UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in charter)
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
(Address of Principal Executive Offices) (Zip Code)
(Registrant’s telephone number, including area code): (240 ) 744-1150
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 2.02 Results of Operations and Financial Condition.
On October 20, 2022, DiamondRock Hospitality Company (the “Company”) issued a slide presentation and a press release intended to provide an update on Company operations, which are attached as Exhibit 99.1 and Exhibit 99.2, respectively, to this Current Report on Form 8-K (“Current Report”) and incorporated by reference herein. The slide presentation and press release include preliminary financial information for the quarter ended September 30, 2022, including preliminary estimates of the Company’s revenues for the quarter ended September 30, 2022 and preliminary estimates of certain key indicators of the Company’s operating results for the quarter ended September 30, 2022, including RevPAR and ADR (collectively, the “Preliminary Information”).
The information in this Item 2.02, including the Preliminary Information, Exhibit 99.1 and Exhibit 99.2 attached hereto, is being furnished and shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, regardless of any general incorporation by reference language in any such filing.
ITEM 7.01 Regulation FD Disclosure.
A copy of the slide presentation and press release attached to this Current Report as Exhibit 99.1 and Exhibit 99.2, respectively, are incorporated by reference herein.
The information in this Item 7.01, including Exhibit 99.1 and Exhibit 99.2 attached hereto, is being furnished and shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that Section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, regardless of any general incorporation by reference language in any such filing. This Current Report will not be deemed an admission as to the materiality of any information in this Current Report that is required to be disclosed solely by Regulation FD.
ITEM 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are included with this report:
Exhibit No. Description
99.1 Company Update - October 2022
101.SCH Inline XBRL Taxonomy Extension Schema Document
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 Cover Page Interactive Data File
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| DIAMONDROCK HOSPITALITY COMPANY | ||||||||||||||||||||
| Dated: October 21, 2022 | By: | /s/ Briony R. Quinn | ||||||||||||||||||
| Briony R. Quinn | ||||||||||||||||||||
| Senior Vice President and Treasurer | ||||||||||||||||||||
COMPANY UPDATE ON OPERATIONS OCTOBER 2022
FORWARD LOOKING STATEMENTS Certain statements made during this presentation are forward- looking statements that are subject to risks and uncertainties. Forward-looking statements generally include the words “believe,” “expect,” “anticipate,” “plan,” “estimate,” “project,” “will,” “intend” or other similar expressions. Forward-looking statements include, without limitation, statements regarding industry outlook, results of operations, cash flows, business strategies, growth and value opportunities, capital and other expenditures, financing plans, expense reduction initiatives and projected dispositions. Factors that could cause actual results to materially differ from those contained in the forward-looking statements include, without limitation, national and local economic and business conditions, including the impact of COVID-19 on occupancy rates at DiamondRock Hospitality Company’s (the "Company“) hotels and the demand for hotel products and services, and those risks and uncertainties discussed in the most recent Annual Report on Form 10-K, which the Company has filed with the Securities and Exchange Commission, and in our other public filings which you should carefully review. The forward-looking statements made are based on our beliefs, assumptions and expectations of future performance, taking into account all information currently available to the Company. Actual results could differ materially from the forward-looking statements made in this presentation. The forward-looking statements made in this presentation are subject to the safe harbor of the Private Securities Litigation Reform Act of 1995. Any forward-looking statement speaks only as of the date on which it is made. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this presentation is as of the date of this presentation, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations. This presentation contains statistics and other data that has been obtained or compiled from information made available by third- party service providers and believed to be reliable, but the accuracy and completeness of the information is not assured. The Company has not independently verified any such information. 2
