LODGIAN, INC.
3445 PEACHTREE ROAD
ATLANTA, GA 30326
www.lodgian.com
NYSE: LOD
[GRAPHIC OMITTED]
AT LODGIAN, INC.
Robert Cole Thomas Eppich
Chief Executive Officer Chief Financial Officer
[email protected] [email protected]
(404) 365-3800 (404) 365-4469
AT THE FINANCIAL RELATIONS BOARD / BSMG (WWW.FRBINC.COM)
Todd Tarbox Georganne Palffy Darcy Bretz
General Information Analysts/Investors Media Inquiries
[email protected] [email protected] [email protected]
(312) 640-6742 (312) 640-6768 (312) 640-6756
FOR IMMEDIATE RELEASE
TUESDAY, JULY 25, 2000
LODGIAN ANNOUNCES PORTFOLIO OF HOTELS TO BE
SOLD AND DATE OF ANNUAL SHAREHOLDER MEETING
ATLANTA--JULY 25, 2000--LODGIAN, INC., (NYSE: LOD), today announced that it has
entered into an Agreement to sell ten of the Company's hotels, located in
Alaska, California, Idaho, New Mexico and Oregon to Sunstone Hotel Investors,
LLC for $132 million in cash. The closing of this transaction is anticipated to
occur no later than September 30, 2000 and is subject to customary closing
conditions. Proceeds will be used substantially to pay down debt.
"This transaction is consistent with Lodgian's previously announced strategy of
reducing debt by selling hotels, particularly those properties in markets where
the Company has concerns regarding future business trends," commented Robert S.
Cole, Lodgian's Chief Executive Officer. "The pricing of this deal not only
reflects an attractive cash flow multiple given today's overall hotel real
estate market environment, but also reflects a meaningful premium to the
Company's 2000 EBITDA multiple implied by our current stock price. In addition,
closing this transaction will be a significant step towards improving Lodgian's
overall leverage."
The properties to be sold include five Holiday Inns, two Hilton Garden Inns, as
well as one Sheraton, one Courtyard by Marriott, and one Marriott, comprising a
total of 2,135 rooms (see attached schedule). Several of these hotels are in
markets that are experiencing some level of weakness as a result of recent,
significant additions to supply.
The purchase price reflects an approximate 11% capitalization rate, after
capital reserves and management fees, of the 2000 estimated cash flow of the
hotels to be sold or a multiple of 8x earnings before interest, taxes,
depreciation and amortization (EBITDA). Upon closing, Lodgian will reduce its
annual interest expense by more than $11 million, based on current interest
rates. The Company expects to record a pre-tax loss associated with the sale of
these hotels of approximately $50 million. There are other potential
transactions in various stages of the Company's disposition pipeline, which, if
they occur, will result in gains that would somewhat offset this loss.
Additionally, Lodgian announces that its Annual Shareholder Meeting has been
scheduled for October 12, 2000. The meeting will take place at 10:00 A.M. in
Atlanta and further details will be provided at a later date.
ABOUT LODGIAN
Lodgian, Inc. owns or manages a portfolio of 128 hotels with approximately
24,000 rooms in 35 states and Canada. The hotels are primarily full service,
providing food and beverage service, as well as meeting facilities.
Substantially all of Lodgian's hotels are affiliated with nationally recognized
hospitality brands such as Holiday Inn, Crowne Plaza, Marriott, Sheraton,
Hilton, Doubletree and Westin.
Lodgian's common shares are listed on the New York Stock Exchange under the
symbol "LOD". Lodgian is a component of both the Russell 2000(R) Index,
representing small cap stocks, and the Russell 3000(R) Index, representing the
broader market.
FORWARD-LOOKING STATEMENTS
Note: Statements in this press release that are not strictly historical are
"forward-looking" statements that are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks, which may cause the
company's actual results in the future to differ materially from expected
results. These risks include, among others, competition within the lodging and
contract service industries; the relationship between supply and demand for
hotel rooms; the effects of economic conditions; issues associated with the
ongoing integration of the former Servico, Inc. and Impac Hotel Group, LLC; the
acquisition and renovation of existing hotels and the development of new hotels;
operating risks; the cyclical nature of the lodging industry; risks associated
with the dependence on franchisers of the company's lodging properties; and the
availability of capital to finance planned growth, as described in the company's
filings with the Securities and Exchange Commission.
FOR MORE INFORMATION ON LODGIAN TOLL-FREE VIA FAX, DIAL 1-800-PRO-INFO
(1-800-776-4636),
FOLLOW THE VOICE MENU PROMPTS AND ENTER THE COMPANY TICKER LOD (OR 563) OR VISIT
THE LODGIAN PAGE ON THE FRB WEB SITE AT WWW.FRBINC.COM
VISIT LODGIAN AT WWW.LODGIAN.COM
-more-
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LODGIAN, INC.
ADD-2-
SCHEDULE OF HOTELS
Holiday Inn, Anchorage, AK - 251 rooms
Holiday Inn, Boise, ID - 265 rooms
Sheraton, Concord, CA - 324 rooms
Holiday Inn, Hollywood, CA - 160 rooms
Hilton Garden Inn, Lake Oswego, OR - 181 rooms
Courtyard by Marriott, Livermore, CA - 121 rooms
Marriott, Portland, OR - 249 rooms
Hilton Garden Inn, Rio Rancho, NM - 129 rooms
Holiday Inn, Riverside, CA - 286 rooms
Holiday Inn, Wilsonville, OR - 169 rooms
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