Hotel Sale Proceeds Boost Arlington Hospitality, Inc. Year End Results; Six AmeriHost Inn Hotels Under Construction / March 2002

Hotel Online Special Report

Hotel Sale Proceeds Boost Arlington Hospitality, Inc.
Year End Results; Six AmeriHost Inn Hotels
Under Construction
Hotel Operating Statistics

4th Quarter Same Room RevPAR Up 2.9%

ARLINGTON HEIGHTS, ILLINOIS, March 13, 2002 � Arlington Hospitality, Inc. (Nasdaq/NM: HOST) today announced its earnings results for the fourth quarter and year ended December 31, 2001. Net income for the year was $755,100, or $0.13 per diluted share, compared to net income of $4.0 million, or $0.74 per diluted share in 2000. Net income during 2000 included a gain of $0.57 per diluted share from the sale of the AmeriHost Inn and AmeriHost Inn & Suites brand names and franchising rights to Cendant Corporation.

Revenues for the year increased 1.3%, to $77.2 million in 2001, including hotel sale proceeds and commissions, from $76.2 million in 2000. Operating income increased 19.5%, to $5.6 million in 2001, from $4.7 million in 2000. Net income plus depreciation was $5.4 million during 2001, compared to $8.6 million (including the gain from the Cendant transaction) during 2000.

For the three months ended December 31, 2001, the net loss was ($634,500), compared to a net loss of ($933,715) during the three months ended December 31, 2000. The net loss for the fourth quarter was due primarily to the seasonality of the Company�s business. Operating income during the fourth quarter of 2001 increased to $466,162, from an operating loss of ($740,633) during the fourth quarter of 2000. Revenues for the quarter increased 24.4%, to $18.2 million during 2001, from $14.6 million during 2000. Net income plus depreciation was $642,564 during the fourth quarter of 2001, compared to $304,771 during the fourth quarter of 2000.

Michael P. Holtz, President and Chief Executive Officer, commented, �Nine AmeriHost Inn hotels operated by the Company were sold in 2001. The Company realized significant profits from the sale of these hotels. In addition, the Company received approximately $1.5 million in incentive fees from the Cendant arrangement.� The Company began construction on six AmeriHost Inn hotels, opened three AmeriHost Inn hotels, and acquired one other hotel in 2001. Holtz continued, �The tragic events of September 11th had a significant impact on the Company�s ability to sell hotels, as several buyers either terminated their contract or indefinitely postponed the purchase of an AmeriHost Inn in the fourth quarter. However, the interest in our hotels has picked up again, with three hotels currently under contract for sale.�

Same Room Revenue Per Available Room (�RevPAR�) for the year ended December 31, 2001 for the AmeriHost Inn hotels operated by the Company decreased 1.8%. Same room RevPAR for these hotels increased 2.9% for the three months ended December 31, 2001. �The horrifying terrorist attacks on September 11, 2001, as well as the general downturn in the economy, had a major effect on business and leisure travel patterns. However, this impact has been primarily felt by the hotels in larger metropolitan markets and hotels close to airports,� said Holtz. �Since our AmeriHost Inn hotels are located primarily in smaller towns across the Midwest, the Company was somewhat less susceptible to these catastrophic world events. In addition, both corporate and leisure travel budgets have been reduced, resulting in many travelers selecting mid-priced hotels offering substantial amenities, such as the AmeriHost Inn hotel, instead of full service, high-priced hotels. After the difficult month of September, we were extremely pleased that the Company�s AmeriHost Inn hotels recovered quickly, actually reporting an increase in same room revenues for the fourth quarter.�

Holtz continued, �2001 was a difficult year for the lodging industry, as it was significantly impacted by the economic climate of the country and the situation in the Middle East. We look forward to 2002 as the economy begins to show signs of recovery. The AmeriHost Inn brand is perfectly positioned for growth, and the Company and Cendant Corporation remain committed to its expansion.�

Arlington Hospitality, Inc.
Property Ownership and Room Management
As of December 31, 2001
.	Hotel Properties	# of Rooms
AmeriHost Inn Hotels
Consolidated hotels	55	3,509
Minority owned hotels	11	720
SUBTOTAL	66	4,229
Other Hotels
Consolidated hotels	8	1,051
Minority owned hotels	2	243
Managed only hotels	2	249
SUBTOTAL	12	1,543
GRAND TOTAL	78	5,772

Owned AmeriHost Inn Hotels
Same Room RevPAR Performance
AmeriHost Inn Hotels	Three Months December 31, 2001	Three Months December 31, 2000	Twelve Months December 31, 2001	Twelve Months December 31, 2000
Average Daily Rate ($)	$55.93	$56.67	$58.26	$57.03
Occupancy (%)	54.9%	52.7%	56.8%	58.8%
RevPAR ($)	$30.73	$29.85	$33.06	$33.55

ARLINGTON HOSPITALITY, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)

ASSETS

                                December 31,        December 31,
                                    2001                2000
                              ---------------     ---------------
Current assets:
Cash and cash equivalents    $     4,748,156     $     1,728,869
Accounts receivable                2,343,423           2,663,825
Notes receivable                     518,499             618,485
Prepaid expenses and other
current assets                      998,559           1,013,053
Costs and estimated earnings
in excess of billings on
uncompleted contracts             1,079,137             375,780
                              ---------------     ---------------
Total current assets              9,687,774           6,400,012

