8-K 1 l09453ae8vk.htm BOYKIN LODGING 8-K
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): September 1, 2004

Boykin Lodging Company

(Exact Name of Registrant as Specified in its Charter)
         
Ohio   001-11975   34-1824586
  		 
  		 
 
(State or Other Jurisdiction of
Incorporation) 		  (Commission File Number)   (IRS Employer Identification Number)
         
Guildhall Building, Suite 1500, 45 W. Prospect Avenue, Cleveland, Ohio   44115
 		  
 
(Address of Principal Executive Offices)   (Zip Code)
         
(216) 430-1200
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

•   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
•   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
•   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
•   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

SECTION 2 FINANCIAL INFORMATION
SECTION 9 FINANCIAL STATEMENTS AND EXHIBITS
SIGNATURE

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SECTION 2
  FINANCIAL INFORMATION
 
    
ITEM 2.01
  COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
 
    
  On September 1, 2004, Boykin Lodging Company (the “Company”) sold its Radisson Hotel Mount Laurel (“Mount Laurel”) in Mount Laurel, New Jersey, for a price of $14.25 million to Highland Hospitality, L.P., an unrelated third party. The net proceeds from the sale were approximately $13.8 million. A portion of the proceeds was applied to the outstanding balance of the Company’s secured revolving credit facility, for which the property served as collateral. The remainder of the proceeds is intended to be used for general corporate purposes.
     
 
    
SECTION 9
  FINANCIAL STATEMENTS AND EXHIBITS
 
    
ITEM 9.01
  FINANCIAL STATEMENTS AND EXHIBITS
 
    
(a) Financial Statements of Businesses Acquired.
 
    
  None.
 
    
(b) Pro Forma Financial Information.
 
    
  The following unaudited pro forma condensed consolidated financial information for Boykin Lodging Company gives effect to the disposition of the Radisson Hotel Mount Laurel in Mount Laurel, New Jersey, as well as the use of proceeds from the sale, as described in this Current Report on Form 8-K.
 
    
  The June 30, 2004 unaudited Pro Forma Condensed Consolidated Balance Sheet is presented as if the disposition and the related debt reduction was effective June 30, 2004. The unaudited Pro Forma Condensed Consolidated Statements of Operations for the six months ended June 30, 2004 and each of the years in the three year period ended December 31, 2003 assume the sale and the reduction of debt were effective as of the beginning of the fiscal year ended December 31, 2001.
 
    
  The unaudited pro forma condensed consolidated financial information should be read in conjunction with the consolidated financial statements and related footnotes included in Boykin Lodging Company’s 2003 Annual Report on Form 10-K.

THE FOLLOWING UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL
INFORMATION IS PRESENTED FOR ILLUSTRATIVE PURPOSES ONLY AND IS NOT
NECESSARILY AN INDICATION OF THE FUTURE FINANCIAL POSITION OR RESULTS
OF OPERATIONS OF BOYKIN LODGING COMPANY.

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BOYKIN LODGING COMPANY
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2004
(unaudited, amounts in thousands, except share data)

                         
            Pro Forma    
            Adjustments    
    (a)   (b)    
    Historical   Mount Laurel   Pro Forma
Investment in hotel properties
   $ 583,662       (19,199 )   $ 564,463  
Accumulated depreciation
     (141,863 )     5,593       (136,270 )
 
    
 		      
 		      
 		  
Investment in hotel properties, net
     441,799       (13,606 )     428,193  
Cash and cash equivalents
     16,700       300 (c)     17,000  
Restricted cash
     13,171       —       13,171  
Accounts receivable, net of allowance for doubtful accounts
     5,086       (173 )     4,913  
Rent receivable from lessee
     17       —       17  
Inventories
     1,798       (42 )     1,756  
Deferred financing costs and other, net
     2,606       —       2,606  
Investment in unconsolidated joint ventures
     15,898       —       15,898  
Other assets
     9,045       (64 )     8,981  
 
    
 		      
 		      
 		  
 
   $ 506,120       (13,585 )   $ 492,535  
 
    
 		      
 		      
 		  
