AMEX:IHT
FOR FURTHER INFORMATION:
602-944-1500
email: mberg@innsuites.com
INNSUITES’ OPERATING INCOME UP 81%
Highlights:
· Operating income increased $1.1 million, or 81%, to $2.5 million for the first nine months of fiscal year 2008 ended October 31, 2007 compared to the nine-month period ended October 31, 2006.
· Net income attributable to Shares of Beneficial Interest increased 223% to $1.1 million, or $0.12 per basic share for the nine months ended October 31, 2007 from $0.04 per basic share in the prior year period.
· Operating income for the third quarter increased $872,000, or 410%, to $1.1 million for the three-month period ended October 31, 2007 compared to $213,000 for the three-month period ended October 31, 2006.
· The Trust’s operations, including revenue per available room (“REVPAR”) and average daily rate (“ADR”), continue to increase as the industry trends upward.
· The Trust plans to increase its focus on hospitality services by expanding its trademark license, management, reservation and advertising services.
InnSuites Hospitality Trust reported operating income of $2.5 million for the nine months ended October 31, 2007, an improvement of $1.1 million, or 81%, from the prior year nine-month period operating income of $1.4 million. This increase is consistent with the strong hospitality industry and is reflective of the Trust’s continued improvement in the operations of its five core suite hotels as well as improved management and licensing fee revenues.
The Trust reported net income attributable to Shares of Beneficial Interest of $1.1 million, or $0.12 per basic and $0.08 per diluted share, an increase of over 223% for the nine months ended October 31, 2008, from $339,000, or $0.04 per basic and $0.01 per diluted share, for the prior year period.
For the third fiscal quarter ended October 31, 2007, the Trust reported revenue of $5.5 million, up 10% compared with the prior year period. Net income attributable to Shares of Beneficial Interest was $1.1 million, an increase of $872,000 from the prior year three-month period ended October 31, 2006. The Trust’s revenues for the three-month period ended October 31, 2007 reflect the strong economy producing high occupancies and rates, increased management and licensing fees, and payroll reimbursements received in connection with management agreements.
Industry
trends in terms of occupancy and rate have been strong in fiscal 2008 (February
1, 2007 to January 31, 2008) for hotel owners and hospitality service companies
and the Trust expects these trends to continue in fiscal 2009. InnSuites
has benefited from these trends in the last eighteen months and looks forward
to continued benefits over the next twelve to eighteen months. In
addition, InnSuites has controlled labor costs, increased technology and
upgraded suites to augment the strong industry trends in the year ahead.
InnSuites has listed its Hotels as “Held for
Funds From Operations (“FFO”) is a widely used measure of a REIT’s performance that excludes non-cash charges, including depreciation of real estate and gains and losses on disposal of assets. FFO is an alternative non-GAAP measure of a company’s cash flow and its ability to pay dividends.
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For the Nine Months Ended October 31, |
For the Three Months Ended October 31, |
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2007 |
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2006 |
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2007 |
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2006 |
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Net Income (Loss) Attributable to Shares of Beneficial Interest |
$ |
1,094,461 |
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$ |
338,794 |
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$ |
547,422 |
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$ |
(6,230) |
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Hotel Property Depreciation |
993,981 |
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1,538,747 |
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15,528 |
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499,867 |
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Loss (Gain) on Disposition of Hotels |
4,182 |
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(138,751) |
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3,409 |
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(138,751) |
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Minority Interest Share of Depreciation and (Gain) Loss on Dispositions |
(230,511) |
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(324,749) |
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(4,872) |
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(75,322) |
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Funds from Operations |
$ |
1,862,113 |
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$ |
1,414,041 |
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$ |
561,487 |
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$ |
279,564 |
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FFO increased approximately $448,000 for the nine-month period ended October 31, 2007, reflecting an increase of 31.7%, when compared to the prior year period. FFO increased approximately $282,000 for the third fiscal quarter ended October 31, 2007, reflecting an increase of more than 100.0% from the prior year period. The increases were primarily due to stronger operating results at the hotel properties. See reconciliation below.
The
Trust classified its five Hotels as “Held for Sale” as of August 1, 2007, which
is part of the Trust’s long-term strategic plan to migrate the focus of the
Trust from a hotel owner to a hospitality service company by expanding its
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 been reducing real estate
holdings and concentrating on hospitality services. Initially, the Trust will
focus its sales efforts in the western region of the
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 1,642 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, and (iii) expectations that the travel and hospitality industries will continue to improve in the near future. 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 that 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 hotel services growth strategies, 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 service obligations, n) terrorist attacks or other acts of war, o) outbreaks of communicable diseases, p) natural disasters, q) loss of key personnel, and r) 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. 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.