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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Red Lion Hotels | NYSE:RLH | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 3.49 | 0 | 01:00:00 |
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Washington
|
|
91-1032187
|
|
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
|
|||
1550 Market St. #350
|
Denver
|
Colorado
|
80202
|
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock
|
RLH
|
New York Stock Exchange
|
Large accelerated filer
|
|
☐
|
|
Accelerated filer
|
|
☒
|
Non-accelerated filer
|
|
☐
|
|
Smaller reporting company
|
|
☒
|
|
|
|
|
Emerging growth company
|
|
☐
|
|
|
|
Item No.
|
Description
|
Page No.
|
|
|
|
|
PART I – FINANCIAL INFORMATION
|
|
|
|
|
Item 1
|
|
|
|
Condensed Consolidated Balance Sheets
|
|
|
Condensed Consolidated Statements of Comprehensive Income (Loss)
|
|
|
Condensed Consolidated Statements of Stockholders' Equity
|
|
|
Condensed Consolidated Statements of Cash Flows
|
|
|
Notes to Condensed Consolidated Financial Statements
|
|
Item 2
|
||
Item 3
|
||
Item 4
|
||
|
|
|
|
PART II – OTHER INFORMATION
|
|
|
|
|
Item 1
|
||
Item 1A
|
||
Item 2
|
||
Item 3
|
||
Item 4
|
||
Item 5
|
||
Item 6
|
||
|
Item 1.
|
Financial Statements
|
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
|
|
(In thousands, except share data)
|
||||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents ($4,363 and $4,564 attributable to VIEs)
|
|
$
|
18,267
|
|
|
$
|
17,034
|
|
Restricted cash ($2,930 and $2,652 attributable to VIEs)
|
|
2,930
|
|
|
2,755
|
|
||
Accounts receivable ($1,405 and $1,064 attributable to VIEs), net of an allowance for doubtful accounts of $3,377 and $2,345, respectively
|
|
19,496
|
|
|
18,575
|
|
||
Notes receivable, net
|
|
4,188
|
|
|
2,103
|
|
||
Other current assets ($716 and $680 attributable to VIEs)
|
|
4,961
|
|
|
6,218
|
|
||
Total current assets
|
|
49,842
|
|
|
46,685
|
|
||
Property and equipment, net ($67,514 and $74,250 attributable to VIEs)
|
|
107,554
|
|
|
115,522
|
|
||
Operating lease right-of-use assets ($10,855 and $0 attributable to VIEs)
|
|
48,553
|
|
|
—
|
|
||
Goodwill
|
|
18,595
|
|
|
18,595
|
|
||
Intangible assets, net
|
|
58,233
|
|
|
60,910
|
|
||
Other assets, net ($703 and $705 attributable to VIEs)
|
|
5,085
|
|
|
8,075
|
|
||
Total assets
|
|
$
|
287,862
|
|
|
$
|
249,787
|
|
|
|
|
|
|
||||
LIABILITIES
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable ($890 and $650 attributable to VIEs)
|
|
$
|
5,176
|
|
|
$
|
5,322
|
|
Accrued payroll and related benefits ($342 and $369 attributable to VIEs)
|
|
1,868
|
|
|
5,402
|
|
||
Other accrued liabilities ($895 and $1,092 attributable to VIEs)
|
|
5,519
|
|
|
4,960
|
|
||
Long-term debt, due within one year ($24,628 and $25,056 attributable to VIEs)
|
|
24,628
|
|
|
25,056
|
|
||
Operating lease liabilities, due within one year ($966 and $0 attributable to VIEs)
|
|
4,801
|
|
|
—
|
|
||
Total current liabilities
|
|
41,992
|
|
|
40,740
|
|
||
Long-term debt, due after one year, net of debt issuance costs ($16,468 and $0 attributable to VIEs)
|
|
20,496
|
|
|
9,114
|
|
||
Line of credit, due after one year
|
|
10,000
|
|
|
10,000
|
|
||
Operating lease liabilities, due after one year ($11,941 and $0 attributable to VIEs)
|
|
46,871
|
|
|
—
|
|
||
Deferred income and other long-term liabilities ($330 and $480 attributable to VIEs)
|
|
1,541
|
|
|
2,245
|
|
||
Deferred income taxes
|
|
1,217
|
|
|
772
|
|
||
Total liabilities
|
|
122,117
|
|
|
62,871
|
|
||
|
|
|
|
|
||||
Commitments and contingencies (Note 10)
|
|
|
|
|
|
|
||
|
|
|
|
|
||||
STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
RLH 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; 25,118,512 and 24,570,158 shares issued and outstanding
|
|
252
|
|
|
246
|
|
||
Additional paid-in capital, common stock
|
|
182,723
|
|
|
182,018
|
|
||
Accumulated deficit
|
|
(26,923
|
)
|
|
(16,512
|
)
|
||
Total RLH Corporation stockholders' equity
|
|
156,052
|
|
|
165,752
|
|
||
Noncontrolling interest
|
|
9,693
|
|
|
21,164
|
|
||
Total stockholders' equity
|
|
165,745
|
|
|
186,916
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
287,862
|
|
|
$
|
249,787
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
(In thousands, except per share data)
|
||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||||||
Royalty
|
|
$
|
5,909
|
|
|
$
|
6,530
|
|
|
$
|
17,516
|
|
|
$
|
16,575
|
|
Other franchise
|
|
2,016
|
|
|
1,016
|
|
|
3,772
|
|
|
2,412
|
|
||||
Company operated hotels
|
|
16,633
|
|
|
20,857
|
|
|
43,839
|
|
|
68,758
|
|
||||
Marketing, reservations and reimbursables
|
|
8,300
|
|
|
7,591
|
|
|
22,632
|
|
|
19,874
|
|
||||
Other
|
|
5
|
|
|
6
|
|
|
13
|
|
|
32
|
|
||||
Total revenues
|
|
32,863
|
|
|
36,000
|
|
|
87,772
|
|
|
107,651
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Selling, general, administrative and other expenses
|
