InnSuites Hospitality Trust (IHT) Reports First Fiscal Quarter Earnings

• Adjusted EBITDA was $940,000 for the three month period ended April 30, 2010 compared to $1.4 million in the prior year quarter.
• Net income attributable to controlling interest was $97,000, or $0.01 per basic and diluted share, for the three months ended April 30, 2010 compared to net income of $532,000, or $0.06 per basic share and $0.04 per diluted share, for the three months ended April 30, 2009.
• Revenues for the first three months of fiscal 2011 were $4.9 million compared to $5.5 million in the prior year period, reflecting the current economic conditions.

InnSuites Hospitality Trust reported operating income of $471,000 for the three months ended April 30, 2010, a decline of $471,000 from the prior year period operating income of $942,000.  The Trust also reported net income attributable to controlling interest of $97,000, or $0.01 per basic and diluted share, for the three months ended April 30, 2010, compared to $532,000, or $0.06 per basic and $0.04 per diluted share, in the prior year period.  Lower hotel revenues, reflecting the current economic conditions, were the primary cause of the decreased operating income figures.

The Trust reported earnings before non-controlling interest, interest, taxes, depreciation and amortization (Adjusted EBITDA) of $940,000 for the three months ended April 30, 2010, as compared to $1.4 million in the prior year period, a decline of $497,000, or 34.6%.  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 months ended April 30 follows:

The Trust reported revenue of $4.9 million for the three months ended April 30, 2010, a decrease of 10.3% from $5.5 million for the prior year period.  The decrease in revenues is primarily due to a decrease in occupancy caused by the current difficult economic conditions.

FUTURE POSITIONING

For the current fiscal year 2011, InnSuites projects a continued difficult economic environment, negatively affecting hotel revenue levels.  The Trust 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, the Trust has cut labor and other expenses and it has actively marketed promotional rates to prior and potential guests.  The recent Spring Special offers Studio InnSuites for $69, Executive/Family Suites for $89 and Presidential Jacuzzi Suites for $99 at select hotels through September 15, 2010.

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.

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