Variance |
Variance |
|||||||||||||||
|
2023 |
2022 |
$ |
% |
2023 |
2022 |
$ |
% |
|||||||||
|
REVENUES |
||||||||||||||||
|
Royalty, licensing and management fees |
$ 140,499 |
$ 121,449 |
$ 19,050 |
16 % |
$ 247,991 |
$ 212,188 |
$ 35,803 |
17 % |
||||||||
|
Initial franchise fees |
7,164 |
6,222 |
942 |
15 % |
15,046 |
14,624 |
422 |
3 % |
||||||||
|
Platform and procurement services fees |
28,801 |
21,803 |
6,998 |
32 % |
42,644 |
33,486 |
9,158 |
27 % |
||||||||
|
Owned hotels |
25,504 |
17,191 |
8,313 |
48 % |
47,836 |
29,228 |
18,608 |
64 % |
||||||||
|
Other |
11,148 |
11,927 |
(779) |
(7) % |
21,775 |
20,156 |
1,619 |
8 % |
||||||||
|
Other revenues from franchised and managed properties |
214,304 |
189,382 |
24,922 |
13 % |
384,920 |
316,019 |
68,901 |
22 % |
||||||||
|
Total revenues |
427,420 |
367,974 |
59,446 |
16 % |
760,212 |
625,701 |
255,307 |
21 % |
||||||||
|
OPERATING EXPENSES |
||||||||||||||||
|
Selling, general and administrative |
67,804 |
43,888 |
23,916 |
54 % |
127,087 |
74,212 |
52,875 |
71 % |
||||||||
|
Depreciation and amortization |
9,812 |
5,479 |
4,333 |
79 % |
19,835 |
11,710 |
8,125 |
69 % |
||||||||
|
Owned hotels |
18,150 |
10,692 |
7,458 |
70 % |
35,296 |
18,846 |
16,450 |
87 % |
||||||||
|
Other expenses from franchised and managed properties |
207,265 |
153,846 |
53,419 |
35 % |
375,754 |
267,496 |
108,258 |
40 % |
||||||||
|
Total operating expenses |
303,031 |
213,905 |
89,126 |
42 % |
557,972 |
372,264 |
185,708 |
50 % |
||||||||
|
Gain on sale of business and assets, net |
— |
3,280 |
(3,280) |
(100) % |
— |
3,309 |
(3,309) |
(100) % |
||||||||
|
Operating income |
124,389 |
157,349 |
(32,960) |
(21) % |
202,240 |
256,746 |
66,290 |
(21) % |
||||||||
|
OTHER INCOME AND EXPENSES, NET |
||||||||||||||||
|
Interest expense |
16,270 |
11,252 |
5,018 |
45 % |
30,354 |
22,722 |
7,632 |
34 % |
||||||||
|
Interest income |
(2,056) |
(1,628) |
(428) |
26 % |
(3,939) |
(2,908) |
(1,031) |
35 % |
||||||||
|
Other (gain) loss |
(2,187) |
5,559 |
(7,746) |
(139) % |
(4,095) |
7,275 |
(11,370) |
(156) % |
||||||||
|
Equity in net (gain) loss of affiliates |
(185) |
40 |
(225) |
(563) % |
(122) |
(204) |
82 |
(40) % |
||||||||
|
Total other income and expenses, net |
11,842 |
15,223 |
(3,381) |
(22) % |
22,198 |
26,885 |
(4,687) |
(17) % |
||||||||
|
Income before income taxes |
112,547 |
142,126 |
(29,579) |
(21) % |
180,042 |
229,861 |
(49,819) |
(22) % |
||||||||
|
Income tax expense |
27,837 |
35,958 |
(8,121) |
(23) % |
42,512 |
56,302 |
(13,790) |
(24) % |
||||||||
|
Net income |
$ 84,710 |
$ 106,168 |
$ (21,458) |
(20) % |
$ 137,530 |
$ 173,559 |
$ (36,029) |
(21) % |
||||||||
|
Basic earnings per share |
$ 1.66 |
$ 1.90 |
$ (0.24) |
(13) % |
$ 2.68 |
$ 3.11 |
$ (0.43) |
(14) % |
||||||||
|
Diluted earnings per share |
$ 1.65 |
$ 1.89 |
$ (0.24) |
(13) % |
$ 2.66 |
$ 3.08 |
$ (0.42) |
(14) % |
||||||||
|
Choice Hotels International, Inc. and Subsidiaries |
Exhibit 2 |
|||||
|
Condensed Consolidated Balance Sheets |
||||||
|
(Unaudited) |
||||||
|
(In thousands) |
June 30, |
December 31, |
||||
|
2023 |
2022 |
|||||
|
ASSETS |
||||||
|
Cash and cash equivalents |
$ 36,167 |
$ 41,566 |
||||
|