|
8,196
|
|
|
8,112
|
|
|
21,921
|
|
|
23,590
|
|
||||
Company operated hotels
|
|
12,673
|
|
|
16,051
|
|
|
36,750
|
|
|
54,924
|
|
||||
Marketing, reservations and reimbursables
|
|
7,080
|
|
|
7,453
|
|
|
22,088
|
|
|
20,226
|
|
||||
Depreciation and amortization
|
|
3,636
|
|
|
3,621
|
|
|
11,192
|
|
|
12,714
|
|
||||
Asset impairment
|
|
5,382
|
|
|
7,100
|
|
|
5,382
|
|
|
7,100
|
|
||||
Loss (gain) on asset dispositions, net
|
|
1
|
|
|
(26,196
|
)
|
|
45
|
|
|
(42,094
|
)
|
||||
Transaction and integration costs
|
|
201
|
|
|
95
|
|
|
436
|
|
|
2,196
|
|
||||
Total operating expenses
|
|
37,169
|
|
|
16,236
|
|
|
97,814
|
|
|
78,656
|
|
||||
Operating income (loss)
|
|
(4,306
|
)
|
|
19,764
|
|
|
(10,042
|
)
|
|
28,995
|
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
|
(1,699
|
)
|
|
(1,417
|
)
|
|
(3,690
|
)
|
|
(5,366
|
)
|
||||
Loss on early retirement of debt
|
|
—
|
|
|
(794
|
)
|
|
(164
|
)
|
|
(794
|
)
|
||||
Other income (loss), net
|
|
44
|
|
|
34
|
|
|
121
|
|
|
214
|
|
||||
Total other income (expense)
|
|
(1,655
|
)
|
|
(2,177
|
)
|
|
(3,733
|
)
|
|
(5,946
|
)
|
||||
Income (loss) before taxes
|
|
(5,961
|
)
|
|
17,587
|
|
|
(13,775
|
)
|
|
23,049
|
|
||||
Income tax expense (benefit)
|
|
486
|
|
|
(26
|
)
|
|
676
|
|
|
(239
|
)
|
||||
Net income (loss)
|
|
(6,447
|
)
|
|
17,613
|
|
|
(14,451
|
)
|
|
23,288
|
|
||||
Net (income) loss attributable to noncontrolling interest
|
|
2,980
|
|
|
(8,670
|
)
|
|
4,040
|
|
|
(14,079
|
)
|
||||
Net income (loss) and comprehensive income (loss) attributable to RLH Corporation
|
|
$
|
(3,467
|
)
|
|
$
|
8,943
|
|
|
$
|
(10,411
|
)
|
|
$
|
9,209
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share - basic
|
|
$
|
(0.14
|
)
|
|
$
|
0.36
|
|
|
$
|
(0.42
|
)
|
|
$
|
0.38
|
|
Earnings (loss) per share - diluted
|
|
$
|
(0.14
|
)
|
|
$
|
0.35
|
|
|
$
|
(0.42
|
)
|
|
$
|
0.36
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares - basic
|
|
25,112
|
|
|
24,545
|
|
|
24,859
|
|
|
24,334
|
|
||||
Weighted average shares - diluted
|
|
25,112
|
|
|
25,729
|
|
|
24,859
|
|
|
25,437
|
|
|
|
Red Lion Hotels Corporation Stockholders' Equity
|
|
|
|
|
|||||||||||||||||||||
|
|
Common Stock
|
|
Retained
Earnings (Accumulated Deficit) |
|
RLH Corporation Total Equity
|
|
Equity Attributable to Noncontrolling Interest
|
|
|
|||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Additional
Paid-In Capital |
|
|
|
|
Total
Equity |
||||||||||||||||
|
|
(In thousands, except share data)
|
|||||||||||||||||||||||||
Balances, January 1, 2018
|
23,651,212
|
|
|
$
|
237
|
|
|
$
|
178,028
|
|
|
$
|
(18,042
|
)
|
|
$
|
160,223
|
|
|
$
|
27,381
|
|
|
$
|
187,604
|
|
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
2,588
|
|
|
2,588
|
|
|
4,750
|
|
|
7,338
|
|
||||||
|
Cumulative effect of adopting ASC Topic 606
|
—
|
|
|
—
|
|
|
—
|
|
|
(427
|
)
|
|
(427
|
)
|
|
—
|
|
|
(427
|
)
|
||||||
|
Shared based payment activity
|
60,388
|
|
|
—
|
|
|
294
|
|
|
—
|
|
|
294
|
|
|
—
|
|
|
294
|
|
||||||
|
Vantage contingent consideration settled
|
414,000
|
|
|
4
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balances, March 31, 2018
|
24,125,600
|
|
|
241
|
|
|
178,318
|
|
|
(15,881
|
)
|
|
162,678
|
|
|
32,131
|
|
|
194,809
|
|
|||||||
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,322
|
)
|
|
(2,322
|
)
|
|
659
|
|
|
(1,663
|
)
|
||||||
|
Shared based payment activity
|
120,918
|
|
|
1
|
|
|
1,004
|
|
|
—
|
|
|
1,005
|
|
|
—
|
|
|
1,005
|
|
||||||
|
Vantage contingent consideration settled
|
—
|
|
|
—
|
|
|
2,870
|
|
|
—
|
|
|
2,870
|
|
|
—
|
|
|
2,870
|
|
||||||
|
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,081
|
)
|
|
(4,081
|
)
|
||||||
Balances, June 30, 2018
|
24,246,518
|
|
|
242
|
|
|
182,192
|
|
|
(18,203
|
)
|
|
164,231
|
|
|
28,709
|
|
|
192,940
|
|
|||||||
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
8,943
|
|
|
8,943
|
|
|
8,670
|
|
|
17,613
|
|
||||||
|
Shared based payment activity
|
28,080
|
|
|
—
|
|
|
1,219
|
|
|
—
|
|
|
1,219
|
|
|
—
|
|
|
1,219
|
|
||||||
|
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,891
|
)
|
|
(16,891
|
)
|
||||||
Balances, September 30, 2018
|
24,274,598
|
|
|
242
|
|
|
183,411
|
|
|
(9,260
|
)
|
|
174,393
|
|
|
20,488
|
|
|
194,881
|
|
|||||||
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,252
|
)
|
|
(7,252
|
)
|
|
(950
|
)
|
|
(8,202
|
)
|
||||||
|
Shared based payment activity
|
19,560
|
|
|
—
|
|
|
1,018
|
|
|
—
|
|
|
1,018
|
|
|
—
|
|
|
1,018
|
|
||||||
|
Vantage contingent consideration settled
|
276,000
|
|
|
4
|
|
|
4
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
||||||
|
Buyout of noncontrolling interest
|
—
|
|
|
—
|
|
|
(2,415
|
)
|
|
—
|
|
|
(2,415
|
)
|
|
2,111
|
|
|
(304
|
)
|
||||||
|
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(485
|
)
|
|
(485
|
)
|
||||||
Balances, December 31, 2018
|
24,570,158
|
|
|
246
|
|
|
182,018
|
|
|
(16,512
|
)
|
|
165,752
|
|
