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SPOKANE, Wash., Nov. 3, 2011/ -- Red Lion Hotels Corporation
(NYSE: RLH), a western U.S. based owner and franchisor
of midscale hotels, today announced its results for the third quarter
ended September 30, 2011.
Comparable operating results for the periods included in this
release exclude from hotel operations 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.
Third Quarter and Key Subsequent Event Overview:
- RevPAR for comparable owned and leased hotels increased
3.5 percent year over year
- ADR for comparable owned and leased hotels increased 0.3
percent compared to prior year
- Occupancy for comparable owned and leased hotels
increased 210 basis points over prior year
- On a comparable basis, EBITDA from continuing operations
before special items decreased $2.3 million
compared to prior year
- Completed acquisition of 10 previously leased hotels
- Signed three new hotel franchise agreements in New Mexico
- Completed refinance of maturing debt; closed on expanded
credit facility
Total revenue reported during the third quarter was $46.2 million compared to total revenue of $49.8 million in the third quarter of 2010. On
a comparable basis, total revenue increased $0.8
million from $45.4 million in the
third quarter of 2010. Third quarter 2011 reported net loss from
continuing operations was $0.1 million,
or $0.01 per share, compared to net
income from continuing operations of $3.2
million, or $0.17 per diluted
share, for the prior year period. EBITDA from continuing operations
before special items for the third quarter of 2011 was $8.2 million, compared to $12.4 million ($10.5
million on a comparable basis) for the third quarter of 2010.
Third quarter 2011 results include a $2.2
million impairment charge, which is classified as a special
item, related to the Red Lion Colonial Hotel in Helena, MT. The Red Lion Colonial Hotel is
classified as an asset held for sale on the balance sheet.
"We were pleased with our RevPAR growth this quarter,
particularly when compared with national results among midscale
hotels," said Jon E. Eliassen,
President and Chief Executive Officer of Red Lion Hotels Corporation.
"We also achieved several key objectives, all resulting in improving
our balance sheet. We refinanced maturing debt on three properties and
completed an expanded credit facility. In addition, today we announced
the acquisition of ten previously leased properties which was an
important strategic move for the company. These actions provide us
significant financial and operational flexibility going forward and
allow us to focus on the Red Lion brand."
Summary Results
Operating results for the three and nine months ended September 30, 2011, and September
30, 2010, follow:
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($ in
thousands, except per share)
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|
|
|
|
|
|
|
Three
months ended September 30,
|
|
Nine
months ended September 30,
|
|
|
|
2011
|
2010
|
%
change
|
|
2011
|
2010
|
%
change
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue, as reported
|
$
46,212
|
$
49,843
|
-7.3%
|
|
$
125,864
|
$
126,600
|
-0.6%
|
|
|
|
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|
|
|
|
|
|
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Results
before special items: (1)
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|
|
|
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|
|
|
|
EBITDA from continuing operations
|
$ 8,238
|
$
12,377
|
-33.4%
|
|
$
13,686
|
$
21,798
|
-37.2%
|
|
|
Net
income (loss) from continuing operations
|
$ 1,100
|
$ 3,157
|
-65.2%
|
|
$
(4,033)
|
$ (217)
|
n/m
|
|
|
Earnings (loss) per share from continuing operations - diluted
|
$ 0.06
|
$ 0.17
|
-64.7%
|
|
$
(0.21)
|
$
(0.01)
|
n/m
|
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Results
as reported:
|
|
|
|
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|
|
|
|
|
EBITDA from continuing operations
|
$ 6,082
|
$
12,377
|
-50.9%
|
|
$
45,079
|
$
20,579
|
119.1%
|
|
|
Net
income (loss) from continuing operations
|
$ (129)
|
$ 3,157
|
-104.1%
|
|
$
13,861
|
$
(1,003)
|
n/m
|
|
|
Earnings (loss) per share from continuing operations - diluted
|
$
(0.01)
|
$ 0.17
|
-105.9%
|
|
$ 0.72
|
$
(0.05)
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
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(1)
Excludes a $2.2 million impairment charge on the Red Lion Colonial
Hotel in Helena, MT, recorded in the third quarter of 2011, a $33.5
million gain on the sale of the Seattle Fifth Avenue property recorded
in the second quarter of 2011, and $1.2 million of separation costs
related to the departure of the company's former President and Chief
Executive Officer recorded in the first quarter of 2010.
