Arlington Announces Restructuring

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:
?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
?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.
?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.”
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.