DiamondRock Hospitality Reports 2016 Q4 & Full Year Results; Q4 Net Income was $23.9 million, Down $1.8 Million from the Year Ago Quarter
February 22, 2017 7:16am
BETHESDA, Md., Feb. 22, 2017 -- DiamondRock Hospitality Company (the "Company") (NYSE: DRH), a lodging-focused real estate investment trust that owns a portfolio of 26 premium hotels in the United States, today announced results of operations for the quarter and year ended December 31, 2016.
2016 Operating Highlights
Fourth Quarter 2016 Highlights
Mark W. Brugger, President and Chief Executive Officer of DiamondRock Hospitality Company stated, "In 2016 DiamondRock implemented rigorous cost controls, resulting in zero growth in total hotel expenses, a record for the Company. This strong asset management led the company to achieve its original EBITDA guidance despite a softer demand environment. With the recent addition of Tom Healy, a proven industry leader, as Chief Operating Officer we look to build upon this success." Mr. Brugger added, "The company also executed on its strategic priority to create $450 million investment capacity through asset sales and financings in 2016, which positions DiamondRock to be opportunistic headed into 2017."
Please see "Non-GAAP Financial Measures" attached to this press release for an explanation of the terms "EBITDA," "Adjusted EBITDA," "Hotel Adjusted EBITDA Margin," "FFO" and "Adjusted FFO"and a reconciliation of these measures to net income. Comparable operating results include our 2015 acquisitions for all periods presented and exclude our 2016 dispositions for all periods presented. See "Reconciliation of Comparable Operating Results" attached to this press release for a reconciliation to historical amounts.
For the quarter ended December 31, 2016, the Company reported the following:
Comparable Operating Results (1)
-1.1 percentage points
Hotel Adjusted EBITDA Margin
-16 basis points
Actual Operating Results
Earnings per diluted share
Adjusted FFO per diluted share
The amounts for all periods presented exclude the three hotels sold during 2016: Orlando Airport Marriott, Hilton Minneapolis and Hilton Garden Inn Chelsea.
For the year ended December 31, 2016, the Company reported the following:
Comparable Operating Results (1)(2)
-0.6 percentage points
15 basis points
The 2015 amounts include pre-acquisition operating results for the Shorebreak Hotel from January 1, 2015 to February 5, 2015 and Sheraton Suites Key West from January 1, 2015 to June 29, 2015 in order to reflect the period in 2015 comparable to our ownership period in 2016. The pre-acquisition operating results were obtained from the respective sellers of the hotels during the acquisition due diligence process. We have made no adjustments to the amounts provided to us by the respective sellers. The pre-acquisition operating results were not audited or reviewed by the Company's independent auditors.
Share Repurchase Program
The Company repurchased 728,237 shares of its common stock at an average price of $8.92 per share for a total purchase price of $6.5 million during 2016. The Company has $143.5 million of remaining authorized capacity under its $150 million share repurchase program. The shares are purchased in the open market or through private transactions from time-to-time, depending upon market conditions, pursuant to a trading plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.
The Company spent approximately $102.9 million on capital improvements at its hotels in 2016, which included the following significant projects:
The Company expects to spend between $110 million and $120 million on capital improvements at its hotels in 2017, which includes carryover from certain projects that commenced in 2016. Significant projects in 2017 include:
As of December 31, 2016, the Company had $243.1 million of unrestricted cash on hand and approximately $920.5 million of total debt, which consisted of property-specific mortgage debt, $100.0 million of borrowings on its term loan and no outstanding borrowings on its $300 million senior unsecured credit facility.
The Company's Board of Directors declared a quarterly dividend of $0.125 per share to stockholders of record as of December 30, 2016. The dividend was paid on January 12, 2017.
The Company is providing annual guidance for 2017, but does not undertake to update it for any developments in its business. Achievement of the anticipated results is subject to the risks disclosed in the Company's filings with the U.S. Securities and Exchange Commission. Comparable RevPAR assumes that all of the Company's 26 hotels were owned since January 1, 2016.
The Company expects the full year 2017 results to be as follows:
Comparable RevPAR Growth
Adjusted FFO per share (based on 201.5 million shares)
$0.92 per share
$0.97 per share
The full year guidance range above reflects expected income tax expense of $7 to $11 million, expected interest expense of $37 million to $38 million and expected corporate expenses of $25 million.
The Company expects approximately 17% to 18% of its full year 2017 Adjusted EBITDA to be earned during the first quarter of 2017.
Selected Quarterly Comparable Operating Information
The following table is presented to provide investors with selected quarterly comparable operating information for 2016. The operating information excludes our 2016 dispositions for all periods presented.
Quarter 1, 2016
Quarter 2, 2016
Quarter 3, 2016
Quarter 4, 2016
Full Year 2016
Revenues (in thousands)
Hotel Adjusted EBITDA (in thousands)
% of full Year
To view full financial release and corresponding tables please click the PDF icon or visit:
Tags: diamondrock hospitality,
diamondrock hospitality company,
q4 2016 results
DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner of a leading portfolio of geographically diversified hotels concentrated in top gateway markets and destination resort locations. The Company owns 26 premium quality hotels with over 9,400 rooms. The Company has strategically positioned its hotels to be operated both under leading global brand families such as Hilton and Marriott as well as unique boutique hotels in the lifestyle segment. For further information on the Company and its portfolio, please visit DiamondRock Hospitality Company's website at www.drhc.com.
Contact: Sean Mahoney
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