RLH Corporation Focuses on Franchise Growth through Sales of Entertainment and Hotel Ownership Interests
October 23 2017 - 6:15AM
RLH Corporation (NYSE:RLH) has simplified and focused its business
strategy over the past few months by selling its Entertainment
business and has engaged CBRE to list for sale the majority of its
hotel ownership interests. This refinement of the company’s
business strategy allows it to accelerate its evolution toward
operating primarily as a franchise company. Its franchising
business requires less capital to grow, provides higher profit
margins and allows it to better leverage the excellent
infrastructure and highly skilled employees over a larger franchise
base.
The sale of RLH Corporation’s Entertainment
business was completed on October 3, 2017. Although the sale
of the Entertainment business required that the company disclose
its results of operations as discontinued operations in the income
statement, the company has determined that it is not necessary to
revise 2017 earnings guidance as a result of the sale. As
reported in its second quarter earnings report, its earnings
guidance range for adjusted EBITDA is $22 million to $23 million
for 2017 – guidance which remains unchanged despite the sale of the
Entertainment business.
On October 5, 2017, the company announced its
intent to engage CBRE to list for sale 11 of its hotels while
working to retain franchise agreements on those assets. The
company is committing significant resources to working with CBRE to
ensure a successful outcome of this sale process. RLH
Corporation is encouraged by preliminary indications of interest it
is receiving for all of the hotels listed for sale. Based on
its review of the market, the company estimates the aggregate value
of the 11 hotels is currently between $165 and
$175 million. The actual current value of the portfolio
will ultimately be determined by the market. The company expects
that the completion of these sales would allow it to significantly
reduce or eliminate its long-term debt and to increase cash
reserves for future franchise agreement growth initiatives.
About RLH CorporationRed 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.
To learn more about franchising with RLH
Corporation, visit franchise.rlhco.com.
Investor Relations Contact:Amy
KochO: 509-777-6417C: 917-579-5012investorrelations@rlhco.com
Media Contact:Dan SchacterDirector
of Corporate Communications847.877.9420Dan.Schacter@rlhco.com
Social
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