Year-Over-Year Franchisee Retention Improved 33%
Launched GuestHouse Extended Stay Brand
Third Quarter Financial Results
Red Lion reported a net loss of
Red Lion’s balance sheet remained strong with cash and cash equivalents totaling
The 2020 financial results reflect reductions in revenue and Adjusted EBITDA from the sale of four company-owned hotels, franchise agreement terminations, as well as the effects of reduced travel due to COVID-19.
Red Lion CEO
Operating Summary
Through the end of the third quarter, RLHC signed 129 franchise agreements including adding 23 new franchised locations. Progress on ROAR initiatives and the introduction of additional franchise support tools and marketing programs continue to contribute to improved retention rates, with 33% and 26% fewer franchisees leaving the brand than in the prior year third quarter and year to date, respectively. During the quarter, RLHC relaunched
Royalties for the third quarter were
Selling, general, administrative, and other expenses, which include franchise sales, operations and corporate costs, and bad debt expense were
Transaction costs for the quarter were
Strategic Alternatives
As previously disclosed, RLHC has engaged advisors to review and respond to bona fide inquiries received from parties considering an investment in or acquisition of the Company. The Board remains committed to evaluating strategic alternatives that it believes are in the best interest of shareholders, particularly as RLHC has attracted attention from those who recognize that its portfolio of franchised hotels are located in areas that are less impacted by a reduction in leisure travel, and are well positioned to respond quickly to upticks in travel, especially drive-to travel. RHLC does not intend to discuss or disclose further developments during this process until its Board of Directors has approved a specific action or otherwise determined that further disclosure is appropriate or required.
Balance Sheet and Liquidity
As of
Adjusted free cash flow for the nine months ended
Red Lion expects to end the year with approximately
Webcast and Conference Call
Red Lion’s senior management team plans to host a webcast and conference call to review its financial results at
The live webcast can be accessed through the Investor Relations section of RLHC’s website http://ir.redlion.com/events-and-presentations/events.
For those unable to access the webcast, the conference call will be accessible domestically or internationally, by dialing 877-407-8289 or 201-689-8341, respectively, and requesting the Red Lion Hotel Corporation Third Quarter 2020 Earnings Conference Call.
A replay of the conference call will be available after
About
Forward Looking Statements
This press release contains forward-looking statements within the meaning of federal securities law, including statements concerning operational and financial impacts of the COVID-19 pandemic, plans, objectives, goals, strategies, projections of future events or performance and underlying assumptions (many of which are based, in turn, upon further assumptions). The forward-looking statements in this press release 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, explorations of possible transactions and strategic alternatives; risks associated with our asset light model; relationships with our franchisees and properties; competitive conditions in the lodging industry; economic cycles; changes in future demand and supply for hotel rooms; international conflicts and conditions; impact of government regulations; ability to obtain financing; changes in energy, healthcare, insurance and other operating expenses; ability to sell non-core assets; the extent and duration of the COVID-19 pandemic; dependency upon the ability and experience of executive officers and ability to retain or replace such officers, as well as other risks and uncertainties discussed in the Company's annual report on Form 10-K for the year ended December 31, 2019, and in other documents filed by the Company with the Securities and Exchange Commission. The forward-looking statements contained herein speak only to the date of this press release. The Company undertakes no obligation to update or revise any forward-looking statements except as required by law.