|
21,164
|
|
|
186,916
|
|
|||||||
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,110
|
)
|
|
(4,110
|
)
|
|
(286
|
)
|
|
(4,396
|
)
|
||||||
|
Shared based payment activity
|
56,301
|
|
|
1
|
|
|
685
|
|
|
—
|
|
|
686
|
|
|
—
|
|
|
686
|
|
||||||
|
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,431
|
)
|
|
(7,431
|
)
|
||||||
Balances, March 31, 2019
|
24,626,459
|
|
|
247
|
|
|
182,703
|
|
|
(20,622
|
)
|
|
162,328
|
|
|
13,447
|
|
|
175,775
|
|
|||||||
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,834
|
)
|
|
(2,834
|
)
|
|
(774
|
)
|
|
(3,608
|
)
|
||||||
|
Shared based payment activity
|
449,453
|
|
|
4
|
|
|
(1,034
|
)
|
|
—
|
|
|
(1,030
|
)
|
|
—
|
|
|
(1,030
|
)
|
||||||
Balances, June 30, 2019
|
25,075,912
|
|
|
251
|
|
|
181,669
|
|
|
(23,456
|
)
|
|
158,464
|
|
|
12,673
|
|
|
171,137
|
|
|||||||
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,467
|
)
|
|
(3,467
|
)
|
|
(2,980
|
)
|
|
(6,447
|
)
|
||||||
|
Shared based payment activity
|
42,600
|
|
|
1
|
|
|
1,054
|
|
|
—
|
|
|
1,055
|
|
|
—
|
|
|
1,055
|
|
||||||
Balances, September 30, 2019
|
25,118,512
|
|
|
$
|
252
|
|
|
$
|
182,723
|
|
|
$
|
(26,923
|
)
|
|
$
|
156,052
|
|
|
$
|
9,693
|
|
|
$
|
165,745
|
|
|
|
Nine Months Ended
|
||||||
|
|
September 30,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(In thousands)
|
||||||
Operating activities:
|
|
|
|
|
||||
Net income (loss)
|
|
$
|
(14,451
|
)
|
|
$
|
23,288
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
11,192
|
|
|
12,714
|
|
||
Noncash PIK interest and amortization of debt issuance costs
|
|
929
|
|
|
892
|
|
||
Amortization of key money and contract costs
|
|
997
|
|
|
535
|
|
||
Amortization of contract liabilities
|
|
(994
|
)
|
|
(563
|
)
|
||
Loss (gain) on asset dispositions, net
|
|
45
|
|
|
(42,094
|
)
|
||
Noncash loss on early retirement of debt
|
|
67
|
|
|
794
|
|
||
Asset impairment
|
|
5,382
|
|
|
7,100
|
|
||
Deferred income taxes
|
|
445
|
|
|
(1,445
|
)
|
||
Stock-based compensation expense
|
|
2,503
|
|
|
2,896
|
|
||
Provision for doubtful accounts
|
|
1,780
|
|
|
651
|
|
||
Fair value adjustments to contingent consideration
|
|
—
|
|
|
581
|
|
||
Change in operating assets and liabilities, net of business acquired:
|
|
|
|
|
||||
Accounts receivable
|
|
(2,148
|
)
|
|
(7,293
|
)
|
||
Notes receivable
|
|
(16
|
)
|
|
(7
|
)
|
||
Key money disbursements
|
|
(665
|
)
|
|
(5,420
|
)
|
||
Other current assets
|
|
1,014
|
|
|
(1,740
|
)
|
||
Accounts payable
|
|
45
|
|
|
1,405
|
|
||
Other accrued liabilities
|
|
(1,170
|
)
|
|
79
|
|
||
Net cash provided by (used in) operating activities
|
|
4,955
|
|
|
(7,627
|
)
|
||
Investing activities:
|
|
|
|
|
||||
Capital expenditures
|
|
(4,104
|
)
|
|
(6,190
|
)
|
||
Acquisition of Knights Inn
|
|
—
|
|
|
(26,888
|
)
|
||
Net proceeds from disposition of property and equipment
|
|
—
|
|
|
113,838
|
|
||
Collection of notes receivable
|
|
262
|
|
|
—
|
|
||
Advances on notes receivable
|
|
(90
|
)
|
|
(537
|
)
|
||
Net cash provided by (used in) investing activities
|
|
(3,932
|
)
|
|
80,223
|
|
||
Financing activities:
|
|
|
|
|
||||
Borrowings on long-term debt, net of discounts
|
|
32,935
|
|
|
30,000
|
|
||
Repayment of long-term debt and finance leases
|
|
(22,510
|
)
|
|
(107,899
|
)
|
||
Proceeds from line of credit borrowing
|
|
—
|
|
|
10,000
|
|
||
Debt issuance costs
|
|
(692
|
)
|
|
(1,317
|
)
|
||
Distributions to noncontrolling interest
|
|
(7,430
|
)
|
|
(20,972
|
)
|
||
Contingent consideration paid for Vantage Hospitality acquisition
|
|
—
|
|
|
(4,000
|
)
|
||
Stock-based compensation awards canceled to settle employee tax withholding
|
|
(2,135
|
)
|
|
(615
|
)
|
||
Stock option and stock purchase plan issuances, net and other
|
|
217
|
|
|
238
|
|
||
Net cash provided by (used in) financing activities
|
|
385
|
|
|
(94,565
|
)
|
||
|
|
|
|
|
||||
Change in cash, cash equivalents and restricted cash:
|
|
|
|
|
||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
|
1,408
|
|
|
(21,969
|
)
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
|
19,789
|
|
|
44,858
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
|
$
|
21,197
|
|
|
$
|
22,889
|
|
1.
|
Organization
|
|
|
Upscale Service Brand ("USB")
|
|
Select Service Brand ("SSB")
|
|
Total
|
||||||||||||
|
|
Hotels
|
|
Total Available Rooms
|
|
Hotels
|
|
Total Available Rooms
|
|
Hotels
|
|
Total Available Rooms
|
||||||
Beginning quantity, January 1, 2019
|
|
112
|
|
|
15,900
|
|
|
1,215
|
|
|
69,800
|
|
|
1,327
|
|
|
85,700
|
|
Newly opened / acquired properties
|
|
7
|
|
|
600
|
|
|
28
|
|
|
1,400
|
|
|
35
|
|
|
2,000
|
|
Change in brand
|
|
(1
|
)
|
|
(100
|
)
|
|
1
|
|
|
100
|
|
|
—
|
|
|
—
|
|
Terminated properties
|
|
(17
|
)
|
|
(1,900
|
)
|
|
(159
|
)
|
|
(10,100
|
)
|
|
(176
|
)
|
|
(12,000
|
)
|
Ending quantity, September 30, 2019
|
|
101
|
|
|
14,500
|
|
|
1,085
|
|
|
61,200
|
|
|
1,186
|
|
|
75,700
|
|
2.
