|
SPOKANE, Wash., Aug. 7, 2012 -- 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, 2012. The company reported second
quarter revenues of $38.8 million and
EBITDA of $5.5 million, each from
continuing operations before special items.
Overview:
- RevPAR for comparable owned and leased hotels increased
5.4 percent year-over-year
- Occupancy increased 280 basis points year-over-year
driven primarily by increases in the transient and group segments
- ADR for comparable owned and leased hotels increased 1.0
percent during the quarter
- Comparable EBITDA from continuing operations before
special items increased $0.8 million
compared with the second quarter of 2011
- Subsequent to quarter end, the company announced a new
franchise near Palm Springs, California
and achieved significant progress on asset sales.
Comparable operating results and data from continuing
operations (as disclosed in the table by the same title) 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 the company is therefore required to report
its financial results in continuing operations.
Total revenue from continuing operations reported during the
second quarter of 2012 was $38.8 million
compared to $42.2 million in the second
quarter of 2011. On a comparable basis, hotel revenue increased by $1.6 million and franchise revenues increased
by $0.4 million, offset by a decrease in
entertainment revenues of $2.3 million.
Second quarter net loss from continuing operations was $0.4 million, or $0.02
per share, compared to net income from continuing operations of $19.1 million or $1.00
per diluted share, in the second quarter of 2011. Second quarter of
2011 results include a $33.5 million
gain on the sale of Seattle Fifth Avenue, which is classified as a
special item for EBITDA purposes. In the second quarter of 2012,
comparable EBITDA from continuing operations before special items
increased to $5.5 million, compared to $4.7 million in the second quarter of 2011.
"We increased our overall market share driven by strong
occupancy growth and improved our RevPAR performance. As a result of
our continued occupancy growth, we are well-positioned to increase
rates when the midscale segment rebounds. We also generated significant
margin improvements in the first half of the year," said President and
Chief Executive Officer Jon E. Eliassen.
"In addition, subsequent to quarter-end, we appointed an
executive vice president for franchise development, and announced a new
hotel franchise agreement in Southern
California. We also closed on the sale of one non-core hotel and
announced a sale agreement for another. These achievements are part of
our continued execution of our strategy to improve the competitive
position of our core hotel properties, expand our franchise network and
reduce debt to enhance value for all Red Lion Hotels shareholders."
Summary Results
On the basis of comparable continuing operations before
special items, key owned and leased hotel operating metrics and total
company EBITDA for the three and six months ended June 30, 2012, and June
30, 2011, are highlighted below:
|
Three
months ended June 30,
|
|
Six
months ended June 30,
|
|
|
2012
|
2011
|
change
|
|
2012
|
2011
|
change
|
|
|
|
|
|
|
|
|
|
|
|
RevPAR
(revenue per available room)
|
$ 56.32
|
$ 53.43
|
5.4%
|
|
$ 49.26
|
$ 46.38
|
6.2%
|
|
|
ADR
(average daily rate)
|
$ 84.28
|
$ 83.42
|
1.0%
|
|
$ 81.29
|
$ 81.03
|
0.3%
|
|
|
Occupancy
|
66.8%
|
64.0%
|
280
|
bps
|
60.6%
|
57.2%
|
340
|
bps
|
|
|
|
|
|
|
|
|
|
|
Hotels
revenue:
|
|
|
|
|
|
|
|
|
|
Rooms
|
$
26,060
|
$
24,724
|
5.4%
|
|
$
45,585
|
$
42,687
|
6.8%
|
|
|
Food
and beverage
|
7,948
|
7,567
|
5.0%
|
|
14,940
|
14,425
|
3.6%
|
|
|
Other
revenue
|
530
|
644
|
-17.7%
|
|
928
|
1,105
|
-16.0%
|
|
|
Total
hotels revenue
|
$
34,538
|
$
32,935
|
4.9%
|
|
$
61,453
|
$
58,217
|
5.6%
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
direct operating margin
|
24.4%
|
23.1%
|
|
|
19.3%
|
17.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
EBITDA from continuing operations before special items(1)
|
$ 5,545
|
$ 4,697
|
18.1%
|
|
$ 6,931
|
$ 4,851
|
42.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)The
above excludes an asset impairment which is included in the non-GAAP
reconciliation schedule named, "Disclosure of Special Items" contained
in this release.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter 2012 Results
In the second quarter of 2012, for comparable owned and leased
hotels from continuing operations, RevPAR increased 5.4 percent
year-over-year driven by a 280 basis point increase in occupancy to
66.8 percent and a 1.0 percent increase in ADR to $84.28. On a comparable basis, EBITDA from
continuing operations before special items increased to $5.5 million for the second quarter compared
to $4.7 million in the prior year
period. The acquisition of the previously leased iStar hotels
contributed facility lease savings of $0.6
million in the quarter.
