SPOKANE, Wash.,
May 7, 2013 -- Red Lion Hotels
Corporation (NYSE: RLH), a western U.S. based owner and franchisor
of midscale hotels, today announced its results for the first quarter
2013.
Highlights:
- ADR for comparable owned and leased hotels increased 3.7
percent year over year
- RevPAR for comparable owned and leased hotels increased
1.3 percent year over year
- Signed agreements for three franchise hotels during the
quarter and two hotels subsequent to quarter end
- Sold the Red Lion Hotel Pendleton and the Kalispell
Center Mall subsequent to quarter end, using part of the proceeds to
pay down $8.8 million in debt
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 Inn Missoula,
Montana, which was sold in the first quarter of 2013, the Red
Lion Colonial Hotel in Helena, Montana,
which was sold in the third quarter of 2012, and the Red Lion Hotel
Denver Southeast, which was sold in the fourth quarter of 2012.
Following the sales, these properties continue to operate as franchised
hotels and the company is therefore required to report their financial
results in continuing operations. Throughout this release the company
refers to certain non-GAAP financial measures. Please refer to the
tables attached to this release for a reconciliation of these non-GAAP
financial measures to their most directly comparable financial measure
determined in accordance with GAAP.
"We had a great start to the year
driving rate growth at our hotels while expanding our franchise network
and continuing to execute on our asset sale strategy," said Jon E. Eliassen, President and Chief
Executive Officer of Red Lion Hotels Corporation. "We also signed a
commitment letter with Wells Fargo for a new credit facility to
refinance our maturing debt on more favorable terms. Our further
improved balance sheet and the new credit facility will give us more
flexibility to take advantage of opportunities to reinvest in our owned
hotels and improve our guests' experience."
First Quarter 2013 Results
Comparable revenue from owned and
leased hotels of $25.5 million decreased
$0.1 million or 0.5 percent
compared to the same period a year ago. Comparable ADR increased by 3.7
percent to $80.57, which drove a RevPAR
increase of 1.3 percent year over year to $42.64.
Despite the increase in RevPAR, rooms revenue was essentially flat due
to the impact of Leap Year Day in 2012.
Comparable hotel direct operating margin declined to 9.2 percent from
12.6 percent in the same period in 2012. Last year, first quarter
results benefitted from one-time seasonal labor cost adjustments that
did not reoccur in the first quarter of 2013. The company also invested
approximately $0.3 million in additional
marketing initiatives in the first quarter of 2013 as compared to the
prior year.
Franchise revenue increased to $1.3 million from $1.1
million and net segment results improved slightly from the same
period a year ago.
Entertainment revenue grew to $3.4 million, up $0.8
million from the first quarter of 2012. This revenue increase,
as well as improved profitability, was primarily driven by the timing
and mix of shows.
On a comparable basis, total company
EBITDA from continuing operations before special items was a loss of $0.1 million for the first quarter of 2013
compared to income of $1.0 million in
the prior year period. Increased marketing investment, legal costs and
workers compensation expense in the first quarter of 2013 contributed
to the decline in EBITDA. Additionally, the first quarter of the prior
year benefitted from favorable labor cost adjustments that did not
reoccur in the 2013 period.
Net loss from continuing operations in
the first quarter of 2013 was $3.2 million
compared to $7.1 million in the first
quarter of 2012. The prior year period included $6.7
million in pre-tax asset impairment charges related to certain
assets held for sale.
Discontinued Operations
The operations of the company's
commercial mall in Kalispell, Montana,
the Red Lion Hotel Medford in Oregon,
the ownership of certain real estate in Sacramento,
California, and a contract catering business in Yakima, Washington, were classified as
discontinued operations. This presentation, as required under generally
accepted accounting principles ("GAAP"), separately reports the results
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.
Assets Sold or Held for Sale
During first quarter, the company sold
the Red Lion Inn Missoula in Montana
for $1.95 million. Upon closing, the
buyers signed a franchise agreement with the company.
