AMEX:IHT Phoenix, Arizona 85020
FOR
FURTHER INFORMATION:
602-944-1500
email: mberg@innsuites.com
INNSUITES REPORTS 120%
INCREASE IN OPERATING INCOME
Phoenix, AZ., September 5, 2006- InnSuites
Hospitality Trust (AMEX:IHT)
Highlights:
InnSuites Hospitality Trust reported operating income of $1.2
million for the six months ended July 31, 2006, an improvement of $637,000 from
the prior year period operating income of $532,000. 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 an operating loss of $(106,000) for the three months ended July
31, 2006, an improvement of $271,000 from the prior year period loss of
$(377,000), further reflecting the continued improvement in the operations of
the Trust’s five core suite hotels.
The
Trust reported net income
attributable to Shares of Beneficial Interest of $345,000, or $0.04 per basic and
$0.02 per diluted share, for the six months ended July 31, 2006, a decrease of
$707,000 from $1.1 million, or $0.12 per basic and $0.10 per diluted share, for
the prior year period. The prior year
period included a gain on the disposition of the Phoenix, Arizona hotel
property of $1.8 million, $1.2 million of which was attributable to Shares of Beneficial
Interest.
The
Trust reported a net loss
attributable to Shares of Beneficial Interest of $(341,000), or $(0.04) per
basic and diluted share, for the three months ended July 31, 2006, a decrease
of $999,000 from net income of $658,000, or $0.07 per basic and diluted share,
for the prior year period. The prior
year period included a gain on the disposition of the Phoenix, Arizona hotel
property of $1.8 million, $1.2 million of which was attributable to Shares of Beneficial
Interest.
The
Trust reported earnings before minority interest, interest, taxes, depreciation
and amortization (“Adjusted EBIDTA”) of $2.2 million for the six months ended July
31, 2006, compared to $3.4 million in the prior year period. The prior year period included a gain on the
disposition of the Phoenix, Arizona hotel property of $1.8 million. 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 Shares of Beneficial Interest follows:
|
|
For the six months ended |
||
|
|
July 31, 2006 |
|
July 31, 2005 |
|
|
|
|
|
|
Net income attributable to Shares of Beneficial Interest |
$344,995 |
|
$1,052,319 |
|
Add back: |
|
|
|
|
Minority
interest |
(145,243) |
|
239,993 |
|
Non-cash depreciation |
1,038,880 |
|
1,043,832 |
|
Interest
expense |
892,527 |
|
1,005,870 |
|
Income tax
expense |
77,650 |
|
82,000 |
|
Less: |
|
|
|
|
Interest
income |
(1,246) |
|
(873) |
|
Adjusted EBITDA |
$2,207,563 |
|
$3,423,141 |
For
the six and three month periods ended July 31, 2006, the Trust reported revenue
of $11.4 million and $4.9 million, respectively, both of which were consistent
with the prior year period. The Trust’s revenues
for the six and three month periods ended July 31, 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 benefit from improved economic
and industry conditions, with occupancy and average daily rate at the Trust
properties increasing 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 also 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.