Ohio
|
34-6647590
|
|
(State
or other jurisdiction of
|
(I.R.S.
Employer Identification Number)
|
|
incorporation
or organization)
|
||
InnSuites
Hotels Centre
|
||
1615
E. Northern Ave., Suite 102
|
||
Phoenix,
AZ 85020
|
||
(Address
of principal executive offices)
|
||
Registrant’s
telephone number, including area code: (602)
944-1500
|
OCTOBER
31, 2006
|
JANUARY 31,
2006
|
|||||
(UNAUDITED)
|
(AUDITED)
|
|||||
ASSETS
|
|
|
||||
Current
Assets:
|
|
|
||||
Cash
and Cash Equivalents
|
$
|
183,470
|
|
34,251
|
|
|
Restricted
Cash
|
41,488
|
|
226,294
|
|
||
Accounts
Receivable, including $0 and $14,828 from related parties, net of
Allowance for Doubtful Accounts of $68,000 and $112,000, as of October
31,
and January 31, 2006, respectively
|
626,801
|
|
531,961
|
|
||
Prepaid
Expenses and Other Current Assets
|
466,714
|
|
494,829
|
|
||
Total
Current Assets
|
1,318,473
|
|
1,287,335
|
|
||
Hotel
Properties, net
|
29,940,435
|
|
30,215,391
|
|
||
Long-Term
Portion of Deferred Finance Costs
|
148,942
|
|
175,645
|
|
||
Long-Term
Deposits
|
14,987
|
14,987
|
||||
Deferred
Income Tax Benefit
|
259,000
|
|
259,000
|
|
||
TOTAL
ASSETS
|
$
|
31,681,837
|
|
31,952,358
|
|
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
|
|
||||
|
|
|||||
LIABILITIES
|
||||||
Current
Liabilities:
|
|
|
||||
Accounts
Payable and Accrued Expenses, including $127,246 and
$95,418 accrued interest and payables to related parties as of October
31,
and January 31, 2006, respectively
|
$
|
2,692,299
|
|
2,594,733
|
|
|
Notes
Payable to Banks
|
655,734
|
|
500,000
|
|
||
Current
Portion of Mortgage Notes Payable
|
906,515
|
|
879,265
|
|
||
Current
Portion of Other Notes Payable
|
107,809
|
121,558
|
||||
Current
Portion of Notes Payable to Related Parties
|
30,548
|
|
428,989
|
|
||
Total
Current Liabilities
|
4,392,905
|
|
4,524,545
|
|
||
Mortgage
Notes Payable
|
18,176,096
|
|
19,029,612
|
|
||
Notes
Payable to Related Parties
|
762,606
|
|
85,717
|
|
||
Other
Notes Payable
|
154,373
|
|
206,424
|
|
||
TOTAL
LIABILITIES
|
23,485,980
|
|
23,846,298
|
|
||
MINORITY
INTEREST IN PARTNERSHIP
|
1,103,254
|
|
1,388,132
|
|
||
SHAREHOLDERS’
EQUITY
|
|
|
||||
Shares
of Beneficial Interest, without par value; unlimited
authorization; 9,228,936
and 9,145,365 shares issued and outstanding at October 31, and January
31,
2006, respectively
|
17,477,690
|
|
17,155,106
|
|
||
Treasury
Stock, 7,456,670 and 7,494,578 shares held at October 31, and January
31,
2006, respectively
|
(10,385,087
|
)
|
(10,437,178
|
)
|
||
TOTAL
SHAREHOLDERS’ EQUITY
|
7,092,603
|
|
6,717,928
|
|
||
TOTAL
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$
|
31,681,837
|
|
31,952,358
|
|
FOR
THE NINE MONTHS ENDED
OCTOBER
31,
|
|||||||
2006
|
2005
|
||||||
REVENUE
|
|
|
|||||
Room
|
$
|
12,075,291
|
|
12,264,755
|
|
||
Food
and Beverage
|
920,994
|
|
807,897
|
|
|||
Telecommunications
|
25,567
|
|
49,050
|
|
|||
Other
|
314,704
|
|
421,184
|
|
|||
Management
and Trademark Fees, including $265,409 and $124,720 from related
parties,
respectively
|
376,755
|
|
271,656
|
|
|||
Payroll
Reimbursements, including $2,238,005
and $1,740,913 from related parties, respectively
|
2,743,718
|
|
2,309,829
