U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended JUNE 30, 2001
--------------
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 For the transition period from to
Commission file number 0-22132
---------
BUCKHEAD AMERICA CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 58-2023732
-------- ----------
(State or other jurisdiction of (IRS Employer Identification No.
incorporation or organization)
7000 CENTRAL PARKWAY, SUITE 850, ATLANTA, GEORGIA 30328
-------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(770) 393-2662
--------------
(Registrant's telephone number, including area code)
N/A
---
(Former name, former address and former fiscal year,
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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date: July 31, 2001
Common stock, par value $.01 - 2,015,885 shares outstanding
-----------------------------------------------------------
1
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
BUCKHEAD AMERICA CORPORATION
AND SUBSIDIARIES
Condensed Consolidated Financial Statements
June 30, 2001 and 2000
(Unaudited)
2
BUCKHEAD AMERICA CORPORATION
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
June 30, 2001 and December 31, 2000
(Unaudited)
June 30, December 31,
ASSETS 2001 2000
---- ----
Current Assets:
Cash and cash equivalents, including restricted cash of $443,170 at
June 30, 2001 and $382,646 at December 31, 2000 $ 729,498 $ 1,345,671
Investment securities, including restricted securities of
$165,474 at June 30, 2001 and $182,067 at December 31, 2000 192,485 202,750
Accounts receivable, net 1,899,218 1,436,030
Current portions of notes receivable, net 669,801 832,055
Property held for sale, net 16,618,563 21,273,517
Other current assets 292,796 202,911
---------------------- -----------------------
Total current assets 20,402,361 25,292,934
Noncurrent portions of notes receivable, net 4,446,124 3,695,160
Property and equipment, at cost, net 17,205,347 20,967,076
Other assets 3,009,609 3,409,302
---------------------- -----------------------
$ 45,063,441 $ 53,364,472
====================== =======================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 3,229,095 $ 3,420,277
Current portions of notes payable 14,006,562 18,803,712
---------------------- -----------------------
Total current liabilities 17,235,657 22,223,989
====================== =======================
Noncurrent portions of notes payable 15,108,406 16,353,009
Other liabilities 208,288 269,330
---------------------- -----------------------
Total liabilities 32,552,351 38,846,328
====================== =======================
Minority interests 672,232 764,068
Shareholders' equity:
Series B preferred stock; par value $100; 200,000 shares
authorized; 30,000 shares issued and outstanding 3,000,000 3,000,000
Common stock; $.01 par value; 5,000,000 shares authorized;
2,113,881 shares issued and 2,015,885 and 2,025,023 shares
outstanding at June 30, 2001 and December 31,2000, respectively 21,139 21,139
Additional paid-in capital 7,897,530 7,897,530
Retained earnings 1,889,285 3,729,683
Accumulated other comprehensive loss (281,779) (245,229)
Treasury stock, 97,996 and 88,858 common shares
at June 30, 2001 and December 31,2000, respectively (687,317) (649,047)
---------------------- -----------------------
Total shareholders' equity 11,838,858 13,754,076
---------------------- -----------------------
$ 45,063,441 $ 53,364,472
====================== =======================
See accompanying notes to condensed consolidated financial statements.
3
BUCKHEAD AMERICA CORPORATION
AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Loss)
Six Months ended June 30, 2001 and 2000
(Unaudited)
2001 2000
---- ----
Revenues:
Hotel revenues $ 9,365,295 $ 12,305,170
Franchise fees, management fees, and other income 1,068,506 990,158
Interest income 244,197 241,384
-------------------- ---------------------
Total revenues 10,677,998 13,536,712
==================== =====================
Expenses:
Hotel operations 7,145,475 8,593,990
Other operating and administrative 1,918,866 1,744,342
Leasehold rent 1,330,754 1,333,197
Depreciation and amortization 542,763 815,922
Interest 1,557,413 1,418,588
-------------------- ---------------------
Total expenses $ 12,495,271 13,906,039
==================== =====================
Income (loss) before income taxes (1,817,273) (369,327)
Deferred income tax expense (benefit) - (148,000)
-------------------- ---------------------
Net income (loss) $ (1,817,273) (221,327)
==================== =====================
Net income (loss) per common share:
Basic (0.97) (0.18)
-------------------- ---------------------
Diluted (0.97) (0.18)
-------------------- ---------------------
Weighted average number of shares used to calculate net income (loss) per common
share:
Basic 2,017,459 2,020,641
-------------------- ---------------------
Diluted 2,017,459 2,020,641
==================== =====================
See accompanying notes to condensed consolidated financial statements.
