Exhibit 99.1
AmREIT Reports First Quarter Results
HOUSTON--(BUSINESS WIRE)--May 6, 2004--AmREIT (AMEX:AMY), a
Houston-based real estate investment trust, announced its first
quarter of 2004 results.
Funds from operations (FFO) for the first quarter were $(0.32) per
class A common share including a non-cash deferred merger charge of
$0.45 per share in this quarter, compared with $0.08 per share for the
same period last year, and there were no non-cash charges. Excluding
that charge, adjusted FFO was $0.13 per share, which is in line with
management's guidance range for annual adjusted FFO of $0.61 to $0.65
per share. A reconciliation of net income to FFO is included in the
financial tables accompanying this press release.
For the quarter AmREIT's loss before discontinued operations per
class A common share was ($0.62) compared to a loss of ($0.06) for the
first quarter of 2003. For the quarter, income generated from
discontinued operations was $0.22 per class A common share compared
with $0.06 for the first quarter of 2003. The company's net loss per
share was ($0.40) compared to net earnings per share of $0.002 for the
same period last year. Diluted earnings per share information is not
applicable due to the anti-dilutive nature of the common class B and
class C shares. Per share operating income and net income available to
class A shareholders adjusted for the non-cash deferred merger charge
was $0.38 and $0.05, respectively, for the first quarter of 2004.
Revenues for the quarter were $4.5 million compared to $1.9
million for the first quarter of 2003 due to an increase in portfolio
revenue of $548 thousand due to property acquisitions made in the
second half of December 2003, an increase in real estate operating and
development revenue of $236 thousand and an increase in securities and
retail partnership revenue of $1.84 million, primarily due to an
increase in securities commissions earned from the sale of class C
shares and the sale of limited partnership units, which was offset by
an increase in securities commission expense of $1.36 million. The
operating loss was $201 thousand for the quarter compared to operating
income of $769 thousand for the fist quarter of last year. Included in
first quarter 2004 expenses is a non-cash deferred merger charge of
$1.3 million related to the purchase of the company's advisor.
Total assets increased to $108 million during the first quarter,
up from $101 million at year-end and $75 million at the first quarter
of 2003. Assets managed under the company's affiliated retail
partnerships increased to $33 million from $30 million at December 31,
2003 and $16 million at March 31, 2003.
"Our business model, a combination of a growing portfolio of
multi-tenant and single tenant assets, combined with an active real
estate operating and development business, flexible capital
alternatives through our securities business and the growth of managed
funds in our retail partnership business combine to give us a platform
for continued growth," said Kerr Taylor, AmREIT's president and chief
executive officer. "As we continue on our journey from good to great,
these supporting businesses are providing us with additional,
supporting income streams to overcome our challenges and drive our
growth year over year."
Operational Highlights
-- During the first quarter, AmREIT entered into a contract for
an $8.5 million property located on an "irreplaceable corner":
premium retail frontage properties in high-traffic, highly
populated areas, which is expected to close during the second
quarter. In addition, the Company's pipeline is healthy with
approximately $55 million under letters of intent.
-- Operating as a wholly owned subsidiary, AmREIT's real estate
operating and development business contributed $975 thousand
in fees and profits from the sale of properties held for sale
(based on recent SEC guidance, income and gain on sale of
assets acquired for and held for sale are required to be
classified as discontinued operations, therefore, the above
amount includes $608 thousand resulting in the sale of real
estate acquired for resale).
-- Also during the quarter, AmREIT, through its wholly owned
subsidiary AmREIT Securities Company, raised $18 million for
the REIT and its affiliated retail partnerships ($16 million
through the class C common share offering and $2 million for
its affiliated retail partnerships), resulting in $480
thousand net revenue for the Company.
-- On March 2, 2004, Footstar declared bankruptcy and
subsequently announced that it intends to close all of its
Just For Feet locations. AmREIT owns two Just For Feet
locations: Baton Rouge, Louisiana and Tucson, Arizona. The
Tucson, Arizona location is under a letter of intent to sell.
The company does not anticipate that this vacancy will have
any negative impact on projected cash flow or dividends in
2004 due to increased fees and profits from the real estate
operating and development business.
Outlook for 2004
In 2004, management maintains its expectations to raise $50 to $60
million through the capital markets to support an anticipated 100
percent increase in asset growth over the next 12 to 18 months. This
growth is expected to result in adjusted EPS (adjusted for non-cash
deferred merger costs expected to be $1.9 million in 2004) in the
range of $0.19 to $0.23 per class A share. Management expects FFO
adjusted for the non-cash deferred merger costs (adjusted FFO), for
the calendar year of 2004 of between $0.61 and $0.65 per class A
share. This represents an increase in adjusted FFO of between 13 and
19 percent when compared to adjusted FFO of $0.54 per class A share
for 2003. AmREIT updates earnings guidance on a quarterly basis.
