RLH Corporation Reports Fourth Quarter and Year-End 2019 Results
Fourth Quarter Highlights
- Net loss attributable to
RLH Corporation for the fourth quarter of 2019 was$(8.1) million or$(0.32) per share compared to$(7.4) million or$(0.30) per share in the prior year period. In the fourth quarter of 2019, the Company recorded an$8.7 million impairment charge related to itsAmericas Best Value Inn and Knights Inn brand names, which was partially offset by a$7.1 million gain on the sale of two joint venture hotels. In 2018, the Company recorded a$3.5 million impairment charge related to its Guesthouse brand name.
- Adjusted EBITDA for the quarter was
$1.0 million , compared to$2.3 million for the prior year period. - In the core franchised hotel segment, fourth quarter revenues grew 2.6% year-over-year to
$15.3 million ; Adjusted Core EBITDA was$1.6 million , compared to$1.4 million in the prior year period. - Completed the sale of two joint venture owned hotels,
Red Lion Hotel Atlanta Airport andHotel RL Salt Lake City receiving approximately$16.7 million in net proceeds, after closing costs, property level debt repayments, and distributions to joint venture partners.
Full Year Highlights
- Net loss attributable to
RLH Corporation was$(19.0) million or$(0.76) per share compared to net income of$1.3 million or$0.05 per diluted share in 2018. In 2019, the Company recorded a$14.1 million impairment charge related to itsWashington DC hotel, andAmericas Best Value Inn and Knights Inn brand names, which was partially offset by a$7.1 million gain on the sale, primarily from two joint venture owned hotels. In 2018, the Company recorded a$10.6 million impairment charge, and$42.0 million in gains on asset sales, primarily from owned hotels.
- Adjusted EBITDA for 2019 was
$11.6 million , compared to$15.8 million for the prior year period. - In the core franchise segment, revenues grew 10% year-over-year to
$59.2 million . Adjusted Core EBITDA for 2019 was$4.2 million versus$0.6 million in 2018. - For the year, the Company executed 169 franchise agreements comprised of 27 midscale hotels and 142 economy hotels, compared to 167 contracts signed in the prior year. Of the 169 contracts signed this year, 43 are for new locations, compared to 61 new locations in the prior year.
“We have focused our efforts on our core franchise business, relationship building, owner satisfaction, and lodging development are our key objectives right now,” said
“On behalf of the RLH Corporation Board of Directors, we are committed to improving shareholder value by supporting the initiatives the RLHC management team is pursuing for franchise system stability and other opportunities that may become available,” said
Fourth Quarter 2019 Financial Results
The Company reported a net loss attributable to
Adjusted EBITDA for the fourth quarter was
Royalty fees decreased 20% to
Selling, general, administrative and other expenses, which include franchise sales, operations and corporate costs and bad debt expense, decreased 9% to
Core Franchise Operations
The following table provides results for the Company’s core franchised hotel segment:
($ in thousands) | Fourth Quarter | Full Year | ||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | |||||||||||||
Revenue: | ||||||||||||||||||
Royalty | $ | 4,605 | $ | 5,734 | (19.7)% | $ | 22,121 | $ | 22,309 | (0.8)% | ||||||||
Marketing, reservations and reimbursables | 8,743 | 8,365 | 4.5% | 31,375 | 28,239 | 11.1% | ||||||||||||
Other franchise | 1,977 | 834 | 137.1% | 5,749 | 3,246 | 77.1% | ||||||||||||
Total revenues | 15,325 | 14,933 | 2.6% | 59,245 | 53,794 | 10.1% | ||||||||||||
Core Adjusted EBITDA: | ||||||||||||||||||
Core Adjusted EBITDA | 1,633 | 1,387 | 17.7% | 4,210 | 587 | NM |
The midscale hotels achieved a RevPAR index of (1.2)% and (2.6)% for the fourth quarter and year ended
For the quarter, the Company executed 26 franchise agreements comprised of four midscale hotels and 22 economy hotels, versus 59 agreements in the year-ago period. Of the 26 contracts signed during the quarter three are for new locations. Franchise sales experienced some disruption in the quarter, as regulations require a franchisor to pause entering into new franchise agreements in the event of a change in certain leadership roles, such as a change in CEO. Contract signings resumed once new franchise disclosure documents were filed and approved by regulatory agencies.
