<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 2000 COMMISSION FILE NO. 1-11915
SUNBURST HOSPITALITY CORPORATION
10770 COLUMBIA PIKE
SILVER SPRING, MD. 20901
(301) 592-3800
Delaware 53-1985619
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(STATE OF INCORPORATION) (I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
-------------------------------------------
(Former name, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
--- ---
SHARES OUTSTANDING
CLASS AT JUNE 30, 2000
----- ----------------
Common Stock, $0.01
par value per share 15,818,000
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================================================================================
1
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SUNBURST HOSPITALITY CORPORATION
INDEX
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PAGE NO.
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PART I. FINANCIAL INFORMATION:
Condensed Consolidated Balance Sheets -
June 30, 2000 (Unaudited) and December 31, 1999 3
Condensed Consolidated Statements of Income -
Three and six months ended June 30, 2000 and 1999 (Unaudited) 4
Condensed Consolidated Statements of Cash Flows -
Six months ended June 30, 2000 and 1999 (Unaudited) 5
Notes to Condensed Consolidated Financial Statements (Unaudited) 6
Management's Discussion and Analysis of Operations and
Financial Condition 8
PART II. OTHER INFORMATION 11
2
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<TABLE>
<CAPTION>
SUNBURST HOSPITALITY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
As of
----------------------------------
June 30, December 31,
2000 1999
--------------- ---------------
(Unaudited)
<S> <C> <C>
ASSETS
Real estate, net $ 314,404 $ 359,258
Real estate held for sale 53,873 34,498
Receivables (net of allowance for doubtful
accounts of $553 and $500, respectively) 13,852 7,851
Other assets 7,088 8,617
Cash and cash equivalents 4,099 2,965
--------------- ---------------
Total assets $ 393,316 $ 413,189
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Debt
Senior debt and capital leases $ 113,312 $ 151,807
Subordinated debt 149,534 141,856
--------------- ---------------
262,846 293,663
Accounts payable and accrued expenses 30,773 30,096
Deferred income taxes ($6,985 and $5,368, respectively)
and other liabilities 7,984 6,383
--------------- ---------------
Total liabilities 301,603 330,142
Total stockholders' equity 91,713 83,047
--------------- ---------------
Total liabilities and stockholders' equity $ 393,316 $ 413,189
=============== ===============
</TABLE>
The accompanying notes are an integral part of these Condensed Consolidated
Balance Sheets.
3
<PAGE>
SUNBURST HOSPITALITY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
For the three months ended For the six months ended
June 30, June 30,
------------ ----------- ----------- -----------
2000 1999 2000 1999
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES
Rooms $ 50,784 $ 49,240 $ 94,420 $ 93,392
Food and beverage 4,822 4,434 9,060 8,500
Other 2,146 2,032 4,252 4,085
------------ ----------- ----------- -----------
Total revenues 57,752 55,706 107,732 105,977
------------ ----------- ----------- -----------
OPERATING EXPENSES
Departmental expenses 17,723 18,425 33,885 34,335
Undistributed operating expenses 17,986 16,686 34,673 33,550
Depreciation and amortization 6,305 6,447 12,737 12,668
Corporate 3,396 2,462 6,555 5,129
Gains on property dispositions, net of impairment charges (7,401) - (7,639) -
------------ ----------- ----------- -----------
Total operating expenses 38,009 44,020 80,211 85,682
------------ ----------- ----------- -----------
OPERATING INCOME 19,743 11,686 27,521 20,295
------------ ----------- ----------- -----------
INTEREST EXPENSE 6,673 6,285 13,170 12,382
------------ ----------- ----------- -----------
INCOME BEFORE INCOME TAXES, EXTRAORDINARY
ITEM AND CUMULATIVE EFFECT OF A CHANGE IN
ACCOUNTING PRINCIPLE 13,070 5,401 14,351 7,913
Income taxes 5,584 2,176 6,104 3,181
------------ ----------- ----------- -----------
INCOME BEFORE EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING
PRINCIPLE 7,486 3,225 8,247 4,732
------------ ----------- ----------- -----------
EXTRAORDINARY ITEM - Loss from early extinguishment of
debt (net of $116, $213, $116 and $255 tax benefit, respectively) 176 336 176 433
CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING
PRINCIPLE - (net of $421 tax benefit) - - - 599
------------ ----------- ----------- -----------
NET INCOME $ 7,310 $ 2,889 $ 8,071 $ 3,700
============ =========== =========== ===========
Basic earnings per share
------------------------
Income before extraordinary item and cumulative
effect of a change in accounting principle $ 0.48 $ 0.17 $ 0.54 $ 0.25
Extraordinary item (0.01) (0.02) (0.01) (0.03)
Cumulative effect of a change in accounting principle - - - (0.03)
------------ ----------- ----------- -----------
Net income $ 0.47 $ 0.15 $ 0.53 $ 0.19
============ =========== =========== ===========
Diluted earnings per share
--------------------------
Income before extraordinary item and cumulative
effect of a change in accounting principle $ 0.48 $ 0.17 $ 0.53 $ 0.24
Extraordinary item (0.02) (0.02) (0.01) (0.02)
Cumulative effect of a change in accounting principle - - - (0.03)
------------ ----------- ----------- -----------
Net income $ 0.46 $ 0.15 $ 0.52 $ 0.19
============ =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these Condensed Consolidated
Statements of Income.
4
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SUNBURST HOSPITALITY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(Unaudited)
<TABLE>
<CAPTION>
For the six months ended June 30,
--------------------------------
2000 1999
-------------- --------------
<S> <C> <C>
Cash Flows From Operating Activities
Income before extraordinary item and cumulative effect of a change
in accounting principle $ 8,247 $ 4,732
Adjustments to reconcile income before extraordinary item and cumulative
effect of a change in accounting principle to net cash provided by
operating activities:
Depreciation and amortization 12,737 12,816
Other non-cash items 9,544 7,238
Changes in assets and liabilities (3,839) (2,418)
-------------- -------------
Net cash provided by operating activities 26,689 22,368
-------------- -------------
Cash Flows From Investing Activities
Investment in property and equipment (19,058) (28,053)
Proceeds from sale of property and equipment 31,800 10,390
-------------- -------------
Net cash provided by (utilized in) investing activities 12,742 (17,663)
-------------- -------------
Cash Flows From Financing Activities
Net repayment of debt (38,491) (1,485)
Proceeds from issuance of stock 226 175
Purchases of treasury stock (32) (2,415)
-------------- -------------
Net cash utilized in financing activities (38,297) (3,725)
-------------- -------------
Increase in cash and cash equivalents 1,134 980
Cash and cash equivalents at beginning of period 2,965 4,113
-------------- -------------
Cash and cash equivalents at end of period $ 4,099 $ 5,093
============== =============
</TABLE>
The accompanying notes are an integral part of these Condensed Consolidated
Statements of Cash Flows.
5
<PAGE>
SUNBURST HOSPITALITY CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000
(Unaudited)
The accompanying condensed consolidated financial statements of Sunburst
Hospitality Corporation and subsidiaries (the "Company") have been prepared by
the Company without audit. Certain information and footnote disclosures normally
included in financial statements presented in accordance with generally accepted
accounting principles have been condensed or omitted. The Company believes the
disclosures made are adequate to make the information presented not misleading.
The condensed consolidated financial statements should be read in conjunction
with the Company's consolidated financial statements for the year ended December
31, 1999 and notes thereto included in the Company's Form 10-K, dated March 30,
2000.
In the opinion of the Company, the accompanying unaudited condensed consolidated
financial statements reflect all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position of the
Company as of June 30, 2000, the results of operations for the three and six
months ended June 30, 2000 and 1999, respectively, and cash flows for the six
months ended June 30, 2000 and 1999, respectively. Interim results are not
necessarily indicative of full year performance because of the impact of
seasonal and short-term variations.
The following table illustrates the reconciliation of net income and number of
shares used in the basic and diluted earnings per share ("EPS") calculations (in
thousands, except per share data).