|
Summary of Significant Accounting Policies
|
3.
|
Business Segments
|
Three Months Ended September 30, 2019
|
|
Franchised Hotels
|
|
Company Operated Hotels
|
|
Other
|
|
Total
|
||||||||
Revenue
|
|
$
|
16,225
|
|
|
$
|
16,633
|
|
|
$
|
5
|
|
|
$
|
32,863
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Segment and other operating expenses
|
|
10,758
|
|
|
13,007
|
|
|
4,184
|
|
|
27,949
|
|
||||
Depreciation and amortization
|
|
1,015
|
|
|
1,777
|
|
|
844
|
|
|
3,636
|
|
||||
Asset impairment
|
|
—
|
|
|
5,382
|
|
|
—
|
|
|
5,382
|
|
||||
Loss (gain) on asset dispositions, net
|
|
—
|
|
|
2
|
|
|
(1
|
)
|
|
1
|
|
||||
Transaction and integration costs
|
|
(6
|
)
|
|
164
|
|
|
43
|
|
|
201
|
|
||||
Operating income (loss)
|
|
$
|
4,458
|
|
|
$
|
(3,699
|
)
|
|
$
|
(5,065
|
)
|
|
$
|
(4,306
|
)
|
Three Months Ended September 30, 2018
|
|
Franchised Hotels
|
|
Company Operated Hotels
|
|
Other
|
|
Total
|
||||||||
Revenue
|
|
$
|
15,137
|
|
|
$
|
20,857
|
|
|
$
|
6
|
|
|
$
|
36,000
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Segment and other operating expenses
|
|
9,220
|
|
|
16,999
|
|
|
5,397
|
|
|
31,616
|
|
||||
Depreciation and amortization
|
|
986
|
|
|
2,170
|
|
|
465
|
|
|
3,621
|
|
||||
Asset impairment
|
|
—
|
|
|
7,100
|
|
|
—
|
|
|
7,100
|
|
||||
Loss (gain) on asset dispositions, net
|
|
—
|
|
|
(26,143
|
)
|
|
(53
|
)
|
|
(26,196
|
)
|
||||
Transaction and integration costs
|
|
95
|
|
|
—
|
|
|
—
|
|
|
95
|
|
||||
Operating income (loss)
|
|
$
|
4,836
|
|
|
$
|
20,731
|
|
|
$
|
(5,803
|
)
|
|
$
|
19,764
|
|
Nine Months Ended September 30, 2019
|
|
Franchised Hotels
|
|
Company Operated Hotels
|
|
Other
|
|
Total
|
||||||||
Revenue
|
|
$
|
43,920
|
|
|
$
|
43,839
|
|
|
$
|
13
|
|
|
$
|
87,772
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Segment and other operating expenses
|
|
30,138
|
|
|
38,331
|
|
|
12,290
|
|
|
80,759
|
|
||||
Depreciation and amortization
|
|
3,039
|
|
|
5,650
|
|
|
2,503
|
|
|
11,192
|
|
||||
Asset impairment
|
|
—
|
|
|
5,382
|
|
|
—
|
|
|
5,382
|
|
||||
Loss (gain) on asset dispositions, net
|
|
(1
|
)
|
|
45
|
|
|
1
|
|
|
45
|
|
||||
Transaction and integration costs
|
|
90
|
|
|
164
|
|
|
182
|
|
|
436
|
|
||||
Operating income (loss)
|
|
$
|
10,654
|
|
|
$
|
(5,733
|
)
|
|
$
|
(14,963
|
)
|
|
$
|
(10,042
|
)
|
Nine Months Ended September 30, 2018
|
|
Franchised Hotels
|
|
Company Operated Hotels
|
|
Other
|
|
Total
|
||||||||
Revenue
|
|
$
|
38,861
|
|
|
$
|
68,758
|
|
|
$
|
32
|
|
|
$
|
107,651
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Segment and other operating expenses
|
|
26,486
|
|
|
57,667
|
|
|
14,587
|
|
|
98,740
|
|
||||
Depreciation and amortization
|
|
3,044
|
|
|
8,328
|
|
|
1,342
|
|
|
12,714
|
|
||||
Asset impairment
|
|
—
|
|
|
7,100
|
|
|
—
|
|
|
7,100
|
|
||||
Loss (gain) on asset dispositions, net
|
|
—
|
|
|
(41,994
|
)
|
|
(100
|
)
|
|
(42,094
|
)
|
||||
Transaction and integration costs
|
|
2,196
|
|
|
—
|
|
|
—
|
|
|
2,196
|
|
||||
Operating income (loss)
|
|
$
|
7,135
|
|
|
$
|
37,657
|
|
|
$
|
(15,797
|
)
|
|
$
|
28,995
|
|
4.
|
Variable Interest Entities
|
|
|
RLH Corporation
|
|
Joint Venture Partner
|
||
RL Venture
|
|
55
|
%
|
|
45
|
%
|
RLS Atla Venture
|
|
55
|
%
|
|
45
|
%
|
RLS DC Venture
|
|
55
|
%
|
|
45
|
%
|
5.
|
Property and Equipment
|
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
Buildings and equipment
|
|
$
|
148,100
|
|
|
$
|
150,072
|
|
Furniture and fixtures
|
|
20,071
|
|
|
19,746
|
|
||
Landscaping and land improvements
|
|
2,732
|
|
|
2,713
|
|
||
|
|
170,903
|
|
|
172,531
|
|
||
Less accumulated depreciation
|
|
(86,343
|
)
|
|
(82,240
|
)
|
||
|
|
84,560
|
|
|
90,291
|
|
||
Land
|
|
19,372
|
|
|
19,372
|
|
||
Construction in progress
|
|
3,622
|
|
|
5,859
|
|
||
Property and equipment, net
|
|
$
|
107,554
|
|
|
$
|
115,522
|
|
6.