Accounts receivable, net |
220,100 |
216,614 |
||||
|
Other current assets |
91,867 |
89,742 |
||||
|
Total current assets |
348,134 |
347,922 |
||||
|
Property and equipment, net |
449,313 |
427,306 |
||||
|
Intangible assets, net |
764,377 |
742,190 |
||||
|
Goodwill |
220,187 |
218,653 |
||||
|
Notes receivable, net of allowances |
50,022 |
55,577 |
||||
|
Investments in affiliates |
44,946 |
30,647 |
||||
|
Operating lease right-of-use assets |
63,902 |
68,985 |
||||
|
Investments, employee benefit plans, at fair value |
36,278 |
31,645 |
||||
|
Other assets |
173,164 |
179,250 |
||||
|
Total assets |
$ 2,150,323 |
$ 2,102,175 |
||||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||
|
Accounts payable |
$ 120,977 |
$ 118,863 |
||||
|
Accrued expenses and other current liabilities |
98,791 |
131,410 |
||||
|
Deferred revenue |
95,658 |
92,695 |
||||
|
Current portion of long-term debt |
4,416 |
2,976 |
||||
|
Liability for guest loyalty program |
86,844 |
89,954 |
||||
|
Total current liabilities |
406,686 |
435,898 |
||||
|
Long-term debt |
1,384,293 |
1,200,547 |
||||
|
Deferred revenue |
131,873 |
134,149 |
||||
|
Liability for guest loyalty program |
46,316 |
47,381 |
||||
|
Operating lease liabilities |
68,785 |
70,994 |
||||
|
Deferred compensation & retirement plan obligations |
41,283 |
36,673 |
||||
|
Other liabilities |
16,396 |
21,873 |
||||
|
Total liabilities |
2,095,632 |
1,947,515 |
||||
|
Total shareholders’ equity |
54,691 |
154,660 |
||||
|
Total liabilities and shareholders’ equity |
$ 2,150,323 |
$ 2,102,175 |
||||
|
Choice Hotels International, Inc. and Subsidiaries |
Exhibit 3 |
||
|
Condensed Consolidated Statements of Cash Flows |
|||
|
(Unaudited) |
|||
|
(In thousands) |
Six Months Ended June 30, |
||
|
2023 |
2022 |
||
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|||
|
Net income |
$ 137,530 |
$ 173,559 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|||
|
Depreciation and amortization |
19,835 |
11,710 |
|
|
Depreciation and amortization – marketing and reservation system |
18,581 |
14,608 |
|
|
Gain on sale and disposal of business and assets, net |
— |
(3,309) |
|
|
Franchise agreement acquisition cost amortization |
9,380 |
7,623 |
|
|
Non-cash stock compensation and other charges |
23,689 |
17,770 |
|
|
Non-cash interest, investment, and affiliate (income) loss, net |
(3,098) |
7,459 |
|
|
Deferred income taxes |
2,157 |
(5,493) |
|
|
Equity in net gain of affiliates, less distributions received |
637 |
745 |
|
|
Franchise agreement acquisition costs, net of reimbursements |
(46,150) |
(27,016) |
|
|
Change in working capital and other |
(36,822) |
(38,307) |
|
|
NET CASH PROVIDED BY OPERATING ACTIVITIES |
125,739 |
159,349 |
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|||
|
Investment in property and equipment |
(45,684) |
(49,866) |
|
|
Investment in intangible assets |
(1,385) |
(1,824) |
|
|
Proceeds from sale of assets and business |
— |
32,893 |
|
|
Asset acquisition, net of cash acquired |
— |
(856) |
|
|
Contributions to investments in affiliates |
(15,328) |
(669) |
|
|
Proceeds from sale of equity method investments |
868 |
— |
|
|
Purchases of investments, employee benefit plans |