|
|
|||
TOTAL
REVENUE
|
16,457,029
|
|
16,124,371
|
|
|||
OPERATING
EXPENSES
|
|
|
|||||
Room
|
3,060,190
|
|
3,245,728
|
|
|||
Food
and Beverage
|
828,680
|
|
869,140
|
|
|||
Telecommunications
|
84,745
|
|
124,525
|
|
|||
General
and Administrative
|
2,387,027
|
|
3,031,065
|
|
|||
Sales
and Marketing
|
941,298
|
|
1,020,336
|
|
|||
Repairs
and Maintenance
|
1,056,666
|
|
1,096,186
|
|
|||
Hospitality
|
565,685
|
|
522,352
|
|
|||
Utilities
|
905,560
|
|
902,851
|
|
|||
Hotel
Property Depreciation
|
1,538,747
|
|
1,570,473
|
|
|||
Real
Estate and Personal Property Taxes, Insurance and Ground
Rent
|
847,414
|
|
954,293
|
|
|||
Other
|
115,684
|
|
142,153
|
|
|||
Payroll
Expenses
|
2,743,718
|
|
2,309,829
|
|
|||
TOTAL
OPERATING EXPENSES
|
15,075,414
|
|
15,788,931
|
|
|||
OPERATING
INCOME
|
1,381,615
|
|
335,440
|
||||
Gain
on Disposition of Hotels
|
138,751
|
|
1,847,425
|
|
|||
Interest
Income
|
2,140
|
1,447
|
|||||
TOTAL
OTHER INCOME
|
140,891
|
|
1,848,872
|
|
|||
Interest
on Mortgage Notes Payable
|
1,281,744
|
|
1,413,621
|
|
|||
Interest
on Notes Payable to Banks
|
26,160
|
|
19,649
|
|
|||
Interest
on Notes Payable and Advances to Related Parties
|
32,656
|
|
7,863
|
|
|||
Interest
on Other Notes Payable
|
16,314
|
|
12,800
|
|
|||
TOTAL
INTEREST EXPENSE
|
1,356,874
|
|
1,453,933
|
|
|||
INCOME
BEFORE MINORITY INTEREST AND INCOME TAXES
|
165,632
|
|
730,379
|
||||
LESS
MINORITY INTEREST
|
(267,512
|
)
|
(55,333
|
)
|
|||
INCOME
ATTRIBUTABLE TO SHARES OF BENEFICIAL INTEREST BEFORE INCOME
TAXES
|
433,144
|
|
785,712
|
||||
INCOME
TAX PROVISION (Note 6)
|
(94,350
|
)
|
(89,175
|
)
|
|||
INCOME
ATTRIBUTABLE TO SHARES OF BENEFICIAL INTEREST
|
$
|
338,794
|
696,537
|
||||
NET
INCOME PER SHARE - BASIC
|
$
|
0.04
|
|
0.08
|
|||
WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC
|
9,263,591
|
|
9,064,078
|
||||
NET
INCOME PER SHARE - DILUTED
|
$
|
0.01
|
0.05
|
||||
WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING - DILUTED
|
13,291,335
|
|
13,364,228
|
|
FOR
THE THREE MONTHS ENDED
OCTOBER
31,
|
|||||||
2006
|
2005
|
||||||
REVENUE
|
|
|
|||||
Room
|
$
|
3,678,951
|
|
3,382,957
|
|
||
Food
and Beverage
|
319,608
|
|
251,952
|
|
|||
Telecommunications
|
9,205
|
|
11,534
|
|
|||
Other
|
86,330
|
|
103,424
|
|
|||
Management
and Trademark Fees, including $80,594 and $56,149 from related parties,
respectively
|
99,810
|
|
106,311
|
|
|||
Payroll
Reimbursements, including $739,776 and $644,094 from related parties,
respectively
|
827,902
|
|
841,980
|
|
|||
TOTAL
REVENUE
|
5,021,806
|
|
4,698,158
|
|
|||
OPERATING
EXPENSES
|
|
|
|||||
Room
|
923,424
|
|
964,435
|
|
|||
Food
and Beverage
|
263,033
|
|
286,785
|
|
|||
Telecommunications
|
18,830
|
|
26,667
|
|
|||
General
and Administrative
|
816,363
|
|
738,171
|
|
|||
Sales
and Marketing
|
282,868
|
|
334,646
|
|
|||
Repairs
and Maintenance
|
339,744
|
|
385,413
|
|
|||
Hospitality
|
193,778
|
|
144,530
|
|
|||
Utilities
|
342,801
|
|
323,132
|
|
|||
Hotel
Property Depreciation
|
499,867
|
|
526,641
|
|
|||
Real
Estate and Personal Property Taxes, Insurance and Ground
Rent
|
259,704
|
|
274,187
|
|
|||
Other
|
40,560
|
|
48,015
|
|
|||
Payroll
Expenses
|
827,902