|
Goodwill and Intangible Assets
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
Goodwill
|
$
|
18,595
|
|
|
$
|
18,595
|
|
|
|
|
|
||||
Intangible assets
|
|
|
|
||||
Brand name - indefinite lived
|
$
|
41,278
|
|
|
$
|
41,278
|
|
Trademarks - indefinite lived
|
128
|
|
|
128
|
|
||
Brand name - finite lived, net
|
3,735
|
|
|
4,326
|
|
||
Customer contracts - finite lived, net
|
13,092
|
|
|
15,178
|
|
||
Total intangible assets, net
|
$
|
58,233
|
|
|
$
|
60,910
|
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
Customer contracts
|
$
|
20,773
|
|
|
$
|
20,773
|
|
Brand name - finite lived
|
5,395
|
|
|
5,395
|
|
||
Accumulated amortization
|
(9,341
|
)
|
|
(6,664
|
)
|
||
Net carrying amount
|
$
|
16,827
|
|
|
$
|
19,504
|
|
7.
|
Revenue from Contracts with Customers
|
•
|
Approximately $1.8 million in trade receivables, of which $0.5 million is included in pre-petition filings of Chapter 11 bankruptcies.
|
•
|
Approximately $3.1 million in various collateralized notes receivables and loans, of which $0.6 million is included in pre-petition filings of Chapter 11 bankruptcies. This balance includes $2.3 million of previously unamortized key money that was converted to notes receivable upon termination of the related franchise agreements.
|
•
|
Approximately $2.3 million in unamortized key money contract assets, of which $0.9 million included in pre-petition filings of Chapter 11 bankruptcies. The remaining $2.3 million of unamortized key money could also be converted to notes receivable if the related agreements are terminated.
|
|
|
Financial Statement Line Item(s)
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
Accounts receivable
|
|
Accounts receivable, net
|
|
$
|
19,496
|
|
|
$
|
18,575
|
|
Key money disbursed
|
|
Other current assets and Other assets, net
|
|
4,212
|
|
|
6,409
|
|
||
Capitalized contract costs
|
|
Other current assets and Other assets, net
|
|
797
|
|
|
1,172
|
|
||
Contract liabilities
|
|
Other accrued liabilities and Deferred income and other long-term liabilities
|
|
1,415
|
|
|
1,981
|
|
|
|
Key Money Disbursed
|
|
Capitalized Contract Costs
|
|
Contract Liabilities
|
||||||
Balance as of January 1, 2019
|
|
$
|
6,409
|
|
|
$
|
1,172
|
|
|
$
|
1,981
|
|
Key money disbursed
|
|
665
|
|
|
—
|
|
|
—
|
|
|||
Key money converted to notes receivable
|
|
(2,442
|
)
|
|
—
|
|
|
—
|
|
|||
Costs incurred to acquire contracts
|
|
—
|
|
|
202
|
|
|
—
|
|
|||
Cash received in advance
|
|
—
|
|
|
—
|
|
|
428
|
|
|||
Revenue or expense recognized that was included in the January 1, 2019 balance
|
|
(388
|
)
|
|
(533
|
)
|
|
(905
|
)
|
|||
Revenue or expense recognized in the period for the period
|
|
(32
|
)
|
|
(44
|
)
|
|
(89
|
)
|
|||
Balance as of September 30, 2019
|
|
$
|
4,212
|
|
|
$
|
797
|
|
|
$
|
1,415
|
|
Year Ending December 31,
|
|
Contra Revenue
|
|
Expense
|
|
Revenue
|
||||||
2019 (remainder)
|
|
$
|
96
|
|
|
$
|
67
|
|
|
$
|
153
|
|
2020
|
|
409
|
|
|
220
|
|
|
474
|
|
|||
2021
|
|
361
|
|
|
154
|
|
|
309
|
|
|||
2022
|
|
336
|
|
|
126
|
|
|
223
|
|
|||
2023
|
|
310
|
|
|
87
|
|
|
130
|
|
|||
Thereafter
|
|
2,700
|
|
|
143
|
|
|
126
|
|
|||
Total
|
|
$
|
4,212
|
|
|
$
|
797
|
|
|
$
|
1,415
|
|
8.
|
Debt and Line of Credit
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
|
Current
|
|
Noncurrent
|
|
Current
|
|
Noncurrent
|
||||||||
Line of Credit
|
|
$
|
—
|
|
|
$
|
10,000
|
|
|
$
|
—
|
|
|
$
|
10,000
|
|
Senior Secured Term Loan
|
|
—
|
|
|
4,189
|
|
|
—
|
|
|
9,355
|
|
||||
RL Venture - Salt Lake City
|
|
—
|
|
|
11,000
|
|
|
—
|
|
|
—
|
|
||||
RL Venture - Olympia
|
|
—
|
|
|
5,600
|
|
|
—
|
|
|
—
|
|
||||
RLH Atla Venture
|
|
8,171
|
|
|
—
|
|
|
9,225
|
|
|
—
|
|
||||
RLH DC Venture (PWB)
|
|
—
|
|
|
—
|
|
|
15,943
|
|
|
—
|
|
||||
RLH DC Venture (CPBF)
|
|
17,520
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total debt
|
|
25,691
|
|
|
30,789
|
|
|
25,168
|
|
|
19,355
|
|
||||
Unamortized debt issuance costs
|
|
(1,063
|
)
|
|
(293
|
)
|
|
(112
|
)
|
|
(241
|
)
|
||||
Debt net of debt issuance costs
|
|
$
|
24,628
|
|
|
$
|
30,496
|
|
|
$
|
25,056
|
|
|
$
|
19,114
|
|
9.