4
BUCKHEAD AMERICA CORPORATION
AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Loss)
Three Months ended June 30, 2001 and 2000
(Unaudited)
2001 2000
---- ----
Revenues:
Hotel revenues $ 5,088,520 $ 6,354,575
Franchise fees, management fees, and other income 462,195 506,692
Interest income 123,708 124,977
--------------------- ------------------
Total revenues 5,674,423 6,986,244
===================== ==================
Expenses:
Hotel operations 3,501,871 4,313,015
Other operating and administrative 916,588 881,649
Leasehold rent 691,514 681,075
Depreciation and amortization 252,382 394,477
Interest 746,800 703,140
--------------------- ------------------
Total expenses 6,109,155 6,973,356
===================== ==================
Income (loss) before income taxes (434,732) 12,888
Deferred income tax expense - 2,000
--------------------- ------------------
Net income (loss) $ (434,732) 10,888
===================== ==================
Net income (loss) per common share:
Basic $ (0.25) $ (0.03)
--------------------- ------------------
Diluted $ (0.25) (0.03)
===================== ==================
Weighted average number of shares used to calculate net income (loss) per common
share:
Basic 2,015,885 2,015,106
===================== ==================
Diluted 2,015,885 2,015,106
===================== ==================
see accompanying notes to condensed consolidated financial statements.
5
BUCKHEAD AMERICA CORPORATION
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
Six Months Ended June 30, 2001 and 2000
(Unaudited)
2001 2000
------------------ ---------------
Cash flows from operating activities:
Net income (loss) $ (1,817,273) $ (221,327)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization 542,763 815,922
Sales of trading securities, net - 1,034,14
Minority interest in income (loss) (129,472) 129,024
Deferred income tax expense (benefit) - (148,000)
Increase in accounts receivable, net (463,188) (958,128)
Increase (decrease) in accounts payable and accrued expenses, net (191,182) 797,028
Other, net (177,212) 106,404
------------------ ---------------
Net cash provided by (used in) operating activities (2,235,564) 1,555,065
------------------ ---------------
Cash flows from investing activities:
Principal receipts on notes receivable 446,290 456,815
Originations of notes receivable (140,000) (510,000)
Capital expenditures (341,600) (1,794,638)
Proceeds from property and leasehold interest sales, net 1,651,418 581,391
Other, net 195,042 (298,306)
------------------ -----------------
Net cash provided by (used in) investing activities 1,811,150 (1,564,738)
------------------ -----------------
Cash flows from financing activities:
Repayments of notes payable (408,000) (715,890)
Proceeds from notes payable 240,000 483,717
Distributions to minority interest partners (27,648) (106,768)
Preferred stock dividends paid (23,125) (115,625)
Other, net 27,014 (52,759)
------------------ ---------------
Net cash provided by (used in) financing activities (191,759) (507,325)
------------------ ---------------
Net increase (decrease) in cash and cash equivalents (616,173) (516,998)
Cash and cash equivalents at beginning of period 1,345,671 2,390,856
------------------ ---------------
Cash and cash equivalents at end of period $ 729,498 $ 1,873,858
================== ===============
See accompanying notes to condensed consolidated financial statements.
