-----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, F0s6zMeBZExQ7J90QzQqdKsIQo3bDIq23K92qOiRbVdGJm5smXoFWi18g/oGM0RO l8WRSrAACjuQCHgnWyRRFw== 0000950137-04-010044.txt : 20041115 0000950137-04-010044.hdr.sgml : 20041115 20041115163705 ACCESSION NUMBER: 0000950137-04-010044 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20041112 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041115 DATE AS OF CHANGE: 20041115 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: 041145880 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 c89812e8vk.txt CURRENT REPORT 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: November 12, 2004 (Date of earliest event reported) ---------- ARLINGTON HOSPITALITY, INC. (Exact name of registrant as specified in its charter) ---------- Delaware 0-15291 36-3312434 (State or other jurisdiction of (Commission File No.) (IRS Employer Identification No.) incorporation)
2355 South Arlington Heights Road Suite 400 Arlington Heights, Illinois 60005 (Address of Principal Executive Offices) (847) 228-5400 (Registrant's telephone number, including area code) NOT APPLICABLE (Former name or former address, if changed since last report) ---------- 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)) ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On November 15, 2004, the Company issued a press release announcing its financial results for the three and nine months ending September 30, 2004. A copy of the Company's press release is attached to this current report on Form 8-K as Exhibit 99.1. ITEM 7.01 REGULATION FD DISCLOSURE. On November 12, 2004, the Company issued a press release announcing that on November 16, 2004, the Company will be holding an earnings call for the quarter ended September 30, 2004. A copy of the Company's press release is attached to this current report on Form 8-K as Exhibit 99.2. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (c) EXHIBITS 99.1 Press Release of Arlington Hospitality, Inc., dated November 15, 2004, announcing financial results for the three and nine months ending September 30, 2004. 99.2 Press Release of Arlington Hospitality, Inc., dated November 12, 2004, announcing Earnings Call. 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: November 15, 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 EX-99.1 2 c89812exv99w1.txt PRESS RELEASE EXHIBIT 99.1 [ARLINGTON HOSPITALITY LOGO] ARLINGTON HOSPITALITY, INC. 2355 South Arlington Heights Road o Suite 400 o Arlington Heights, IL 60005 847-228-5400 Fax: 847-228-5409 www.arlingtonhospitality.com 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 2004 THIRD QUARTER RESULTS SELLS TWO HOTELS, MOVES FORWARD WITH NEW AMERIHOST IN LARGER MARKETS ARLINGTON HEIGHTS, Ill., November 15, 2004--Arlington Hospitality, Inc. (Nasdaq/NM: HOST), a hotel development and management company, today announced results for the third quarter ended September 30, 2004. 10-Q FILING AND RESULTS CONFERENCE CALL The company expects to file its form 10-Q with the Securities and Exchange Commission later today. The document is accessible through the SEC's electronic filings database at www.sec.gov, and will be available shortly on the company's Web site, www.arlingtonhospitality.com. At 11:30 a.m. ET tomorrow, November 16, 2004, the company's senior management team will conduct a conference call to review third quarter 2004 financial results, followed by a question-and-answer period. Stockholders and other interested parties may participate in the conference call by calling (800) 240-2430, reference number 11015250. - more - Arlington Hospitality Page 2 THIRD QUARTER RESULTS For the 2004 third quarter, revenues decreased approximately $8.5 million to $14.8 million, compared to the year-earlier period. The timing of hotel sales had a significant impact on revenues and operating income for the third quarter of 2004 compared to the same period in 2003. The company sold two hotels in the 2004 third quarter at a lower aggregate price than the aggregate price of three properties sold in the 2003 third quarter. In addition to the impact of the timing of hotel sales, the company reported lower hotel operating revenues due to a reduction in the number of consolidated AmeriHost Inn hotels as a result of the sale of 11 such hotels over the last 12 months. These decreases were partially offset by an increase in incentive and royalty-sharing fees. Net income (loss), and its components, is summarized below for the three and nine months ended September 30, 2004 and 2003:
