PHOENIX, May 1 /PRNewswire-FirstCall/ -- InnSuites Hospitality Trust (NYSE Amex: IHT)
Highlights: -- Adjusted EBITDA declined by 20% from $3.99 million to $3.19 million -- Earnings attributable to Shares of Beneficial Interest dropped to a loss of $631,000 or $(0.07) per share basic for the fiscal year ended January 31, 2009 from a profit of $1.12 million or $0.12 per share basic for the fiscal year ended January 31, 2008, primarily due to recording prior year depreciation of $963,000 and a decline in revenues. -- Revenues for fiscal 2009 of $20.39 million were down $1.7 million, or 7.7%, compared to $22.10 million in the prior year, reflecting the current economic environment. -- The Trust continues to benefit from efficiencies in the operations of its core hotels, effective cost control and successful rate management strategies to offset declining revenue.
InnSuites Hospitality Trust reported operating income of $274,000 for the fiscal year ended January 31, 2009, a decline of $2.71 million from the prior year operating income of $2.98 million. The decline is primarily due to recording $963,000 of prior year depreciation that was suspended in fiscal 2008 while the Trust's Hotels were classified as "held for sale" as well as a slowdown in room sales of $1.4 million. The Trust also reported a loss of $631,000 attributable to Shares of Beneficial Interest or $(0.07) per basic and diluted share for the fiscal year ended January 31, 2009, down from $1.12 million or $0.12 per basic share and $0.07 per diluted share in the prior fiscal year. The change since the prior year is partially attributable to reclassifying assets from held for sale to held and used and as a result recording $963,000 of prior-year depreciation as of August 1, 2008.
The Trust reported earnings before minority interest, interest, taxes, depreciation and amortization (Adjusted EBITDA) of $3.19 million for the twelve months ended January 31, 2009, as compared to $3.99 million in the prior year, a decline of $803,000, or 20%. 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 follows:
FY 2009 FY 2008 Net income (loss) attributable to Shareholders of Beneficial Interest $(630,526) $1,119,160 Add back: Depreciation 2,913,328 1,009,978 Interest expense 1,503,444 1,819,186 Income tax expense 34,692 192,091 Less: Minority interest (630,519) (147,077) Interest income (2,604) (1,565) ADJUSTED EBITDA $3,187,815 $3,991,773
The Trust reported revenue of $20.39 million for the fiscal year ended January 31, 2009, a decrease of 7.7% from $22.10 million for the prior year. The decrease in revenues is primarily due to a decrease in occupancy reflecting the current economic conditions.
The Trust's hotel operations and sales efforts continue to become more effective and efficient in the current economic climate. In addition, the Trust continues to benefit from effective rate management and cost control strategies and trademark licensing agreements acquired during fiscal year 2005.
FUTURE POSITIONING
For the 2010 current fiscal year, InnSuites projects a continued reduction in revenue and 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, it announced an early roll out of its 2009 Summer Vacation Special as part of its summer advertising campaign. The Summer Vacation Special offers Studio suites for $59, Family suites for $79 and Presidential Jacuzzi suites for $99 at select hotels through September 17, 2009.
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(R)- 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 ten hotels 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) 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(R) 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; . 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.
InnSuites Hospitality Trust
CONTACT: Marc Berg, Executive Vice President of InnSuites Hospitality
Trust, +1-602-944-1500, mberg@innsuites.com
Web Site: http://www.innsuites.com/
http://www.innsuitestrust.com/
