SPOKANE, Wash., Aug. 4, 2011 -- Red Lion Hotels Corporation
(NYSE: RLH), a western U.S. based owner and franchisor
of midscale hotels, today announced its results for the second quarter
ended June 30, 2011.
Comparable hotel basis operating results for the periods
included in this release exclude the results of the Red Lion Hotel on
Fifth Avenue in Seattle, which was
sold in the second quarter of 2011. Following the sale, this property
continues to operate as a franchised hotel and, therefore, the company
is required to report its financial results in continuing operations.
Overview:
- Closed $71 million sale
of Seattle Fifth Avenue property
- Negotiating refinance of maturing debt
- RevPAR for comparable owned and leased hotels increased
6.3 percent year over year
- ADR for comparable owned and leased hotels up 1.2
percent compared to prior year
- Occupancy for comparable owned and leased hotels
increased 290 basis points over prior year
- EBITDA before special items decreased $1.9 million to $5.6
million, primarily driven by increased hotel and franchise
operating expense
Total revenue reported during the second quarter was $45.4 million. Revenue from hotels of $39.3 million increased slightly compared to $38.6 million in the prior year period. Second
quarter 2011 reported net income was $18.6
million, or $0.97 per diluted
share, compared to a net loss of $0.1 million,
or $0.00 per share, for the prior year
period. Second quarter 2011 results include a $33.5
million gain on the sale of Seattle Fifth Avenue which is
classified as a special item. EBITDA from continuing operations before
special items for the second quarter of 2011 was $5.6
million, compared to $7.5 million
for the second quarter of 2010. On a comparable hotel basis, EBITDA
from continuing operations before special items was $4.6 million for the quarter compared to $6.1 million in the prior year period.
"The completion of the sale of our Seattle Fifth Avenue
property was an important first step in our strategy to restructure our
balance sheet and reduce debt," said President and Chief Executive
Officer Jon E. Eliassen. "Unlocking the
real estate value on the Seattle
property while maintaining the hotel as a franchise affords us the
balance sheet flexibility to reduce debt, retire leases or use sale
proceeds for other company needs."
Summary results for the second quarter and six months ended June 30, 2011 and June
30, 2010 follow:
($ in
thousands, except per share)
|
|
|
|
|
|
|
|
|
|
Three
months ended June 30,
|
|
Six
months ended June 30,
|
|
|
2011
|
2010
|
%
change
|
|
2011
|
2010
|
%
change
|
|
|
|
|
|
|
|
|
|
|
Total
revenue, as reported
|
$
45,380
|
$
42,455
|
6.9%
|
|
$
79,652
|
$
76,757
|
3.8%
|
|
|
|
|
|
|
|
|
|
|
Results
before special items: (1)
|
|
|
|
|
|
|
|
|
EBITDA from continuing operations
|
$ 5,601
|
$ 7,549
|
-25.8%
|
|
$ 5,448
|
$ 9,421
|
-42.2%
|
|
Net
income (loss) from continuing operations
|
$ (363)
|
$ 67
|
n/m
|
|
$
(5,134)
|
$
(3,372)
|
-52.3%
|
|
Earnings (loss) per share from continuing operations - diluted
|
$
(0.02)
|
$ -
|
n/m
|
|
$
(0.27)
|
$
(0.18)
|
-50.0%
|
|
|
|
|
|
|
|
|
|
|
Results
as reported:
|
|
|
|
|
|
|
|
|
EBITDA from continuing operations
|
$
39,150
|
$ 7,549
|
n/m
|
|
$
38,997
|
$ 8,202
|
n/m
|
|
Net
income (loss) from continuing operations
|
$
18,760
|
$ 67
|
n/m
|
|
$
13,989
|
$
(4,158)
|
n/m
|
|
Earnings (loss) per share from continuing operations - diluted
|
$ 0.98
|
$ 0.00
|
n/m
|
|
$ 0.73
|
$
(0.23)
|
n/m
|
|
|
|
(1)
Excludes $33.5 million gain on the sale of the Seattle Fifth Avenue
property recorded in the second quarter of 2011 and $1.2 million of
separation costs related to the departure of the company's former
President and Chief Executive Officer recorded in the first quarter of
2010.
|
|
|
|
|
|
|
|
|
|
In addition, on a comparable hotel basis, key hotel operating
metrics and hotel revenues and operating margin for the second quarter
and six months ended June 30, 2011 and June 30, 2010, are highlighted below for owned
and leased hotels:
|
Three
months ended June 30,
|
|
Six
months ended June 30,
|
|
|
2011
|
2010
|
change
|
|
2011
|
2010
|
change
|
|
|
|
|
|
|
|
|
|
|
RevPAR
(revenue per available room)
|
$ 50.43
|
$ 47.44
|
6.3%
|
|
$ 43.56
|
$ 42.21
|
3.2%
|
|
ADR
(average daily rate)
|
$ 82.20
|
$ 81.23
|
1.2%
|
|
$ 80.11
|
$ 79.64
|
0.6%
|
|
Occupancy
|
61.3%
|
58.4%
|
2.90
|
|
54.4%
|
53.0%
|
1.40
|
|
|
|
|
|
|
|
|
|
|
Hotels
revenue:
|
|
|
|
|
|
|
|
|
Rooms
|
$
26,725
|
$
25,144
|
6.3%
|
|
$
45,924
|
$
44,500
|
3.2%
|
|
Food
and beverage
|
8,558
|
8,806
|
-2.8%
|
|
16,016
|
16,685
|
-4.0%
|
|
Other
revenue
|
847
|
855
|
-0.9%
|
|
1,507
|
1,464
|
2.9%
|
|
Total
hotels revenue
|
$
36,130
|
$
34,805
|
3.8%
|
|
$
63,447
|
$
62,649
|
1.3%
|
|
|
|
|
|
|
|
|
|
|
Hotel
direct operating margin
|
22.2%
|
24.6%
|
-9.8%
|
|
16.2%
|
19.2%
|
-15.6%
|
|
|
|
|
|
|
|
|
|
Second Quarter 2011 Results
In the second quarter of 2011, comparable owned and leased
hotels occupancy increased 290 basis points to 61.3 percent and ADR
increased 1.2 percent to $82.20, both
contributing to a 6.3 percent increase in comparable RevPAR year over
year. Including franchised hotels, system wide RevPAR on a comparable
basis for the quarter increased 6.5 percent, due to a 390 basis point
increase in occupancy, with ADR remaining relatively flat.