|
|
841,980
|
|
|||
TOTAL
OPERATING EXPENSES
|
4,808,874
|
|
4,894,602
|
|
|||
OPERATING
INCOME (LOSS)
|
212,932
|
|
(196,444
|
)
|
|||
Gain
on Disposition of Hotels
|
138,751
|
|
—
|
|
|||
Interest
Income
|
894
|
574
|
|||||
TOTAL
OTHER INCOME
|
139,645
|
|
574
|
|
|||
Interest
on Mortgage Notes Payable
|
427,303
|
|
431,670
|
|
|||
Interest
on Notes Payable to Banks
|
17,822
|
|
9,235
|
|
|||
Interest
on Notes Payable and Advances to Related Parties
|
14,305
|
|
2,676
|
|
|||
Interest
on Other Notes Payable
|
4,917
|
|
4,482
|
|
|||
TOTAL
INTEREST EXPENSE
|
464,347
|
|
448,063
|
|
|||
LOSS
BEFORE MINORITY INTEREST AND INCOME TAXES
|
(111,770
|
)
|
(643,933
|
)
|
|||
LESS
MINORITY INTEREST
|
(122,240
|
)
|
(279,440
|
)
|
|||
INCOME
(LOSS) ATTRIBUTABLE TO SHARES OF BENEFICIAL INTEREST BEFORE INCOME
TAXES
|
10,470
|
|
(364,493
|
)
|
|||
INCOME
TAX PROVISION (Note 6)
|
(16,700
|
) |
(7,175
|
)
|
|||
NET
LOSS ATTRIBUTABLE TO SHARES OF BENEFICIAL INTEREST
|
$
|
(6,230
|
) |
(371,668
|
)
|
||
NET
LOSS PER SHARE - BASIC
|
$
|
(0.00
|
)
|
(0.04
|
)
|
||
WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC
|
9,249,716
|
|
9,209,205
|
||||
NET
LOSS PER SHARE - DILUTED
|
$
|
(0.00
|
)
|
(0.04
|
)
|
||
WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING - DILUTED
|
9,249,716
|
|
9,209,205
|
|
FOR
THE NINE MONTHS ENDED
OCTOBER
31,
|
||||||
2006
|
2005
|
|||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
||||
Net
Income Attributable to Shares of Beneficial Interest
|
$
|
338,794
|
|
696,537
|
|
|
Adjustments
to Reconcile Net Income Attributable to Shares of Beneficial Interest
to
Net Cash Provided By Operating Activities:
|
|
|
||||
Minority
Interest
|
(267,512
|
)
|
(55,333
|
)
|
||
Provision
for Uncollectible Receivables
|
72,099
|
|
312,697
|
|
||
Deferred
Stock Compensation Expense
|
77,733
|
—
|
||||
Depreciation
and Amortization
|
1,565,450
|
|
1,597,944
|
|
||
Loss
(Gain) on Disposal
|
(137,097
|
)
|
(1,835,279
|
)
|
||
Changes
in Assets and Liabilities, net of effect of consolidation of
Suite Hospitality Management and InnSuites Licensing
Corp:
|
|
|
||||
(Increase)
Decrease in Accounts Receivable
|
(159,785
|
)
|
46,751
|
|||
Decrease
(Increase) in Prepaid Expenses and Other Assets
|
28,115
|
(88,703
|
)
|
|||
Increase
(Decrease) in Accounts Payable and Accrued Expenses
|
126,726
|
(320,915
|
)
|
|||
NET
CASH PROVIDED BY OPERATING ACTIVITIES
|
1,644,523
|
|
353,699
|
|||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|
|
||||
Change
in Restricted Cash
|
184,806
|
|
8,000
|
|
||
Cash
Received from Disposition of Hotel Properties
|
160,000
|
1,190,192
|
||||
Improvements
and Additions to Hotel Properties
|
(1,286,694
|
)
|
(808,389
|
)
|
||
NET
CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES
|
(941,888
|
)
|
389,803
|
|||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|
|
||||
Principal
Payments on Mortgage Notes Payable
|
(826,266
|
)
|
(725,032
|
)
|
||
Payments
on Notes Payable to Banks
|
(2,464,492
|
)
|
(1,797,000
|
)
|
||
Borrowings
on Notes Payable to Banks
|
2,620,226
|
|
1,597,000
|
|
||
Repurchase
of Partnership Units
|
(246
|
)
|
(774
|
)
|
||
Repurchase
of Treasury Stock
|
(78,286
|
)
