EXHIBIT 99.1
AmeriVest Announces Performance and Operating Results for
Second Quarter 2004
DENVER--(BUSINESS WIRE)--Aug. 4, 2004--AmeriVest Properties Inc.
(AMEX: AMV) reported results today for the quarter ended June 30,
2004. Funds from operations (FFO) for the second quarter of 2004 were
$2,796,665, or $0.12 per diluted share, compared with $357,707, or
$0.03 per diluted share, for the same period in 2003. The Company
reported a net loss for the quarter of $547,588, or $0.02 per share,
compared with a loss of $1,110,051, or $0.09 per share, for the prior
year period. For the six months ended June 30, 2004, FFO totaled
$4,674,361, or $0.22 per diluted share, and net loss was $922,599, or
$0.04 per share, compared with FFO of $2,143,319, or $0.18 per diluted
share, and net loss of $705,087, or $0.06 per share, for the same
period in 2003. The reported results for the quarter and six months
ended June 30, 2003, include a reduction for impairment charges of
$1,465,932 related to the Company's investment in certain non-core
properties in Texas. 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.
Revenues for the second quarter of 2004 increased 71% over the
prior year period primarily due to the Company's continued growth.
Second quarter 2004 includes the results of operations from the
late-2003 acquisitions (Financial Plaza, Scottsdale Norte and
Greenhill Park), the March 2004 Camelback Lakes acquisition in Phoenix
for a full quarter and the May 2004 Hackberry View acquisition in
Dallas for a partial quarter.
Property operating expenses increased by 87% from 2003 to 2004
because of these post-June 2003 transactions as well as increases in
property taxes, utility costs and administrative expense from the
addition of regional operating teams in the Phoenix, Dallas and Denver
markets in late 2003 and early 2004.
"Our second quarter results were again in line with our
expectations," according to Charles Knight, AmeriVest's President and
Chief Operating Officer. "Compared to the first quarter of this year,
revenues were up 19% and FFO per share was up 9%, while G&A expenses,
as a percentage of revenue, continued to decline, dropping below 9%
for the first time since 2002. While we anticipate that additional
costs will be incurred over the latter half of 2004 related to Section
404 compliance under the Sarbanes-Oxley Act, we continue to closely
monitor our spending in this area. We are pleased with our measured
progress midway through our eighth year as a public company."
Second Quarter Highlights and Subsequent Events
-- As previously announced, in May 2004, the Company acquired the
Hackberry View property, a 114,598 square foot office building
in the Las Colinas submarket of Dallas, Texas.
-- During the quarter, the Company entered into a contract to
acquire an office property in a submarket of Dallas comprised
of approximately 153,000 square feet. In July 2004, the
Company entered into a contract to acquire an office property
totaling approximately 109,000 square feet, also in the Dallas
area. Both contracts are subject to a number of contingencies
and there is no assurance that either of these acquisitions
will occur.
-- The Company posted continued increases in occupancy during the
quarter, completing 40 lease transactions involving more than
117,000 square feet resulting in slight increases in both
overall and same-store occupancy rates. As previously
announced, at June 30, 2004, occupancy for our
2,480,232-square-foot portfolio was 85.1%, up from 84.5% at
March 31, 2004. The occupancy of our same-store core
properties, which consist of approximately 1,123,503 square
feet, was 89.4% at the end of the quarter, up from 88.9% at
the end of the previous quarter.
-- In June, the Board of Directors declared a quarterly dividend
of $0.13 per common share, which was paid on July 15, 2004,
representing our 32nd consecutive quarterly dividend.
-- A recently published article stated that AmeriVest Properties
was ranked by Institutional Shareholder Services as number
three on its list of Best Corporate Governance companies in
Colorado. William Atkins, Chairman and CEO of the Company,
stated: "This is extremely gratifying to us, especially in the
current atmosphere of public company scrutiny. We have spent a
great deal of time and money establishing internal best
practices to ensure that we are always open and responsive to
our investors."
Supplemental Operating and Financial Information
The Supplemental Operating and Financial Information for the
second 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
August 5, 2004, beginning at 9:00 am MST (11:00 am EST, 10:00 am CST
and 8:00 am PST) to discuss its second 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.
