InnSuites Hospitality Trust (IHT) Reports Full Fiscal Year 2010 Earnings

PHOENIX, April 21 /PRNewswire-FirstCall/ -- InnSuites Hospitality Trust (NYSE Amex: IHT)

Highlights:

• Adjusted EBITDA decreased 47.1% from $3.2 million to $1.7 million for the fiscal year ended January 31, 2010 compared to the prior fiscal year.
• Revenues for fiscal year 2010 of $16.9 million were down $3.5 million, or 17.0%, compared to $20.4 million in the prior year, reflecting declining rates and occupancy in the current economic conditions.
• Net loss attributable to controlling interest was $1.1 million, or $(0.12) per basic share, for the fiscal year ended January 31, 2010

InnSuites Hospitality Trust reported an operating loss of $248,000 for the fiscal year ended January 31, 2010, a decline of $522,000 from the prior fiscal year operating income of $274,000.  The Trust also reported a net loss attributable to controlling interest of $1.1 million, or $(0.12) per basic and diluted share, for the fiscal year ended January 31, 2010, compared to a net loss of $631,000, or $(0.07) per basic and diluted share, in the prior fiscal year.  The prior year results include additional deprecation recorded in the prior year when the hotel properties were reclassified from "held for sale" to "held for use," resulting in a $979,000 decrease in depreciation expense in the current fiscal year.  The decrease in depreciation is offset by decreased hotel revenues reflecting the current economic conditions.

The Trust reported earnings before minority interest, interest, taxes, depreciation and amortization (Adjusted EBITDA) of $1.7 million for the fiscal year ended January 31, 2010, as compared to $3.2 million in the prior year, a decline of $1.5 million, or 47.1%. 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 Adjusted EBITDA to net loss attributable to controlling interest follows:

The Trust reported revenue of $16.9 million for the fiscal year ended January 31, 2010, a decrease of 17.0% from $20.4 million for the prior year.  The decrease in revenues is primarily due to a decrease in occupancy and room rates reflecting the current economic conditions.

In order to provide additional liquidity for fiscal year 2011, the Trust increased the mortgage note payable secured by its Yuma, Arizona property by $1.0 million subsequent to year end, netting cash proceeds of $975,000.  The transaction was an increase in the note payable with the current lender on the property, and the additional funding bears interest at 8.0% per annum.  The total revised mortgage note remains at less than 50% loan-to-value.  All other terms of the loan remained unchanged.

FUTURE POSITIONING

For current fiscal year 2011, InnSuites projects relatively flat occupancy and ADR during the first half of the year with slight improvements during the second half of the year.  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.

InnSuites Hospitality Trust's 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®- 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 hotels located primarily in Arizona, New Mexico, Texas and Southern California.  For reservations, call 1-888-INNSUITES, or visit www.innsuites.com.  For investor information, visit 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® 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.

SOURCE InnSuites Hospitality Trust