Offsetting the new contracts in the quarter were 98 terminations which included six midscale hotels and 92 economy hotels.
Royalty revenue mix for 2019 was 70% from economy hotels and 30% from midscale hotels. Midscale hotels typically take three to 18 months to open and contain future royalty rate increases, generating franchise revenue growth. For instance, midscale contracts for new locations signed in 2019, contributed in the year
Offsetting the new signings for the year were 274 terminations which included 23 midscale hotels and 251 economy hotels.
Balance Sheet and Liquidity
As previously announced, to increase focus on its franchising business strategy, the Company has been engaged in an ongoing hotel asset disposition program. During 2019, the Company sold, or is under contract to sell, four hotels, including the
On
On
Based on the two hotel sales in 2019, after the repayment of closing costs, property level debt and distributions to the joint venture partner, the Company netted
Subsequent to the end of the quarter, the Company completed the sale of its
The Company has announced one hotel currently under a non-binding contract to be sold, the
In addition, the Company has listed its
2020 Outlook
The Company is not providing financial guidance for 2020 at this time due to the following factors:
- Ongoing impact and timing of the remaining hotel sales
- Initiatives to improve franchise owner satisfaction and reduce termination trends
- Timing and associated transition costs for the implementation of G&A reduction initiatives
- Impacts of the hiring of a permanent CEO
The company anticipates signing 60 to 80 franchise agreements for new locations in 2020.
Conference Call Information
This conference call will also be webcast live on www.rlhco.com in the Investor Relations section of the website. To listen to the live call, please go to the
To learn more about franchising with
About
Forward Looking Statements
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, risks associated with our asset light model; relationships with our franchisees and properties; competitive conditions in the lodging industry; economic cycles; changes in future demand and supply for hotel rooms; international conflicts and conditions; impact of government regulations; ability to obtain financing; changes in energy, healthcare, insurance and other operating expenses; ability to sell non-core assets; dependency upon the ability and experience of executive officers and ability to retain or replace such officers as well as other risks and uncertainties discussed in the Company's annual report on Form 10-K for the year ended December 31, 2019, and in other documents filed by the Company with the Securities and Exchange Commission. The forward-looking statements contained herein speak only to the date of this press release. The Company undertakes no obligation to update or revise any forward-looking statements except as required by law.
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Investor Relations Contact:
Investor Relations
203-682-8263
investorrelations@rlhco.com
Consolidated Statements of Comprehensive Income (Loss) | |||||||||||||||
(unaudited) | |||||||||||||||
(In thousands, except footnotes and per share data) | |||||||||||||||
Three Months Ended | Years Ended | ||||||||||||||
2019 | 2018 (Revised) |
2019 | 2018 (Revised) |
||||||||||||
Revenue: | |||||||||||||||
Royalty | $ | 4,605 | $ | 5,734 | $ | 22,121 | $ | 22,309 | |||||||
Marketing, reservations and reimbursables | 8,743 | 8,365 | 31,375 | 28,239 | |||||||||||
Other franchise | 1,977 | 834 | 5,749 | 3,246 | |||||||||||
Company operated hotels | 11,190 | 13,263 | 55,029 | 82,021 | |||||||||||
Other | 1 | 2 | 14 | 34 | |||||||||||
Total revenues | 26,516 | 28,198 | 114,288 | 135,849 | |||||||||||
Operating expenses: | |||||||||||||||
Selling, general, administrative and other expenses | 6,968 | 7,636 | 29,420 | 31,681 | |||||||||||
Company operated hotels | 11,862 | 12,390 | 48,612 | 67,314 | |||||||||||