Comparable hotel revenue of $34.5
million was 4.9 percent higher compared to the same period a
year ago. Comparable hotel direct operating margin increased to 24.4
percent from 23.1 percent in the same period in 2011 primarily driven
by a change in mix of promotional activities targeting the transient
segment partially offset by higher reservation and credit card fees
related to the increases in occupancy and rooms revenue.
Revenue and profitability in the entertainment segment
declined $2.3 million and $0.7 million, respectively. The declines were
primarily a result of the mix of entertainment shows produced and fewer
shows in the second quarter of 2012 as compared to the prior year
period.
Franchise revenue increased to $1.3
million from $0.9 million.
Profitability improved year-over-year primarily due to increased rooms
revenue at the company's franchised hotels.
Subsequent Events
On July 31, the company closed
on the sale of its Red Lion Colonial Hotel in Helena,
Montana for $5.6 million. Upon
completion of the sale of the hotel, the company entered into a
franchise agreement under which the hotel will continue to operate as a
Red Lion.
On August 6, the company
announced it has reached a definitive agreement to sell its Red Lion
Hotel Denver Southeast for $13.0 million.
The sale of this property is anticipated to close by October 31, 2012. Under the agreement, the
hotel will not continue to operate as a Red Lion. Accordingly, the
financial results of this property have been classified as discontinued
operations in the company's statement of operations for all periods
presented.
In the past month, the company has signed separate letters of
intent to sell the company's commercial mall in Kalispell, Montana and the Red Lion Hotel
in Medford, Oregon. Both sales are
contingent on completion of mutually acceptable definitive agreements
and on each of the prospective buyer's satisfactory completion of due
diligence.
Franchise Update
On July 9, the company
appointed Ron Burgett as Executive Vice
President, Brand Development. His
primary responsibility is expanding Red Lion's operations through new
franchises. Burgett is also overseeing relationships with the company's
franchise owners, including ensuring adherence to Red Lion brand
standards and maximizing franchisees' results through Red Lion network
benefits.
On July 18, the company
announced the signing of a franchise agreement with the owners of a
hotel in Cathedral City, California
in the Palm Springs area. This 97
room property is expected to convert to a Red Lion Hotel in fall 2012.
Discontinued Operations
Under the sale agreement for the Red Lion Hotel Denver
Southeast, the property will not continue to operate as a Red Lion
hotel. Accordingly, the operations of this property have been
classified as discontinued operations in the company's statement of
operations. Also during the second quarter of 2012, based on the
company's right to sell its franchised hotel in Sacramento, California to its tenant and on
continuing negotiations regarding transaction terms, the company
reclassified the real estate and land into assets held for sale. The
operating results from the ownership of this real estate and land have
appropriately been classified as discontinued operations for all
periods presented. The operations of the aforementioned properties are
in addition to the operations of the properties in Medford, Oregon and Missoula, Montana which were classified as
discontinued operations in the fourth quarter of 2011. This
presentation, as required under generally accepted accounting
principles ("GAAP"), separately reports the revenue and expenses
including any related asset impairment charges, net of income taxes as
"net income (loss) from discontinued operations" on the company's
statement of operations for all periods presented.
Liquidity and Balance Sheet
As of June 30, 2012, the
company had $4.9 million in cash and
cash equivalents, and $10.0 million
available on its line of credit. As of June 30,
2012, the company had outstanding debt of $99.4
million, of which $30.3 million
is classified as current debt. Proceeds from the announced asset sales
in the aforementioned Subsequent Events will be primarily used to
reduce debt.
Capital expenditures for the six months ended June 30, 2012, totaled $3.0
million.
Assets Held for Sale
As of June 30, 2012, the
following were classified as assets held for sale on the balance sheet,
the Red Lion Colonial Hotel in Helena,
Red Lion Inn Missoula, Red Lion Hotel Denver Southeast, Red Lion Hotel
Medford and a hotel property in Sacramento
which is leased to a franchise tenant. The company's hotel property in Sacramento was added to this classification
in the second quarter of 2012.
