-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ELcQ0WfgLKL1PIBvnDpf1dU0/j46w1B6XCWmNqaAJKdccQz26GrBhTVda57Bxonv V9gDxUwQAaQYzm3WuJTn0Q== 0000950137-04-001956.txt : 20040317 0000950137-04-001956.hdr.sgml : 20040317 20040317104503 ACCESSION NUMBER: 0000950137-04-001956 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040312 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040317 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ARLINGTON HOSPITALITY INC CENTRAL INDEX KEY: 0000778423 STANDARD INDUSTRIAL CLASSIFICATION: HOTELS & MOTELS [7011] IRS NUMBER: 363312434 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-15291 FILM NUMBER: 04674482 BUSINESS ADDRESS: STREET 1: 2355 SOUTH ARLINGTON HEIGHTS ROAD STREET 2: SUITE 400 CITY: ARLINGTON HEIGHTS STATE: IL ZIP: 60005 BUSINESS PHONE: 8472285400 MAIL ADDRESS: STREET 1: 2355 SOUTH ARLINGTON HEIGHTS ROAD STREET 2: SUITE 400 CITY: ARLINGTON HEIGHTS STATE: IL ZIP: 60005 FORMER COMPANY: FORMER CONFORMED NAME: AMERIHOST PROPERTIES INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: AMERICA POP INC DATE OF NAME CHANGE: 19871111 8-K 1 c83846e8vk.txt CURRENT REPORT 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) March 12, 2004 Arlington Hospitality, Inc. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Its Charter) Delaware - -------------------------------------------------------------------------------- (State or Other Jurisdiction of Incorporation) 0-15291 36-3312434 - -------------------------------------------------------------------------------- (Commission File Number) (IRS Employer Identification Number) 2355 South Arlington Heights Road, Suite 400, Arlington Heights, Illinois 60005 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's Telephone Number, Including Area Code (847) 228-5400 N/A - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Arlington Hospitality Page 2 ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE. On March 16, 2004, Arlington Hospitality, Inc. (the "Company") issued a press release announcing a temporary letter agreement, dated March 12, 2004, with the landlord of 21 of its hotel properties and February 2004 operating results and recent hotel development and sales activity. A copy of the Company's press release is attached to this current report on Form 8-K as Exhibit 99.1. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) EXHIBITS 10.1 Temporary letter agreement, dated March 12, 2004, by and between Arlington Inns, Inc. and PMC Commercial Trust. 99.1 Press Release of Arlington Hospitality, Inc., dated March 16, 2004 Announcing A Temporary letter agreement with Landlord and February 2004 Operating Results and Recent Hotel Development and Sales Activity. SIGNATURES 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 hereunto duly authorized. DATE: March 16, 2004 Arlington Hospitality, Inc. (Registrant) By: /s/ Jerry H. Herman -------------------------- Jerry H. Herman Chief Executive Officer By: /s/ James B. Dale -------------------------- James B. Dale Senior Vice President and Chief Financial Officer -more- EX-10.1 3 c83846exv10w1.txt TEMPORARY LETTER AGREEMENT EXHIBIT 10.1 March 11, 2004 Arlington Inns, Inc. (f/k/a Amerihost Inns, Inc.) c/o Arlington Hospitality, Inc. (f/k/a Amerihost Properties, Inc.) 2355 South Arlington Heights Road Suite 400 Arlington Heights, Illinois 60005 Attention: Jerry H. Herman, President Gentleman: Reference is made to (i) those certain Lease Agreements listed in Schedule 1 attached hereto (the "PROPERTY LEASES") between Arlington Inns, Inc. (f/k/a Amerihost Inns, Inc.) ("TENANT") and the landlords described therein (collectively, the "LANDLORD"), (ii) that certain Amended and Restated Master Agreement dated as of January 24, 2001, which agreement was amended by the parties thereto pursuant to that certain First Amendment to Amended and Restated Master Agreement dated as of May 25, 2001 and that certain Second Amendment to Amended and Restated Master Agreement dated as of June 4, 2003 (the Amended and Restated Master Agreement as so amended herein called the "MASTER AGREEMENT") and (iii) that certain Guaranty Agreement dated June 30, 1998 (the "GUARANTY"), executed by Arlington Hospitality, Inc. (f/k/a Amerihost Properties, Inc.) ("GUARANTOR"). Capitalized terms used but not otherwise defined herein shall have the meaning set forth in the Master Agreement. Pursuant to the various letters each dated March 2, 2004, Landlord provided notice to Tenant