Second quarter hotel revenue on a comparable basis of $36.1 million increased 3.7 percent from $34.8 million in the prior year period. Rooms
revenue increased approximately $1.6 million
or 6.3 percent, due to an increase in occupancy and ADR. Food and
beverage revenue on a comparable basis declined slightly to $8.6 million versus $8.8
million in the prior year period primarily due to reduced
banquet business. Hotel direct operating margin on a comparable basis
declined to 22.2 percent during the quarter from 24.6 percent in the
same period in 2010. This decline was driven by an increase in
operating expenses including labor cost, utility costs and repairs and
maintenance.
Franchise revenue remained essentially flat at $0.9 million in the second quarter of 2011.
Profitability in the segment was impacted by an increase in lease costs
relating to the company's subleased and franchised Sacramento property.
Revenue in the entertainment segment increased $2.3 million to $4.6
million, driven by a successful 11-day run of Wicked in
the Best of Broadway series. Profitability in the entertainment segment
was $0.5 million, despite reduced
margins in the ticketing portion of the business.
Six Months Ended June 30, 2011
Results
Total revenue on a comparable hotel basis for the six months
ended June 30, 2011 was $73.7 million versus $70.2
million in the prior year period. Comparable revenue from hotels
of $63.4 million was up $0.8 million, or 1.3 percent. Comparable hotel
direct operating margin declined to 16.2 percent from 19.2 percent in
the prior year period.
RevPAR for comparable owned and leased hotels increased 3.2
percent driven by a 140 basis point increase in occupancy and a 0.6
percent increase in ADR. Including franchised hotels, system wide
RevPAR on a comparable basis for the period increased 4.7 percent due
to a 250 basis point increase in occupancy, while ADR remained flat.
Liquidity and Balance Sheet
As of June 30, 2011, the
company had approximately $51.5 million
in cash and cash equivalents. The company used a portion of the
proceeds from the sale of the Seattle Fifth Avenue property to retire
the line of credit that was secured by the property. The balance of the
proceeds will be used to further reduce debt and lease obligations and
for other corporate purposes.
As of June 30, 2011, the
company had outstanding debt of $106.3 million,
including $30.8 million of trust
preferred securities. The company is negotiating a refinance of $24.6 million of debt classified as current.
Capital expenditures for the six months ended June 30, 2011, totaled $3.1
million for hotel improvement projects.
Franchise Update
On June 14, 2011, the company
entered into a franchise agreement on the Seattle Fifth Avenue property
under which the hotel will continue to operate as a Red Lion.
On May 19, 2011, the company
announced that a 109-room limited service hotel in Rancho Cordova officially converted to the
Red Lion brand. The Red Lion Inn Rancho Cordova is located near Sacramento, increasing the company's brand
presence in California.
Outlook for 2011
The company is reaffirming its RevPAR guidance for 2011,
previously provided on May 5, 2011,
based on the outlook for the markets in which the company operates and
information available today:
- Full year 2011 RevPAR for comparable company owned and
leased hotels is expected to increase 3 to 5 percent over 2010 on an
annual basis.
- The company expects to invest approximately $11.0 million to $13.0 million in capital
improvements in 2011.
Conference Call Information
The company will conduct a conference call on August 4, 2011 at 2:00
p.m. Pacific Time (5:00 p.m. Eastern Time),
to discuss the results for interested investors, analysts and portfolio
managers. Hosting the call will be President and Chief Executive
Officer Jon E. Eliassen and Executive
Vice President and Chief Financial Officer Dan
Jackson. Executive Vice President and Chief Operating Officer George Schweitzer will also be available to
answer questions.
To participate in the conference call, please dial the
following number ten minutes prior to the scheduled time: (800)
230-1085. International callers should dial (612) 288-0329.
This conference call will also be webcast live at http://www.redlion.com
in the Investor Relations section of the website. To listen to the live
call, please go to the Red Lion website at least fifteen minutes prior
to the start of the call to register, download and install any
necessary audio software. For those unable to participate during the
live broadcast, a replay will be available at 4:00
p.m. Pacific Time on August 4, 2011,
through September 4, 2011, at (800)
475-6701 or (320) 365-3844 (International) access code - 210796. The
replay will also be available shortly after the call on the Red Lion
website.
About Red Lion Hotels Corporation:
Red Lion Hotels Corporation is a hospitality and leisure
Company primarily engaged in the ownership, operation and franchising
of midscale hotels under its Red Lion® brand. As of June 30, 2011, the RLH hotel network was
comprised of 44 hotels located in eight states and one Canadian
province, with 8,457 rooms and 424,387 square feet of meeting space.
The Company also owns and operates an entertainment and event ticket
distribution business. For more information, please visit the Company's
website at www.redlion.com.
