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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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WESTCOAST HOSPITALITY CORPORATION
(Exact name of registrant as specified in its charter)
Washington 91-1032187
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
201 W. North River Drive, Suite 100
Spokane, Washington 99201
(509) 459-6100
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
DONALD K. BARBIERI
President and Chief Executive Officer
WestCoast Hospitality Corporation
201 W. North River Drive, Suite 100
Spokane, Washington 99201
(509) 459-6100
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
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Copies to:
BENJAMIN F. STEPHENS
Riddell Williams P.S.
1001 Fourth Avenue Plaza, Suite 4500
Seattle, Washington 98154
(206) 624-3600
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Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
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Proposed Maximum
Title of Each Class of Securities Aggregate Offering Amount of
to Be Registered Price(1) Registration Fee
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<S> <C> <C> <C> <C>
Common Stock, par value $.01 per share(2) $1,642,328 $434.00
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(1) Estimated pursuant to Rule 457(c) under the Securities Act solely for the
purpose of calculating the registration fee, based upon the last reported sale
of the common stock $6.875 as quoted on the New York Stock Exchange on February
10, 2000. (2) To be offered by certain selling shareholders.
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The registrant hereby undertakes to amend this Registration Statement
on such date or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until this Registration Statement
shall become effective on such date as the SEC, acting pursuant to said Section
8(a), may determine.
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The information in this prospectus is not complete and may be changed.
The selling shareholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and is not soliciting an
offer to buy these securities in any state where the offer of sale is not
permitted.
Subject to completion, dated February 24, 2000
238,884 Shares
WESTCOAST HOSPITALITY CORPORATION
Common Stock
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Certain shareholders of WestCoast Hospitality Corporation ("WestCoast") may
offer for sale up to 238,884 shares of common stock at various times at market
prices prevailing at the time of sale or at privately negotiated prices. The
selling shareholders may sell the common stock to or through broker-dealers, who
may receive compensation in the form of discounts, concessions or commissions.
WestCoast will not receive any proceeds from the sale of the shares by the
selling shareholders. WestCoast will pay all expenses (other than selling
commissions and fees and stock transfer taxes) of the registration and sale of
the shares.
The common stock trades on the New York Stock Exchange ("NYSE") under the symbol
"CVH." We have just completed the formal change of our corporate name from
Cavanaughs Hospitality Corporation to WestCoast Hospitality Corporation, and are
in the process of changing the NYSE to "WEH" (see "Recent Events"). On February
10, 2000, the last reported sales price of the common stock on NYSE was $6.875
per share.
Investing in the common stock involves a high degree of risk. See "Risk Factors"
beginning on page 5.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
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FORWARD-LOOKING INFORMATION
This prospectus includes "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. The Act
provides a "safe harbor" for forward-looking statements to encourage companies
to provide prospective information about themselves so long as they identify
these statements as forward-looking and provide meaningful cautionary statements
identifying important factors that could cause actual results to differ from the
projected results. All statements other than statements of historical fact we
make in this Prospectus or in any document incorporated by reference are
forward-looking. In particular, the statements herein or incorporated by
reference regarding industry prospects and our future results of operations or
financial position are forward-looking statements. Forward-looking statements
reflect our current expectations and are inherently uncertain. Our actual
results may differ significantly from our expectations. The section entitled
"Risk Factors" describes some, but not all, of the factors that could cause
these differences.
HOW TO OBTAIN MORE INFORMATION
We file reports, proxy statements and other information with the
Securities and Exchange Commission. We have just completed the formal change of
our corporate name from Cavanaughs Hospitality Corporation to WestCoast
Hospitality Corporation, and are in the process of changing that reference on
the NYSE (see "Recent Events"). The filed documents we refer to below were filed
under the name Cavanaughs Hospitality Corporation. For the sake of consistency
throughout this document, we use our current name of WestCoast. You may read any
document we file at the SEC's public reference rooms in Washington, D.C.,
Chicago, Illinois and New York, New York. Please call the SEC toll free at
1-800-SEC-0330 for information about its public reference rooms. You may also
read our filings at the SEC's web site at http://www.sec.gov.
We have filed with the SEC a registration statement on Form S-3 under
the Securities Act. This prospectus does not contain all of the information in
the registration statement. We have omitted certain parts of the registration
statement, as permitted by the rules and regulations of the SEC. You may inspect
and copy the registration statement, including exhibits, at the SEC's public
reference facilities or web site. Our statements in this prospectus about the
contents of any contract or other document are not necessarily complete. You
should refer to the copy of each contract or other document we have filed as an
exhibit to the registration statement for complete information.
The SEC allows us to "incorporate by reference" into this prospectus
the information contained in documents we file with it. This means that we can
disclose important information to you by referring you to those documents. The
information we incorporate by reference is considered a part of this prospectus,
and later information we file with the SEC will automatically update and
supersede this information. We incorporate by reference the documents listed
below and any future filings we make with the SEC under Sections 13(a), 13(c),
14 and 15(d) of the Securities Exchange Act of 1934 until this offering is
completed:
1. Our Annual Report on Form 10-K for the year ended December 31, 1998;
2. Our Proxy Statement on Form DEF 14A for its April 19, 1999 Annual
General Meeting of Stockholders;
3. Our Quarterly Reports on Form 10-Q for the quarters ended March 31,
1999, June 30, 1999 and September 30, 1999;
4. Our report of the acquisition of WestCoast Hotels Inc. and related
property on Form 8-K;
4. The description of the common stock in our Registration Statement on
Form S-1 as amended in Amendment o. 3 filed on March 27, 1998; and
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5. All other documents filed by us pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this prospectus and prior
to the termination of this offering.
