Press Release: Arlington Hospitality, Inc.
August 9, 2001
ARLINGTON HEIGHTS, IL -- Arlington Hospitality, Inc. (Nasdaq/NM: HOST) yesterday announced its earnings results
for the second quarter ended June 30, 2001. Net income for the quarter was $152,596, or $0.03 per diluted share,
compared to net income of $1.2 million, or $0.23 per diluted share in 2000. Net income during the second quarter
of 2001 included gains from the sale of property and equipment of $275,207, versus $840,257 during the second quarter
of 2000. Revenues for the second quarter decreased 22.2%, to $17.0 million in the second quarter of 2001, from
$21.8 million in 2000. Net income plus depreciation was $1.3 million during the second quarter of 2001, compared
to $2.2 million during the second quarter of 2000.
For the six months ended June 30, 2001, the net loss was ($467,522), compared to net income of $301,698 during
the six months ended June 30, 2000. During the first six months of 2001, the Company reported gains from the sale
of property and equipment of $590,445, compared to $1.0 million during the first six months of 2000. Revenues for
the first six months decreased 3.3%, to $36.4 million during 2001, from $37.7 million during 2000. Net income plus
depreciation was $1.8 million during the first six months of 2001, compared to $2.4 million during the first six
months of 2000.
Michael P. Holtz, President and Chief Executive Officer commented, ``As anticipated, the Company is reporting significant
fluctuations in segment revenues as it executes its strategy to build and sell hotels. The sale of hotels positively
impacts our revenues at the time we sell a hotel, but it also translates to decreased hotel operations revenue.
However, the Company continues to build and operate new AmeriHost Inn hotels, offsetting this decrease.'' During
the last twelve months, the Company sold six AmeriHost Inn hotels, opened three newly constructed AmeriHost Inn
hotels, and acquired the remaining ownership interest from its joint venture partners in one AmeriHost Inn hotel.
Holtz continued, ``The Company and Cendant Corporation, the world's largest hotel franchiser and the owner of the
AmeriHost Inn brand name since the Company sold it to them in September 2000, are committed to growing this brand.
Building and selling AmeriHost Inn hotels will allow the Company to maximize the value inherent in the long-term
relationship established with Cendant.''
The Company opened one Amerihost Inn hotel in Lomira, Wisconsin during the second quarter of 2001, and currently
has five AmeriHost Inn & Suites hotels under construction. These hotels are located in Redding, California;
Pella, Iowa; Dowagiac, Michigan; Fontana, California; and Howell, Michigan.
The Company has several additional hotel projects in various stages of development and intends to begin construction
on an additional 4-7 hotels during 2001. Currently, the Company owns and operates 67 AmeriHost Inn hotels, in addition
to the hotels under construction and development.
Same Room Revenue Per Available Room (``RevPAR'') for the second quarter ended June 30, 2001 for the AmeriHost
Inn hotel brand decreased 2.5%. Holtz commented, ``We have seen a decrease in same room occupancy during the first
half of 2001, due primarily from a decrease in demand from business travelers. This decrease has been partially
offset by our continued focus on increasing average daily rates. In addition, our hotel operational results were
negatively impacted by significant increases in utility costs at many of our hotels during the first half of 2001.''
Arlington Hospitality, Inc. is a hotel management and development company that builds and manages mid-priced hotels.
As of June 30, 2001, Arlington Hospitality, Inc. owns or manages 79 properties in 17 states, including 68 AmeriHost
Inn hotels, for a total of 5,764 rooms, with five additional AmeriHost Inn & Suites hotels under construction.
Each hotel offers an amenity package not often found in other mid-priced hotels.
The statements appearing in this press release can be construed as forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. These statements are subject to risks and uncertainties that could cause actual results to differ materially
from those set forth in the forward-looking statements, including without limitation, risks relating to the development
and operation of hotels, the availability of capital to finance growth, and the historical cyclicality of the lodging
industry.
Arlington Hospitality, Inc.