6
BUCKHEAD AMERICA CORPORATION
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
June 30, 2001 and 2000
(Unaudited)
(1) Basis of Presentation
---------------------
The accompanying unaudited condensed consolidated financial statements do
not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
The results of operations for interim periods are not necessarily
indicative of the results that may be expected for a full year or any other
interim period. For further information, see the consolidated financial
statements included in the Company's Form 10-K for the year ended December
31, 2000.
(2) Comprehensive Income (Loss)
---------------------------
Total comprehensive income (loss) for the six months ended June 30, 2001
and 2000 was $(1,853,823) and $(267,986), respectively, and for the three
months ended June 30, 2001 and 2000 was $(447,175) and$(20,218),
respectively.
(3) Segment Information
-------------------
Condensed operating results for each Company segment for the six months
ended June 30, 2001 and 2000 are presented below:
Six months ended June 30, 2001
--------------------------------------------------------------------------------------
Hotel Hotel Hotel Development
Operations Management Franchising & Corporate Eliminations Consolidated
--------------------------------------------------------------------------------------
Revenues $ 9,365,295 864,657 1,010,592 245,781 (808,327) 10,677,998
Expenses 7,369,028 1,221,178 570,842 711,620 (808,327) 9,064,341
------------- -------------- ------------- -------------- -------------- -------------
EBITDAR* 1,996,267 (356,521) 439,750 (465,839) - 1,613,657
Rent 1,330,754 - - - - 1,330,754
Depreciation 400,500 67,263 3,000 12,000 - 542,763
Interest 1,222,677 - - 334,736 - 1,557,413
------------- -------------- ------------- -------------- -------------- -------------
Income (loss) before
income taxes $ (957,664) (423,784) 376,750 (812,575) - (1,817,273)
Six Months Ended June 30, 2000
--------------------------------------------------------------------------------------
Hotel Hotel Hotel Development
Operations Management Franchising & Corporate Eliminations Consolidated
----------- ---------- ----------- ----------- ------------ ------------
Revenues $ 12,305,170 947,772 904,207 369,307 (889,744) 13,536,712
Expenses 8,844,655 1,048,817 504,759 829,845 (889,744) 10,338,332
------------- -------------- ------------- -------------- -------------- -------------
EBITDAR* 3,460,515 (101,045) 399,448 (560,538) - 3,198,380
------------- -------------- ------------- -------------- -------------- -------------
Rent 1,333,197 - - - - 1,333,197
Depreciation 677,678 63,244 3,000 12,000 - 815,922
Interest 1,102,970 - - 315,618 - 1,418,588
------------- -------------- ------------- -------------- -------------- -------------
Income (loss) before
income taxes $ 346,670 (164,289) 336,448 (888,156) - (369,327)
============= ============== ============= ============== ============== =============
7
BUCKHEAD AMERICA CORPORATION
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
June 30, 2001 and 2000
(Unaudited)
Condensed operating results for each Company segment for the three months ended
June 30, 2001 and 2000 are presented below:
Three months ended June 30, 2001
--------------------------------------------------------------------------------------------
Hotel Hotel Hotel Development
Operations Management Franchising & Corporate Eliminations Consolidated
---------- ---------- ----------- ----------- ------------ ------------
Revenues $ 5,088,520 402,481 505,034 124,586 (446,198) 5,674,423
Expenses 3,624,019 546,263 270,180 424,195 (446,198) 4,418,459
------------- ------------- ------------- -------------- ------------- --------------
EBITDAR* 1,464,501 (143,782) 234,854 (299,609) 1,255,964
Rent 691,514 - - - 691,514
Depreciation 189,926 24,956 31,500 6,000 252,382
Interest 576,462 - - 170,338 746,800
------------- ------------- ------------- -------------- ------------- --------------
Income (loss) before
income taxes $ 6,599 (168,738) 203,354 (475,947) (434,732)
============= ============= ============= ============== ============= ==============
Three months ended June 30, 2000
-----------------------------------------------------------------------------------------------
Hotel Hotel Hotel Development
Operations Management Franchising & Corporate Eliminations Consolidated
---------- ---------- ----------- ----------- ------------ -------------
Revenues $ 6,354,575 508,203 461,669 138,914 (477,117) 6,986,244
Expenses 4,450,146 534,155 247,953 439,527 (477,117) 5,194,664
------------- ------------- ------------- -------------- ------------- --------------
EBITDAR* 1,904,429 (25,952) 213,716 (300,613) 1,791,580
Rent 681,075 - - - 681,075
Depreciation 325,176 31,801 31,500 6,000 394,477
Interest 543,445 - - 159,695 703,140
------------- ------------- ------------- -------------- ------------- --------------
Income (loss) before
income taxes $ 354,733 (57,753) 182,216 (466,308) 12,888
============== ============== ============= ============== ============= ==============
* Earnings before interest, taxes, depreciation, amortization, and rent
8
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Material Changes in Financial Condition.