You may obtain copies of these documents (other than exhibits) free of
charge by contacting WestCoast's corporate secretary at our principal offices,
which are located at 201 W. North River Drive, Suite 100, Spokane, Washington
99201, telephone number (509) 459-6100.
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. The selling shareholders
are not making an offer of these securities in any state where the offer is not
permitted. You should not assume that the information in this prospectus or any
prospectus supplement is accurate as of any date other than the date on the
front of the document.
THE COMPANY
WestCoast Hospitality Corporation is a hotel operating company that
owns, operates, franchises, acquires, develops, renovates and repositions full
service hotels in the Western United States under its proprietary brand names,
"Cavanaughs(R)" and "WestCoast(R)". Substantially all of WestCoast's assets,
including the hotels, are owned by or for the benefit of Cavanaughs Hospitality
Limited Partnership, a Delaware limited partnership. Cavanaughs Hospitality
Limited Partnership is also in the process of being renamed as WestCoast
Hospitality Limited Partnership (see "Recent Events"). WestCoast manages the day
to day operations of the partnership in its capacity as sole general partner.
The Company currently has ownership interests and operates 24 hotel properties,
manages an additional 9 properties and franchises an additional 13 properties,
totaling 46 hotels in 9 states, including Alaska, Arizona, California, Hawaii,
Idaho, Montana, Oregon, Utah and Washington. The Company intends to re-brand 18
of its 19 Cavanaughs hotels to the WestCoast brand during 2000 (see "Recent
Events"). Additionally, the Company provides computerized ticketing for
entertainment events and arranges Broadway and other entertainment event
productions. Further, during the second quarter 1999, the Company announced the
launch of www.TicketsWest.com(TM), an Internet ticketing service offering
consumers up-to-the-minute information on live entertainment and the ability to
make real-time ticket purchases of the best available seats to events through
the website. The Company owns and manages ticketing operations in Washington,
Oregon, Idaho, Montana and Colorado. The Company also leases retail and office
space in buildings owned by the Company and manages residential and commercial
properties in Washington, Idaho and Montana.
We are seeking to become the dominant full service hotel company in the
Western United States and Canada by providing customers with access to a
WestCoast brand hotel in multiple locations throughout the region. Our growth
strategy focuses on:
o the acquisition and re-branding of full service hotels with
the WestCoast name;
o the acquisition, conversion and redevelopment of non-hotel
properties into WestCoast brand hotels;
o the construction of new WestCoast hotels;
o the expansion of existing WestCoast hotels;
o the management of third party owned hotels; and
o franchising of WestCoast hotels to third party owners and
operators.
Our operating strategy is designed to enhance our revenue and operating
margins by increasing revenue per available room, average daily rates, occupancy
and operating efficiencies at our hotels. This strategy includes:
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o building brand name recognition by maintaining our strategic
focus on the Western United States and Canada;
o promoting a coordinated marketing program utilizing corporate
level sales and marketing departments in conjunction with
local hotel-based sales and marketing personnel;
o controlling operating expenses and achieving cost reductions
through operating efficiencies and economies of scale;
o enhancing guest satisfaction and loyalty by providing high
quality service;
o utilizing our yield management and proprietary management
information systems to enable the general managers of each
hotel to optimize revenue per available room, average daily
rates, occupancy and net income;
o maintaining a consistent level of quality at the hotels
through our maintenance and capital expenditure programs;
o emphasizing the quality of our food and beverage services to
attract convention, group and special event business and to
create local awareness of the hotels;
o providing valuable guest benefit programs that promote
customer loyalty, such as frequent flier mileage and repeat
guest programs; and
o attracting and retaining qualified employees by providing
ongoing training and stock incentive programs at all levels of
employment to enhance productivity and align the efforts of
employees with our objectives.
WestCoast's principal executive offices are located at 201 W. North
River Drive, Suite 100, Spokane, Washington 99201 and its telephone number is
(509) 459-6100. Our website addresses are www.Cavanaughs.com.,
www.WestCoastHotels.com and www.TicketsWest.com.
Recent Events
On October 26, 1999, WestCoast acquired substantially all of the assets
of The Show Terminal, LLC (d.b.a. Colorado Neighborhood Box Office),
headquartered in Colorado Springs, Colorado. The acquisition was the first
expansion of WestCoast operations into the state of Colorado. Colorado
Neighborhood Box Office sells tickets to entertainment events throughout the
Colorado Springs area. Since the acquisition, TicketsWest.com(TM) has announced
an agreement to sell ski lift tickets for Colorado area resorts through the King
Soopers grocery chain, located in and around the cities of Fort Collins, Denver,
Boulder, and Colorado Springs, Colorado.
On November 1, 1999, WestCoast acquired Oregon Ticket Company, Inc.
(d.b.a. Fastixx), headquartered in Portland, Oregon. The acquisition increased
the number of TicketsWest.com(TM) outlets from 23 to 116 and expanded the
Entertainment Division's geographic presence into Northern California, Oregon
and Western Washington.
On January 4, 2000, WestCoast acquired WestCoast Hotels, Inc.,
headquartered in Seattle, Washington. Effective February 3, 2000 the Articles of
Incorporation of Cavanaughs Hospitality Corporation were amended to change our
name to WestCoast Hospitality Corporation. We intend to re-brand 18 of our 19
Cavanaughs hotels to the WestCoast brand in 2000. The acquisition grows the
chain to 46 hotels with 8,766 rooms and increases the Company's lodging presence
from five states to nine. Of the 46 hotels, we
o have ownership interest in and manage 24 hotels with 4,620
rooms;
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o manage and market an additional 9 hotels with 1,698 rooms; and
o market under the WestCoast brand an additional 13 hotels with
2,448 rooms.