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Investor Relations Contact:
Investor Relations
203-682-8263
investorrelations@rlhco.com
Condensed Consolidated Statements of Comprehensive Loss | ||||||||||||||||
(unaudited) | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Revenue: | ||||||||||||||||
Royalty | $ | 4,058 | $ | 5,909 | $ | 11,999 | $ | 17,516 | ||||||||
Marketing, reservations and reimbursables | 5,271 | 8,300 | 15,549 | 22,632 | ||||||||||||
Other franchise | 692 | 2,016 | 2,167 | 3,772 | ||||||||||||
Company operated hotels | 3,262 | 16,633 | 11,062 | 43,839 | ||||||||||||
Other | — | 5 | — | 13 | ||||||||||||
Total revenues | 13,283 | 32,863 | 40,777 | 87,772 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling, general, administrative and other expenses | 4,748 | 8,401 | 25,783 | 22,452 | ||||||||||||
Company operated hotels | 2,961 | 12,673 | 11,778 | 36,750 | ||||||||||||
Marketing, reservations and reimbursables | 4,594 | 7,080 | 14,143 | 22,088 | ||||||||||||
Depreciation and amortization | 2,509 | 3,636 | 7,456 | 11,192 | ||||||||||||
Asset impairment | 729 | 5,382 | 2,489 | 5,382 | ||||||||||||
Loss (gain) on asset dispositions, net | 107 | 1 | (7,454 | ) | 45 | |||||||||||
Transaction and integration costs | 860 | 201 | 2,260 | 436 | ||||||||||||
Total operating expenses | 16,508 | 37,374 | 56,455 | 98,345 | ||||||||||||
Operating loss | (3,225 | ) | (4,511 | ) | (15,678 | ) | (10,573 | ) | ||||||||
Other income (expense): | ||||||||||||||||
Interest expense | (44 | ) | (1,699 | ) | (599 | ) | (3,690 | ) | ||||||||
Loss on early retirement of debt | — | — | (1,309 | ) | (164 | ) | ||||||||||
Other income, net | 2 | 44 | 249 | 121 | ||||||||||||
Total other income (expense) | (42 | ) | (1,655 | ) | (1,659 | ) | (3,733 | ) | ||||||||
Loss before taxes | (3,267 | ) | (6,166 | ) | (17,337 | ) | (14,306 | ) | ||||||||
Income tax expense (benefit) | 18 | 486 | (586 | ) | 676 | |||||||||||
Net loss | (3,285 | ) | (6,652 | ) | (16,751 | ) | (14,982 | ) | ||||||||
Net loss attributable to noncontrolling interest | 148 | 2,980 | 1,553 | 4,040 | ||||||||||||
Net loss and comprehensive loss attributable to | $ | (3,137 | ) | $ | (3,672 | ) | $ | (15,198 | ) | $ | (10,942 | ) | ||||
Loss per share - basic | $ | (0.12 | ) | $ | (0.15 | ) | $ | (0.60 | ) | $ | (0.44 | ) | ||||
Loss per share - diluted | $ | (0.12 | ) | $ | (0.15 | ) | $ | (0.60 | ) | $ | (0.44 | ) | ||||
Weighted average shares - basic | 25,397 | 25,112 | 25,311 | 24,859 | ||||||||||||
Weighted average shares - diluted | 25,397 | 25,112 | 25,311 | 24,859 | ||||||||||||
Non-GAAP Financial Measures (1) | ||||||||||||||||
EBITDA | $ | (714 | ) | $ | (831 | ) | $ | (9,282 | ) | $ | 576 | |||||
Adjusted EBITDA | $ | 1,538 | $ | 5,899 | $ | (8,517 | ) | $ | 10,624 | |||||||
(1) The definitions of "EBITDA" and "Adjusted EBITDA" and how those measures relate to net income (loss) are discussed further in this release under Reconciliation of Non-GAAP Financial Measures. | ||||||||||||||||
Condensed Consolidated Balance Sheets | ||||||||
(unaudited) | ||||||||
(In thousands, except share data) | ||||||||
2020 | 2019 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents ( | $ | 33,974 | $ | 29,497 | ||||
Restricted cash ( | 100 | 2,311 | ||||||
Accounts receivable ( | 10,772 | 15,143 | ||||||
Notes receivable, net | 424 | 5,709 | ||||||