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In addition, on a comparable basis, key hotel operating
metrics and hotel revenues and operating margin for the three and nine
months ended September 30, 2011, and September 30, 2010, are highlighted below for
owned and leased hotels:
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|
|
|
|
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Three
months ended September 30,
|
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Nine
months ended September 30,
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|
|
|
2011
|
2010
|
change
|
|
2011
|
2010
|
change
|
|
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|
|
|
|
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RevPAR
(revenue per available room)
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$ 62.22
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$ 60.14
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3.5%
|
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$ 49.85
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$ 48.26
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3.3%
|
|
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ADR
(average daily rate)
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$ 87.21
|
$ 86.95
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0.3%
|
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$ 82.95
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$ 82.56
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0.5%
|
|
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Occupancy
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71.3%
|
69.2%
|
210
|
bps
|
60.1%
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58.4%
|
170
|
bps
|
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|
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Hotels
revenue:
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Rooms
|
$
33,336
|
$
32,224
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3.5%
|
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$
79,260
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$
76,723
|
3.3%
|
|
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Food
and beverage
|
8,532
|
8,476
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0.7%
|
|
24,548
|
25,160
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-2.4%
|
|
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Other
revenue
|
1,060
|
1,041
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1.8%
|
|
2,567
|
2,506
|
2.4%
|
|
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Total
hotels revenue
|
$
42,928
|
$
41,741
|
2.8%
|
|
$
106,375
|
$
104,389
|
1.9%
|
|
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Hotel
direct operating margin
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26.7%
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30.4%
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20.5%
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23.7%
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Third Quarter 2011 Results
In the third quarter of 2011, for comparable hotels, excluding
Seattle Fifth Avenue, occupancy increased 210 basis points to 71.3
percent and ADR increased 0.3 percent to $87.21,
both contributing to a 3.5 percent increase in comparable RevPAR year
over year. Including franchised hotels, a 260 basis point increase in
occupancy drove a 3.8 percent increase in system wide RevPAR.
On a comparable hotel basis, EBITDA from continuing operations
before special items was $8.2 million
for the third quarter compared to $10.5 million
in the prior year period. Hotel revenue on a comparable basis of $42.9 million increased 2.9 percent from $41.7 million in the prior year period.
Comparable rooms revenue increased approximately $1.1
million or 3.5 percent, primarily due to an increase in
occupancy. Food and beverage revenue on a comparable basis was flat
compared to the prior year at $8.5 million.
Hotel direct operating margin on a comparable basis declined to 26.7
percent from 30.4 percent in the same period in 2010. This decline was
driven by an increase in operating expenses including payroll, sales,
marketing and maintenance.
Franchise revenue increased to $1.2
million from $1.0 million.
Profitability in the segment was impacted by an increase in marketing
on behalf of the franchise hotels and costs relating to the company's
subleased and franchised Sacramento
property.
Revenue in the entertainment segment decreased to $1.5 million compared to $2.0 million, primarily due to a decline in
sales processed through the ticketing division.
Nine Months Ended September 30, 2011
Results
Total revenue on a comparable basis for the nine months ended September 30, 2011 was $119.9
million versus $115.5 million in
the prior year period. Comparable revenue from hotels of $106.4 million was up $2.0
million, or 1.9 percent. Comparable hotel direct operating
margin declined to 20.5 percent from 23.7 percent in the prior year
period, primarily driven by increased labor, sales, marketing, energy
and maintenance costs.
RevPAR for comparable hotels increased 3.3 percent driven by a
170 basis point increase in occupancy and a 0.5 percent increase in
ADR. Including franchised hotels, system wide RevPAR on a comparable
basis for the period increased 4.3 percent due to a 250 basis point
increase in occupancy, while ADR remained flat.
Liquidity and Balance Sheet
As of September 30, 2011, the
company had $50.9 million in cash and
cash equivalents. The company had outstanding debt of $106.4 million, of which $8.4 million is current. This compares to
outstanding debt of $126.0 million, of
which $43.3 million was current, at December 31, 2010.
Capital expenditures for the nine months ended September 30, 2011, totaled $7.3 million primarily for hotel improvement
projects.
On September 13, 2011, the
company completed the first step of an expansion of its credit facility
with Wells Fargo Bank. Under the secured facility, Red Lion Hotels
obtained $18 million in new term debt in
addition to the renewal of $12 million
outstanding under the original facility. Substantially all of the
additional term debt proceeds were used to pay off maturing loans
secured by the Red Lion Hotel at the Park in Spokane
and the Red Lion Hotel Olympia.
Franchise Update
On September 20, 2011, the
company entered into franchise license agreements with the owners of
two New Mexico hotels in Farmington and Gallup.
The two properties are among a group of hotels beneficially owned by
Positive Investments, Inc., which is also the owner of the Red Lion
Hotel Oakland International Airport in California.
The hotels are expected to convert to the Red Lion brand in the fourth
quarter, expanding the company's western United
States footprint from eight states to nine.
Subsequent to the quarter end, on October
10, 2011, the company entered into a third franchise license
agreement with Positive Investments, Inc. for a hotel in Grants, NM.
Subsequent Events
On October 11, 2011, the
company used cash reserves to retire the maturing debt of $5.0 million secured by the Red Lion Colonial
Hotel in Helena, MT.
On October 13, 2011, the
company completed its $40 million credit
facility with Wells Fargo Bank, making available $10
million in revolving credit, in addition to $30 million in term debt obtained in September 2011.
