Exhibit 99.1
Gladstone Commercial Corporation Announces Financial Results for the Third
Quarter Ended September 30, 2004: Net Income of $0.09 Per Weighted Average
Common Share and Funds From Operations of $0.13 Per Diluted Weighted Average
Common Share
MCLEAN, Va., Nov. 3 /PRNewswire-FirstCall/ -- Gladstone Commercial Corp.
(Nasdaq: GOOD) (the "Company") reported today financial results for the third
quarter ended September 30, 2004. Net income for the three months ended
September 30, 2004 was $685,038, or $0.09 per basic and diluted weighted
average common share, compared to a net loss for the three months ended
September 30, 2003 of $104,208, or $0.03 per basic and diluted weighted
average common share.
For the nine months ended September 30, 2004, net income was $624,009, or
$0.08 per basic and diluted weighted average common share, compared to a net
loss for the period from February 14, 2003 (inception) through September 30,
2003 of $114,862, or $0.08 per basic and diluted weighted average common
share. Total assets were $105,113,407 as of September 30, 2004 as compared to
$105,061,370 as of December 31, 2003.
"In the third quarter we added four additional properties to our
portfolio, for an aggregate purchase price of approximately $23.3 million. At
September 30, 2004, we had approximately $62.5 million invested from our
initial public offering in eight real properties and one mortgage loan.
Subsequent to September 30, 2004, we acquired four properties for an aggregate
cost of $12.8 million. The third quarter showed positive growth and results
for us. We look forward to closing out our first full fiscal year ending
December 31, 2004 with a strong portfolio, good backlog and a consistent
dividend," said a spokesperson for the Company.
The National Association of Real Estate Investment Trusts (NAREIT)
developed Funds from Operations, ("FFO"), as a relative non-GAAP (Generally
Accepted Accounting Principles) 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.
For the three months ended September 30, 2004, FFO was $998,070, or $0.13
per diluted weighted average common share. For the nine months ended
September 30, 2004, FFO was $1,143,142, or $0.15 per diluted weighted average
common share.
A reconciliation of net income to FFO is set forth below:
Three months ended Nine months ended
September 30, 2004 September 30, 2004
Net income $ 685,038 $ 624,009
Real estate depreciation and
amortization 313,032 519,133
Funds from operations 998,070 1,143,142
Weighted average shares
outstanding - diluted 7,697,079 7,703,504
Diluted net income per
weighted average common
share $ 0.09 $ 0.08
Diluted funds from
operations per weighted
average common share $ 0.13 $ 0.15
To learn more about our FFO please refer to the Quarterly Report on the
Form 10-Q for the quarter ended September 30, 2004 filed with the Securities
and Exchange Commission ("SEC") today.
The financial statements below are without footnotes so readers should
obtain and carefully review our Form 10-Q for the period ended September 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 http://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 EST, November
4, 2004. To enter the call please dial 866-219-5268 and use the confirmation
code 589810. An operator will monitor the call and set a queue for questions.
To hear the replay of the call please dial 888-266-2081 and use the
confirmation code 589810. The replay will be available until December 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)
September 30, December 31,
2004 2003
ASSETS
Real estate, net $ 48,784,959 $ 5,436,153
Mortgage note receivable 11,131,050 -
Cash and cash equivalents 41,349,714 99,075,765
Funds held in escrow 983,501 -
Interest receivable - mortgage note 61,840 -
Interest receivable - officers 1,250 -
Deferred rent receivable 100,110 -
Prepaid expenses 228,725 191,432
Other assets 225,319 -
Lease intangibles, net of accumulated
amortization of $98,755 and $1,208,
respectively 2,246,939 358,020
TOTAL ASSETS $ 105,113,407 $ 105,061,370
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Due to Adviser $ 109,639 $ 234,295
Accounts payable and accrued expenses 11,898 -
Dividends payable 920,040 76,420
Rent received in advance, security
deposits and funds held in escrow 1,459,016 -
