AMEX:IHT Phoenix, Arizona 85020
FOR
FURTHER INFORMATION:
602-944-1500
email: mberg@innsuites.com
INNSUITES REPORTS 312%
INCREASE IN OPERATING INCOME
Highlights:
InnSuites Hospitality Trust reported operating income of $1.4
million for the nine months ended October 31, 2006, an improvement of $1.0
million from the prior year period operating income of $335,000. This increase is consistent with a strong
hospitality industry and 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 operating income of $213,000 for the three months ended October
31, 2006, an improvement of $409,000 from the prior year period loss of $(196,000),
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 $339,000, or $0.04 per basic and
$0.01 per diluted share, for the nine months ended October 31, 2006, compared
to $697,000, or $0.08 per basic and $0.05 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 net loss
attributable to Shares of Beneficial Interest of $(6,000), or $(0.00) per basic
and diluted share, for the three months ended October 31, 2006, an improvement
of $365,000 from a net loss of $(372,000), or $0.04 per basic and diluted
share, for the prior year period.
“The
industry trends in terms of occupancy and rate have been strong in 2006 and we
expect these trends to continue in 2007,” said James Wirth, President and CEO. “InnSuites has benefited from these trends in
the last twelve months and looks forward to continue benefiting over the next
twelve months. In addition, InnSuites is
working to control labor, technology, amenity, and other costs to augment the
strong industry trends in the year ahead to improve operating profits and
EBITDA.”
For
the nine month period ended October 31, 2006, the Trust reported revenue of $16.5
million, an increase of $333,000, or 2.1% from $16.1 million in the prior year
period. The Trust’s revenues for the nine
month period ended October 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 more than offset by improved
occupancy, increased management and licensing fees, and payroll reimbursements received
in connection with management agreements.
For
the three month period ended October 31, 2006, the Trust reported revenue of
$5.0 million, an increase of $324,000, or 6.9% from $4.7 million in the prior
year period. This increase reflects
stronger sales at the Trust’s hotels, particularly in southern California.
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.
On December 1, 2006, the Trust increased its line of credit from
$700,000 to $1.0 million with Rare Earth Financial L.L.C, an affiliate of Mr.
Wirth, our President, CEO and largest shareholder, to continue to facilitate
the upgrade of all five Trust properties and the potential conversion of two of
its properties to individual condo ownership.
The Trust has added an Oceanside/North San Diego County property, owned
by a third party, to its reservation and trademark system, replacing its reservations
affiliation with its former
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
1,641 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. For condominium hotel information, visit
www.condohotelvacation.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 REIT tax
status 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.