The acquisition opens up a new revenue stream for us in the form of fee-based
management and franchise revenues from its WestCoast brand, something not
previously offered by the Company under the Cavanaughs brand.
Key management of WestCoast Hotels, Inc., including Rodney D. Olson and
Michael Bashaw, remain with the combined company. Rodney D. Olson has been
nominated to our Board of Directors, to be voted on at our upcoming annual
stockholders meeting. Donald Barbieri continues as Chairman, President and Chief
Executive Officer of WestCoast Hospitality Corporation.
WestCoast Hotels was established in 1910 as Vance Hotels. In 1987, with
three properties, Vance Hotels changed its name to become WestCoast Hotels.
Hotel ownership has been a component of the WestCoast Hotel business, but they
have primarily focused on the franchise and management of hotels. They were
recently named in "Top 20 Management Companies in the U.S." by Hotel and Motel
Management and Hotels Magazines.
We believe that combining WestCoast with Cavanaughs will result in
synergies that include revenue enhancements as well as expense reductions.
Revenue enhancement opportunities include cross selling among hotels and
overflowing to Company hotels in cities that have multiple properties, such as
Seattle, Washington, where previously we had only one hotel. In addition, the
ongoing development of a new frequent-guest reward program, called
WestAwards(TM), may increase occupancy by offering more variety in ways to spend
points earned from the program, such as stays at resort locations or
entertainment from TicketsWest.com(TM), the Company's Entertainment Division.
Expense reductions should be realized in combining marketing, spreading overhead
costs, eliminating duplicate corporate expenses and purchasing economies of
scale.
On January 24, 2000 the Company announced a strategic alliance with
Canada based Coast Hotels & Resorts. Coast Hotels & Resorts is western Canada's
largest regional hotel chain, with 20 hotels and 2,816 rooms in British Columbia
and Alberta. Its principal office is located in Vancouver, British Columbia. The
relationship between the two full-service lodging companies includes a marketing
affiliation as well as cross selling among the hotels. Other components of the
alliance include an integrated website designed to allow one-stop shopping for
the combined 66 hotels and 11,582 rooms throughout the western United States and
Canada, as well as a joint central purchasing program that takes advantage of
volume purchasing and rebates. Finally, integration of toll-free call centers
between the two companies will result in the ability for either call center to
sell inventory from both hotel chains.
The marketing affiliation will include publishing joint hotel and
resort directories as well as producing combined marketing presentations that
will focus on cross selling groups among the hotels. The tour and travel segment
is expected to generate the largest portion of the cross selling between the two
brands.
The integration of the websites will aggregate content from both hotel
chains as well as TicketsWest.com(TM). In 1999, Cavanaughs Entertainment
presented the Broadway musical Cats in Edmonton and Calgary, Alberta, both
cities in which Coast has hotels. TicketsWest.com(TM) expects to participate in
other ticketing opportunities in western Canada, which would provide the
opportunity to package entertainment with hotel rooms from Coast Hotels &
Resorts.
RISK FACTORS
This prospectus and the documents we incorporate by reference contain
forward-looking statements that involve risks and uncertainties. The statements
in this prospectus that are not purely historical are forward-looking
statements. Words such as "anticipates," "expects," "intends," "plans,"
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"believes," "seeks," estimates," and similar expressions identify
forward-looking statements. But the absence of these words does not mean the
statement is not forward-looking. We cannot guarantee the accuracy of these
statements, which are subject to risks, uncertainties and assumptions that are
difficult to predict. Our actual results may differ materially from those we
forecast in forward-looking statements due to a variety of factors, including
those set forth in the following risk factors, elsewhere in this prospectus and
in the documents we have incorporated by reference. Before investing in the
common stock, you should consider carefully the following factors, as well as
the information contained in the rest of this prospectus and in the documents we
incorporate by reference.
We Are Subject to Conditions Affecting the Lodging Industry.
Our revenues and our operating results are subject to conditions
affecting the lodging industry. These include:
o changes in the national, regional and local economic climate;
o local conditions such as an oversupply of, or a reduction in
demand for, hotel rooms;
o the attractiveness of our hotels to consumers and competition
from comparable hotels;
o the quality philosophy and performance of the managers of our
hotels;
o changes in room rates and increases in operating costs due to
inflation and other factors;
o changes in travel patterns, extreme weather conditions,
cancellation of or changes in, events scheduled to occur in
our markets; and
o the need periodically to repair and renovate our hotels.
Adverse changes in these conditions could adversely affect our
financial performance.
Due to the Geographic Concentration of Our Hotels, Our Results of Operations Are
Subject to Fluctuations in Regional Economic Conditions.
Many of our hotels are currently located in the Pacific Northwest 35 of
46 hotels are located in Oregon, Washington, Idaho and Montana. As a result, our
results of operations and financial condition are significantly dependent on the
economy of the Pacific Northwest. The Pacific Northwest economy is dependent in
large part on a number of major industries, including agriculture, tourism,
technology, timber and aerospace. These industries may be affected by:
o changes in governmental regulations and economic conditions;
o the relative strength of national and local economy; and
o the rate of national and local unemployment.
Any of these factors could materially affect the local economies in which these
industries operate.