Conference Call
AmREIT will hold its quarterly conference call to discuss first
quarter results today at 10:00 am Central Time (11:00 am Eastern
Time). The dial-in number for the call is 800-599-9795, passcode
AmREIT. A live Web cast of the call can be accessed on the investor
relations page of AmREIT's Web site at www.amreit.com. The call will
also be available for replay for 30 days by dialing 888-286-8010,
passcode 15464786, or by going to the investor relations events page
of the company's Web site.
About AmREIT
AmREIT, a self-managed real estate investment firm, has been
acquiring, developing, and managing high quality commercial retail
real estate to generate monthly income and growth opportunities for
investors for more than 19 years. A growing publicly traded company,
AmREIT is known for its ownership of "irreplaceable corners" --
premier retail frontage properties in high-traffic, highly populated
areas. These properties are leased to high-end multi-tenant shopping
centers, grocery anchored centers and regional and national single
tenants. Its business model consists of a publicly traded REIT that is
supported by three synergistic businesses -- a real estate operating
and development business, a securities business and a retail
partnership business. This flexible structure gives AmREIT access to
the intellectual and financial capital required to support a rapid
growth platform.
In addition to historical information, this press release contains
forward-looking statements under the federal securities law. These
statements are based on current expectations, estimates and
projections about the industry and markets in which AmREIT operates,
management's beliefs and assumptions made by management. Past
performance is not indicative of future returns. Forward-looking
statements are not guarantees of future performance and involve
certain risks and uncertainties, which are difficult to predict.
This press release does not constitute an offer to sell, or the
solicitation of an offer to buy any public or private securities from
the Company. The purchase of any securities may only be made pursuant
to a prospectus or Private Offering Memorandum. A copy of any
available prospectus or Private Offering Memorandum and the related
subscription documents are available to qualified potential investors
on request.
For more information, call Jennifer Tweeton, Vollmer Public
Relations, at (713) 970-2100, or Chad Braun, AmREIT, 713-850-1400.
AmREIT is online at www.amreit.com.
(Tables to Follow)
Operating Results
(in thousands, except share and per share data)
Three Months
Ended
March 31,
Revenues: 2004 2003
-------- -------
(Unaudited)
Rental income from operating leases $1,687 $1,116
Earned income from direct financing leases 507 530
Real estate fee income 367 131
Securities commission income 1,905 85
Asset management fee income 75 51
Interest and other income 11 3
-------- -------
Total Revenues 4,552 1,916
Expenses:
General operating and administrative 1,435 771
Legal and professional 328 104
Securities commissions 1,424 65
Depreciation and amortization 246 207
Deferred merger costs 1,320 -
-------- -------
Total Expenses 4,753 1,147
Operating (Loss) Income (201) 769
Income from non-consolidated affiliates 14 41
Federal income tax (expense) benefit (171) 73
Interest expense (619) (551)
Minority interest in income of consolidated joint
ventures (44) (40)
-------- -------
(Loss) income before discontinued operations (1,021) 292
Income from discontinued operations 656 166
-------- -------
Net (loss) income (365) 458
Distributions paid to class B and C shareholders (813) (453)
-------- -------
Net income (loss) available to class A shareholders $(1,178) $5
Operating Results - Continued
(in thousands, except share and per share data)
Three Months
Ended
March 31,
2004 2003
------- -----
(Unaudited)
Reconciliation of Net (Loss) Income to Funds From
Operations ("FFO"):
(Loss) income - before discontinued operations (1,021) 292
Income from discontinued operations 656 166
Plus depreciation of real estate assets - from
operations 244 181
Plus depreciation of real estate assets - from
discontinued operations - 38
Less class B and C distributions (813) (453)
------- -----
FFO available to class A Shares (934) 224
Basic and Diluted Per Share Data:
Net income per class A common share - basic
and diluted:
Loss before discontinued operations (0.62)(0.06)
Income (loss) from discontinued
operations 0.22 0.06
------- -----
Net (loss) income (0.40) 0.00
Weighted average class A common shares used
to compute net income per class A share,
basic and diluted 2,952,984 2,768,253
Balance Sheet Highlights
(in thousands)
(Unaudited)
March 31, December 31,
2004 2003
-------- --------
Real estate held for investment, net $66,813 $68,018
Net investment in direct financing
leases 19,220 22,046
Real estate held for resale, net 7,241 4,384
Total assets 107,987 101,327
Notes payable 36,986 48,485
Total liabilities 44,674 51,684
Minority interest 866 847
Total shareholders' equity 62,446 48,796
Non-GAAP Financial Disclosure
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 the operating
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 calculates its
base FFO in accordance with this definition. AmREIT adjusts its FFO
calculation 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 2004
Range Historical
High Low 12/31/03
Net (loss) income available to class A
shareholders ($0.37) ($0.41) $ 0.02
Depreciation and amortization 0.42 0.42 0.30
Less gain on sale of real estate - - (0.11)
-------- -------- ----------
FFO available to class A shareholders 0.05 0.01 0.21
Deferred merger costs 0.60 0.60 0.33
-------- -------- ----------
Adjusted FFO $0.65 $0.61 $0.54
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CONTACT: VOLLMER
JenniferTweeton, 713-970-2100
jennifert@vollmerpr.com