Exhibit 99.1
American Spectrum Realty Reports Year End Results; Rental Revenues
Increased 13.0% for Year; Portfolio Refocus Continues: Texas,
California, Arizona are Target Markets
HOUSTON--(BUSINESS WIRE)--March 21, 2005--
Acquired Six Office Properties in Houston Area and Divested Fourteen
Non-Core Properties in Last Two Years
American Spectrum Realty Inc. (AMEX:AQQ), a real estate investment
and management company headquartered in Houston, announced today its
results for the fourth quarter and year ended Dec. 31, 2004, further
reflecting the continuation of the Company's strategy to refocus and
strengthen its property portfolio.
For the year ended Dec. 31, 2004, the Company recorded rental
revenue of $26.9 million compared with $23.8 million for the 2003
year. The increase of $3.1 million, or 13.0%, was attributable to (i)
$2,273,000 in revenue generated from six office properties acquired in
May 2003 through October 2004, (ii) higher revenues of $637,000 for
properties owned on Dec. 31, 2004 and 2003 ("Same Properties") and
(iii) a $196,000 payment received from the owner of a neighboring
property for past use of common parking areas. The increase in Same
Properties revenue was primarily attributable to an increase in
occupancy, particularly to an office property located in San Diego.
For 2004 revenue included results from six office properties, located
in the Houston area, acquired during 2003 and 2004. Rental revenue
from the acquired properties was included in the Company's results
since their respective dates of acquisition. The weighted average
occupancy of the Company's properties held for investment increased to
88% at Dec. 31, 2004 from 85% at Dec. 31, 2003.
Rental revenues for 2004 and 2003 do not include revenues from
fourteen non-core properties sold in these years. In accordance with
generally accepted accounting principles, the results of operations of
the acquired properties are included in the Company's results since
acquisition and the results of the properties sold are included in the
Company's financial statements as discontinued operations.
Net loss for the year ended Dec. 31, 2004 was $9.1 million, or
$5.87 per share, compared with a net loss of $14.3 million, or $9.67
per share, for the 2003 year.
The Company expended $4.5 million and $3.8 million for capital
improvements to real estate assets for the year ended Dec. 31, 2004
and 2003, respectively. The operating loss and capital improvements to
real estate assets were funded by property sales and refinancing
activities. Results for 2004 and 2003 reflect the following non-cash
items (in thousands):
Year Ended December 31,
2004 2003
----------- -----------
Non-Cash Charges:
Depreciation and amortization from real
estate held for investment $10,433 $8,641
Mark-to-market adjustments on interest rate
protection agreements - 162
Deferred compensation expense 101 332
Deferred income tax expense - 278
Net loss on extinguishment debt 729 145
----------- -----------
Total Non-Cash Charges 11,263 9,558
Non-Cash Items:
Deferred income tax benefit (2,222) -
Deferred rental income (525) (628)
Minority interest (1,299) (2,124)
Interest on receivable from principal
stockholders (66) (57)
Amortization of loan premiums (515) (490)
Amortization of note receivable discount (58) (17)
Mark-to-market adjustments on interest rate
protection agreements (65) -
----------- -----------
Total Non-Cash Items (4,750) (3,316)
William J. Carden, president of American Spectrum, commented,
"American Spectrum Realty Inc. continued to divest non-strategic
assets and acquire value-added projects in our core markets during
2004. Our goal is to continue this strategy in 2005 as we strive to
lower our operating costs and expand our portfolio in each of our core
markets."
He added, "The recent Real Estate Forecasts indicate that our core
markets of Texas, Southern California and Arizona will continue to
expand in job growth in 2005 thus helping to increase rental and
occupancy rates for our properties. We will continue to seek value
added real estate projects in each of these core markets."
Rental revenue from real estate held for investment totaled $7.0
million for the fourth quarter 2004, compared with $6.3 million for
the same prior-year quarter. Again, this increase primarily resulted
from the previously outlined increase in occupancy, in addition to
revenue related to acquired properties.