On November 2, 2011, the
company completed a purchase for $37 million
of 10 hotels formerly leased from a subsidiary of iStar Financial Inc.
Approximately $32 million of the
purchase price was funded with cash proceeds received from the sale of
Red Lion Hotel on Fifth Avenue and structured as a tax deferred
exchange. The transaction will reduce the company's lease obligations
by approximately $4.3 million per year.
Outlook for 2011
The company is reducing 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 1 to 3 percent over 2010 on an
annual basis.
- The company expects to invest approximately $10 million in capital improvements in 2011.
Conference Call Information
The company will conduct a conference call on November 3, 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 Julie
Shiflett. 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) 234-9960.
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 and to 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 November 3, 2011, through
December 3, 2011 at (800) 475-6701
or (320) 365-3844 (International) access code – 221163. 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 September 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
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Red
Lion Hotels Corporation
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Consolidated
Statements of Operations
|
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|
|
(unaudited)
|
|
|
|
($ in
thousands, except footnotes)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended September 30,
|
|
|
|
|
|
|
2011
|
2010
|
$
Change
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
Hotels
|
|
$
42,928
|
$
46,221
|
$
(3,293)
|
-7.1%
|
|
|
Franchise
|
|
1,218
|
999
|
219
|
21.9%
|
|
|
Entertainment
|
|
1,499
|
2,048
|
(549)
|
-26.8%
|
|
|
Other
|
|
567
|
575
|
(8)
|
-1.4%
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
46,212
|
49,843
|
(3,631)
|
-7.3%
|
|
|
|
|
|
|
|
|
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|
Operating
expenses:
|
|
|
|
|
|
|
|
Hotels
|
|
31,448
|
31,652
|
(204)
|
-0.6%
|
|
|
Franchise
|
|
1,178
|
789
|
389
|
49.3%
|
|
|
Entertainment
|
|
1,484
|
1,545
|
(61)
|
-3.9%
|
|
|
Other
|
|
383
|
438
|
(55)
|
-12.6%
|
|
|
Depreciation
and amortization
|
|
4,430
|
5,216
|
(786)
|
-15.1%
|
|
|
Hotel
facility and land lease
|
|
2,174
|
1,987
|
187
|
9.4%
|
|
|
Impairment
charge (1)
|
|
2,156
|
-
|
2,156
|
n/m
|
|
|
Loss
(gain) on asset dispositions, net
|
|
(115)
|
(118)
|
(3)
|
2.5%
|
|
|
Undistributed
corporate expenses
|
|
1,457
|
1,431
|
26
|
1.8%
|
|
|
|
|
|
|
|
|
|
|
Total
expenses
|
|
44,595
|
42,940
|
1,655
|
3.9%
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
1,617
|
6,903
|
(5,286)
|
-76.6%
|
|
|
|
|
|
|
|
|
|
|
Other
income (expense):
|
|
|
|
|
|
|
|
Interest
expense
|
|
(1,997)
|
(2,282)
|
(285)
|
-12.5%
|
|
|
Other
income, net
|
|
28
|
265
|
(237)
|
-89.4%
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes
|
|
(352)
|
4,886
|
(5,238)
|
107.2%
|
|
|
|
|
|
|
|
|
|
|
Income
tax (benefit) expense
|
|
(223)
|
1,729
|
(1,952)
|
-112.9%
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) from continuing operations
|
|
(129)
|
3,157
|
(3,286)
|
-104.1%
|
|
|
|
|
|
|
|
|
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Income
(loss) from operations of discontinued business units,
|
|
|
|
|
|
|
|
net
of income tax (benefit) expense of ($36)
|
|
-
|
(68)
|
68
|
100.0%
|
|
|
Income
(loss) on disposal of discontinued business units,
|
|
|
|
|
|
|
|
net
of income tax (benefit) expense of ($20)
|
|
-
|
(38)
|
38
|
0.0%
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) from discontinued operations
|
|
-
|
(106)
|
106
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
(129)
|
3,051
|
(3,180)
|
104.2%
|
|
|
|
|
|
|
|
|
|
|
Less:
Net income or loss attributable to noncontrolling interest
|
|
7
|
(7)
|
14
|
n/m
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) attributable to Red Lion Hotels Corporation (1)
|
|
$ (122)
|
$ 3,044
|
$
(3,166)
|
104.0%
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share - basic
|
|
|
|
|
|
|
|
Net
income (loss) from continuing operations
|
|
$
(0.01)
|
0.17
|
|
|
|
|
Net
Income (loss) from discontinued operations
|
|
$ -
|
(0.01)
|
|
|
|
|
Net
income (loss) attributable to Red Lion Hotels Corporation
|
|
$
(0.01)
|
0.16
|
|
|
|
|
Weighted
average shares - basic (2)
|
|
19,089
|
18,514
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share - diluted
|
|
|
|
|
|
|
|
Net
income (loss) from continuing operations
|
|
$
(0.01)
|
0.17
|
|
|
|
|
Net
Income (loss) from discontinued operations
|
|
$ 0.00
|
(0.01)
|
|
|
|
|
Net
income (loss) attributable to Red Lion Hotels Corporation
|
|
$
(0.01)
|
0.16
|
|
|
|
|
Weighted
average shares - diluted (2)
|
|
19,089
|
18,710
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
(1,3)
|
|
$ 6,082
|
$
12,221
|
$
(6,139)
|
-50.2%
|
|
|
EBITDA
as a percentage of revenues
|
|
13.2%
|
24.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
from continuing operations (1,3)
|
|
$ 6,082
|
$
12,377
|
$
(6,295)
|
-50.9%
|
|
|
EBITDA
from continuing operations
|
|
13.2%
|
24.8%
|
|
|
|
|
as a
percentage of revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes
an impairment charge of $2.2 million of a hotel property located in
Helena, Montana as discussed further in this release under Disclosure
of Special Items.