Other current assets ( | 4,258 | 5,849 | ||||||
Total current assets | 49,528 | 58,509 | ||||||
Property and equipment, net ( | 32,422 | 68,668 | ||||||
Operating lease right-of-use assets ( | 5,000 | 48,283 | ||||||
18,595 | 18,595 | |||||||
Intangible assets, net | 46,319 | 48,612 | ||||||
Other assets, net ( | 2,762 | 3,851 | ||||||
Total assets | $ | 154,626 | $ | 246,518 | ||||
LIABILITIES | ||||||||
Current liabilities: | ||||||||
Accounts payable ( | $ | 3,632 | $ | 5,510 | ||||
Accrued payroll and related benefits ( | 1,103 | 2,709 | ||||||
Other accrued liabilities ( | 5,309 | 5,469 | ||||||
Long-term debt, due within one year ( | 5,588 | 16,984 | ||||||
Operating lease liabilities, due within one year ( | 1,521 | 4,809 | ||||||
Total current liabilities | 17,153 | 35,481 | ||||||
Long-term debt, due after one year, net of debt issuance costs ( | — | 5,576 | ||||||
Line of credit, due after one year | — | 10,000 | ||||||
Operating lease liabilities, due after one year ( | 4,770 | 46,592 | ||||||
Deferred income and other long-term liabilities ( | 762 | 1,105 | ||||||
Deferred income taxes | 830 | 743 | ||||||
Total liabilities | 23,515 | 99,497 | ||||||
Commitments and contingencies | ||||||||
STOCKHOLDERS’ EQUITY | ||||||||
Preferred stock - 5,000,000 shares authorized; | — | — | ||||||
Common stock - 50,000,000 shares authorized; | 255 | 251 | ||||||
Additional paid-in capital, common stock | 180,069 | 181,608 | ||||||
Accumulated deficit | (52,073 | ) | (36,875 | ) | ||||
128,251 | 144,984 | |||||||
Noncontrolling interest | 2,860 | 2,037 | ||||||
Total stockholders’ equity | 131,111 | 147,021 | ||||||
Total liabilities and stockholders’ equity | $ | 154,626 | $ | 246,518 | ||||
Condensed Consolidated Statements of Cash Flows | |||||||
(unaudited) | |||||||
(In thousands) | |||||||
Nine Months Ended | |||||||
2020 | 2019 | ||||||
Operating activities: | |||||||
Net loss | $ | (16,751 | ) | $ | (14,982 | ) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization | 7,456 | 11,192 | |||||
Noncash PIK interest and amortization of debt issuance costs | 194 | 929 | |||||
Amortization of key money and contract costs | 694 | 997 | |||||
Amortization of contract liabilities | (458 | ) | (994 | ) | |||
Loss (gain) on asset dispositions, net | (7,454 | ) | 45 | ||||
Loss on early retirement of debt | 1,309 | 67 | |||||
Asset impairment | 2,489 | 5,382 | |||||
Deferred income taxes | 87 | 445 | |||||
Stock-based compensation expense | 840 | 2,503 | |||||
Provision for doubtful accounts | 10,712 | 1,780 | |||||
Change in operating assets and liabilities: | |||||||
Accounts receivable | (1,050 | ) | (2,148 | ) | |||
Key money disbursements | (429 | ) | (665 | ) | |||
Other current assets | 1,232 | 998 | |||||
Accounts payable | (2,018 | ) | 45 | ||||
Other accrued liabilities | (1,420 | ) | (639 | ) | |||
Net cash provided by (used in) operating activities | (4,567 | ) | 4,955 | ||||
Investing activities: | |||||||
Capital expenditures | (1,637 | ) | (4,104 | ) | |||
Net proceeds from disposition of property and equipment | 36,896 | — | |||||
Collection of notes receivable | 12 | 262 | |||||
Advances on notes receivable | (150 | ) | (90 | ) | |||
Net cash provided by (used in) investing activities | 35,121 | (3,932 | ) | ||||
Financing activities: | |||||||
Borrowings on long-term debt, net of discounts | 4,234 | 32,935 | |||||
