Choice Hotels;

Choice Hotels International, Inc. (NYSE: CHH) today reported its results for the three months ended March 31, 2021.

"The strategic decisions we have made in recent years and our targeted actions amid the pandemic to support our franchisees drove impressive first quarter results that position the company to further capitalize on growth opportunities in 2021 and beyond," said Patrick Pacious, president and chief executive officer, Choice Hotels. "Our results are a testament to the success of our long-term growth strategy to invest in brands built for the customer of tomorrow. We believe our high-quality, well-segmented brand portfolio, compelling franchisee value proposition and the continued expansion of our travel platform, combined with our strong balance sheet, will allow us to continue to grow our share of travel demand in the years to come."

Highlights of first quarter and year-to-date 2021 results include:1

  • Domestic systemwide revenue per available room (RevPAR) change outperformed the total industry by 23 percentage points, declining 18.7% and 4.4% for first quarter 2021 compared to the same periods of 2019 and 2020, respectively.
  • The company's performance has continued the trend of sequential domestic systemwide RevPAR change improvement, with April 2021 RevPAR declining approximately 4.2% versus April 2019 and increasing 140% from April 2020.
  • The company's Board of Directors reinstated the dividend at the pre-pandemic rate and declared a cash dividend on the company's common stock of $0.225 per share. The dividend is payable on July 16, 2021 to stockholders of record on July 1, 2021. The Board has also approved the resumption of the company's share repurchase program.
  • The company awarded 89 domestic franchise agreements in first quarter 2021, a 53% increase compared to the same period of the prior year. Over 80% of the agreements awarded in the first quarter were for conversion hotels.
  • Net income was $22.3 million for first quarter 2021, representing diluted earnings per share (EPS) of $0.40.
  • First quarter adjusted net income, excluding certain items described in Exhibit 7, decreased 26% to $31.6 million from first quarter 2020.
  • Adjusted diluted EPS were $0.57, a decrease of 25% from first quarter 2020.
  • Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the first quarter were $63.1 million, an 11% decrease from first quarter 2020. First quarter adjusted EBITDA margin increased 330 basis points to 69% from first quarter 2020.

    • ____________________________

    1 RevPAR comparison data is shown for comparable prior year periods that include 2019 and 2020 for additional context in light of the onset of the COVID-19 pandemic toward the end of the first quarter of 2020.

    Performance Trends

  • Domestic systemwide RevPAR for first quarter 2021 outperformed the respective chain scales in which the company competes by 750 basis points compared to the same period of 2019.
  • All Choice Hotels' brands achieved domestic systemwide RevPAR index gains versus their local competitors with portfolio average share gains of 640 basis points for first quarter 2021, compared to the same period of 2019.
  • The company's extended-stay portfolio continued to outperform the industry throughout the first quarter, with an average domestic systemwide occupancy rate of 70%. Specifically, the WoodSpring Suites brand achieved RevPAR growth of 3.2% in first quarter 2021, compared to the same period of 2019, driven by an increase in average daily rate (ADR) of 4.3% and occupancy levels of over 74%.
  • The company's upscale portfolio continued to achieve domestic systemwide RevPAR share gains versus its local competitors for first quarter 2021, compared to first quarter 2019, with the Cambria Hotels brand achieving gains of 16 percentage points. In addition, the Ascend Hotel Collection's domestic systemwide RevPAR change surpassed the upscale segment by nearly 20 percentage points in first quarter 2021, compared to the same period of 2019.
  • The company's midscale portfolio continued to achieve RevPAR share gains versus its local competitors for first quarter 2021, compared to the same period of 2019. Specifically, the Comfort brand family's domestic systemwide RevPAR change outperformed the upper-midscale chain scale by nearly 11 percentage points, and the brand gained nearly 10 percentage points in RevPAR share from its local competitors in first quarter 2021, compared to the same period in 2019.

    • Additional details for the company's first quarter 2021 results are as follows:

    Revenues 

  • Total revenues decreased 16% to $182.9 million for first quarter 2021, compared to the same period of 2020.
  • Total revenues excluding marketing and reservation system fees decreased 15% to $91.4 million for first quarter 2021, compared to the same period of 2020.
  • First quarter 2021 domestic royalties totaled $63.0 million, a 5% decrease from the same period of 2020.
  • The company's domestic effective royalty rate for first quarter 2021 increased 7 basis points over the prior year first quarter to 5.02%.