Three Months Ended September 30, Nine months ended September 30, 2004 2003 2004 2003 ----------- ----------- ----------- ----------- Net income (loss) from continuing operations, before impairment $ (106,578) $ 1,358,708 $ (327,675) $ 712,104 Impairment provision, net of tax (297,876) (84,496) (559,390) (2,883,008) ----------- ----------- ----------- ----------- Net income (loss) from continuing operations (404,454) 1,274,212 (887,065) (2,170,904) Discontinued operations (121,679) (191,974) (1,159,629) (1,587,164) ----------- ----------- ----------- ----------- Net income (loss) $ (526,133) $ 1,082,238 $(2,046,694) $(3,758,068) =========== =========== =========== =========== Net loss per share - Diluted: From continuing operations $ (0.08) $ 0.25 $ (0.18) $ (0.43) From discontinued operations (0.02) (0.03) (0.23) (0.31) ----------- ----------- ----------- ----------- $ (0.10) $ 0.22 $ (0.41) $ (0.74) =========== =========== =========== ===========
- more - Arlington Hospitality Page 3 Net loss for the 2004 third quarter was approximately ($526,000), or ($0.10) per share, compared to net income of approximately $1.1 million, or $0.22 per share, in the 2003 third quarter. The decline was due primarily to an approximate $1.6 million decrease in operating income from the sale of consolidated AmeriHost Inn hotels, as a result of the specific hotels sold and the timing of the sale of these hotels, as discussed above. In addition, certain professional fees, reported as corporate general and administrative expenses, were incurred as a result of substantial legal and financial advisory services involving the company's strategic initiatives and business plan, including alternatives relating to the previously announced PMC lease modification consummated on October 4, 2004. These results also include non-cash hotel impairment charges of approximately $435,000 pre-tax ($298,000 after tax) and approximately $143,000 pre-tax ($84,000 after tax) in the third quarter of 2004 and 2003, respectively. Furthermore, the results also include net losses from discontinued operations of approximately ($122,000) and ($192,000), in the third quarter of 2004 and 2003, respectively. The 2003 third quarter includes impairment charges of approximately $31,000 pre-tax ($19,000 after tax), related to the non-AmeriHost hotels classified as discontinued operations. The non-cash hotel impairment charges have been recorded primarily in connection with the company's previously announced plan to dispose of 25 to 35 hotels. The additional impairment charges recorded subsequent to the initial adoption of this plan in 2003 are the result of the continuous evaluation of current market conditions and other hotel-specific factors. Discontinued operations relates to the operations of the non-AmeriHost Inn hotels disposed of, or expected to be disposed of within the next 12 months, which have been reclassified from continuing operations, and includes the non-cash impairment charges related to those hotels. Discontinued operations also includes incremental depreciation of approximately - more - Arlington Hospitality Page 4 $216,000 and $647,000 in the 2004 third quarter and first nine months of 2004, respectively, which was recorded in connection with a lease modification on one non-AmeriHost Inn hotel executed in the first quarter of 2004 that accelerated the termination date of the lease to November 2005, or earlier under certain conditions. Arlington paid off approximately $8.7 million and $19.1 million of mortgage debt in connection with the sale of hotels during the 2004 third quarter and nine month period, respectively. Total hotel mortgage debt was approximately $41.7 million as of September 30, 2004, compared to $60.1 million on December 31, 2003. Third quarter 2004 incentive and royalty-sharing revenues improved 42 percent to approximately $376,000, compared to the like period a year earlier. This improvement was a result of the amortization of a greater number of development incentive fees received from Cendant Corporation ("Cendant") (NYSE: CD) in connection with the sale of AmeriHost hotels, and the growing stream of royalty-sharing fees received from Cendant as the number of non-Arlington owned AmeriHost Inn franchisees expands. PMC LEASE RESTRUCTURED OCTOBER 4, 2004 Arlington modified its leases on 20 hotels owned by PMC Commercial Trust ("PMC") (AMEX: PCC) shortly after the close of the 2004 third quarter. The new arrangement reduces the monthly cash lease payments and provides for an accelerated exit strategy, consistent