(3,206) |
(3,294) |
|
|
Proceeds from sales of investments, employee benefit plans |
1,099 |
1,854 |
|
|
Issuance of notes receivable |
(4,284) |
(1,987) |
|
|
Collections of notes receivable |
9,296 |
63 |
|
|
Other items, net |
(526) |
(305) |
|
|
NET CASH USED IN INVESTING ACTIVITIES |
(59,150) |
(23,991) |
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|||
|
Net borrowings pursuant to revolving credit facilities |
185,000 |
— |
|
|
Debt issuance costs |
(755) |
(24) |
|
|
Purchases of treasury stock |
(234,455) |
(15,140) |
|
|
Proceeds from exercise of stock options |
5,616 |
2,359 |
|
|
Dividends paid |
(27,534) |
(26,453) |
|
|
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES |
(72,128) |
(39,258) |
|
|
Net change in cash and cash equivalents |
(5,539) |
96,100 |
|
|
Effect of foreign exchange rate changes on cash and cash equivalents |
140 |
(520) |
|
|
Cash and cash equivalents at beginning of period |
41,566 |
511,605 |
|
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ 36,167 |
$ 607,185 |
|
|
Exhibit 4 |
||||||||||||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES |
||||||||||||||||||
|
SUPPLEMENTAL OPERATING INFORMATION |
||||||||||||||||||
|
DOMESTIC HOTEL SYSTEM |
||||||||||||||||||
|
(UNAUDITED) |
||||||||||||||||||
|
For the Three Months Ended June 30, 2023 |
For the Three Months Ended June 30, 2022 |
Change |
||||||||||||||||
|
Average Daily |
Average Daily |
Average Daily |
||||||||||||||||
|
Rate |
Occupancy |
RevPAR |
Rate |
Occupancy |
RevPAR |
Rate |
Occupancy |
RevPAR |
||||||||||
|
Upscale & Above(1) |
$ 155.07 |
59.9 % |
$ 92.94 |
$ 149.60 |
58.0 % |
$ 86.84 |
3.7 % |
190 |
bps |
7.0 % |
||||||||
|
Midscale & Upper Midscale(2) |
104.50 |
60.5 % |
63.18 |
103.42 |
61.2 % |
63.33 |
1.0 % |
(70) |
bps |
(0.2) % |
||||||||
|
Extended Stay(3) |
65.24 |
74.6 % |
48.64 |
62.44 |
78.8 % |
49.23 |
4.5 % |
(420) |
bps |
(1.2) % |
||||||||
|
Economy(4) |
72.72 |
50.5 % |
36.74 |
72.94 |
53.0 % |
38.67 |
(0.3) % |
(250) |
bps |
(5.0) % |
||||||||
|
Total(5) |
$ 100.10 |
60.3 % |
$ 60.32 |
$ 97.42 |
61.6 % |
$ 60.04 |
2.8 % |
(130) |
bps |
0.5 % |
||||||||
|
For the Six Months Ended June 30, 2023 |
For the Six Months Ended June 30, 2022 |
Change |
||||||||||||||||
|
Average Daily |
Average Daily |
Average Daily |
||||||||||||||||
|
Rate |
Occupancy |
RevPAR |
Rate |
Occupancy |
RevPAR |
Rate |
Occupancy |
RevPAR |
||||||||||
|
Upscale & Above(1) |
$ 148.02 |
55.6 % |
$ 82.34 |
$ 141.20 |
52.6 % |
$ 74.32 |
4.8 % |
300 |
bps |
10.8 % |
||||||||
|
Midscale & Upper Midscale(2) |
100.19 |
56.4 % |
56.46 |
98.06 |
56.3 % |
55.24 |
2.2 % |
10 |
bps |
2.2 % |
||||||||
|
Extended Stay(3) |
64.07 |
72.9 % |
46.73 |
60.88 |
76.7 % |
46.67 |
5.2 % |
(380) |
bps |
0.1 % |
||||||||
|
Economy(4) |
70.35 |
47.7 % |
33.53 |
69.69 |
49.4 % |
34.40 |
0.9 % |
(170) |
bps |
(2.5) % |
||||||||
|
Total(5) |
$ 95.97 |
56.5 % |
$ 54.22 |
$ 92.30 |
57.1 % |
$ 52.73 |
4.0 % |
(60) |
bps |
2.8 % |
||||||||
|
Effective Royalty Rate |
||||||||||||||||||
|
For the Three Months Ended |
For the Six Months Ended |
|||||||||||||||||
|
June 30, 2023 |
June 30, 2022 |
June 30, 2023 |
June 30, 2022 |
|||||||||||||||
|
System-wide(5) |