Repayment of long-term debt and finance leases | (21,964 | ) | (22,510 | ) | |||
Repayment of line of credit borrowing | (10,000 | ) | — | ||||
Prepayment penalty on long-term debt | (559 | ) | — | ||||
Debt issuance costs | — | (692 | ) | ||||
Distributions to noncontrolling interest | — | (7,430 | ) | ||||
Stock-based compensation awards canceled to settle employee tax withholding | (81 | ) | (2,135 | ) | |||
Stock option and stock purchase plan issuances, net and other | 82 | 217 | |||||
Net cash provided by (used in) financing activities | (28,288 | ) | 385 | ||||
Change in cash, cash equivalents and restricted cash: | |||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 2,266 | 1,408 | |||||
Cash, cash equivalents and restricted cash at beginning of period | 31,808 | 19,789 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 34,074 | $ | 21,197 | |||
(unaudited)
A summary of activity relating to our open franchise and company operated hotels by type from
Midscale Brand | Economy Brand | Total | |||||||||||||||
Hotels | Total Available Rooms | Hotels | Total Available Rooms | Hotels | Total Available Rooms | ||||||||||||
Beginning quantity, | 96 | 13,500 | 966 | 54,200 | 1,062 | 67,700 | |||||||||||
Newly opened | 2 | 100 | 22 | 1,200 | 24 | 1,300 | |||||||||||
Change in brand | 1 | 100 | (1 | ) | (100 | ) | — | — | |||||||||
Terminated properties | (14 | ) | (2,600 | ) | (116 | ) | (7,200 | ) | (130 | ) | (9,800 | ) | |||||
Ending quantity, | 85 | 11,100 | 871 | 48,100 | 956 | 59,200 | |||||||||||
A summary of activity relating to our open midscale franchise and company operated hotels by brand from
Hotels | Red Lion Inn and Suites | Signature | Other | Total | ||||||||||||||
Beginning quantity, | 9 | 39 | 40 | 4 | 4 | 96 | ||||||||||||
Newly opened | — | — | 2 | — | — | 2 | ||||||||||||
Change in brand | — | — | 1 | — | — | 1 | ||||||||||||
Terminated properties | (1 | ) | (7 | ) | (4 | ) | — | (2 | ) | (14 | ) | |||||||
Ending quantity, | 8 | 32 | 39 | 4 | 2 | 85 | ||||||||||||
Ending rooms, | 1,400 | 6,200 | 3,000 | 300 | 200 | 11,100 | ||||||||||||
A summary of activity relating to our open economy franchise hotels by brand from
ABVI and CBVI | Knights Inn | Country Hearth | Guest House | Other | Total | |||||||||||||
Beginning quantity, | 657 | 232 | 47 | 19 | 11 | 966 | ||||||||||||
Newly opened | 14 | 8 | — | — | — | 22 | ||||||||||||
Change in brand | — | — | — | (1 | ) | — | (1 | ) | ||||||||||
Terminated properties | (74 | ) | (31 | ) | (4 | ) | (2 | ) | (5 | ) | (116 | ) | ||||||
Ending quantity, | 597 | 209 | 43 | 16 | 6 | 871 | ||||||||||||
Ending rooms, | 31,600 | 12,800 | 2,100 | 1,200 | 400 | 48,100 | ||||||||||||
A summary of our executed agreements for the nine months ended
Midscale Brand | Economy Brand | Total | ||||||
Executed franchise license agreements, nine months ended | ||||||||
New locations | 3 | 20 | 23 | |||||
New contracts for existing locations | 6 | 100 | 106 | |||||
Total executed franchise license agreements, nine months ended | 9 | 120 | 129 | |||||
Reconciliation of Non-GAAP Financial Measures
(unaudited)
Free Cash Flow is a non-GAAP measured defined as net cash provided by or used in operating activities less capital expenditures. The Company believes it is an important liquidity measure that provides useful information to management and investors about the amount of cash generated by the business.