of certain defaults under the Property Leases and Master Agreement. Notwithstanding the continued existence of such defaults, Landlord hereby waives such defaults and agrees to refrain from exercising its remedies under the Property Leases and Master Agreement, subject to the following terms and conditions: 1. Although Base Rent will continue to accrue at the rate set forth in the Master Agreement and the separate Property Leases, the Base Rent payments required to be paid on March 1, 2004 and April 1, 2004 hereunder shall be reduced to an amount equal to an annualized rate of 8 1/2% of the stated value of the leased properties (the "REDUCED PAYMENT"). The Base Rent due, less the Reduced Payment, is herein called the "ACCRUED BASE RENT." 2. The Reduced Payment amount for March 1, 2004 is $385,319.00, which amount includes the late fee due on the March 1 Base Rent payment and past due Base Rent due to CPI increases as provided in the Property Leases. Tenant shall pay to Landlord, by wire transfer of good funds, on or before March 12, 2004, the March 1, 2004 Reduced Payment, less the sum of $108,897.00 (which amount shall be funded by Landlord from the Escrow Funds held under the Master Agreement), Arlington Inns, Inc. (f/k/a Amerihost Inns, Inc.) c/o Arlington Hospitality, Inc. (f/k/a Amerihost Properties, Inc.) March 11, 2004 Page 2 for a net payment of $276,422.00. The Reduced Payment amount for April 1, 2004 is $359,833.00. Tenant shall pay to Landlord, by wire transfer of good funds, on or before April 1, 2004, the April 1, 2004 Reduced Payment, less the sum of $100,000 (which amount shall be funded by Landlord from the Escrow Funds held under the Master Agreement), for a net payment of $259,833.00. 3. Concerning capital expenditures reimbursement requests previously made by Tenant to Landlord with respect to the calendar year 2003, Landlord agrees to reimburse Tenant the total of $62,499.29 by wire transfer of good funds on or before March 12, 2004, which amount is net of the amount of $89,161.78, which is the estimated reserve payments to the Capital Expenditure Reserve Account due under the Property Leases and Master Agreement by Tenant for the months of January, 2004 (which payment was due on February 15, 2004) and February, 2004 (which payment is due on March 15, 2004 (the "Outstanding Reserve Payments"). The credit against the amount to be paid by Landlord in accordance with the prior sentence shall satisfy Tenant's obligation to fund the OUTSTANDING RESERVE PAYMENTS and to the extent Tenant is entitled to any further reimbursement for any additional capital expenditures for the calendar year 2003 under the terms of the Property Leases, such reimbursement shall not exceed $20,000.00 in any event. The provisions of this Section 3 do not apply to the payment of capital expenditures for the four hotels with securitized financing. 4. On or before the earlier of (a) April 30, 2004 or (b) the date of any failure by Tenant to comply with the terms hereof (the "TERMINATION DATE"), Tenant shall (a) pay all Accrued Base Rent, and (b) restore the $208,897.00 of the Escrow Funds used by Landlord to fund a portion of the Reduced Payment as provided in Paragraph 2 above. 5. Subject to the terms of that certain Confidentiality Agreement between Tenant and Landlord and dated February 19, 2004 and the advice of its auditors and legal counsel, Tenant will use good faith efforts to promptly provide to Landlord all financial information regarding Tenant, Guarantor and the operation of the leased properties requested by Landlord in order for Landlord to evaluate the financial position of Arlington, the properties and the Guarantor. 6. Concerning the sale of the hotels subject to the Property Leases, Tenant shall prepare on a good faith basis and present to Landlord a plan for pricing, listing and selling such hotels, the terms of which may be incorporated into any modification of the Property Leases and Master Agreement entered into between the parties during the term of this Letter Agreement. Pending the finalization of any such plan, Tenant will present to Landlord all offers received on said hotels, if Arlington Inns, Inc. (f/k/a Amerihost Inns, Inc.) c/o Arlington Hospitality, Inc. (f/k/a Amerihost Properties, Inc.) March 11, 2004 Page 3 any, which are received directly from any prospective purchaser or through any broker inquiries, whether or not listed with such broker, together with Tenant's written recommendation on the action to be taken in connection with such offer. 