Exhibit 99.1
AmeriVest Announces Performance and Operating Results for Fourth
Quarter and Year Ended December 31, 2003
DENVER--(BUSINESS WIRE)--Feb. 25, 2004--AmeriVest Properties Inc.
(AMEX:AMV) reported results today for the fourth quarter and year
ended December 31, 2003. Funds from operations (FFO) for the fourth
quarter of 2003 were $1,317,449, or $0.07 per diluted share, compared
with $135,562, or $0.01 per diluted share, for the same period in
2002. The Company reported a net loss for the quarter of $1,251,865,
or $0.07 per share, compared with a net loss of $1,083,991, or $0.10
per share, for the prior year period; the fourth quarter of 2002 was
impacted by adjustments for advisory and capital projects fees and
impairment charges and the fourth quarter of 2003 was impacted by
items discussed below. See the Summary Financial Information for a
reconciliation of FFO and FFO per share from net loss and loss per
share, the most directly comparable GAAP measures.
The increase in revenues and expenses for the fourth quarter of
2003 over the prior year period is primarily due to the Company's
continued growth during 2003. Included in the quarter's results are
the operations of Financial Plaza (acquired September 10, 2003) for a
full quarter and Scottsdale Norte (acquired October 7, 2003) and
Greenhill Park (acquired December 4, 2003) for a partial quarter.
Operating results for our existing portfolio were negatively impacted
by a general decline in occupancy and rental rates as a result of the
soft economy.
The fourth quarter included approximately $220,000 in additional
real estate tax expense as 2003 actual real estate tax bills were
higher than anticipated, particularly with respect to the Parkway
Centre II and Chateau Plaza properties in Texas and the Kellogg
Building and Sheridan Center properties in Colorado. A majority of our
leases allow us to pass these, and other operating expense increases,
through to the respective tenants; however it has not yet been
determined how much of these increases will be recovered. Any amounts
recovered will be recorded as revenue in 2004. Furthermore, we use
outside real estate tax consulting firms to protest the valuations of
any properties that are deemed to be overvalued. Amounts refunded to
the Company through this process are recorded when realized.
Also included in the quarter were charges of approximately $60,000
in executive officer bonuses granted in accordance with the Long-Term
Incentive Plan, $170,000 in severance expenses to our former Chief
Financial Officer and approximately $73,000 in recruiting fees related
to corporate and regional hires during the quarter. In addition, the
Company continued to incur additional expenses, including salary,
consulting, legal and accounting costs, relating to its growth.
Year-To-Date Results
FFO for the year ended December 31, 2003, totaled $5,128,363, or
$0.34 per diluted share, compared with $3,251,321, or $0.34 per
diluted share for 2002. The net loss for 2003 was $1,980,420, or $0.13
per share, compared with a net loss of $157,274, or $0.02 per share,
for 2002. The increase in revenues and expenses from 2002 to 2003 is
due to the previously mentioned transactions and continued growth of
the Company. During the year, the Company recorded $1,465,932, or
$0.10 per diluted share, in impairment charges related to its
investment in certain non-core properties previously leased to the
State of Texas. In addition, the Company estimates that the cost of
its growth, including investor relations, legal and accounting,
additional management overhead, acquisition overhead, recruiting and
other growth expenses were more than $1,150,000, or $0.08 per diluted
share during 2003.
"We are pleased with our 2003 results, particularly in a year
where our assets grew more than 50% and our revenues grew more than
80%," stated William Atkins, Chairman and Chief Executive Officer of
AmeriVest. "Although our FFO per share results were flat with 2002,
when you consider the per share impact of the impairment and growth
costs and the dilutive effect of our equity offering, our results as a
stabilized company would have been much different. As our markets
improve and we are able to increase our occupancies and our rates, we
look forward to improved operating performance in the future,"
continued Atkins. "AmeriVest is a company trying to grow within the
constraints of a REIT structure. We continue to make significant
investments in systems, people and technology to support this growth
ahead of our revenues," said Atkins.
Fourth-Quarter Highlights
-- In October, the Company acquired the Scottsdale Norte building
located in Scottsdale, Arizona, which contains approximately
79,000 rentable square feet on 5.451 acres of land, for
$12,250,000. A portion of the purchase price was funded with
$6,630,000 from the assumption of the existing loan from
Southern Farm Bureau Life Insurance Company. This loan bears
fixed interest at 7.9% and is due on April 1, 2011. This loan
may be prepaid after March 31, 2006, subject to a prepayment
penalty as defined in the loan agreement.
-- In December, the Company acquired the Greenhill Park building
located in Addison, Texas, which contains approximately
252,000 rentable square feet, for $10,500,000. Greenhill Park
is subject to a ground lease with annual minimum rent payments
of $642,165 through December 2005, when it is subject to
escalation. A portion of the purchase price was paid with
$5,250,000 from our senior secured revolving line of credit
with Fleet National Bank. This credit facility bears interest
at LIBOR plus 275 basis points and is due on November 12,
2005.