with the company's strategic business plan to divest many of its existing hotels and increase focus on development of larger hotels in secondary markets. Key provisions of the modified lease, which became effective October 1, 2004 include: - more - Arlington Hospitality Page 5 o An immediate 19 percent reduction in monthly cash lease payments for the 20 hotels, at an approximate $1.0 million annual savings to Arlington. o The early termination of the leases upon the sale of all 20 leased AmeriHost Inns to third parties over the next four years, compared to the original 2013 and 2014 lease termination dates. "This restructuring is a major milestone for Arlington," said Herman. "It allows us to convert an unfavorable long-term lease to more favorable terms, while creating an orderly exit strategy. We believe these modifications will reduce our former aggregate lease payment obligation through 2014 from approximately $47.2 million to an estimated aggregate of $10.0 million to $12.0 million, plus a shortfall obligation of approximately $8.0 million to $9.5 million, depending on the ultimate timing and pricing of the hotel sales. Our intention is to sell these hotels as AmeriHost Inn hotels, thereby mitigating any shortfall obligation with the incentives received from the Cendant agreement. We expect to receive incentive fees from Cendant of approximately $3.0 to $4.0 million from the sale of the 20 leased hotels, and to utilize these fees to reduce the anticipated shortfall obligation to approximately $4.0 to $6.5 million. This modification was critical in positioning the company for future growth." DISCONTINUED OPERATIONS LOSSES REDUCED SIGNIFICANTLY The company continues to aggressively work to reduce losses from discontinued operations. Exclusive of impairment charges, incremental depreciation, and a franchise termination fee accrual, the company's losses from discontinued operations were reduced significantly from a pretax loss of approximately ($1.9) million in the first nine months of 2003, to a pretax loss of approximately ($243,000) in the first nine months of 2004. "We continue to make solid inroads in reducing losses from the non-strategic, non-AmeriHost Inn hotels, - more - Arlington Hospitality Page 6 primarily through the sale of these assets," said James B. Dale, chief financial officer. "We sold two wholly owned, non-AmeriHost Inns during the 2004 third quarter and in November 2004, we sold our joint venture ownership interest in one additional non-AmeriHost Inn, reducing our non-AmeriHost Inn properties to three, all of which are for sale." AMERIHOST INN OPERATIONS Same-room revenue per available room (RevPAR) in the 2004 third quarter, for the company's 48 AmeriHost Inn hotels improved 0.5 percent to $38.13, compared to the same period in 2003. The comparable midscale hotel, without food and beverage, segment in the United States, according to Smith Travel Research, rose 6.6 percent for the 2004 third quarter. RevPAR for the company's AmeriHost Inn hotels began to regain momentum in September 2004, up 5.9 percent.
Three Months Nine Months Twelve Months Ended Ended Ended September 30 September 30 September 30 ------------ ------------ ------------ Occupancy - 2004 63.7% 57.9% 56.2% Occupancy - 2003 64.0% 57.2% 55.6% Increase (decrease) (0.5%) 1.2% 1.1% Average Daily Rate - 2004 $ 59.88 $ 57.73 $ 57.44 Average Daily Rate - 2003 $ 59.26 $ 57.18 $ 56.94 Increase (decrease) 1.0% 1.0% 0.9% RevPAR - 2004 $ 38.13 $ 33.42 $ 32.31 RevPAR - 2003 $ 37.95 $ 32.72 $ 31.69 Increase (decrease) 0.5% 2.6% 2.3%
"Most of our hotels are located in the Midwest, which still lags behind the nation as a whole in economic recovery," Herman noted. "The success of our marketing programs is encouraging in this still-difficult operating environment. We closed 2003 with a RevPAR market share index of 97.3, according to Smith Travel Research. For the third consecutive - more - Arlington Hospitality Page 7 quarter, we have improved our market share--from an index of 99.2 at the end of the first quarter of 2004, to an index of 100.5 as of September 30, 2004. We continue to work hard to increase this index." Hotel operating margins for the 2004 third quarter continued to be under pressure. "We, at last, are beginning to achieve some pricing power, as the economy begins to slowly rebound in our primary markets, and we were able to increase room rates in the later part of the 2004 third quarter. We are rolling out an energy conservation program that we tested at several properties earlier this