LIABILITIES AND SHAREHOLDERS’ EQUITY
                        
Borrowings against credit facility
   $ 26,769       (13,500 )(c)   $ 13,269  
Term notes payable
     195,373       —       195,373  
Accounts payable and accrued expenses
     37,796       (609 )     37,187  
Accounts payable to related party
     924       (32 )     892  
Dividends/distributions payable
     1,188       —       1,188  
Deferred lease revenue
     318       —       318  
Minority interest in joint ventures
     1,126       —       1,126  
Minority interest in operating partnership
     11,134       83 (d)     11,217  
SHAREHOLDERS’ EQUITY:
                        
Preferred shares, without par value; 10,000,000 shares authorized; 181,000 shares issued and outstanding as of June 30, 2004 (liquidation preference of $45,250)
     —       —       —  
Common shares, without par value; 40,000,000 shares authorized; 17,441,658 outstanding as of June 30, 2004
     —       —       —  
Additional paid-in capital
     358,723       —       358,723  
Distributions and losses in excess of income
     (124,753 )     473 (d)     (124,280 )
Unearned compensation – restricted shares
     (2,478 )     —       (2,478 )
 
    
 		      
 		      
 		  
Total shareholders’ equity
     231,492       473       231,965  
 
    
 		      
 		      
 		  
 
   $ 506,120       (13,585 )   $ 492,535  
 
    
 		      
 		      
 		  

 

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BOYKIN LODGING COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2004
(unaudited, amounts in thousands, except for per share data)

                         
            Pro Forma    
            Adjustments    
    (a)   (e)    
    Historical   Mount Laurel   Pro Forma
Revenues:
                        
Hotel revenues
                        
Rooms
   $ 71,964       (2,211 )   $ 69,753  
Food and beverage
     32,430       (999 )     31,431  
Other
     6,103       (113 )     5,990  
 
    
 		      
 		      
 		  
Total hotel revenues
     110,497       (3,323 )     107,174  
Lease revenue
     686       —       686  
Other operating revenue
     209       —       209  
Revenues from condominium development and unit sales
     4,274       —       4,274  
 
    
 		      
 		      
 		  
Total revenues
     115,666       (3,323 )     112,343  
 
    
 		      
 		      
 		  
Expenses:
                        
Hotel operating expenses
                        
Rooms
     17,685       (563 )     17,122  
Food and beverage
     22,743       (726 )     22,017  
Other direct
     4,134       (78 )     4,056  
Indirect
     35,335       (1,030 )     34,305  
Management fees to related party
     3,030       (104 )     2,926  
Management fees — other
     36       —       36  
 
    
 		      
 		      
 		  
Total hotel operating expenses
     82,963       (2,501 )     80,462  
Property taxes, insurance and other
     7,981       (205 )     7,776  
Cost of condominium development and unit sales
     3,481       —       3,481  
Real estate related depreciation and amortization
     12,536       (438 )     12,098  
Corporate general and administrative
     4,013       —       4,013  
Impairment of real estate
     4,300       —       4,300  
 
    
 		      
 		      
 		  
Total operating expenses
     115,274       (3,144 )     112,130  
 
    
 		      
 		      
 		  
Operating income
     392       (179 )     213  
Interest income
     169       —       169  
Other income
     8       —       8  
Interest expense
     (6,242 )     330       (5,912 )
Amortization of deferred financing costs
     (668 )     —       (668 )
Minority interest in earnings of joint ventures
     (39 )     —       (39 )
Minority interest in loss of operating partnership
     1,264       (23 )     1,241  
Equity in loss of unconsolidated joint ventures
     (588 )     —       (588 )
 
    
 		      
 		      
 		  
Loss from continuing operations
     (5,704 )     128       (5,576 )
 
                        
Loss from continuing operations per share:
                        
      Basic
   $ (0.33 )           $ (0.32 )
      Diluted
   $ (0.33 )           $ (0.32 )
 
                        
Weighted average number of common shares outstanding:
                        
      Basic
     17,404               17,404  
      Diluted
     17,495               17,495  

 

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BOYKIN LODGING COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2003
(unaudited, amounts in thousands, except for per share data)

                         
            Pro Forma    
            Adjustments    
    (a)   (e)    
    Historical   Mount Laurel   Pro Forma
Revenues:
                        
Hotel revenues
                        
Rooms
   $ 130,036       (4,699 )   $ 125,337  
Food and beverage
     61,194       (2,122 )     59,072  
Other
     11,658       (267 )     11,391  
 
    
 		      
 		      
 		  
Total hotel revenues
     202,888       (7,088 )     195,800  
Lease revenue
     1,958       —       1,958  
Other operating revenue
     323       —       323  
Revenues from condominium development and unit sales
     36,883       —       36,883  
 