Marketing, reservations and reimbursables | 7,204 | 7,711 | 29,292 | 27,937 | |||||||||||
Depreciation and amortization | 3,375 | 4,289 | 14,567 | 17,003 | |||||||||||
Asset impairment | 8,746 | 3,482 | 14,128 | 10,582 | |||||||||||
(Gain) loss on asset dispositions, net | (7,112 | ) | 73 | (7,067 | ) | (42,021 | ) | ||||||||
Transaction and integration costs | 196 | 23 | 632 | 2,219 | |||||||||||
Total operating expenses | 31,239 | 35,604 | 129,584 | 114,715 | |||||||||||
Operating income (loss) | (4,723 | ) | (7,406 | ) | (15,296 | ) | 21,134 | ||||||||
Other income (expense): | |||||||||||||||
Interest expense | (1,467 | ) | (843 | ) | (5,157 | ) | (6,209 | ) | |||||||
Loss on early retirement of debt | (264 | ) | — | (428 | ) | (794 | ) | ||||||||
Other income, net | 40 | 51 | 161 | 265 | |||||||||||
Total other income (expense) | (1,691 | ) | (792 | ) | (5,424 | ) | (6,738 | ) | |||||||
Income (loss) before taxes | (6,414 | ) | (8,198 | ) | (20,720 | ) | 14,396 | ||||||||
Income tax expense (benefit) | (423 | ) | 168 | 253 | (71 | ) | |||||||||
Net income (loss) | (5,991 | ) | (8,366 | ) | (20,973 | ) | 14,467 | ||||||||
Net (income) loss attributable to noncontrolling interest | (2,096 | ) | 950 | 1,944 | (13,129 | ) | |||||||||
Net income (loss) and comprehensive income (loss) attributable to |
$ | (8,087 | ) | $ | (7,416 | ) | $ | (19,029 | ) | $ | 1,338 | ||||
Earnings (loss) per share - basic | $ | (0.32 | ) | $ | (0.30 | ) | $ | (0.76 | ) | $ | 0.05 | ||||
Earnings (loss) per share - diluted | $ | (0.32 | ) | $ | (0.30 | ) | $ | (0.76 | ) | $ | 0.05 | ||||
Weighted average shares - basic | 25,145 | 24,564 | $ | 24,931 | $ | 24,392 | |||||||||
Weighted average shares - diluted | 25,145 | 24,564 | $ | 24,931 | $ | 25,477 | |||||||||
Non-GAAP Financial Measures: (1) | |||||||||||||||
EBITDA | $ | (1,572 | ) | $ | (3,066 | ) | $ | (996 | ) | $ | 37,608 | ||||
Adjusted EBITDA | $ | 968 | $ | 2,308 | $ | 11,592 | $ | 15,766 | |||||||
(1) The definitions of EBITDA and Adjusted EBITDA and how those measures relate to net income (loss) are discussed further in this release under Reconciliation of Non-GAAP Financial Measures. | |||||||||||||||
Consolidated Balance Sheets | ||||||||
(unaudited) | ||||||||
(In thousands, except share data) | ||||||||
2019 | 2018 (Revised) |
|||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 29,497 | $ | 17,034 | ||||
Restricted cash | 2,311 | 2,755 | ||||||
Accounts receivable, net of allowance for doubtful accounts of |
15,143 | 18,575 | ||||||
Notes receivable, net | 5,709 | 2,103 | ||||||
Other current assets | 5,849 | 6,218 | ||||||
Total current assets | 58,509 | 46,685 | ||||||
Property and equipment, net | 68,668 | 115,522 | ||||||
Operating lease right-of-use assets | 48,283 | — | ||||||
18,595 | 18,595 | |||||||
Intangible assets, net | 48,612 | 60,910 | ||||||
Other assets, net | 3,851 | 8,075 | ||||||
Total assets | $ | 246,518 | $ | 249,787 | ||||
LIABILITIES | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 5,510 | $ | 5,322 | ||||
Accrued payroll and related benefits | 2,709 | 5,402 | ||||||
Other accrued liabilities | 5,469 | 6,294 | ||||||
Long-term debt, due within one year | 16,984 | 25,056 | ||||||
Operating lease liabilities, due within one year | 4,809 | — | ||||||
Total current liabilities | 35,481 | 42,074 | ||||||
Long-term debt, due after one year, net of debt issuance costs | 5,576 | 9,114 | ||||||
Line of credit, due after one year | 10,000 | 10,000 | ||||||
Operating lease liabilities, due after one year | 46,592 | — | ||||||
Deferred income and other long-term liabilities | 1,105 | 2,245 | ||||||
Deferred income taxes | 743 | 772 | ||||||
Total liabilities | 99,497 | 64,205 | ||||||
Commitments and contingencies | ||||||||
STOCKHOLDERS’ EQUITY | ||||||||
Preferred stock - 5,000,000 shares authorized; |
— | — | ||||||
Common stock - 50,000,000 shares authorized; |
251 | 246 | ||||||
Additional paid-in capital, common stock | 181,608 | 182,018 | ||||||
Accumulated deficit | (36,875 | ) | (17,846 | ) | ||||
