AMEX:IHT Phoenix, Arizona 85020
FOR FURTHER INFORMATION:
602-944-1500
email:
mberg@innsuites.com
INNSUITES HOSPITALITY TRUST
(IHT) REPORTS SECOND CONSECUTIVE YEAR-END PROFIT FOR FISCAL 2006
Phoenix, AZ., May 2, 2006-
InnSuites Hospitality Trust (AMEX:IHT)
Highlights:
InnSuites Hospitality Trust reported
net income attributable to Shares of Beneficial Interest of $542,000, or $0.06
per basic and $0.02 per diluted share, for the fiscal year ended January 31,
2006, an improvement of $301,000 from $240,000, or $0.10 per basic and diluted
share, for the prior fiscal year.
Current year earnings reflected a $1.8 million gain on the sale of the
The Trust had a net loss
attributable to Shares of Beneficial Interest of $(162,000), or $(0.02) per
basic and diluted share, for the fourth fiscal quarter of fiscal year 2006
ended January 31, 2006, which was an improvement of $314,000 from the same
period in fiscal year 2005, which was a loss of $(476,000), or $(0.17) per
basic and diluted share.
The Trust reported
operating income of $349,000 for the fiscal year ended January 31, 2006, an
improvement of $571,000 from the prior year operating loss of $(222,000). This increase reflects the continued
improvement in the operations of the Trust’s core hotels and a full year of
management and licensing fee revenues from acquired management and licensing
agreements.
The Trust had earnings
before minority interest, interest, taxes, depreciation and amortization
(“Adjusted EBITDA”) of $4.4 million for the twelve months ended January 31,
2006, compared to $6.8 million in fiscal year 2005 and $2.7 million in fiscal
year 2004. Gains on the sale of hotel
properties totaling $1.8 million and $5.1 million are included in Adjusted
EBITDA for fiscal years 2006 and 2005, respectively. There is no such gain in fiscal year 2004. Adjusted EBITDA is a non-GAAP financial
measure that management believes provides meaningful insight into the Trust’s
cash flow performance. A reconciliation
of Adjusted EBITDA to net income attributable to shareholders of beneficial
interest follows:
|
|
FY 2006 |
|
FY 2005 |
|
FY 2004 |
|
|
|
|
|
|
|
|
Net
income (loss) attributable to shareholders of beneficial interest |
$541,578 |
|
$240,442 |
|
$(2,594,317) |
|
Add
back: |
|
|
|
|
|
|
Minority interest |
(267,265) |
|
1,384,985 |
|
(1,050,400) |
|
Depreciation |
2,118,492 |
|
2,755,499 |
|
2,977,583 |
|
Interest expense |
1,909,097 |
|
2,259,581 |
|
3,373,219 |
|
Income tax expense |
75,175 |
|
160,000 |
|
— |
|
Less: |
|
|
|
|
|
|
Interest income |
(2,134) |
|
(7,517) |
|
(981) |
|
Adjusted
EBITDA |
$4,374,943 |
|
$6,792,990 |
|
$2,705,104 |
The Trust reported
revenue of $21.2 million for the fiscal year ended January 31, 2006, a decrease
of 7.1% from $22.9 million for the prior year.
The Trust’s revenues decreased due to the sales of certain of the
Trust’s properties during the first quarter of fiscal year 2005 and the second
quarter of fiscal year 2006. This
decrease was partially offset by a full year of management and licensing fee
revenue and payroll reimbursements from acquired management and licensing
agreements recognized by the Trust during fiscal year 2006 as well as increased
occupancy at the Trust’s core hotels.
During the second quarter
of fiscal year 2006, the Trust sold its Phoenix, Arizona property for $5.1
million, recognizing a gain of $1.8 million on the sale, $1.3 million of which
was attributable to Trust shareholders.
The Trust’s hotel operations continue to improve as economic and industry conditions become more favorable. In addition, the Trust continues to benefit from the prior disposal of underperforming properties and from management and trademark licensing agreements acquired during the prior fiscal year. The Trust has also moved forward with the initial stages of conversion of two of its properties to individual condo-hotel suite ownership.
.
InnSuites Hospitality Trust is a mid-market studio and
two-room suite hospitality business trust owning 5 moderate service and full
service hotels containing 843 hotel suites and managing and/or licensing 11
hotels with 1,692 suites located in Arizona, New Mexico, Texas and Southern
California. For reservations, call
1-888-INNSUITES, or visit www.innsuites.com. For investor information, visit
www.innsuitestrust.com.
Certain matters within this press release may be discussed using forward-looking language as specified in the 1995 Private Securities Litigation Reform Act and InnSuites Hospitality Trust intends that such forward-looking statements be subject to the safe-harbor created thereby. Such forward-looking statements include, but are not limited to: (i) expectations of growth in the financial and operating results of the Trust, (ii) expectations of reductions in costs incurred by the Trust, (iii) expectations that the travel and hospitality industries will continue to rebound in the near future, and (iv) expectations of benefits of condo-hotel conversion. InnSuites Hospitality Trust cautions that these statements may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statements contained herein. Such risks include, but are not limited to: a) fluctuations in hotel occupancy rates, b) changes in room rental rates which may be charged by InnSuites Hotels in response to market rental rate changes or otherwise, c) seasonality of our business, d) interest rate fluctuations, e) changes in governmental regulations, federal income tax laws and regulations, f) competition, g) any changes in the Trust’s financial condition or operating results due to acquisitions or dispositions of hotel properties, h) insufficient resources to pursue our current growth strategy, i) concentration of our investments in our InnSuites Hotel® brand, j) loss of franchise contracts, k) real estate and hospitality market conditions, l) hospitality industry factors, m) our ability to meet present and future debt obligations, n) terrorist attacks or other acts of war, o) outbreaks of communicable diseases, p) natural disasters, q) loss of key personnel, r) market demand or lack of demand for condo-hotel conversions, s) local or national economic and business conditions, including, without limitation, conditions which may affect public securities markets generally, the hospitality industry or the markets in which the Trust operates or will operate, and t) uncertainties the Trust might encounter in changing from a REIT to a tax-paying entity. From time to time, these and other risks are discussed in the Trust’s Annual Report on Form 10-K and other filings with the Securities and Exchange Commission.