    • Development

  • Of the total domestic franchise agreements awarded in the first quarter, over half were executed in the month of March. The company's domestic franchise agreements for conversion hotels increased by 76% in the first quarter, compared to the same period of 2020, and include 22 franchise agreements associated with the company's strategic alliance with Penn National Gaming.
  • As of March 31, 2021, the number of domestic rooms in the company's upscale portfolio expanded by 22% since March 31, 2020, driven by an increase in room count of 12% for the Cambria Hotels brand and 26% for the Ascend Hotel Collection, the latter of which includes 22 properties associated with the company's strategic alliance with Penn National Gaming. For the first three months in 2021, the upscale portfolio experienced the highest number of hotel openings in a quarter, matching the company's all-time record.
  • The company's extended-stay portfolio continued its rapid expansion, reaching 454 domestic hotels as of March 31, 2021, an 11% increase since March 31, 2020, with the domestic extended-stay pipeline expanding year-over-year to 310 hotels awaiting conversion, under construction or approved for development. Since March 31, 2020, the WoodSpring Suites, MainStay Suites and Suburban brands grew the number of open domestic hotels by 7%, 26% and 10%, respectively.
  • The company continued its leadership in the midscale segment by increasing the number of domestic hotels by 1.2% from March 31, 2020. Specifically, the Comfort brand family continued to grow its number of domestic hotels by 1.7% since March 31, 2020, and reached over 260 hotels in its domestic pipeline, including over 70 hotels awaiting conversion, which will drive the brand's growth in the near term. In March, the company launched the new Comfort Rise & Shine™ prototype to position the brand for continued strong performance and system growth while maximizing owners' return on investment.
  • The number of domestic hotels and rooms, as of March 31, 2021, increased 0.7% and 1.9%, respectively, from March 31, 2020. The company's domestic upscale, midscale and extended stay segments reported a 2.4% and 3.3% aggregate increase in units and rooms, respectively, since March 31, 2020.
  • The company's total domestic pipeline of hotels awaiting conversion, under construction or approved for development, as of March 31, 2021, reached 943 hotels that represent over 77,000 rooms.

    • Balance Sheet and Liquidity

    The company maintained its strong balance sheet and liquidity position in first quarter 2021 and continues to benefit from its primarily franchise-only business model, which has historically provided a relatively stable earnings stream, low capital expenditure requirements and significant free cash flow. As of March 31, 2021, the company's total available liquidity consisting of cash and available borrowing capacity through the revolving credit facility was approximately $823 million.

    Shareholder Returns

    On May 7, 2021, the company's Board of Directors approved the reinstatement of its quarterly cash dividend payments at the pre-pandemic level, declaring a cash dividend of $0.225 per share of common stock payable on July 16, 2021, to stockholders of record on July 1, 2021. Based on the current quarterly dividend rate of $0.225 per share of common stock, the company expects to pay dividends totaling approximately $25 million during 2021, subject to declaration by the Board of Directors.

    The company's Board of Directors has also approved the resumption of the company's stock repurchase program. As of March 31, 2021, the company had 3.4 million shares remaining under the current share repurchase authorization. During the three months ended March 31, 2021, the company repurchased less than 0.1 million shares of common stock for $5.1 million through repurchases from employees in connection with tax withholding and option exercises relating to awards under the company's equity incentive plans.

    Outlook

    The company is not providing formal guidance for second quarter or full year 2021 given that the precise impact of COVID-19 on the company's future results is still unknown.

    For the month of April 2021, the company's RevPAR declined by approximately 4.2% versus April 2019 while occupancy levels increased by 80 basis points from April 2019, marking near returns to 2019 RevPAR levels. The company currently expects RevPAR change for the remainder of 2021, as compared to both 2019 and 2020, to outperform first quarter 2021 results as compared to both 2019 and 2020.

    The company will continue to evaluate the impact of COVID-19 across its business and will provide further updates in the next earnings report based on the best information then available.

