PHOENIX, June 3 /PRNewswire-FirstCall/ -- InnSuites Hospitality Trust (NYSE AMEX: IHT) Highlights:
- Adjusted EBITDA was $940,000 for the three month period ended April 30, 2010 compared to $1.4 million in the prior year quarter.
- Net income attributable to controlling interest was $97,000, or $0.01 per basic and diluted share, for the three months ended April 30, 2010 compared to net income of $532,000, or $0.06 per basic share and $0.04 per diluted share, for the three months ended April 30, 2009.
- Revenues for the first three months of fiscal 2011 were $4.9 million compared to $5.5 million in the prior year period, reflecting the current economic conditions.
InnSuites Hospitality Trust reported operating income of $471,000 for the three months ended April 30, 2010, a decline of $471,000 from the prior year period operating income of $942,000. The Trust also reported net income attributable to controlling interest of $97,000, or $0.01 per basic and diluted share, for the three months ended April 30, 2010, compared to $532,000, or $0.06 per basic and $0.04 per diluted share, in the prior year period. Lower hotel revenues, reflecting the current economic conditions, were the primary cause of the decreased operating income figures.
The Trust reported earnings before non-controlling interest, interest, taxes, depreciation and amortization (Adjusted EBITDA) of $940,000 for the three months ended April 30, 2010, as compared to $1.4 million in the prior year period, a decline of $497,000, or 34.6%. 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 Adjusted EBITDA to net income attributable to controlling interest for the three months ended April 30 follows:
April 30, 2010
April 30, 2009
Net income attributable to controlling interest
Income tax expense
The Trust reported revenue of $4.9 million for the three months ended April 30, 2010, a decrease of 10.3% from $5.5 million for the prior year period. The decrease in revenues is primarily due to a decrease in occupancy caused by the current difficult economic conditions.
For the current fiscal year 2011, InnSuites projects a continued difficult economic environment, negatively affecting hotel revenue levels. The Trust 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, the Trust has cut labor and other expenses and it has actively marketed promotional rates to prior and potential guests. The recent Spring Special offers Studio InnSuites for $69, Executive/Family Suites for $89 and Presidential Jacuzzi Suites for $99 at select hotels through September 15, 2010.
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.
Your Suite Choice®- Value Concept
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 hotels located primarily 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.
SOURCE InnSuites Hospitality Trust