|
(26,759
|
)
|
||
Payments
on Notes and Advances Payable to Related Parties
|
(21,552
|
)
|
(29,896
|
)
|
||
Borrowings
on Notes and Advances Payable to Related Parties
|
300,000
|
|
400,000
|
|
||
Payments
on Other Notes Payable
|
(82,800
|
)
|
(67,621
|
)
|
||
NET
CASH USED IN FINANCING ACTIVITIES
|
(553,416
|
)
|
(650,082
|
)
|
||
NET
INCREASE IN CASH AND CASH EQUIVALENTS
|
149,219
|
93,420
|
||||
CASH
AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
34,251
|
|
1,343
|
|
||
CASH
AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
183,470
|
|
94,763
|
|
For
the nine months ended
|
||||
October
31, 2006
|
October
31, 2005
|
|||
Income
attributable to Shares of Beneficial Interest
|
$
|
338,794
|
696,537
|
|
Plus:
Income (Loss) attributable to minority interest unit
holders
|
(267,512)
|
(55,333)
|
||
Income
attributable to Shares of Beneficial Interest after unit
conversion
|
$
|
71,282
|
641,204
|
|
Weighted
average common shares outstanding
|
9,263,591
|
9,064,078
|
||
Plus:
Weighted average incremental shares resulting from unit
conversion
|
4,027,744
|
4,300,150
|
||
Weighted
average common shares outstanding after unit
conversion
|
13,291,335
|
13,364,228
|
||
Diluted
Earnings Per Share
|
$
|
0.01
|
0.05
|
Restricted
Shares
|
||
Shares
|
Weighted-Average
Grant Date Fair Value
|
|
Balance
at January 31, 2006
|
—
|
—
|
Granted
|
99,300
|
$1.35
|
Vested
|
(84,480)
|
$1.35
|
Forfeited
|
—
|
—
|
Balance
of unvested awards at October 31, 2006
|
14,820
|
$1.35
|
October
31, 2006
|
January
31, 2006
|
||||||
Note
payable to The Anderson Charitable Remainder Unitrust, an affiliate
of
Mason Anderson, former Trustee of the Trust, bearing interest at
7% per
annum, and secured by Shares of Beneficial Interest in the Trust.
Due in
monthly principal and interest payments of $1,365 through
November 2009.
|
$
|
45,306
|
|
$
|
54,929
|
|
Note
payable to Wayne Anderson, son of Mason Anderson, former Trustee
of the
Trust, bearing interest at 7% per annum, and secured by Shares of
Beneficial Interest in the Trust. Due in monthly principal and interest
payments of $574 through June 2009.
|
16,718
|
|
20,886
|
|
|||
Note
payable to Karen Anderson, daughter of Mason Anderson, former Trustee
of
the Trust, bearing interest at 7% per annum, and secured by Shares
of
Beneficial Interest in the Trust. Due in monthly principal and interest
payments of $574 through June 2009.
|
16,718
|
|
20,886
|
|
|||
Note
payable to Kathy Anderson, daughter of Mason Anderson, former Trustee
of
the Trust, bearing interest at 7% per annum, and secured by Shares
of
Beneficial Interest in the Trust. Due in monthly principal and interest
payments of $495 through June 2009.
|
14,412
|
|
18,005
|
|
|||
Note
payable to Rare Earth Financial, L.L.C., affiliate of Wirth. Fully
satisfied in March 2006 using the line of credit established with
Rare
Earth Financial, L.L.C.
|
—
|
400,000
|
|||||
Revolving
line of credit to Rare Earth Financial, L.L.C., affiliate of Wirth,
bearing interest at 7% per annum, and secured by the Partnership’s
ownership interest in Tucson St. Mary’s Hospitality LLC. Due in monthly
interest installments with unpaid principal due in March
2008.