An audio replay will be available two hours after the completion
of the conference call until August 12, 2004, by calling 800-642-1687
or for participants outside North America, please call 706-645-9291
and enter conference ID# 8772028. 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 Six months ended
June 30, June 30,
------------------------- -------------------------
2004 2003 2004 2003
------------ ------------ ------------ ------------
Selected Income
Statement
Information:
Real Estate
Operating Revenue
Rental revenue $11,402,649 $6,680,723 $20,996,544 $13,229,350
Real Estate
Operating Expenses
Property
operating
expenses-
Operating
expenses 3,105,339 1,660,895 5,911,233 3,209,600
Real estate
taxes 1,477,758 762,939 2,715,622 1,514,777
Management
fees 17,428 33,297 34,750 67,174
General and
administrative
expenses 984,265 742,773 1,916,814 1,579,853
Ground rent
expense 160,542 - 321,683 -
Interest expense 2,831,282 1,781,535 5,553,349 3,506,970
Depreciation and
amortization
expense 3,445,634 1,414,553 6,222,725 2,742,519
Impairment of
investment in
real estate - 1,465,932 - 1,465,932
------------ ------------ ------------ ------------
Total
operating
expenses 12,022,248 7,861,924 22,676,176 14,086,825
------------ ------------ ------------ ------------
Loss From
Continuing
Operations (619,599) (1,181,201) (1,679,632) (857,475)
------------ ------------ ------------ ------------
Other Income/(Loss)
Interest income 10,893 11,936 26,256 17,753
Equity in loss of
affiliate - (13,312) (18,076) (23,914)
Minority interest 61,118 - 61,118 -
------------ ------------ ------------ ------------
Total other
income/(loss) 72,011 (1,376) 69,298 (6,161)
------------ ------------ ------------ ------------
Loss Before
Discontinued
Operations (547,588) (1,182,577) (1,610,334) (863,636)
Discontinued
Operations - 72,526 687,735 158,549
------------ ------------ ------------ ------------
Net Loss $(547,588) $(1,110,051) $(922,599) $(705,087)
============ ============ ============ ============
Loss Per Share
Basic $(0.02) $(0.09) $(0.04) $(0.06)
============ ============ ============ ============
Diluted $(0.02) $(0.09) $(0.04) $(0.06)
============ ============ ============ ============
Weighted Average
Common Shares
Outstanding - Loss
Per Share
Basic 23,898,957 12,806,389 20,733,185 11,958,053
============ ============ ============ ============
Diluted 23,898,957 12,806,389 20,733,185 11,958,053
============ ============ ============ ============
Funds From
Operations:
Net loss $(547,588) $(1,110,051) $(922,599) $(705,087)
Depreciation and
amortization
expense 3,318,908 1,447,426 6,123,569 2,808,139
Share of
depreciation of
affiliate 25,345 20,332 47,667 40,267
Gain on sale - - (574,276) -
------------ ------------ ------------ ------------
Funds From
Operations $2,796,665 $357,707 $4,674,361 $2,143,319
============ ============ ============ ============
Funds From
Operations Per
Share
Basic $0.12 $0.03 $0.23 $0.18
============ ============ ============ ============
Diluted $0.12 $0.03 $0.22 $0.18
============ ============ ============ ============
Weighted Average
Common Shares
Outstanding -
Loss Per
Share - FFO
Basic 23,898,957 12,806,389 20,733,185 11,958,053
============ ============ ============ ============
Diluted 24,011,520 12,906,283 20,855,351 12,055,179
============ ============ ============ ============
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)
June 30, December 31,
2004 2003
------------- -------------
Selected Balance Sheet Information:
Assets at cost $314,445,219 $253,826,130
Less: accumulated depreciation and
amortization (19,568,721) (13,325,668)
------------- -------------
Total assets $294,876,498 $240,500,462
Total mortgage loans and notes payable $176,637,287 $159,530,410
Total stockholders' equity $104,277,691 $70,104,407
Common shares issued and outstanding 23,928,849 17,401,309
Selected Property Information:
Number of operating properties owned 28 30
Total rentable square feet 2,480,232 2,222,079
Occupancy 85.1% 84.2%
Selected Stock Information:
Common share price (as of period end) $5.89 $7.18
Equity market capitalization $140,940,921 $124,941,399
Common share annualized dividends $0.52 $0.52
Common share annualized dividend yield (as
of period end) 8.8% 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
kim@amvproperties.com
Fax: 303-296-7353
www.amvproperties.com