year to 35 hotels by year end," Herman said. "At the hotels involved in the test program, we are seeing considerable energy cost savings and expect to receive a payback on our investment within the first 18 to 24 months. Cost containment remains a constant focus, and we continue to expand our marketing efforts through our Operation Heads in Beds initiative. Finally, we expect to see margin improvement as we sell off our older AmeriHost Inn hotels located in tertiary markets, and the non-AmeriHost Inn properties." OPERATION SELL UPDATE In the 2004 third quarter, Arlington sold two wholly owned AmeriHost Inn hotels and two non-AmeriHost Inn hotels for total gross proceeds to the company of approximately $7.3 million. In addition, the company facilitated the sale of one leased AmeriHost Inn hotel in the 2004 third quarter on behalf of PMC, the landlord, resulting in the termination of the lease with Arlington. For the nine months ended September 30, 2004, the company has sold a total of eight wholly-owned AmeriHost Inn hotels and two wholly-owned, non-AmeriHost Inn hotels. In addition, Arlington facilitated the sale of one non-AmeriHost Inn hotel owned by a joint venture - more - Arlington Hospitality Page 8 in which it was a partner, and facilitated the sale of one leased AmeriHost Inn hotel on behalf of PMC, as discussed above. Following the close of the 2004 third quarter, the company sold one wholly-owned, AmeriHost Inn hotel and its ownership interest in a joint venture that owns and operates a non-AmeriHost Inn hotel. Both transactions will be reported in the company's fourth quarter results. Since the company announced its plans to dispose of 25 to 30 hotels in July 2003, the company has sold 18 hotels, exclusive of the sale of the PMC hotel and the sale of our ownership interest in a non-AmeriHost Inn joint venture. "We currently have eight additional hotels under sale contracts, including PMC hotels, and we expect the sales pipeline to remain active," Herman said. "We are on target with our original disposition schedule of our Operation Sell program. We believe the rebounding economy and improving lodging industry fundamentals will benefit our sales efforts." The company's hotel assets designated for sale within the next 12 months have been classified as "held for sale" on the accompanying balance sheet as of September 30, 2004. The operations of the non-AmeriHost Inn hotels to be sold have been reclassified from the company's continuing operations and presented as "discontinued operations" in the consolidated statements of operations. It should be noted that 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. Any forecasted amounts from closed or pending sales could differ from the final amounts included in the company's applicable quarterly and annual financial statements when issued. Furthermore, such forecasted - more - Arlington Hospitality Page 9 amounts do not represent guidance on, or forecasts of, the results of the company's entire consolidated operations, which are reported on a quarterly basis. Information on Arlington's hotels being brokered for sale may be obtained from Steve Miller, senior vice-president of real estate and business development, at 847-228-5401, extension 312, or e-mailing stevem@arlingtonhospitality.com. DEVELOPMENT PROGRAM UPDATE Arlington broke ground on an 82-room AmeriHost Inn & Suites in Lansing, Mich. during the third quarter of 2004 for a joint venture in which it is a partner. This project features one of Arlington's new 80- to 90-room hotel designs, developed specifically for larger markets. The hotel is expected to open in the 2005 second quarter. The company has secured debt and equity commitments for an 87-room AmeriHost Inn & Suites at the Columbus, Ohio airport, and expects to begin construction in the near future, pending finalizing all closing conditions. The company has four additional development sites in California and one in Virginia under agreement, pending completion of due diligence and the arrangement of both debt and equity financing. These developments are also expected to utilize the new, larger prototype design. However, there can be no assurance that any of these transactions will be completed as contemplated. "We are ramping up our development program as fast as prudently possible," Herman said. "As the outlook for an improving hotel economy continues to gain momentum, we expect to increase our hotel development activities." 