Exhibit 99.1
AmeriVest Announces Performance and Operating Results for
First Quarter 2004
DENVER--(BUSINESS WIRE)--May 5, 2004--AmeriVest Properties Inc.
(AMEX: AMV) reported results today for the first quarter ended March
31, 2004. Funds From Operations (FFO) for the first quarter of 2004
were $1,877,696 or $0.11 per diluted share, compared with $1,785,612,
or $0.16 per diluted share, for the same period in 2003. The Company
reported a net loss for the quarter of $375,011, or $0.02 per share,
compared with net income of $404,964, or $0.04 per share, for the
prior year period. See the Summary Financial Information for a
reconciliation of FFO and FFO per share from net (loss)/income and
(loss)/earnings per share, the most directly comparable GAAP measures.
Revenues for the first quarter of 2004 increased 47% over the
prior year period primarily due to the Company's continued growth,
consisting of the inclusion of the operations from the Southwest Gas
Building for a full quarter in 2004 versus a partial quarter in 2003,
the late-2003 acquisitions (Financial Plaza, Scottsdale Norte and
Greenhill Park) for a full quarter in 2004, and the March 2004
Camelback Lakes acquisition for a partial month.
Property operating expenses increased by 74% from 2003 to 2004
because of these transactions as well as increases in property taxes
and utility costs, which were previously discussed in the Company's
2003 year-end earnings release. Additionally, the Company added
regional operating management personnel in the Phoenix and Dallas
markets during the latter half of 2003 and in the Denver market in the
first quarter of 2004. Management believes it is important to the
Company's strategy to have experienced property management personnel
in its local markets; the regional offices are positioned to absorb
management of existing properties and future acquisitions within each
market.
"Our first quarter financial results were generally in line with
our expectations," commented William Atkins, Chairman and Chief
Executive Officer of AmeriVest. "Compared to the fourth quarter of
2003, revenues were up 11%, operating margins were up 2%, general and
administrative expenses, as a percentage of revenue, were down almost
4% and FFO per diluted share was up 57%. In addition, our leasing
activity increased markedly during the quarter, with more than 50% of
the square footage leased during the quarter occurring in March. As
our markets continue to improve, we believe we are well positioned to
continue to make operating progress during the remainder of the year,"
continued Atkins.
First Quarter Highlights
-- On March 16, the Company acquired the Camelback Lakes office
complex. Camelback Lakes is located in Phoenix, Arizona and
contains approximately 203,000 square feet on 12.04 acres of
land. The purchase price for Camelback Lakes was $31,980,000,
which was paid with the proceeds from the Company's revolving
lines of credit from Fleet National Bank.
-- On March 16, the Company sold its Texas Bank Buildings for
$4,100,000. The four properties are located in Clifton,
Georgetown, Henderson and Mineral Wells, Texas and contain an
aggregate of 60,095 square feet. This sale resulted in a gain
of approximately $574,000. The operations of these properties,
including the gain on sale, have been reclassified on the
Company's consolidated statements of operations to
discontinued operations for the current and comparable prior
year period.
-- During the first quarter, the Company entered into a contract
to acquire an office property in metropolitan Dallas for
$16,800,000. The property contains approximately 115,000
square feet and the transaction is expected to close during
May. The contract is subject to a number of contingencies and
there is no assurance that this acquisition will occur.
-- In March, the Company completed a 6,325,000 share common stock
offering, which raised approximately $39,940,000 after
underwriting commissions and offering expenses. RBC Capital
Markets acted as the sole book-runner, with Ferris, Baker
Watts, Incorporated, BB&T Capital Markets (a division of Scott
& Stingfellow, Inc.), J.J.B. Hilliard, W.L. Lyons, Inc. and
Stifel, Nicolaus & Company, Incorporated, having served as
co-managers of the offering. The proceeds were used to repay
the outstanding balance on the unsecured revolving line of
credit with Fleet National Bank and a portion of the
outstanding balance on the senior secured revolving line of
credit, also with Fleet. The Company intends to use available
amounts under these facilities to fund future property
acquisitions and other working capital needs.
-- In March, the Board of Directors declared a quarterly dividend
of $0.13 per common share, which was paid on April 15, 2004,
and represents our 31st consecutive quarterly dividend.