Property Ownership and Room Management
As of June 30, 2001
Hotel Properties # of Rooms
AmeriHost Inn Hotels
Consolidated hotels 57 3,626
Minority owned hotels 11 720
SUBTOTAL 68 4,346
Other Hotels
Consolidated hotels 6 820
Minority owned hotels 3 349
Managed only hotels 2 249
SUBTOTAL 11 1,418
GRAND TOTAL 79 5,764
AmeriHost Inn Hotels
Same Room RevPAR Performance
Three Months Six Months
June 30, June 30,
2001 2000 2001 2000
AmeriHost Inn
Average Daily Rate ($) 59.53 56.86 58.35 56.39
Occupancy (%) 59.8 64.2 54.5 56.9
RevPAR ($) 35.57 36.49 31.81 32.08
ARLINGTON HOSPITALITY, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
ASSETS
June 30, December 31,
2001 2000
------------ -----------
Current assets:
Cash and cash equivalents $ 2,273,461 $ 1,728,869
Accounts receivable 3,100,374 2,663,825
Notes receivable 618,453 618,485
Prepaid expenses and
other current assets 869,233 1,013,053
Refundable income taxes 776,933 -
Costs and estimated earnings
in excess of billings
on uncompleted contracts 89,723 375,780
------------ ----------
Total current assets 7,728,177 6,400,012
Investments in and
advances to affiliates 7,262,495 7,031,982
Property and equipment, net 80,332,622 77,802,696
Long-term notes receivable 788,289 801,346
Other assets, net 5,968,286 6,106,679
------------ ----------
$ 102,079,869 $98,142,715
============ ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,967,040 $ 2,313,640
Bank line-of-credit 6,593,702 3,408,133
Accrued expenses and
other current liabilities 3,297,824 3,019,275
Income taxes payable - 132,420
Current portion
of long-term debt 1,744,660 1,698,538
------------ ----------
Total current liabilities 14,603,226 10,572,006
Long-term debt, net
of current portion 57,331,166 56,905,152
Deferred income 11,982,271 12,196,330
Minority interests 234,239 203,449
Shareholders' equity 17,928,967 18,265,778
------------ ----------
$ 102,079,869 $98,142,715
============ ==========
ARLINGTON HOSPITALITY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
2001 2000 2001 2000
------------ ------------ ------------ ------------
Revenue:
Hotel operations:
AmeriHost
Inn hotels $ 12,251,152 $ 13,346,621 $ 22,117,815 $ 23,758,124
Other hotels 2,963,923 3,281,511 5,138,261 5,754,300
Development and
construction 42,018 2,990,247 107,175 4,086,765
Hotel sales
and commissions 93,373 - 5,858,068 -
Management services 242,090 323,395 471,898 613,238
Employee leasing 1,370,134 1,643,580 2,730,016 3,072,451
Other - 219,329 - 386,854
------------ ------------ ------------ ------------
16,962,690 21,804,683 36,423,233 37,671,732
------------ ------------ ------------ ------------
Operating costs and expenses:
Hotel operations:
AmeriHost
Inn hotels 8,507,534 8,842,746 16,692,558 17,026,443
Other hotels 2,098,862 2,468,283 4,274,177 4,832,229
Development
and construction 211,256 2,859,650 587,424 3,774,381
Hotel sales
and commissions - - 3,717,468 -
Management services 159,455 188,455 351,912 408,258
Employee leasing 1,341,867 1,630,607 2,696,781 3,027,587
Other - 160,441 - 397,995
------------ ------------ ------------ ------------
12,318,974 16,150,182 28,320,320 29,466,893
------------ ------------ ------------ ------------
4,643,716 5,654,501 8,102,913 8,204,839
Depreciation
and amortization 1,148,002 1,022,847 2,269,348 2,126,671
Leasehold
rents - hotels 1,705,280 1,716,679 3,461,139 3,415,041
Corporate general
and administrative 411,804 404,216 1,025,432 803,169
------------ ------------ ------------ ------------
Operating income 1,378,630 2,510,759 1,346,994 1,859,958
Other income (expense):
Interest expense (1,389,474) (1,442,870) (2,797,047) (2,942,586)
Interest income 122,163 201,983 270,029 433,740
Other income 63,143 11,096 106,388 111,957
Gain on sale
of property 275,207 840,257 590,445 1,011,836
Equity in net
income and losses
of affiliates (159,767) (57,140) (272,540) 11,611
------------ ------------ ------------ ------------
Income (loss) before
minority interests
and income taxes 289,902 2,064,085 (755,731) 486,516
Minority interests
in income of
consolidated
subsidiaries
and partnerships (34,306) (20,307) (30,791) (1,818)
------------ ------------ ------------ ------------
Income (loss)
before income taxes 255,596 2,043,778 (786,522) 484,698
Income tax
expense (benefit) 103,000 838,000 (319,000) 183,000
------------ ------------ ------------ ------------
Net income
(loss) $ 152,596 $ 1,205,778 $ (467,522)$ 301,698
============ ============ ============ ============
Income (loss) per
common share -
diluted $ 0.03 $ 0.23 $ (0.10)$ 0.05
============ ============ ============ ============
Weighted average
shares outstanding -
diluted basis 5,229,255 5,264,524 5,148,053 5,266,378
============ ============ ============ ============
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Contact:
Arlington Hospitality, Inc., Arlington Heights
James B. Dale, 847/228-5401 ext. 361
jimdale@arlingtonhospitality.com
Media Contact:
Karin Rowe, 847/228-5401 ext. 365
karinr@arlingtonhospitality.com