Exhibit 99.1
AMERICAN SPECTRUM REALTY, INC. William J. Carden, Chairman, President and CEO 713-706-6200 | FOR IMMEDIATE RELEASE |
AMERICAN SPECTRUM REALTY REPORTS FIRST QUARTER RESULTS
Net Income of $17.2 Million Generated
Rental Revenue Increased 12.3% for Quarter
Houston, TX, May 8, 2006 - American Spectrum Realty, Inc. (“the Company”) (AMEX:AQQ), a real estate investment and management company located in Houston, Texas, announced today its results for the first quarter of 2006.
Net income for the quarter ended March 31, 2006 was $17.2 million, or $12.37 per share, compared to a net loss of $199,000, or $.13 per share, for the first quarter of 2005. The net income recorded during the three months ended March 31, 2006 was primarily attributable to income from discontinued operations of $19.3, which included a gain on the sale of three properties. The three sales consisted of the Company’s two remaining properties located in San Diego, California, an office and an industrial property. The third sale was an office property located in Palatine, Illinois. During the three months ended March 31, 2005, income from discontinued operations amounted to $1.7 million, which was primarily due to a gain recognized on the sale of Sorrento I in San Diego, California. Sorrento I was unoccupied at the time of the sale.
Rental revenue increased 12.3% for the quarter ended March 31, 2006 compared to the same quarter in the prior year. This increase was attributable to $484,000 in revenue generated from four office properties acquired during the quarter, in addition to $126,000 in higher revenues from properties owned on March 31, 2006 and March 31, 2005 (“Same Properties”). This increase in Same Properties revenue was primarily due to higher rental rates. The weighted average occupancy of properties held for investment by the Company was 87% at March 31, 2006 and March 31, 2005.
Net proceeds of $11.3 million (net of debt repayments and sales costs) were generated as a result of the three first quarter sales. Approximately $4.3 million of these proceeds were used to assist with the funding of one of the Company’s first quarter acquisitions. The Company acquired a total of four office properties during the first quarter of 2006. All four properties are located in Houston, Texas, one of the Company’s core-markets. As of March 31, 2006, the Company had deposits of approximately $4.5 million held in escrow in which the Company anticipates the majority will be used as a source of funding for future acquisitions.
Results for the first quarter 2006 and 2005 reflect the following non-cash items (in thousands). These amounts include non-cash items from discontinued operations, which are reported separately on the Company’s consolidated statements of operations.
Three Months Ended March 31, | |||||||
2006 | 2005 | ||||||
Non-Cash Charges: | |||||||
Depreciation and amortization | $ | 2,536 | $ | 2,792 | |||
Minority interest | 2,647 | - | |||||
Deferred rental expense | 11 | - | |||||
Stock-based compensation | 8 | - | |||||
Deferred compensation expense | - | 19 | |||||
Total Non-Cash Charges | 5,202 | 2,811 | |||||
Non-Cash Items: | |||||||
Amortization of loan premiums | (114 | ) | (133 | ) | |||
Deferred rental income | - | (50 | ) | ||||
Minority interest | - | (29 | ) | ||||
Interest on receivable from principal stockholders | - | (13 | ) | ||||
Total Non-Cash Items | (114 | ) | (225 | ) |
American Spectrum Realty, Inc. is a real estate investment and management company that owns 23 office, industrial and retail properties aggregating approximately 1.9 million square feet in California, Texas, Arizona, South Carolina and the Midwest. Publicly traded on the American Stock Exchange since November 2001, American Spectrum Realty’s business plan focuses on expansion of office and industrial property investments in California, Texas and Arizona.
Certain matters discussed in this release are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those projected, including the risks and uncertainties of acquiring, owning, operating and disposing of real estate. Such risks and uncertainties are disclosed in the Company’s past and current filings with the U.S. Securities and Exchange Commission.
- Financial Tables Follow -
AMERICAN SPECTRUM REALTY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
Three Months Ended March 31, | |||||||
2006 | 2005 | ||||||
REVENUES: | |||||||
Rental revenue | $ 5,577 | $ 4,967 | |||||
Interest and other income | 74 | 49 | |||||
Total revenues | 5,651 | 5,016 | |||||
EXPENSES: | |||||||
Property operating expense | 2,496 | 1,962 | |||||
General and administrative | 920 | 920 | |||||
Depreciation and amortization | 2,461 | 2,032 | |||||
Interest expense | 2,185 | 2,248 | |||||
Total expenses | 8,062 | 7,162 | |||||
Net loss before minority interest | (2,411 | ) | (2,146 | ) | |||
Minority interest (share from continuing operations) | 321 | 29 | |||||
Net loss from continuing operations | (2,090 | ) | (1,878 | ) | |||
Discontinued operations: | |||||||
Loss from discontinued operations | (65 | ) | (542 | ) | |||
Gain on sale of discontinued operations | 22,349 | 2,460 | |||||
Minority interest | (2,968 | ) | (239 | ) | |||
Income from discontinued operations | 19,316 | 1,679 | |||||
Net income (loss) | $ | 17,226 | $ | (199 | ) | ||
Basic and diluted per share data: | |||||||
Net loss from continuing operations | $ | (1.50 | ) | $ | (1.25 | ) | |
Income from discontinued operations | 13.87 | 1.12 | |||||
Net income (loss) | $ | 12.37 | $ | (0.13 | ) | ||
Basic weighted average shares used | 1,392,089 | 1,499,419 |
March 31, 2006 | December 31, 2005 | ||||||
Real estate held for investment, net of accumulated depreciation | $ | 162,136 | $ | 126,711 | |||
Cash | 1,215 | 300 | |||||
Total assets | 183,256 | 169,185 | |||||
Notes payable, net of premiums | 141,812 | 114,543 | |||||
Total liabilities | 149,193 | 155,035 | |||||
Total stockholders’ equity | 26,280 | 9,014 |