|
|
|
|
|
(2)
|
For
the three months ended September 30, 2011 none of the 333,551 options
to purchase common shares outstanding as of that date were considered
dilutive for the period, as were none of the 300,027 restricted stock
units outstanding and none of the 44,837 convertible operating
partnership units due to the net loss during the period. For the three
months ended September 30, 2010, 109,924 of the 793,083 options to
purchase common shares outstanding as of that date were considered
dilutive as were 42,619 of the 229,547 restricted stock units
outstanding and all of the 44,837 operating partnership units.
|
|
|
|
|
(3)
|
The
definition of "EBITDA" and how that measure relates to net income
attributable to Red Lion Hotels Corporation is discussed further in
this release under Non-GAAP Financial Measures.
|
|
|
|
|
Red
Lion Hotels Corporation
|
|
|
|
Consolidated
Statements of Operations
|
|
|
|
(unaudited)
|
|
|
|
($ in
thousands, except footnotes)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine
months ended September 30,
|
|
|
|
|
|
|
2011
|
2010
|
$
Change
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
Hotels
|
|
$
112,362
|
$
115,473
|
$
(3,111)
|
-2.7%
|
|
|
Franchise
|
|
2,870
|
2,446
|
424
|
17.3%
|
|
|
Entertainment
|
|
8,940
|
6,866
|
2,074
|
30.2%
|
|
|
Other
|
|
1,692
|
1,815
|
(123)
|
-6.8%
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
125,864
|
126,600
|
(736)
|
-0.6%
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Hotels
|
|
89,230
|
86,864
|
2,366
|
2.7%
|
|
|
Franchise
|
|
3,142
|
2,177
|
965
|
44.3%
|
|
|
Entertainment
|
|
8,236
|
5,544
|
2,692
|
48.6%
|
|
|
Other
|
|
1,209
|
1,275
|
(66)
|
-5.2%
|
|
|
Depreciation
and amortization
|
|
14,493
|
15,590
|
(1,097)
|
-7.0%
|
|
|
Hotel
facility and land lease
|
|
6,473
|
5,512
|
961
|
17.4%
|
|
|
Impairment
charge (1)
|
|
2,156
|
-
|
2,156
|
n/m
|
|
|
Loss
(gain) on asset dispositions, net (2)
|
|
(33,698)
|
(273)
|
33,425
|
n/m
|
|
|
Undistributed
corporate expenses (3)
|
|
4,355
|
5,237
|
(882)
|
-16.8%
|
|
|
|
|
|
|
|
|
|
|
Total
expenses
|
|
95,596
|
121,926
|
(26,330)
|
-21.6%
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
30,268
|
4,674
|
25,594
|
n/m
|
|
|
|
|
|
|
|
|
|
|
Other
income (expense):
|
|
|
|
|
|
|
|
Interest
expense
|
|
(6,570)
|
(6,832)
|
262
|
3.8%
|
|
|
Other
income, net
|
|
414
|
312
|
102
|
32.7%
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes
|
|
24,112
|
(1,846)
|
25,958
|
n/m
|
|
|
|
|
|
|
|
|
|
|
Income
tax (benefit) expense
|
|
10,251
|
(843)
|
(11,094)
|
n/m
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) from continuing operations
|
|
13,861
|
(1,003)
|
14,864
|
n/m
|
|
|
|
|
|
|
|
|
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Income
(loss) from operations of discontinued business units,
|
|
|
|
|
|
|
|
net
of income tax (benefit) expense of ($181)
|
|
-
|
(351)
|
351
|
100.0%
|
|
|
Income
(loss) on disposal of discontinued business units,
|
|
|
|
|
|
|
|
net
of income tax (benefit) expense of ($20)
|
|
-
|
(38)
|
38
|
0.0%
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) from discontinued operations
|
|
-
|
(389)
|
389
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
13,861
|
(1,392)
|
15,253
|
n/m
|
|
|
|
|
|
|
|
|
|
|
Less:
Net income or loss attributable to noncontrolling interest
|
|
(96)
|
3
|
(99)
|
n/m
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) attributable to Red Lion Hotels Corporation (1,2,3)
|
|
$
13,765
|
$
(1,389)
|
$
15,154
|
n/m
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share - basic
|
|
|
|
|
|
|
|
Net
income (loss) from continuing operations
|
|
$ 0.73
|
$
(0.05)
|
|
|
|
|
Net
Income (loss) from discontinued operations
|
|
$ -
|
$
(0.02)
|
|
|
|
|
Net
income (loss) attributable to Red Lion Hotels Corporation
|
|
$ 0.72
|
$
(0.07)
|
|
|
|
|
Weighted
average shares - basic (4)
|
|
19,029
|
18,402
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share - diluted
|
|
|
|
|
|
|
|
Net
income (loss) from continuing operations
|
|
$ 0.72
