AMEX:IHT Phoenix, Arizona 85020
FOR
FURTHER INFORMATION:
602-944-1500
email: mberg@innsuites.com
INNSUITES FIRST QUARTER
EPS DOUBLED ON STRONG OPERATIONS
Phoenix, AZ., June 2, 2006- InnSuites Hospitality
Trust (AMEX:IHT)
Highlights:
InnSuites Hospitality Trust reported operating income of $1.3
million for the first quarter ended April 30, 2006, an improvement of $366,000
from the prior year period operating income of $909,000. This increase reflects the continued improvement
in the operations of the Trust’s five core suite hotels and improved management
and licensing fee revenues.
The
Trust reported net income
attributable to Shares of Beneficial Interest of $686,000, or $0.07 per basic and
$0.06 per diluted share, for the first quarter ended April 30, 2006, an
improvement of $281,000 from $404,000, or $0.05 per basic and $0.03 diluted
share, for the prior year period.
The
Trust reported earnings before minority interest, interest, taxes, depreciation
and amortization (“Adjusted EBIDTA”) of $1.8 million for the three months ended
April 30, 2006, compared to $1.4 million in the prior year period. Adjusted EBITDA is a non-GAAP financial
measure that management believes provides meaningful insight into the Trust’s operating
performance. A reconciliation of Adjusted
EBITDA to net income attributable to shareholders of beneficial interest
follows:
|
|
For the three months
ended |
||
|
|
April 30, 2006 |
|
April 30, 2005 |
|
|
|
|
|
|
Net income attributable to shareholders of beneficial
interest |
$685,510 |
|
$404,301 |
|
Add back: |
|
|
|
|
Minority
interest |
70,198 |
|
(29,953) |
|
Non-cash depreciation |
514,351 |
|
516,465 |
|
Interest
expense |
441,779 |
|
503,169 |
|
Income tax
expense |
78,500 |
|
32,000 |
|
Less: |
|
|
|
|
Interest
income |
(1,213) |
|
(472) |
|
Adjusted EBITDA |
$1,789,125 |
|
$1,425,510 |
The
Trust reported revenue of $6.5 million for the first quarter ended April 30,
2006, compared to $6.6 million for the prior year period. The Trust’s revenues for the three months
ended April 30, 2006 reflect the absence of the Trust’s Phoenix, Arizona property,
which was sold during the second quarter of fiscal year 2006. This was offset by improved occupancy, increased
management and licensing fees, and payroll reimbursements received in
connection with the management agreements.
The Trust’s hotel operations continue to improve as economic and
industry conditions become more favorable, with occupancy at the Trust properties
increasing 4.9% over the prior year period.
In addition, the Trust continues to benefit from management and
trademark licensing agreements acquired during fiscal year 2005. The Trust is moving forward with the
conversion of two of its properties to individual condo ownership.
InnSuites Hospitality Trust is a mid-market studio and
two-room suite hospitality trust owning 5 moderate service and full service suite
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 the benefits of condo-hotel conversions. 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, including
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
Hotels® 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.