The Company experienced negative cash flow from operations of approximately
$2,235,000 during the first half of 2001. This included an accounts receivable
increase of over $460,000 which had a negative impact on cash used in
operations. This accounts receivable increase is largely attributable to the
seasonal nature of hotels managed and franchised by the Company and such
balances are expected to decline in the third quarter. The Company repaid
approximately $408,000 of debt obligations and invested approximately $342,000
in capital expenditures for improvements and replacements on existing properties
and on new construction. A portion of the funding for these items was from
additional borrowings of approximately $240,000, principal receipts on notes
receivable of approximately $446,000, and from proceeds from property sales of
approximately $1,651,000.
As of December 31, 2000, the Company had 17 owned or leased properties
classified as held for sale. Seven of these properties were sold during the
first half of 2001 and two others are presently under contract for sale. During
the second quarter of 2001, an additional hotel was categorized as held for sale
and management is evaluating other owned hotel properties for their potential
for sale and the resulting impact on the Company.
Management has negotiated the extension of payment terms for certain of its
unsecured borrowings and is presently discussing extension terms with other
lenders. Preferred stock dividends are five months in arrears. Certain staff and
executive level positions in the Company's hotel management and hotel
franchising operations have been eliminated. Capital expenditure commitments
have been limited and certain previous lease commitments have been cancelled.
Adequate liquidity for future operations will be dependent upon the generation
of significant cash proceeds from hotel property sales and the timing thereof,
and the Company's ability to negotiate an extension or replacement of its
existing credit facility.
Material Changes in Results of Operations.
The decline in revenues and increase in net loss in the first and second
quarters of 2001 versus 2000 is mostly attributable to the loss of the Company's
Orlando and Daytona, Florida hotel properties. The Orlando hotel property lease
expired at the end of 2000 and the Daytona hotel was sold in September 2000. The
combined revenues and income before taxes from these two hotels in the first
half of 2000 amounted to approximately $3,184,000 and $1,039,000 respectively.
Owned and leased hotel earnings before interest, taxes, depreciation,
amortization and rent ("EBITDAR") during the three and six month periods ended
June 30, 2001 decreased approximately $418,000 and $1,158,000, respectfully, as
a result of the loss of the Orlando and Daytona hotels. The remaining decreases
in 2001 are attributable to the impact of properties sold during 2001 and slight
overall revenue declines in other owned hotel properties which are presently
held for sale. The Company's Rural Gold properties generally performed the same
as or slightly ahead of the prior year.
The increase in owned and leased hotel first and second quarter losses before
income taxes was not as significant as the EBITDAR changes due primarily to
reductions in depreciation expense resulting from 2000 and 2001 property sales
and the non-recognition of depreciation on properties held for sale. Interest
expense increased as a result of hotel acquisitions made in 2000. Interest
expense is expected to decrease in future periods as additional properties are
sold.
