Red Lion Hotels Corp (RLH) SEC Filing 10-Q Quarterly report for the period ending Monday, September 30, 2019

Net loss attributable to RLH Corporation for the quarter was $3.5 million or ($0.14) per share compared to net income attributable to RLH Corporation of $8.9 million or $0.35 per diluted share in the prior year period. The year-over-year change is primarily due to a gain of $26.0 million from asset sales in the year ago period and lost revenue from hotels sold during 2018.

Adjusted EBITDA for the third quarter was $5.9 million, an increase of $0.1 million as compared to the third quarter of 2018, reflecting the impact of cost controls the Company has implemented over the last year offset by lower company operated hotel profits and higher bad debt expense primarily due to one large customer.

Franchise related revenues grew 7% year-over-year to $16.2 million. Adjusted Core EBITDA was $1.9 million as compared to $0.8 million a year ago.

Executed 47 franchise agreements, an increase of 57% year-over-year. The agreements are comprised of 10 midscale hotels and 37 select service hotels; of these, 14 are for new locations. Offsetting new franchise agreements were 60 terminations, comprised of 9 midscale hotels and 51 economy hotels. Year-to-date, the Company executed 143 agreements, an increase of 43% from last year, and had 176 terminations compared to 68 in the prior year.

Announced non-binding agreements for the sale of four hotels, Red Lion Hotel Atlanta Airport, Hotel RL Washington D.C., Hotel RL in Salt Lake City and Red Lion Hotel Anaheim, for an approximate total of $85 million in gross proceeds with net proceeds to the Company of $32 million to $36 million after hotel debt repayments and joint venture distributions. The sale of all four hotels are expected to close by the end of Q1 2020.

Realigned 2019 guidance for Adjusted EBITDA from continuing operations to a range of $11.5 million to $13.5 million from $20.5 million to $22.5 million prior, reflecting under-performance of company owned hotels, elevated terminations in the core franchise business year-to-date and increase in bad debt expense and related collection costs for a large customer.