7. Landlord, Tenant and Guarantor will comply with all other provisions of and obligations under the Master Agreement, the Property Leases, and any other agreements between Tenant, Guarantor and Landlord, including, without limitation, keeping all other payments required under such documents current. Nothing herein shall be deemed to preclude Landlord from exercising any of its rights and remedies under the Property Leases and/or the Master Agreement upon the expiration of this Letter Agreement. Please indicate your acceptance of the terms hereof by signing a copy of this letter in the space provided below and returning one executed counterpart to Jan F. Salit of PMC Commercial Trust. Very truly yours, PMC COMMERCIAL TRUST By: /s/ LANCE B. ROSEMORE ------------------------------ Name: Lance B. Rosemore Title: President Arlington Inns, Inc. (f/k/a Amerihost Inns, Inc.) c/o Arlington Hospitality, Inc. (f/k/a Amerihost Properties, Inc.) March 11, 2004 Page 4 ACCEPTED AND AGREED THIS 17th DAY OF MARCH, 2004: ARLINGTON INNS, INC. (f/k/a Amerihost Inns, Inc.) By: /s/ JERRY H. HERMAN ---------------------------------- Name: Jerry H. Herman ----------------------------- Title: President ---------------------------- By: /s/ JAMES B. Dale ---------------------------------- Name: James B. Dale ----------------------------- Title: Secretary ---------------------------- ARLINGTON HOSPITALITY, INC. (f/k/a Amerihost Properties, Inc.) By: /s/ JERRY H. HERMAN ---------------------------------- Name: Jerry H. Herman ----------------------------- Title: President ---------------------------- By: /s/ JAMES B. Dale ---------------------------------- Name: James B. Dale ----------------------------- Title: Secretary ---------------------------- SCHEDULE 1 1. Lease Agreement dated June 30, 1998 between PMC Commercial Trust and Arlington Inns, Inc. (f/k/a Amerihost Inns, Inc.) with respect to the property known as the AmeriHost Inn and located at 1611 Range Road, Port Huron, Michigan 48074 2. Lease Agreement dated June 30, 1998 between PMC Commercial Trust and Arlington Inns, Inc. (f/k/a Amerihost Inns, Inc.) with respect to the property known as the AmeriHost Inn and located at 400 Orbiting Drive, Mosinee, Wisconsin 54455 3. Lease Agreement dated June 30, 1998 between PMC Commercial Trust and Arlington Inns, Inc. (f/k/a Amerihost Inns, Inc.) with respect to the property known as the AmeriHost Inn and located at 1726 Lake Avenue, Storm Lake, Iowa 50588 4. Lease Agreement dated June 30, 1998 between PMC Commercial Trust and Arlington Inns, Inc. (f/k/a Amerihost Inns, Inc.) with respect to the property known as the AmeriHost Inn and located at 625 Spicer Drive, Tupelo, Mississippi 38801 5. Lease Agreement dated June 30, 1998 between PMC Commercial Trust and Arlington Inns, Inc. (f/k/a Amerihost Inns, Inc.) with respect to the property known as the AmeriHost Inn and located at 2055 E. Lincolnway, Wooster, Ohio 44691 6. Lease Agreement dated June 30, 1998 between PMC Commercial Trust and Arlington Inns, Inc. (f/k/a Amerihost Inns, Inc.) with respect to the property known as the AmeriHost Inn and located at 789 East Milltown Road, Wooster, Ohio 44691 7. Lease Agreement dated March 23, 1999 between PMCT Sycamore, L.P. and Arlington Inns, Inc. (f/k/a Amerihost Inns, Inc.) with respect to the property known as the AmeriHost Inn and located at 1475 South Peace Road, Sycamore, Illinois 60178 8. Lease Agreement dated March 23, 1999 between PMCT Macomb, L.P. and Arlington Inns, Inc. (f/k/a Amerihost Inns, Inc.) with respect to the property known as the AmeriHost Inn and located at 1646 N. Lafayette Expressway, Macomb, Illinois 61455 9. Lease Agreement dated March 5, 1999 between PMCT Plainfield, L.P. and Arlington Inns, Inc. (f/k/a Amerihost Inns, Inc.) with respect to the property known as the AmeriHost Inn and located at 6105 Cambridge Way, Plainfield, Indiana 46168 10. Lease Agreement dated March 5, 1999 between PMCT Marysville, L.P.) and Arlington Inns, Inc. (f/k/a Amerihost Inns, Inc.) with respect to the property known as the AmeriHost Inn and located at 16520 Allenby Drive, Marysville, Ohio 43040 11. Lease Agreement dated June 30, 1998 between PMC Commercial Trust and Arlington Inns, Inc. (f/k/a Amerihost Inns, Inc.) with respect to the property known as the AmeriHost Inn and located at 567 East Highway 38, Rochelle, Illinois 61068 12. Lease