This press release contains forward-looking statements
within the meaning of federal securities law, including statements
concerning plans, objectives, goals, strategies, projections of future
events or performance and underlying assumptions (many of which are
based, in turn, upon further assumptions). The forward-looking
statements in this press release are inherently subject to a variety of
risks and uncertainties that could cause actual results to differ
materially from those expressed. Such risks and uncertainties include,
among others, economic cycles; international conflicts; changes in
future demand and supply for hotel rooms; competitive conditions in the
lodging industry; relationships with franchisees and properties; impact
of government regulations; ability to obtain financing; changes in
energy, healthcare, insurance and other operating expenses; ability to
sell non-core assets; ability to locate lessees for rental property;
dependency upon the ability and experience of executive officers and
ability to retain or replace such officers as well as other matters
discussed in the Company's annual report on Form 10-K for the year
ended December 31, 2010 and in other
documents filed by the Company with the Securities and Exchange
Commission.
Company Contact:
Pam Scott
Director of Corporate Communications
(509) 777-6393
Red
Lion Hotels Corporation
|
|
Consolidated
Statements of Operations
|
|
(unaudited)
|
|
($ in
thousands, except footnotes)
|
|
|
|
|
|
|
|
|
|
|
Three
months ended June 30,
|
|
|
|
|
|
2011
|
2010
|
$
Change
|
%
Change
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
Hotels
|
$
39,276
|
$
38,632
|
$ 644
|
1.7%
|
|
|
Franchise
|
945
|
889
|
56
|
6.3%
|
|
|
Entertainment
|
4,640
|
2,340
|
2,300
|
98.3%
|
|
|
Other
|
519
|
594
|
(75)
|
-12.6%
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
45,380
|
42,455
|
2,925
|
6.9%
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
Hotels
|
30,613
|
28,620
|
1,993
|
7.0%
|
|
|
Franchise
|
1,070
|
810
|
260
|
32.1%
|
|
|
Entertainment
|
4,138
|
1,986
|
2,152
|
108.4%
|
|
|
Other
|
435
|
413
|
22
|
5.3%
|
|
|
Depreciation
and amortization
|
4,757
|
5,164
|
(407)
|
-7.9%
|
|
|
Hotel
facility and land lease
|
2,187
|
1,779
|
408
|
22.9%
|
|
|
Loss
(gain) on asset dispositions, net (1)
|
(33,497)
|
(57)
|
33,440
|
n/m
|
|
|
Undistributed
corporate expenses
|
1,553
|
1,362
|
191
|
14.0%
|
|
|
|
|
|
|
|
|
|
Total
expenses
|
11,256
|
40,077
|
(28,821)
|
-71.9%
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
34,124
|
2,378
|
31,746
|
n/m
|
|
|
|
|
|
|
|
|
Other
income (expense):
|
|
|
|
|
|
|
Interest
expense
|
(2,272)
|
(2,314)
|
42
|
1.8%
|
|
|
Other
income, net
|
381
|
9
|
372
|
n/m
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes
|
32,233
|
73
|
32,160
|
n/m
|
|
|
|
|
|
|
|
|
Income
tax (benefit) expense
|
13,473
|
6
|
13,467
|
n/m
|
|
|
|
|
|
|
|
|
Net
income (loss) from continuing operations
|
18,760
|
67
|
18,693
|
n/m
|
|
|
|
|
|
|
|
|
Discontinued
operations:
|
|
|
|
|
|
|
Income
(loss) from operations of discontinued business units, net of income
tax (benefit) expense of ($66)
|
--
|
(129)
|
129
|
100.0%
|
|
|
|
|
|
|
|
|
Net
income (loss) from discontinued operations
|
--
|
(129)
|
129
|
100.0%
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
18,760
|
(62)
|
18,822
|
n/m
|
|
|
|
|
|
|
|
|
Less:
Net income or loss attributable to noncontrolling interest
|
(112)
|
(2)
|
(110)
|
n/m
|
|
|
|
|
|
|
|
|
Net
income (loss) attributable to Red Lion Hotels Corporation (1)
|
$
18,648
|
$ (64)
|
$
18,712
|
n/m
|
|
|
|
|
|
|
|
|
Earnings
per share - basic
|
|
|
|
|
|
|
Net
income (loss) from continuing operations
|
$ 0.99
|
0.00
|
|
|
|
|
Net
Income (loss) from discontinued operations
|
$ 0.00
|
0.00
|
|
|
|
|
Net
income (loss) attributable to Red Lion Hotels Corporation
|
$ 0.98
|
0.00
|
|
|
|
Weighted
average shares - basic (2)
|
19,023
|
18,420
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share - diluted
|
|
|
|
|
|
|
Net
income (loss) from continuing operations
|
$ 0.98
|
0.00
|
|
|
|
|
Net
Income (loss) from discontinued operations
|
$ 0.00
|
0.00
|
|
|
|
|
Net
income (loss) attributable to Red Lion Hotels Corporation
|
$ 0.97
|
0.00
|
|
|
|
Weighted
average shares - diluted (2)
|
19,182
|
18,651
|
|
|
|
|
|
|
|
|
|
|
EBITDA
(1,3)
|
$
39,150
|
$ 7,365
|
$
31,785
|
n/m
|
|
EBITDA
as a percentage of revenues
|
86.3%
|
17.3%
|
|
|
|
|
|
|
|
|
|
|
EBITDA
from continuing operations (1,3)
|
$
39,150
|
$ 7,549
|
$
31,601
|
n/m
|
|
EBITDA
from continuing operations as a percentage of revenues
|
86.3%
|
17.8%
|
|
|
|
|
|
|
|
|
|
|
(1)
Includes $33.5 million gain on the sale of hotel property located in
Seattle, as discussed further in this release under Disclosure of
Special Items.