    Choice Hotels International, Inc. and Subsidiaries

    Exhibit 1

    Condensed Consolidated Statements of Income

    (Unaudited)

    Three Months Ended March 31,

    Variance

    2021

    2020

    $

    %

    (In thousands, except per share amounts)

    REVENUES

    Royalty fees

    $              66,047

    $              70,339

    $               (4,292)

    (6)%

    Initial franchise and relicensing fees

    5,427

    7,284

    (1,857)

    (25)%

    Procurement services

    11,191

    13,797

    (2,606)

    (19)%

    Marketing and reservation system

    91,521

    110,385

    (18,864)

    (17)%

    Owned hotels

    4,354

    9,422

    (5,068)

    (54)%

    Other

    4,407

    6,948

    (2,541)

    (37)%

    Total revenues

    182,947

    218,175

    (35,228)

    (16)%

    OPERATING EXPENSES

    Selling, general and administrative

    30,267

    28,383

    1,884

    7 %

    Depreciation and amortization

    6,362

    6,529

    (167)

    (3)%

    Marketing and reservation system

    98,173

    130,447

    (32,274)

    (25)%

    Owned hotels

    4,147

    6,034

    (1,887)

    (31)%

    Total operating expenses

    138,949

    171,393

    (32,444)

    (19)%

    Operating income

    43,998

    46,782

    (2,784)

    (6)%

    OTHER INCOME AND EXPENSES, NET

    Interest expense

    11,777

    11,380

    397

    3 %

    Interest income

    (1,281)

    (2,288)

    1,007

    (44)%

    Loss on extinguishment of debt

    -

    607

    (607)

    (100)%

    Other (gain) loss

    (1,205)

    4,729

    (5,934)

    (125)%

    Equity in net loss of affiliates

    5,997

    1,955

    4,042

    207 %

             Total other income and expenses, net

    15,288

    16,383

    (1,095)

    (7)%

    Income before income taxes

    28,710

    30,399

    (1,689)

    (6)%

    Income tax expense (benefit)

    6,373

    (25,064)

    31,437

    (125)%

    Net income

    $              22,337

    $              55,463

    $             (33,126)

    (60)%

    Basic earnings per share

    $                  0.40

    $                   1.00

    $                 (0.60)

    (60)%

    Diluted earnings per share 

    $                  0.40

    $                  0.99

    $                 (0.59)

    (60)%

     

    Choice Hotels International, Inc. and Subsidiaries

    Exhibit 2

    Condensed Consolidated Balance Sheets

    (Unaudited)

    (In thousands, except per share amounts)

    March 31,

    December 31,

    2021

    2020

    ASSETS

    Cash and cash equivalents

    $               222,961

    $               234,779

    Accounts receivable, net

    156,754

    149,921

    Other current assets

    65,429

    48,214

     

    Total current assets

    445,144

    432,914

    Property and equipment, net

    336,508

    334,901

    Intangible assets, net

    306,868

    303,725

    Goodwill

    159,196

    159,196

    Notes receivable, net of allowances

    82,651

    95,785

    Investments in unconsolidated entities

    53,003

    57,879

    Operating lease right-of-use assets

    15,312

    17,688

    Investments, employee benefit plans, at fair value

    28,558

    29,104

    Other assets

    156,898

    156,141

     

                                            Total assets

    $            1,584,138

    $            1,587,333

    LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

    Accounts payable

    $                 70,980

    $                 83,329

    Accrued expenses and other current liabilities

    65,687

    78,920

    Deferred revenue

    52,701

    50,290

    Liability for guest loyalty program

    54,432

    43,308

    Total current liabilities

    243,800

    255,847

    Long-term debt

    1,059,169

    1,058,738

    Deferred revenue

    114,279

    122,406

    Liability for guest loyalty program

    71,428

    77,071

    Operating lease liabilities

    10,212

    12,739

    Deferred compensation & retirement plan obligations

    33,114

    33,756

    Other liabilities

    32,901

    32,528

    Total liabilities

    1,564,903

    1,593,085

    Total shareholders' equity (deficit)

    19,235

    (5,752)

                                            Total liabilities and shareholders' equity (deficit)  

    $            1,584,138

    $            1,587,333

     

    Choice Hotels International, Inc. and Subsidiaries

    Exhibit 3

    Condensed Consolidated Statements of Cash Flows

    (Unaudited)

    (In thousands)

    Three Months Ended March 31,

    2021

    2020

    CASH FLOWS FROM OPERATING ACTIVITIES:

    Net income

    $                       22,337

    $                       55,463

    Adjustments to reconcile net income to net cash provided by operating activities:

    Depreciation and amortization

    6,362

    6,529

    Depreciation and amortization - marketing and reservation system

    5,815

    4,873

    Franchise agreement acquisition cost amortization

    3,044

    2,819

    Loss on debt extinguishment

    -

    607

    Non-cash stock compensation and other charges

    5,026

    (2,575)

    Non-cash interest and other investment (income) loss

    (2,059)

    4,339

    Deferred income taxes

    (1,378)

    (26,677)

    Equity in net losses from unconsolidated joint ventures, less distributions received