|
Leases
|
Operating Leases
|
|
September 30, 2019
|
||
Operating lease right-of-use assets
|
|
$
|
48,553
|
|
|
|
|
||
Operating lease liabilities, due within one year
|
|
$
|
4,801
|
|
Operating lease liabilities, due after one year
|
|
46,871
|
|
|
Total operating lease liabilities
|
|
$
|
51,672
|
|
Finance Leases
|
|
September 30, 2019
|
||
Property and equipment
|
|
$
|
660
|
|
Less accumulated depreciation
|
|
(402
|
)
|
|
Property and equipment, net
|
|
$
|
258
|
|
|
|
|
||
Other accrued liabilities
|
|
$
|
154
|
|
Deferred income and other long-term liabilities
|
|
123
|
|
|
Total finance lease liabilities
|
|
$
|
277
|
|
|
|
Financial Statement Line Item(s)
|
|
Three Months Ended September 30, 2019
|
|
Nine Months Ended September 30, 2019
|
||||
Operating lease expense
|
|
Selling, general, administrative and other expenses, and Company operated hotels
|
|
$
|
1,168
|
|
|
$
|
3,444
|
|
Short-term lease expense
|
|
Selling, general, administrative and other expenses, and Company operated hotels
|
|
167
|
|
|
572
|
|
||
Finance lease expense
|
|
|
|
|
|
|
||||
Amortization of finance right-of-use assets
|
|
Depreciation and amortization
|
|
35
|
|
|
104
|
|
||
Interest on lease liabilities
|
|
Interest expense
|
|
7
|
|
|
23
|
|
||
Total finance lease expense
|
|
|
|
42
|
|
|
127
|
|
||
|
|
|
|
|
|
|
||||
Total lease expense
|
|
|
|
$
|
1,377
|
|
|
$
|
4,143
|
|
Cash paid for amounts included in the measurement of lease liabilities:
|
|
Nine Months Ended September 30, 2019
|
||
Cash used in operating activities for operating leases
|
|
$
|
3,547
|
|
Cash used in operating activities for finance leases
|
|
23
|
|
|
Cash used in financing activities for finance leases
|
|
104
|
|
|
|
September 30, 2019
|
|
Weighted average remaining lease term (in years)
|
|
|
|
Operating leases
|
|
69
|
|
Finance leases
|
|
2
|
|
Weighted average discount rate
|
|
|
|
Operating leases
|
|
7.2
|
%
|
Finance leases
|
|
9.5
|
%
|
Years Ending December 31,
|
|
Operating Leases
|
|
Finance Leases
|
||||
2019 (remainder)
|
|
$
|
1,197
|
|
|
$
|
43
|
|
2020
|
|
4,809
|
|
|
149
|
|
||
2021
|
|
4,813
|
|
|
75
|
|
||
2022
|
|
4,776
|
|
|
38
|
|
||
2023
|
|
4,739
|
|
|
11
|
|
||
Thereafter
|
|
248,844
|
|
|
—
|
|
||
Total lease payments
|
|
269,178
|
|
|
316
|
|
||
Less: imputed interest
|
|
217,506
|
|
|
39
|
|
||
|
|
$
|
51,672
|
|
|
$
|
277
|
|
10.
|
Commitments and Contingencies
|
11.
|
Stock Based Compensation
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Restricted stock units
|
|
$
|
581
|
|
|
$
|
841
|
|
|
$
|
1,871
|
|
|
$
|
2,033
|
|
Unrestricted stock awards
|
|
158
|
|
|
105
|
|
|
417
|
|
|
334
|
|
||||
Performance stock units
|
|
172
|
|
|
184
|
|
|
123
|
|
|
445
|
|
||||
Stock options
|
|
22
|
|
|
17
|
|
|
65
|
|
|
51
|
|
||||
Employee stock purchase plan
|
|
8
|
|
|
13
|
|
|
27
|
|
|
33
|
|
||||
Total stock-based compensation
|
|
$
|
941
|
|
|
$
|
1,160
|
|
|
$
|
2,503
|
|
|
$
|
2,896
|
|
|
|
Number
of Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|||
January 1, 2019
|
|
1,288,714
|
|
|
$
|
8.47
|
|
Granted
|
|
361,360
|
|
|
$
|
8.24
|
|
Vested
|
|
(728,014
|
)
|
|
$
|
7.49
|
|
Forfeited
|
|
(183,516
|
)
|
|
$
|
8.96
|
|
September 30, 2019
|
|
738,544
|
|
|
$
|
9.22
|
|
|
|
Number
of Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|||
January 1, 2019
|
|
209,201
|
|
|
$
|
8.23
|
|
Granted
|
|
218,437
|
|
|
$
|
8.08
|
|
Forfeited
|
|
(112,954
|
)
|
|
$
|
9.75
|
|
September 30, 2019
|
|
314,684
|
|
|
$
|
7.58
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Shares of unrestricted stock granted
|
|
22,075
|
|
|
9,210
|
|
|
52,986
|
|
|
32,961
|
|
||||
Weighted average grant date fair value per share
|
|
$
|
7.19
|
|
|
$
|
11.40
|
|
|
$
|
7.89
|
|
|
$
|
10.14
|
|
12.
|
Earnings (Loss) Per Share
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Numerator - basic and diluted:
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
|
$
|
(6,447
|
)
|
|
$
|
17,613
|
|
|
$
|
(14,451
|
)
|
|
$
|
23,288
|
|
Net (income) loss attributable to noncontrolling interest
|
|
2,980
|
|
|
(8,670
|
)
|
|
4,040
|
|
|
(14,079
|
)
|
||||
Net income (loss) attributable to RLH Corporation
|
|
$
|
(3,467
|
)
|
|
$
|
8,943
|
|
|
$
|
(10,411
|
)
|
|
$
|
9,209
|
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares - basic
|
|
25,112
|
|
|
24,545
|
|
|
24,859
|
|
|
24,334
|
|
||||
Weighted average shares - diluted
|
|
25,112
|
|
|
25,729
|
|
|
24,859
|
|
|
25,437
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share - basic
|
|
$
|
(0.14
|
)
|
|
$
|
0.36
|
|
|
$
|
(0.42
|
)
|
|
$
|
0.38
|
|
Earnings (loss) per share - diluted
|
|
$
|
(0.14
|
)
|
|
$
|
0.35
|
|
|
$
|
(0.42
|
)
|
|
$
|
0.36
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Stock Options(1)
|
|
|
|
|
|
|
|
|
||||
Dilutive awards outstanding
|
|
—
|
|
|
20,504
|
|
|
—
|
|
|
12,097
|
|
Antidilutive awards outstanding
|
|
81,130
|
|
|
60,626
|
|
|
81,130
|
|
|
69,033
|
|
Total awards outstanding
|
|
81,130
|
|
|
81,130
|
|
|
81,130
|
|
|
81,130
|
|
|
|
|
|
|
|
|
|
|
||||
Restricted Stock Units(2)
|
|
|
|
|
|
|
|
|
||||
Dilutive awards outstanding
|
|
—
|
|
|
854,604
|
|
|
—
|
|
|
808,934
|
|
Antidilutive awards outstanding
|
|
738,544
|
|
|
521,348
|
|
|
738,544
|
|
|
567,018
|
|
Total awards outstanding
|
|
738,544
|
|
|
1,375,952
|
|
|
738,544
|
|
|
1,375,952
|
|
|
|
|
|
|
|
|
|
|
||||
Performance Stock Units(3)
|
|
|
|
|
|
|
|
|
||||
Dilutive awards outstanding
|
|
—
|
|
|
101,793
|
|
|
—
|
|
|
106,743
|
|
Antidilutive awards outstanding
|
|
314,684
|
|
|
196,728
|
|
|
314,684
|
|
|
191,778
|
|
Total awards outstanding
|
|
314,684
|
|
|
298,521
|
|
|
314,684
|
|
|
298,521
|
|
|
|
|
|
|
|
|
|
|
||||
Warrants(4)
|
|
|
|
|
|
|
|
|
||||
Dilutive awards outstanding
|
|
—
|
|
|
207,444
|
|
|
—
|
|
|
174,846
|
|
Antidilutive awards outstanding
|
|
442,533
|
|
|
235,089
|
|
|
442,533
|
|
|
267,687
|
|
Total awards outstanding
|
|
442,533
|
|
|
442,533
|
|
|
442,533
|
|
|
442,533
|
|
13.