Outlook for 2012
The company is reaffirming its RevPAR guidance for 2012,
previously provided on February 28, 2012,
based on the management team's outlook for the markets in which the
company operates and currently available information:
- Full year 2012 RevPAR for company owned and leased hotels
is expected to increase 2 to 4 percent compared to 2011 on an annual
basis.
- The company expects to invest approximately $10.0 million in capital improvements in 2012.
Conference Call Information
The management team of Red Lion Hotels will host a conference
call on Aug. 7, 2012, at 2:00 p.m. Pacific Time (5:00
p.m. Eastern Time), to discuss financial and operational results
for the second quarter of 2012. To access the conference call, domestic
participants should dial the following number ten minutes prior to the
scheduled start time of the call: (800) 230-1766. International
participants should dial (612) 288-0337.
The conference call may also be accessed via live webcast at http://www.redlion.com
from the Investor Relations section of the website. To listen to the
live webcast, 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 Aug. 7, 2012, through Aug.
21, 2012, at (800) 475-6701 or (320) 365-3844 (International)
access code – 254894. 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, 2012, the RLH hotel network was
comprised of 47 hotels located in nine states and one Canadian
province, with 8,872 rooms and 443,587 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, 2011 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 and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
Three
months ended June 30,
|
|
|
|
|
|
2012
|
2011
|
$
Change
|
%
Change
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
Hotels
|
|
$
34,538
|
$
36,081
|
$
(1,543)
|
-4.3%
|
|
Franchise
|
|
1,309
|
945
|
364
|
38.5%
|
|
Entertainment
|
|
2,376
|
4,640
|
(2,264)
|
-48.8%
|
|
Other
|
|
582
|
519
|
63
|
12.1%
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
38,805
|
42,185
|
(3,380)
|
-8.0%
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
Hotels
|
|
26,123
|
27,813
|
(1,690)
|
-6.1%
|
|
Franchise
|
|
1,096
|
968
|
128
|
13.2%
|
|
Entertainment
|
|
2,567
|
4,138
|
(1,571)
|
-38.0%
|
|
Other
|
|
448
|
435
|
13
|
3.0%
|
|
Depreciation
and amortization
|
|
4,065
|
4,299
|
(234)
|
-5.4%
|
|
Hotel
facility and land lease
|
|
1,243
|
1,796
|
(553)
|
-30.8%
|
|
Asset
impairment
|
|
252
|
-
|
252
|
n/m
|
|
Loss
(gain) on asset dispositions, net
|
|
(103)
|
(33,497)
|
(33,394)
|
99.7%
|
|
Undistributed
corporate expenses
|
|
1,902
|
1,553
|
349
|
22.5%
|
|
|
|
|
|
|
|
|
Total
expenses
|
|
37,593
|
7,505
|
30,088
|
n/m
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
1,212
|
34,680
|
(33,468)
|
96.5%
|
|
|
|
|
|
|
|
|
Other
income (expense):
|
|
|
|
|
|
|
Interest
expense
|
|
(1,820)
|
(2,272)
|
452
|
19.9%
|
|
Other
income, net
|
|
16
|
381
|
(365)
|
-95.8%
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes
|
|
(592)
|
32,789
|
(33,381)
|
n/m
|
|
|
|
|
|
|
|
|
Income
tax (benefit) expense
|
|
(225)
|
13,674
|
13,899
|
n/m
|
|
|
|
|
|
|
|
|
Net
income (loss) from continuing operations
|
|
(367)
|
19,115
|
(19,482)
|
n/m
|
|
|
|
|
|
|
|
|
Discontinued
operations (2,3,4):
|
|
|
|
|
|
|
Income
(loss) from operations of discontinued business units, net of
income tax (benefit) expense of $202 and $(201) respectively
|
|
356
|
(355)
|
711
|
n/m
|
|
Impairment
of the assets of the discontinued business units, net of income
tax (benefit) expense of $(1,679) and $0 respectively
|
|
(2,959)
|
-
|
(2,959)
|
n/m
|
|
|
|
|
|
|
|
|
Net