4.99 % |
4.93 % |
4.99 % |
4.93 % |
||||||||||||||
|
(1) Includes Cambria, Ascend, Radisson Blu, Radisson Red, Park Plaza, Radisson Individuals and Radisson brands. |
||||||||||||||||||
|
(2) Includes Country, Comfort, Clarion, Sleep, Quality and Park brands. |
||||||||||||||||||
|
(3) Includes WoodSpring, Mainstay, Suburban and Everhome brands. |
||||||||||||||||||
|
(4) Includes Econo Lodge and Rodeway brands. |
||||||||||||||||||
|
(5) Radisson Hotels Americas was acquired on August 11, 2022. To enhance comparability, ADR, Occupancy, RevPAR, and effective royalty rate reflect operating performance for the three and six months ended June 30, 2022 as if the legacy Radisson brands were acquired on January 1, 2022. |
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|
Exhibit 5 |
||||||||||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES |
||||||||||||||||
|
SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA |
||||||||||||||||
|
(UNAUDITED) |
||||||||||||||||
|
June 30, 2023 |
June 30, 2022 |
Variance |
||||||||||||||
|
Hotels |
Rooms |
Hotels |
Rooms |
Hotels |
Rooms |
% |
% |
|||||||||
|
Ascend Hotel Collection |
200 |
22,665 |
197 |
20,381 |
3 |
2,284 |
1.5 % |
11.2 % |
||||||||
|
Cambria Hotels |
69 |
9,399 |
60 |
8,303 |
9 |
1,096 |
15.0 % |
13.2 % |
||||||||
|
Radisson(1) |
68 |
15,887 |
— |
— |
68 |
15,887 |
NM |
NM |
||||||||
|
Comfort(2) |
1,688 |
132,572 |
1,659 |
130,637 |
29 |
1,935 |
1.7 % |
1.5 % |
||||||||
|
Country(3) |
430 |
34,326 |
— |
— |
430 |
34,326 |
NM |
NM |
||||||||
|
Clarion(4) |
176 |
19,329 |
188 |
21,100 |
(12) |
(1,771) |
(6.4) % |
(8.4) % |
||||||||
|
Quality |
1,618 |
119,590 |
1,630 |
121,149 |
(12) |
(1,559) |
(0.7) % |
(1.3) % |
||||||||
|
Sleep |
427 |
30,149 |
418 |
29,419 |
9 |
730 |
2.2 % |
2.5 % |
||||||||
|
Park |
4 |
363 |
— |
— |
4 |
363 |
NM |
NM |
||||||||
|
Everhome |
1 |
98 |
— |
— |
1 |
98 |
NM |
NM |
||||||||
|
MainStay |
119 |
8,152 |
107 |
7,549 |
12 |
603 |
11.2 % |
8.0 % |
||||||||
|
WoodSpring |
224 |
27,005 |
312 |
37,586 |
(88) |
(10,581) |
(28.2) % |
(28.2) % |
||||||||
|
Suburban |
83 |
7,408 |
70 |
6,246 |
13 |
1,162 |
18.6 % |
18.6 % |
||||||||
|
Econo Lodge |
676 |
39,906 |
718 |
43,161 |
(42) |
(3,255) |
(5.8) % |
(7.5) % |
||||||||
|
Rodeway |
484 |
27,286 |
505 |
28,783 |
(21) |
(1,497) |
(4.2) % |
(5.2) % |
||||||||
|
Domestic Franchises(5) |
6,267 |
494,135 |
5,864 |
454,314 |
403 |
39,821 |
6.9 % |
8.8 % |
||||||||
|
International Franchises(5) |
1,205 |
134,766 |
1,106 |
120,574 |
99 |
14,192 |
9.0 % |
11.8 % |
||||||||
|
Total Franchises |
7,472 |
628,901 |
6,970 |
574,888 |
502 |
54,013 |
7.2 % |
9.4 % |
||||||||
|
(1) Includes Radisson Blu, Radisson Red, Radisson Individuals and Radisson brands. |
|||||||||||||||||
|
(2) Includes Comfort family of brand extensions including Comfort and Comfort Suites. |
|||||||||||||||||
|
(3) Includes Country Inn & Suites and Park Plaza brands. |
|||||||||||||||||
|
(4) Includes Clarion family of brand extensions including Clarion and Clarion Pointe. |
|||||||||||||||||
|
(5) The Company reclassified six properties located in the Caribbean from Domestic Franchises to International Franchises as of June 30, 2022 to conform to current year presentation. |
