InnSuites Hospitality Trust (IHT) Reports Second Fiscal Quarter Earnings

InnSuites Hospitality Trust (NYSE Amex: IHT)

Highlights:

• Adjusted EBITDA declined by 48.5% from $2.7 million to $1.4 million for the six month period of February 1 to July 31, 2009.

• Net income (loss) attributable to controlling interest decreased to a loss of $111,000, or $(0.01) per basic share, for the six months ended July 31, 2009 from income of $1.6 million, or $0.18 per basic share, for the six months ended July 31, 2008, primarily due to a decline in revenue due to lower occupancy and an increase of $947,000 in non-cash depreciation expense.

• Revenues for the first six months of fiscal 2010 of $9.5 million were down $2.3 million, or 19.6%, compared to $11.8 million in the prior year period, reflecting declining rates and occupancy in the current economic conditions.

• The Trust continues to tighten cost controls and manage rates to partially mitigate the effects of the economic conditions.

InnSuites Hospitality Trust reported operating income of $401,000 for the six months ended July 31, 2009, a decline of $2.2 million from the prior year period operating income of $2.7 million. The Trust also reported a net loss attributable to controlling interest of $111,000, or $0.01 per basic and diluted share, for the six months ended July 31, 2009, down from net income of $1.6 million, or $0.18 per basic share and $0.15 per diluted share, in the prior year period. These declines are primarily due to decreased revenues due to reduced occupancy and room rates and an increase of $947,000 in depreciation expense due to the suspension of depreciation in the first six months of fiscal year 2009 while the Trust's Hotels were classified as "held for sale."

For the second fiscal quarter (May 1 to July 31, 2009), the Trust reported an operating loss of $541,000, a decline of $979,000 from the prior year period operating income of $438,000. The Trust also reported a net loss attributable to controlling interest of $645,000, or $0.07 per basic and diluted share, down from net income of $123,000, or $0.01 per basic share and $0.00 per diluted share, in the prior year period. These declines are primarily due to decreased revenues due to reduced occupancy and room rates and an increase of $468,000 in depreciation expense due to the suspension of depreciation in the first six months of fiscal year 2009 while the Trust's Hotels were classified as "held for sale."

The Trust reported earnings before minority interest, interest, taxes, depreciation and amortization (Adjusted EBITDA) of $1.4 million for the six months ended July 31, 2009, as compared to $2.7 million in the prior year period, a decline of $1.3 million, or 48.5%. The Trust reported Adjusted EBITDA of $(54,000) for the three months ended July 31, 2009, as compared to $457,000 in the prior year period, a decline of $510,000, or greater than 100%. 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 and six month periods ended July 31, 2009 and 2008 follows:

                            For the six months        For the three months

                                   ended                      ended

                          7/31/2009       7/31/2008   7/31/2009  7/31/2008

                         ----------      ----------  ----------  ---------

  Net income

   (loss)attributable to

   controlling interest   $(111,113)     $1,629,202   $(644,555)  $122,792

  Add back:

    Depreciation            982,305          34,991     487,402     18,954

    Interest expense        758,753         760,083     376,671    375,013

    Income tax expense            -               -           -          -

    Minority interest      (236,985)        259,977    (269,686)   (60,017)

  Less:

    Interest income          (9,926)           (484)     (3,589)      (231)

  ADJUSTED EBITDA        $1,383,034      $2,683,769    $(53,757)  $456,511

The Trust reported revenue of $9.5 million for the six months ended July 31, 2009, a decrease of 19.6% from $11.8 million for the prior year period. The Trust reported revenue of $4.0 million for the three months ended July 31, 2009, a decrease of 20.4% from $5.0 million for the prior year period. The decrease in revenues is primarily due to a decrease in occupancy and room rates reflecting the current economic conditions.


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