144,984 | 164,418 | |||||||
Noncontrolling interest | 2,037 | 21,164 | ||||||
Total stockholders’ equity | 147,021 | 185,582 | ||||||
Total liabilities and stockholders’ equity | $ | 246,518 | $ | 249,787 | ||||
Consolidated Statements of Cash Flows | ||||||||
(unaudited) | ||||||||
(In thousands) | ||||||||
Years Ended |
||||||||
2019 | 2018 (Revised) |
|||||||
Operating activities: | ||||||||
Net income (loss) | $ | (20,973 | ) | $ | 14,467 | |||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 14,567 | 17,003 | ||||||
Noncash PIK interest and amortization of debt issuance costs | 1,077 | 942 | ||||||
Amortization of key money and contract costs | 1,166 | 748 | ||||||
Amortization of contract liabilities | (1,167 | ) | (753 | ) | ||||
Gain on asset dispositions, net | (7,067 | ) | (42,021 | ) | ||||
Noncash loss on early retirement of debt | 276 | 794 | ||||||
Asset impairment | 14,128 | 10,582 | ||||||
Deferred income taxes | (29 | ) | (1,302 | ) | ||||
Stock based compensation expense | 1,780 | 3,955 | ||||||
Provision for doubtful accounts | 3,935 | 1,014 | ||||||
Fair value adjustments to contingent consideration | — | 581 | ||||||
Change in current assets and liabilities, net of business acquired: | ||||||||
Accounts receivable | (89 | ) | (3,644 | ) | ||||
Key money disbursements | (857 | ) | (5,695 | ) | ||||
Other current assets | (248 | ) | (1,231 | ) | ||||
Accounts payable | 380 | 1,249 | ||||||
Other accrued liabilities | (1,497 | ) | (203 | ) | ||||
Net cash provided by (used in) operating activities | 5,382 | (3,514 | ) | |||||
Investing activities: | ||||||||
Capital expenditures | (4,939 | ) | (8,615 | ) | ||||
Acquisition of |
— | (27,249 | ) | |||||
Net proceeds from disposition of property and equipment | 44,137 | 113,748 | ||||||
Collection of notes receivable | 283 | 62 | ||||||
Advances on notes receivable | (90 | ) | (1,048 | ) | ||||
Net cash provided by (used in) investing activities | 39,391 | 76,898 | ||||||
Financing activities: | ||||||||
Borrowings on long-term debt, net of discounts | 32,935 | 30,000 | ||||||
Repayment of long-term debt and finance leases | (45,943 | ) | (107,999 | ) | ||||
Proceeds from line of credit borrowing | — | 10,000 | ||||||
Debt issuance costs | (253 | ) | (1,282 | ) | ||||
Buyout of joint venture interest | — | (304 | ) | |||||
Distributions to noncontrolling interest | (17,559 | ) | (21,457 | ) | ||||
Contingent consideration paid for Vantage Hospitality acquisition | — | (7,000 | ) | |||||
Stock-based compensation awards canceled to settle employee tax withholding | (2,150 | ) | (647 | ) | ||||
Stock option and stock purchase plan issuances, net and other | 216 | 236 | ||||||
Net cash provided by (used in) financing activities | (32,754 | ) | (98,453 | ) | ||||
Change in cash, cash equivalents and restricted cash: | ||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 12,019 | (25,069 | ) | |||||
Cash, cash equivalents and restricted cash at beginning of year | 19,789 | 44,858 | ||||||
Cash, cash equivalents and restricted cash at end of year | $ | 31,808 | $ | 19,789 | ||||
A summary of our open franchise and company operated hotels as of
(unaudited) | ||||||||||||||||||
Midscale Brand | Economy Brand | Total | ||||||||||||||||
Hotels | Total Available Rooms |
Hotels | Total Available Rooms |
Hotels | Total Available Rooms |
|||||||||||||
Beginning quantity, |
112 | 15,900 | 1,215 | 69,800 | 1,327 | 85,700 | ||||||||||||
Newly opened | 8 | 700 | 32 | 1,600 | 40 | 2,300 | ||||||||||||
Change in brand / adjustments (1) | (1 | ) | 100 | (30 | ) | (1,800 | ) | (31 | ) | (1,700 | ) | |||||||
Terminated properties | (23 | ) | (3,200 | ) | (251 | ) | (15,400 | ) | (274 | ) | (18,600 | ) | ||||||
Ending quantity, |
96 | 13,500 | 966 | 54,200 | 1,062 | 67,700 |
(1) During the fourth quarter of 2019 we identified a number of errors in our contract tracking system, primarily related to the status of acquired contracts from acquisitions. The impact of these adjustments is reflected on this line.
