Exhibit 99.1
Gladstone Commercial Corporation Announces the Financial Results
for the Second Quarter Ended June 30, 2004
MCLEAN, Va., Aug. 4 /PRNewswire-FirstCall/ -- Gladstone Commercial Corp.
(Nasdaq: GOOD) (the "Company") reported today financial results for the second
quarter ended June 30, 2004. Net income for the period was $132,275, or $0.02
per basic and diluted weighted average common share, compared to a net loss
for the second quarter ended June 30, 2003 of $105, or $0.00 per basic and
diluted weighted average common share. For the six months ended June 30, 2004
the net loss was $61,029, or $0.01 per basic and diluted weighted average
common share, compared to a net loss for the period from February 14, 2003
(inception) through June 30, 2003 of $10,654, or $0.20 per basic and diluted
weighted average common share. Our initial public offering took place in
August of 2003 and therefore, the financial statements for the corresponding
periods of 2003 do not provide an accurate basis for comparison. Total assets
were $104,404,705 as of June 30, 2004 as compared to $105,061,370 at December
31, 2003.
The National Association of Real Estate Investment Trusts (NAREIT)
developed Funds from Operations, ("FFO"), as a relative non-GAAP (Generally
Accepted Accounting Principles in the United States) financial measure of
performance and liquidity of an equity REIT in order to recognize that income-
producing real estate historically has not depreciated on the basis determined
under GAAP. FFO, as defined by NAREIT, is net income (loss) (computed in
accordance with GAAP), excluding gains (or losses) from sales of property,
plus depreciation and amortization of real estate assets, and after
adjustments for unconsolidated partnerships and joint ventures. FFO for the
second quarter ended June 30, 2004 was $259,047, or $0.03 per diluted weighted
average common share. A reconciliation of FFO to net income is set forth
below:
Three months Six months
ended June 30, ended June 30,
2004 2004
Net income (loss) $ 132,275 $ (61,029)
Real estate depreciation and amortization 126,772 206,101
Funds from operations 259,047 145,072
Weighted average shares outstanding -
diluted 7,764,734 7,695,132
Diluted net income (loss) per weighted
average common share $ 0.02 $ (0.01)
Diluted funds from operations per
weighted average common share $ 0.03 $ 0.02
To learn more about our FFO please refer to the Quarterly Report on the
Form 10-Q for the quarter ended June 30, 2004 filed with the Securities and
Exchange Commission ("SEC") today.
"In the second quarter we added two properties for an aggregate purchase
price of $18.6 million to our portfolio. At June 30, 2004, we had
approximately $39.2 million invested from our initial public offering in four
real properties and one mortgage loan. Subsequent to June 30, 2004, we have
also acquired one property for $5.2 million. Once the proceeds from our
initial public offering have been substantially or fully invested, we intend
to obtain and use a line of credit to continue to make investments," said a
spokesperson for the Company.
The financial statements below are without footnotes so readers should
obtain and carefully review our Form 10-Q for the period ended June 30, 2004,
including the footnotes to the financial statements contained therein. We
have filed the Form 10-Q today with the SEC and the Form 10-Q can be retrieved
at the SEC website at www.SEC.gov or the website for Gladstone Commercial at
http://www.GladstoneCommercial.com.
Gladstone Commercial will have a conference call at 10:30 am EDT, August
5, 2004. To enter the call please dial 866-818-1395 and use the confirmation
code 530364. An operator will monitor the call and set a queue for questions.
To hear the replay please dial 888-266-2081 and use the confirmation code
530364. The replay will be available until September 4, 2004.
For further information contact our Chief Financial Officer, Harry Brill
or Skye Breeden, Director of Shareholder Relations at 703-286-7000.
This press release may include statements that may constitute "forward-
looking statements" within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, including statements with regard to the future performance of the
Company and the closing of any transaction. Words such as "believes,"
"intend," "expects," "projects" and "future" or similar expressions are
intended to identify forward-looking statements. These forward-looking
statements inherently involve certain risks and uncertainties, although they
are based on the Company's current plans that are believed to be reasonable as
of the date of this press release. Factors that may cause the Company's
actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance
or achievements expressed or implied by such forward-looking statements
include, among others, those factors listed under the caption "Risk factors"
of the Company's Annual Report on Form 10-K for the year ended, December 31,
2003, as filed with the Securities and Exchange Commission on March 10, 2004.
The Company undertakes no obligation to publicly update or revise any forward-
looking statements, whether as a result of new information, future events or
otherwise.
