Funds from operations, considered the prime measure of financial performance for REITs, were $3.6 million, representing a 2.9% decrease from the first quarter 2000. FFO per diluted share declined 6% to 29 cents.
The company reports total first quarter revenues of $6.8 million, and net earnings of $1.3 million, which are lower than the first quarter 2000 by $788,000 and $288,000, respectively, while earnings per diluted share declined 21% for the same period. The REIT's board of directors has voted to temporarily suspend paying monthly dividends.
The company's financial problems came to head earlier this year when the management company leasing its hotels, Humphrey Hospitality Management, said it wanted to get out of its leases or have its rent reduced because it was losing money operating them. The REIT appointed an independent board to review its operations. According to the REIT, the results of the review will be released in the "the near future."
Meanwhile, two class action suits have been filed on behalf of stockholders who claim the REIT intentionally misled them and its executives that it was in better financial shape than it actually was. "The company denies any wrongdoing and intends to defend these claims vigorously," said Humphrey Hospitality Trust chairman and CEO Paul J. Schulte Jr.
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