Q3 2020 Red Lion Hotels Corp Earnings Call

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As well as subsequent filings, including a form 10-Q to be filed after today's call.

Our form 10-K, and other filings are available on our website R. L. H C O dot com and the Investor Relations section or through the S. E. C website S E C Dot Gov East.

These forward looking statements speak as of today, and we undertake no obligation to publicly update them to reflect subsequent events or circumstances.

You will also be referring to non-GAAP measures. The reconciliation of these measures to their comparable gap measures are provided and the tables over a press release that released is also available on the Investor Relations section of our website.

I will now turn the call over to John Russell Chief Executive Officer.

Thank you Dan Good morning, all thank you for joining us today to review our results for the third quarter of 2020.

We hope that you and your loved ones are remaining healthy shape.

The pandemic continue to impact the lodging industry and our business and the third Corps.

Despite the dampening effect of the virus, we were pleased with the relative outperformance hotels and the Red line franchise network and with the continued improvement enfranchise retention.

The nitrogen brands. We've also launched a new franchise initiative with incentives that we believe can enhance new contract signings.

The focus to support our franchisees was further deepened for the broadening of marketing opportunities with additional co op marketing and digital advertising.

We added 20, new accounts to our corporate enterprise program, bringing the total to 150. In addition, we also launched new local sales solutions for our franchised hotels.

Okay, just <unk>, we will be well positioned to continue our wins as the economy stabilizes.

I want to take a moment to think Red line Hotel Corporation team for their dedication and hard work it has not gone unnoticed.

I also want to applaud our franchisees for their determination and efforts to welcome our guests safely gives any positive travel experience in such a trying time.

Gary well now review our financial results Gary.

Thanks, John.

Good morning, all.

We appreciate your joining the call today.

Our team achieved successful third quarter.

We delivered positive adjusted in court of Justice EBITDA.

Given by the 60 revenue base of our economy hotel portfolio.

Better than the industry occupancy rates in our G. R. R based mid scale properties.

And our expense reduction actions.

Do these positive results in the proactive steps, we have taken we're maintaining a strong cash balance and a healthy balance sheet.

This suggests that as we continue to slow terminations and accelerate new signings revenue will stabilize then returned to growth.

For the royalty revenue generated on occupancy. We also believe we are well positioned to benefit from increasing leisure travel.

Improving franchisee satisfaction and performance translates to exactly what we are achieving.

Higher retention increased signings and a more robust deal pipeline.

With the introduction of a number of new support services and marketing efforts, we expect to build on the momentum of the successes we have recently achieved.

The aggressive cost saving initiatives instituted in the first quarter have continued to generate benefits, we reduced selling general and administrative expenses in the quarter by 43% from the previous year to $4.7 million.

Turning now to our balance sheet and liquidity at September 30, we had cash and cash equivalents totaling $34.1 million. This.

This is up $300000 from June 30, and $2.3 million from year end 2019.

We expect to finish the year with cash on hand of approximately $30 million, assuming no more hotel sales.

It remains healthy with a strong cash position and no corporate debt.

We will remain focused on increasing the success of our brands franchisees and ultimately that of Red Lion.

That concludes our prepared remarks, and we will now open the call for questions operator.

Thank you at this time, we'll be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad a confirmation until indicate your line is in the question queue. You infrastructure. If you will like to move to your questions in the queue for.

For participants using speaker equipment to make it may be necessary to pick up your handset before pressing the star keys, one more pieces, we poll for questions.

A window of opportunity. So I think it's a combination of improved performance with brand along with a constant communications with our with <unk> with that franchise community.

Okay. That's that's really helpful. Thanks, and then you know it looks like you know some of your your trends within a year over year basis things like royalty revenue, then and marketing fees are are looking better here in the third quarter than the second quarter I I know, it's tough to know you know what what the next few months will bring but you know given given the pipeline Ya.

Have of franchise agreements and and you know maybe what you've started to see so far hearing cute for on the on the Midscale side can you give us a sense of of kind of how those trends my play out in the fourth quarter and heading into next year.

Yeah, I'll <unk> I'll start to that and then maybe Gary might want them O'brien.

We do a very good job on <unk>, what I call our contract the contract should come up for renewal. We're in the high 80% of on renewals for those those properties I do see you know Luckily a lot of our our our properties on and secondary or tertiary cities alone.

<unk> Bye wise in your destination areas and they're <unk>. They are budget and economy. These hotels do very well with a leisure market and that's what the <unk> that that's the market to picked up you know arguably back in June July August in through September, we still see pretty strong performance.

It is there are no further questions at this time I'd like to pass the floor back over to management for any closing remarks.

Thank you and we really appreciate everyone being on our third quarter earnings release call before too.

Talking to you next quarter.

Maybe some more good news.

Please stay healthy and safe and thank you.

Thank you for joining us on todays conference call.

A replay of today's call will be available shortly after the conclusion the dial in number for today's replay is 87766 0685 through again the number is a 7766 or 6.53 and the conference I'd is one through 690 to 94 again the numbers one to 692 non core with that.

This concludes today's teleconference. You may now disconnect. Your lines. Thank you for your participation and have a wonderful day.

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