InnSuites Hospitality Trust (IHT, Financial) filed Quarterly Report for the period ended 2010-04-30.
Innsuites Hospitality Trust has a market cap of $12.8 million; its shares were traded at around $1.49 with and P/S ratio of 0.7. The dividend yield of Innsuites Hospitality Trust stocks is 0.7%.
For the three months ended April 30, 2010, our total revenue was $4.9 million, a decrease of $568,000, or 10.3%, compared with the prior year period total of $5.5 million. Revenues from hotel operations, which include Room, Food and Beverage, Telecommunications and Other revenues, decreased 12.5% to $4.2 million for the three months ended April 30, 2010, from $4.8 million for the three months ended April 30, 2009. Hotel operations, including Food and Beverage operations, experienced decreases in revenues during the first quarter of fiscal year 2011 due to lower occupancy and increased rate pressure, most prominently at our Yuma, Arizona location as a result of increased supply in the area. Expenses may not decline proportionately with a decline in revenues due to a high degree of operational and financial leverage in the hotel industry.
Total expenses were $4.8 million for the three months ended April 30, 2010, a decrease of $89,000, or 1.8%, from the prior year period total of $4.9 million. Total operating expenses were $4.4 million for the three months ended April 30, 2010, a decrease of $96,000, or 2.1%, from the prior year period total of $4.5 million. The majority of the hotel operating expenses decreased due to lower occupancy.
General and administrative expense was $804,000 for the three months ended April 30, 2010, a decrease of $47,000, or 5.5%, from the prior year period total of $851,000. The decrease was primarily due to reduced professional fees and salary expenses incurred by the Trust.
During the first quarter of fiscal year 2011, we increased our mortgage note payable secured by the Yuma, Arizona property. The new balance of the mortgage note payable is $5.0 million. The additional $1.0 million borrowed bears interest at 8.0% and matures on December 31, 2013. The note is due in monthly interest-only installments of $30,000, an increase of $6,667 from the previous monthly interest-only installments of $23,333. We used the $1.0 million to build operating reserves and reduce payables.
We continue to contribute to a Capital Expenditures Fund (the “Fund”) an amount equal to 4% of the Hotels room revenues. The Fund is restricted by the mortgage lender for four of our properties. As of April 30, 2010, $128,935 was held in restricted capital expenditure funds and is included on our Balance Sheet as “Restricted Cash.” The Fund is intended to be used for capital improvements to the Hotels and for refurbishment and replacement of furniture, fixtures and equipment, in addition to other uses of amounts in the Fund considered appropriate from time to time. During the three months ended April 30, 2010, the Hotels spent $250,724 for capital expenditures. We consider the majority of these improvements to be revenue producing. Therefore, these amounts have been capitalized and are being depreciated over their estimated useful lives. The Hotels also spent $327,014 and $288,190 during the three-month periods ended April 30, 2010 and 2009, respectively, on repairs and maintenance and these amounts have been charged to expense as incurred.
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Innsuites Hospitality Trust has a market cap of $12.8 million; its shares were traded at around $1.49 with and P/S ratio of 0.7. The dividend yield of Innsuites Hospitality Trust stocks is 0.7%.
Highlight of Business Operations:
Our expenses consist primarily of hotel operating expenses, property taxes, insurance, corporate overhead, interest on mortgage debt, professional fees and depreciation of the Hotels. Our operating performance is principally related to the performance of the Hotels. Therefore, management believes that a review of the historical performance of the operations of the Hotels, particularly with respect to occupancy, calculated as rooms sold divided by the number of rooms available, average daily rate (“ADR”), calculated as total room revenue divided by number of rooms sold, and revenue per available room (“REVPAR”), calculated as total room revenue divided by the number of rooms available, is appropriate for understanding revenue from the Hotels. Occupancy was 62.2% for the three months ended April 30, 2010, a decrease of 8.0% from the prior year same period. ADR decreased $1.46, or 1.8%, to $80.89. The decrease in ADR and reduced occupancy resulted in a decrease of $7.50, or 13.0%, in REVPAR to $50.33 from $57.83 in the prior year period. The decrease in occupancy is due to the downward trend in our economy, which caused less vacation and fewer business travelers.For the three months ended April 30, 2010, our total revenue was $4.9 million, a decrease of $568,000, or 10.3%, compared with the prior year period total of $5.5 million. Revenues from hotel operations, which include Room, Food and Beverage, Telecommunications and Other revenues, decreased 12.5% to $4.2 million for the three months ended April 30, 2010, from $4.8 million for the three months ended April 30, 2009. Hotel operations, including Food and Beverage operations, experienced decreases in revenues during the first quarter of fiscal year 2011 due to lower occupancy and increased rate pressure, most prominently at our Yuma, Arizona location as a result of increased supply in the area. Expenses may not decline proportionately with a decline in revenues due to a high degree of operational and financial leverage in the hotel industry.
Total expenses were $4.8 million for the three months ended April 30, 2010, a decrease of $89,000, or 1.8%, from the prior year period total of $4.9 million. Total operating expenses were $4.4 million for the three months ended April 30, 2010, a decrease of $96,000, or 2.1%, from the prior year period total of $4.5 million. The majority of the hotel operating expenses decreased due to lower occupancy.
General and administrative expense was $804,000 for the three months ended April 30, 2010, a decrease of $47,000, or 5.5%, from the prior year period total of $851,000. The decrease was primarily due to reduced professional fees and salary expenses incurred by the Trust.
During the first quarter of fiscal year 2011, we increased our mortgage note payable secured by the Yuma, Arizona property. The new balance of the mortgage note payable is $5.0 million. The additional $1.0 million borrowed bears interest at 8.0% and matures on December 31, 2013. The note is due in monthly interest-only installments of $30,000, an increase of $6,667 from the previous monthly interest-only installments of $23,333. We used the $1.0 million to build operating reserves and reduce payables.
We continue to contribute to a Capital Expenditures Fund (the “Fund”) an amount equal to 4% of the Hotels room revenues. The Fund is restricted by the mortgage lender for four of our properties. As of April 30, 2010, $128,935 was held in restricted capital expenditure funds and is included on our Balance Sheet as “Restricted Cash.” The Fund is intended to be used for capital improvements to the Hotels and for refurbishment and replacement of furniture, fixtures and equipment, in addition to other uses of amounts in the Fund considered appropriate from time to time. During the three months ended April 30, 2010, the Hotels spent $250,724 for capital expenditures. We consider the majority of these improvements to be revenue producing. Therefore, these amounts have been capitalized and are being depreciated over their estimated useful lives. The Hotels also spent $327,014 and $288,190 during the three-month periods ended April 30, 2010 and 2009, respectively, on repairs and maintenance and these amounts have been charged to expense as incurred.
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