To the extent that general economic or other conditions in the Pacific
Northwest decline and result in a decrease in customer demand in this region,
our performance and results of operations will be adversely effected. In
addition, we operate or market multiple hotels within several cities, including
Seattle, Portland, Spokane and Yakima, Washington. A downturn in general
economic or other relevant conditions in these specific markets or in any other
market in which we operate could adversely impact our results of operations and
financial condition.
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Our Expenses May Remain Constant Even if Our Revenues Drop.
The expenses of owning property are not necessarily reduced when
circumstances such are market factors and competition cause a reduction in
income from a hotel. Our financial condition and ability to service debt could
be adversely effected by:
o Interest rate levels;
o the availability of financing;
o the cost of compliance with government regulations, including
zoning and tax laws; and
o changes in governmental regulations, including those governing
usage, zoning and taxes.
We May Be Unable to Sell Hotel Properties When Appropriate.
Real estate investments generally cannot be sold quickly. We may not be
able to vary our portfolio promptly in response to economic or other conditions.
This inability to respond promptly to changes in the performance of our
investments could adversely affect our financial condition and ability to
service debt. in addition, sales of appreciated real property could generate
material adverse tax consequences, which may make it disadvantageous for us to
sell hotels.
Our Growth Is Dependent on Our Ability to Increase the Number of Our Hotels.
We intend to continue to pursue an aggressive growth strategy for the
foreseeable future. Our ability to successfully pursue new growth opportunities
will depend on a number of factors. These include our ability to:
o identify suitable hotels for acquisition, development,
management or franchise;
o finance acquisitions and renovations; and
o successfully integrate new hotels into our operations.
There is no assurance that suitable hotels for acquisition,
development, management or franchise will be available or, if available, will be
on acceptable terms or that capital will be available on acceptable terms. While
we believe that we have sufficient capital to fund our growth strategy in the
near term, this belief is based on adequate cash being generated from operations
and the availability of a revolving credit facility. There is no assurance that
we will generate adequate cash from operations. Even if we generate anticipated
cash from operations, we may seek to obtain additional debt or equity financing,
depending upon the amount of capital required to pursue future growth
opportunities or address other liquidity needs.
We May Not Be Able to Effectively Integrate New Hotels Into Our Operations.
We cannot assure you that:
o we will be able to successfully integrate new hotels or new
hotel products into our operations;
o new hotels or new hotel products will achieve revenue and
profitability levels comparable to our existing hotels; or
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o the combined business will be profitable. Newly acquired,
developed or converted hotels typically begin with lower
occupancy and room rates.
Furthermore, our expansion within our existing markets could adversely
affect the financial performance of our existing hotels in those markets or our
overall results of operations. Expansion into new markets may present operating
and marketing challenges that are different from those we currently encounter in
our existing markets. There is no assurance that we will be able to anticipate
all of the changing demands that expanding operations will impose on our
management and management information and reservation systems. The failure to
adapt our systems and procedures could have a material adverse effect on our
business.
We May Not Be Able to Implement Our Growth Strategy.
We intend to pursue a full range of growth opportunities, including
acquisitions, new construction, management for third party owners and franchise
agreements. We compete for growth opportunities with national and regional
hospitality companies, some of which have greater name recognition, marketing
support, reservation system capacity and financial resources than we do. Our
ability to make acquisitions is dependent upon our relationships with owners of
existing hotels and certain major hotel investors. Our failure to compete
successfully for acquisitions or to attract or maintain relationships with hotel
owners and major hotel investors could adversely affect our ability to expand
our portfolio of hotels. Our inability to implement our external growth strategy
would limit our ability to grow our revenue base.
Our Growth Is Dependent on Our Ability to Expand Our Operations.
We intend to acquire additional hotels, ticket, and entertainment
operations in the future. Acquisitions entail the risk that investments will
fail to perform in accordance with our expectations. We also intend to continue
the redevelopment and re-branding of other acquired hotels into "WestCoast"
hotels. In addition, we expect to develop new hotels in the future, depending on
market conditions. Hotel redevelopment and new project development is subject to
a number of risks, including:
o construction delays or cost overruns;
o risks that the hotels will not achieve anticipated performance
levels; and
o new project commencement risks such as receipt of zoning,
occupancy and other required governmental permits and
authorizations.
As a result, we could incur substantial costs for a project that is
never completed. There is no assurance that financing for these projects will be
available or, if available, will be on acceptable terms. In addition, the
renovation of our hotels is subject to a number of risks, including, without
limitation, construction delays or cost overruns due to various factors. Any
unanticipated delays or expenses in connection with the renovation of our hotels
could have an adverse effect on our results of operations and financial
condition.
We Are Subject to Real Estate Ownership Risks.
Our ownership portfolio contains 29 properties, including 24 hotels, 2
office properties, 1 retail property and 2 mixed-use office and retail
properties. Accordingly, we are subject to varying degrees of risk generally
related to owning real estate. These risks, many of which are beyond our
control, include:
o changes in national, regional and local economic conditions;
o local real estate market conditions;
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o changes in interest rates, and the availability, cost and
terms of financing and lease obligations;
o the impact of present or future environmental legislation and
adverse changes in zoning laws and other regulations; and
o compliance with environmental laws.
Management's Control of the Company May Limit Your Ability to Change the
Composition of the Board of Directors, and May Deter a Change in Control.
