AmREIT Announces Third Quarter Operating Results
HOUSTON, TX (November 12, 2003) - AmREIT (AMEX: AMY), a Texas-based real estate
investment trust, announced that its net income available to its class A
shareholders ("EPS") for the third quarter 2003 was $0.072 per class A share,
compared with a loss of $0.744 per share for the same period in 2002. AmREIT's
EPS for the nine months ended September 30, 2003 was $0.150 compared with a
loss of $0.568 for the same period in 2002. Funds from operations ("FFO") for
the third quarter of 2003 totaled $0.148 per class A share, compared with
($0.648) for the same period in 2002. AmREIT's FFO for the nine months ended
September 30, 2003 was $0.380 per class A share compared with ($0.373) for the
same period in 2002. Reg G disclosure, including a reconciliation of net income
to FFO is included in the financial tables accompanying this press release.
Diluted earnings per share information is not disclosed due to the accretive
nature of the common class B and class C shares.
During the third quarter, AmREIT purchased a TGI Friday's restaurant in
Hanover, Maryland, and contracted for approximately $22.4 million of single
tenant and multi-tenant real estate projects that are anticipated to close
during the fourth quarter, subject to completion of due diligence and customary
closing conditions. These acquisitions will be funded primarily from proceeds
of AmREIT's $44 million class C offering. The first significant contribution to
earnings from these acquisitions and developments will take place in the first
quarter 2004. These acquisitions, complemented by the public offering of the
class C common shares, should continue to fuel the Company's growth.
Management expects EPS loss for the calendar year 2003 of between $0.155 and
$0.175 per class A share due to an anticipated non-cash charge to earnings of
$0.371 per class A share related to deferred merger costs. Management expects
FFO adjusted for certain non-cash deferred merger costs (adjusted FFO), for the
calendar year of 2003 of between $0.540 and $0.560 per class A share. This
represents an increase in adjusted FFO of over 20% when compared to adjusted
FFO of $0.420 per class A share for 2002. AmREIT updates earnings guidance on a
quarterly basis.
AmREIT is an American Stock Exchange listed real estate investment trust
operating in two distinct lines of business. The Investment Sponsorship
division is a sponsor of high quality real estate investment opportunities to
the independent financial planning community. The Company researches,
identifies and participates in quality real estate opportunities and works hand
in hand with the broker-dealer financial services community to sponsor real
estate investment products and services. AmREIT's real estate team focuses on
the acquisition, development, management, brokerage and ownership of
freestanding credit-tenant leased and multi-tenant shopping centers located
contiguous to major thoroughfares and traffic generators. AmREIT projects have
been leased to parent companies such as Goodyear Tire, Washington Mutual, IHOP,
McDonalds, Memorial Herman Hospital, RadioShack, Sprint, Coldwell Banker, Jack
in the Box, Guaranty Federal, Bennigan's, Chili's, Texas Children's Hospital,
and Discount Tire.
In addition to historical statements included in this press release, certain
statements are included that state the Company's or management's intentions,
hopes, beliefs, expectations or predictions of the future and are considered
"forward looking" statements within the meaning of the Private Securities
Litigation Reform Act of 1995, which by their nature, involve known and unknown
risks and uncertainties. The Company's actual results, performance, or
achievements could differ materially from those expressed as implied by such
statements. Reference is made to the Company's regulatory filings with the
Securities and Exchange Commission for information or factors, which may impact
the Company's performance.
For further information, contact AmREIT's Investor Relations Department at
800-888-4400 or 713-850-1400, or access our web site at www.amreit.com.