Agreement dated June 30, 1998 between PMC Commercial Trust and Arlington Inns, Inc. (f/k/a Amerihost Inns, Inc.) with respect to the property known as the AmeriHost Inn and located at 1100 North Grand Avenue, Mt. Pleasant, Iowa 52641 13. Lease Agreement dated June 30, 1998 between PMC Commercial Trust and Arlington Inns, Inc. (f/k/a Amerihost Inns, Inc.) with respect to the property known as the AmeriHost Inn and located at 14774 Laplaisance Road, Monroe, Michigan 48161 14. Lease Agreement dated June 30, 1998 between PMC Commercial Trust and Arlington Inns, Inc. (f/k/a Amerihost Inns, Inc.) with respect to the property known as the AmeriHost Inn and located at 951 South Central Expressway, McKinney, Texas 75070 15. Lease Agreement dated June 30, 1998 between PMC Commercial Trust and Arlington Inns, Inc. (f/k/a Amerihost Inns, Inc.) with respect to the property known as the AmeriHost Inn and located at 465 Vann Drive, Jackson, Tennessee 38305 16. Lease Agreement dated June 30, 1998 between PMC Commercial Trust and Arlington Inns, Inc. (f/k/a Amerihost Inns, Inc.) with respect to the property known as the AmeriHost Inn and located at 2171 Holton Court, Walker, Michigan 49544 17. Lease Agreement dated June 30, 1998 between PMC Commercial Trust and Arlington Inns, Inc. (f/k/a Amerihost Inns, Inc.) with respect to the property known as the AmeriHost Inn and located at 7625 Caterpillar Court, Grand Rapids, Michigan 49548 18. Lease Agreement dated June 30, 1998 between PMC Commercial Trust and Arlington Inns, Inc. (f/k/a Amerihost Inns, Inc.) with respect to the property known as the AmeriHost Inn and located at 100 North Park Court, Stockbridge, Georgia 30281 19. Lease Agreement dated June 30, 1998 between PMC Commercial Trust and Arlington Inns, Inc. (f/k/a Amerihost Inns, Inc.) with respect to the property known as the AmeriHost Inn and located at 1040 O'Malley Drive, Coopersville, Michigan 49404 20. Lease Agreement dated June 30, 1998 between PMC Commercial Trust and Arlington Inns, Inc. (f/k/a Amerihost Inns, Inc.) with respect to the property known as the AmeriHost Inn and located at 741 US 250 East, Ashland, Ohio 44805 21. Lease Agreement dated June 30, 1998 between PMC Commercial Trust and Arlington Inns, Inc. (f/k/a Amerihost Inns, Inc.) with respect to the property known as the AmeriHost Inn and located at 5130 S. Cobb Drive, Smyrna, Georgia 30082 EX-99.1 4 c83846exv99w1.txt PRESS RELEASE EXHIBIT 99.1 [ARLINGTON HOSPITALITY, INC. LETTERHEAD] For Immediate Release CONTACT: MEDIA CONTACT: James B. Dale, Chief Financial Officer Jerry Daly or Carol McCune 847-228-5401 x 361 703-435-6293 jimdale@arlingtonhospitality.com jerry@dalygray.com ARLINGTON HOSPITALITY, INC. ANNOUNCES TEMPORARY AGREEMENT WITH HOTEL LANDLORD, FEBRUARY 2004 RESULTS ARLINGTON HEIGHTS, Ill., March 16, 2004--Arlington Hospitality, Inc. (Nasdaq/NM: HOST), a hotel development and management company, today announced a temporary letter agreement with the landlord of 21 AmeriHost Inn hotels operated by the company, and February 2004 same-room operating results for the AmeriHost Inn hotels in which the company has an ownership interest. The February 2004 same-room results include 55 AmeriHost Inn hotels which have been opened for at least 13 months. TEMPORARY AGREEMENT WITH PMC COMMERCIAL TRUST As previously announced, the company had entered into discussions with PMC Commercial Trust ("PMC") (AMEX: PCC), regarding 21 AmeriHost Inn hotels owned by PMC, which are leased and operated by a wholly-owned subsidiary of Arlington Hospitality. The company seeks to restructure the lease agreements, in order to improve operating results and cash flow with respect to these hotels, and to agree on a plan that would transfer these hotels to other operators through the sale of the properties. On March 12, 2004 the company, through the wholly-owned subsidiary, entered into a temporary letter agreement with PMC, which expires on April 30, 2004. The temporary letter - more - Arlington Hospitality Page 2 agreement provides that base rent will continue to accrue at the rate of approximately $445,000 per month, as set forth in the lease agreements; however, the base rent payments required to be paid on March 1, 2004 and April 1, 2004 were reduced to approximately $360,000 per month, with the March 1, 2004 payment being due and payable upon execution of the temporary letter agreement. In addition, the company's subsidiary was allowed to utilize $200,000 