    5,997

    2,105

    Franchise agreement acquisition costs, net of reimbursements

    (6,770)

    (7,122)

    Change in working capital and other

    (38,254)

    (34,597)

     NET CASH PROVIDED BY OPERATING ACTIVITIES 

    120

    5,764

    CASH FLOWS FROM INVESTING ACTIVITIES:

    Investment in property and equipment

    (9,364)

    (6,229)

    Investment in intangible assets

    (885)

    (1,004)

    Contributions to equity method investments

    (968)

    (2,201)

    Distributions from equity method investments

    -

    157

    Purchases of investments, employee benefit plans

    (551)

    (1,544)

    Proceeds from sales of investments, employee benefit plans

    1,992

    1,697

    Issuance of notes receivable

    -

    (5,778)

    Collections of notes receivable

    63

    63

    Other items, net

    -

    14

     NET CASH USED IN INVESTING ACTIVITIES 

    (9,713)

    (14,825)

    CASH FLOWS FROM FINANCING ACTIVITIES:

    Net borrowings pursuant to revolving credit facilities

    -

    396,800

    Principal payments on long-term debt

    -

    (33,239)

    Purchases of treasury stock

    (5,046)

    (54,072)

    Dividends paid

    -

    (12,791)

    Proceeds from exercise of stock options

    2,845

    1,235

     NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES

    (2,201)

    297,933

    Net change in cash and cash equivalents

    (11,794)

    288,872

    Effect of foreign exchange rate changes on cash and cash equivalents

    (24)

    (684)

    Cash and cash equivalents at beginning of period

    234,779

    33,766

    CASH AND CASH EQUIVALENTS AT END OF PERIOD

    $                     222,961

    $                     321,954

     

    CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

    Exhibit 4

    SUPPLEMENTAL OPERATING INFORMATION 

    DOMESTIC HOTEL SYSTEM

    (UNAUDITED)

    For the Three Months Ended March 31, 2021

    For the Three Months Ended March 31, 2020

    Change

    Average Daily

    Average Daily

    Average Daily

    Rate

    Occupancy

    RevPAR

    Rate

    Occupancy

    RevPAR

    Rate

    Occupancy

    RevPAR

    Comfort(1)

    $               80.51

    48.9 %

    $          39.34

    $               87.57

    48.3 %

    $          42.33

    (8.1)%

    60

    bps

    (7.1)%

    Sleep

    72.72

    47.6 %

    34.65

    78.82

    48.9 %

    38.54

    (7.7)%

    (130)

    bps

    (10.1)%

    Quality

    69.89

    42.2 %

    29.52

    72.79

    41.7 %

    30.36

    (4.0)%

    50

    bps

    (2.8)%

    Clarion(2)

    69.39

    33.0 %

    22.91

    74.59

    36.7 %

    27.34

    (7.0)%

    (370)

    bps

    (16.2)%

    Econo Lodge

    58.26

    41.4 %

    24.10

    57.25

    38.3 %

    21.93

    1.8 %

    310

    bps

    9.9 %

    Rodeway

    58.84

    43.7 %

    25.70

    59.61

    40.9 %

    24.36

    (1.3)%

    280

    bps

    5.5 %

    WoodSpring Suites

    47.31

    74.3 %

    35.13

    47.02

    70.3 %

    33.05

    0.6 %

    400

    bps

    6.3 %

    MainStay

    70.48

    51.4 %

    36.21

    78.35

    53.9 %

    42.25

    (10.0)%

    (250)

    bps

    (14.3)%

    Suburban

    49.57

    65.7 %

    32.55

    54.19

    61.8 %

    33.51

    (8.5)%

    390

    bps

    (2.9)%

    Cambria Hotels

    100.76

    42.4 %

    42.73

    131.95

    48.2 %

    63.55

    (23.6)%

    (580)

    bps

    (32.8)%

    Ascend Hotel Collection

    110.30

    42.5 %

    46.88

    119.06

    46.2 %

    54.97

    (7.4)%

    (370)

    bps

    (14.7)%

    Total

    $               69.49

    47.1 %

    $          32.73

    $               74.22

    46.1 %

    $          34.23

    (6.4)%

    100

    bps

    (4.4)%

    Effective Royalty Rate

    For the Quarter Ended

    March 31, 2021

    March 31, 2020

    System-wide(3)

    5.02 %

    4.95 %

    (1)Includes Comfort family of brand extensions including Comfort and Comfort Suites