Supplemental Operating and Financial Information
The Supplemental Operating and Financial Information for the first
quarter of 2004 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 May
6, 2004, beginning at 9:00 am MST (11:00 am EST, 10:00 am CST and 8:00
am PST) to discuss its first quarter 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 May 13, 2004 by calling (800) 642-1687 or
for participants outside North America, please call (706) 645-9291 and
enter conference ID# 6880560. 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 2003 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 March 31,
2004 2003
----------- -----------
Selected Income Statement Information:
- --------------------------------------
REAL ESTATE OPERATING REVENUE
Rental revenue $9,593,895 $6,548,627
REAL ESTATE OPERATING EXPENSES
Property operating expenses
Operating expenses 2,805,894 1,548,705
Real estate taxes 1,237,864 751,838
Management fees 17,322 33,877
General and administrative expenses 932,549 837,080
Ground rent expense 161,141 -
Interest expense 2,722,067 1,725,435
Depreciation and amortization expense 2,777,091 1,327,966
----------- -----------
10,653,928 6,224,901
----------- -----------
OTHER INCOME/(LOSS)
Interest income 15,363 5,817
Equity in loss of unconsolidated affiliate (18,076) (10,602)
----------- -----------
(2,713) (4,785)
----------- -----------
(LOSS)/INCOME FROM CONTINUING OPERATIONS (1,062,746) 318,941
DISCONTINUED OPERATIONS 687,735 86,023
----------- -----------
NET (LOSS)/INCOME $(375,011) $404,964
=========== ===========
(LOSS)/EARNINGS PER SHARE
Basic $(0.02) $0.04
=========== ===========
Diluted $(0.02) $0.04
=========== ===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic 17,567,414 11,100,292
=========== ===========
Diluted 17,567,414 11,203,104
=========== ===========
FUNDS FROM OPERATIONS
Net (loss)/income $(375,011) $404,964
Depreciation and amortization expense 2,804,661 1,360,713
Share of depreciation of unconsolidated
affiliate 22,322 19,935
Gain on sale (574,276) -
----------- -----------
FUNDS FROM OPERATIONS $1,877,696 $1,785,612
=========== ===========
FUNDS FROM OPERATIONS PER SHARE
Basic $0.11 $0.16
=========== ===========
Diluted $0.11 $0.16
=========== ===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic 17,567,414 11,100,292
=========== ===========
Diluted 17,721,219 11,203,104
=========== ===========
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 or (loss) and a comparison to earnings or (loss) per share,
the most directly comparable GAAP measure, for the periods presented.
AMERIVEST PROPERTIES INC.
Summary Financial Information (continued)
(unaudited)
March 31, December 31,
2004 2003
------------- -------------
Selected Balance Sheet Information:
- -----------------------------------
Assets at cost $292,244,142 $253,826,130
Less: accumulated depreciation and
amortization (16,333,209) (13,325,668)
------------- -------------
Total assets $275,910,933 $240,500,462
Total mortgage loans and notes payable $154,739,860 $159,530,410
Total stockholders' equity $107,597,554 $70,104,407
Common shares issued and outstanding 23,859,639 17,401,309
Selected Property Information:
- ------------------------------
Number of operating properties owned 27 30
Total rentable square feet 2,365,640 2,222,079
Occupancy 84.5% 84.2%
Selected Stock Information:
- ---------------------------
Common share price (as of period end) $6.75 $7.18
Equity market capitalization $161,052,563 $124,941,399
Common share annualized dividends $0.52 $0.52
Common share annualized dividend yield (as
of period end) 7.7% 7.2%
Non-GAAP Financial Measures. Funds From Operations (FFO) is a
non-GAAP financial measure. FFO is defined as net income or (loss),
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, it facilitates an understanding
of the operating performance of its properties without giving effect
to real estate depreciation and amortization, which assumes that the
value of real estate assets diminishes predictably over time. Since
real estate values have historically risen or fallen with market
conditions, we believe that FFO provides a more meaningful and
accurate indication of our performance. 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. FFO
does not represent cash generated from operating activities determined
by GAAP and should not be considered as an alternative to net income
or (loss) (determined in accordance with GAAP) as an indication of our
financial performance or to cash flows from operating activities
(determined in accordance with GAAP) as a measure of our liquidity,
nor is it indicative of funds available to fund our cash needs,
including our ability to make cash distributions. FFO may include
funds that may not be available for our management's discretionary use
due to requirements to conserve funds for capital expenditures, debt
repayments, property acquisitions and other commitments and
uncertainties.
CONTACT: AmeriVest Properties Inc.
Kim P. Boswood, 303-297-1800, ext. 118
Fax: 303-296-7353
kim@amvproperties.com
www.amvproperties.com