Hotel management revenues, EBITDAR, and loss before income taxes worsened during
the first and second quarters of 2001 versus the same periods in 2000. This is
partially attributable to increased payroll costs resulting from severance
payments relating to eliminated positions and the addition of three sales and
marketing positions since the first quarter of 2000 in an effort to improve
revenues at Company and third party owned hotels. In April 2001, nine management
contracts relating to hotels owned by affiliates of Quality Lodging LLC were
terminated. The Company is contesting the validity of such terminations and is
seeking to recover damages through arbitration and litigation. The Company's
June 30, 2001 balance sheet includes deferred costs of approximately $777,000
relating to these contracts; and management fees earned from these contracts
amounted to approximately $300,000 annually. The valuation of the Company's
recorded asset is dependent upon the Company's ability to recover sought
damages. The recoverability of the carrying value of the Company's deferred
management contracts is dependent upon the Company's success in the
aforementioned arbitration and litigation.
Hotel franchising revenues, EBITDAR, and income before income taxes increased
during the first and second quarters of 2001 versus the same periods in 2000.
Such improvements resulted primarily from additional franchise property
openings. Presently there are 61 Country Hearth Inn properties open and an
additional 20 properties under development, of which approximately half are
expected to open within the next 12 months.
9
Net losses of approximately $1,330,000 resulting from first and second quarter
2001 hotel property sales were charged to previously established impairment
allowances and therefore had no impact on 2001 net losses.
Corporate expenses in the first quarter of 2000 included approximately $45,000
of nonrecurring professional fee charges. The remaining decreases in 2001
resulted from the termination of an executive officer in the fourth quarter of
2000.
The Company files income tax returns and recognizes income tax expense (benefit)
on an annual calendar basis. The deferred income tax benefit recognized in the
first and second quarters of 2000 represented management's estimates of the
impact on the annual income tax expense (benefit) which resulted from each
quarter's operations. In the fourth quarter of 2000, management elected to
establish a valuation allowance for the full amount of the Company's deferred
tax assets. Consequently, no deferred tax benefit has been recognized in 2001.
Effect of New Accounting Pronouncements.
---------------------------------------
In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement
No. 141, "Business Combinations" ("Statement 141"), and Statement No. 142,
"Goodwill and Other Intangible Assets" ("Statement 142"). Statement 141 requires
that the purchase method of accounting be used for all business combinations
initiated after June 30, 2001 as well as all purchase method business
combinations completed after June 30, 2001. Statement 141 also specifies
criteria intangible assets acquired in a purchase method business combination
must meet to be recognized and reported apart from goodwill, noting that any
purchase price allocable to an assembled workforce may not be accounted for
separately. Statement 142 will require that goodwill and intangible assets with
indefinite useful lives no longer be amortized, but instead tested for
impairment at least annually in accordance with the provisions of Statement 142.
Statement 142 will also require that intangible assets with estimable useful
lives be amortized over their respective estimated useful lives to their
estimated residual values, and reviewed for impairment in accordance with FASB
Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of."
The Company is required to adopt the provisions of Statement 141 immediately,
except with regard to business combinations initiated prior to July 1, 2001,
which it expects to account for using the pooling-of-interests method, and
Statement 142 effective January 1, 2002. Furthermore, goodwill and intangible
assets determined to have an indefinite useful life acquired in a purchase
business combination completed after June 30, 2001, but before Statement 142 is
adopted in full will not be amortized, but will continue to be evaluated for
impairment in accordance with the appropriate pre-Statement 142 accounting
literature. Goodwill and intangible assets acquired in business combinations
completed before July 1, 2001 will continue to be amortized and tested for
impairment in accordance with the appropriate pre-Statement 142 accounting
requirements prior to the adoption of Statement 142.