|||||||||||||||||
|
Exhibit 6 |
|||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES |
|||||||||
|
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION |
|||||||||
|
(UNAUDITED) |
|||||||||
|
REVENUES EXCLUDING REIMBURSABLE REVENUE FROM FRANCHISED AND MANAGED PROPERTIES |
|||||||||
|
(dollar amounts in thousands) |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||
|
2023 |
2022 |
2023 |
2022 |
||||||
|
Total Revenues |
$ 427,420 |
$ 367,974 |
$ 760,212 |
$ 625,701 |
|||||
|
Adjustments: |
|||||||||
|
Reimbursable revenue from franchised and managed properties |
(199,645) |
(189,382) |
(357,427) |
(316,019) |
|||||
|
Revenues excluding reimbursable revenue from franchised and managed properties |
$ 227,775 |
$ 178,592 |
$ 402,785 |
$ 309,682 |
|||||
|
ADJUSTED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES |
|||||||||
|
(dollar amounts in thousands) |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||
|
2023 |
2022 |
2023 |
2022 |
||||||
|
Total Selling, General and Administrative Expenses |
$ 67,804 |
$ 43,888 |
$ 127,087 |
74,212 |
|||||
|
Mark to market adjustments on non-qualified retirement plan investments |
(2,051) |
4,835 |
(3,868) |
6,560 |
|||||
|
Operational restructuring charges |
(3,082) |
— |
(5,340) |
— |
|||||
|
Share-based compensation |
(6,007) |
(4,613) |
(10,613) |
(8,207) |
|||||
|
Due diligence and transition costs |
(7,867) |
(3,569) |
(15,971) |
(3,970) |
|||||
|
Limited payment guarantee charge |
(1,551) |
— |
(1,551) |
— |
|||||
|
Adjusted Selling, General and Administrative Expenses |
$ 47,246 |
$ 40,541 |
$ 89,744 |
$ 68,595 |
|||||
|
ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (“EBITDA”) |
|||||||||
|
(dollar amounts in thousands) |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||
|
2023 |
2022 |
2023 |
2022 |
||||||
|
Net income |
$ 84,710 |
$ 106,168 |
$ 137,530 |
$ 173,559 |
|||||
|
Income tax expense |
27,837 |
35,958 |
42,512 |
56,302 |
|||||
|
Interest expense |
16,270 |
11,252 |
30,354 |
22,722 |
|||||
|
Interest income |
(2,056) |
(1,628) |
(3,939) |
(2,908) |
|||||
|
Other (gain) loss |
(2,187) |
5,559 |
(4,095) |
7,275 |
|||||
|
Equity in net (gain) loss of affiliates |
(185) |
40 |
(122) |
(204) |
|||||
|
Gain on sale of business and assets, net |
— |
(3,280) |
— |
(3,309) |
|||||
|
Depreciation and amortization |
9,812 |
5,479 |
19,835 |
11,710 |
|||||
|
Mark to market adjustments on non-qualified retirement plan investments |
2,051 |
(4,835) |
3,868 |
(6,560) |
|||||
|
Operational restructuring charges |
3,082 |
— |
5,340 |
— |
|||||
|
Share-based compensation |
6,007 |
4,613 |
10,613 |
8,207 |
|||||
|
Due diligence and transition costs |
7,867 |
3,569 |
15,971 |
3,970 |
|||||
|
Limited payment guarantee charge |
1,551 |
— |
1,551 |
— |
|||||
|
Net reimbursable surplus from franchised and managed properties |
(4,388) |
(35,536) |
(5,262) |
(48,523) |
|||||
|
Franchise agreement acquisition costs amortization |
2,736 |
2,196 |
5,397 |
4,358 |
|||||
|
Adjusted EBITDA |
$ 153,107 |
$ 129,555 |
$ 259,553 |
$ 226,599 |
|||||
|
ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE (EPS) |
|||||||||
|
