Costs Associated with Exit or Disposal Activities
As previously announced, on April 29, 2020, the Company committed to a plan of termination as part of the Company’s efforts to reduce operating expenses and adjust cash flows in light of the ongoing economic challenges resulting from the COVID-19 pandemic and its impact on the Company’s business. At the time of the Original Report, the Company estimated that it would incur approximately $28 million to $36 million of restructuring and related charges primarily related to employee severance and benefits costs. The Company continues to expect to incur such charges within the previously estimated range. At the time of the Original Report, the Company further expected to record a stock-based compensation charge and corresponding payroll tax expense related to equity compensation for employees who were terminated and a restructuring charge related to the shutdown of certain facilities. At the time of the Original Report, the Company was unable to estimate the stock-based compensation, payroll tax and facility-related charges. On June 25, 2020, the Company made a determination of such information. As of the date of this Current Report, in the second quarter of 2020, the Company expects to record a stock-based compensation charge and payroll tax expense related to equity compensation for employees who were terminated, as well as an offsetting benefit related to the reversal of previously recognized stock-based compensation expenses for unvested stock awards, resulting in a net benefit of $48.7 million for the quarter. Additionally, the Company expects to record other restructuring charges of $1.7 million primarily related to the shutdown of certain facilities.
Forward Looking Statements
This Current Report on Form 8-K/A contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally relate to future events or the Company’s future financial or operating performance. In some cases, you can identify forward looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “going to,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern the Company’s expectations, strategy, priorities, plans or intentions. Forward-looking statements in this Current Report on Form 8-K/A include, but are not limited to, statements regarding the Company’s future financial and operating performance, including the effect of the COVID-19 pandemic on the Company’s business; the Company’s efforts to reduce operating expenses and adjust cash flows in light of the ongoing economic challenges resulting from the COVID-19 pandemic; and the Company’s expected costs related to restructuring and related charges, including the timing of such charges. The Company’s expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected, including risks related to the impact of the COVID-19 pandemic, including business and government responses thereto, on its business, operations and the trading price of its Class A common stock and risks regarding its ability to forecast its performance due to the COVID-19 pandemic. The forward-looking statements contained in this Current Report on Form 8-K/A are also subject to other risks and uncertainties, including those more fully described in the Company’s filings with the SEC, including the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 as filed with the SEC and the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2020 as filed with the SEC. The forward-looking statements in this Current Report on Form 8-K/A are based on information available to the Company as of the date hereof, and the Company disclaims any obligation to update any forward-looking statements, except as required by law.
Nick Trahair, CLM,CHA serves as General Manager of the GrandStay Hotel & Suites of Traverse City, MI.
Prior to joining the staff at the GrandStay, he served as the Regional Operations Manager for a large hospitality management company based in the Midwest and also has worked in the food and beverage management field.