Statement 141 will require upon adoption of Statement 142, that the Company
evaluate its existing intangible assets and goodwill that were acquired in a
prior purchase business combination, and to make any necessary reclassifications
in order to conform with the new criteria in Statement 141 for recognition apart
from goodwill. Upon adoption of Statement 142, the Company will be required to
reassess the useful lives and residual values of all intangible assets acquired,
and make any necessary amortization period adjustments by the end of the first
interim period after adoption. In addition, to the extent an intangible asset is
identified as having an indefinite useful life, the Company will be required to
test the intangible asset for impairment in accordance with the provisions of
Statement 142 within the first interim period. Any impairment loss will be
measured as of the date of adoption and recognized as the cumulative effect of a
change in accounting principle in the first interim period.
In connection with Statement 142's transitional goodwill impairment evaluation,
the Statement will require the Company to perform an assessment of whether there
is an indication that goodwill (and equity-method goodwill) is impaired as of
the date of adoption. To accomplish this, the Company must identify its
reporting units and determine the carrying value of each reporting unit by
assigning the assets and liabilities, including the existing goodwill and
intangible assets, to those reporting units as of the date of adoption. The
Company will then have up to six months from the date of adoption to determine
the fair value of each reporting unit and compare it to the reporting unit's
carrying amount. To the extent a reporting unit's carrying amount exceeds its
fair value, an indication exists that the reporting unit's goodwill may be
impaired and the Company must perform the second step of the transitional
impairment test. In the second step, the Company must compare the implied fair
value of the reporting unit's goodwill, determined by allocating the reporting
unit's fair value to all of its assets (recognized and unrecognized) and
liabilities in a manner similar to a purchase price allocation in accordance
with Statement 141, to its carrying amount, both of which would be measured as
of the date of adoption. This second step is required to be completed as soon as
possible, but no later than the end of the year of adoption. Any transitional
impairment loss will be recognized as the cumulative effect of a change in
accounting principle in the Company's statement of earnings.
And finally, any unamortized negative goodwill (and equity-method negative
goodwill) existing at the date Statement 142 is adopted must be written off as
the cumulative effect of a change in accounting principle.
Because of the extensive effort needed to comply with adopting Statements 141
and 142, it is not practicable to reasonably estimate the impact of adopting
these Statements on the Company's financial statements at the date of this
report, including whether it will be required to recognize any transitional
impairment losses as the cumulative effect of a change in accounting principle.
Risk Factors.
This Form 10-Q contains forward looking statements that involve risks and
uncertainties. Statements contained in this Form 10-Q that are not historical
facts are forward looking statements that are subject to the safe harbor created
by the Private Securities Litigation Reform Act of 1995. The Company's actual
results may differ significantly from the results indicated by such forward
looking statements.
The Company is subject to a number of risks, including the general risks of
investing in real estate, the illiquidity of real estate, environmental risks,
possible uninsured or under insured losses, fluctuations in property taxes,
hotel operating risks, the impact of competition, the difficulty of managing
growth, seasonality, the risks inherent in operating a hotel franchise business
and hotel management business, and the risks involved in hotel renovation and
construction, and the uncertainty of obtaining additional financing or
extensions of existing credit facilities as needed. For a discussion of these
and other risk factors, see the "RISK FACTOR" section contained in the Company's
Registration Statement on Form S-3 (File No. 333-37691).
10
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As of June 30, 2001, the Company's obligations included variable rate mortgage
notes and a line of credit bank note with aggregate principal balances of
$2,972,711 which mature at various dates through 2015. The Company is exposed to
the market risk of significant increases in future interest rates. Each
incremental one-point increase in the prime interest rate would increase the
Company's interest expense by approximately $30,000 per year. This risk is
somewhat mitigated in that inflationary increases in interest rates would
theoretically result in increases in average hotel room rates. Also, significant
increases in interest rates would have a dampening effect on additions of
competitive hotels in the Company's markets.