income (loss) from discontinued operations
|
|
(2,603)
|
(355)
|
(2,248)
|
n/m
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
(2,970)
|
18,760
|
(21,730)
|
n/m
|
|
|
|
|
|
|
|
|
Less
net income or loss attributable to noncontrolling interest
|
|
-
|
112
|
(112)
|
n/m
|
|
|
|
|
|
|
|
|
Net
income (loss) attributable to Red Lion Hotels Corporation
|
|
$
(2,970)
|
$
18,648
|
$(21,618)
|
n/m
|
|
|
|
|
|
|
|
|
Earnings
per share - basic and diluted
|
|
|
|
|
|
|
Net
income (loss) from continuing operations
|
|
$
(0.02)
|
$ 1.00
|
|
|
|
Net
Income (loss) from discontinued operations
|
|
$
(0.13)
|
$
(0.01)
|
|
|
|
Net
income (loss) attributable to Red Lion Hotels Corporation
|
|
$
(0.15)
|
$ 0.98
|
|
|
|
Weighted
average shares - basic
|
|
19,292
|
19,023
|
|
|
|
Weighted
average shares - diluted
|
|
19,292
|
19,182
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Financial Measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
(1)
|
|
$ 1,276
|
$
39,150
|
$(37,874)
|
-96.7%
|
|
EBITDA
as a percentage of revenues
|
|
3.3%
|
92.8%
|
|
|
|
|
|
|
|
|
|
|
EBITDA
from continuing operations (1)
|
|
$ 5,293
|
$
39,248
|
$(33,955)
|
-86.5%
|
|
EBITDA
from continuing operations
|
|
13.6%
|
93.0%
|
|
|
|
as a
percentage of revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The
definition of "EBITDA" and how that measure relates to net income
(loss) attributable to Red Lion Hotels Corporation is discussed further
in this release under Non-GAAP Financial Measures.
|
|
(2)
|
During
the fourth quarter 2011, the company listed for sale its hotels in
Medford, Oregon and Missoula, Montana, two non-core assets in which the
company does not expect to maintain significant continuing involvement.
Accordingly, the operations of these properties have been classified as
discontinued operations for all periods presented.
|
|
(3)
|
On
July 30, 2012, the company entered into a definitive agreement to sell
its hotel in Aurora, Colorado in which the company does not expect to
maintain significant continuing involvement. Accordingly, the operation
of this property has now been classified as discontinued operations for
all periods presented.
|
|
(4)
|
During
the second quarter 2012, based on the company's right to sell its hotel
in Sacramento, California to its tenant and on continuing negotiations
regarding transaction terms, the operating results from the ownership
of this real estate and land have been classified as discontinued
operations for all periods presented.
|
|
|
|
|
Red
Lion Hotels Corporation
|
|
Consolidated
Statements of Operations
|
|
(unaudited)
|
|
($
in thousands, except footnotes and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
Six
months ended June 30,
|
|
|
|
|
|
2012
|
2011
|
$
Change
|
%
Change
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
Hotels
|
|
$
61,453
|
$
64,204
|
$
(2,751)
|
-4.3%
|
|
Franchise
|
|
2,398
|
1,652
|
746
|
45.2%
|
|
Entertainment
|
|
4,900
|
7,440
|
(2,540)
|
-34.1%
|
|
Other
|
|
1,195
|
1,126
|
69
|
6.1%
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
69,946
|
74,422
|
(4,476)
|
-6.0%
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
Hotels
|
|
49,621
|
52,528
|
(2,907)
|
-5.5%
|
|
Franchise
|
|
2,268
|
1,753
|
515
|
29.4%
|
|
Entertainment
|
|
4,770
|
6,752
|
(1,982)
|
-29.4%
|
|
Other
|
|
886
|
828
|
58
|
7.0%
|
|
Depreciation
and amortization
|
|
8,124
|
9,167
|
(1,043)
|
-11.4%
|
|
Hotel
facility and land lease
|
|
2,423
|
3,428
|
(1,005)
|
-29.3%
|
|
Asset
impairment
|
|
2,263
|
-
|
2,263
|
n/m
|
|
Loss
(gain) on asset dispositions, net
|
|
(207)
|
(33,583)
|
(33,376)