-- In December, the Company announced the appointment of Kathryn
L. Hale as its new Chief Financial Officer.
-- In December, the board of directors declared a quarterly
dividend of $0.13 per common share, which was paid on January
13, 2004, and represents our 30th consecutive quarterly
dividend.
-- In December, the Company announced an increase in its
Unsecured Revolving Credit Facility with Fleet National Bank
to $30,000,000. This credit facility has an annual facility
fee of 150 basis points on the total commitment, an annual
unused fee of 75 basis points and bears interest at LIBOR plus
400 basis points or the Fleet Prime Rate plus 250 basis
points.
Subsequent Events
-- In January 2004, the Company entered into a contract to
acquire an office complex within the next 60 days for
$32,000,000. The property is located in Phoenix, Arizona, and
contains approximately 200,000 rentable square feet. The
contract is subject to a number of contingencies and there is
no assurance that this acquisition will occur.
-- In January 2004, the Company entered into a contract to sell
its non-core Bank of America buildings within the next 90 days
for $4,100,000. The four properties are located in Clifton,
Georgetown, Henderson and Mineral Wells, Texas, and contain an
aggregate of 60,095 rentable square feet. The contract is
subject to a number of contingencies and there is no assurance
that this sale will occur.
Supplemental Operating and Financial Information
The Supplemental Operating and Financial Information for the
fourth quarter of 2003 is available online at the company's website,
www.amvproperties.com by clicking the Investor Relations link and then
the Supplemental Information link.
Conference Call Information
The Company will hold an investor/analyst conference call on
February 26, 2004, beginning at 9:00 am MST (11:00 am EST, 10:00 am
CST and 8:00 am PST) to discuss its fourth quarter and year end
financial results. To participate in the conference call, please dial
(800) 548-8725 approximately ten minutes before the scheduled start of
the call. If you are calling from outside North America, please call
(706) 634-5929.
A digital replay will be available two hours after the completion
of the conference call until March 3, 2004 by calling (800) 642-1687
or for participants outside North America, please call (706) 645-9291
and enter conference ID# 5450898. A live webcast of the conference
call will be available at www.amvproperties.com. You must have Windows
Media Player installed on your computer in order to listen to the
webcast, which may be downloaded for free at the website listed above.
Company Information
AmeriVest Properties Inc., with its principal office in Denver,
Colorado, provides Smart Space for Small Business(SM) in Denver,
Phoenix, Dallas, and Indianapolis through the acquisition,
repositioning and operation of multi-tenant office buildings in those
markets. To receive AmeriVest's latest news and information, visit our
website at www.amvproperties.com.
In addition to historical information, this press release contains
forward-looking statements and information under the federal
securities laws. These statements are based on expectations, estimates
and projections about the industry and markets in which AmeriVest
operates, management's beliefs and assumptions made by management.
While AmeriVest management believes the assumptions underlying its
forward-looking statements and information are reasonable, such
information is necessarily subject to uncertainties and may involve
certain risks, many of which are difficult to predict and are beyond
management's control. As such, these statements and information are
not guarantees of future performance, and actual operating results may
differ materially from what is expressed or forecasted in this press
release. In particular, the factors that could cause actual operating
results to differ materially include, without limitation, continued
qualification as a real estate investment trust, the effects of
general and local economic and market conditions, competition,
regulatory changes, the ability to enter into new leases or renew
leases on favorable terms, dependence on tenants' financial condition,
the uncertainties of real estate development and acquisition activity,
development and construction costs, insurance risks, the costs and
availability of financing, potential liability relating to
environmental matters and liquidity of real estate investments and
other risks and uncertainties detailed in AmeriVest's 2002 Annual
Report on Form 10-KSB and from time to time in the Company's filings
with the Securities and Exchange Commission.
AMERIVEST PROPERTIES INC.