of its security deposit held with PMC to fund these payments. Upon the expiration of the temporary letter agreement on April 30, 2004, the deferred portion of the base rent (approximately $170,000) will be payable, and the security deposit is to be restored to its March 12, 2004 balance. The temporary letter agreement also resolved all material outstanding open issues existing between the company's subsidiary and PMC regarding capital expenditure escrow account contributions and reimbursements, and provided for the gathering and sharing of certain information regarding a possible restructuring of the lease. The company and PMC are in ongoing discussions regarding such a possible restructuring of the lease. While the objective is to reach a restructured agreement prior to the expiration of the temporary letter agreement, there can be no assurance that the leases will be restructured on terms and conditions acceptable to the company and its subsidiary, if at all, or that a restructuring will improve operations and cash flow, or provide for the sale of the hotels to third party operators. FEBRUARY RESULTS Same-room revenue per available room (RevPAR) in February 2004 decreased 0.7 percent to $27.89, compared to February 2003. Occupancy decreased 3.7 percent to 49.2 percent, - more - Arlington Hospitality Page 3 and average daily rate (ADR) increased 3.0 percent to $56.67. However, total room revenue on a same-room basis for the month of February 2004 compared to February 2003 increased 2.8 percent as a result of the extra day for leap year in 2004.
Two Months One Month Ended Ended Twelve Months Ended February 29 February 29 February 29 --------------- ------------ ------------------- Occupancy - 2004 49.2% 45.3% 56.5% Occupancy - 2003 51.1% 46.2% 56.6% Increase (decrease) (3.7%) (1.9%) 0.2% Average Daily Rate - 2004 $56.67 $55.68 $57.31 Average Daily Rate - 2003 $55.03 $54.35 $57.16 Increase (decrease) 3.0% 2.4% 0.3% RevPAR - 2004 $27.89 $25.19 $32.39 RevPAR - 2003 $28.10 $25.10 $32.35 Increase (decrease) (0.7%) 0.4% 0.3%
According to Smith Travel Research, preliminary results for February 2004 indicate that RevPAR for the midscale without food and beverage segment of the lodging industry will improve between 2 and 4 percent, compared to February 2003. SALES/DEVELOPMENT ACTIVITY The company did not sell any hotels since its last sales development update. Currently, the company has six hotels under contract for sale, which are expected to be consummated within the next six months. When the company has hotels under contract for sale, even with nonrefundable cash deposits in certain cases, certain conditions to closing remain, and there can be no assurance that these sales will be consummated as anticipated. - more - Arlington Hospitality Page 4 For more information regarding Arlington's hotels for sale and development opportunities either on a joint venture or turnkey basis, contact Stephen Miller, Senior Vice President - Real Estate and Business Development via email at stevem@arlingtonhospitality.com, or by telephone at (847) 228-5401, ext. 312. ABOUT ARLINGTON HOSPITALITY Arlington Hospitality, Inc. is a hotel development and management company that builds, operates and sells mid-market hotels. Arlington is the nation's largest owner and franchisee of AmeriHost Inn hotels, a 103-property mid-market, limited-service hotel brand owned and presently franchised in 22 states and Canada by Cendant Corporation (NYSE: CD). Currently, Arlington Hospitality, Inc. owns or manages 64 properties in 17 states, including 57 AmeriHost Inn hotels, for a total of 4,655 rooms, with additional AmeriHost Inn & Suites hotels under development. This press release may contain forward-looking statements. Forward-looking statements are statements that are not historical, including statements regarding management's intentions, beliefs, expectations, representations, plans or predictions of the future, and are typically identified by words such as "believe," "expect," "anticipate," "intend," "estimate," "may," "will," "should," and "could." There are numerous risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements. For a discussion of these factors, see the Company's report on Form 10-Q for the quarter ended September 30, 2003 under the section headed "Management's Discussion and Analysis of Financial Condition and Results of Operations-Factors Affecting Future Performance." -----END PRIVACY-ENHANCED MESSAGE-----