|
700,000
|
—
|
|||||
Totals
|
$
|
793,154
|
|
$
|
514,706
|
|
FOR
THE NINE MONTHS ENDED
|
||||||||
OCTOBER
31,
|
||||||||
2006
|
2005
|
|
||||||
OCCUPANCY
|
73.1
|
%
|
69.1
|
%
|
||||
AVERAGE
DAILY RATE (ADR)
|
$
|
71.82
|
|
71.60
|
|
|||
REVENUE
PER AVAILABLE ROOM (REVPAR)
|
$
|
52.47
|
|
49.46
|
|
2006
|
2005
|
Change
|
%
Change
|
|||||||||
Revenue
|
$
|
16,457,029
|
|
$
|
16,124,371
|
|
$
|
332,658
|
2.1
|
%
|
||
Operating
Income
|
$
|
1,381,615
|
|
$
|
335,440
|
|
$
|
1,046,175
|
>100.0
|
%
|
||
Gain
on Disposition of Hotels
|
$
|
138,751
|
$
|
1,847,425
|
$
|
(1,708,674
|
)
|
(92.5
|
)%
|
|||
Net
Income Attributable to Shares of Beneficial Interest
|
$
|
338,794
|
|
$
|
696,537
|
|
$
|
(357,743
|
)
|
(51.4
|
)%
|
|
Net
Income Per Share - Basic
|
$
|
0.04
|
|
$
|
0.08
|
|
$
|
(0.04
|
)
|
(50.0
|
)%
|
|
Net
Income Per Share - Diluted
|
$
|
0.01
|
|
$
|
0.05
|
|
$
|
(0.04
|
)
|
(80.0
|
)%
|
2006
|
2005
|
Change
|
%
Change
|
|||||||||
Revenue
|
$
|
5,021,806
|
|
$
|
4,698,158
|
|
$
|
323,648
|
6.9
|
%
|
||
Operating
Income (Loss)
|
$
|
212,932
|
|
$
|
(196,444
|
)
|
$
|
409,376
|
>100.0
|
%
|
||
Gain
on Disposition of Hotels
|
$
|
138,751
|
$
|
—
|
$
|
138,751
|
100.0
|
%
|
||||
Net
Loss Attributable to Shares of Beneficial Interest
|
$
|
(6,230
|
)
|
$
|
(371,668
|
)
|
$
|
365,438
|
98.3
|
%
|
||
Net
Loss Per Share - Basic
|
$
|
(0.00
|
)
|
$
|
(0.04
|
)
|
$
|
0.04
|
100.0
|
%
|
||
Net
Loss Per Share - Diluted
|
$
|
(0.00
|
)
|
$
|
(0.04
|
)
|
$
|
0.04
|
100.0
|
%
|
For
the Nine Months Ended October 31,
|
For
the Three Months Ended October 31,
|
|||||||
2006
|
2005
|
2006
|
2005
|
|||||
Net
Income (Loss) Attributable to Shares of Beneficial
Interest
|
$
|
338,794
|
696,537
|
(6,230)
|
(371,668)
|
|||
Hotel
Property Depreciation
|
1,538,747
|
1,570,473
|
499,867
|
526,641
|
||||
(Gain)
Loss on Disposition of Hotels
|
(138,751)
|
(1,847,425)
|
(138,751)
|
—
|
||||
Minority
Interest Share of Depreciation and (Gain) Loss on
Dispositions
|
(324,749)
|
190,825
|
(75,322)
|
(133,528)
|
||||
Funds
from Operations
|
$
|
1,414,041
|
610,410
|
279,564
|
21,445
|
Issuer
Purchases of Equity Securities
|
||||||||||
Period
|
Total
Number
of
Shares
Purchased
|
Average
Price
Paid
per
Share
|
Total
Number of Shares
Purchased
as Part of
Publicly
Announced
Plans
|
Maximum
Number of
Shares
that May Be
Yet
Purchased
Under
the Plans
|
||||||
August
1 - August 31, 2006
|
690
|
$
|
1.50
|
690
|
172,353
|
|||||
September
1 - September 30, 2006
|
10,600
|
$
|
1.34
|
10,600
|
161,753
|
|||||
October 1
- October 31, 2006
|
15,300
|
$
|
1.17
|
15,300
|
146,453
|
10.1
|
Promissory
Note dated December 1, 2006 by RRF Limited Partnership in favor of
Rare
Earth Financial, L.L.C.
|
|
31.1
|
Section 302
Certification By Chief Executive Officer
|
|
31.2
|
Section 302
Certification By Chief Financial Officer
|
|
32.1
|
Section 906
Certification of Principal Executive Officer and Principal Financial
Officer
|
INNSUITES
HOSPITALITY TRUST
|
|||||
Dated:
|
December
1, 2006
|
/s/
James F. Wirth
|
|||
James
F. Wirth
|
|||||
Chairman,
President and Chief Executive Officer
|
|||||
Dated:
|
December
1, 2006
|
/s/
Anthony B. Waters
|
|||
Anthony
B. Waters
|
|||||
Chief
Financial Officer
|