InnSuites Hospitality Trust (IHT) Reports Improved First Fiscal Half Results

Sep 15, 2011, 19:52 ET from InnSuites Hospitality Trust

PHOENIX, Sept. 15, 2011 /PRNewswire/ -- InnSuites Hospitality Trust (NYSE AMEX: IHT)

Highlights:

  • Adjusted EBITDA was $1.2 million for the first six month period ended July 31, 2011 up from $758,000 in the prior year period.
  • Net loss attributable to controlling interest was $(309,000), or $(0.04) per basic and diluted share, for the six months ended July 31, 2011.  This loss includes $887,000 of non-cash depreciation expenses.  This compares to a loss of $(688,000), or $(0.08) per basic share and diluted share, for the six months ended July 31, 2010.
  • Revenues for the first six months of fiscal 2012 were $9.0 million compared to $8.4 million in the prior year period, up 7.3%, reflecting increased occupancy; and improved market strategy.
  • Following the success of the sale of membership interests in the subsidiary which owns and operates the Albuquerque, New Mexico hotel property, the Trust began sales of partnership interests in the subsidiary which owns and operates the Tucson Foothills, Arizona hotel property.

InnSuites Hospitality Trust reported operating income of $337,000 for the six months ended July 31, 2011, an increase of $514,000 from the prior year period operating loss of $(177,000).  The Trust also reported a net loss attributable to controlling interest of $(309,000), or $(0.04) per basic and diluted share, for the six months ended July 31, 2011, compared to $(688,000), or $(0.08) per basic and diluted share, in the prior year period.  For the second fiscal quarter ended July 31, 2011, the Trust reported an operating loss of $(106,000), an improvement of $541,000 from the prior year period operating loss of $(647,000).  The Trust also reported a net loss attributable to controlling interest of $(359,000), or $(0.04) per basic and diluted share, for the three months ended July 31, 2011, an improvement of $426,000 from $(785,000), or $(0.09) per basic and diluted share, in the prior year period.  Increased hotel revenues reflect increased occupancy and improved marketing strategy.

The Trust reported earnings before minority interest, interest, taxes, depreciation and amortization (Adjusted EBITDA) of $1.2 million for the six months ended July 31, 2011, as compared to $758,000 in the prior year period, an increase of $465,000, or 61%. Adjusted EBITDA was $331,000 for the three months ended July 31, 2011, as compared to $(182,000) in the prior year period, an improvement of $513,000. 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 EBITDA to net income attributable to Shareholders of Beneficial Interest for the six and three months ended July 31, 2011 follows:





For the six months ended


For the three months ended


7/31/2011


7/31/2010


7/31/2011


7/31/2010

Net loss attributable to controlling interest

$(308,881)


$(688,208)


$(358,987)


$(785,446)

Add back:








      Depreciation

886,550


935,238


437,518


465,494

      Interest expense

771,454


791,960


384,233


402,473

      Non-controlling interest

(124,952)


(279,277)


(130,970)


(263,561)

Less:








      nterest income

(560)


(1,233)


(417)


(769)

ADJUSTED EBITDA

$1,223,611


$758,480


$331,377


$(181,809)




The Trust reported revenue of $9.0 million for the six months ended July 31, 2011, an increase of 7.3% from $8.4 million for the prior year period.  The Trust reported revenue of $4.0 million for the three months ended July 31, 2011, an increase of 15.3% from $3.5 million for the prior year period.  The increase in revenues are primarily due to an increase in occupancy and improved market strategy.

Beginning in the first quarter of fiscal 2012, the Trust has been selling partnership interests in the subsidiary which owns and operates the Tucson Foothills, Arizona hotel property to improve equity and cash.  The partnership interests are sold through private placements to accredited investors for $10,000 per unit.  The offering has received strong interest with net cash proceeds of $1,518,400 received and subscriptions of $2,660,000 through September 12, 2011.

FUTURE POSITIONING

For the balance of the current fiscal year 2012, InnSuites projects a moderate improvement in hotel revenue and profit levels.  The Trust is focused on improved sales efficiencies 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 including large HD flat screen TVs and high capacity free to guests high speed internet, 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."

Our long-term strategic plan is to obtain the full benefit of our real estate equity and to migrate our focus from hotel owner to hospitality service by expanding our trademark license, management, and reservation 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 real estate trust which wholly or partially owns and manages five moderate and full service suite hotels with 843 hotel suites located in Arizona, California and New Mexico.  The Trust through its wholly-owned subsidiary, InnSuites Hotels, Inc., manages a total of eight hotels and, as owner of the "InnSuites"® trademarks (which allow the Trust to enter markets that are not available to other hotel companies that do not control the brand), provides trademark and reservations services to a total of 35 hotels containing 3,709 rooms and suites.  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) an uncertain economy; (ii) contribution of recent improving trend; (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 and hospitality industry factors, m) our ability to meet present and future debt service obligations; n) our inability to refinance indebtedness at or prior to the time it matures; 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



RELATED LINKS

http://www.innsuites.com