|
$
(0.05)
|
|
|
|
|
Net
Income (loss) from discontinued operations
|
|
$ 0.00
|
$
(0.02)
|
|
|
|
|
Net
income (loss) attributable to Red Lion Hotels Corporation
|
|
$ 0.72
|
$
(0.07)
|
|
|
|
|
Weighted
average shares - diluted (4)
|
|
19,170
|
18,402
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
(1,2,3,5)
|
|
$
45,079
|
$
20,021
|
$
25,058
|
125.2%
|
|
|
EBITDA
as a percentage of revenues
|
|
35.8%
|
15.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
from continuing operations (1,2,3,5)
|
|
$
45,079
|
$
20,579
|
$
24,500
|
119.1%
|
|
|
EBITDA
from continuing operations
|
|
35.8%
|
16.3%
|
|
|
|
|
as a
percentage of revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes
an impairment charge of $2.2 million of a hotel property located in
Helena, Montana as discussed further in this release under Disclosure
of Special Items.
|
|
|
|
|
(2)
|
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.
|
|
|
|
|
(3)
|
Includes
$1.2 million of cash and non-cash expense recorded in the first quarter
of 2010 related to the separation of the company's former President and
CEO, as discussed further in this release under Disclosure of Special
Items.
|
|
|
|
|
(4)
|
For
the nine months ended September 30, 2011, 38,849 of the 333,551 options
to purchase common shares outstanding as of that date were considered
dilutive as were 86,733 of the 300,027 restricted stock units
outstanding and 14,946 of the 44,837 convertible operating partnership
units. For the nine months ended September 30, 2010, none of the
793,083 options to purchase common shares, 229,547 restricted stock
units outstanding, or 44,837 OP units as of that date were considered
dilutive due to the loss for the period.
|
|
|
|
|
(5)
|
The
definition of "EBITDA" and how that measure relates to net income
attributable to Red Lion Hotels Corporation is discussed further in
this release under Non-GAAP Financial Measures.
|
|
|
|
|
Red
Lion Hotels Corporation
|
|
|
Consolidated
Balance Sheets
|
|
|
(unaudited)
|
|
|
($ in
thousands, except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
|
$
46,036
|
|
$ 4,012
|
|
|
|
Restricted
cash
|
|
|
4,817
|
|
4,120
|
|
|
|
Accounts
receivable, net
|
|
|
8,167
|
|
5,985
|
|
|
|
Inventories
|
|
|
1,403
|
|
1,328
|
|
|
|
Prepaid
expenses and other
|
|
|
2,928
|
|
1,937
|
|
|
|
Assets
held for sale
|
|
|
7,663
|
|
-
|
|
|
|
|
|
Total
current assets
|
|
|
71,014
|
|
17,382
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
and equipment, net
|
|
|
227,433
|
|
272,030
|
|
|
Goodwill
|
|
|
|
22,749
|
|
28,042
|
|
|
Intangible
assets, net
|
|
|
7,949
|
|
7,984
|
|
|
Other
assets, net
|
|
|
6,344
|
|
6,044
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
|
$
335,489
|
|
$
331,482
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
$ 5,395
|
|
$ 7,146
|
|
|
|
Income
taxes payable
|
|
|
418
|
|
-
|
|
|
|
Accrued
payroll and related benefits
|
|
|
3,756
|
|
4,367
|
|
|
|
Accrued
interest payable
|
|
|
251
|
|
276
|
|
|
|
Advance
deposits
|
|
|
453
|
|
487
|
|
|
|
Other
accrued expenses
|
|
|
11,026
|
|
10,178
|
|
|
|
Revolving
credit facility
|
|
|
-
|
|
18,000
|
|
|
|
Long-term
debt, due within one year
|
|
|
8,375
|
|
25,275
|
|
|
|
|
|
Total
current liabilities
|
|
|
29,674
|
|
65,729
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
debt, due after one year
|
|
|
67,208
|
|
51,877
|
|
|
Deferred
income
|
|
|
4,767
|
|
4,859
|
|
|
Deferred
income taxes
|
|
|
16,898
|
|
7,427
|
|
|
Debentures
due Red Lion Hotels Capital Trust
|
|
|
30,825
|
|
30,825
|
|
|
|
|
|
Total
liabilities
|
|
|
149,372
|
|
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;
|
|
|
|
|
|
|
|
|
19,094,948
and 18,869,254 shares issued and outstanding
|
|
|
191
|
|
189
|
|
|
|
Additional
paid-in capital, common stock
|
|
|
148,358
|
|
146,834
|
|
|
|
Retained
earnings
|
|
|
37,502
|
|
23,737
|
|
|
|
|
|
Total
Red Lion Hotels Corporation stockholders' equity
|
|
|
186,051
|
|
170,760
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling
interest
|
|
|
66
|
|
5
