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Arlington Hospitality, Inc. Announces Hotel Sale and new Hotel Development Update |
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Seeks Transfer of Listing to Nasdaq SmallCap Market |
Arlington Hospitality, Inc. (Nasdaq/NM: HOST), a hotel development and management company, announced a hotel sales and new hotel developments update. In addition, Arlington announced it has applied to transfer the listing of its common stock from the Nasdaq National Market to the Nasdaq SmallCap Market.
Sales Activity
During 2004, the company divested 15 hotels. The company has sold nine wholly owned AmeriHost Inn hotels, sold two wholly owned non-AmeriHost Inn hotels, facilitated the sale of one non-AmeriHost Inn hotel owned by a joint venture, facilitated the sale of two leased AmeriHost Inn hotels on behalf of PMC, the landlord, and sold its ownership interest in a non-AmeriHost Inn joint venture.
The company currently has seven hotels under contract for sale, including three leased hotels, 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.
Hotel Development Activity
The company continues its construction of an AmeriHost Inn & Suites hotel in Lansing, Mich. for a joint venture in which it is a partner. In addition, the company expects to close on the debt and equity financing for an 87-room AmeriHost Inn & Suites at the Columbus, Ohio airport in the near future, pending final entitlements and site work required by the seller, at which time Arlington will commence construction.
The company has several other projects in the pre-construction development stage. The sales and development activities set forth above do not represent guidance on, or forecasts of, the results of the company's entire consolidated operations, which are reported on a quarterly basis.
Application to move Arlington listing to Nasdaq SmallCap Market
As of September 30, 2004 the company's stockholders' equity was $9,969,586, which is $30,414 less than the $10.0 million minimum stockholders' equity threshold for continued listing on Nasdaq's National Market. Although the company believes that the execution of its business plan for growth will eventually result in an increase in stockholders' equity to satisfy the National Market minimum, on January 13, 2005, Nasdaq denied Arlington's request for continued listing of its shares on the National Market. As a result, Arlington has applied to transfer the listing of its common stock from the Nasdaq National Market to the Nasdaq SmallCap Market. Arlington believes it satisfies all the requirements for listing on the Nasdaq SmallCap Market, including that market's lower minimum stockholders' equity threshold, and that its application will be approved. However, there can be no assurance that the company's SmallCap Market listing application will be approved as anticipated. While Nasdaq is reviewing Arlington's SmallCap Market listing application, Arlington's common stock will continue to be listed on the National Market.
Kenneth M. Fell, Chairman of the board of directors of Arlington, commented, "We have made substantial progress in our strategic and transitional plan. The primary factor for the decline in stockholders' equity was an aggressive plan to sell 25 - 30 hotel properties over a two-year period to enable the company to grow its hotel development activities. Under Generally Accepted Accounting Principles, the formal hotel disposition plan required the immediate writedown (before the sale) of any hotels having an anticipated sale value below book value, while prohibiting recognition of gains (until sale) on the other hotels in the plan." Fell added, "Although we cannot currently maintain our Nasdaq National Market listing, the SmallCap Market provides services and accessibility very similar to the National Market and will be more than adequate to meet the needs of the company, as well as our current and future shareholders."
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