Members of the Barbieri family beneficially own, in the aggregate,
54.5% of our outstanding shares of common stock. Donald Barbieri, our Chairman,
President and Chief Executive Officer, has sole voting and investment power with
respect to 27.74% of the outstanding shares of common stock. So long as the
Barbieri family owns a substantial portion of the outstanding common stock, it
will have the ability to control our management and affairs and will have the
power to approve or block most actions requiring the approval of our
shareholders, including a merger, or a sale of all the assets of the company.
Compliance With Governmental Regulations Could Affect Our Results of Operations.
The lodging industry is subject to numerous federal, state and local
government regulations, including building and zoning requirements. Also, the
Company is subject to laws governing its relationship with employees, including
minimum wage requirements, overtime, working conditions and work permit
requirements. An increase in the minimum wage rate, employee benefit costs or
other costs associated with employees could adversely affect the company. Under
the Americans with Disabilities Act of 1990, all public accommodations are
required to meet certain federal requirements related to access and use by
disabled persons. Although we believe we are in compliance with the ADA, there
is no assurance that a material ADA claim will not be asserted against us.
We Could Experience Seasonal Fluctuations in Our Results of Operations.
The lodging industry is seasonal in nature, with the months from May
through October generally accounting for a greater portion of annual revenues
than the months from November through April. For example, for the year ended
December 31, 1999, our revenues in the first through fourth quarters were 20.1%,
25.4%, 30.7% and 23.8%, respectively, of our total revenue for such year and our
net income (loss) for the first through fourth quarters was 4.4%, 37.5%, 48.9%
and 9.2%, respectively, of our total net income for that year. Quarterly
earnings also may be adversely affected by events beyond our control, such as
extreme weather conditions, economic factors and other considerations affecting
travel.
We Are Dependent on Our Senior Management.
We place substantial reliance on the lodging industry experience and
the continued availability of our senior management led by Donald Barbieri,
Chairman, President and Chief Executive Officer, Arthur Coffey, Executive Vice
President and Chief Financial Officer, Richard Barbieri, Senior Vice President
and General Counsel, Thomas Barbieri, Executive Vice President of Hotel
Operations, and David Bell, Senior Vice President Development. We believe that
our future success and our ability to manage future growth depend in large part
upon the efforts of the senior management and on our ability to attract and
retain other highly qualified personnel. Competition for such personnel is
intense, and there can be no assurance that we will be successful in attracting
and retaining such personnel. The Company does not carry key man insurance on
any of its senior management.
We May Be Unable to Locate Lessees for Our Rental Property.
We own approximately 590,000 square feet of office and retail space in
Spokane, Washington and Kalispell, Montana. We are subject to the risk that upon
expiration, leases may not be renewed, the
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space may not be relet or the terms of renewal or reletting (including the cost
of required renovations) may be less favorable than current lease terms. There
is no assurance that we will be able to locate tenants for rental spaces vacated
in the future or receive satisfactory rents from tenants. Delays or difficulties
in attracting tenants and costs incurred in preparing for tenants could reduce
cash flow, decrease the value of a property or jeopardize our ability to pay our
expenses. Vacancies could subsequently result due to termination of a tenant's
tenancy, the tenant's financial failure or a breach of the tenant's obligations.
We Are Subject to Risks Associated With Managing and Leasing Properties Owned by
Third Parties.
We plan to continue to manage and lease properties owned by third
parties. Risks associated with these activities include the risk that the
related contracts (which are typically cancelable upon 30-days' notice or upon
certain events, including sale of the property) will be terminated by the
property owner or will be lost in connection with a sale of such property, that
contracts may not be renewed upon expiration or may not be renewed on terms
consistent with current terms and that the rental revenues upon which management
and leasing fees are based will decline as a result of general real estate
market conditions or specific market factors affecting properties managed or
leased by WestCoast, resulting in decreased management or leasing fee income.
The Performance of Our Entertainment, Management and Services Division Is
Particularly Subject to Fluctuations in Economic Conditions.
Our entertainment services include computerized event ticketing and the
presentation of touring Broadway shows. In addition, we attract additional hotel
guests through cross-selling the products of our entertainment, management and
services division. This division is vulnerable to risks associated with changes
in general regional and economic conditions, the potential for significant
competition and a change in consumer trends, among others. In addition, there is
no assurance that Broadway shows will continue to tour the Northwest or that
such productions will use the Company as a promoter.
Certain Types of Losses May Exceed Insurance Coverage.
We carry comprehensive liability, public area liability, fire, flood,
boiler and machinery, extended coverage and rental loss insurance covering our
properties. There are, however, certain types of losses that are not generally
insured because it is not economically feasible to insure against such losses.
Should an uninsured loss or a loss in excess of insured limits occur with
respect to any particular property, we could lose our capital invested in the
property, as well as the anticipated future revenue from the property and, in
the case of debt which is with recourse to WestCoast, would remain obligated for
any mortgage debt or other financial obligations related to the property.
Although we believe that our properties are adequately insured, any such loss
would adversely affect us. There is no assurance that material losses in excess
of insurance proceeds will not occur in the future.
We Are Subject to Environmental Risks Which Could Be Costly.
Our operating costs may be affected by the obligation to pay for the
cost of complying with existing environmental laws, ordinances and regulations,
as well as the cost of compliance with future legislation. Under current
federal, state and local environmental laws, ordinances and regulations, a
current or previous owner or operator of real property may be liable for the
costs of removal or remediation of hazardous or toxic substances on, under or in
such property. Such laws often impose liability whether or not the owner or
operator knew of, or was responsible for, the presence of such hazardous or
toxic substances. In addition, the presence of contamination from hazardous or
toxic substances, or the failure to remediate such contaminated property
properly, may adversely affect the ability of the owner of the property to
borrow using such property as collateral for a loan or to sell such property.