A summary of activity relating to our open midscale franchise and company operated hotels by brand from
(unaudited) | ||||||||||||||||||
Red Lion Hotel |
Red Lion Inns and Suites |
Signature | Other | Total | ||||||||||||||
Beginning quantity, |
8 | 46 | 43 | 2 | 13 | 112 | ||||||||||||
Newly opened | 1 | — | 5 | 2 | — | 8 | ||||||||||||
Change in brand / adjustments | — | 1 | 1 | — | (3 | ) | (1 | ) | ||||||||||
Terminated properties | — | (8 | ) | (9 | ) | — | (6 | ) | (23 | ) | ||||||||
Ending quantity, |
9 | 39 | 40 | 4 | 4 | 96 | ||||||||||||
Ending rooms, |
1,400 | 8,000 | 3,300 | 300 | 500 | 13,500 |
A summary of activity relating to our open economy franchise hotels by brand from
(unaudited) | |||||||||||||||||||||
ABVI and CBVI |
Knights Inn |
Country Hearth |
Guest House |
Signature Inn |
Other | Total | |||||||||||||||
Beginning quantity, |
777 | 332 | 53 | 27 | 2 | 24 | 1,215 | ||||||||||||||
Newly opened | 28 | 2 | 1 | 1 | — | — | 32 | ||||||||||||||
Change in brand / adjustments (1) | (7 | ) | (20 | ) | — | — | — | (3 | ) | (30 | ) | ||||||||||
Terminated properties | (141 | ) | (82 | ) | (7 | ) | (9 | ) | (2 | ) | (10 | ) | (251 | ) | |||||||
Ending quantity, |
657 | 232 | 47 | 19 | — | 11 | 966 | ||||||||||||||
Ending rooms, |
34,900 | 14,100 | 2,300 | 1,300 | — | 1,600 | 54,200 |
(1) During the fourth quarter of 2019 we identified a number of errors in our contract tracking system, primarily related to the status of acquired contracts from acquisitions. The impact of these adjustments is reflected on this line.
A summary of our executed franchise agreements for the year ended
(unaudited) | |||||||||
Midscale Brand |
Economy Brand |
Total | |||||||
Executed franchise license agreements, year ended |
|||||||||
New locations | 16 | 27 | 43 | ||||||
New contracts for existing locations | 11 | 115 | 126 | ||||||
Total executed franchise license agreements, year ended |
27 | 142 | 169 |
A summary of our executed franchise agreements for the year ended
(unaudited) | |||||||||
Midscale Brand |
Economy Brand |
Total | |||||||
Executed franchise license agreements, year ended |
|||||||||
New locations (1) | 22 | 39 | 61 | ||||||
New contracts for existing locations (1) | 15 | 91 | 106 | ||||||
Total executed franchise license agreements, year ended |
37 | 130 | 167 |
(1) The prior year number of executed franchise license agreements for new locations has been adjusted to exclude contracts for transfers between brands. These contracts are now reported within new contracts for existing locations.