    
 		      
 		      
 		  
Total revenues
     242,052       (7,088 )     234,964  
 
    
 		      
 		      
 		  
Expenses:
                        
Hotel operating expenses
                        
Rooms
     33,032       (1,252 )     31,780  
Food and beverage
     43,114       (1,373 )     41,741  
Other direct
     7,377       (167 )     7,210  
Indirect
     65,369       (2,255 )     63,114  
Management fees to related party
     4,585       (221 )     4,364  
Management fees – other
     951       —       951  
 
    
 		      
 		      
 		  
Total hotel operating expenses
     154,428       (5,268 )     149,160  
Property taxes, insurance and other
     14,746       (389 )     14,357  
Cost of condominium development and unit sales
     24,645       —       24,645  
Real estate related depreciation and amortization
     27,762       (890 )     26,872  
Corporate general and administrative
     8,102       —       8,102  
Impairment of real estate
     —       —       —  
 
    
 		      
 		      
 		  
Total operating expenses
     229,683       (6,547 )     223,136  
 
    
 		      
 		      
 		  
Operating income
     12,369       (541 )     11,828  
Interest income
     603       —       603  
Other income
     27       —       27  
Interest expense
     (14,509 )     147       (14,362 )
Amortization of deferred financing costs
     (1,906 )     —       (1,906 )
Minority interest in loss of joint ventures
     (133 )     —       (133 )
Minority interest in loss of operating partnership
     1,807       59       1,866  
Equity in loss of unconsolidated joint ventures
     (870 )     —       (870 )
 
    
 		      
 		      
 		  
Loss from continuing operations
     (2,612 )     (335 )     (2,947 )
 
                        
Loss from continuing operations per share:
                        
Basic
   $ (0.15 )           $ (0.17 )
Diluted
   $ (0.15 )           $ (0.17 )
 
                        
Weighted average number of common shares outstanding:
                        
Basic
     17,336               17,336  
Diluted
     17,470               17,470  

 

Table of Contents

BOYKIN LODGING COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2002
(unaudited, amounts in thousands, except for per share data)

                         
            Pro Forma    
            Adjustments    
    (a)   (e)    
    Historical   Mount Laurel   Pro Forma
Revenues:
                        
Hotel revenues:
                        
Rooms
   $ 137,614       (5,044 )   $ 132,570  
Food and beverage
     64,950       (2,246 )     62,704  
Other
     11,998       (254 )     11,744  
 
    
 		      
 		      
 		  
Total hotel revenues
     214,562       (7,544 )     207,018  
Lease revenue
     1,885       —       1,885  
Other operating revenue
     896       —       896  
Revenues from condominium development and unit sales
     8,715       —       8,715  
 
    
 		      
 		      
 		  
Total revenues
     226,058       (7,544 )     218,514  
Expenses:
                        
Hotel operating expenses:
                        
Rooms
     33,716       (1,222 )     32,494  
Food and beverage
     45,315       (1,423 )     43,892  
Other direct
     7,576       (158 )     7,418  
Indirect
     61,823       (2,569 )     59,254  
Management fees to related party
     3,973       (232 )     3,741  
Management fees — other
     2,380       —       2,380  
 
    
 		      
 		      
 		  
Total hotel operating expenses
     154,783       (5,604 )     149,179  
Property taxes, insurance and other
     13,510       (386 )     13,124  
Cost of condominium development and unit sales
     6,474       —       6,474  
Real estate related depreciation and amortization
     25,033       (865 )     24,168  
Corporate general and administrative
     6,443       —       6,443  
 
    
 		      
 		      
 		  
Total operating expenses
     206,243       (6,855 )     199,388  
 
    
 		      
 		      
 		  
 
                        
Operating income
     19,815       (689 )     19,126  
 
                        
Interest income
     125       —       125  
Other income
     28       —       28  
Interest expense
     (16,570 )     93       (16,477 )
Amortization of deferred financing costs
     (2,105 )     —       (2,105 )
Minority interest in earnings of joint ventures
     (133 )     —       (133 )
Minority interest in loss of operating partnership
     623       90       713  
Equity in loss of unconsolidated joint ventures
     (2,040 )     —       (2,040 )
 
    
 		      
 		      
 		  
 
                        