<TABLE>
<CAPTION>
For the three For the six
months ended months ended
June 30, June 30,
-----------------------------------------------------------------------
2000 1999 2000 1999
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income before extraordinary item and cumulative
effect of a change in accounting principle $ 7,486 $ 3,225 $ 8,247 $ 4,732
Weighted average shares 15,619 19,199 15,202 19,305
-----------------------------------------------------------------------
Basic EPS before extraordinary item and cumulative
effect of a change in accounting principle $ 0.48 $ 0.17 $ 0.54 $ 0.25
=======================================================================
Shares for basic EPS 15,619 19,199 15,202 19,305
Effect of dilutive employee stock options 118 205 263 179
-----------------------------------------------------------------------
Shares for diluted EPS 15,737 19,404 15,465 19,484
-----------------------------------------------------------------------
Diluted EPS before extraordinary item and cumulative
effect of a change in accounting principle $ 0.48 $ 0.17 $ 0.53 $ 0.24
=======================================================================
</TABLE>
The effect of dilutive securities is computed using the treasury stock method
and average market prices during the period. Certain options to purchase common
stock were not included in the computation of diluted earnings per share because
the exercise price of the options exceeded the average market price of the
common shares for the period. In February, 2000, the Board of Directors
authorized the Company, through March 16, 2000, to offer current employees the
opportunity to terminate stock options with a strike price of $5.25 (the then
current fair market price) or higher, and replace the terminated options with an
award of restricted stock based upon a Black-Scholes valuation of the stock
options terminated. At the expiration of the offer, 1,300,994 shares under
option with an average strike price of $7.00, were, accordingly, terminated and
638,355 shares of restricted stock were issued.
As of June 30, 2000, the Company owned and managed 79 hotels with 10,747 rooms
in 26 states under the following brand names: Comfort, Clarion, Sleep, Quality
and MainStay.
At June 30, 1999, the Company has nine hotels that are currently being marketed
for sale with a carrying value of $53.9 million. In accordance with Statement
of Financial Accounting Standards No. 121 ("SFAS No. 121"),
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<PAGE>
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of," the Company has discontinued depreciating these assets while
they are held for sale. In addition, SFAS No. 121 requires that assets held for
sale be reported at the lower of the carrying amount or fair value less costs to
sell. The Company began actively marketing an additional six hotels for sale
during the quarter ended June 30, 2000. In accordance with SFAS No. 121, the
Company recorded an impairment charge of approximately $1.9 million during the
quarter to write certain properties down to their fair value less costs to sell.
The nine hotels held for sale reported total revenues of $10.1 million and $18.6
million for the three and six months ended June 30, 2000, and $9.8 million and
$18.0 million for the three and six months ended June 30, 1999, respectively.
Income from operations before interest, taxes, depreciation and amortization and
allocations for corporate expenses of the nine hotels was $2.5 million and $3.9
million for the three and six months ended June 30, 2000, and $2.5 million and
$3.8 million for the three and six months ended June 30, 1999, respectively.
During the six months ended June 30, 2000, the Company sold five hotels (738
rooms) for total proceeds of approximately $31.8 million. The Company recorded
net gains from these dispositions of approximately $9.5 million during the six
months ended June 30, 2000
At the time of the Choice Spin-off and as subsequently amended, Choice and the
Company entered into a Strategic Alliance Agreement pursuant to which: (i)
requires the Company to give Choice two weeks notice of the filing of a hotel
franchise application with any competitor of Choice; (ii) the Company has also
agreed, barring a material change in market conditions, to continue to develop
MainStay Suites hotels so that it will have opened a total of 25 MainStay Suites
hotels by October 15, 2001; (iii) Choice will provide certain credits against
MainStay Suites franchise fees otherwise payable by the Company if certain
financial performance goals for those hotels are not achieved; (iv) provides a
put/call option for Choice to acquire three of Sunburst's MainStay Suites hotels
in 2000 at a price equal to Sunburst's original cost, with the proceeds used to
reduce the balance of Sunburst's term note to Choice; (v) Choice and the Company
have agreed to continue to cooperate with respect to matters of mutual interest,
including new product and concept testing for Choice in hotels owned by the
Company; and (vi) the Company has authorized Choice, on a non-exclusive basis,
to negotiate with third-party vendors on the Company's behalf for the purchase
of certain items. The Strategic Alliance Agreement expires on October 15, 2002.