Reconciliation of Non-GAAP Financial Measures | ||||||||
(unaudited) | ||||||||
Free Cash Flow is a non-GAAP measured defined as net cash provided by or used in operating activities less capital expenditures. The Company believes it is an important liquidity measure that provides useful information to management and investors about the amount of cash generated by the business. | ||||||||
Adjusted Free Cash Flow is a non-GAAP measure defined as Free Cash Flow adjusted to reflect the impact of certain investing or financing cash flows such as acquisitions, proceeds from dispositions of properties, borrowings and repayments of long-term debt, and distributions to non-controlling interests. We believe this information is necessary as reflecting significant cash flows from strategic investing and financing decisions provides the most accurate overall measure of cash generated or used by the business. | ||||||||
Free Cash Flow and Adjusted Free Cash Flow are commonly used measures of performance. We utilize these measures because management finds them a useful tool to calculate more meaningful comparisons of past, present and future cash generation and as a means to evaluate the results of core, ongoing operations. We believe they are a complement to reported net cash provided by (used in) operating activities, investing activities, and financing activities. Free Cash Flow and Adjusted Free Cash Flow are not intended to represent net cash provided by (used in) operating activities, investing activities, or financing activities defined by generally accepted accounting principles in |
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The following is a reconciliation of GAAP net cash provided by (used in) operating activities to non-GAAP Free Cash Flow and Adjusted Free Cash Flow for the years ended |
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Year Ended |
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2019 |
2018 |
|||||||
Net cash provided by (used in) operating activities (1) | $ | 5,382 | $ | (3,514 | ) | |||
Less: Capital expenditures | (4,939 | ) | (8,615 | ) | ||||
Free Cash Flow | 443 | (12,129 | ) | |||||
Acquisition of |
— | (27,249 | ) | |||||
Net proceeds from disposition of property and equipment | 44,137 | 113,748 | ||||||
Borrowings on long-term debt, net of discounts | 32,935 | 30,000 | ||||||
Proceeds from line of credit borrowing | — | 10,000 | ||||||
Repayment of long-term debt and finance leases | (45,943 | ) | (107,999 | ) | ||||
Distributions to noncontrolling interest | (17,559 | ) | (21,457 | ) | ||||
Adjusted Free Cash Flow | $ | 14,013 | $ | (15,086 | ) | |||
(1) Includes cash outflows for key money disbursements of |
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Reconciliation of Non-GAAP Financial Measures | ||||||||||||
(unaudited) | ||||||||||||
(In thousands) | ||||||||||||
EBITDA is defined as net income (loss), before interest, taxes, depreciation and amortization. The Company believes it is a useful financial performance measure due to the significance of the long-lived assets and level of indebtedness. | ||||||||||||
Adjusted EBITDA is an additional measure of financial performance. The Company believes that the inclusion or exclusion of certain special items, such as gains and losses on asset dispositions and impairments, is necessary to provide the most accurate measure of core operating results and as a means to evaluate comparative results. Adjusted EBTIDA also excludes the effect of non-cash stock compensation expense. We believe that the exclusion of this item is consistent with the purposes of the measure described below. | ||||||||||||
EBITDA and Adjusted EBITDA are commonly used measures of performance in the industry. |
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Non-Core Adjusted EBITDA includes the results of our |
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The following is a reconciliation of Core and Non-Core GAAP net income (loss) to Core and Non-Core non-GAAP EBITDA and Adjusted EBITDA for the three months ended |
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Core | Non-Core | Total | ||||||||||
Net income (loss) | $ | (9,552 | ) | $ | 3,561 | $ | (5,991 | ) | ||||
Depreciation and amortization | 1,864 | 1,511 | 3,375 | |||||||||
Interest expense | 193 | 1,274 | 1,467 | |||||||||
Income tax benefit | (423 | ) | — | (423 | ) | |||||||
EBITDA | (7,918 | ) | 6,346 | (1,572 | ) | |||||||
Stock-based compensation (1) | (723 | ) | — | (723 | ) | |||||||