Summary Financial Information
(unaudited)
Three Months Ended Year Ended
December 31, December 31,
------------------------- -------------------------
2003 2002 2003 2002
------------ ------------ ------------ ------------
Selected Income
Statement
Information:
- -------------------
REAL ESTATE
OPERATING REVENUE
Rental revenue $8,939,101 $5,448,123 $29,865,670 $16,385,965
REAL ESTATE
OPERATING EXPENSES
Property
operating
expenses:
Operating
expenses 2,669,274 1,209,843 8,117,055 3,935,774
Real estate
taxes 1,313,889 622,105 3,721,266 1,628,455
Management
fees 27,420 76,067 141,150 173,011
General and
administrative
expenses 1,170,315 685,013 3,527,747 1,755,104
Advisory and
capital
projects fees - 1,115,470 - 1,367,380
Interest expense 2,459,527 1,370,148 7,867,534 4,144,231
Depreciation and
amortization
expense 2,546,322 1,200,928 7,023,923 3,362,508
Impairment of
investment in
real estate - 275,000 1,465,932 275,000
------------ ------------ ------------ ------------
Total
operating
expenses 10,186,747 6,554,574 31,864,607 16,641,463
------------ ------------ ------------ ------------
OTHER INCOME/(LOSS)
Interest income 12,283 28,558 73,470 164,519
Equity in loss
of
unconsolidated
affiliate (16,502) (6,098) (54,953) (66,295)
------------ ------------ ------------ ------------
(4,219) 22,460 18,517 98,224
------------ ------------ ------------ ------------
NET LOSS $(1,251,865) $(1,083,991) $(1,980,420) $(157,274)
============ ============ ============ ============
LOSS PER SHARE
Basic $(0.07) $(0.10) $(0.13) $(0.02)
============ ============ ============ ============
Diluted $(0.07) $(0.10) $(0.13) $(0.02)
============ ============ ============ ============
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING - NET
LOSS
Basic 17,383,652 10,990,919 14,686,369 9,341,608
============ ============ ============ ============
Diluted 17,383,652 10,990,919 14,686,369 9,341,608
============ ============ ============ ============
FUNDS FROM
OPERATIONS:
Net loss $(1,251,865) $(1,083,991) $(1,980,420) $(157,274)
Depreciation and
amortization
expense 2,546,322 1,200,928 7,023,923 3,362,508
Share of
depreciation of
unconsolidated
affiliate 22,992 18,625 84,860 46,087
------------ ------------ ------------ ------------
FUNDS FROM
OPERATIONS $1,317,449 $135,562 $5,128,363 $3,251,321
============ ============ ============ ============
FUNDS FROM
OPERATIONS PER
SHARE
Basic $0.08 $0.01 $0.35 $0.35
============ ============ ============ ============
Diluted $0.07 $0.01 $0.34 $0.34
============ ============ ============ ============
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING -
FUNDS FROM
OPERATIONS
Basic 17,383,652 10,990,919 14,686,369 9,341,608
============ ============ ============ ============
Diluted 17,633,834 11,146,351 14,907,011 9,501,117
============ ============ ============ ============
Funds from Operations ("FFO") is a non-GAAP financial measure. We
believe FFO, as defined by the Board of Governors of the National
Association of Real Estate Investment Trusts ("NAREIT"), to be an
appropriate measure of performance for an equity REIT, for the
reasons, and subject to the qualifications, specified in the paragraph
entitled "Non-GAAP Financial Measures" below. The above summary
financial information table reflects the reconciliation of FFO from
net income and a comparison to earnings per share, the most directly
comparable GAAP measure, for the periods presented.
AMERIVEST PROPERTIES INC.
Summary Financial Information (continued)
(unaudited)
December 31,
---------------------------
2003 2002
------------- -------------
Selected Balance Sheet Information:
- -----------------------------------
Assets at cost $253,826,130 $163,697,991
Less: accumulated depreciation and
amortization (13,325,668) (6,514,404)
------------- -------------
Total assets $240,500,462 $157,183,587
Total mortgage loans and notes payable $159,530,410 $106,094,232
Total stockholders' equity $70,104,407 $43,895,800
Common shares issued and outstanding 17,401,309 11,060,260
Selected Property Information:
- ------------------------------
Number of operating properties owned 30 26
Total rentable square feet 2,222,079 1,416,350
Occupancy 84.2% 88.0%
Selected Stock Information:
- ---------------------------
Common share price (as of period end) $7.18 $6.20
Equity market capitalization $124,941,399 $68,573,612
Common share annual dividends declared $0.52 $0.51
Common share annualized dividend yield
(as of period end) 7.24% 8.39%
Non-GAAP Financial Measures. Funds from Operations ("FFO") is a
non-GAAP financial measure. FFO is defined as net income, computed in
accordance with generally accepted accounting principles ("GAAP"),
excluding gains (or losses) from sales of properties, plus real estate
related depreciation and amortization and after adjustments for
unconsolidated partnerships and joint ventures. We believe that FFO is
helpful to investors as a measure of the performance of an equity REIT
because, along with cash flow from operating activities, investing
activities and financing activities, it provides investors with an
indication of the ability of a company to incur and service debt, to
make capital expenditures and to fund other cash needs. We compute FFO
in accordance with standards established by the Board of Governors of
the National Association of Real Estate Investment Trusts ("NAREIT"),
which may not be comparable to FFO reported by other REITs that do not
define the term in accordance with the current NAREIT definition or
that interpret the current NAREIT definition differently than we do.
CONTACT: AmeriVest Properties Inc.
Investor Relations:
Kim P. Boswood, 303-297-1800 ext. 118
Fax: 303-296-7353
kim@amvproperties.com