At March 31,
2013, the following assets were classified as held for sale on
the balance sheet:
- Red Lion Hotel Medford in Oregon
- Red Lion Hotel Pendleton in Oregon
- Kalispell Center Mall in Montana
Subsequent to quarter end, the company
sold the following assets:
- Red Lion Hotel Pendleton in Oregon
for $2.25 million, which converted to a
franchise upon closing
- Kalispell Center Mall in Montana
for $11.6 million. Concurrent with the
sale, the company entered into an operating lease agreement with the
buyer of the commercial mall under which the company will continue to
operate the attached Red Lion Hotel Kalispell.
Franchise Update
During the first quarter, the company
signed three franchise agreements; two with owners of new locations and
one with the buyer of the company's previously owned property:
- Red Lion Inn Missoula in Montana,
converted in February 2013 (formerly
owned by the company)
- The LVH – Las Vegas Hotel & Casino in Nevada, converted in March
2013 as the first property in the Leo Hotel Collection
- Red Lion Inn & Suites Kennewick in Washington, converted in April 2013
Subsequent to quarter end, the company
signed two franchise agreements; one with the buyer of the company's
previously owned property and one with the owner of a new location:
- Red Lion Hotel Pendleton in Oregon,
converted in April 2013 (formerly owned
by the company)
- Future Red Lion Inn & Suites Tempe in Arizona, expected to convert in May 2013
Liquidity and Balance Sheet
At March 31,
2013, the company had $5.2 million
in cash and cash equivalents and $10.0 million
available on its line of credit. Additionally, at March 31, 2013, the company had outstanding
debt of $79.2 million, of which $48.3 million is current.
During the first quarter of 2013, the
company amended its existing credit facility with Wells Fargo Bank,
National Association ("Wells Fargo") to extend its maturity to June 30, 2013. The company also signed a
commitment letter with Wells Fargo for a new credit facility. Proceeds
from the new facility will be used to refinance all maturing debt, for
capital expenditures and for general corporate purposes, and is
expected to close prior to June 30, 2013.
Subsequent to quarter end, the company
used a portion of the proceeds from the sale of the Kalispell Center
Mall to pay off $8.8 million on the
existing credit facility.
Capital expenditures for the first
quarter ended March 31, 2013, totaled $2.0 million primarily for hotel improvement
projects.
Outlook for 2013
Based on the outlook for the markets in
which the company operates and on currently available information, the
company reaffirms the previously announced RevPAR guidance and plans
for capital expenditures for 2013:
- Full year 2013 RevPAR for comparable owned and leased
hotels is expected to increase 1 to 3 percent over 2012, driven
primarily by ADR increases.
- The company expects to invest $10-12
million in capital improvements in 2013. This investment could
increase up to an additional $10 million.
However, timing of the investment will depend on the scheduling and
scope of projects as the company enters its high occupancy season.
Conference Call Information
The company will conduct a conference
call on May 7, 2013, 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.
To participate in the conference call,
please dial the following number ten minutes prior to the scheduled
time: (800) 230-1096. International callers should dial (612) 234-9960.
This conference call will also be
webcast live on 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 5:00
p.m. Pacific Time on May 7, 2013,
through May 21, 2013, at (800) 475-6701
or (320) 365-3844 (International) access code - 291589. The replay will
also be available shortly after the call on the Red Lion website.
Red Lion Hotels Corporation is a
hospitality company primarily engaged in the franchising, ownership and
operation of hotels located in nine states and one Canadian province.
As of, the company has system wide. The Red Lion Hotels and Red Lion
Inn & Suites network is comprised of square feet of meeting space.