Total Liabilities $ 2,500,593 $ 310,715
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value,
20,000,000 shares authorized and
7,667,000 and 7,642,000 shares
issued and outstanding, respectively $ 7,667 $ 7,642
Additional paid in capital 105,427,549 105,060,304
Notes receivable - employees (375,000) -
Distributions in excess of
accumulated earnings (2,447,402) (317,291)
Total Stockholders' Equity $ 102,612,814 $ 104,750,655
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 105,113,407 $ 105,061,370
Gladstone Commercial Corporation
Consolidated Statements of Operations
(Unaudited)
For the three months For the three months
ended September 30, ended September 30,
2004 2003
OPERATING REVENUES
Rental income $ 1,066,076 $ -
Interest income from mortgage
note receivable 284,659 -
Total operating revenues 1,350,735 -
OPERATING EXPENSES
Management advisory fee 333,825 124,096
Depreciation and amortization 313,032 -
General and administrative 173,806 71,644
Total operating expenses 820,663 195,740
Net income (loss) from operations 530,072 (195,740)
Interest income from temporary
investments 153,716 91,532
Interest income - employee loans 1,250 -
NET INCOME (LOSS) $ 685,038 $ (104,208)
Earnings (loss) per weighted
average common share
Basic $ 0.09 $ (0.03)
Diluted $ 0.09 $ (0.03)
Weighted average shares
outstanding
Basic 7,648,250 3,547,297
Diluted 7,697,079 3,547,297
For the period
For the nine February 14, 2003
months ended (inception) through
September 30, 2004 September 30, 2004
OPERATING REVENUES
Rental income $ 1,667,538 $ -
Interest income from mortgage
note receivable 697,059 -
Total operating revenues 2,364,597 -
OPERATING EXPENSES
Management advisory fee 843,360 124,096
Depreciation and amortization 519,133 -
General and administrative 868,046 82,298
Total operating expenses 2,230,539 206,394
Net income (loss) from operations 134,058 (206,394)
Interest income from temporary
investments 488,701 91,532
Interest income - employee loans 1,250 -
NET INCOME(LOSS) 624,009 (114,862)
Earnings (loss) per weighted average
common share
Basic $ 0.08 $ (0.08)
Diluted $ 0.08 $ (0.08)
Weighted average shares outstanding
Basic 7,644,099 1,448,482
Diluted 7,703,504 1,448,482
Gladstone Commercial Corporation
Consolidated Statement of Cash Flows
(Unaudited)
For the period
For the nine February 14, 2003
months ended (inception) through
September 30, 2004 September 30, 2004
Cash flows from operating
activities:
Net income (loss) $ 624,009 $ (114,862)
Adjustments to reconcile net
income (loss) to net cash
provided by (used in) operating
activities:
Depreciation and amortization 519,133 -
Changes in assets and liabilities:
Increase in mortgage interest
receivable (61,840) -
Increase in employee interest
receivable (1,250) -
Increase in prepaid expenses (37,293) (267,058)
Increase in other assets (25,319) -
Increase in deferred rent
receivable (100,110) -
Increase in accounts payable
and accrued expenses 11,898 -
(Decrease) increase in due
to Adviser (124,656) 41,203
Increase in rent received in
advance and security deposits 475,515 -
Net cash provided by (used in)
operating activities 1,280,087 (340,717)
Cash flows from investing
activities:
Acquisition of real estate (45,756,858) -
Mortgage note receivable (11,170,000) -
Deposit on future acquisition (200,000) -
Principal repayments on mortgage
note receivable 38,950 -
Net cash used in investing
activities (57,087,908) -
Cash flows from financing
activities:
Proceeds from share issuance - 105,233,148
Offering costs (7,730) -
Dividends paid (1,910,500) -
Net cash (used in) provided
by financing activities (1,918,230) 105,233,148
Net (decrease) increase in cash
and cash equivalents (57,726,051) 104,892,431
Cash and cash equivalents,
beginning of period 99,075,765 -
Cash and cash equivalents, end
of period $ 41,349,714 $ 104,892,431
Non-cash financing activities:
Notes receivable issued in
exchange for common stock
associated with the exercise
of employee stock options $ 375,000 $ -
SOURCE Gladstone Commercial Corporation
-0- 11/03/2004
/CONTACT: Harry Brill, Chief Financial Officer, or Skye Breeden, Director
of Shareholder Relations, of Gladstone Commercial Corporation,
+1-703-286-7000/
/Web site: http://www.gladstonecommercial.com /
(GOOD)
CO: Gladstone Commercial Corporation
ST: Virginia
IN: FIN RLT
SU: CCA ERN