    (2)Includes Clarion family of brand extensions including Clarion and Clarion Pointe

    (3)Includes United States and Caribbean countries and territories

     

    CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

    Exhibit 5

    SUPPLEMENTAL OPERATING INFORMATION 

    DOMESTIC HOTEL SYSTEM

    (UNAUDITED)

    For the Three Months Ended March 31, 2021

    For the Three Months Ended March 31, 2019

    Change

    Average Daily

    Average Daily

    Average Daily

    Rate

    Occupancy

    RevPAR

    Rate

    Occupancy

    RevPAR

    Rate

    Occupancy

    RevPAR

    Comfort(1)

    $            80.51

    48.9 %

    $          39.34

    $               90.78

    55.9 %

    $          50.77

    (11.3)%

    (700)

    bps

    (22.5)%

    Sleep

    72.72

    47.6 %

    34.65

    82.35

    55.7 %

    45.89

    (11.7)%

    (810)

    bps

    (24.5)%

    Quality

    69.89

    42.2 %

    29.52

    75.87

    48.0 %

    36.40

    (7.9)%

    (580)

    bps

    (18.9)%

    Clarion(2)

    69.39

    33.0 %

    22.91

    78.39

    43.2 %

    33.83

    (11.5)%

    (1,020)

    bps

    (32.3)%

    Econo Lodge

    58.26

    41.4 %

    24.10

    59.50

    42.2 %

    25.10

    (2.1)%

    (80)

    bps

    (4.0)%

    Rodeway

    58.84

    43.7 %

    25.70

    60.70

    44.4 %

    26.98

    (3.1)%

    (70)

    bps

    (4.7)%

    WoodSpring Suites

    47.31

    74.3 %

    35.13

    45.36

    75.0 %

    34.04

    4.3 %

    (70)

    bps

    3.2 %

    MainStay

    70.48

    51.4 %

    36.21

    82.51

    58.7 %

    48.46

    (14.6)%

    (730)

    bps

    (25.3)%

    Suburban

    49.57

    65.7 %

    32.55

    58.36

    67.7 %

    39.49

    (15.1)%

    (200)

    bps

    (17.6)%

    Cambria Hotels

    100.76

    42.4 %

    42.73

    134.26

    61.3 %

    82.26

    (25.0)%

    (1,890)

    bps

    (48.1)%

    Ascend Hotel Collection

    110.30

    42.5 %

    46.88

    115.97

    56.4 %

    65.40

    (4.9)%

    (1,390)

    bps

    (28.3)%

    Total

    $            69.49

    47.1 %

    $          32.73

    $               77.15

    52.2 %

    $          40.27

    (9.9)%

    (510)

    bps

    (18.7)%

    Effective Royalty Rate

    For the Quarter Ended

    March 31, 2021

    March 31, 2019

    System-wide(3)

    5.02 %

    4.84 %

    (1)Includes Comfort family of brand extensions including Comfort and Comfort Suites

    (2)Includes Clarion family of brand extensions including Clarion and Clarion Pointe

    (3)Includes United States and Caribbean countries and territories

     

    CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

    Exhibit 6

    SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA

    (UNAUDITED)

    March 31, 2021

    March 31, 2020

    Variance

    Hotels

    Rooms

    Hotels

    Rooms

    Hotels

    Rooms

    %

    %

    Comfort(1)

    1,648

    129,785

    1,621

    127,563

    27

    2,222

    1.7 %

    1.7 %

    Sleep

    409

    28,831

    399

    28,188

    10

    643

    2.5 %

    2.3 %

    Quality

    1,691

    128,093

    1,688

    128,951

    3

    (858)

    0.2 %

    (0.7)%

    Clarion(2)

    183

    21,951

    178

    22,548

    5

    (597)

    2.8 %

    (2.6)%

    Econo Lodge

    762

    46,258

    794

    47,774

    (32)

    (1,516)

    (4.0)%

    (3.2)%

    Rodeway

    544

    31,212

    581

    33,404

    (37)

    (2,192)

    (6.4)%

    (6.6)%

    WoodSpring Suites

    296

    35,631

    277

    33,303

    19

    2,328

    6.9 %

    7.0 %

    MainStay

    92

    6,504

    73

    4,636

    19

    1,868

    26.0 %

    40.3 %

    Suburban

    66

    6,365

    60

    6,082

    6

    283

    10.0 %

    4.7 %

    Cambria Hotels

    57

    8,058

    50

    7,222

    7

    836

    14.0 %

    11.6 %

    Ascend Hotel Collection

    219

    27,864

    205

    22,202

    14

    5,662

    6.8 %

    25.5 %

    Domestic Franchises(3)