Investments in and advances
to affiliates 5,404,744 7,031,982

Property and equipment, net 92,895,038 77,802,696

Long-term notes receivable 1,000,000 801,346

Other assets, net 6,186,900 6,106,679
--------------- ---------------

$ 115,174,456 $ 98,142,715
=============== ===============

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
Accounts payable             $     2,467,704     $     2,313,640
Bank line-of-credit                6,793,702           3,408,133
Accrued expenses and other
current liabilities               3,476,164           3,151,695
Current portion of
long-term debt                    2,110,652           1,698,538
                              ---------------     ---------------
Total current liabilities        14,848,222          10,572,006

Long-term debt, net of
current portion 70,088,269 56,905,152

Deferred income 10,714,735 12,196,330

Minority interests 456,631 203,449

Shareholders' equity 19,066,599 18,265,778
--------------- ---------------

$ 115,174,456 $ 98,142,715
=============== ===============

             ARLINGTON HOSPITALITY, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF OPERATIONS
                              (UNAUDITED)
----------------------------------------------------------------------

                     Three Months Ended            Year Ended
                        December 31,               December 31,
                  -------------------------- -------------------------
                     2001          2000         2001         2000
                  ------------ ------------ ------------ ------------
Revenue:
Hotel operations:
    AmeriHost Inn
     hotels       $10,023,773   $10,937,515 $45,081,431 $49,228,661
    Other hotels    3,041,147     2,599,170   11,301,107   12,123,035
Development and
   construction       978,962      (714,380)      1,933,882    6,982,678
Hotel sales and
   commissions      2,833,346             0        12,922,459            0
Management
   services           336,939       316,873            1,066,645    1,251,107
Employee leasing    790,586     1,472,684    4,678,189    5,979,363
Other               169,612             0                 169,612      586,276
                  ------------ ------------ ------------ ------------

                   18,174,365    14,611,862      77,153,235   76,151,120
                  ------------ ------------ ------------ ------------
Operating costs
and expenses:
Hotel operations:
    AmeriHost Inn
     hotels         7,721,703     8,694,556   32,919,678   34,811,649
    Other hotels    2,528,417     2,395,343    9,194,835    9,858,175
Development and
   construction       640,916      (464,091)   1,479,947    6,901,617
Hotel sales and
   commissions      2,785,858             0    9,621,536            0
Management
   services           169,148       190,254      716,802      806,959
Employee leasing    715,017     1,417,128    4,564,508    5,868,189
Other                 1,340         8,210        2,958      489,064
                  ------------ ------------ ------------ ------------
                   14,562,399    12,241,400   58,500,264   58,735,653
                  ------------ ------------ ------------ ------------
                    3,611,966     2,370,462   18,652,971   17,415,467

Depreciation and
   amortization     1,277,064     1,238,485    4,676,069    4,542,461
Leasehold rents
   - hotels         1,437,950     1,465,596    6,510,436    6,524,930
Corporate general
   and
   administrative     430,790       407,014    1,907,742    1,694,611
                  ------------ ------------ ------------ ------------
Operating income
(loss)               466,162      (740,633)   5,558,724    4,653,465

Other income
(expense):
Interest expense (1,149,106)   (1,252,097) (5,153,590) (5,605,550)
Interest income     317,919       199,400      821,839      786,806
Other income        (88,344)      109,737      525,880      381,867
Gain on sale of
   assets                   0       144,405      886,338    6,663,124
Equity in net
   income and
   (losses) of
   affiliates        (530,785)      (59,073)    (925,654)    (101,872)
                  ------------ ------------ ------------ ------------
Income (loss)
before minority
interests and
income taxes        (984,154)   (1,598,261)   1,713,537    6,777,840

Minority interests
in operations of
consolidated
subsidiaries and
partnerships          (8,346)       29,546     (343,437)     (60,939)
                  ------------ ------------ ------------ ------------
Income (loss)
before income
taxes               (992,500)   (1,568,715)   1,370,100    6,716,901

Income tax
(expense) benefit 358,000 635,000 (615,000) (2,707,000)
------------ ------------ ------------ ------------

Net income
(loss) $ (634,500) $ (933,715) $ 755,100 $ 4,009,901
============ ============ ============ ============

Income per
common share
- diluted $ (0.13) $ (0.19) $ 0.13 $ 0.74
============ ============ ============ ============

Weighted average
shares outstanding
- diluted basis 5,129,275 5,228,594 5,181,571 5,271,852
============ ============ ============ ============

Arlington Hospitality, Inc. is a hotel management and development company that builds and manages mid-priced hotels. As of December 31, 2001, Arlington Hospitality, Inc. owns or manages 78 properties in 16 states, including 66 AmeriHost Inn hotels, for a total of 5,772 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.

###

Contact:
James B. Dale, Chief Financial Officer
847-228-5401 x 361
[email protected]

Also See	Amerihost Properties, Inc. dba Arlington Hospitality Reduces Seasonal Net Loss by 46% / May 2001
	AmeriHost Properties Reports 1999 Occupancy of 55.2% for 71 AmeriHost Inn Hotels / Jan 2000

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