Adjusted Free Cash Flow is a non-GAAP measure defined as Free Cash Flow adjusted to reflect the impact of certain investing or financing cash flows such as acquisitions, proceeds from dispositions of properties, borrowings and repayments of long-term debt, and distributions to non-controlling interests. We believe this information is necessary as reflecting significant cash flows from strategic investing and financing decisions provides the most accurate overall measure of cash generated or used by the business.
Free Cash Flow and Adjusted Free Cash Flow are commonly used measures of performance. We utilize these measures because management finds them a useful tool to calculate more meaningful comparisons of past, present and future cash generation and as a means to evaluate the results of core, ongoing operations. We believe they are a complement to reported net cash provided by (used in) operating activities, investing activities, and financing activities. Free Cash Flow and Adjusted Free Cash Flow are not intended to represent net cash provided by (used in) operating activities, investing activities, or financing activities defined by generally accepted accounting principles in
The following is a reconciliation of GAAP net cash provided by (used in) operating activities to non-GAAP Free Cash Flow and Adjusted Free Cash Flow for the nine months ended
Nine Months Ended | |||||||
2020 | 2019 | ||||||
Net cash provided by (used in) operating activities | $ | (4,567 | ) | $ | 4,955 | ||
Less: Capital expenditures | (1,637 | ) | (4,104 | ) | |||
Free Cash Flow | (6,204 | ) | 851 | ||||
Net proceeds from disposition of property and equipment | 36,896 | — | |||||
Borrowings on long-term debt, net of discounts | 4,234 | 32,935 | |||||
Repayment of line of credit borrowing | (10,000 | ) | — | ||||
Repayment of long-term debt and finance leases | (21,964 | ) | (22,510 | ) | |||
Distributions to noncontrolling interest | — | (7,430 | ) | ||||
Adjusted Free Cash Flow | $ | 2,962 | $ | 3,846 | |||
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 our long-lived assets and level of indebtedness.
Adjusted EBITDA is an additional measure of financial performance. The Company believes that the inclusion or exclusion of certain special items, such as stock-based compensation and 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.
Adjusted EBITDA also excludes the effect of non-cash stock compensation expense. We believe that the exclusion of this item is consistent with the purposes of the measure described below.
EBITDA and Adjusted EBITDA are commonly used measures of performance in the industry.
Non-Core Adjusted EBITDA includes the results of our
The following is a reconciliation of Core and Non-Core GAAP net income (loss) to Core and Non-Core non-GAAP EBITDA and Adjusted EBITDA for the three months ended
Core | Non-Core | Total | |||||||||
Net loss | $ | (2,200 | ) | $ | (1,085 | ) | $ | (3,285 | ) | ||
Depreciation and amortization | 1,997 | 512 | 2,509 | ||||||||
Interest expense | 2 | 42 | 44 | ||||||||
Income tax expense | 18 | — | 18 | ||||||||
EBITDA | (183 | ) | (531 | ) | (714 | ) | |||||
Stock-based compensation (1) | 265 | — | 265 | ||||||||
Asset impairment(2) | — | 729 | 729 | ||||||||
Transaction and integration costs (3) | 860 | — | 860 | ||||||||
Employee separation and transition costs (4) | 227 | — | 227 | ||||||||
Loss on asset dispositions | 3 | 104 | 107 | ||||||||
Non-income tax expense assessment (5) | 64 | — | 64 | ||||||||
Adjusted EBITDA | 1,236 | 302 | 1,538 | ||||||||
Adjusted EBITDA attributable to noncontrolling interests | — | 32 | 32 | ||||||||
Adjusted EBITDA attributable to | $ | 1,236 | $ | 334 | $ | 1,570 | |||||
(1) Costs represent total stock-based compensation for the period. These costs are included within Selling, general, administrative and other expenses and Marketing, reservations and reimbursables on the Condensed Consolidated Statements of Comprehensive Loss. | |||||||||||