|
|
|
|
|
|
Total
equity
|
|
|
186,117
|
|
170,765
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and stockholders' equity
|
|
|
$
335,489
|
|
$
331,482
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Red
Lion Hotels Corporation
|
|
|
Consolidated
Statement of Cash Flows
|
|
|
(unaudited)
|
|
|
($ in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Nine
months ended September 30,
|
|
|
|
|
2011
|
|
2010
|
|
|
Operating
activities:
|
|
|
|
|
|
|
Net
income (loss)
|
|
$
13,861
|
|
$
(1,392)
|
|
|
Adjustments
to reconcile net income (loss) attributable to Red Lion Hotels
Corporation
|
|
|
|
|
|
|
to
net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
14,493
|
|
15,624
|
|
|
Gain
on disposition of property, equipment and other assets, net
|
|
(33,698)
|
|
(273)
|
|
|
Impairment charge
|
|
2,156
|
|
58
|
|
|
Deferred income tax provision (benefit)
|
|
9,536
|
|
(1,254)
|
|
|
Equity in investments
|
|
36
|
|
11
|
|
|
Stock
based compensation expense
|
|
959
|
|
1,341
|
|
|
Provision for doubtful accounts
|
|
159
|
|
196
|
|
|
Change in current assets and liabilities:
|
|
|
|
|
|
|
Restricted cash
|
|
(1,373)
|
|
(1,842)
|
|
|
Accounts receivable
|
|
(1,665)
|
|
(2,171)
|
|
|
Inventories
|
|
(113)
|
|
21
|
|
|
Prepaid expenses and other
|
|
(991)
|
|
680
|
|
|
Accounts payable
|
|
(1,751)
|
|
3,490
|
|
|
Income taxes payable
|
|
418
|
|
-
|
|
|
Accrued payroll and related benefits
|
|
(611)
|
|
1,252
|
|
|
Accrued interest payable
|
|
(25)
|
|
(55)
|
|
|
Deferred income
|
|
275
|
|
-
|
|
|
Other
accrued expenses and advance deposits
|
|
798
|
|
2,713
|
|
|
Net
cash (used in) provided by operating activities
|
|
2,464
|
|
18,399
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
Purchases
of property and equipment
|
|
(7,260)
|
|
(7,902)
|
|
|
Proceeds
from disposition of property and equipment
|
|
68,343
|
|
100
|
|
|
Advances
to Red Lion Hotels Capital Trust
|
|
(27)
|
|
(27)
|
|
|
Other,
net
|
|
(732)
|
|
395
|
|
|
|
|
|
|
|
|
|
Net
cash (used in) provided by investing activities
|
|
60,324
|
|
(7,434)
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
Borrowings
on revolving credit facility
|
|
10,000
|
|
10,500
|
|
|
Borrowings
on long-term debt
|
|
18,042
|
|
-
|
|
|
Repayment
of revolving credit facility
|
|
-
|
|
(20,500)
|
|
|
Retirement
of revolving credit facility
|
|
(28,000)
|
|
-
|
|
|
Repayment
of long-term debt
|
|
(19,611)
|
|
(2,358)
|
|
|
Distribution to operating partnership unit holders
|
|
(35)
|
|
-
|
|
|
Proceeds
from stock options exercised
|
|
513
|
|
800
|
|
|
Proceeds
from issuance of common stock under employee stock
|
|
|
|
|
|
|
purchase plan
|
|
129
|
|
130
|
|
|
Additions
to deferred financing costs
|
|
(1,662)
|
|
(292)
|
|
|
Common
stock redeemed
|
|
(140)
|
|
(84)
|
|
|
|
|
|
|
|
|
|
Net
cash (used in) provided by financing activities
|
|
(20,764)
|
|
(11,804)
|
|
|
|
|
|
|
|
|
|
Net
change in cash from operating activities of discontinued operations
|
|
-
|
|
4
|
|
|
|
|
|
|
|
|
|
Change
in cash and cash equivalents:
|
|
|
|
|
|
|
Net
increase (decrease) in cash and cash equivalents
|
|
42,024
|
|
(835)
|
|
|
Cash
and cash equivalents at beginning of period
|
|
4,012
|
|
3,881
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents at end of period
|
|
$
46,036
|
|
$ 3,046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Red
Lion Hotels Corporation
|
|
|
Additional
Hotel Statistics
|
|
|
(unaudited)
|
|
|
|
|
System-wide
Hotels as of September 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 September 30, 2011
|
|
Three
months ended September 30, 2010
|
|
|
|
Average
|
|
|
|
Average
|
|
|
|
|
|
Occupancy
(2)
|
ADR (3)
|
RevPAR
(4)
|
|
Occupancy
(2)
|
ADR (3)
|
RevPAR
(4)
|
|
|
Owned
and Leased Hotels
|
71.3%
|
$ 87.21
|
$ 62.22
|
|
69.2%
|
$ 86.95
|
$ 60.14
|
|
|
Franchised
Hotels
|
78.1%
|
$ 89.98
|
$ 70.31
|
|
74.3%
|
$ 90.51
|
$ 67.26
|
|
|
Total
System Wide
|
73.1%
|
$ 87.99
|
$ 64.36
|
|
70.5%
|
$ 87.95
|
$ 62.03
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