|
|
|
|
(2)
For the three months ended June 30, 2011 40,157 of the 335,926 options
to purchase common shares outstanding as of that date were considered
dilutive, as were 74,740 of the 303,974 restricted stock units
outstanding. For the three months ended June 30, 2010, 125,384 of the
904,189 options to purchase common shares outstanding as of the date
were considered dilutive. Of the 262,684 restricted stock units
outstanding, 60,738 shares were considered dilutive during the second
quarter of 2010. For both comparative periods, all of the 44,837
convertible operating partnership units were considered dilutive.
|
|
|
|
(3)
The definition of "EBITDA" and how that measure relates to net income
attributable to Red Lion Hotels Corporation is discussed further in
this release under Non-GAAP Financial Measures.
|
|
|
|
|
|
|
|
Red
Lion Hotels Corporation
|
|
Consolidated
Statements of Operations
|
|
(unaudited)
|
|
($ in
thousands, except footnotes)
|
|
|
|
|
|
|
|
|
|
|
Six
months ended June 30,
|
|
|
|
|
|
2011
|
2010
|
$
Change
|
%
Change
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
Hotels
|
$
69,434
|
$
69,253
|
$ 181
|
0.3%
|
|
|
Franchise
|
1,652
|
1,447
|
205
|
14.2%
|
|
|
Entertainment
|
7,440
|
4,818
|
2,622
|
54.4%
|
|
|
Other
|
1,126
|
1,239
|
(113)
|
-9.1%
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
79,652
|
76,757
|
2,895
|
3.8%
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
Hotels
|
57,782
|
55,212
|
2,570
|
4.7%
|
|
|
Franchise
|
1,964
|
1,388
|
576
|
41.5%
|
|
|
Entertainment
|
6,752
|
3,999
|
2,753
|
68.8%
|
|
|
Other
|
828
|
835
|
(7)
|
-0.8%
|
|
|
Depreciation
and amortization
|
10,063
|
10,374
|
(311)
|
-3.0%
|
|
|
Hotel
facility and land lease
|
4,298
|
3,526
|
772
|
21.9%
|
|
|
Loss
(gain) on asset dispositions, net (1)
|
(33,583)
|
(155)
|
33,428
|
n/m
|
|
|
Undistributed
corporate expenses (2)
|
2,897
|
3,805
|
(908)
|
-23.9%
|
|
|
|
|
|
|
|
|
|
Total
expenses
|
51,001
|
78,984
|
(27,983)
|
-35.4%
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
28,651
|
(2,227)
|
30,878
|
n/m
|
|
|
|
|
|
|
|
|
Other
income (expense):
|
|
|
|
|
|
|
Interest
expense
|
(4,573)
|
(4,550)
|
(23)
|
-0.5%
|
|
|
Other
income, net
|
385
|
46
|
339
|
n/m
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes
|
24,463
|
(6,731)
|
31,194
|
n/m
|
|
|
|
|
|
|
|
|
Income
tax (benefit) expense
|
10,474
|
(2,573)
|
(13,047)
|
n/m
|
|
|
|
|
|
|
|
|
Net
income (loss) from continuing operations
|
13,989
|
(4,158)
|
18,147
|
n/m
|
|
|
|
|
|
|
|
|
Discontinued
operations:
|
|
|
|
|
|
|
Income
(loss) from operations of discontinued business units, net of income
tax (benefit) expense of ($142)
|
--
|
(283)
|
283
|
100.0%
|
|
|
|
|
|
|
|
|
Net
income (loss) from discontinued operations
|
--
|
(283)
|
283
|
100.0%
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
13,989
|
(4,441)
|
18,430
|
n/m
|
|
|
|
|
|
|
|
|
Less:
Net income or loss attributable to noncontrolling interest
|
(102)
|
9
|
(111)
|
n/m
|
|
|
|
|
|
|
|
|
Net
income (loss) attributable to Red Lion Hotels Corporation (1,2)
|
$
13,887
|
$
(4,432)
|
$
18,319
|
n/m
|
|
|
|
|
|
|
|
|
Earnings
per share - basic
|
|
|
|
|
|
|
Net
income (loss) from continuing operations
|
$ 0.74
|
$
(0.23)
|
|
|
|
|
Net
Income (loss) from discontinued operations
|
$ 0.00
|
$
(0.01)
|
|
|
|
|
Net
income (loss) attributable to Red Lion Hotels Corporation
|
$ 0.73
|
$
(0.24)
|
|
|
|
Weighted
average shares - basic (3)
|
18,999
|
18,345
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share - diluted
|
|
|
|
|
|
|
Net
income (loss) from continuing operations
|
$ 0.73
|
$
(0.23)
|
|
|
|
|
Net
Income (loss) from discontinued operations
|
$ 0.00
|
$
(0.01)
|
|
|
|
|
Net
income (loss) attributable to Red Lion Hotels Corporation
|
$ 0.72
|
$
(0.24)
|
|
|
|
Weighted
average shares - diluted (3)
|
19,163
|
18,345
|
|
|
|
|
|
|
|
|
|
|
EBITDA
(1,2,4)
|
$
38,997
|
$ 7,803
|
$
31,194
|
n/m
|
|
EBITDA
as a percentage of revenues
|
49.0%
|
10.2%
|
|
|
|
|
|
|
|
|
|
|
EBITDA
from continuing operations (1,2,4)
|
$
38,997
|
$ 8,202
|
$
30,795
|
n/m
|
|
EBITDA
from continuing operations as a percentage of revenues
|
49.0%
|
10.7%
|
|
|
|
|
|
|
|
|
|
|
(1)
Includes $33.5 million gain on the sale of hotel property located in
Seattle, as discussed further in this release under Disclosure of
Special Items.
|
|
|
|
(2)
Includes $1.2 million of cash and non-cash expense recorded in the
first quarter of 2010 related to the separation of the company's former
President and CEO, as discussed further in this release under
Disclosure of Special Items.