Environmental laws also may impose restrictions on the manner in which a
property may be used or transferred or in which businesses may be operated, and
may impose remedial or compliance costs. The costs of defending against claims
of liability or remediating contaminated property and the cost
10
<PAGE>
of complying with environmental laws could materially adversely affect our
results of operations and financial condition.
In connection with our acquisition of a property, a Phase I
environmental assessment is conducted by a qualified independent environmental
engineer. Phase I environmental assessments have been performed on all of our
properties and we expect that all of our future hotel acquisitions will be
subject to a Phase I environmental assessment. A Phase I environmental
assessment involves researching historical usage's of a property, databases
containing registered underground storage tanks and other matters, including an
on-site inspection, to determine whether an environmental issue exists with
respect to the property which needs to be addressed. If the results of a Phase I
environmental assessment reveal potential issues, a Phase II environmental
assessment, which may include soil testing, ground water monitoring or borings
to locate underground storage tanks, may, depending upon the circumstances, be
ordered for further evaluation.
It is possible that Phase I environmental assessments will not reveal
all environmental liabilities or compliance concerns or that there will be
material environmental liabilities or compliance concerns of which WestCoast
will not be aware. While we have not been notified by any governmental authority
and we have no other knowledge of any material noncompliance, liability or claim
relating to hazardous or toxic substances or other environmental substances in
connection with any of our properties, no assurances can be given that future
laws, ordinances or regulations will not impose any material environmental
liability or the current environmental condition of our existing and future
properties will not be affected by the condition of neighboring properties (such
as the presence of leaking underground storage tanks) or by third parties
(whether neighbors such as dry cleaners or others) unrelated to WestCoast.
We Have Incurred Debt Financing and May Incur Increased Indebtedness in
Connection With Acquisitions.
Our outstanding indebtedness as of December 31, 1999 was approximately
$125.9 million. Substantially all of our outstanding indebtedness is secured by
individual properties, including our hotels. Borrowings under the Revolving
Credit Facility are used by us to repay existing indebtedness, to fund the
acquisition of hotels, to fund renovations and capital improvements to hotels
and for general working capital needs. The Revolving Credit Facility is secured
by deeds of trust on certain of our properties. At December 31, 1999, our
outstanding indebtedness had a weighted average annual interest rate of 7.7%. At
December 31, 1999, our ratio of long-term debt (including capital lease
obligations) to equity was 1.2 to 1. We had incurred additional debt and
obligations associated with the acquisition of WestCoast Hotels Inc. of
approximately $61.4 million subsequent to December 31, 1999.
Neither our Articles of Incorporation nor our Bylaws limit the amount
of indebtedness that we may incur. Subject to limitations in our debt
instruments, we expect to incur additional debt in the future to finance
acquisitions and renovations and for general corporate purposes. Our continuing
indebtedness could increase our vulnerability to general economic and lodging
industry conditions (including increases in interest rates) and could impair our
ability to obtain additional financing in the future and to take advantage of
significant business opportunities that may arise. Our indebtedness is, and will
likely continue to be, secured by mortgages on our hotels. There is no assurance
that we will be able to meet our debt service obligations and, to the extent
that we cannot, we risk the loss of some or all of our assets, including our
hotels, to foreclosure. Adverse economic conditions could cause the terms on
which borrowings become available to be unfavorable. In such circumstances, if
we are in need of capital to repay indebtedness in accordance with its terms or
otherwise, we could be required to liquidate one or more investments in our
hotels at times which may not permit realization of the maximum return on such
investments.
Most of our outstanding indebtedness bears interest at a variable rate.
Economic conditions could result in higher interest rates, which would increase
debt service requirements on variable rate debt and could reduce the amount of
cash available for various corporate purposes.
11
<PAGE>
SELLING SHAREHOLDERS
The following table presents information regarding the selling
shareholders and the number of shares they may offer by this prospectus.
<TABLE>
<CAPTION>
Shares Beneficially Owned After
Shares that May Be Sold Offering
------------------------------------ ----------------------------------
Shares
Beneficially Percentage of Percentage of
Owned Prior to Common Stock Common Stock
Name of Shareholder Offering Amount Outstanding Amount Outstanding
- -------------------------- ---------------- -------------- ----------------- ------------- -----------------
<S> <C> <C> <C> <C> <C>
David Leiken 105,160 105,160 * 0 0%
Thomas Keenan 33,724 33,724 * 0 0%
Templin's Resort and 100,000 100,000 * 0 0%
Conference Center Inc.
---------------- -------------- ----------------- ------------- -----------------
- ---------
* Less than 1%
</TABLE>
Mr. Leiken has a consulting agreement with the Company. Mr. Keenan has
an employment agreement with the Company. Templin's Resort and Conference Center
Inc. is beneficially owned, in part, by Robert Templin, who has been a director
of the Company since April 1998. The selling shareholders acquired the shares
from WestCoast in private transactions on June 15, 1999 as to Templin's Resort
and November 1, 1999 as to Mr. Leiken and Mr. Keenan.
The selling shareholders have represented to us that they purchased the
shares for their own account for investment only and not with a view towards
selling or distributing them, except pursuant to sales registered under the
Securities Act or exemptions. The Company agreed with the selling shareholders
to file the registration statement to register the resale of the shares. The
Company agreed to prepare and file all necessary amendments and supplements to
the registration statement to keep it effective until the earlier of (1)
February 14, 2001 or (2) the date on which the selling shareholders have sold
all the shares.