|
99.4%
|
|
Undistributed
corporate expenses
|
|
3,283
|
2,897
|
386
|
13.3%
|
|
|
|
|
|
|
|
|
Total
expenses
|
|
73,431
|
43,770
|
29,661
|
67.8%
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
(3,485)
|
30,652
|
(34,137)
|
n/m
|
|
|
|
|
|
|
|
|
Other
income (expense):
|
|
|
|
|
|
|
Interest
expense
|
|
(3,637)
|
(4,573)
|
936
|
-20.5%
|
|
Other
income, net
|
|
22
|
384
|
(362)
|
-94.3%
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes
|
|
(7,100)
|
26,463
|
(33,563)
|
n/m
|
|
|
|
|
|
|
|
|
Income
tax (benefit) expense
|
|
(2,792)
|
11,198
|
13,990
|
n/m
|
|
|
|
|
|
|
|
|
Net
income (loss) from continuing operations
|
|
(4,308)
|
15,265
|
(19,573)
|
n/m
|
|
|
|
|
|
|
|
|
Discontinued
operations (2,3,4):
|
|
|
|
|
|
|
Income
(loss) from operations of discontinued business units, net of
income tax (benefit) expense of $60 and $(724) respectively
|
106
|
(1,276)
|
1,382
|
n/m
|
|
Impairment
of the assets of the discontinued business units, net of income
tax (benefit) expense of $(3,367) and $0 respectively
|
|
(5,936)
|
-
|
(5,936)
|
n/m
|
|
|
|
|
|
|
|
|
Net
income (loss) from discontinued operations
|
|
(5,830)
|
(1,276)
|
(4,554)
|
n/m
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
(10,138)
|
13,989
|
(24,127)
|
n/m
|
|
|
|
|
|
|
|
|
Less
net income or loss attributable to noncontrolling interest
|
|
(7)
|
102
|
(109)
|
n/m
|
|
|
|
|
|
|
|
|
Net
income (loss) attributable to Red Lion Hotels Corporation
|
|
$(10,131)
|
$
13,887
|
$(24,018)
|
n/m
|
|
|
|
|
|
|
|
|
Earnings
per share - basic and diluted
|
|
|
|
|
|
|
Net
income (loss) from continuing operations
|
|
$
(0.23)
|
$ 0.80
|
|
|
|
Net
Income (loss) from discontinued operations
|
|
$
(0.30)
|
$
(0.06)
|
|
|
|
Net
income (loss) attributable to Red Lion Hotels Corporation
|
|
$
(0.53)
|
$ 0.73
|
|
|
|
Weighted
average shares - basic
|
|
19,257
|
18,999
|
|
|
|
Weighted
average shares - diluted
|
|
19,257
|
19,163
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Financial Measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
(1)
|
|
$
(4,341)
|
$
38,998
|
$(43,339)
|
n/m
|
|
EBITDA
as a percentage of revenues
|
|
-6.2%
|
52.4%
|
|
|
|
|
|
|
|
|
|
|
EBITDA
from continuing operations (1)
|
|
$ 4,668
|
$
40,101
|
$(35,433)
|
-88.4%
|
|
EBITDA
from continuing operations
|
|
6.7%
|
53.9%
|
|
|
|
as a
percentage of revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The
definition of "EBITDA" and how that measure relates to net income
(loss) attributable to Red Lion Hotels Corporation is discussed further
in this release under Non-GAAP Financial Measures.
|
|
(2)
|
During
the fourth quarter 2011, the company listed for sale its hotels in
Medford, Oregon and Missoula, Montana, two non-core assets in which the
company does not expect to maintain significant continuing involvement.
Accordingly, the operations of these properties have been classified as
discontinued operations for all periods presented.
|
|
(3)
|
On
July 30, 2012, the company entered into a definitive agreement to sell
its hotel in Aurora, Colorado in which the company does not expect to
maintain significant continuing involvement. Accordingly, the operation
of this property has now been classified as discontinued operations for
all periods presented.
|
|
(4)
|
During
the second quarter 2012, based on the company's right to sell its hotel
in Sacramento, California to its tenant and on continuing negotiations
regarding transaction terms, the operating results from the ownership
of this real estate and land have been classified as discontinued
operations for all periods presented.
