InnSuites Hospitality Trust (NYSE Amex: IHT)
Highlights:
• Adjusted EBITDA declined by 35.5% from $2.2 million to $1.4 million
• Net income attributable to Shares of Beneficial Interest decreased to $532,000, or $0.06 per basic share, for the three months ended April 30, 2009 from $1.5 million, or $0.16 per basic share, for the three months ended April 30, 2008, primarily due to a decline in revenue due to lower occupancy and an increase of $479,000 in depreciation expense.
• Revenues for the first quarter of fiscal 2010 of $5.5 million were down $1.3 million, or 19.0%, compared to $6.8 million in the prior year period, reflecting the current economic environment.
• The Trust continues to proactively review and reduce operating expenses to offset declining revenue.
InnSuites Hospitality Trust reported operating income of $942,000 for the first quarter ended April 30, 2009, a decline of $1.3 million from the prior year period operating income of $2.2 million. The Trust also reported net income attributable to Shares of Beneficial Interest of $532,000, or $0.06 per basic and $0.04 per diluted share, for the first quarter ended April 30, 2009, down from $1.5 million, or $0.16 per basic share and $0.14 per diluted share, in the prior year period. These declines are primarily due to decreased revenues due to reduced occupancy and room rates and a $479,000 increase in depreciation expense due to the suspension of depreciation in the first quarter 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 $1.44 million for the three months ended April 30, 2009, as compared to $2.23 million in the prior year period, a decline of $790,000, or 35.5%. 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:
April 30, 2009 April 30, 2008
Net income attributable to Shareholders of
Beneficial Interest
$531,666 $1,506,460
Add back:
Depreciation 494,903 16,037
Interest expense 382,082 385,070
Income tax expense - -
Minority interest 34,478 319,944
Less:
Interest income (6,337) (253)
ADJUSTED EBITDA $1,436,792 $2,227,258
The Trust reported revenue of $5.5 million for the first quarter ended April 30, 2009, a decrease of 19.0% from $6.8 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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