|
Income Taxes
|
14.
|
Fair Value
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
|
Carrying
Amount |
|
Fair
Value |
|
Carrying
Amount |
|
Fair
Value |
||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
||||||||
Notes receivable
|
|
$
|
4,188
|
|
|
$
|
4,188
|
|
|
$
|
2,103
|
|
|
$
|
2,103
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Debt
|
|
$
|
56,480
|
|
|
$
|
55,063
|
|
|
$
|
44,523
|
|
|
$
|
43,880
|
|
Total finance lease obligations
|
|
277
|
|
|
277
|
|
|
378
|
|
|
378
|
|
15.
|
Related Party Transactions
|
16.
|
Acquisitions
|
|
|
Fair Value
|
||
Current assets
|
|
$
|
1,288
|
|
Intangible assets
|
|
16,800
|
|
|
Goodwill
|
|
9,191
|
|
|
Total assets acquired
|
|
27,279
|
|
|
|
|
|
||
Current liabilities
|
|
30
|
|
|
Total liabilities acquired
|
|
30
|
|
|
|
|
|
||
Total net assets acquired
|
|
$
|
27,249
|
|
|
Fair Value
|
|
Useful Life
|
||
Brand names
|
$
|
7,700
|
|
|
Indefinite
|
Customer contracts
|
9,100
|
|
|
15 years
|
|
Total intangible assets
|
$
|
16,800
|
|
|
|
|
|
|
Nine Months Ended September 30, 2018
|
||
Revenue
|
|
|
$
|
110,280
|
|
Net income (loss)
|
|
|
25,219
|
|
|
Net income (loss) and comprehensive income (loss) attributable to RLH Corporation
|
|
|
11,140
|
|
|
Earnings (loss) per share attributable to RLH Corporation - basic
|
|
|
$
|
0.46
|
|
Earnings (loss) per share attributable to RLH Corporation - diluted
|
|
|
$
|
0.44
|
|
17.
|
Subsequent Events
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
The franchised hotels segment is engaged primarily in licensing our brands to franchisees. This segment generates revenue from royalty, marketing, and other fees that are primarily based on a percentage of room revenue or on room count or on transaction count and are charged to hotel owners in exchange for the use of our brand and access to our marketing and central services programs. These central services and marketing programs include our reservation system, guest loyalty program, national and regional sales, revenue management tools, quality inspections, advertising and brand standards. Additionally, this segment includes our initial contracts for Canvas Integrated Systems, discussed further below, as we begin to grow this new offering.
|
•
|
The company operated hotel segment derives revenues primarily from guest room rentals and food and beverage offerings at owned and leased hotels for which we consolidate results. Revenues have also been derived from management
|
|
|
USB
|
|
SSB
|
|
Total
|
||||||||||||
|
|
Hotels
|
|
Total Available Rooms
|
|
Hotels
|
|
Total Available Rooms
|
|
Hotels
|
|
Total Available Rooms
|
||||||
Beginning quantity, January 1, 2019
|
|
112
|
|
|
15,900
|
|
|
1,215
|
|
|
69,800
|
|
|
1,327
|
|
|
85,700
|
|
Newly opened / acquired properties
|
|
7
|
|
|
600
|
|
|
28
|
|
|
1,400
|
|
|
35
|
|
|
2,000
|
|
Change in brand
|
|
(1
|
)
|
|
(100
|
)
|
|
1
|
|
|
100
|
|
|
—
|
|
|
—
|
|
Terminated properties
|
|
(17
|
)
|
|
(1,900
|
)
|
|
(159
|
)
|
|
(10,100
|
)
|
|
(176
|
)
|
|
(12,000
|
)
|
Ending quantity, September 30, 2019
|
|
101
|
|
|
14,500
|
|
|
1,085
|
|
|
61,200
|
|
|
1,186
|
|
|
75,700
|
|
USB Brand Hotels
|
|
Hotel RL
|
|
Red Lion Hotels
|
|
Red Lion Inn and Suites
|
|
Signature
|
|
Other
|
|
Total
|
||||||
Beginning quantity, January 1, 2019
|
|
8
|
|
|
46
|
|
|
43
|
|
|
2
|
|
|
13
|
|
|
112
|
|
Newly opened / acquired properties
|
|
—
|
|
|
—
|
|
|
5
|
|
|
2
|
|
|
—
|
|
|
7
|
|
Change in brand
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(1
|
)
|
Terminated properties
|
|
—
|
|
|
(5
|
)
|
|
(7
|
)
|
|
—
|
|
|
(5
|
)
|
|
(17
|
)
|
Ending quantity, September 30, 2019
|
|
9
|
|
|
41
|
|
|
41
|
|
|
4
|
|
|
6
|
|
|
101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Ending rooms, September 30, 2019
|
|
1,800
|
|
|
8,400
|
|
|
3,400
|
|
|
200
|
|
|
700
|
|
|
14,500
|
|
SSB Brand Hotels
|
|
ABVI and CBVI
|
|
Knights Inn
|
|
Country Hearth
|
|
Guest House
|
|
Signature Inn
|
|
Other
|
|
Total
|
|||||||
Beginning quantity, January 1, 2019
|
|
777
|
|
|
332
|
|
|
53
|
|
|
27
|
|
|
2
|
|
|
24
|
|
|
1,215
|
|
Newly opened / acquired properties
|
|
24
|
|
|
2
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
28
|
|
Change in brand
|
|
1
|
|
|
(1
|
)
|
|
5
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
1
|
|
Terminated properties
|
|
(89
|
)
|
|
(49
|
)
|
|
(6
|
)
|
|
(6
|
)
|
|
(2
|
)
|
|
(7
|
)
|
|
(159
|
)
|
Ending quantity, September 30, 2019
|
|
713
|
|
|
284
|
|
|
53
|
|
|
22
|
|
|
—
|
|
|
13
|
|
|
1,085
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Ending rooms, September 30, 2019
|
|
38,100
|
|
|
16,900
|
|
|
2,500
|
|
|
1,500
|
|
|
—
|