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 - more - Arlington Hospitality Page 10 AmeriHost Inn hotels, a 106-property, mid-market, limited-service hotel brand owned and presently franchised in 20 states and Canada by Cendant Corporation (NYSE: CD). Currently, Arlington Hospitality, Inc. owns or manages 51 properties in 15 states, including 48 AmeriHost Inn hotels, for a total of 3,672 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-K for the year ended December 31, 2003 and reports on Form 10-Q for the periods ended March 31, 2004, June 30, 2004, and September 30, 2004 under the section headed "Management's Discussion and Analysis of Financial Condition and Results of Operations - Risk Factors" as they may be updated in the company's subsequent SEC filings. - 30 - ARLINGTON HOSPITALITY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ================================================================================
September 30, December 31, 2004 2003 (Unaudited) ----------- ----------- ASSETS Current assets: Cash and cash equivalents $ 3,303,941 $ 3,623,550 Accounts receivable, less an allowance of $76,500 at September 30, 2004 and December 31, 2003 (including approximately $283,000 and $382,000 from related parties) 1,870,567 1,289,492 Notes receivable, current portion 116,042 146,000 Prepaid expenses and other current assets 690,048 1,142,032 Refundable income taxes 201,227 975,316 Costs and estimated earnings in excess of billings on uncompleted contracts 658,163 1,232,481 Assets held for sale - other brands 7,989,911 10,603,160 Assets held for sale - AmeriHost Inn hotels 15,835,968 28,162,442 ----------- ----------- Total current assets 30,665,867 47,174,473 ----------- ----------- Investments in and advances to unconsolidated hotel joint ventures 3,224,533 3,309,344 ----------- ----------- Property and equipment: Land 5,469,977 5,735,489 Buildings 28,504,291 31,174,776 Furniture, fixtures and equipment 9,357,438 13,176,842 Construction in progress 320,981 312,925 Leasehold improvements 96,736 2,396,689 ----------- ----------- 43,749,423 52,796,721 Less accumulated depreciation and amortization 11,397,270 13,242,842 ----------- ----------- 32,352,153 39,553,879 ----------- ----------- Notes receivable, less current portion 800,000 867,500 Deferred income taxes 7,353,763 6,071,000 Other assets, net of accumulated amortization of approximately $580,000 and $633,000 2,039,396 2,737,217 ----------- ----------- 10,193,159 9,675,717 ----------- ----------- $76,435,712 $99,713,413 =========== ===========
-11- ARLINGTON HOSPITALITY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ================================================================================
September 30, December 31, 2004 2003 (Unaudited) ------------ ------------ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,733,906 $ 2,768,402 Bank line-of-credit 1,750,000 3,850,000 Accrued payroll and related expenses 277,310 393,815 Accrued real estate and other taxes 2,239,980 1,980,015 Other accrued expenses and current liabilities 1,303,243 1,407,511 Current portion of long-term debt 1,254,240 1,195,050 Liabilities of assets held for sale - other brands 7,077,290 9,585,492 Liabilities of assets held for sale - AmeriHost Inns 15,923,880 28,540,561 ------------ ------------ Total current liabilities 31,559,849 49,720,846 ------------ ------------ Long-term debt, net of current portion 23,255,114 26,513,398 ------------ ------------ Deferred income 11,431,901 11,361,927 ------------ ------------ Commitments and contingencies Minority interests 219,262 329,819 ------------ ------------ Shareholders' equity: Preferred stock, no par value; authorized 100,000 shares; none issued -- -- Common stock, $.005 par value; authorized at 25,000,000 shares; issued and outstanding 5,040,598 shares at September 30, 2004, and 4,994,956 shares at December 31, 2003 25,203 24,975 Additional paid-in capital 13,399,556 13,220,302 Retained earnings (deficit) (3,067,673) (1,020,979) ------------ ------------ 10,357,086 12,224,298 Less: Stock subscriptions receivable (387,500) (436,875) ------------ ------------ Total shareholders' equity 9,969,586 11,787,423 ------------ ------------ $ 76,435,712 $ 99,713,413 ============ ============
-12- ARLINGTON HOSPITALITY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) ================================================================================
