RED LION HOTELS CORPORATION (NYSE:RLH) Files An 8-K Completion of Acquisition or Disposition of Assets

RED LION HOTELS CORPORATION (NYSE:RLH) Files An 8-K Completion of Acquisition or Disposition of Assets
Item 2.01. Completion of Acquisition or Disposition of Assets.

On October 3, 2017, Red Lion Hotels Corporation, doing business as RLH Corporation, (the “company”) and its wholly-owned subsidiary, Inc. (“TicketsWest”) completed the sale of certain specified liabilities and substantially all of the assets of TicketsWest, including ticketing agreements and engagement agreements with various entertainment venues, teams and artists located throughout the Western United States, to Paciolan, LLC (the “Asset Sale”) for a preliminary purchase price, before transaction costs, of $6.0million. The final purchase price is subject to a working capital adjustment, which is expected to be finalized within 165 days of the closing date. The accrued third party ticketing liability was $8.2million as of the close date and was included as part of the Asset Sale. As a result of the transaction, the company’s cash balance decreased by $2.9 million upon completion of the Asset Sale, with $0.6 million in escrow on its balance sheet as of the close date.

Item 7.01. Regulation FD Disclosure.

A copy of the company’s press release, dated October 3, 2017, announcing the completion of the sale is furnished as Exhibit 99.1 hereto.

Non-GAAP Financial Measures

The following is a reconciliation of pro forma Adjusted EBITDA to amounts previously reported, to reflect the deconsolidation of the TicketsWest business, including WestCoast Entertainment, (comprising the Entertainment reportable segment):

Six Months Ended Year Ended December 31,
June 30, 2017
(in thousands)
Adjusted EBITDA – as previously reported $ 8,536 $ 19,472 $ 12,463 $ 13,350
Less: Deconsolidation of the Entertainment Segment (260 ) (2,243 ) (986 ) (2,348 )
Pro Forma Adjusted EBITDA $ 8,276 $ 17,229 $ 11,477 $ 11,002

EBITDA is defined as net income (loss), before interest, taxes, depreciation and amortization. We believe it is a useful financial performance measure due to the significance of our long-lived assets and level of indebtedness. Adjusted EBITDA is an additional measure of financial performance. We believe 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.

EBITDA and Adjusted EBITDA are commonly used measures of performance in our industry. We utilize these measures because management finds them a useful tool to calculate 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. EBITDA and Adjusted EBITDA are not intended to represent net income (loss) 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. In addition, other companies in our industry may calculate EBITDA and, in particular, Adjusted EBITDA differently.

Item 9.01. Financial Statements and Exhibits.

(b) Pro forma financial information.

The unaudited pro formacondensed statements of operations of the company for the years ended December 31, 2016, 2015 and 2014 and for the six months ended June 30, 2017, unaudited pro forma condensed balance sheet as of June30, 2107, and the notes related thereto are filed as Exhibit99.2 to this amendment and are incorporated in their entirety herein by reference.

Red Lion Hotels CORP Exhibit
EX-99.1 2 exh_991.htm EXHIBIT 99.1 EdgarFilingEXHIBIT 99.1RLH Corporation Completes the Sale of TicketsWest and WestCoast Entertainment to Paciolan DENVER,…
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Red Lion Hotels Corporation (RLHC) is a hospitality and leisure company. The Company is engaged in the franchising, management and ownership of hotels under the brands, including Hotel RL, Red Lion Hotel, Red Lion Inn & Suites, GuestHouse and Settle Inn & Suites (collectively the RLHC Brands). The RLHC brands represent upscale, midscale and economy hotels. The Company’s segments include company operated hotel segment, franchised hotels segment, entertainment segment and other. The hotels segment is engaged in guest room rentals, and food and beverage operations at its operated hotels. The franchised hotels segment is engaged in licensing its brands to franchisees. It offers various programs, which include its reservation system, guest loyalty program, national and regional sales, revenue management tools, quality inspections, advertising and brand standards. The entertainment segment consists of its WestCoast Entertainment and TicketsWest operations.

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