CorePoint Lodging (CPLG) Tops Q1 EPS by 37c; Dividend Remains Suspended for FY20

CorePoint Lodging (NYSE: CPLG) reported Q1 EPS of ($0.37), $0.37 better than the analyst estimate of ($0.74). Revenue for the quarter came in at $146 million versus the consensus estimate of $146.9 million.

First Quarter 2020 and Subsequent Highlights

• Net loss of $21 million, or $0.37 loss per fully diluted share
• Comparable RevPAR of $48.20, a decrease of 22.8% from the same period in 2019 with 474 basis points of RevPAR Index market share decline
• Adjusted EBITDAre of $10 million
• Adjusted FFO attributable to common stockholders of $4 million, or $0.07 per fully diluted share
• In mid-March, the Company began taking aggressive steps at the corporate and hotel level to control costs and preserve capital to mitigate the ongoing operational and financial impact from the COVID-19 pandemic. As previously disclosed, these initiatives included drawing $110 million from its Revolving Credit Facility to further enhance the Company’s cash liquidity position, suspending its common stock dividend, temporarily suspending operations at certain of its hotels and implementing cost containment initiatives at all other hotels, deferring all non-essential capital expenditures, and implementing various cost containment measures with respect to corporate spending
• Sold 23 non-core hotels for a combined gross sales price of approximately $100 million during the quarter
• Subsequent to quarter end, sold 3 non-core hotels for a combined gross sales price of approximately $13 million, resulting in a total of 26 non-core hotels sold during 2020 for a combined gross sales price of $113 million and a total of 70 non-core hotels sold since March 2019 for a combined gross sales price of $290 million
• An additional 26 hotels are under contract with qualified buyers, expected to generate approximately $115 million of gross proceeds, and expected to close by the end of 2020, subject to market and other conditions
• Subsequent to quarter end, the Company amended its Revolving Credit Facility to extend the maturity date to May 2021 and eliminate its total net leverage and interest coverage financial covenants through the extended maturity date
• First quarter dividend of $0.20 per share of common stock was paid on April 15, 2020 to holders of record on March 31, 2020; as previously disclosed, the Company expects that its common stock dividend will remain suspended for the balance of 2020

“The challenging environment we began to experience late in the first quarter from the global impact of COVID-19 has created unprecedented disruption in the lodging sector,” noted Keith Cline, President and Chief Executive Officer of CorePoint. “During this period of disruption, we have worked with our third-party manager to focus on the pursuit of alternative sources of hotel revenue, and we initiated aggressive liquidity, capital preservation and cost mitigation actions at both the property and corporate level.”

“Certain of these measures resulted in temporarily suspending operations at the peak of this period at 30 of our hotels in order to minimize ongoing operating expenditures and to prioritize the health and safety of our hotels’ guests and employees. Of the original 30 hotels that were suspended, all have either resumed accepting transient guests or expected to do so over the next several weeks. Since hitting a low of 15% portfolio occupancy in mid-April, we have experienced an acceleration to around 35% portfolio occupancy to date in May.”

Mr. Cline added, “We believe our portfolio of select-service hotels predominantly focused on the midscale segments is well positioned to capture incremental transient room demand coming back online, in particular leisure travel and the associated demand for many of our drive-to destinations hotels. We are also committed to creating value through a long-term, disciplined execution of our non-core disposition strategy and made significant progress with the sale of 23 non-core hotels during the first quarter for gross proceeds of approximately $100 million.”

For earnings history and earnings-related data on CorePoint Lodging (CPLG) click here.

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