Item 8.01 in the Original 8-K to disclose additional information regarding the transaction.

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Impact on Earnings

The Company expects the transaction to enhance franchise revenue and EBITDA growth and boost franchise profit margins as the Company will be able to leverage existing technology and support systems. The transaction will be immediately accretive to the Company’s earnings and cash flow and on an annualized basis the Company expects EBITDA related to acquired contracts to be more than $3million.

Forward Looking Statements

The earnings, profit margin and EBITDA guidance above are forward-looking statements within the meaning of federal securities law. The forward-looking statements in this Form 8-K 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; changes in energy, healthcare, insurance and other operating expenses; 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 December31, 2017, and in other documents filed by the Company with the Securities and Exchange Commission.

Non-GAAP Financial Measures

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.

EBITDA is a commonly used measures of performance in the industry. The Company utilizes this measure 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. The Company believes it is a complement to reported operating results. EBITDA is 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 the industry may calculate EBITDA differently than the Company does or may not calculate them at all, limiting the usefulness of EBITDA as a comparative measure.

We are not able, without unreasonable efforts, to reconcile our EBITDA guidance above to its most directly comparable GAAP guidance financial measures, because certain information needed to make a reasonable forward-looking estimate of GAAP net income (loss) is highly variable and difficult to predict and estimate, and is dependent on future events which are uncertain or outside of our control. These include that historical audited financial information is not currently available and the target has not maintained distinct and separate accounts necessary to present full financial statements of the entity or its activities.In addition, we cannot predict the amortization expense for future periods until purchase price allocations are completed.The probable significance of such adjustments is also similarly difficult to estimate for the same reasons. The disclosure of such a reconciliation may also imply to our investors a degree of precision in our calculations that is not possible.


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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