Asset impairment (2) | 8,746 | — | 8,746 | |||||||||
Transaction and integration costs (3) | 84 | 112 | 196 | |||||||||
Employee separation and transition costs (4) | 1,066 | — | 1,066 | |||||||||
Loss on early retirement of debt | 154 | 110 | 264 | |||||||||
Loss (gain) on asset dispositions (5) | 121 | (7,233 | ) | (7,112 | ) | |||||||
Non-income tax expense assessment (6) | 103 | — | 103 | |||||||||
Adjusted EBITDA | 1,633 | (665 | ) | 968 | ||||||||
Adjusted EBITDA attributable to noncontrolling interests | — | 208 | 208 | |||||||||
Adjusted EBITDA attributable to |
$ | 1,633 | $ | (457 | ) | $ | 1,176 | |||||
(1) Costs represent total stock-based compensation. These costs are included within Selling, general, administrative and other expenses and Marketing, reservations and reimbursables on the Consolidated Statements of Comprehensive Income (Loss). | ||||||||||||
(2) During the fourth quarter of 2019, we recognized impairments on our |
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(3) Transaction and integration costs include incremental expenses incurred for potential and executed acquisitions and dispositions of assets. | ||||||||||||
(4) The costs relate to severance agreements with our Chief Executive Officer and other executives in |
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(5) Relates primarily to the sale of two properties in the fourth quarter of 2019, which are included within Gain on asset dispositions, net on the Consolidated Statements of Comprehensive Income (Loss). | ||||||||||||
(6) During the fourth quarter of 2019, we concluded that we are probable of being assessed non-income taxes in additional states of |
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The following is a reconciliation of Core and Non-Core GAAP net income (loss) to Core and Non-Core non-GAAP EBITDA and Adjusted EBITDA for the three months ended |
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Core | Non-Core | Total | ||||||||||
Net loss | $ | (5,957 | ) | $ | (2,409 | ) | $ | (8,366 | ) | |||
Depreciation and amortization | 1,610 | 2,679 | 4,289 | |||||||||
Interest expense | 283 | 560 | 843 | |||||||||
Income tax expense | 168 | — | 168 | |||||||||
EBITDA | (3,896 | ) | 830 | (3,066 | ) | |||||||
Stock-based compensation (1) | 1,059 | — | 1,059 | |||||||||
Asset impairment (2) | 3,482 | — | 3,482 | |||||||||
Transaction and integration costs (3) | 23 | — | 23 | |||||||||
Employee separation and transition costs (4) | 534 | — | 534 | |||||||||
Loss on asset dispositions (5) | 21 | 91 | 112 | |||||||||
Non-income tax expense assessment (6) | 164 | — | 164 | |||||||||
Adjusted EBITDA | 1,387 | 921 | 2,308 | |||||||||
Adjusted EBITDA attributable to noncontrolling interests | — | 109 | 109 | |||||||||
Adjusted EBITDA attributable to |
$ | 1,387 | $ | 1,030 | $ | 2,417 | ||||||
(1) Costs represent total stock-based compensation. These costs are included within Selling, general, administrative and other expenses, Company operated hotels and Marketing, reservations and reimbursables on the Consolidated Statements of Comprehensive Income (Loss). | ||||||||||||
(2) During the fourth quarter of 2018 we recognized an impairment on our Guesthouse brand name. The expense is included within Asset impairment on the Consolidated Statements of Comprehensive Income (Loss). | ||||||||||||
(3) Transaction and integration costs include incremental expenses incurred for potential and executed acquisitions and dispositions of assets. | ||||||||||||
(4) The costs recognized relate to employee separation, primarily for a severance agreement with our Chief Marketing Officer in |
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(5) Relates to our sale of nine properties during 2018 and is included within Gain on asset dispositions, net on the Consolidated Statements of Comprehensive Income (Loss). | ||||||||||||
(6) During the fourth quarter of 2019, we concluded that we are probable of being assessed non-income taxes in additional states of |
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The following is a reconciliation of Core and Non-Core GAAP net income (loss) to Core and Non-Core non-GAAP EBITDA and Adjusted EBITDA for the year ended |
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Core | Non-Core | Total | ||||||||||
Net loss | $ | (17,365 | ) | $ | (3,608 | ) | $ | (20,973 | ) | |||
Depreciation and amortization | 7,406 | 7,161 | 14,567 | |||||||||
Interest expense | 1,024 | 4,133 | 5,157 | |||||||||