At June 30, 2001, the Company's unrestricted investment securities included
equity securities valued at $33,232. The Company is exposed to the risk that
such securities will become worthless. The Company's restricted investment
securities also include equity securities. Such restricted securities comprise
the assets of the Company's deferred compensation plan and changes in the value
of such securities have no net impact on the Company's earnings.
The ultimate collection of the Company's notes receivable is subject to various
credit risks. Net notes receivable at June 30, 2001 amounted to $5,115,925 and
consisted of 34 notes, most of which were collateralized by or related to
various hotel assets. Also, certain of these notes relate to leasehold interests
in hotel properties for which the Company remains contingently liable for future
rent payments. The Company is also contingently liable for certain notes payable
relating to hotel properties which have been sold. The collection of such notes
receivable and the potential financial exposure for contingent rents and note
payable obligations is determined by the ability of other hotel operators to
satisfy these obligations. Their ability to satisfy such obligations is subject
to many risks, including economic conditions affecting the hotel industry, their
ability to effectively manage their hotel assets, new competition, and other
factors.
11
PART II - OTHER INFORMATION
Item 3. Defaults Upon Senior Securities
As of August 14, 2001, a total of $115,625 of Series B preferred dividends are
in arrears.
Item 4. Submission of Matters to a Vote of Security Holders
The Company held its Annual Meeting of Stockholders on May 24, 2001. The purpose
of the meeting was to consider and vote upon the following matters:
1. To elect six directors to serve until the next annual meeting of
stockholders and until their successors are elected and have qualified.
2. To transact such other business as may have properly come before the
meeting.
The Company's six incumbent directors (Douglas C. Collins, David C. Glickman,
Robert B. Lee, David B. Mumford, William K. Stern, and Steven A. Van Dyke) were
nominated for re-election. Each of the nominees was elected as follows:
Votes For Votes Withheld
--------- --------------
Douglas C. Collins 1,581,322 92,473
David C. Glickman 1,666,526 7,269
Robert B. Lee 1,581,322 92,473
David B. Mumford 1,666,526 7,269
William K. Stern 1,666,526 7,269
Steven A. Van Dyke 1,666,526 7,269
No other matters came before the meeting.
12
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit Index
Exhibit Description
------- -----------
3(i) Articles of Incorporation.(Incorporated by reference to
Exhibit 3(i) to the Registrant's Registration Statement on
Form 10-SB (No.0-22132) which became effective on November
22, 1993.)
3(i)(a) Certificate of Amendment of Certificate of Incorporation.
(Incorporated by reference to Exhibit 3(i)(a) to the
Registrant's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1994.)
3(i)(b) Certificate of Amendment of Certificate of Incorporation.
(Incorporated by reference to Appendix "A" to the
Registrant's Definitive Proxy Statement filed with the
Securities and Exchange Commission on June 9, 1997.)
3(i)(c) Certificate of Amendment of Certificate of Incorporation.
(Incorporated by reference to Appendix "A" to the
Registrant's Definitive Proxy Statement filed with the
Securities and Exchange Commission on May 5, 1998.)
3(ii) By-Laws - Amended and Restated as of June 27, 1994.
(Incorporated by reference to Exhibit 3(ii) to the
Registrant's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1994.)
4(i) Certificate of Designation, Preferences and Rights of Series
B Preferred Stock of the Registrant. (Incorporated by
reference to Exhibit 4(i) to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended March 31, 2001.)
11 Statement re: Computation of per share Earnings
(b) Reports on Form 8-K
The Company has not filed any reports on Form 8-K during the quarter for
which this report is filed.
13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Buckhead America Corporation
(Registrant)
August 14, 2001 /s/ Douglas C. Collins
------------------- -----------------------------------------
Date Douglas C. Collins
President and Chief Executive Officer
August 14, 2001 /s/ Robert B. Lee
--------------- ----------------------------------------
Date Robert B. Lee
Senior Vice President and
Chief Financial and Accounting Officer
14