(2) During the third quarter of 2020, we recognized an impairment on our | |||||||||||
(3) Transaction and integration costs relate primarily to costs incurred with advisors who have been engaged to review and vet inquires received by interested parties. | |||||||||||
(4) The costs primarily relate to severance payments due to our Chief Operating Officer upon the announcement of his departure in | |||||||||||
(5) Costs relate to estimated non-income taxes we have concluded we are probable of being assessed. We accrued these estimated taxes in Selling, general, administrative and other expenses on the Condensed Consolidated Statements of Comprehensive Loss. | |||||||||||
The following is a reconciliation of Core and Non-Core GAAP net income (loss) to Core and Non-Core non-GAAP EBITDA and Adjusted EBITDA for the three months ended
Core | Non-Core | Total | |||||||||
Net loss | $ | (1,889 | ) | $ | (4,763 | ) | $ | (6,652 | ) | ||
Depreciation and amortization | 1,859 | 1,777 | 3,636 | ||||||||
Interest expense | 302 | 1,397 | 1,699 | ||||||||
Income tax expense | 486 | — | 486 | ||||||||
EBITDA | 758 | (1,589 | ) | (831 | ) | ||||||
Stock-based compensation (1) | 941 | — | 941 | ||||||||
Asset impairment (2) | — | 5,382 | 5,382 | ||||||||
Transaction and integration costs (3) | 37 | 164 | 201 | ||||||||
(Gain) loss on asset dispositions | (1 | ) | 2 | 1 | |||||||
Non-income tax expense assessment (4) | 205 | — | 205 | ||||||||
Adjusted EBITDA | 1,940 | 3,959 | 5,899 | ||||||||
Adjusted EBITDA attributable to noncontrolling interests | — | (660 | ) | (660 | ) | ||||||
Adjusted EBITDA attributable to | $ | 1,940 | $ | 3,299 | $ | 5,239 | |||||
(1) Costs represent total stock-based compensation for the period. These costs are included within Selling, general, administrative and other expenses and Marketing, reservations and reimbursables on the Condensed Consolidated Statements of Comprehensive Loss. | |||||||||||
(2) During the third quarter of 2019, we recognized an impairment on our | |||||||||||
(3) Transaction and integration costs include incremental expenses incurred for potential and executed acquisitions and dispositions of assets. | |||||||||||
(4) Costs relate to estimated non-income taxes we have concluded we are probable of being assessed. These estimated taxes have been accrued in Selling, general, administrative and other expenses on the Condensed Consolidated Statements of Comprehensive Loss. | |||||||||||
The following is a reconciliation of Core and Non-Core GAAP net income (loss) to Core and Non-Core non-GAAP EBITDA and Adjusted EBITDA for the nine months ended
Core | Non-Core | Total | |||||||||
Net income (loss) | $ | (18,028 | ) | $ | 1,277 | $ | (16,751 | ) | |||
Depreciation and amortization | 5,655 | 1,801 | 7,456 | ||||||||
Interest expense | 176 | 423 | 599 | ||||||||
Income tax benefit | (586 | ) | — | (586 | ) | ||||||
EBITDA | (12,783 | ) | 3,501 | (9,282 | ) | ||||||
Stock-based compensation (1) | 840 | — | 840 | ||||||||
Asset impairment (2) | — | 2,489 | 2,489 | ||||||||
Transaction and integration costs (3) | 2,207 | 53 | 2,260 | ||||||||
Employee separation and transition costs (4) | 1,023 | — | 1,023 | ||||||||
Loss on early retirement of debt (5) | 223 | 1,086 | 1,309 | ||||||||
Loss (gain) on asset dispositions (6) | 223 | (7,677 | ) | (7,454 | ) | ||||||
Non-income tax expense assessment (7) | 298 | — | 298 | ||||||||
Adjusted EBITDA | (7,969 | ) | (548 | ) | (8,517 | ) | |||||
Adjusted EBITDA attributable to noncontrolling interests | — | 76 | 76 | ||||||||
Adjusted EBITDA attributable to | $ | (7,969 | ) | $ | (472 | ) | $ | (8,441 | ) | ||
