Exhibit 99.1
American Spectrum Realty Reports Third Quarter and First Nine Months Results;
Rental Revenues Increased 13.7% for Quarter; Occupancy Increased to 86% from 78%
Last Year
HOUSTON--(BUSINESS WIRE)--Nov. 11, 2004--American Spectrum Realty
Inc. (AMEX:AQQ), a real estate investment and management company,
headquartered in Houston, Texas, announced today its results for the
third quarter and nine months of 2004.
For the quarter ended Sept. 30, 2004, the Company recorded rental
revenue of $6.5 million compared with $5.7 million for the 2003 third
quarter. This increase of $786,000 was the result of $456,000 in
revenue generated from three Houston office properties acquired
between Oct. 27, 2003 and Aug. 2, 2004 and $330,000 in higher revenues
from properties owned on Sept. 30, 2004 and Sept. 30, 2003. Rental
revenue from the acquired properties was included in the Company's
results since the date of acquisition of each property. The weighted
average occupancy of the Company's properties held for investment
increased to 86% at Sept. 30, 2004 from 78% at Sept. 30, 2003.
Third quarter 2004 net loss was $5.0 million, or $3.17 per common
share, versus a net loss of $6.1 million, or $3.98 per share, for
third quarter 2003.
For the nine months ended Sept. 30, 2004, the Company recorded
rental revenue of $20.0 million compared with $17.5 million for the
nine months ended Sept. 30, 2003.
Net loss for the nine months ended Sept. 30, 2004 was $9.7
million, or $6.23 per share, compared with a net loss of $12.8
million, or $8.70 per share, for the same period prior nine months.
The Company expended $3.9 million and $2.8 million for capital
improvements to real estate assets for the nine months ended Sept. 30,
2004 and 2003, respectively. The operating loss and capital
improvements to real estate assets were funded by property sales and
refinancing activities. Results for the nine months ended 2004 and
2003 reflect the following non-cash items (in thousands):
Nine Months Ended
Sept. 30,
2004 2003
------- ------
Non-Cash Charges:
Depreciation and amortization from real
estate held for investment $7,735 $6,397
Mark-to-market adjustments on interest
rate protection agreements - 202
Deferred compensation expense 83 233
Loss on extinguishment of debt
(primarily prepayment penalties and the
write-off of unamortized loan costs) 827 -
------- -------
Total Non-Cash Charges 8,645 6,832
Non-Cash Items:
Deferred rental income (447) (305)
Minority interest (1,390) (1,845)
Interest on receivable from principal
stockholders (50) (39)
Amortization of loan premiums (411) (384)
Amortization of note receivable discount (58) -
Mark-to-market adjustments on interest
rate protection agreements (65) -
------- -------
Total Non-Cash Items (2,421) (2,573)
William J. Carden, president of American Spectrum, said, "Our
increase of 14.5% in rental revenue for the current year nine-month
period is the result of our continued effort to aggressively market
all of our properties along with revenue from three Houston area
office properties acquired subsequent to September 2003. Our overall
occupancy increased to 86% at Sept. 30, 2004 from 78% a year ago."
Carden added, "We continue to focus on our strategy to sell
non-core property types - apartment and shopping center properties -
and to sell properties located in the Midwest and Carolinas - our
non-core markets. During the last four months, we sold two non-core
properties and purchased an office building in the Houston area." The
Company's long-term focus is primarily on office and industrial
properties located in Texas, California and Arizona.
American Spectrum Realty Inc. is a real estate investment and
management company that owns 25 office, industrial, apartment and
retail properties aggregating over 2.2 million square feet in
California, Texas, Arizona, South Carolina and the Midwest. Publicly
traded on the American Stock Exchange since November 2001, American
Spectrum Realty's business plan focuses on expansion of office and
industrial property investments in California, Texas and Arizona.
Certain matters discussed in this release are forward-looking
statements that are subject to risks and uncertainties that could
cause actual results to differ materially from those projected,
including the risks and uncertainties of acquiring, owning, operating
and disposing of real estate. Such risks and uncertainties are
disclosed in the Company's past and current filings with the U.S.
Securities and Exchange Commission.
- Financial Tables Follow -
AMERICAN SPECTRUM REALTY INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
--------------------- ---------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
REVENUES:
Rental revenue $6,520 $5,734 $20,006 $17,475
Interest and other income 49 34 211 77
---------- ---------- ---------- ----------
Total revenues 6,569 5,768 20,217 17,552
---------- ---------- ---------- ----------
EXPENSES:
Property operating expense 2,758 2,578 7,851 7,054
General and administrative 1,243 1,650 3,551 4,952
Depreciation and
amortization 2,606 2,212 7,735 6,397
Interest expense 3,139 2,452 8,998 7,456
---------- ---------- ---------- ----------
Total expenses 9,746 8,892 28,135 25,859
---------- ---------- ---------- ----------
OTHER LOSS:
Loss on extinguishment of
debt (214) - (827) -
---------- ---------- ---------- ----------
Total other loss (214) - (827) -
---------- ---------- ---------- ----------
Net loss before minority
interest and discontinued
operations (3,391) (3,124) (8,745) (8,307)
Minority interest 704 930 1,390 1,845
---------- ---------- ---------- ----------
Net loss before
discontinued operations (2,687) (2,194) (7,355) (6,462)
Discontinued operations:
Income (loss) from
discontinued operations 25 (443) (63) (1,074)
(Loss) gain on sale of
discontinued operations (2,298) 51 (2,298) 2,279
Impairment of real estate
assets held for sale - (3,500) - (7,500)
---------- ---------- ---------- ----------
Loss from discontinued
operations: (2,273) (3,892) (2,361) (6,295)
---------- ---------- ---------- ----------
Net loss $(4,960) $(6,086) $(9,716) $(12,757)
========== ========== ========== ==========
Basic and diluted per share
data:
Net loss before
discontinued
operations $(1.72) $(1.43) $(4.72) $(4.41)
Loss from discontinued
operations (1.45) (2.54) (1.51) (4.29)
---------- ---------- ---------- ----------
Net loss $(3.17) $(3.98) $(6.23) $(8.70)
========== ========== ========== ==========
Basic weighted average
shares used 1,564,885 1,529,702 1,558,859 1,465,849
Sept. 30, Dec. 31,
2004 2003
------------- ---------------
Real estate held for investment, net $167,138 $168,540
Cash 2,007 2,937
Total assets 186,917 208,003
Notes payable, net of premiums 146,784 143,742
Total liabilities 170,005 180,259
Total stockholders' equity 11,085 20,435
CONTACT: American Spectrum Realty Inc., Houston
William J. Carden, 713-706-6200