|
|
|
|
(3)
For the six months ended June 30, 2011, 42,260 of the 335,926 options
to purchase common shares outstanding as of that date were considered
dilutive as were 99,670 of the 303,974 restricted stock units
outstanding. In addition, 22,542 of the 44,837 convertible operating
partnership units were considered dilutive. For the six months ended
June 30, 2010 none of the 904,189 options to purchase common shares
outstanding were considered dilutive due to the loss for the period,
nor were any of the 262,684 restricted stock units outstanding or
44,837 convertible operating partnership units.
|
|
|
|
(4)
The definition of "EBITDA" and how that measure relates to net income
attributable to Red Lion Hotels Corporation is discussed further in
this release under Non-GAAP Financial Measures.
|
|
|
|
|
|
|
|
Red
Lion Hotels Corporation
|
|
Consolidated
Balance Sheets
|
|
(unaudited)
|
|
($ in
thousands, except share data)
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
2011
|
|
2010
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
$
46,818
|
|
$ 4,012
|
|
|
|
Restricted
cash
|
4,707
|
|
4,120
|
|
|
|
Accounts
receivable, net
|
6,532
|
|
5,985
|
|
|
|
Inventories
|
|
|
1,519
|
|
1,328
|
|
|
|
Prepaid
expenses and other
|
3,090
|
|
1,937
|
|
|
|
Assets
held for sale
|
9,805
|
|
-
|
|
|
|
|
|
Total
current assets
|
72,471
|
|
17,382
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
and equipment, net
|
227,574
|
|
272,030
|
|
|
Goodwill
|
|
|
|
|
22,749
|
|
28,042
|
|
|
Intangible
assets, net
|
7,961
|
|
7,984
|
|
|
Other
assets, net
|
|
5,991
|
|
6,044
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
$
336,746
|
|
$
331,482
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
$ 4,893
|
|
$ 7,146
|
|
|
|
Accrued
payroll and related benefits
|
5,023
|
|
4,367
|
|
|
|
Accrued
interest payable
|
255
|
|
276
|
|
|
|
Advance
deposits
|
931
|
|
487
|
|
|
|
Other
accrued expenses
|
11,554
|
|
10,178
|
|
|
|
Revolving
credit facility
|
-
|
|
18,000
|
|
|
|
Long-term
debt, due within one year
|
24,594
|
|
25,275
|
|
|
|
|
|
Total
current liabilities
|
47,250
|
|
65,729
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
debt, due after one year
|
50,901
|
|
51,877
|
|
|
Deferred
income
|
|
4,891
|
|
4,859
|
|
|
Deferred
income taxes
|
16,955
|
|
7,427
|
|
|
Debentures
due Red Lion Hotels Capital Trust
|
30,825
|
|
30,825
|
|
|
|
|
|
Total
liabilities
|
150,822
|
|
160,717
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
Red
Lion Hotels Corporation stockholders' equity
|
|
|
|
|
|
|
Preferred
stock - 5,000,000 shares authorized; $0.01 par value; no shares issued
or outstanding
|
--
|
|
--
|
|
|
|
Common
stock - 50,000,000 shares authorized; $0.01 par value; 19,067,541 and
18,869,254 shares issued and outstanding
|
191
|
|
189
|
|
|
|
Additional
paid-in capital, common stock
|
148,002
|
|
146,834
|
|
|
|
Retained
earnings
|
37,624
|
|
23,737
|
|
|
|
|
|
Total
Red Lion Hotels Corporation stockholders' equity
|
185,817
|
|
170,760
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling
interest
|
107
|
|
5
|
|
|
|
|
|
Total
equity
|
185,924
|
|
170,765
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and stockholders' equity
|
$
336,746
|
|
$
331,482
|
|
|
|
|
|
|
|
|
|
|
|
|
Red
Lion Hotels Corporation
|
|
Consolidated
Statement of Cash Flows
|
|
(unaudited)
|
|
($ in
thousands)
|
|
|
|
|
|
|
|
|
|
Six
months ended June 30,
|
|
|
|
2011
|
|
2010
|
|
Operating
activities:
|
|
|
|
|
|
Net
income (loss)
|
$
13,989
|
|
$
(4,441)
|
|
|
Adjustments
to reconcile net income (loss) attributable to Red Lion Hotels
Corporation to net cash provided by (used in) operating activities:
|
|
|
|
|
|
Depreciation and amortization
|
10,063
|
|
10,400
|
|
|
Gain
on disposition of property, equipment and other assets, net
|
(33,583)
|
|
(155)
|
|
|
Deferred income tax provision (benefit)
|
9,589
|
|
(2,926)
|
|
|
Equity in investments
|
23
|
|
25
|
|
|
Stock
based compensation expense
|
655
|
|
1,050
|
|
|
Provision for doubtful accounts
|
65
|
|
131
|
|
|
Change in current assets and liabilities:
|
|
|
|
|
|
Restricted cash
|
(587)
|
|
(1,422)
|
|
|
Accounts receivable
|
(612)
|
|
(1,851)
|
|
|
Inventories
|
(229)
|
|
69
|
|
|
Prepaid expenses and other
|
(1,153)
|
|
(600)
|
|
|
Accounts payable
|
(2,253)
|
|
3,501
|
|
|
Accrued payroll and related benefits
|
656
|
|
2,868
|
|
|
Accrued interest payable
|
(21)
|
|
(17)
|
|
|
Deferred income
