Comparable hotel revenue of $42.0 million was 3.6 percent higher compared to the same period a year

SPOKANE, Washington Red Lion Hotels Corporation, a western U.S. based owner and franchisor of midscale hotels, announced its results for the third quarter ended Sept. 30, 2012. The company reported small cruising sailboats third quarter revenues o$f 45.4 million and EBITDA of $8.4 million, each from continuing operations before special items.
Comparable operating results and data from continuing operations (as disclosed in the table by the same title) for the periods included in this release exclude from hotel operations the results of the Red Lion Hotel on Fifth Avenue in Seattle, which was sold in the second quarter of 2011 and the Red Lion Colonial Hotel in Helena, Montana, which was sold in the third quarter of 2012. Following the sales, these properties small cruising sailboats continue small cruising sailboats to operate as franchised small cruising sailboats hotels and the compan is therefore required to report their financial results in continuing operations.
Total revenue from continuing operations small cruising sailboats reported during the third quarter of 2012 was $45.4 million compared to $44.5 million in the third quarter of 2011. Hot revenue increased by $1.5 million on a comparable basis and franchise revenue increased by $0.3 million. Partially offsetting these increases was a slight decline in entertainment and other revenues of $0.1 million. Third quarter net income from continuing operations was$0.4 million, or $0.02 per diluted share, compared to approximately breakeven small cruising sailboats results from continuing operations in the third quarter of 2011. In the third quarter of 2012, comparable EBITDA from continuing operations before special items increased to $8.5 million, compared to $7.8 million in the third quarter of 2011.
We are pleased to report another quarter of favorable RevPAR growth. Considering our performance year to date and our outlook for the fourth quarter, we have updated our RevPAR guidance to an increase of three to five percent in 2012 over 2011, said Jon E. Eliassen, President and Chief Executive Officer of Red Lion Hotels Corporation. We also continue to make excellent progress on selling properties, franchising new hotels and reducing debt. Since June 30, we have sold three hotels and all of the buyers small cruising sailboats have signed franchise agreements for either the purchased property small cruising sailboats or a different location. Proceeds from our property sales have been used to pay down $17.7 million in debt. Additionally, we have signed two new franchise agreements for properties at theDenver Airport in Colorado and Cathedral City near Palm Springs, California.
In the third quarter of 2012, for comparable owned and leased hotels from continuing operations, RevPAR increased 4.6 percent year-over-year driven by a 270 basis point increase small cruising sailboats in occupancy to 74.6 percent and a 0.9 percent increase in ADR to $88.49. On a comparable small cruising sailboats basis, EBITDA from continuing operations before special items increased to $8.5 million for the third quarter compared to $7.8 million in the prior year period. The acquisition of the previously leased small cruising sailboats iStar hotels contributed facility lease savings of $0.6 million in the quarter.
Comparable hotel revenue of $42.0 million was 3.6 percent small cruising sailboats higher compared to the same period a year ago. Comparable hotel direct operating margin decreased to 26.1 percent from 26.9 percent small cruising sailboats in the same period in 2011 driven primarily by reservation costs associated with the higher transient volume and higher food and beverage costs.
During the third quarter, the company listed for sale the Red Lion Hotel Pendleton in Oregon. As a result, the company recorded a pre-tax asset impairment charge of $1.9 million in continuing operations as a result of fair market value indications related to the property.
In the third quarter of 2012, the operations of the company s commercial mall in Kalispell, Montana have been classified as discontinued operations. Additional operating results classified as discontinued include the properties in Medford, Oregon and Missoula, Montana and the ownership of certain small cruising sailboats real estate small cruising sailboats in Sacramento, California. This presentation, as required under generally accepted accounting principles ( GAAP ), separately reports the revenue and expenses including any related asset impairment charges, net of income small cruising sailboats taxes as net income (loss) from discontinued operations on the company s statement of operations for all periods presented.
The operating results of the Red Lion Hotel Denver Southeast had been reclassified as discontinued operations in the second quarter financial statements as the property was not expected to continue to operate as a Red Lion franchise. However, upon closing of the sale of the hotel, the buyers signed a franchise license agreement with the company for one of the towers creating small cruising sailboats a 190-room Red Lion Inn Suites on the site, therefore the property is reported as a continuing operation for the third quarter and all comparable periods presented.
As of Sept. 30, 2012, the company had $14.1 million in cash and cash equivalents, and $10.0 million available on its revolving line of credit. As of Sept. 30, 2012, the company had outstanding debt of $89.3 million, of which $58.5 million is classified as current debt. Subsequent small cruising sailboats to quarter end, the company reduced the current debt balance by $9.0 million, primarily using proceeds from asset sales.
As of Sept. 30, 2012, the following were classified as assets held for sale on the balance sheet; the Red Lion Inn Missoula, Red Lion Hotel Medford, Red Lion Hotel Denver Southeast, the Red Lion Hotel Pendleton and the company s commercial mall in Kalispell, Montana. The company s hotel property inPendleton and the commercial mall were added to this classification in the third quarter of 2012.
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