NYSE AMEX:IHT Phoenix, Arizona
85020
FOR
FURTHER INFORMATION:
602-944-1500
email: mberg@innsuites.com
INNSUITES HOSPITALITY
TRUST (IHT) REPORTS FIRST QUARTER EARNINGS
Phoenix, AZ, June 4, 2009 - InnSuites
Hospitality Trust (NYSE AMEX:IHT)
Highlights:
InnSuites Hospitality Trust reported operating income of $942,000 for the first quarter ended April 30, 2009, a decline of $1.3 million from the prior year period operating income of $2.2 million. The Trust also reported net income attributable to Shares of Beneficial Interest of $532,000, or $0.06 per basic and $0.04 per diluted share, for the first quarter ended April 30, 2009, down from $1.5 million, or $0.16 per basic share and $0.14 per diluted share, in the prior year period. These declines are primarily due to decreased revenues due to reduced occupancy and room rates and a $479,000 increase in depreciation expense due to the suspension of depreciation in the first quarter of fiscal year 2009 while the Trust’s Hotels were classified as “held for sale.”
The Trust reported
earnings before minority interest, interest, taxes, depreciation and
amortization (Adjusted EBITDA) of $1.44 million for the three months ended
April 30, 2009, as compared to $2.23 million in the prior
year period, a decline of $790,000, or 35.5%. Adjusted EBITDA is a
non-GAAP financial measure that management believes provides meaningful insight
into the Trust’s financial performance and its operating profitability before
non-operating
expenses (such as interest and "other" non-core expenses)
and non-cash charges (depreciation and amortization).
A reconciliation of
EBITDA to net income attributable to Shareholders of Beneficial Interest for
the three months ended April 30 follows:
|
|
April 30, 2009 |
|
April 30, 2008 |
|
|
|
|
|
|
Net
income attributable to Shareholders of Beneficial Interest |
$531,666 |
|
$1,506,460 |
|
Add
back: |
|
|
|
|
Depreciation |
494,903 |
|
16,037 |
|
Interest expense |
382,082 |
|
385,070 |
|
Income tax expense |
- |
|
- |
|
Minority interest |
34,478 |
|
319,944 |
|
Less: |
|
|
|
|
Interest income |
(6,337) |
|
(253) |
|
ADJUSTED
EBITDA |
$1,436,792 |
|
$2,227,258 |
The Trust reported
revenue of $5.5 million for the first quarter ended April 30, 2009, a decrease
of 19.0% from $6.8 million for the prior year period. The decrease in revenues is primarily due to
a decrease in occupancy and room rates reflecting the current economic
conditions.
FUTURE POSITIONING
For the 2010 current fiscal year, InnSuites projects a continued reduction in revenue and plans to offset the decline in revenues by focusing on improved sales efficiency and effective cost controls. Although the travel and hospitality industries are down worldwide, InnSuites is experiencing strength relative to the rest of the industry by continuing to refurbish its hotels, increase boutique fashion trends, as well as increase internet marketing as more and more travelers move to the value-oriented InnSuites Suite Hotels and value suite concept “By the day and extended stay.”
As part of InnSuites’ efforts to mitigate the decline in revenues, it announced an early roll out of its 2009 Summer Vacation Special as part of its summer advertising campaign. The Summer Vacation Special offers Studio suites for $59, Family suites for $79 and Presidential Jacuzzi suites for $99 at select hotels through September 17, 2009.
Our long-term strategic plan is to obtain full benefit of our real estate equity and to migrate our focus from a hotel owner to a hospitality service company by expanding our trademark license, management, reservation and advertising services. This plan is similar to strategies followed by international diversified hotel industry leaders, which over the last several years have reduced real estate holdings and concentrated on hospitality services.
InnSuites Hospitality Trust is a mid-market studio and
two-room suite hospitality business trust owning five moderate service and full
service hotels containing 843 hotel suites and managing and/or licensing ten
hotels 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) the declaration or payment of dividends; (ii) the leasing, management or operation of the hotels; (iii) the adequacy of reserves for renovation and refurbishment; (iv) the Trust’s financing plans; (v) the Trust’s position regarding investments, acquisitions, developments, financings, conflicts of interest and other matters; (vi) the Trust’s plans and expectations regarding future sales of hotel properties; and (vii) trends affecting the Trust’s or any hotel’s financial condition or results of operations. 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) 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, b) fluctuations in hotel occupancy rates; c) changes in room rental rates which may be charged by InnSuites Hotels in response to market rental rate changes or otherwise; d) seasonality of our business; e) interest rate fluctuations; f) changes in governmental regulations, including federal income tax laws and regulations; g) competition; h) any changes in the Trust’s financial condition or operating results due to acquisitions or dispositions of hotel properties; i) insufficient resources to pursue our current strategies; j) concentration of our investments in the InnSuites Hotels® brand; k) loss of franchise contracts; l) real estate and hospitality market conditions; m) hospitality industry factors, n) our ability to meet present and future debt service obligations; o) terrorist attacks or other acts of war; p) outbreaks of communicable diseases; q) natural disasters; and r) loss of key personnel; . 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.