2022 YTD OPERATING RESULTS (1) Comparable operating information excludes the Kimpton Fort Lauderdale Beach Resort as it was not operating in 2019 (2) Preliminary results (3) “Resort/Lifestyle” refers to Luxury Resort, Lifestyle Resort, and Urban Lifestyle hotels (4) “Urban” refers to Urban Gateway hotels 3 CONTINUED RECORD REVPAR IN SEPTEMBER 2022 COMPARABLE OPERATING RESULTS(1) Occ (%) ADR ($) RevPAR ($) RevPAR B/(W) 2019 Revenue ($000s) Revenue B/(W) 2019 Q1 55.8% 279.09 155.76 (3.5%) 197,263 (4.4%) Q2 74.9% 297.36 222.70 6.9% 279,445 7.4% Q3(2) 75.1% 281.35 211.39 8.7% 266,952 11.7% Jul 74.9% 286.18 214.31 10.6% 89,790 12.7% Aug 74.6% 261.49 195.19 5.6% 83,760 9.8% Sep(2) 75.9% 296.63 225.13 9.8% 93,401 12.5% Q3 REVPAR(2) VS PREVIOUS YEARS (3) (4) +29.3% +8.0% +55.5% +8.7% +26.8% -3.1% PORTFOLIO RESORT/LIFESTYLE URBAN vs 2021 vs 2019
OPERATING TRENDS ACROSS THE PORTFOLIO 4 RESORT • Durable Resort Rates: ADR 40% above September 2019 with strong pricing power • Robust Outside the Room Spend: September outside the room revenues increased 31% over the same period in 2019, demonstrating strong consumer spending on experiences URBAN GATEWAY/LIFESTYLE HOTEL ADJUSTED EBITDA MARGINS • Q3 2022 Hotel Adjusted EBITDA margin is expected to be 75 to 100 basis points above comparable Q3 2019 Increase Over 2019 ADR RevPAR Henderson Beach Resort 16.0% 49.9% The Hythe Vail 32.2% 44.6% Kimpton Shorebreak 37.3% 42.4% • Rates Strong: September ADR at the Urban Gateway hotels increased 5.5% to 2019 and Total RevPAR increased 2.2% • Positive Demand Trajectory: Occupancy in the Urban Gateway portfolio was 79.4% in September versus 75.6% in August • Urban Lifestyle Outperforms: September ADR in our Urban Lifestyle portfolio increased 23.1% and Total RevPAR increased 11.6% compared to 2019 • Business Transient Gains Momentum: Q3 Business Transient revenues increased to 91.2% of 2019 as compared to 87.6% of 2019 in Q2
(1) Reflects exercise of one-year extension of $300MM term loan COMPLETED $1.2B REFINANCING IN SEPTEMBER 2022 PROFORMA BALANCE SHEET BALANCE SHEET ENHANCED WITH SEPTEMBER REFINANCING 5 $77 $314 $300 $500 0 100 200 300 400 500 600 2022 2023 2024 2025 2026 2027 2028 Mortgages Term Loans and Revolver Units in $M • Doubled weighted-average debt maturity • No meaningful debt maturities until 2025 • Increased liquidity and balance sheet flexibility with undrawn revolver • Retained attractive pricing grid starting at 135 basis points over SOFR • Proceeds used to repay 2023 maturities by end of 2022 (1)
COMPANY CONTACTS
Jeff Donnelly
Chief Financial Officer
(240) 744-1190
Briony Quinn
Senior Vice President
(240) 744-1196
FOR IMMEDIATE RELEASE
DIAMONDROCK HOSPITALITY ANNOUNCES UPDATE ON RECENT OPERATIONS
BETHESDA, Maryland, October 20, 2022 – DiamondRock Hospitality Company (the "Company") (NYSE: DRH) today provided an update on September 2022 operations, showing continued strong RevPAR growth both for the month and the third quarter. September RevPAR grew 43.5% and 9.8% compared to 2021 and 2019, respectively. Comparable total revenues for September were $93.4 million, an increase of 12.5% compared to 2019. For the third quarter, RevPAR grew 8.7% and total revenues increased 11.7% compared to 2019.
“DiamondRock is pleased to announce another record-setting quarter as the industry bounces back from the pandemic and consumers continue to spend on travel and experiences,” said Mark W. Brugger, President and Chief Executive Officer of the Company. “Our unique portfolio’s ability to deliver outstanding operating results, along with the enhanced balance sheet strength from the Company’s recently completed $1.2 billion bank facility, position DiamondRock to continue to be a leader in the lodging sector.”
Please visit https://investor.drhc.com/presentations to view the presentation with additional data on the Company’s current operating trends.
About the Company
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 leisure destinations and top gateway markets. The Company currently owns 34 premium quality hotels with over 9,500 rooms. The Company has strategically positioned its hotels to be operated both under leading global brand families 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.