InnSuites Hospitality Trust (IHT) Reports First Quarter Fiscal 2012 Results

2011-06-07

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InnSuites Revenues for the first quarter of fiscal year 2012 were $5.0 million compared to $4.9 million in the prior year, reflecting increased occupancy as the travel industry improves.

Highlights:

Adjusted EBITDA was $892,000 for the first quarter ended April 30, 2011 compared to $940,000 in the prior year period.
Net income attributable to controlling interest was $50,000, or $0.01 per basic share, for the first quarter ended April 30, 2011, which includes $449,000 of non-cash depreciation. This compares to income of $97,000, or $0.01 per basic share, for the first quarter ended April 30, 2010, which includes $470,000 of non-cash depreciation.
Revenues for the first quarter of fiscal year 2012 were $5.0 million compared to $4.9 million in the prior year, reflecting increased occupancy as the travel industry improves.
Following the success of the sale of membership interests in the subsidiary which owns and operates the Albuquerque, New Mexico hotel property, the Trust began sales of membership interests in the subsidiary which owns and operates the Tucson Foothills, Arizona hotel property.

InnSuites Hospitality Trust reported a operating income of $443,000 for the first quarter ended April 30, 2011, a decline of $28,000 from the prior year period operating income of $471,000. The Trust also reported net income attributable to controlling interest of $50,000, or $0.01 per basic share and $0.00 per diluted share, for the fiscal quarter ended April 30, 2011, declining from $97,000, or $0.01 per basic and diluted share, in the prior year period. Increased operating expenses due to significant property enhancements were the primary driver of the decreased income figures.

The Trust reported earnings before minority interest, interest, taxes, depreciation and amortization (Adjusted EBITDA) of $892,000 for the first quarter ended April 30, 2011, as compared to $940,000 in the prior year period, a decline of $48,000, or 5.1%. 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 for the three months ended April 30 follows:


	For the three months ended
	4/30/2011	4/30/2010
Net income attributable to controlling interest	$50,106	$97,238
Add back:
Depreciation	449,032	469,744
Interest expense	387,221	389,487
Non-controlling interest	6,018	(15,716)
Less:
Interest income	(143)	(464)
ADJUSTED EBITDA	$ 892,234	$ 940,289

The Trust reported revenues of $5.0 million for the first quarter ended April 30, 2011, an increase of 1.6% from $4.9 million for the prior year period. The increase in revenues is primarily due to increased occupancy as a result of improving travel industry conditions.

During the first quarter ended April 30, 2011, the Trust began selling partnership interests in the subsidiary which owns and operates the Tucson Foothills, Arizona hotel property, through private placements to accredited investors, for $10,000 per unit, with a total of 232 units available for sale. The offering has received strong interest with net cash proceeds of $899,000 received and subscriptions of $2,070,000 through June 3, 2011.

FUTURE POSITIONING

For the current fiscal year 2012, InnSuites projects a moderate improvement in the economic environment, with slight increases in hotel revenue levels. The Trust is focused on improved sales efficiencies 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."

Our long-term strategic plan is to obtain the 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.