PHOENIX, Sept. 14 /PRNewswire-FirstCall/ -- InnSuites Hospitality Trust
Highlights: -- Operating income increased $247,000, or 21.1%, to $1.4 million for the first six months of fiscal year 2008 ended July 31, 2007 compared to the six-month period ended July 31, 2006. -- Net income attributable to Shares of Beneficial Interest was $548,000, or $0.06 per basic share for the six months ended July 31, 2007 up from $0.04 in the prior year period. -- The Trust's operations, including revenue per available room ("REVPAR") and average daily rate, continue to follow the industry trends upward.
InnSuites Hospitality Trust reported operating income of $1.4 million for the six months ended July 31, 2007, an improvement of $247,000, or 21.1%, from the prior year six-month period operating income of $1.2 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 $548,000, or $0.06 per basic and $0.04 per diluted share, an increase of over 58.7% for the six months ended July 31, 2008, from $345,000, or $0.04 per basic and $0.02 per diluted share, for the prior year period.
"The industry trends in terms of occupancy and rate were strong in fiscal 2007 (February 1, 2006 to January 31, 2007) and we expect these trends to continue in fiscal 2008," said James Wirth, President and CEO. "InnSuites has benefited from these trends in the last eighteen months and looks forward to continued benefits over the next eighteen months. In addition, InnSuites has controlled labor costs, increased technology and upgraded suites to augment the strong industry trends in the year ahead and to improve operating profits and asset value."
For the three-month period ended July 31, 2007, the Trust reported revenue of $4.9 million, consistent with the prior year period. Net loss attributable to Shares of Beneficial Interest was $(354,311) down $14,000 from the prior year three month period ended July 31, 2006. The Trust's revenues for the three month period ended July 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.
For the six-month period ended July 31, 2007 the Trust's hotel operations continued to benefit from improved economic and industry conditions, with occupancy remaining strong at 74.6% and average daily rate increasing $5.11 over the prior year period. In addition, the Trust continues to benefit from management and trademark licensing agreements acquired during fiscal year 2005.
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.
FFO increased approximately $165,000 for the six month period ended July 31, 2007, reflecting an increase of 15.4%, when compared to the prior year period. The increase was due primarily to stronger operating results at the hotel properties. See reconciliation below.
For the Six Months Ended July 31, 2007 2006 Net Income (Loss) Attributable to Shares of Beneficial Interest $ 547,520 344,995 Hotel Property Depreciation 978,453 1,038,880 Loss on Disposition of Hotels 773 1,628 Minority Interest Share of Depreciation and (Gain) Loss on Dispositions (226,399) (249,908) Funds from Operations $ 1,300,347 1,135,595
On September 10, 2007, the Board of Trustees approved the purchase of up to 350,000 additional limited partnership units in the Partnership and/or Shares of Beneficial Interest in open market or privately negotiated transactions. Additionally, on September 10, 2007, the Board of Trustees ratified and approved the limited partnership unit and Share of Beneficial Interest repurchases that occurred during the period from June 1, 2007 through September 10, 2007.
Your Suite Choice(R) -- Value Concept
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 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, and (iii) expectations that the travel and hospitality industries will continue to rebound 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 growth strategies, i) concentration of our investments in our InnSuites Hotels(R) 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, 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, and s) uncertainties the Trust might encounter in changing from a real estate investment trust 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.
