Exhibit 99.1
American Spectrum Realty Reports
Third Quarter Results; Rental Revenues Increased 9% from Last Year
HOUSTON--(BUSINESS WIRE)--Nov. 9, 2005--
Corporate General and Administrative Expenses Decreased 28% from
Last Year
American Spectrum Realty, Inc. (AMEX:AQQ), a real estate
investment and management company located in Houston, Texas, announced
today its results for the third quarter of 2005.
The Company's net loss was $1.3 million, or $0.92 per share, for
the third quarter of 2005 compared to a net loss of $5.0 million, or
$3.17 per share, for the third quarter of 2004, which reduced its net
loss by $3.7 million for the quarter. The net loss for the quarter
ended September 30, 2005 included income from discontinued operations
of $1.5 million compared to a loss from discontinued operations of
$2.3 million for the quarter ended September 30, 2004.
For the quarter ended September 30, 2005, the Company's rental
revenue increased $501,000, or 9.1%, from $5.5 million to $6.0 million
compared with the quarter ended September 30, 2004. This increase was
due to $278,000 in revenue generated from the acquisition of two
office properties in August and October 2004 and $223,000 in higher
revenues from the Company's other properties ("Same Properties"). The
increase in Same Properties revenue was in large part due to occupancy
fluctuations between periods as well as increases in CAM revenue and
roof-top lease revenue. Rental revenue from the two 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 at September 30, 2005 and
2004 was 86%.
For the quarter ended September 30, 2005, the Company reduced its
corporate general and administrative expenses $342,000 or 27.5%. This
decrease was in large part due to a decrease in compensation expense
as a result of a reduction of corporate staff, lower corporate
insurance expense and other cost cutting measures implemented by
management.
Net loss for the nine months ended September 30, 2005 was $3.8
million, or $2.58 per share, compared with a net loss of $9.7 million,
or $6.23 per share, for the nine months ended September 30, 2004. The
net loss for the nine months ended September 30, 2005 included income
from discontinued operations of $3.7 million compared to a loss from
discontinued operations of $2.6 million for the quarter ended
September 30, 2004.
During the third quarter of 2005, the Company sold Richardson
Plaza a 107,827 square foot shopping center located in South Carolina
for $5.0 million. A gain of $1.5 million was generated from the sale,
which is reflected as discontinued operations in the consolidated
statements of operations. Proceeds of $552,000 (net of the repayment
of debt and sales costs) are currently held in escrow.
In October 2005, the Company sold The Lakes, a 408-unit apartment
property located in Missouri for $17.1 million. Proceeds of $4.7
million (net of the assumption of debt, repayment of debt and sales
costs) are currently held in escrow. The Company anticipates a gain
will be recognized in the fourth quarter of 2005 related to the sale.
William J. Carden, President of American Spectrum, said, "The sale
of these two properties are part of our strategy to sell non-core
property types--apartment and shopping center properties--and to sell
properties located in the Midwest and Carolina's--our non-core
markets. We plan on utilizing the net proceeds generated from these
sales as a source to facilitate the funding of future acquisitions in
Texas, California and Arizona - our core markets."
The Company expended $2.9 million and $3.9 million for capital
improvements to real estate assets for the nine months ended September
30, 2005 and 2004, respectively. The operating losses and capital
improvements to real estate assets were funded by property sales and
refinancing activities.
Results for the nine months ended September 30, 2005 and 2004
reflect the following non-cash items (in thousands):
Nine Months Ended
September 30,
2005 2004
--------- ---------
Non-Cash Charges:
Depreciation and amortization from real estate
held for investment $7,791 $6,995
Deferred compensation expense 55 83
Loss on extinguishment of debt - 827
--------- ---------
Total-Cash Charges 7,846 7,905
Non-Cash Items:
Deferred rental income (154) (441)
Minority interest (555) (1,390)
Interest on receivable from principal stockholders (39) (50)
Amortization of loan premiums (344) (391)
Amortization of note receivable discount - (58)
Mark-to-market adjustments on interest rate
protection agreements - (65)
--------- ---------
Total Non-Cash Items (1,092) (2,395)
American Spectrum Realty, Inc. is a real estate investment and
management company that owns 22 office, industrial, and retail
properties aggregating over 1.8 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-
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------------------------
2005 2004 2005 2004
--------------------- ---------------------
REVENUES:
Rental revenue $6,036 $5,535 $17,955 $17,329
Interest and other income 79 49 334 209
---------- ---------- ---------- ----------
Total revenues 6,115 5,584 18,289 17,538
---------- ---------- ---------- ----------
EXPENSES:
Property operating expense 2,927 2,255 7,791 6,465
General and administrative 901 1,243 2,745 3,551
Depreciation and
amortization 2,641 2,358 7,791 6,995
Interest expense 2,640 2,862 8,004 8,173
---------- ---------- ---------- ----------
Total expenses 9,109 8,718 26,331 25,184
OTHER LOSS:
Loss on extinguishment of
debt - (214) - (827)
---------- ---------- ---------- ----------
Total other loss - (214) - (827)
---------- ---------- ---------- ----------
Net loss before minority
interest and discontinued
operations (2,994) (3,348) (8,042) (8,473)
Minority interest 197 704 555 1,390
---------- ---------- ---------- ----------
Net loss before
discontinued operations (2,797) (2,644) (7,487) (7,083)
Discontinued operations:
Loss from discontinued
operations (71) (18) (313) (335)
Gain (loss) on sale of
discontinued operations 1,535 (2,298) 3,995 (2,298)
---------- ---------- ---------- ----------
Income (loss) from
discontinued
operations 1,464 (2,316) 3,682 (2,633)
---------- ---------- ---------- ----------
Net loss $(1,333) $(4,960) $(3,805) $(9,716)
========== ========== ========== ==========
Basic and diluted per share
data:
Net loss before
discontinued operations $(1.94) $(1.69) $(5.08) $(4.54)
Income (loss) from
discontinued operations 1.02 (1.48) 2.50 (1.69)
---------- ---------- ---------- ----------
Net loss $(0.92) $(3.17) $(2.58) $(6.23)
========== ========== ========== ==========
Basic weighted average
shares used 1,441,866 1,564,885 1,472,549 1,558,859
September 30, December 31,
2005 2004
------------- -------------
Real estate held for investment, net $147,344 $151,825
Cash 848 589
Total assets 178,837 187,545
Notes payable, net of premiums 134,835 134,059
Total liabilities 166,923 170,626
Total stockholders' equity 7,001 11,427
CONTACT: American Spectrum Realty, Inc.
William J. Carden, 713-706-6200