RLH Corporation Announces Execution Of Five Hotel Purchase And Sale Agreements

Company Advances On Asset-Light Commitment

January 26, 2018 // Franchising.com // DENVER - RLH Corporation (NYSE:RLH) today announced the execution of five hotel purchase and sale agreements resulting from the previously disclosed listing for sale of 11 company-owned hotels. The five sales are currently anticipated to close in February or early March, 2018, subject to standard contingencies and closing conditions.

The sale prices contracted on these five assets exceeded the company’s expectations. The real estate market conditions remain robust and RLH Corporation was able to negotiate pricing for these first five hotels reflecting single-digit cap rates. The company expects to maintain Red Lion Hotel franchises going forward on all five of the contracted hotels. Based on these contracts and the current negotiations for remaining hotels in the sales program, the company is happy to reiterate its expectation that aggregate pricing for the 11 hotels will be in the $165 million to $175 million range.

“As a key component of our transition to a high-growth franchise company, we are extremely pleased with the initial five contracted sales and the excellent market we are finding for our hotel sales program,” stated Greg Mount, RLH Corporation President and Chief Executive Officer. “We are confident that we will complete the majority of our hotel sales during the first and second quarters of 2018. These sales will allow us to significantly reduce our long-term debt and the expected gains on the assets sales will increase our cash reserves. This clean-up of our balance sheet will further enhance our very strong position as we pursue the aggressive growth of our franchise business.”

As the company closes on each individual hotel sale, it plans to disclose details that will allow shareholders and analysts to adjust their models to discontinue the earnings and cash flows from the disposed asset and to reflect the reduction in debt and increase to the company’s cash reserves.

In November, the company substantially modified its cost base in anticipation of completing most of its hotel sales in the first half of 2018 and making the transition to operating primarily as a franchise company. This resulted in anticipated annual expense reductions of $2.5 million. “We expect to initiate additional cost reductions as we sell hotels in 2018 to further bring our costs in line with typical franchise operations,” said Mount. “We expect franchise segment adjusted EBITDA margins to continue to improve during 2018.”

To learn more about franchising with RLH Corporation, visit franchise.rlhco.com.

About RLH Corporation

Red Lion Hotels Corporation is an innovative hotel company doing business as RLH Corporation and focuses on the franchising, management and ownership of upscale, midscale and economy hotels. The company focuses on maximizing return on invested capital for hotel owners across North America through relevant brands, industry-leading technology and forward-thinking services. For more information, please visit the company's website at www.rlhco.com.

Social Media:
www.Facebook.com/myhellorewards
www.Twitter.com/myhellorewards
www.Instagram.com/myhellorewards
www.Linkedin.com/company/rlhco

Investor Relations Contact:
Amy Koch
O: 509-777-6417
C: 917-579-5012
investorrelations@rlhco.com

Media Contact:
Dan Schacter
Director, Social Engagement and Public Relations
509-777-6222
dan.schacter@rlhco.com

SOURCE RLH Corporation

###

Comments:

comments powered by Disqus

Franchise News Room »


News By Industry »


Featured Opportunities

Tune Up Salon
Tune Up "The Manly Salon" is now offering Franchising Nationally! With a proven walk-in/VIP business model that delivers high revenue per...
Golden Corral Buffet and Grill
Golden Corral is the nation's leading family style restaurant franchise featuring steaks, buffet and bakery items.
Elements Massage
When simplicity is the essence of your business model, clients and owners benefit. Clients want a predictably wonderful experience with every visit....
Del Taco
Del Taco, one of the nation's largest Mexican quick-serve chains, first opened in 1964 serving up freshly prepared Mexican menu items such as tacos...
Dickey's Barbecue Pit®
Since 1941 Dickey's Barbecue Pit® has been treating customers to great tasting barbecue and has become a restaurant icon in the process! Now you can...
Share This Page

Subscribe to Franchising.com Express

A Franchise Update Media Production
Franchise Update Media
P.O. Box 20547
San Jose, CA 95160
PH. (408) 402-5681
In Loving Memory Of Timothy Gardner (1987-2014)

Copyright © 2001 - 2018.
All Rights Reserved.