    5,967

    470,552

    5,926

    461,873

    41

    8,679

    0.7 %

    1.9 %

    International Franchises

    1,171

    133,215

    1,219

    136,350

    (48)

    (3,135)

    (3.9)%

    (2.3)%

    Total Franchises

    7,138

    603,767

    7,145

    598,223

    (7)

    5,544

    (0.1)%

    0.9 %

    (1)Includes Comfort family of brand extensions including Comfort and Comfort Suites

    (2)Includes Clarion family of brand extensions including Clarion and Clarion Pointe

    (3)Includes United States and Caribbean countries and territories

     

    CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

    Exhibit 7

    SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION

    (UNAUDITED)

    REVENUES, EXCLUDING MARKETING AND RESERVATION ACTIVITIES

    (dollar amounts in thousands)

    Three Months Ended March 31, 

    2021

    2020

    Revenues, Excluding Marketing and Reservation Activities

    Total Revenues

    $              182,947

    $               218,175

    Adjustments:

         Marketing and reservation system revenues

    (91,521)

    (110,385)

    Revenues, excluding marketing and reservation activities

    $                91,426

    $               107,790

    ADJUSTED SELLING, GENERAL AND ADMINISTRATION EXPENSES

    (dollar amounts in thousands)

    Three Months Ended March 31, 

    2021

    2020

    Total Selling, General and Administrative Expenses

    $                30,267

    $                 28,383

    Mark to market adjustments on non-qualified retirement plan investments

    (1,425)

    4,334

    Operational restructuring charges

    (447)

    (1,364)

    Share-based compensation

    (2,351)

    1,157

    Exceptional allowances attributable to COVID-19

    (133)

    -

    Adjusted Selling, General and Administrative Expenses

    $                25,911

    $                 32,510

    ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA") AND ADJUSTED EBITDA MARGINS

    (dollar amounts in thousands)

    Three Months Ended March 31, 

    2021

    2020

    Net income 

    $                22,337

    $                 55,463

    Income tax expense (benefit)

    6,373

    (25,064)

    Interest expense

    11,777

    11,380

    Interest income

    (1,281)

    (2,288)

    Other (gain) loss

    (1,205)

    4,729

    Loss on extinguishment of debt

    -

    607

    Equity in operating net loss of affiliates, net of impairments

    1,192

    1,955

    Loss on impairment of unconsolidated joint venture

    4,805

    -

    Depreciation and amortization

    6,362

    6,529

    Mark to market adjustments on non-qualified retirement plan investments

    1,425

    (4,334)

    Operational restructuring charges

    447

    1,364

    Share-based compensation

    2,351

    (1,157)

    Exceptional allowances attributable to COVID-19

    133

    -

    Marketing and reservation system reimbursable deficit

    6,652

    20,062

    Franchise agreement acquisition costs amortization

    1,726

    1,598

    Adjusted EBITDA

    $                63,094

    $                 70,844

    Revenues, excluding marketing and reservation activities

    $                91,426

    $               107,790

    Adjusted EBITDA margins

    69.0 %

    65.7 %

    ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE (EPS)

    (dollar amounts in thousands, except per share amounts)

    Three Months Ended March 31, 

    2021

    2020

    Net income 

    $                22,337

    $                 55,463

    Adjustments:

    Loss on the extinguishment of debt

    -

    493

    Loss on impairment of unconsolidated joint venture

    3,719

    -

    Operational restructuring charges

    336

    1,070

    Exceptional allowances attributable to COVID-19

    103

    -

    Marketing and reservation system reimbursable deficit

    5,149

    16,328

    Foreign tax benefit on international restructuring

    -

    (30,572)

    Adjusted Net Income

    $                31,644

    $                 42,782

    Diluted Earnings Per Share

    $                   0.40

    $                     0.99

    Adjustments:

    Loss on extinguishment of debt

    -

    0.01

    Loss on impairment of unconsolidated joint venture

    0.07

    -

    Operational restructuring costs

    0.01

    0.02

    Exceptional allowances attributable to COVID-19

    -

    -

    Marketing and reservation system reimbursable deficit

    0.09

    0.29

    Foreign tax benefit on international restructuring

    -

    (0.55)

    Adjusted Diluted Earnings Per Share (EPS)

    $                   0.57

    $                     0.76

     

    SOURCE Choice Hotels International, Inc.