|
|
|
|
|
Red
Lion Hotels Corporation
|
|
Consolidated
Balance Sheets
|
|
(unaudited)
|
|
($
in thousands, except share data)
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
|
|
2012
|
|
2011
|
|
Assets:
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$ 4,911
|
|
$ 1,981
|
|
|
Restricted
cash
|
|
2,756
|
|
3,358
|
|
|
Accounts
receivable, net
|
|
7,561
|
|
7,591
|
|
|
Inventories
|
|
1,451
|
|
1,346
|
|
|
Prepaid
expenses and other
|
|
3,361
|
|
1,973
|
|
|
Deferred
income taxes
|
|
8,202
|
|
4,291
|
|
|
Assets
held for sale
|
|
31,969
|
|
30,380
|
|
|
Total
current assets
|
|
60,211
|
|
50,920
|
|
|
|
|
|
|
|
|
Property
and equipment, net
|
|
215,154
|
|
232,589
|
|
Goodwill
|
|
8,512
|
|
8,512
|
|
Intangible
assets
|
|
6,992
|
|
6,992
|
|
Other
assets, net
|
|
5,232
|
|
5,883
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
296,101
|
|
$
304,896
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$ 5,409
|
|
$ 4,928
|
|
|
Income
taxes payable
|
|
65
|
|
-
|
|
|
Accrued
payroll and related benefits
|
|
4,753
|
|
2,103
|
|
|
Accrued
interest payable
|
|
1,115
|
|
231
|
|
|
Advance
deposits
|
|
753
|
|
380
|
|
|
Other
accrued expenses
|
|
10,269
|
|
9,249
|
|
|
Revolving
credit facility
|
|
-
|
|
844
|
|
|
Long-term
debt, due within one year
|
|
30,325
|
|
3,274
|
|
|
Total
current liabilities
|
|
52,689
|
|
21,009
|
|
|
|
|
|
|
|
|
Long-term
debt, due after one year
|
|
38,201
|
|
66,378
|
|
Deferred
income
|
|
4,157
|
|
4,643
|
|
Deferred
income taxes
|
|
13,698
|
|
16,176
|
|
Debentures
due Red Lion Hotels Capital Trust
|
|
30,825
|
|
30,825
|
|
|
Total
liabilities
|
|
139,570
|
|
139,031
|
|
|
|
|
|
|
|
|
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;
|
|
|
|
|
|
19,348,355
and 19,172,670 shares issued and outstanding
|
|
194
|
|
192
|
|
|
Additional
paid-in capital, common stock
|
|
149,879
|
|
149,027
|
|
|
Retained
earnings
|
|
6,458
|
|
16,589
|
|
|
Total
Red Lion Hotels Corporation stockholders' equity
|
|
156,531
|
|
165,808
|
|
|
|
|
|
|
|
|
Noncontrolling
interest
|
|
-
|
|
57
|
|
|
Total
stockholders' equity
|
|
156,531
|
|
165,865
|
|
|
|
|
|
|
|
|
|
Total
liabilities and stockholders' equity
|
|
$
296,101
|
|
$
304,896
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Red
Lion Hotels Corporation
|
|
Additional
Hotel Statistics
|
|
(unaudited)
|
|
|
System-wide
Hotels as of June 30, 2012
|
|
|
|
|
|
|
|
|
Meeting
Space
|
|
|
|
|
|
|
Hotels
|
Rooms
|
(sq.
ft.)
|
|
|
|
|
|
Red
Lion Owned or Leased Hotels(1):
|
|
|
|
|
|
|
|
|
Comparable
Continuing Operations
|
27
|
5,085
|
255,574
|
|
|
|
|
|
Discontinued
Operations
|
3
|
739
|
35,192
|
|
|
|
|
|
Red
Lion Franchised Hotels (1)
|
17
|
3,048
|
152,821
|
|
|
|
|
|
Total
Red Lion Hotels
|
47
|
8,872
|
443,587
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
Hotel Statistics from Continuing Operations (1,2)
|
|
|
|
|
|
|
|
|
|
Three
months ended June 30, 2012
|
|
Three
months ended June 30, 2011
|
|
|
Average
|
|
|
|
Average
|
|
|
|
|
Occupancy
(3)
|
ADR(4)
|
RevPAR(5)
|
|
Occupancy
(3)
|
ADR(4)
|
RevPAR(5)
|
|
Owned
and Leased Hotels
|
66.8%
|
$ 84.28
|
$ 56.32
|
|
64.0%
|
$ 83.42
|
$ 53.43
|
|
Franchised
Hotels
|
69.5%
|
$ 89.98
|
$ 62.57
|
|
69.8%
|
$ 87.15
|
$ 60.82
|
|
Total
System Wide
|
67.6%
|
$ 85.91
|
$ 58.06
|
|
65.6%
|
$ 84.53
|
$ 55.49
|
|
|
|
|
|
|
|
|
|
|
Change
from prior comparative period:
|
|
|
|
|
|
|
|
|
Owned
and Leased Hotels
|
2.8
|
1.0%
|
5.4%
|
|
|
|
|
|
Franchised
Hotels
|
(0.3)
|
3.2%
|
2.9%
|
|
|
|
|
|
Total
System Wide
|
2.0
|
1.6%
|
4.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six
months ended June 30, 2012
|
|
Six
months ended June 30, 2011
|
|
|
Average
|
|
|
|
Average
|
|
|
|
|
Occupancy
(3)
|
ADR(4)
|
RevPAR(5)
|
|
Occupancy
(3)
|
ADR(4)
|
RevPAR(5)
|
|
Owned
and Leased Hotels
|
60.6%
|
$ 81.29
|
$ 49.26
|
|
57.2%
|
$ 81.03
|
$ 46.38
|
|
Franchised
Hotels
|
64.0%
|
$ 87.24
|
$ 55.81
|
|
63.4%
|
$ 85.51
|
$ 54.19
|
|
Total
System Wide
|
61.5%
|
$ 83.01
|
$ 51.08
|
|
58.9%
|
$ 82.37
|
$ 48.55
|
|
|
|
|
|
|
|
|
|
|
Change
from prior comparative period:
|
|
|
|
|
|
|
|
|
Owned
and Leased Hotels
|
3.4
|
0.3%
|
6.2%
|
|
|
|
|
|
Franchised
Hotels
|
0.6
|
2.0%
|
3.0%
|
|
|
|
|
|
Total
System Wide
|
2.6
|
0.8%
|
5.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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)
|
Excludes
three hotels identified as discontinued operations.