|
275
|
|
--
|
|
|
Other
accrued expenses and advance deposits
|
1,812
|
|
2,733
|
|
|
Net
cash (used in) provided by operating activities
|
(1,311)
|
|
9,365
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
Purchases
of property and equipment
|
(3,070)
|
|
(3,832)
|
|
|
Proceeds
from disposition of property and equipment
|
68,331
|
|
8
|
|
|
Advances
to Red Lion Hotels Capital Trust
|
(27)
|
|
(27)
|
|
|
Other,
net
|
(694)
|
|
198
|
|
|
|
|
|
|
|
|
Net
cash (used in) provided by investing activities
|
64,540
|
|
(3,653)
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
Borrowings
on revolving credit facility
|
10,000
|
|
4,500
|
|
|
Repayment
of revolving credit facility
|
--
|
|
(9,500)
|
|
|
Retirement
of revolving credit facility
|
(28,000)
|
|
--
|
|
|
Repayment
of long-term debt
|
(1,657)
|
|
(1,570)
|
|
|
Proceeds
from stock options exercised
|
513
|
|
304
|
|
|
Proceeds
from issuance of common stock under employee stock
|
|
|
|
|
|
purchase plan
|
63
|
|
71
|
|
|
Additions
to deferred financing costs
|
(1,220)
|
|
(171)
|
|
|
Common
stock redeemed
|
(122)
|
|
(84)
|
|
|
|
|
|
|
|
|
Net
cash (used in) provided by financing activities
|
(20,423)
|
|
(6,450)
|
|
|
|
|
|
|
|
Net
change in cash from operating activities of discontinued operations
|
--
|
|
1
|
|
|
|
|
|
|
|
Change
in cash and cash equivalents:
|
|
|
|
|
|
Net
increase (decrease) in cash and cash equivalents
|
42,806
|
|
(737)
|
|
|
Cash
and cash equivalents at beginning of period
|
4,012
|
|
3,882
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents at end of period
|
$
46,818
|
|
$ 3,145
|
|
|
|
|
|
|
Red
Lion Hotels Corporation
|
|
Additional
Hotel Statistics
|
|
(unaudited)
|
|
|
|
|
System-wide
Hotels as of June 30, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
Meeting
Space
|
|
|
|
|
|
|
|
Hotels
|
Rooms
|
(sq.
ft.)
|
|
|
|
|
|
|
Red
Lion Owned and Leased Hotels (1)
|
30
|
5,824
|
290,766
|
|
|
|
|
|
|
Red
Lion Franchised Hotels (1)
|
14
|
2,633
|
133,621
|
|
|
|
|
|
|
Total
Red Lion Hotels
|
44
|
8,457
|
424,387
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
Hotel Statistics (1)
|
|
|
|
|
|
|
|
|
|
|
Three
months ended June 30, 2011
|
|
Three
months ended June 30, 2010
|
|
|
|
Average
|
|
|
|
Average
|
|
|
|
|
|
Occupancy
(2)
|
ADR (3)
|
RevPAR
(4)
|
|
Occupancy
(2)
|
ADR (3)
|
RevPAR
(4)
|
|
|
Owned
and Leased Hotels
|
61.3%
|
$ 82.20
|
$ 50.43
|
|
58.4%
|
$ 81.23
|
$ 47.44
|
|
|
Franchised
Hotels
|
68.7%
|
$ 86.19
|
$ 59.19
|
|
62.2%
|
$ 88.79
|
$ 55.23
|
|
|
Total
System Wide
|
63.3%
|
$ 83.35
|
$ 52.75
|
|
59.4%
|
$ 83.32
|
$ 49.51
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
from prior comparative period:
|
|
|
|
|
|
|
|
|
|
Owned
and Leased Hotels
|
2.9
|
1.2%
|
6.3%
|
|
|
|
|
|
|
Franchised Hotels
|
6.5
|
-2.9%
|
7.2%
|
|
|
|
|
|
|
Total
System Wide
|
3.9
|
0.0%
|
6.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six
months ended June 30, 2011
|
|
Six
months ended June 30, 2010
|
|
|
|
Average
|
|
|
|
Average
|
|
|
|
|
|
Occupancy
(2)
|
ADR (3)
|
RevPAR
(4)
|
|
Occupancy
(2)
|
ADR (3)
|
RevPAR
(4)
|
|
|
Owned
and Leased Hotels
|
54.4%
|
$ 80.11
|
$ 43.56
|
|
53.0%
|
$ 79.64
|
$ 42.21
|
|
|
Franchised
Hotels
|
61.9%
|
$ 84.64
|
$ 52.42
|
|
56.3%
|
$ 86.10
|
$ 48.48
|
|
|
Total
System Wide
|
56.4%
|
$ 81.43
|
$ 45.91
|
|
53.9%
|
$ 81.43
|
$ 43.87
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
from prior comparative period:
|
|
|
|
|
|
|
|
|
|
Owned
and Leased Hotels
|
1.4
|
0.6%
|
3.2%
|
|
|
|
|
|
|
Franchised Hotels
|
5.6
|
-1.7%
|
8.1%
|
|
|
|
|
|
|
Total
System Wide
|
2.5
|
0.0%
|
4.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Includes all hotels owned, leased and franchised, presented on a
comparable basis for hotel statistics. The Seattle property has been
excluded from
|
|
the
owned and leased hotel statistics and included in the franchised
statistics for all periods shown
|
|
|
|
(2)
Average occupancy represents total paid rooms divided by total
available rooms. Total available rooms represents the number of rooms
available multiplied by the number of days in the reported period and
includes rooms taken out of service for renovation.
|
|
|
|
(3)
Average daily rate ("ADR") represents total room revenues divided by
the total number of paid rooms occupied by hotel guests.
|
|
|
|
(4)
Revenue per available room ("RevPAR") represents total room and related
revenues divided by total available rooms.