7
<PAGE>
SUNBURST HOSPITALITY CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION
June 30, 2000
The Company is a national owner and operator of hotel properties with a
portfolio at June 30, 2000 of 79 hotels (10,747 rooms) in a total of 26 states.
The Company operates its hotels under the following brands: MainStay, Comfort,
Quality, Clarion and Sleep. The Company's continuing business consists primarily
of guest room revenue, meeting room revenue, and food and beverage revenue from
owned and operated hotels.
COMPARISON OF RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 2000 and 1999:
------------------------------------------------------------------------
Total revenues for the three months ended June 30, 2000 increased 3.7% to $57.8
million, compared to $55.7 million in the prior year, in spite of a 10.3%
decrease in the number of rooms to 10,747 at June 30, 2000 from 11,987 at June
30, 1999. The increase in revenue is primarily due to a 10.3% overall increase
in revenue per available room ("RevPAR"). Significant to the 10.3% increase in
RevPAR is the 24.7% increase in RevPAR for the extended-stay segment. The
Company has opened 21 mid-priced, extended-stay hotels since October 1996. As
the extended-stay hotels continue to ramp-up, occupancy increased to 78.5% in
the second quarter of 2000 from 71.5% in the second quarter of the prior year
and average daily rates increased to $64.94 from $57.09, or 13.8%. At June 30,
2000, extended-stay revenue represented approximately 17.1% of total revenue
compared to 10.6% in the prior year.
For those properties opened at least one year, occupancies increase to 74.2% in
the second quarter of 2000 from 72.1% in the second quarter of the prior year
and average daily rates increased to $67.08 from $66.08, or 1.5%. This resulted
in an increase in RevPAR of 4.4% on a "same store" basis.
Hotel operating profit increased to 38.2% in the second quarter of 2000 from
37.0% in the prior year. Notwithstanding the tight labor markets within which
the Company operates, various cost control measures enabled the Company to hold
most operating cost increases below the rate of total revenue increases. In
addition, operating margins benefit as the Company opens and ramps-up newly
developed, mid-priced extended-stay hotels, which operate at higher margins than
the Company's traditional hotels.
Earnings before interest, taxes, depreciation and amortization ("EBITDA")
increased to $18.6 million in the second quarter of 2000 from $18.1 million in
the second quarter of the prior year. The Company considers EBITDA to be an
indicative measure of operating performance for its business. Such information
should not be considered an alternative to net income, operating income, cash
flow from operations or any other operating or liquidity performance measure
defined by generally accepted accounting principles. EBITDA presented by the
Company may not necessarily be comparable to EBITDA defined and presented by
other companies.
Interest expense increased 6.2% to $6.7 million in the second quarter of the
current year from $6.3 million in the second quarter of the prior year. The
increase is principally the result of increased short-term rates associated with
the floating rate bank debt.
Notwithstanding the opening of a number of newly developed hotels during the
past year, depreciation expense decreased slightly to $6.3 million in the
current quarter from $6.4 million in the second quarter of the prior year. The
increased depreciation expense associated with newly developed hotels was offset
by a decline in depreciation expense relative to hotels held for sale. In
accordance with Statement of Financial Accounting Standards No. 121, the Company
discontinued depreciating those assets while they are held for sale. The nine
hotels held for sale at June 30, 1999, have been reported at the lower of the
carrying amount or fair value less cost of sale. The nine hotels held for sale
have a combined book value of $53.9 million at June 30, 1999.