Income (loss) from continuing operations
     (257 )     (506 )     (763 )
 
                        
Income (loss) from continuing operations per share:
                        
Basic
   $ (0.01 )           $ (0.04 )
Diluted
   $ (0.01 )           $ (0.04 )
 
                        
Weighted average number of common shares outstanding:
                        
Basic
     17,248               17,248  
Diluted
     17,383               17,383  

 

Table of Contents

BOYKIN LODGING COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2001
(unaudited, amounts in thousands, except for per share data)

                         
            Pro Forma    
            Adjustments    
    (a)   (e)    
    Historical   Mount Laurel   Pro Forma
Revenues:
                        
Hotel revenues:
                        
Rooms
   $ 4,315       (4,315 )   $ —  
Food and beverage
     2,051       (2,051 )     —  
Other
     297       (297 )     —  
 
    
 		      
 		      
 		  
Total hotel revenues
     6,663       (6,663 )     —  
Lease revenue from related parties
     52,559       —       52,559  
Other lease revenue
     5,724       —       5,724  
Other operating revenue
     829       (15 )     814  
 
    
 		      
 		      
 		  
Total revenues
     65,775       (6,678 )     59,097  
Expenses:
                        
Hotel operating expenses:
                        
Rooms
     1,121       (1,121 )     —  
Food and beverage
     1,422       (1,422 )     —  
Other direct
     157       (157 )     —  
Indirect
     2,511       (2,511 )     —  
Management fees to related party
     200       (200 )     —  
 
    
 		      
 		      
 		  
Total hotel operating expenses
     5,411       (5,411 )     —  
Property taxes, insurance and other
     8,993       (254 )     8,739  
Real estate related depreciation and amortization
     23,487       (981 )     22,506  
Corporate general and administrative
     6,096       —       6,096  
Impairment of real estate
     17,898       (3,700 )     14,198  
Costs associated with termination of leases
     1,581       —       1,581  
Related party costs associated with termination of leases
     12,994       —       12,994  
 
    
 		      
 		      
 		  
Total operating expenses
     76,460       (10,346 )     66,114  
 
    
 		      
 		      
 		  
 
                        
Operating loss
     (10,685 )     3,668       (7,017 )
 
                        
Interest income
     319       (8 )     311  
Other income
     —       —       —  
Interest expense
     (17,932 )     —       (17,932 )
Amortization of deferred financing costs
     (1,129 )     —       (1,129 )
Minority interest in loss of joint ventures
     (151 )     —       (151 )
Minority interest in loss of operating partnership
     2,551       (287 )     2,264  
Equity in income of unconsolidated joint ventures
     589       —       589  
 
    
 		      
 		      
 		  
Loss from continuing operations
     (26,438 )     3,373       (23,065 )
 
                        
Loss from continuing operations per share:
                        
Basic
   $ (1.54 )           $ (1.34 )
Diluted
   $ (1.54 )           $ (1.34 )
 
                        
Weighted average number of common shares outstanding:
                        
Basic
     17,176               17,176  
Diluted
     17,281               17,281  

 

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(a)   Historical data presented reflects amounts reported on Form 8-K filed on August 3, 2004.
 
(b)   Represents the necessary adjustments to Boykin’s historical financial statements to remove the assets and liabilities associated with Mount Laurel as well as to reflect the receipt of the sales proceeds and repayment of debt.
 
(c)   The net proceeds from the sale were approximately $13.8 million. A portion of the proceeds was applied to the outstanding balance of the Company’s secured revolving credit facility, for which the property served as collateral. The remainder will be used for general corporate purposes.
 
(d)   Reflects the estimated impact of the sale on minority interest and shareholders’ equity as if the sale took place on June 30, 2004. The actual impact of the transactions was based upon the carrying value of the assets at the time of the sale.
 
(e)   Reflects the adjustment to Boykin’s historical financial statements to present them as if the disposition of Mount Laurel had occurred on January 1, 2001. The gain or loss on the sale is not reflected in the pro forma condensed consolidated statements of operations. Boykin anticipates that the combined actual gain on the sale, net of minority interest, will approximate $0.3 million.

 

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(c) Exhibits.

    None.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

         
    BOYKIN LODGING COMPANY
 
        
  By:   /s/ Shereen P. Jones
     
 
      Shereen P. Jones
      Executive Vice President, Chief Financial and
      Investment Officer
 
        
Date: September 3, 2004