from prior comparative period:
|
|
|
|
|
|
|
|
|
|
Owned
and Leased Hotels
|
2.1
|
0.3%
|
3.5%
|
|
|
|
|
|
|
Franchised Hotels
|
3.8
|
-0.6%
|
4.5%
|
|
|
|
|
|
|
Total
System Wide
|
2.6
|
0.0%
|
3.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine
months ended September 30, 2011
|
|
Nine
months ended September 30, 2010
|
|
|
|
Average
|
|
|
|
Average
|
|
|
|
|
|
Occupancy
(2)
|
ADR (3)
|
RevPAR
(4)
|
|
Occupancy
(2)
|
ADR (3)
|
RevPAR
(4)
|
|
|
Owned
and Leased Hotels
|
60.1%
|
$ 82.95
|
$ 49.85
|
|
58.4%
|
$ 82.56
|
$ 48.26
|
|
|
Franchised
Hotels
|
67.4%
|
$ 86.73
|
$ 58.45
|
|
62.4%
|
$ 87.87
|
$ 54.81
|
|
|
Total
System Wide
|
62.0%
|
$ 84.04
|
$ 52.13
|
|
59.5%
|
$ 84.03
|
$ 49.99
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
from prior comparative period:
|
|
|
|
|
|
|
|
|
|
Owned
and Leased Hotels
|
1.7
|
0.5%
|
3.3%
|
|
|
|
|
|
|
Franchised Hotels
|
5.0
|
-1.3%
|
6.6%
|
|
|
|
|
|
|
Total
System Wide
|
2.5
|
0.0%
|
4.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 September 30,
|
|
Nine
months ended September 30,
|
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
total revenue (2)
|
|
$
46,212
|
|
$
45,363
|
|
$
119,877
|
|
$
115,516
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
hotel revenue (2)
|
|
42,928
|
|
41,741
|
|
106,375
|
|
104,387
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
hotel operating expense (3)
|
|
31,448
|
|
29,038
|
|
84,591
|
|
79,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
hotel direct operating profit (1)
|
|
11,480
|
|
12,703
|
|
21,784
|
|
24,720
|
|
|
Comparable
hotel direct operating margin (1)
|
|
26.7%
|
|
30.4%
|
|
20.5%
|
|
23.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
total EBITDA before special items (4)
|
|
$ 8,238
|
|
$
10,510
|
|
$
11,985
|
|
$
17,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 September 30,
|
|
Nine
months ended September 30,
|
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue per the consolidated statements of operations
|
|
$
46,212
|
|
$
49,843
|
|
$
125,864
|
|
$
126,600
|
|
|
less:
Revenue from Seattle Fifth Avenue property
|
|
-
|
|
(4,480)
|
|
(5,987)
|
|
(11,086)
|
|
|
Comparable
total revenue
|
|
$
46,212
|
|
$
45,363
|
|
$
119,877
|
|
$
115,514
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
revenue per the consolidated statements of operations
|
|
$
42,928
|
|
$
46,221
|
|
$
112,362
|
|
$
115,473
|
|
|
less:
Revenue from Seattle Fifth Avenue property
|
|
-
|
|
(4,480)
|
|
(5,987)
|
|
(11,086)
|
|
|
Comparable
hotel revenue
|
|
$
42,928
|
|
$
41,741
|
|
$
106,375
|
|
$
104,387
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
The reconciliation of hotel operating expense per the consolidated
statements of operations to comparable hotel operating expense is as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended September 30,
|
|
Nine
months ended September 30,
|
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
operating expense per the consolidated statements of operations
|
|
$
31,448
|
|
$
31,652
|
|
$
89,230
|
|
$
86,864
|
|
|
less:
Operating expense from Seattle Fifth Avenue property
|
|
-
|
|
(2,615)
|
|
(4,639)
|
|
(7,197)
|
|
|
Comparable
hotel operating expense
|
|
$
31,448
|
|
$
29,037
|
|
$
84,591
|
|
$
79,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 September 30,
|
|
Nine
months ended September 30,
|
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
before special items per the table "Disclosure of Special Items"
|
|
$ 8,238
|
|
$
12,377
|
|
$
13,686
|
|
$
21,798
|
|
|
less:
EBITDA of Seattle Fifth Avenue property
|
|
-
|
|
(1,867)
|
|
(1,701)
|
|
(3,887)
|
|
|
Comparable
total EBITDA before special items
|
|
$ 8,238
|
|
$
10,510
|
|
$
11,985
|
|
$
17,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Red
Lion Hotels Corporation
|
|
|
|
Disclosure
of Special Items
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
During
the third quarter 2011, the Company recorded a $2.2 million impairment
charge related to its Red Lion Colonial Hotel in Helena, Montana.