Income before income taxes, extraordinary item and cumulative effect of a change
in accounting principle increased $7.7 million to $13.1 million in the second
quarter of 2000 from $5.4 million in the second quarter of 1999. The increase
results from the net gains on the sale of assets during the second quarter of
2000. After the effect of an extraordinary loss from early debt redemption and
cumulative effect of a change in accounting principle, the Company reported an
increase of $4.4 million in net income to $7.3 million for the second quarter of
2000 from $2.9 million during the prior year's second quarter. The
extraordinary loss from early debt redemption during the current quarter of
$176,000 (net of $116,000 tax benefit) and the second quarter of 1999 of
$336,000 (net of $213,000 tax benefit) related to the early redemption of debt
collateralized by one property sold during the second
8
<PAGE>
quarter of 2000 and two properties sold during the second quarter of 1999,
respectively.
COMPARISON OF RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2000 and 1999:
----------------------------------------------------------------------
Total revenues for the six months ended June 30, 2000 increased 1.7% to $107.7
million, compared to $106.0 million in the prior year. The increase results
primarily from the 7.5% increase in revenues per available room. For those
properties opened at least one year, occupancies increased to 69.7% from 67.5%
and average daily rates increased to $66.06 from $65.60.
For the six months ended June 30, 2000, hotel operating profit increased to
36.4% from 35.9% in the prior year. EBITDA decreased 1.0%, to $32.6 million for
the six months ended June 30, 2000 from $33.0 million for the same period in the
prior year as a result of the sale of twelve hotels over the last twelve months.
Interest expense increased $788,000 or 6.4% to $13.2 million for the six months
ended June 30, 2000 from $12.4 million from the prior year as a result of
increased short-term rates associated with the floating rate bank debt.
Income before income taxes, extraordinary item and cumulative effect of a change
in accounting principle increased $6.4 million to $14.4 million for the six
months ended June 30, 2000 from $7.9 million in the prior year. The increase
results from the gain on the sale of assets during the first six months of 2000.
After the effect of an extraordinary loss from early debt redemption and
cumulative effect of a change in accounting principle, the Company reported an
increase of $4.4 million in net income to $8.1 million for the six months ended
June 30, 2000 from $3.7 million during the prior year. The extraordinary loss
from early debt redemption during the first six months of the current year of
$176,000 (net of $116,000 tax benefit) and the prior year of $433,000 (net of
$255,000 tax benefit) related to the early redemption of debt collateralized by
one property sold during the first six months of 2000 and three properties sold
during the same period of 1999, respectively.
On January 1, 1999, the Company adopted the AICPA Accounting Standards Executive
Committee's Statement of Position 98-5, "Reporting on the Cost of Start-Up
Activities" ("SOP 98-5"). In accordance with that new accounting
pronouncement, the Company wrote off the unamortized balance of deferred pre-
opening costs on its balance sheet at January 1, 1999 and recorded an after-tax
charge of $599,000 (net of $421,000 tax benefit) for the cumulative effect of
that change in accounting principle. Beginning January 1, 1999, pre-opening
costs associated with properties under construction are expensed as incurred.
Liquidity and Capital Resources:
-------------------------------
The Company maintains an $80 million committed line of credit with a group of
four banks to support on-going operations and to fulfill capital requirements.
The Credit Facility expires in October 2000. Availability under that line of
credit is a function of trailing cash flow, but amounted to the full $80.0
million during the quarter ended June 30, 2000. Borrowings under the line
amounted to $19 million at June 30, 2000 compared to $51 million at December 31,
1999. The Company is currently exploring refinancing options, but expects that
planned asset sales will result in the outstanding balance under the Credit
Facility being significantly reduced prior to its expiration.
At June 30, 2000, the Company has $262.8 million of long-term debt outstanding.
The $149.5 million of subordinated debt payable to Choice Hotels International,
Inc. matures in October, 2002. The Choice note provides additional financial
flexibility as interest is not payable until maturity.
The Company has been a developer of MainStay Suites, a mid-priced extended-stay
hotel product. At June 30, 2000, twenty-one Sunburst-owned MainStay Suites were
open and operating. The cost of developing a MainStay Suites approximates $6.0
million. At June 30, 2000, costs incurred to date on acquiring sites amounted
to $5.4 million. Accordingly, the estimated cost to complete is approximately
$16.8 million. In order for the Company to continue the extended-stay
development program, additional capital will be required.
