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Diamondrock Hospitality Company has a market cap of $1.69 billion; its shares were traded at around $10.96 with a P/E ratio of 19.6 and P/S ratio of 2.9. Diamondrock Hospitality Company had an annual average earning growth of 6.4% over the past 5 years.DRH is in the portfolios of Ken Heebner of CAPITAL GROWTH MANAGEMENT LP, David Williams of Columbia Value and Restructuring Fund, Richard Pzena of Pzena Investment Management LLC, Manning & Napier Advisors, Inc, Steven Cohen of SAC Capital Advisors, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:As of September 10, 2010, we had $61.3 million of unrestricted corporate cash. We believe that we maintain a reasonable amount of fixed interest rate mortgage debt. As of September 10, 2010, we had $782.7 million of mortgage debt outstanding with a weighted average interest rate of 5.86 percent and a weighted average maturity date of approximately 5.4 years, with no maturities until late 2014. In addition, we amended and restated our $200 million unsecured credit facility in August 2010, which now provides reasonable financial covenants. Finally, we currently have 13 hotels unencumbered by debt and no corporate-level debt outstanding.
Allerton Mortgage Loan. On May 24, 2010, we acquired the $69.0 million senior mortgage loan secured by the 443-room Allerton Hotel in Chicago, Illinois (the “Allerton Loan”) for approximately $60.6 million. The Allerton Loan matured in January 2010 and is currently in default. The Allerton Loan earns a blended interest rate of LIBOR plus 692 basis points, which includes 5 percentage points of default interest. As of September 10, 2010, the Allerton Loan had a principal balance of $69.0 million and unpaid basic and default interest of approximately $2.1 million. As of September 10, 2010, we have received default interest payments from the borrower of approximately $1.3 million, which have been recorded as a reduction of our basis in the Allerton Loan. We received $0.5 million of default interest payments subsequent to September 10, 2010.
New Line of Credit. On August 6, 2010, we amended and restated our $200 million senior unsecured revolving credit facility. The new credit agreement has a term of 36 months, which may be extended for an additional year. We also have the right to increase the amount of the credit agreement to $275 million with lender approval.
Follow-on Public Offering. We completed a follow-on public offering of our common stock during the second quarter. We sold 23,000,000 shares of common stock, including the underwriters’ overallotment of 3,000,000 shares, at an offering price of $8.40 per share. The net proceeds to us, after deduction of offering costs, were approximately $184.7 million.
Controlled Equity Offering Program. During the first quarter ended March 26, 2010, we completed our previously announced $75 million controlled equity offering program by selling 2.8 million shares at an average price of $9.13 per share, raising net proceeds of $25.1 million.
Revenue. Revenue consists primarily of the room, food and beverage and other operating revenues from our hotels. Our total revenues increased $13.3 million from $137.8 million for the fiscal quarter ended September 11, 2009 to $151.1 million for the fiscal quarter ended September 10, 2010. This increase includes amounts that are not comparable year-over-year as follows:
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