(1) Costs represent total stock-based compensation for the period. These costs are included within Selling, general, administrative and other expenses and Marketing, reservations and reimbursables on the Condensed Consolidated Statements of Comprehensive Loss. | |||||||||||
(2) In the first and third quarters of 2020, we recognized impairments on our | |||||||||||
(3) Transaction and integration costs relate primarily to costs incurred with advisors who have been engaged to review and vet inquires received by interested parties. | |||||||||||
(4) The costs relate to the accrual of severance payments due to our Chief Financial Officer upon her departure in | |||||||||||
(5) The loss on early retirement of debt relates to unamortized deferred debt issuance costs and prepayment fees incurred related to the payoff of a secured debt agreement at | |||||||||||
(6) The gain primarily relates to the sale of two properties during the first quarter of 2020. | |||||||||||
(7) Costs relate to estimated non-income taxes we have concluded we are probable of being assessed. We accrued these estimated taxes in Selling, general, administrative and other expenses on the Condensed Consolidated Statements of Comprehensive Loss. | |||||||||||
The following is a reconciliation of Core and Non-Core GAAP net income (loss) to Core and Non-Core non-GAAP EBITDA and Adjusted EBITDA for the nine months ended
Core | Non-Core | Total | |||||||||
Net loss | $ | (7,813 | ) | $ | (7,169 | ) | $ | (14,982 | ) | ||
Depreciation and amortization | 5,542 | 5,650 | 11,192 | ||||||||
Interest expense | 831 | 2,859 | 3,690 | ||||||||
Income tax expense | 676 | — | 676 | ||||||||
EBITDA | (764 | ) | 1,340 | 576 | |||||||
Stock-based compensation (1) | 2,503 | — | 2,503 | ||||||||
Asset impairment (2) | — | 5,382 | 5,382 | ||||||||
Transaction and integration costs (3) | 272 | 164 | 436 | ||||||||
Employee separation and transition costs (4) | 35 | — | 35 | ||||||||
Loss on early retirement of debt (5) | — | 164 | 164 | ||||||||
Loss on asset dispositions | — | 45 | 45 | ||||||||
Legal settlement expense (6) | — | 952 | 952 | ||||||||
Non-income tax expense assessment (7) | 531 | — | 531 | ||||||||
Adjusted EBITDA | 2,577 | 8,047 | 10,624 | ||||||||
Adjusted EBITDA attributable to noncontrolling interests | — | (1,665 | ) | (1,665 | ) | ||||||
Adjusted EBITDA attributable to | $ | 2,577 | $ | 6,382 | $ | 8,959 | |||||
(1) Costs represent total stock-based compensation for the period. These costs are included within Selling, general, administrative and other expenses and Marketing, reservations and reimbursables on the Condensed Consolidated Statements of Comprehensive Loss. | |||||||||||
(2) During the third quarter of 2019, we recognized an impairment on our | |||||||||||
(3) Transaction and integration costs include incremental expenses incurred for potential and executed acquisitions and dispositions of assets. | |||||||||||
(4) The costs relate to a reduction in force that was implemented in the second quarter of 2019. These costs are included within Selling, general, administrative and other expenses on the Condensed Consolidated Statements of Comprehensive Loss. | |||||||||||
(5) The loss on early retirement of debt relates to unamortized deferred debt issuance costs and prepayment fees incurred related to the payoff of a mortgage loan at RLS DC Venture, which was replaced through a new mortgage loan with a different lender. | |||||||||||
(6) Legal settlement expense relates to a settlement agreement with current and former hotel workers regarding a wage dispute in | |||||||||||
(7) Costs relate to estimated non-income taxes we have concluded we are probable of being assessed. These estimated taxes have been accrued in Selling, general, administrative and other expenses on the Condensed Consolidated Statements of Comprehensive Loss. | |||||||||||
Source: RLHC (
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