The Leo Hotel Collection is comprised of one hotel with 2,956 rooms and
220,000 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, 2012, 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
March
31,
|
|
|
|
|
|
2013
|
2012
|
$
Change
|
%
Change
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
Hotels
|
|
$
25,594
|
$
28,152
|
$(2,558)
|
-9.1%
|
|
Franchise
|
|
1,264
|
1,089
|
175
|
16.1%
|
|
Entertainment
|
|
3,373
|
2,524
|
849
|
33.6%
|
|
Other
|
|
85
|
110
|
(25)
|
-22.7%
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
30,316
|
31,875
|
(1,559)
|
-4.9%
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
Hotels
|
|
23,312
|
25,038
|
(1,726)
|
-6.9%
|
|
Franchise
|
|
1,299
|
1,172
|
127
|
10.8%
|
|
Entertainment
|
|
2,984
|
2,203
|
781
|
35.5%
|
|
Other
|
|
108
|
191
|
(83)
|
-43.5%
|
|
Depreciation
and amortization
|
|
3,664
|
3,842
|
(178)
|
-4.6%
|
|
Hotel
facility and land lease
|
|
1,124
|
1,126
|
(2)
|
-0.2%
|
|
Asset
impairment
|
|
-
|
6,676
|
(6,676)
|
-100.0%
|
|
Loss
(gain) on asset dispositions, net
|
|
(92)
|
(104)
|
(12)
|
-11.5%
|
|
Undistributed
corporate expenses
|
|
1,806
|
1,381
|
425
|
30.8%
|
|
|
|
|
|
|
|
|
Total
expenses
|
|
34,205
|
41,525
|
(7,320)
|
-17.6%
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
(3,889)
|
(9,650)
|
5,761
|
-59.7%
|
|
|
|
|
|
|
|
Other
income (expense):
|
|
|
|
|
|
|
Interest
expense
|
|
(1,484)
|
(1,817)
|
333
|
18.3%
|
|
Other
income, net
|
|
101
|
13
|
88
|
n/m
|
|
|
|
|
|
|
|
Income
(loss) before income taxes
|
|
(5,272)
|
(11,454)
|
6,182
|
54.0%
|
|
|
|
|
|
|
|
Income
tax (benefit) expense
|
|
(2,069)
|
(4,358)
|
(2,289)
|
-52.5%
|
|
|
|
|
|
|
|
Net
income (loss) from continuing operations
|
|
(3,203)
|
(7,096)
|
3,893
|
-54.9%
|
|
|
|
|
|
|
|
Discontinued
operations (3,4,5,6):
|
|
|
|
|
|
|
Income
(loss) from operations of discontinued business units, net of
income tax (benefit) expense of $79 and $(40) respectively
|
|
138
|
(72)
|
210
|
n/m
|
|
Loss
on disposal and impairment of the assets of the discontinued business units,
net of income tax (benefit) expense of $(25) and $0 respectively
|
|
(45)
|
-
|
(45)
|
n/m
|
|
|
|
|
|
|
|
Net
income (loss) from discontinued operations
|
|
93
|
(72)
|
165
|
n/m
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
(3,110)
|
(7,168)
|
4,058
|
-56.6%
|
|
|
|
|
|
|
|
Less
net income or loss attributable to noncontrolling interest
|
|
-
|
(7)
|
7
|
100.0%
|
|
|
|
|
|
|
|
Net
income (loss) attributable to Red Lion Hotels Corporation
|
|
$
(3,110)
|
$
(7,161)
|
$ 4,051
|
-56.6%
|
|
|
|
|
|
|
|
Earnings
per share - basic and diluted
|
|
|
|
|
|
|
Net
income (loss) from continuing operations
|
|
$
(0.17)
|
$
(0.37)
|
|
|
|
Net
income (loss) from discontinued operations
|
|
$ 0.01
|
$
(0.00)
|
|
|
|
Net
income (loss) attributable to Red Lion Hotels Corporation
|
|
$
(0.16)
|
$
(0.37)
|
|
|
Weighted
average shares - basic
|
|
19,469
|
19,222
|
|
|
Weighted
average shares - diluted
|
|
19,469
|
19,222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Financial Measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
(1)
|
|
$ 26
|
$
(5,618)
|
$ 5,644
|
n/m
|
EBITDA
as a percentage of revenues
|
|
0.1%
|
-17.6%
|
|
|
|
|
|
|
|
|
|
Comparable
EBITDA from continuing operations before special items (2)
|
|
$ (32)
|
$ 1,005
|
$(1,037)
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The
definition of "EBITDA" and how that measure relates to net income
(loss) attributable to Red Lion Hotels Corporation is discussed further
in this release under Non-GAAP Financial Measures.
|
|
|
(2)
|
The
definition of "Comparable EBITDA from continuing operations before
special items" can be found in the table named "Comparable Operating
Results and Data From Continuing Operations".
|
|
|
(3)
|
During
the fourth quarter 2011, the company listed for sale its hotel in
Medford, Oregon, a non-core asset in which the company does not expect
to maintain significant continuing involvement following a sale.
