0001574085-26-000079
SEC filingRevenue declined 3.2% due to hotel dispositions, but operating income and net income rose sharply on cost controls and lower interest expense, driving a swing to positive EPS.
Revenue for the first quarter of 2026 decreased 3.2% to $209.0 million from $215.8 million in the prior-year period. The decline was primarily attributable to the sales of The Clancy and Marriott Seattle Waterfront in the second half of 2025, which removed their revenue contributions. Partially offsetting this was continued demand in urban markets and resort locations with favorable growth characteristics from multiple demand generators. Rooms revenue, which is dictated by occupancy, average daily rate (ADR), and available room supply, remained resilient at the remaining properties.
Net income rose 61.0% to $17.7 million from $11.0 million, reflecting higher operating income and lower interest expense. Diluted earnings per share improved to $0.07 from a loss of $0.04 in the prior year, benefiting from the higher net income and lower preferred dividends. The company's long-term liquidity requirements consist primarily of funds for acquisitions, redevelopments, renovations, and scheduled debt payments.
Net cash provided by operating activities increased to $21.9 million from $15.1 million, supported by favorable working capital changes. The company continues to manage its capital structure prudently, with a focus on maintaining liquidity for strategic initiatives.
Management continues to evaluate opportunities to optimize the portfolio, including potential acquisitions and dispositions. The company's strategy focuses on urban and resort locations with multiple demand generators to drive long-term growth.