ATLANTA Suburban Lodges of America intends to resume open market purchases of its stock under a previously authorized stock buyback program. The company had stopped its stock repurchases on October 1, 2000.
David Krischer, CEO, said because of the continued low market price of the company s stock, and in order to enhance shareholder value, Suburban Lodges suspended its stock repurchase program in the final quarter of 2000 and engaged Salomon Smith Barney to evaluate the company s strategic alternatives.
Upon completing the strategic analysis, the company will record pre-tax expenses associated with the review, totaling approximately $475,000, in the first quarter of 2001. In addition, Suburban Lodges has decided to actively dispose of 11 sites it had been holding for future hotel development. As a result of this decision, the company will record an impairment reserve, expected to be approximately $6.7 million before reduction for income tax savings, in the first quarter. The company also expects to realize in excess of $10 million upon the ultimate sale of these sites.
As of March 31, 2001, the company purchased 3,735,798 of the 4,500,000 shares of common stock authorized for repurchase by its Board of Directors and has 12,003,570 shares outstanding. (4/13/01)