Fourth quarter 2004 net income was $0.6 million, or $0.40 per
common share, versus a net loss of $1.6 million, or $1.04 per share,
for fourth quarter 2003. Results for the fourth quarter 2004 and 2003
reflect the following non-cash items:
Three Months
Ended December 31,
2004 2003
---------- ----------
Non-Cash Charges:
Depreciation and amortization from real estate
held for investment $2,794 $2,340
Deferred compensation expense 18 99
Minority interest 91 -
Net loss on extinguishment of debt - 145
Deferred income tax expense - 278
---------- ----------
Total Non-Cash Charges 2,903 2,862
Non-Cash Items:
Deferred income tax benefit (2,222) -
Deferred rental income (78) (323)
Minority interest - (279)
Net gain on extinguishment of debt (98) -
Mark-to-market adjustments on interest rate
protection agreements - (40)
Interest on receivable from principal
stockholders (16) (18)
Amortization of loan premiums (97) (128)
Amortization of note receivable discount - (17)
---------- ----------
Total Non-Cash Items (2,511) (805)
The share and per share data in this press release and tables to
follow have been adjusted to reflect the one-for-four reverse split of
common stock which was approved by the stockholders on Feb. 27, 2004
and became effective March 2, 2004.
American Spectrum Realty Inc. is a real estate investment and
management company that owns 24 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 Twelve Months Ended
December 31, December 31,
--------------------- ---------------------
2004 2003 2004 2003
--------------------- ---------------------
REVENUES:
Rental revenue $7,029 $6,326 $26,923 $23,817
Interest and other income 24 62 235 139
---------- ---------- ---------- ----------
Total revenues 7,053 6,388 27,158 23,956
---------- ---------- ---------- ----------
EXPENSES:
Property operating expense 2,797 2,420 10,582 9,358
General and administrative 887 1,849 4,438 6,801
Depreciation and
amortization 2,794 2,340 10,433 8,641
Interest expense 3,084 2,769 11,996 10,139
---------- ---------- ---------- ----------
Total expenses 9,562 9,378 37,449 34,939
---------- ---------- ---------- ----------
OTHER INCOME (LOSS):
Net gain (loss) on
extinguishment of debt 98 (145) (729) (145)
---------- ---------- ---------- ----------
Total other income (loss) 98 (145) (729) (145)
---------- ---------- ---------- ----------
Net loss before deferred
income tax benefit
(expense), minority
interest and discontinued
operations (2,411) (3,135) (11,020) (11,128)
Deferred income tax
benefit (expense) 2,222 (278) 2,222 (278)
---------- ---------- ---------- ----------
Net loss before minority
interest and discontinued
operations (189) (3,413) (8,798) (11,406)
Minority interest (91) 279 1,299 2,124
---------- ---------- ---------- ----------
Net loss before
discontinued operations (280) (3,134) (7,499) (9,282)
Discontinued operations:
Loss from discontinued
operations (96) (374) (295) (1,762)
Gain (loss) on sale of
discontinued operations - 261 (2,298) 2,540
Impairment of real estate
assets - - - (7,500)
Income tax benefit 985 1,656 985 1,656
---------- ---------- ---------- ----------
Income (loss) income
from discontinued
operations: 889 1,543 (1,608) (5,066)
---------- ---------- ---------- ----------
Net income (loss) $609 $(1,591) $(9,107) $(14,348)
========== ========== ========== ==========
Basic and diluted per
share data:
Net loss before
discontinued operations $(0.18) $(2.04) $(4.83) $(6.26)
Income (loss) from
discontinued operations 0.58 1.00 (1.04) (3.41)
---------- ---------- ---------- ----------
Net income (loss) $0.40 $(1.04) $(5.87) $(9.67)
========== ========== ========== ==========
Basic weighted average
shares used 1,534,846 1,537,152 1,551,189 1,483,675
December 31, December 31,
2004 2003
------------- -------------
Real estate held for investment, net $168,531 $165,991
Cash 589 2,937
Total assets 187,545 208,003
Notes payable, net of premiums 149,589 142,008
Total liabilities 170,626 180,259
Total stockholders' equity 11,427 20,435
CONTACT: American Spectrum Realty Inc., Houston
William J. Carden, 713-706-6200