|
|
|
|
|
|
|
|
|
|
|
(3)
|
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.
|
|
|
|
|
|
|
|
|
|
|
(4)
|
Average
daily rate ("ADR") represents total room revenues divided by the total
number of paid rooms occupied by hotel guests.
|
|
|
|
|
|
|
|
|
|
|
(5)
|
Revenue
per available room ("RevPAR") represents total room and related
revenues divided by total available rooms.
|
|
|
|
|
|
|
|
|
|
|
|
Red
Lion Hotels Corporation
|
|
Comparable
Operating Results and Data From Continuing Operations
|
|
(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 from continuing
operations for the entirety of the reporting
periods
being compared.
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended June 30,
|
|
Six
months ended June 30,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
Comparable
total revenue (2)
|
$
38,805
|
|
$
39,039
|
|
$
69,946
|
|
$
68,435
|
|
|
|
|
|
|
|
|
|
|
Comparable
hotel revenue (2)
|
34,538
|
|
32,935
|
|
61,453
|
|
58,217
|
|
|
|
|
|
|
|
|
|
|
Comparable
hotel operating expense(3)
|
26,123
|
|
25,317
|
|
49,621
|
|
47,889
|
|
|
|
|
|
|
|
|
|
|
Comparable
hotel direct operating profit(1)
|
8,415
|
|
7,618
|
|
11,832
|
|
10,328
|
|
Comparable
hotel direct operating margin (1)
|
24.4%
|
|
23.1%
|
|
19.3%
|
|
17.7%
|
|
|
|
|
|
|
|
|
|
|
Comparable
total EBITDA from continuing operations before special items (4)
|
$
5,545
|
|
$
4,697
|
|
$
6,931
|
|
$
4,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
Total
revenue per the consolidated statements of operations
|
$
38,805
|
|
$
42,185
|
|
$
69,946
|
|
$
74,422
|
|
less:
Revenue from Seattle Fifth Avenue property
|
-
|
|
(3,146)
|
|
-
|
|
(5,987)
|
|
Comparable
total revenue
|
$
38,805
|
|
$
39,039
|
|
$
69,946
|
|
$
68,435
|
|
|
|
|
|
|
|
|
|
|
Hotel
revenue per the consolidated statements of operations
|
$
34,538
|
|
$
36,081
|
|
$
61,453
|
|
$
64,204
|
|
less:
Revenue from Seattle Fifth Avenue property
|
-
|
|
(3,146)
|
|
-
|
|
(5,987)
|
|
Comparable
hotel revenue
|
$
34,538
|
|
$
32,935
|
|
$
61,453
|
|
$
58,217
|
|
|
|
|
|
|
|
|
|
|
(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,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
Hotel
operating expense per the consolidated statements of operations
|
$
26,123
|
|
$
27,813
|
|
$
49,621
|
|
$
52,528
|
|
less:
Operating expense from Seattle Fifth Avenue property
|
-
|
|
(2,496)
|
|
-
|
|
(4,639)
|
|
Comparable
hotel operating expense
|
$
26,123
|
|
$
25,317
|
|
$
49,621
|
|
$
47,889
|
|
|
|
|
|
|
|
|
|
|
(4)
|
The
reconciliation of EBITDA from continuing operations before special
items per the table entitled "Disclosure of Special Items" to
comparable total EBITDA before
special items is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended June 30,
|
|
Six
months ended June 30,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
EBITDA
before special items per the table "Disclosure of Special Items"
|
$ 5,545
|
|
$ 5,699
|
|
$ 6,931
|
|
$ 6,552
|
|
less:
EBITDA of Seattle Fifth Avenue property
|
-
|
|
(1,002)
|
|
-
|
|
(1,701)
|
|
Comparable
total EBITDA from continuing operations before special items
|
$
5,545
|
|
$
4,697
|
|
$
6,931
|
|
$
4,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
EBITDA
from continuing operations
|
$ 5,293
|
|
$
39,248
|
|
$ 4,668
|
|
$
40,101
|
|
Income
tax benefit (expense) - continuing operations
|
225
|
|
(13,674)
|
|
2,792