On March 27, 2000, the Company entered into a Put/Call agreement with Choice
which provides an option for Choice to acquire three of Sunburst's MainStay
Suites hotels in 2000 at a price equal to Sunburst's original cost, with the
proceeds used to reduce the balance of Sunburst's term note to Choice. On
August 31, 2000, Choice will acquire three of Sunburst's MainStay Suites located
in Brentwood, Tennessee; Greenville, South Carolina and Pittsburgh,
Pennsylvania. Proceeds of $16.3 million will be used to reduce the balance of
Sunburst's term note to Choice. The three put/call hotels reported total
revenues of $4.4 million and EBITDA of $1.5 million over the last twelve months.
9
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The Company's objective is to reduce its overall leverage. The Company
continuously evaluates its existing portfolio and seeks to sell hotels that have
limited upside potential, or that are projected to under-perform, in order to
reduce debt and redeploy capital to higher yielding opportunities. The Company
has identified nine such properties that as of June 30, 2000, are being marketed
for sale. During the quarter ended June 30, 2000, the Company sold four hotels
for total proceeds of $29.7 million. The five hotels sold during 2000 reported
last twelve months revenue of $11.4 million and EBITDA of $2.3 million.
The Company's Board of Directors authorized a Treasury share purchase program
aggregating six million shares. The program was completed in January, 2000 and
six million shares have been purchased at an aggregate cost of $30 million, or
$5.00 per share. The Company does not anticipate expanding the Treasury share
purchase program, at least until such time as additional financing is arranged.
At June 30, 2000, the Company's debt to book capitalization amounted to 74.1%
and debt to market capitalization was 78.9%.
While operating cash flow, credit available under the Company's bank facility
and proceeds from the sale of hotels are expected to be adequate to fund
operations and committed construction projects, accessing additional capital is
imperative in order for the Company to implement development and growth plans.
Also, given the relatively short maturities of the note payable to Choice and
the near term expiration of the bank facility, refinancing or extending
maturities is an imperative. If the Company is unsuccessful in completing
planned asset sales or otherwise arranging for an extension of its bank facility
which otherwise expires October 15, 2000, alternative sources of capital will
have to be identified and accessed.
FORWARD-LOOKING STATEMENTS
---------------------------
The statements contained in this document that are not historical facts are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995.
A number of important factors could cause the Company's actual results for
future periods to differ materially from those expressed in any forward-looking
statements made by, or on behalf of the Company.
Certain statements contained in this Form 10-Q, including those in the
section entitled "Management's Discussion and Analysis of Operating Results and
Financial Condition," contain forward-looking information that involves risk and
uncertainties. Actual future results and trends may differ materially depending
on a variety of factors discussed in the "Risk Factors" section included in the
Company's SEC filings, including (a) the Company's success in implementing its
business strategy, including its success in arranging financing where required
and (b) the nature and extent of future competition, and political, economic and
demographic developments in regions where the Company does business or in the
future may do business.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The Company undertakes no
obligation to revise or update these forward-looking statements.
10
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PART II OTHER INFORMATION
-------------------------
ITEM 1. LEGAL PROCEEDINGS
-----------------
The Company is not party to any litigation, other than routine litigation
incidental to the business of the Company. None of such litigation, either
individually or in the aggregate, is expected to be material to the business,
financial condition or results of operations of the Company.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits
Exhibit 27.01 - Financial Data Schedule - June 30, 2000
(b) The following reports were filed pertaining to the quarter ended June 30,
2000.
None
11
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SIGNATURE
Pursuant to the requirements of the Securities Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
SUNBURST HOSPITALITY CORPORATION
Date: August 9, 2000 /s/ James A. MacCutcheon
--------------- --------------------------
By: James A. MacCutcheon
Executive Vice President,
Chief Financial Officer and
Treasurer
12
