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Business; Seeking Buyers for Remaining 20 Owned or Leased Hotel Properties |
ATLANTA, March 1, 2002 - Buckhead America Corporation (Nasdaq: BUCK),
a hospitality services company, said it expects to report a substantial
loss for 2001 and that its board of directors voted to expand the company's
asset sales program. At Sept. 30, 2001, the company reported assets
of $43.3 million and liabilities of $31.3 million.
 The
company said the 2001 loss reflects weak hospitality markets and the necessity
for additional charges against earnings in the fourth quarter of 2001 of
approximately $10 million. To conserve funds, the company said it
has laid off personnel and instituted a salary deferment program for officers
and managers.
A year ago, Buckhead America began a restructuring due to disappointing results in its hotel management and hotel ownership business segments. At that time, the company recorded charges totaling $5.2 million, installed new management in its hotel management subsidiary, The Lodge Keeper Group Inc., and proposed to sell up to 20 hotel properties. So far, the company has sold 11 properties and terminated eight hotel leases. Buckhead America said continued losses through 2001 and the significant deterioration of hospitality property values and financing sources after Sept. 11 severely strained the company's financial resources. As a result, the board of directors expanded the company's asset sales program. Among new steps, Buckhead America said it is exiting the hotel management business. The company said it contracted with Cornerstone Hospitality Management Co., Atlanta, to take over management of the company's owned properties. That process is expected to be completed in April, this year, at which time Buckhead America's Prospect, Ohio, management service center will be closed. Buckhead America also said it is seeking buyers for its 20 remaining owned or leased hotel properties. The company said fourth quarter 2001 charges would include approximately $7.5 million in writedowns of properties held for sale and approximately $2.5 million from other actions and devaluations of other hospitality related assets, principally receivables. Buckhead America said its Country Hearth Inn franchising system remains profitable. Currently, there are 62 mid-priced, limited-service Country Hearth Inns. An additional 20 are under development. Country Hearth Inns combine the homey atmosphere of a bed-and-breakfast with the convenience of a modern hotel. Buckhead America common shares trade on the Nasdaq National Market System under the stock symbol "BUCK." Certain statements contained in this release are forward-looking statements based on current expectations as defined under the Private Securities Litigation Reform Act of 1995. |
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Buckhead America Corporation http://www.buckheadamerica.com |