|
|
|
|
|
|
|
|
|
|
|
Red
Lion Hotels Corporation
|
|
Comparable
Operating Data
|
|
(unaudited)
|
|
($ in
thousands)
|
|
|
|
Certain
operating results for the periods included in this report are shown on
a comparable hotel basis. Comparable hotels are defined as properties
that are owned or leased by the company and the operations of which are
included in the consolidated results for the entirety of the reporting
periods being compared.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended June 30,
|
|
Six
months ended June 30,
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
total revenue (2)
|
$
42,234
|
|
$
38,628
|
|
$
73,665
|
|
$
70,153
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
hotel revenue (2)
|
36,130
|
|
34,805
|
|
63,447
|
|
62,649
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
hotel operating expense (3)
|
28,117
|
|
26,237
|
|
53,143
|
|
50,629
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
hotel direct operating profit (1)
|
8,013
|
|
8,568
|
|
10,304
|
|
12,020
|
|
|
Comparable
hotel direct operating margin (1)
|
22.2%
|
|
24.6%
|
|
16.2%
|
|
19.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
total EBITDA before special items (4)
|
$ 4,599
|
|
$ 6,104
|
|
$ 3,747
|
|
$ 7,400
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Operating profit margins are calculated by dividing the applicable
operating profit by the related revenue amount. GAAP margins are
calculated using amounts presented in the consolidated statements of
operations. Comparable margins are calculated using amounts presented
in the table above.
|
|
|
|
(2)
The reconciliation of total and hotel revenue per the consolidated
statements of operations to comparable total and hotel revenue is as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended June 30,
|
|
Six
months ended June 30,
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue per the consolidated statements of operations
|
$
45,380
|
|
$
42,455
|
|
$
79,652
|
|
$
76,757
|
|
|
less:
Revenue from Seattle Fifth Avenue property
|
(3,146)
|
|
(3,827)
|
|
(5,987)
|
|
(6,604)
|
|
|
Comparable
total revenue
|
$
42,234
|
|
$
38,628
|
|
$
73,665
|
|
$
70,153
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
revenue per the consolidated statements of operations
|
$
39,276
|
|
$
38,632
|
|
$
69,434
|
|
$
69,253
|
|
|
less:
Revenue from Seattle Fifth Avenue property
|
(3,146)
|
|
(3,827)
|
|
(5,987)
|
|
(6,604)
|
|
|
Comparable
hotel revenue
|
$
36,130
|
|
$
34,805
|
|
$
63,447
|
|
$
62,649
|
|
|
|
|
|
|
|
|
|
|
|
(3)
The reconciliation of hotel operating expense per the consolidated
statements of operations to comparable hotel operating expense is as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended June 30,
|
|
Six
months ended June 30,
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
operating expense per the consolidated statements of operations
|
$
30,613
|
|
$
28,620
|
|
$
57,782
|
|
$
55,212
|
|
|
less:
Operating expense from Seattle Fifth Avenue property
|
(2,496)
|
|
(2,383)
|
|
(4,639)
|
|
(4,583)
|
|
|
Comparable
hotel operating expense
|
$
28,117
|
|
$
26,237
|
|
$
53,143
|
|
$
50,629
|
|
|
|
|
|
|
|
|
|
|
|
(4)
The reconciliation of EBITDA before special items per the table titled
"Disclosure of Special Items" to comparable total EBITDA before special
items is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended June 30,
|
|
Six
months ended June 30,
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
before special items per the table "Disclosure of Special Items"
|
$ 5,601
|
|
$ 7,549
|
|
$ 5,448
|
|
$ 9,421
|
|
|
less:
EBITDA of Seattle Fifth Avenue property
|
(1,002)
|
|
(1,445)
|
|
(1,701)
|
|
(2,020)
|
|
|
Comparable
total EBITDA before special items
|
$ 4,599
|
|
$ 6,104
|
|
$ 3,747
|
|
$ 7,401
|
|
|
|
|
|
|
|
|
|
|
Red
Lion Hotels Corporation
|
|
Disclosure
of Special Items
|
|
(unaudited)
|
|
|
|
During
the second quarter 2011, the Company recorded a $33.5 million gain from
the sale of its Red Lion Hotel on Fifth Avenue in Seattle, Washington
and in the first quarter of 2010, the Company recorded an expense of
$1.2 million resulting from the separation of the Company's former
President and Chief Executive Officer. As a result, the operations as
presented in the accompanying financial statements for the three and
six months ended June 30, 2011 compared to 2010 do not reflect a
meaningful comparison between periods. The following table represents a
reconciliation of certain earnings measures before special items to net
income / (loss) from continuing operations.