(dollar amounts in thousands, except per share amounts) |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||
|
2023 |
2022 |
2023 |
2022 |
||||||
|
Net income |
$ 84,710 |
$ 106,168 |
$ 137,530 |
$ 173,559 |
|||||
|
Adjustments: |
|||||||||
|
Gain on sale of business and assets, net |
— |
(2,473) |
— |
(2,495) |
|||||
|
Operational restructuring charges |
2,331 |
— |
4,042 |
— |
|||||
|
Due diligence and transition costs |
5,947 |
2,691 |
12,090 |
2,993 |
|||||
|
Limited payment guarantee charge |
1,174 |
— |
1,174 |
— |
|||||
|
Net reimbursable surplus from franchised and managed properties |
(5,050) |
(26,510) |
(7,550) |
(36,198) |
|||||
|
Adjusted Net Income |
$ 89,112 |
$ 79,876 |
$ 147,286 |
$ 137,859 |
|||||
|
Diluted Earnings Per Share |
$ 1.65 |
$ 1.89 |
$ 2.66 |
$ 3.08 |
|||||
|
Adjustments: |
|||||||||
|
Gain on sale of business and assets, net |
— |
(0.04) |
— |
(0.04) |
|||||
|
Operational restructuring charges |
0.05 |
— |
0.08 |
— |
|||||
|
Due diligence and transition costs |
0.12 |
0.05 |
0.24 |
0.05 |
|||||
|
Limited payment guarantee charge |
0.02 |
— |
0.02 |
— |
|||||
|
Net reimbursable surplus from franchised and managed properties |
(0.09) |
(0.47) |
(0.13) |
(0.64) |
|||||
|
Adjusted Diluted Earnings Per Share (EPS) |
$ 1.75 |
$ 1.43 |
$ 2.87 |
$ 2.45 |
|||||
|
Exhibit 7 |
|||
|
CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES |
|||
|
SUPPLEMENTAL INFORMATION – 2023 OUTLOOK |
|||
|
(UNAUDITED) |
|||
|
Guidance represents the midpoint of the company’s range of estimated outcomes for the year ended December 31, 2023 |
|||
|
ADJUSTED EBITDA FULL YEAR FORECAST |
|||
|
(dollar amounts in thousands) |
Midpoint |
||
|
2023 Guidance |
|||
|
Net income |
$ 254,800 |
||
|
Income tax expense |
81,800 |
||
|
Interest expense |
64,200 |
||
|
Interest income |
(7,100) |
||
|
Other gain |
(3,700) |
||
|
Equity in net gain of affiliates |
(1,600) |
||
|
Limited payment guarantee charge |
1,600 |
||
|
Depreciation and amortization |
49,200 |
||
|
Mark to market adjustments on non-qualified retirement plan investments |
3,900 |
||
|
Operational restructuring, due diligence and transition costs |
42,100 |
||
|
Share-based compensation |
20,400 |
||
|
Franchise agreement acquisition costs amortization |
10,800 |
||
|
Net reimbursable deficit from franchised and managed properties |
18,600 |
||
|
Adjusted EBITDA |
$ 535,000 |
||
|
ADJUSTED NET INCOME & DILUTED EARNINGS PER SHARE (EPS) FULL YEAR FORECAST |
|||
|
(dollar amounts in thousands, except per share amounts) |
Midpoint |
||
|
2023 Guidance |
|||
|
Net income |
$ 254,800 |
||
|
Adjustments: |
|||
|
Operational restructuring, due diligence and transition costs |
31,900 |
||
|
Limited payment guarantee charge |
1,200 |
||
|
Net reimbursable deficit from franchised and managed properties |
13,900 |
||
|
Adjusted Net Income |
$ 301,800 |
||
|
Diluted Earnings Per Share |
$ 5.01 |
||
|
Adjustments: |
|||
|
Operational restructuring, due diligence and transition costs |
0.63 |
||
|
Limited payment guarantee charge |
0.02 |
||
|
Net reimbursable deficit from franchised and managed properties |
0.28 |
||
|
Adjusted Diluted Earnings Per Share (EPS) |
$ 5.94 |
||
SOURCE Choice Hotels International, Inc.