|
|
2,200
|
|
|
61,200
|
|
|
|
USB
|
|
SSB
|
|
Total
|
|||
Executed franchise license agreements, nine months ended September 30, 2019:
|
|
|
|
|
|
|
|||
New locations
|
|
14
|
|
|
26
|
|
|
40
|
|
New contracts for existing locations
|
|
9
|
|
|
94
|
|
|
103
|
|
Total executed franchise license agreements, nine months ended September 30, 2019
|
|
23
|
|
|
120
|
|
|
143
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Total revenues
|
|
$
|
32,863
|
|
|
$
|
36,000
|
|
|
$
|
87,772
|
|
|
$
|
107,651
|
|
Total operating expenses
|
|
37,169
|
|
|
16,236
|
|
|
97,814
|
|
|
78,656
|
|
||||
Operating income (loss)
|
|
(4,306
|
)
|
|
19,764
|
|
|
(10,042
|
)
|
|
28,995
|
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
|
(1,699
|
)
|
|
(1,417
|
)
|
|
(3,690
|
)
|
|
(5,366
|
)
|
||||
Loss on early retirement of debt
|
|
—
|
|
|
(794
|
)
|
|
(164
|
)
|
|
(794
|
)
|
||||
Other income (loss), net
|
|
44
|
|
|
34
|
|
|
121
|
|
|
214
|
|
||||
Income (loss) before taxes
|
|
(5,961
|
)
|
|
17,587
|
|
|
(13,775
|
)
|
|
23,049
|
|
||||
Income tax expense (benefit)
|
|
486
|
|
|
(26
|
)
|
|
676
|
|
|
(239
|
)
|
||||
Net income (loss)
|
|
(6,447
|
)
|
|
17,613
|
|
|
(14,451
|
)
|
|
23,288
|
|
||||
Net (income) loss attributable to noncontrolling interest
|
|
2,980
|
|
|
(8,670
|
)
|
|
4,040
|
|
|
(14,079
|
)
|
||||
Net income (loss) and comprehensive income (loss) attributable to RLH Corporation
|
|
$
|
(3,467
|
)
|
|
$
|
8,943
|
|
|
$
|
(10,411
|
)
|
|
$
|
9,209
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP Financial Measures (1)
|
|
|
|
|
|
|
|
|
||||||||
EBITDA
|
|
$
|
(626
|
)
|
|
$
|
22,625
|
|
|
$
|
1,107
|
|
|
$
|
41,129
|
|
Adjusted EBITDA
|
$
|
5,899
|
|
|
$
|
5,751
|
|
|
$
|
10,624
|
|
|
$
|
13,458
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
(in thousands)
|
||||||||||||||
Royalty
|
|
$
|
5,909
|
|
|
$
|
6,530
|
|
|
$
|
17,516
|
|
|
$
|
16,575
|
|
Other franchise
|
|
2,016
|
|
|
1,016
|
|
|
3,772
|
|
|
2,412
|
|
||||
Marketing, reservations and reimbursables
|
|
8,300
|
|
|
7,591
|
|
|
22,632
|
|
|
19,874
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
(in thousands)
|
||||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Company operated hotels
|
|
$
|
16,633
|
|
|
$
|
20,857
|
|
|
$
|
43,839
|
|
|
$
|
68,758
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Marketing, reservations and reimbursables
|
|
$
|
7,080
|
|
|
$
|
7,453
|
|
|
$
|
22,088
|
|
|
$
|
20,226
|
|
Company operated hotels
|
|
12,673
|
|
|
16,051
|
|
|
36,750
|
|
|
54,924
|
|
||||
Selling, general, administrative and other expenses
|
|
8,196
|
|
|
8,112
|
|
|
21,921
|
|
|
23,590
|
|
||||
Depreciation and amortization
|
|
3,636
|
|
|
3,621
|
|
|
11,192
|
|
|
12,714
|
|
||||
Asset impairment
|
|
5,382
|
|
|
7,100
|
|
|
5,382
|
|
|
7,100
|
|
||||
Loss (gain) on asset dispositions, net
|
|
1
|
|
|
(26,196
|
)
|
|
45
|
|
|
(42,094
|
)
|
||||
Transaction and integration costs
|
|
201
|
|
|
95
|
|
|
436
|
|
|
2,196
|
|
||||
Total operating expenses
|
|
$
|
37,169
|
|
|
$
|
16,236
|
|
|
$
|
97,814
|
|
|
$
|
78,656
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2019
|
|
2018
|
||||
Net cash provided by (used in) operating activities
|
|
$
|
4,955
|
|
|
$
|
(7,627
|
)
|
Net cash provided by (used in) investing activities
|
|
(3,932
|
)
|
|
80,223
|
|
||
Net cash provided by (used in) financing activities
|
|
385
|
|
|
(94,565
|
)
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
|
Fair Value
|
||||||||||||||||
Total Debt
|
|
$
|
25,691
|
|
|
$
|
—
|
|
|
$
|
16,600
|
|
|
$
|
—
|
|
|
$
|
14,189
|
|
|
$
|
—
|
|
|
$
|
56,480
|
|
|
$
|
55,063
|
|
Average interest rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.0
|
%
|
|
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
Exhibit
Number
|
|
Description
|
|
|
|
|
Amendment to Julie Shiflett Offer Letter dated October 8, 2019
|
|
|
|
|
|
Amendment to Paul Sacco Promotion Letter dated October 8, 2019
|
|
|
|
|
|
Amendment to Gary L. Sims Offer Letter dated October 8, 2019
|
|
|
|
|
|
Certification of Principal Financial Officer & Principal Executive Officer pursuant to Exchange Act Rule 13a-14(a)
|
|
|
|
|
|
Certification of Principal Financial Officer & Principal Executive Officer pursuant to Exchange Act Rule 13a-14(b)
|
|
|
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
|
|
|
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
Signature
|
|
Title
|
|
Date
|
||
|
|
|
|
|
|
|
By:
|
|
/s/ Julie Shiflett
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer and Principal Executive Officer)
|
|
November 12, 2019
|
|
|
Julie Shiflett
|
|
|
|
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