PLAN OF DISTRIBUTION
We are registering the shares on behalf of the selling shareholders and
their successors (including donees and pledgees, who may sell shares they
receive from the selling shareholders after the date of this prospectus). The
selling shareholders or their successors may sell all of the shares from time to
time in one or more types of transactions (which may include block transactions)
on the NYSE, in the over-the-counter market, or on one or more other securities
markets and exchanges, in privately negotiated transactions or through writing
put or call options on the shares, through short sales of the shares, or a
combination of any such methods of sale. They may sell the shares at fixed
prices that may change, at market prices prevailing at the time of sale, at
prices relating to prevailing market prices or at negotiated prices. The selling
shareholders have advised us that they have not entered into any agreements,
understandings or arrangements for the sale of the shares with any underwriters
or broker-
12
<PAGE>
dealers and that no underwriter or coordinating broker is now acting in
connection with the proposed sale of shares.
The Company will not receive any proceeds from the sale of the shares
by the selling shareholders. The Company may suspend use of this prospectus
under certain circumstances.
The selling shareholders may sell the shares directly to purchasers or
to or through broker-dealers, which may act as agents or principals. These
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the selling shareholders and/or the purchasers for whom such
broker-dealers may act as agents or to whom they sell as principal, or both
(which compensation as to a particular broker-dealer might be in excess of
customary commissions).
In effecting sales, brokers and dealers engaged by any selling
shareholder or successor may arrange for other brokers or dealers to
participate. Broker-dealers may agree with a selling shareholder to sell a
specified number of such shares at a stipulated price per share, and, to the
extent such broker-dealer is unable to do so acting as agent for the selling
shareholder, to purchase as principal any unsold shares at the price required to
fulfill the broker-dealer commitment to the selling shareholder. Broker-dealers
who acquire shares as principal may thereafter resell such shares from time to
time in transactions (which may involve block transactions and sales to and
through other broker-dealers, including transactions of the nature described
above) in the over-the-counter market or otherwise at prices and on terms then
prevailing at the time of sale, at prices then related to the then-current
market price or in negotiated transactions and, in connection with such
resale's, may pay to or receive from the purchasers of such shares commissions
as described above. From time to time a selling shareholder may pledge its
shares pursuant to the margin provisions of its customer agreements with its
brokers. Upon a default by a selling shareholder, the broker may offer and sell
the pledged shares from time to time.
The selling shareholders and broker-dealers who assist in the sale of
the shares may be "underwriters" within the meaning of Section 2(11) of the
Securities Act. Any commissions or profit they earn on any resale of the shares
may be underwriting discounts and commissions under the Securities Act.
Selling shareholders who are "underwriters" within the meaning of
Section 2(11) of the Securities Act will be subject to the prospectus delivery
requirements of the Securities Act, which may include delivery through the
facilities of the NYSE pursuant to Rule 153 under the Securities Act. We have
informed the selling shareholders that the anti-manipulative provisions of
Regulation M of the Exchange Act may restrict their sales in the market.
Each selling shareholder may also sell all or a portion of the shares
in the open market in accordance with Rule 144 under the Securities Act, rather
than pursuant to this Prospectus, provided they meet the criteria and conform to
the requirements of the Rule.
Upon our receipt of notification from the selling shareholders that any
material arrangement has been entered into with a broker-dealer for the sale of
shares through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing:
o the name of each such selling shareholder and of the
participating broker-dealer(s);
o the number of shares involved;
o the price at which such shares were sold;
o the commissions paid or discounts or concessions allowed to
such broker-dealer(s), where applicable;
13
<PAGE>
o that such broker-dealer(s) did not conduct any investigation
to verify the information set out or incorporated by reference
in this prospectus; and
o other facts material to the transaction. In addition, upon our
being notified by a selling shareholder that a donee or
pledgee intends to sell more than 500 shares, a supplement to
this prospectus will be filed.
The Company will pay all expenses (other than selling commissions and
fees and stock transfer taxes) of the registration and sale of the shares.
We cannot guarantee that the selling shareholders will sell any or all
of the shares.
14
<PAGE>
VALIDITY OF COMMON STOCK
Riddell Williams P.S., Seattle, Washington, will provide WestCoast with
an opinion as to legal matters in connection with the common stock offered by
this prospectus.
EXPERTS
The financial statements of WestCoast Hospitality Corporation
incorporated in this Prospectus by reference to the Annual Report on Form 10-K
for the year ended December 31, 1998, have been so incorporated in reliance on
the report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
We have not authorized any person to give you any information or to
make any representations other than those contained in this prospectus. You
should not rely on any information or representations other than this
prospectus. This prospectus is not an offer to sell or a solicitation of an
offer to buy any securities other than the common stock. It is not an offer to
sell or a solicitation of an offer to buy securities if the offer or
solicitation would be unlawful. The affairs of WestCoast may have changed since
the date of this prospectus. You should not assume that the information in this
prospectus is correct at any time subsequent to its date.
---------------------
238,884 Shares
WESTCOAST HOSPITALITY CORPORATION.
Common Stock
---------------
PROSPECTUS
---------------
February ___, 2000
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses, other than
underwriting discounts payable, by the registrant in connection with the sale of
common stock being registered. All amounts are estimates except the SEC
registration fee.
