PHOENIX, March 24 /PRNewswire-FirstCall/ -- InnSuites Hospitality Trust Highlights:
* The Trust amended its fiscal year 2006 second and third quarter 10-Q
filings, increasing income attributable to Shareholders of Beneficial
Interest by $1.2 and $1.3 million, respectively, for the six and three
months ended July 31, 2005 and increasing income by $1.2 million for
the nine months ended October 31, 2005.
* The Trust strengthens its position in the Hotel Industry with Hotel
Condo Sales.
* The Trust expects that it will report positive earnings for the second
consecutive year.
InnSuites Hospitality Trust amended its fiscal year 2006 second quarter 10-Q filing to reclassify the gain on the sale of its Phoenix, Arizona property from a capital contribution to a gain on sale included in net income. The total gain on the sale was $1.8 million, $1.2 million of which is attributable to Trust shareholders. The Trust reclassified this transaction after the buyer, which is partially owned by Mr. James Wirth, CEO of the Trust, was determined not to be under common control, as defined by generally accepted accounting principles. This reclassification resulted in the Trust reporting income of $1.1 million, or $0.12 per basic share, for the six months ended July 31, 2005, an increase of $1.2 million from the previously reported loss of $(182,000), or $(0.02) per basic share. The reported income for the three months ended July 31, 2005 is $658,000, or $0.07 per basic share, an increase of $1.3 million from the previously reported loss of $(597,000), or $(0.07) per basic share.
The Trust amended its fiscal year 2006 third quarter 10-Q filing to reflect the reclassification of the gain on sale of the Phoenix property. This reclassification resulted in the Trust reporting income of $697,000, or $0.08 per basic share, for the nine months ended October 31, 2005, an increase of $1.2 million from the previously reported loss of $(550,000), or $(0.06) per basic share. The reported income for the three months ended October 31, 2005 was not changed.
The Trust also amended its fiscal year 2005 10-K filing to reflect comments received from the Staff of the Securities and Exchange Commission, Division of Corporate Finance. The amended filing includes additional disclosures of the Trust's anticipated future interest expense under its debt obligations and further clarification of management's assessment of the effectiveness of the Trust's disclosure controls and procedures. No financial information in this filing was amended.
The hotel industry has gone through many changes since the 1960's. The Interstate Highway System helped larger chains such as Holiday Inn, Ramada Inn and Best Western to grow while the independent motels and hotels began to disappear. During the 1980's, the concept of "suite hotels' was born with InnSuites as one of the pioneers. Throughout the 1990's timeshares were popular. And now as we begin the 21st century, the Trust believes that individual ownership of hotel condos will eclipse timeshares as the preferred vacation residence. The Trust again is leading the way with hotel condo sales beginning in Arizona.
Improving Trend
The Trust expects that it will report positive earnings for the second consecutive year. The Trust's hotel operations continue to recover from prior disruptions in the travel and hospitality industries. The Trust also continues to benefit from the disposal of underperforming properties and from management and trademark licensing agreements acquired during the prior fiscal year. The Trust continues to take aggressive steps to cut costs, increase sales, as well as engage in new business opportunities, including condo-hotel resort-area individual ownership.
Your Suite Choice(R) -- Value Concept
InnSuites Hospitality Trust is a mid-market studio and two-room suite hospitality business trust owning 5 moderate service and full service 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 http://www.innsuites.com/. For investor information, visit http://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 benefits of condo-hotel conversion. 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) interest rate fluctuations, d) changes in federal income tax laws and regulations, e) competition, f) any changes in the Trust's financial condition or operating results due to acquisitions or dispositions of hotel properties, g) real estate and hospitality market conditions, h) hospitality industry factors, i) terrorist attacks or other acts of war, j) outbreaks of communicable diseases, k) natural disasters, l) market demand or lack of demand for condo-hotel conversions, and m) 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.