Accordingly, the operations of this property have been classified as
discontinued operations for all periods presented.
|
|
|
(4)
|
During
the second quarter 2012, based on the company's right to sell its hotel
in Sacramento, California to its tenant and on negotiations regarding
transaction terms, the operating results from the ownership of this
real estate and land were classified as discontinued operations for all
periods presented. This hotel sale was completed in the third quarter
of 2012.
|
|
|
(5)
|
During
the third quarter 2012, the company listed for sale its commercial mall
in Kalispell, Montana. The company does not expect to maintain
significant continuing involvement in the property following a sale.
Accordingly, the operations of this property have been classified as
discontinued operations for all periods presented.
|
|
|
(6)
|
During
the first quarter 2013, the company gave notice to the City of Yakima,
Washington to terminate its contract to operate as the catering company
for the Convention Center. Accordingly, the operations under this
agreement have been classified as discontinued operations for all
periods presented.
|
Red
Lion Hotels Corporation
|
Consolidated
Balance Sheets
|
(unaudited)
|
($
in thousands, except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
|
|
|
|
2013
|
|
2012
|
Assets:
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$ 5,158
|
|
$ 6,477
|
|
|
Restricted
cash
|
|
2,583
|
|
2,417
|
|
|
Accounts
receivable, net
|
|
5,767
|
|
5,774
|
|
|
Notes
receivable
|
|
4,105
|
|
4,112
|
|
|
Inventories
|
|
1,435
|
|
1,329
|
|
|
Prepaid
expenses and other
|
|
2,608
|
|
2,648
|
|
|
Deferred
income taxes
|
|
2,261
|
|
2,342
|
|
|
Assets
held for sale
|
|
16,449
|
|
18,288
|
|
|
|
|
Total
current assets
|
|
40,366
|
|
43,387
|
|
|
|
|
|
|
|
|
|
|
Property
and equipment, net
|
|
193,402
|
|
195,012
|
|
Goodwill
|
|
8,512
|
|
8,512
|
|
Intangible
assets
|
|
6,992
|
|
6,992
|
|
Notes
receivable, long term
|
|
2,922
|
|
2,902
|
|
Other
assets, net
|
|
3,992
|
|
4,137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
256,186
|
|
$
260,942
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$ 5,344
|
|
$ 5,967
|
|
|
Accrued
payroll and related benefits
|
|
3,000
|
|
2,504
|
|
|
Accrued
interest payable
|
|
916
|
|
190
|
|
|
Advance
deposits
|
|
510
|
|
248
|
|
|
Other
accrued expenses
|
|
9,556
|
|
9,286
|
|
|
Long-term
debt, due within one year
|
|
48,335
|
|
49,178
|
|
|
|
|
Total
current liabilities
|
|
67,661
|
|
67,373
|
|
|
|
|
|
|
|
|
|
|
Deferred
income
|
|
3,806
|
|
3,923
|
|
Deferred
income taxes
|
|
3,836
|
|
5,913
|
|
Debentures
due Red Lion Hotels Capital Trust
|
|
30,825
|
|
30,825
|
|
|
|
|
Total
liabilities
|
|
106,128
|
|
108,034
|
|
|
|
|
|
|
|
|
|
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; 19,473,520
and 19,451,849 shares issued and outstanding
|
|
195
|
|
195
|
|
|
Additional
paid-in capital, common stock
|
|
151,058
|
|
150,798
|
|
|
Retained
earnings (accumulated deficit)
|
|
(1,195)
|
|
1,915
|
|
|
|
|
Total
stockholders' equity
|
|
150,058
|
|
152,908
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and stockholders' equity
|
|
$
256,186
|
|
$
260,942
|
|
|
|
|
|
|
|
|
|
Red
Lion Hotels Corporation
|
Additional
Hotel Statistics
|
(unaudited)
|
|
|
System-wide
Hotels as of March 31, 2013
|
|
|
|
|
|
|
Meeting
Space
|
|
|
Hotels
|
Rooms
|
(sq.
ft.)