SEC registration fee $ 434.00
Legal fees and expenses 15,000.00
Accounting fees and expenses 1,000.00
Miscellaneous fees and expenses 5,000.00
Total $ 21,434.00
Item 15. Indemnification of Directors and Officers
Sections 23B.08.500 through 23B.08.600 of the Washington Business
Corporation Act authorize a court to award, or a corporation's board of
directors to grant, indemnification to directors and officers on terms
sufficiently broad to permit indemnification under certain circumstances for
liabilities arising under the Securities Act of 1933, as amended (the
"Securities Act"). Section 5.1 of the registrant's Bylaws provides for
indemnification of the registrant's directors, officers, employees and agents to
the maximum extent permitted by Washington law.
Section 23B.08.320 of the Washington Business Corporation Act
authorizes a corporation to limit a director's liability to the corporation or
its shareholders for monetary damages for acts or omissions as a director,
except in certain circumstances involving intentional misconduct, knowing
violations of law or illegal corporate loans or distributions, or any
transaction from which the director personally receives a benefit in money,
property or services to which the director is not legally entitled. Article
Seven of the registrant's Articles of Incorporation contains provisions
implementing, to the fullest extent permitted by Washington law, such
limitations on a director's liability to the registrant and its shareholders.
Item 16. Exhibits
5.1 Opinion of Riddell Williams P.S., counsel to the registrant,
regarding the legality of the Common Stock (Contained in
Exhibit 23.2)
23.1 Consent of PricewaterhouseCoopers LLP, independent auditors
23.2 Consent of Riddell Williams P.S.
24.1 Power of Attorney (contained on signature page)*
* Previously filed.
Item 17. Undertakings
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement to include
any material information with respect to the plan of distribution not previously
disclosed in this Registration Statement or any material change to such
information in this Registration Statement;
II-1
<PAGE>
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered, which remain, unsold at the
termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
D. The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part
of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment
No. 1 to Registration Statement to be signed on its behalf by the undersigned,
thereunder duly authorized, in the City of Spokane, State of Washington, on the
24th day of February, 2000.
WestCoast Hospitality Corporation
By: /s/ Donald K. Barbieri
---------------------------
Chairman, President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to Registration Statement has been signed by the following
persons in the capacities indicated below on the day of February, 2000.
<TABLE>
<CAPTION>
Signature Title
---------- -----
<S> <C> <C>
Chairman, President, Chief Executive Officer,
/s/ Donald K. Barbieri * and Director (Principal Executive Officer)
------------------------- ------------------------------------------
Donald K. Barbieri
Executive Vice President, Chief Financial
Officer and Director (Principal Financial
Officer)
/s/ Arthur M. Coffey *
------------------------
Arthur M. Coffey
Executive Vice President Hotel Operations
and Director
/s/ Thomas M. Barbieri *
-------------------------
Thomas M. Barbieri
Senior Vice President, General Counsel
and Director
/s/ Richard L. Barbieri *
--------------------------
Richard L. Barbieri
II-3
<PAGE>
Senior Vice President Development
/s/ David M. Bell *
--------------------------
David M. Bell
Director
/s/ Peter F. Stanton *
--------------------------
Peter F. Stanton
Director
/s/ Ronald R. Taylor *
--------------------------
Ronald R. Taylor
Director
/s/ Robert G. Templin *
---------------------------
Robert G. Templin
Director
/s/ Stephen R. Blank *
-------------------------
Stephen R. Blank
* By /s/ Richard L. Barbieri
-------------------------
Richard L. Barbieri
Attorney-in-Fact
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
Exhibit
Number
-----
5.1 Opinion of Riddell Williams P.S., counsel to the registrant,
regarding the legality of the Common Stock (Contained in
Exhibit 23.2)
23.1 Consent of PricewaterhouseCoopers LLP, independent auditors
23.2 Consent of Riddell Williams P.S.
24.1 Power of Attorney (contained on signature page)*
*Previously filed.
Exhibit 23.1
[Letterhead of PricewaterhouseCoopers LLP - Spokane, Washington]
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement on Form S-3 of our report dated January 29, 1999 relating
to the financial statements, which appear in Cavanaughs Hospitality
Corporation's Annual Report on Form 10-K, for the year ended December 31, 1998.
We also consent to the reference to us under the heading "Experts" in such
Registration Statement.
/s/ PricewaterhouseCoopers LLP
February 24, 2000
Exhibit 23.2
[Riddell Williams P.S. Letterhead]
February 24, 2000
WestCoast Hospitality Corporation
201 W. North River Drive, Suite 100
Spokane, WA 99201
Ladies and Gentlemen:
We have acted as counsel to you in connection with the preparation and
filing of a registration statement on Form S-3 (the "Registration Statement")
under the Securities Act of 1933, as amended (the "Securities Act"), which you
are filing with the Securities and Exchange Commission with respect to the
resale of 238,884 shares (the "Shares") of common stock of WestCoast Hospitality
Corporation (the "Company"), $.01 par value per share.
We have examined the Registration Statement and such documents and
records of the Company and other documents as we have deemed necessary for the
purpose of this opinion. Based on and subject to the foregoing, we are of the
opinion that the Shares have been duly authorized and are validly issued, fully
paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and any amendment thereto, including any and all
post-effective amendments and any registration statement relating to the same
offering that is to be effective upon filing pursuant to Rule 462(b) under the
Securities Act, and to the reference to our firm in the Prospectus of the
Registration Statement under the heading "Validity of Common Stock." In giving
such consent, we do not thereby admit that we are in the category of persons
whose consent is required under Section 7 of the Securities Act.
Very truly yours,
/s/ Riddell Williams P.S.