Operating Results
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
Revenues: 2003 2002 2003 2002
Rental income from
operating leases $1,243,067 $1,007,891 $3,575,964 $2,259,905
Earned income from direct
financing leases 681,309 594,429 1,950,637 1,222,780
Service fee income 944,530 725,967 2,004,390 1,258,377
Management fees 78,302 50,910 188,549 236,316
Income from non-consolidated
affiliates 7,138 - 92,476 283,509
Gain on sale of real estate
acquired for resale 237,579 (37,061) 237,579 (37,061)
Interest and other income 1,459 542 5,289 209,859
__________ __________ __________ __________
Total Revenues $3,193,384 $2,342,678 $8,054,884 $5,433,685
Expenses:
General operating and
administrative 869,675 648,849 2,407,338 1,894,836
Legal and professional 864,535 365,400 1,597,211 694,861
Interest 598,189 519,665 1,743,535 1,183,345
Deferred merger costs - 1,904,370 1,904,370
Depreciation and amortization 216,375 226,049 617,946 454,356
__________ __________ __________ __________
Total Expenses $2,548,774 $3,664,333 $6,366,030 $6,131,768
Income (loss) before federal income
taxes and minority interest in
income of consolidated joint
ventures 644,610 (1,321,655) 1,688,854 (698,083)
Federal income tax expense for
taxable REIT subsidiary (15,300) (75,000) - (90,000)
Minority interest in income of
consolidated joint venture (45,841) (35,339) (128,790) (307,284)
__________ __________ __________ __________
Income (loss) from continuing
operations 583,469 (1,431,994) 1,560,064 (1,095,367)
Income from discontinued operations 75,531 61,966 205,917 168,943
__________ __________ __________ __________
Net income (loss) 659,000 (1,370,028) 1,765,981 (926,424)
Distributions paid to class B and C
shareholders (457,343) (423,732) (1,349,010) (423,732)
__________ __________ __________ __________
Net income (loss) available to class A
shareholders $ 201,657 $(1,793,760) $ 416,971 $(1,350,156)
Reconciliation of Net Income (loss) to
Funds From Operations ("FFO"):
Net income (loss) $ 659,000 $(1,370,028) $ 1,765,981 $ (926,424)
Depreciation 214,870 231,563 642,245 462,836
Class B & C distributions (457,343) (423,732) (1,349,010) (423,732)
_____________ ___________ ___________ ___________
FFO available to class A Shares $ 416,527 $(1,562,197) $ 1,059,216 $ (887,320)
Basic Per Share Data:
Net income (loss) available to
class A shareholders $ 0.072 $ (0.744) $ 0.150 $ (0.568)
Income from discontinued operations
per class A share 0.027 0.026 0.074 0.071
FFO - Basic 0.148 (0.648) 0.380 (0.373)
Distributions per class A share 0.110 0.107 0.332 0.248
Distributions per class B & C
share 0.186 0.215 0.577 0.638
Weighted average number of class A
common shares outstanding 2,805,753 2,412,544 2,788,303 2,376,569
Weighted average number of class B
common shares outstanding 2,399,128 1,972,240 2,316,067 664,638
Weighted average number of class C
common shares outstanding 64,580 - 21,763 -
Balance Sheet Highlights
(Unaudited)
As of September 30,
2003 2002
Real estate held for investment, net $ 45,849,893 $ 49,306,778
Net investment in direct financing leases 22,048,739 22,356,174
Real estate held for sale, net 8,850,670 -
Total assets 80,771,842 74,225,487
Notes payable 38,308,124 33,634,770
Total liabilities 39,697,066 34,530,636
Minority interest 821,380 629,845
Total shareholders' equity 40,253,396 39,065,006
Non-GAAP Financial Disclosure
(Unaudited)
This press release contains certain non-GAAP financial measures that management
believes are useful in evaluating an equity REIT's performance. AmREIT's
definitions and calculations of non-GAAP financial measures may differ from
those used by other equity REIT's, and therefore may not be comparable. The
non-GAAP financial measures should not be considered as an alternative to net
income as an indication of our operating results, or to net cash provided by
operating activities as a measure of our liquidity.
AmREIT considers FFO to be an appropriate measure of performance of an equity
REIT. The National Association of Real Estate Investment Trusts ("NAREIT")
defines FFO as net income computed in accordance with generally accepted
accounting principles ("GAAP"), excluding gains or losses from sales of
property, plus real estate depreciation and amortization, and after adjustments
for unconsolidated partnerships and joint ventures. AmREIT further adjusts FFO
by adding back non-cash charges to earnings related to the issuance of stock in
conjunction with the payment of deferred merger costs, resulting in its
adjusted FFO. The Company considers FFO to be an appropriate supplemental
measure of operating performance because, by excluding gains or losses on
dispositions and excluding depreciation, FFO is a helpful tool that can assist
in the comparison of the operating performance of a company's real estate
between periods, or as compared to different companies. FFO is not defined by
GAAP and should not be considered as an alternative to net income as an
indication of our operating performance or to net cash provided by operating
activities as a measure of our liquidity. FFO and adjusted FFO as disclosed by
other REITs may not be comparable to AmREIT's calculation.
Projected FFO is calculated in a method consistent with historical FFO, and
AmREIT considers projected FFO to be an appropriate supplemental measure when
compared with projected EPS. A reconciliation of the projected FFO to projected
EPS per share is provided below:
Projected 2003 Range
Historical
High Low 12/31/02
Net loss available to class A shareholders ($0.155) ($0.175) ($ 0.617)
Depreciation and amortization 0.344 0.344 0.249
Plus loss on sale of real estate - - 0.019
_______ _______ ________
FFO available to class A shareholders 0.189 0.169 (0.349)
Deferred merger costs 0.371 0.371 0.769
_______ _______ ________
Adjusted FFO $0.560 $0.540 $0.420
_______ _______ ________
_______ _______ ________