|
|
(11,198)
|
|
Interest
expense - continuing operations
|
(1,820)
|
|
(2,272)
|
|
(3,637)
|
|
(4,573)
|
|
Depreciation
and amortization - continuing operations
|
(4,065)
|
|
(4,299)
|
|
(8,124)
|
|
(9,167)
|
|
Net
income (loss) attributable to Red Lion Hotels Corporation from
continuing operations
|
(367)
|
|
19,003
|
|
(4,301)
|
|
15,163
|
|
Income
(loss) on discontinued operations, net of tax
|
(2,603)
|
|
(355)
|
|
(5,830)
|
|
(1,276)
|
|
Net
income (loss) attributable to Red Lion Hotels Corporation
|
$
(2,970)
|
|
$
18,648
|
|
$
(10,131)
|
|
$
13,887
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended June 30,
|
|
Six
months ended June 30,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
$ 1,276
|
|
$
39,150
|
|
$
(4,341)
|
|
$
38,998
|
|
Income
tax benefit (expense)
|
1,702
|
|
(13,473)
|
|
6,099
|
|
(10,474)
|
|
Interest
expense
|
(1,820)
|
|
(2,272)
|
|
(3,637)
|
|
(4,573)
|
|
Depreciation
and amortization
|
(4,128)
|
|
(4,757)
|
|
(8,252)
|
|
(10,064)
|
|
Net
income (loss) attributable to Red Lion Hotels Corporation
|
$
(2,970)
|
|
$
18,648
|
|
$
(10,131)
|
|
$
13,887
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
Red
Lion Hotels Corporation
|
|
Disclosure
of Special Items
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
During
the second and first quarters of 2012 , the Company recorded $0.3
million and $2.0 million, respectively, in pre-tax impairment charges
in continuing operations related to its Red Lion Colonial Hotel
property. During the second quarter 2011, the Company recorded a $33.5
million gain from the sale of its Red Lion Hotel on Fifth Avenue in
Seattle, Washington. As a result, the operations as presented in the
accompanying financial statements for the three and six months ended
June 30, 2012 compared to 2011 do not reflect a meaningful comparison
between periods. The following table represents a reconciliation of
EBITDA from continuing operations before special items to EBITDA from
continuing operations per the consolidated statement of operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended June 30,
|
|
Six
months ended June 30,
|
|
|
|
2012
|
2011
|
|
2012
|
2011
|
|
|
|
($
in thousands)
|
EBITDA
from continuing operations (1)
|
|
EBITDA
from continuing operations (1)
|
|
EBITDA
from continuing operations (1)
|
|
EBITDA
from continuing operations (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount
before special items
|
$ 5,545
|
|
$ 5,699
|
|
$ 6,931
|
|
$ 6,552
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special
items:
|
|
|
|
|
|
|
|
|
|
|
Asset
impairment charges (2)
|
(252)
|
|
-
|
|
(2,263)
|
|
-
|
|
|
|
Gain
on asset disposal (3)
|
-
|
|
33,549
|
|
-
|
|
33,549
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount
per consolidated statement of operations
|
$ 5,293
|
|
$
39,248
|
|
$ 4,668
|
|
$
40,101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amount
defined on the preceding table "Reconciliation of EBITDA to Net Income
Attributable to Red Lion Hotels Corporation".
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
Amounts
as included in the line items "Asset impairment" on the accompanying
consolidated statements of operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
Amount
as included in the line item "Loss (gain) on asset dispositions, net"
on the accompanying consolidated statements of operations.
|
|