Three Months Ended September 30, Nine Months Ended September 30, ---------------------------------- ------------------------------- 2004 2003 2004 2003 --------------- --------------- ------------- -------------- Revenue: AmeriHost Inn hotel operations $ 9,378,850 $ 11,725,203 $ 26,790,374 $ 31,292,257 Development and construction 299,008 380,834 1,889,694 2,478,095 Hotel sales 4,109,179 10,040,670 18,386,384 19,074,417 Management services 97,773 124,542 300,599 352,997 Employee leasing 382,607 605,993 1,505,766 1,664,675 Incentive and royalty sharing 376,111 264,945 976,525 694,594 Office building rental 175,591 180,941 524,885 537,163 ------------- ------------- ------------- -------------- 14,819,119 23,323,128 50,374,227 56,094,198 ------------- ------------- ------------- -------------- Operating costs and expenses: AmeriHost Inn hotel operations 6,620,210 8,108,425 20,750,339 23,594,346 Development and construction 668,764 591,467 2,790,749 2,727,944 Hotel sales 4,094,016 8,382,581 15,580,227 15,637,779 Management services 47,727 65,918 163,438 205,677 Employee leasing 357,703 585,582 1,427,618 1,612,296 Office building rental 45,350 45,967 121,310 142,383 ------------- ------------- ------------- -------------- 11,833,770 17,779,940 40,833,681 43,920,425 ------------- ------------- ------------- -------------- 2,985,349 5,543,188 9,540,546 12,173,773 Depreciation and amortization 518,280 625,640 1,584,936 2,540,350 Leasehold rents - hotels 1,173,963 1,211,727 3,567,054 3,649,980 Corporate general and administrative 1,170,989 526,848 2,750,799 1,489,686 Impairment provision 435,491 143,496 880,929 4,808,008 ------------- ------------- ------------- -------------- Operating income (loss) (313,374) 3,035,477 756,828 (314,251) Other income (expense): Interest expense (740,484) (1,026,407) (2,556,739) (3,266,510) Interest income 86,040 109,565 316,006 350,446 Other income (expense) 14,218 (115,167) 37,185 (73,147) Gain on sale of assets) 283,690 400,000 283,690 400,000 Extinguishment of debt 112,429 (61,994) (122,590) (141,227) Equity in net income and (losses) of unconsolidated joint ventures 15,661 (138,020) 26,523 (412,282) ------------- ------------- ------------- -------------- Income (loss) before minority interests and income taxes (541,820) 2,203,454 (1,259,097) (3,456,971) Minority interests in operations of consolidated joint ventures (49,634) (47,242) (137,645) (128,933) ------------- ------------- ------------- -------------- Income (loss) before income taxes (591,454) 2,156,212 (1,396,742) (3,585,904) Income tax (expense) benefit 187,000 (882,000) 509,677 1,415,000 ------------- ------------- ------------- -------------- Net income (loss) from continuing operations (404,454) 1,274,212 (887,065) (2,170,904) Discontinued operations, net of tax (121,679) (191,974) (1,159,629) (1,587,164) ------------- ------------- ------------- -------------- Net income (loss) $ (526,133) $ 1,082,238 $ (2,046,694) $ (3,758,068) ============== ============= ============== ============== Net income (loss) from continuing operations per share: Basic $ (0.08) $ 0.26 $ (0.18) $ (0.43) Diluted $ (0.08) $ 0.25 $ (0.18) $ (0.43) Net income (loss) per share: Basic $ (0.10) $ 0.22 $ (0.41) $ (0.74) Diluted $ (0.10) $ 0.22 $ (0.41) $ (0.74)
-13- EX-99.2 3 c89812exv99w2.txt PRESS RELEASE EXHIBIT 99.2 (ARLINGTON HOSPITALITY 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 TO HOLD THIRD-QUARTER 2004 EARNINGS CALL ON NOVEMBER 16 ARLINGTON HEIGHTS, Ill., November 12, 2004--Arlington Hospitality, Inc. (Nasdaq/NM: HOST), a hotel development and management company, primarily of AmeriHost Inns, today announced that the company will hold a conference call to discuss third-quarter 2004 financial results on Tuesday, November 16, 2004, at 11:30 a.m. ET. The call will be led by Jerry H. Herman, Arlington Hospitality president and chief executive officer, who will be joined by James B. Dale, chief financial officer. A question-and-answer period will follow the prepared remarks. Stockholders and other interested parties may participate in the conference call by calling (800) 240-2430, reference number 11015250. A recording of the call will be available by telephone until midnight on Tuesday, November 23, by dialing (800) 405-2236, reference number 11015250. 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 106-property, mid-market, limited-service hotel brand owned and presently franchised in 20 states and Canada by Cendant Corporation (NYSE: CD). Currently, Arlington Hospitality, Inc. owns or manages 51 properties in 15 states, including 48 AmeriHost Inn hotels, for a total of 3,672 rooms, with additional AmeriHost Inn & Suites hotels under development. -----END PRIVACY-ENHANCED MESSAGE-----