Additionally, in 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. In the first quarter of 2010, the Company recorded
an expense of $1.2 million resulting from the separation of the
Company's former President and Chief Executive Officer. As a result,
the operations as presented in the accompanying financial statements
for the three and nine months ended September 30, 2011 compared to 2010
do not reflect a meaningful comparison between periods. The following
table represents a reconciliation of certain earnings measures before
special items to net income /(loss) from continuing operations.
|
|
|
|
|
|
|
|
|
|
Three
months ended September 30, 2011
|
|
Three
months ended September 30, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ 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
|
$ 1,100
|
$ 8,238
|
$ 0.06
|
|
$ 3,157
|
$
12,377
|
$ 0.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special
items:
|
|
|
|
|
|
|
|
|
|
|
Impairment
charge (1)
|
(2,156)
|
(2,156)
|
(0.11)
|
|
|
|
|
|
|
|
Income
tax benefit (expense) of special items, net (4)
|
927
|
-
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount
per consolidated statement of operations
|
$ (129)
|
$ 6,082
|
$
(0.01)
|
|
$ 3,157
|
$
12,377
|
$ 0.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine
months ended September 30, 2011
|
|
Nine
months ended September 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
|
$
(4,033)
|
$
13,686
|
$
(0.21)
|
|
$ (217)
|
$
21,798
|
$
(0.01)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special
items:
|
|
|
|
|
|
|
|
|
|
|
Impairment
charge (1)
|
(2,156)
|
(2,156)
|
(0.11)
|
|
|
|
|
|
|
|
Gain
on asset disposition (2)
|
33,549
|
33,549
|
1.75
|
|
|
|
|
|
|
|
Separation
costs (3)
|
|
|
|
|
(1,219)
|
(1,219)
|
(0.06)
|
|
|
|
Income
tax benefit (expense) of special items, net (4)
|
(13,499)
|
|
(0.71)
|
|
433
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount
per consolidated statement of operations
|
$
13,861
|
$
45,079
|
$ 0.72
|
|
$
(1,003)
|
$
20,579
|
$
(0.05)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Amount as included in the line item "Impairment charge" on the
accompanying consolidated statements of operations.
|
|
|
|
|
|
(2)
Amount as included in the line item "Loss (gain) on asset dispositions,
net" on the accompanying consolidated statements of operations.
|
|
|
|
|
|
(3)
Amount as included in the line item "Undistributed corporate expenses"
on the accompanying consolidated statements of operations.
|
|
|
|
|
|
(4)
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 September 30,
|
|
Nine
months ended September 30,
|
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$ 6,082
|
|
$
12,221
|
|
$
45,079
|
|
$
20,021
|
|
|
Income
tax benefit (expense)
|
|
223
|
|
(1,674)
|
|
(10,251)
|
|
1,046
|
|
|
Interest
expense
|
|
(1,997)
|
|
(2,282)
|
|
(6,570)
|
|
(6,832)
|
|
|
Depreciation
and amortization
|
|
(4,430)
|
|
(5,221)
|
|
(14,493)
|
|
(15,624)
|
|
|
Net
income (loss) attributable to Red Lion Hotels Corporation
|
|
$ (122)
|
|
$ 3,044
|
|
$
13,765
|
|
$
(1,389)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended September 30,
|
|
Nine
months ended September 30,
|
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA from continuing operations
|
|
$ 6,082
|
|
$
12,377
|
|
$
45,079
|
|
$
20,579
|
|
|
Income
tax benefit (expense)
|
|
223
|
|
(1,729)
|
|
(10,251)
|
|
843
|
|
|
Interest
expense
|
|
(1,997)
|
|
(2,282)
|
|
(6,570)
|
|
(6,832)
|
|
|
Depreciation
and amortization
|
|
(4,430)
|
|
(5,216)
|
|
(14,493)
|
|
(15,590)
|
|
|
Discontinued
operations, net of tax
|
|
-
|
|
(106)
|
|
-
|
|
(389)
|
|
|
Net
income (loss) attributable to Red Lion Hotels Corporation
|
|
$ (122)
|
|
$ 3,044
|
|
$
13,765
|
|
$
(1,389)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
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