|
|
|
|
|
|
|
|
Three
months ended June 30, 2011
|
|
Three
months ended June 30, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in
thousands except per share data)
|
Net
income / (loss) from continuing operations
|
EBITDA
|
Diluted
EPS
|
|
Net
income / (loss) from continuing operations
|
EBITDA
|
Diluted
EPS
|
|
|
|
|
|
|
|
|
|
|
|
Amount
before special items
|
$ (363)
|
$ 5,601
|
$
(0.02)
|
|
$ 67
|
$ 7,549
|
0.00
|
|
|
|
|
|
|
|
|
|
|
|
|
Special
items:
|
|
|
|
|
|
|
|
|
|
Gain
on asset disposition (1)
|
33,549
|
33,549
|
1.75
|
|
-
|
-
|
-
|
|
|
Income
tax benefit (expense) of special items, net (3)
|
(14,426)
|
-
|
(0.75)
|
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Amount
per consolidated statement of operations
|
$
18,760
|
$
39,150
|
$ 0.98
|
|
$ 67
|
$ 7,549
|
0.00
|
|
|
|
|
|
|
|
|
|
|
|
|
Six
months ended June 30, 2011
|
|
Six
months ended June 30, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in
thousands except per share data)
|
Net
income / (loss) from continuing operations
|
EBITDA
|
Diluted
EPS
|
|
Net
income / (loss) from continuing operations
|
EBITDA
|
Diluted
EPS
|
|
|
|
|
|
|
|
|
|
|
|
Amount
before special items
|
$
(5,134)
|
$ 5,448
|
$
(0.27)
|
|
$
(3,372)
|
$ 9,421
|
$
(0.18)
|
|
|
|
|
|
|
|
|
|
|
|
|
Special
items:
|
|
|
|
|
|
|
|
|
|
Gain
on asset disposition (1)
|
33,549
|
33,549
|
1.75
|
|
-
|
-
|
-
|
|
|
Separation
costs (2)
|
-
|
-
|
|
|
(1,219)
|
(1,219)
|
(0.07)
|
|
|
Income
tax benefit (expense) of special items, net (3)
|
(14,426)
|
-
|
(0.75)
|
|
433
|
-
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
Amount
per consolidated statement of operations
|
$
13,989
|
$
38,997
|
$ 0.73
|
|
$
(4,158)
|
$ 8,202
|
$
(0.23)
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Amount as included in the line item "Loss (gain) on asset dispositions,
net" on the accompanying consolidated statements of operations.
|
|
|
|
(2)
Amount as included in the line item "Undistributed corporate expenses"
on the accompanying consolidated statements of operations.
|
|
|
|
(3)
Represents taxes on special items at the Company's expected incremental
tax rate as applicable.
|
|
|
|
|
|
|
|
|
|
|
Red
Lion Hotels Corporation
|
|
Reconciliation
of EBITDA to Net Income Attributable to Red Lion Hotels Corporation
|
|
(unaudited)
|
|
($ in
thousands)
|
|
|
|
The
following is a reconciliation of EBITDA and EBITDA from continuing
operations to net income (loss) attributable to Red Lion Hotels
Corporation for the periods presented:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended June 30,
|
|
Six
months ended June 30,
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
$
39,150
|
|
$ 7,365
|
|
$
38,997
|
|
$ 7,803
|
|
|
Income
tax benefit (expense)
|
(13,473)
|
|
60
|
|
(10,474)
|
|
2,715
|
|
|
Interest
expense
|
(2,272)
|
|
(2,314)
|
|
(4,573)
|
|
(4,550)
|
|
|
Depreciation
and amortization
|
(4,757)
|
|
(5,175)
|
|
(10,063)
|
|
(10,400)
|
|
Net
income (loss) attributable to Red Lion Hotels Corporation
|
$
18,648
|
|
$ (64)
|
|
$
13,887
|
|
$
(4,432)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended June 30,
|
|
Six
months ended June 30,
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA from continuing operations
|
$
39,150
|
|
$ 7,549
|
|
$
38,997
|
|
$ 8,202
|
|
|
Income
tax benefit (expense)
|
(13,473)
|
|
(6)
|
|
(10,474)
|
|
2,573
|
|
|
Interest
expense
|
(2,272)
|
|
(2,314)
|
|
(4,573)
|
|
(4,550)
|
|
|
Depreciation
and amortization
|
(4,757)
|
|
(5,164)
|
|
(10,063)
|
|
(10,374)
|
|
|
Discontinued
operations, net of tax
|
-
|
|
(129)
|
|
-
|
|
(283)
|
|
Net
income (loss) attributable to Red Lion Hotels Corporation
|
$
18,648
|
|
$ (64)
|
|
$
13,887
|
|
$
(4,432)
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP FINANCIAL MEASURES
EBITDA is defined as net income attributable to Red Lion
Hotels Corporation, before interest, taxes, depreciation and
amortization. EBITDA is considered a non-GAAP financial measurement. We
believe it is a useful financial performance measure for us and for our
shareholders and is a complement to net income attributable to Red Lion
Hotels Corporation and other financial performance measures provided in
accordance with generally accepted accounting principles in the United States ("GAAP").
We use EBITDA to measure financial performance because it
excludes interest, taxes, depreciation and amortization, which bear
little or no relationship to operating performance. By excluding
interest expense, EBITDA measures our financial performance
irrespective of our capital structure or how we finance our properties
and operations. We generally pay federal and state income taxes on a
consolidated basis, taking into account how the applicable taxing laws
apply to our company in the aggregate. By excluding taxes on income, we
believe EBITDA provides a basis for measuring the financial performance
of our operations excluding factors that our hotels and other
operations cannot control. By excluding depreciation and amortization
expense, which can vary from hotel to hotel based on historical cost
and other factors unrelated to the hotels’ financial performance,
EBITDA measures the financial performance of our hotels without regard
to their historical cost. For all of these reasons, we believe that
EBITDA provides us and investors with information that is relevant and
useful in evaluating our business.
However, because EBITDA excludes depreciation and
amortization, it does not measure the capital we require to maintain or
preserve our long-lived assets. In addition, because EBITDA does not
reflect interest expense, it does not take into account the total
amount of interest we pay on outstanding debt nor does it show trends
in interest costs due to changes in our borrowings or changes in
interest rates. EBITDA, as defined by us, may not be comparable to
EBITDA as reported by other companies that do not define EBITDA exactly
as we define the term. Because we use EBITDA to evaluate our financial
performance, we reconcile all EBITDA measures to net income
attributable to Red Lion Hotels Corporation, which is the most
comparable financial measure calculated and presented in accordance
with GAAP. EBITDA does not represent cash provided by operating
activities determined in accordance with GAAP, and should not be
considered as an alternative to operating income or net income
attributable to Red Lion Hotels Corporation determined in accordance
with GAAP as an indicator of performance or as an alternative to cash
flows from operating activities as an indicator of liquidity.
|