Income tax expense | 253 | — | 253 | |||||||||
EBITDA | $ | (8,682 | ) | $ | 7,686 | $ | (996 | ) | ||||
Stock-based compensation (1) | 1,780 | — | 1,780 | |||||||||
Asset impairment (2) | 8,746 | 5,382 | 14,128 | |||||||||
Transaction and integration costs (3) | 356 | 276 | 632 | |||||||||
Employee separation and transition costs (4) | 1,101 | — | 1,101 | |||||||||
Loss on early retirement of debt | 154 | 274 | 428 | |||||||||
Loss (gain) on asset dispositions (5) | 121 | (7,188 | ) | (7,067 | ) | |||||||
Legal settlement expense (6) | — | 952 | 952 | |||||||||
Non-income tax expense assessment (7) | 634 | — | 634 | |||||||||
Adjusted EBITDA | $ | 4,210 | $ | 7,382 | $ | 11,592 | ||||||
Adjusted EBITDA attributable to noncontrolling interests | — | (1,457 | ) | (1,457 | ) | |||||||
Adjusted EBITDA attributable to |
$ | 4,210 | $ | 5,925 | $ | 10,135 | ||||||
(1) Costs represent total stock-based compensation. These costs are included within Selling, general, administrative and other expenses and Marketing, reservations and reimbursables on the Consolidated Statements of Comprehensive Income (Loss). | ||||||||||||
(2) During 2019, we recognized impairments on our |
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(3) Transaction and integration costs include incremental expenses incurred for potential and executed acquisitions and dispositions of assets. | ||||||||||||
(4) The costs recognized relate to employee separation, primarily for severance agreements with our Chief Executive Officer and other executives in |
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(5) Gains relate primarily to the sale of two properties in the fourth quarter of 2019, which are included within Gain on asset dispositions, net on the Consolidated Statements of Comprehensive Income (Loss). | ||||||||||||
(6) Legal settlement expense relates to a settlement agreement with former hotel workers regarding a wage dispute in |
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(7) During the fourth quarter of 2019, we concluded that we are probable of being assessed non-income taxes in additional states of |
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The following is a reconciliation of Core and Non-Core GAAP net income (loss) to Core and Non-Core non-GAAP EBITDA and Adjusted EBITDA for the year ended |
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Core | Non-Core | Total | ||||||||||
Net income (loss) | $ | (18,865 | ) | $ | 33,332 | $ | 14,467 | |||||
Depreciation and amortization | 5,996 | 11,007 | 17,003 | |||||||||
Interest expense | 928 | 5,281 | 6,209 | |||||||||
Income tax benefit | (71 | ) | — | (71 | ) | |||||||
EBITDA | (12,012 | ) | 49,620 | 37,608 | ||||||||
Stock-based compensation (1) | 3,955 | — | 3,955 | |||||||||
Asset impairment (2) | 3,482 | 7,100 | 10,582 | |||||||||
Transaction and integration costs (3) | 2,219 | — | 2,219 | |||||||||
Employee separation and transition costs (4) | 1,509 | — | 1,509 | |||||||||
Loss on early retirement of debt | 794 | — | 794 | |||||||||
Loss (gain) on asset dispositions (5) | 21 | (41,541 | ) | (41,520 | ) | |||||||
Non-income tax expense assessment (6) | 619 | — | 619 | |||||||||
Adjusted EBITDA | 587 | 15,179 | 15,766 | |||||||||
Adjusted EBITDA attributable to noncontrolling interests | — | (1,806 | ) | (1,806 | ) | |||||||
Adjusted EBITDA attributable to |
$ | 587 | $ | 13,373 | $ | 13,960 | ||||||
(1) Costs represent total stock-based compensation. These costs are included within Selling, general, administrative and other expenses, Company operated hotels and Marketing, reservations and reimbursables on the Consolidated Statements of Comprehensive Income (Loss). | ||||||||||||
(2) During 2018, we recognized impairments on our |
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(3) Transaction and integration costs include incremental expenses incurred for potential and executed acquisitions and dispositions of assets. | ||||||||||||
(4) The costs recognized relate to employee separation, primarily for severance agreements with our Chief Operating Officer, and President of |
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(5) Represents the gain on our sale of nine properties during 2018, which is included within Gain on asset dispositions, net on the Consolidated Statements of Comprehensive Income (Loss). | ||||||||||||
(6) During the fourth quarter of 2019, we concluded that we are probable of being assessed non-income taxes in additional states of |
Source: RLHC (Red Lion Hotels Corporation