|
|
Red
Lion Owned or Leased Hotels (1):
|
|
|
|
|
Comparable Continuing Operations
|
26
|
4,936
|
240,074
|
|
Discontinued Operations
|
1
|
185
|
9,552
|
|
Red
Lion Franchised Hotels (1)
|
22
|
3,744
|
220,461
|
|
Leo
Hotel Collection
|
1
|
2,956
|
220,000
|
|
Total
|
50
|
11,821
|
690,087
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
Hotel Statistics from Continuing Operations (1,2,3)
|
|
|
Three
months ended March 31, 2013
|
|
Three
months ended March 31, 2012
|
|
|
Average
|
|
|
|
Average
|
|
|
|
|
Occupancy
(4)
|
ADR
(5)
|
RevPAR
(6)
|
|
Occupancy
(4)
|
ADR
(5)
|
RevPAR
(6)
|
|
Owned
and Leased Hotels
|
52.9%
|
$ 80.57
|
$ 42.64
|
|
54.2%
|
$ 77.67
|
$ 42.08
|
|
Franchised
Hotels
|
46.7%
|
$ 82.01
|
$ 38.30
|
|
47.7%
|
$ 78.62
|
$ 37.54
|
|
Total
System Wide
|
50.5%
|
$ 81.08
|
$ 40.96
|
|
51.7%
|
$ 78.01
|
$ 40.32
|
|
|
|
|
|
|
|
|
|
|
Change
from prior comparative period:
|
|
|
|
|
|
|
|
|
Owned
and Leased Hotels
|
(1.3)
|
3.7%
|
1.3%
|
|
|
|
|
|
Franchised Hotels
|
(1.0)
|
4.3%
|
2.0%
|
|
|
|
|
|
Total
System Wide
|
(1.2)
|
3.9%
|
1.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes
all hotels owned, leased and franchised, presented on a comparable
basis for hotel statistics. The Helena, Denver Southeast and Missoula
properties have been excluded
from the owned and leased hotel statistics and included in the
franchised statistics for all periods shown.
|
|
|
|
|
|
|
|
|
|
(2)
|
Excludes
one hotel identified as a discontinued operation.
|
|
|
|
|
|
|
|
|
|
(3)
|
Excludes
statistics for Leo Collection hotel.
|
|
|
|
|
|
|
|
|
|
(4)
|
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.
|
|
|
|
|
|
|
|
|
|
(5)
|
Average
daily rate ("ADR") represents total room revenues divided by the total
number of paid rooms occupied by hotel guests.
|
|
|
|
|
|
|
|
|
|
(6)
|
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 March 31,
|
|
|
2013
|
|
2012
|
|
|
|
|
|
|
Comparable
total revenue(2)
|
$
30,246
|
|
$
29,384
|
|
|
|
|
|
|
Comparable
hotel revenue (2)
|
25,524
|
|
25,661
|
|
|
|
|
|
|
Comparable
hotel operating expense(3)
|
23,174
|
|
22,425
|
|
|
|
|
|
|
Comparable
hotel direct operating profit(1)
|
2,350
|
|
3,236
|
|
Comparable
hotel direct operating margin (1)
|
9.2%
|
|
12.6%
|
|
|
|
|
|
|
Comparable
total EBITDA from continuing operations before special items(4)
|
$
(32)
|
|
$
1,005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 March 31,
|
|
|
2013
|
|
2012
|
|
|
|
|
|
|
Total
revenue per the consolidated statements of operations
|
$
30,316
|
|
$
31,875
|
|
less:
Revenue from Helena, Denver Southeast and Missoula properties
|
(70)
|
|
(2,491)
|
|
Comparable
total revenue
|
$
30,246
|
|
$
29,384
|
|
|
|
|
|
|
Hotel
revenue per the consolidated statements of operations
|
$
25,594
|
|
$
28,152
|
|
less:
Revenue from Helena, Denver Southeast and Missoula properties
|
(70)
|
|
(2,491)
|
|
Comparable
hotel revenue
|
$
25,524
|
|
$
25,661
|
|
|
|
|
|
(3)
|
The
reconciliation of hotel operating expense per the consolidated
statements of operations to comparable hotel operating expense is as
follows:
|
|
|
|
|
|
|
|
Three
months ended March 31,
|
|
|
2013
|
|
2012
|
|
|
|
|
|
|
Hotel
operating expense per the consolidated statements of operations
|
$
23,312
|
|
$
25,038
|
|
less:
Operating expense from Helena, Denver Southeast and Missoula properties
|
(138)
|
|
(2,613)
|
|
Comparable
hotel operating expense
|
$
23,174
|
|
$
22,425
|
|
|
|
|
|
(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 March 31,
|
|
|
2013
|
|
2012
|
|
|
|
|
|
|
EBITDA
before special items per the table "Disclosure of Special Items"
|
$ (124)
|
|
$ 888
|
|
less:
EBITDA of Helena, Denver Southeast and Missoula properties
|
92
|
|
117
|
|
Comparable
total EBITDA from continuing operations before special items
|
$
(32)
|
|
$
1,005
|
|
|
|
|
|
|
Comparable
operating results from continuing operations and comparable operating
results from continuing operations before special items represent
reported operating results less the impact of the Helena, Denver
Southeast and Missoula properties' results and less the impact of
certain non-recurring charges that do not allow for a meaningful
comparison between periods. We utilize these measures because
management finds them a useful tool to perform more meaningful
comparisons of past, present and future operating results and as a
means to evaluate the results of core, ongoing operations. We also
believe that investors will find them to be a useful tool to perform
more meaningful comparisons of past, present and future operating
results and as a means to evaluate the results of core, ongoing
operations. We believe they are a complement to reported operating
results. Comparable operating results from continuing operations and
comparable operating results from continuing operations before special
items are not intended to represent reported operating results defined
by generally accepted accounting principles in the United States
("GAAP"), and such information should not be considered as an
alternative to reported information or any other measure of performance
prescribed by GAAP.
|
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 March 31,
|
|
|
2013
|
|
2012
|
|
|
|
|
|
EBITDA from continuing operations
|
$ (124)
|
|
$
(5,788)
|
|
Income
tax benefit (expense) - continuing operations
|
2,069
|
|
4,358
|
|
Interest
expense - continuing operations
|
(1,484)
|
|
(1,817)
|
|
Depreciation
and amortization - continuing operations
|
(3,664)
|
|
(3,842)
|
Net
income (loss) attributable to Red Lion Hotels Corporation from
continuing operations
|
(3,203)
|
|
(7,089)
|
|
Income
(loss) on discontinued operations, net of tax
|
93
|
|
(72)
|
Net
income (loss) attributable to Red Lion Hotels Corporation
|
$
(3,110)
|
|
$
(7,161)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended March 31,
|
|
|
2013
|
|
2012
|
|
|
|
|
|
EBITDA
|
$ 26
|
|
$
(5,618)
|
|
Income
tax benefit (expense)
|
2,015
|
|
4,398
|
|
Interest
expense
|
(1,484)
|
|
(1,817)
|
|
Depreciation
and amortization
|
(3,667)
|
|
(4,124)
|
Net
income (loss) attributable to Red Lion Hotels Corporation
|
$
(3,110)
|
|
$
(7,161)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 first quarter of 2012, the Company recorded $3.9 million, $2.0
million and $0.7 million, in pre-tax impairment charges in continuing
operations related to its sold Denver Southeast property, its sold
property in Helena, Montana and its sold property in Missoula, Montana,
respectively. As a result, the operations as presented in the
accompanying financial statements for the three months ended March 31,
2013 compared to 2012 do not reflect a meaningful comparison between
periods. The following table represents a reconciliation of EBITDA from
continuing operations before special items to EBITDA from continuing
operations per the consolidated statement of operations.
|
|
|
|
|
|
|
|
Three
months ended March 31,
|
|
|
2013
|
|
2012
|
|
($
in thousands)
|
EBITDA
from
continuing
operations
(1)
|
|
EBITDA
from
continuing
operations
(1)
|
|
|
|
|
|
Amount
before special items
|
$ (124)
|
|
$ 888
|
|
|
|
|
|
|
Special
items:
|
|
|
|
|
Asset
impairment charges (2)
|
-
|
|
(6,676)
|
|
|
|
|
|
EBITDA
from continuing operations
|
$ (124)
|
|
$
(5,788)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
|