ARLINGTON HEIGHTS, Ill., July 16, 2003 � Arlington Hospitality,
Inc. (Nasdaq/NM:
HOST), a hotel development and management company and
the nation�s largest franchisee of AmeriHost Inn hotels, today announced
a corporate restructuring in connection with the company�s previously announced
new growth-oriented business plan. As part of the plan, the company
confirmed plans to sell 25 to 30 of its hotels over the next two years
and to use the proceeds to accelerate its hotel development program of
AmeriHost Inn hotels, primarily in joint venture arrangements. In anticipation
of this shift toward accelerating hotel development and reducing hotel
ownership:
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The company will reduce its corporate and regional operations
staff by 13 people, or approximately 20 percent. This move is expected
to result in annual savings of approximately $580,000 in labor and related
costs. The company expects these savings will be partially offset by the
addition of certain key positions as described below.
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The company has not replaced several corporate positions
which had been vacated as a result of normal attrition during the last
three months, saving the company approximately $165,000 annually in payroll
and related costs. In addition, the company has not filled several positions
which had been budgeted for in 2003.
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The restructuring will include a reduction in the size of
the company�s corporate office space needs. Arlington, which owns the building
that houses its corporate offices, plans to re-lease the vacated space.
The company expects to incur non-recurring restructuring
charges of approximately $140,000 over the next six months, which will
be accounted for in accordance with Financial Accounting Standards Board
Statements No. 112 and No. 146. According to Arlington�s president
and chief operating officer, Jerry H. Herman, the company concurrently
is building its development team to help execute the new business plan.
�We are conducting an executive search for four experienced
executives to support our new development initiatives, including a senior
vice president of business development, senior vice president of construction,
vice president of finance/corporate controller and senior financial/market
analyst. When hired, these executives will bring additional depth and knowledge
in hotel development, acquisitions and capital markets.� The company has
engaged HVS Executive Search, and its president, Keith Kefgen ([email protected]),
to assist in the search process. �We anticipate announcing our expanded
team shortly,� Herman said.
�As we shift to a development mode and reduce our existing
hotel portfolio, we are
changing the composition of our staff to reflect our
future direction, which we believe will better position Arlington for growth,�
he added. �Over the next six months, we will reduce our existing corporate
staff, primarily in hotel management and accounting, to levels that better
correspond with our smaller portfolio. We have put into place a comprehensive
separation package, including an out-placement program, to assist our associates
in transitioning to new career opportunities.�
About Arlington Hospitality, Inc.
Arlington Hospitality, Inc. is a hotel development and
management company that builds, operates and sells mid-market hotels, primarily
the AmeriHost Inn brand. Currently, Arlington Hospitality, Inc. owns or
manages 71 properties in 17 states, including 62 AmeriHost Inn hotels,
for a total of 5,224 rooms, with additional AmeriHost Inn & Suites
hotels under development. The AmeriHost Inn brand is a mid-market,
limited service hotel brand with approximately 100 properties located in
20 states. Cendant Corporation (NYSE: CD) is the franchisor of the AmeriHost
Inn brand.
This press release may contain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934.
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