Gladstone Commercial Corporation
Consolidated Balance Sheet
(Unaudited)
June 30, December 31,
2004 2003
ASSETS
Real estate, net $26,863,418 $5,436,153
Mortgage note receivable 11,150,787 -
Cash and cash equivalents 65,016,018 99,075,765
Funds held in escrow 187,234 -
Interest receivable - mortgage note 61,950 -
Deferred rent receivable 41,535 -
Prepaid expenses 68,932 191,432
Other assets 25,000 -
Lease intangibles, net of accumulated
amortization of $38,979 and $1,208,
respectively 989,831 358,020
TOTAL ASSETS $104,404,705 $105,061,370
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Due to Adviser $103,210 $234,295
Accounts payable 41,594 -
Dividends payable 917,040 76,420
Accrued expenses 14,220 -
Rent received in advance, security
deposits and funds held in escrow 480,826 -
Total Liabilities 1,556,890 310,715
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value,
20,000,000 shares authorized,
7,642,000 shares issued and
outstanding 7,642 7,642
Additional paid-in capital 105,052,573 105,060,304
Distributions in excess of
accumulated earnings (2,212,400) (317,291)
Total Stockholders' Equity 102,847,815 104,750,655
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $104,404,705 $105,061,370
Gladstone Commercial Corporation
Consolidated Statements of Operations
(Unaudited)
For the Three For the Three
Months Ended Months Ended
June 30, June 30,
2004 2003
OPERATING REVENUES:
Rental income $403,690 $-
Interest income from mortgage note
receivable 278,980 -
Total operating revenues 682,670 -
OPERATING EXPENSES:
Management advisory fee 280,122 -
Depreciation and amortization 126,772 -
General and administrative 306,024 105
Total operating expenses 712,918 105
Net loss from operations (30,248) (105)
Interest income from temporary
investments 162,523 -
NET INCOME (LOSS) $132,275 $(105)
Earnings (loss) per weighted average
common share
Basic $0.02 $-
Diluted $0.02 $-
Weighted average shares outstanding
Basic 7,642,000 52,000
Diluted 7,695,134 52,000
For the Period
For the Six February 14, 2003
Months Ended (Inception) to
June 30, June 30,
2004 2003
OPERATING REVENUES:
Rental income $601,463 $-
Interest income from mortgage note
receivable 412,400 -
Total operating revenues 1,013,863 -
OPERATING EXPENSES:
Management advisory fee 509,538 -
Depreciation and amortization 206,101 -
General and administrative 694,238 10,654
Total operating expenses 1,409,877 10,654
Net loss from operations (396,014) (10,654)
Interest income from temporary
investments 334,985 -
NET LOSS $(61,029) $(10,654)
Loss per weighted average common
share
Basic $(0.01) $(0.20)
Diluted $(0.01) $(0.20)
Weighted average shares outstanding
Basic 7,642,000 52,000
Diluted 7,764,732 52,000
Gladstone Commercial Corporation
Consolidated Statement of Cash Flows For the Period
(Unaudited) For the Six February 14, 2003
Months Ended (Inception) to
June 30, June 30,
2004 2003
Cash flows from operating activities:
Net loss $(61,029) $(10,654)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Depreciation and amortization 206,101 -
Changes in assets and liabilities:
Increase in mortgage interest
receivable (61,950) -
Decrease in prepaid expenses 122,500 -
Increase in other assets (25,000)-
Increase in deferred rent receivable (41,535) -
Increase in accounts payable 41,594 10,654
Decrease in due to Adviser (131,085) -
Increase in accrued expenses 14,220 -
Increase in rent received in advance
and security deposits 293,592 -
Net cash provided by operating
activities 357,408 -
Cash used in investing activities:
Acquisition of real estate (22,265,178) -
Mortgage note receivable (11,170,000) -
Principal repayments on mortgage
note receivable 19,213 -
Net cash used in investing activities (33,415,965) -
Cash flow from financing activities:
Proceeds from share issuance - 52,000
Payments for deferred offering costs - (22,385)
Offering costs (7,730) -
Dividends paid (993,460) -
Net cash (used in) provided by
financing activities (1,001,190) 29,615
Net (decrease) increase in cash and
cash equivalents (34,059,747) 29,615
Cash and cash equivalents, beginning
of period 99,075,765 -
Cash and cash equivalents, end of
period $65,016,018 $29,615
SOURCE Gladstone Commercial Corp.
-0- 08/04/2004
/CONTACT: Harry Brill, Chief Financial Officer, or Skye Breeden, Director
of Shareholder Relations, both of Gladstone Commercial Corp., +1-703-286-7000/
/Web site: http://www.gladstonecommercial.com /
(GOOD)
CO: Gladstone Commercial Corp.
ST: Virginia
IN: FIN RLT
SU: ERN CCA