Exhibit 99.1
American Spectrum Realty Reports Year End Results; Portfolio Refocus Continues:
Texas, California, Arizona are Target Markets
HOUSTON--(BUSINESS WIRE)--March 23, 2006--American Spectrum
Realty, Inc. (AMEX:AQQ) ("the Company"), a real estate investment and
management company headquartered in Houston, Texas, announced today
its results for the fourth quarter and year ended December 31, 2005.
The Company's net loss for the year ended December 31, 2005 was
$2.3 million, or $1.56 per share, compared with a net loss of $9.1
million, or $5.87 per share, for the 2004 year, which reduced its net
loss by $6.8 million. The reduction in net loss was in large part
attributable to a gain from discontinued operations of $3.6 million in
2005 compared to a loss from discontinued operations of $3.9 million
in 2004.
Rental revenue for the year ended December 31, 2005 increased
$421,000, or 2.2%, in comparison to the year ended December 31, 2004.
This increase was attributable to $1,001,000 in revenue generated from
two office properties acquired in August and October 2004, offset by
$580,000 in fewer revenues from properties owned on December 31, 2004
and 2005 ("Same Properties"). This decrease in Same Properties revenue
was primarily due to $293,000 in lease buyout revenue obtained at an
office property in California during 2004 and due to a decrease in
overall occupancy. The weighted average occupancy of the Company's
properties held for investment decreased to 88% at December 31, 2005
from 89% at December 31, 2004.
Rental revenues do not include revenues from six non-core
properties sold in these years and from three properties classified as
real estate held for sale at December 31, 2005. In accordance with
generally accepted accounting principles, the results of operations of
the two properties acquired in 2004 are included in the Company's
results since acquisition and the results of the properties sold or
classified as real estate held for sale are included in the Company's
financial statements as discontinued operations.
Corporate General and Administrative expenses for the year ended
December 31, 2005 decreased $735,000, or 16.6%, when compared to the
year ended December 31, 2004. This decrease was in large part due to a
decrease in compensation expense of $422,000, primarily due to an
overall reduction of corporate staff. Further, non-recurring costs of
$183,000 associated with the Company's March 2004 reverse stock split
and a $75,000 treasury management fee was incurred during 2004. The
decrease was also attributable to a cost reduction related to the
printing of the Company's Annual Report, a decrease in corporate
insurance expense, and other cost cutting measures implemented by
management.
The Company expended $4.9 million and $4.5 million for capital
improvements to real estate assets for the year ended December 31,
2005 and 2004, respectively. The operating loss and capital
improvements to real estate assets were funded by property sales and
refinancing activities. Results for 2005 and 2004 reflect the
following non-cash items (in thousands). These amounts include
non-cash items from discontinued operations which are reported
separately on the Company's consolidated statements of operations.
Year Ended December 31,
2005 2004
----------- -----------
Non-Cash Charges:
Depreciation and amortization $11,190 $10,946
Deferred compensation expense 55 101
----------- -----------
Total Non-Cash Charges 11,245 11,047
Non-Cash Items:
Deferred income tax benefit (1,162) (3,207)
Deferred rental income (137) (520)
Minority interest (320) (1,299)
Interest on receivable from principal
stockholders (39) (66)
Amortization of loan premiums (459) (564)
Amortization of note receivable discount - (58)
Mark-to-market adjustments on interest rate
protection agreements - (65)
----------- -----------
Total Non-Cash Items (2,117) (5,779)
Fourth quarter 2005 net income was $1.5 million, or $1.09 per
common share, versus net income of $609,000, or $0.40 per share, for
fourth quarter 2004.
William J. Carden, President of American Spectrum, commented, "In
2005, American Spectrum Realty, Inc. realized its goals to reduce the
number of its non-core properties, reduce its corporate general and
administrative costs and eliminate debt coming due in 2005 and 2006,
with the exception of a $2.7 loan secured by our one remaining
shopping center which is due in July 2006. We also completed the
planned renovations on several of our properties."
He added, "Although no properties in our core markets of Texas,
Southern California and Arizona were acquired in 2005, two properties
were acquired in February 2006 and two more are currently in escrow
for purchase, all four of which are located in Houston, Texas. We will
continue to seek to acquire additional properties in our core markets
and further reduce our non-core assets while focusing on an aggressive
leasing program in 2006."
American Spectrum Realty, Inc. is a real estate investment and
management company that owns 22 office, industrial, apartment 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 -
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,
--------------------- ---------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
REVENUES:
Rental revenue $4,991 $5,126 $19,919 $19,498
Interest and other income 13 24 350 235
---------- ---------- ---------- ----------
Total revenues 5,004 5,150 20,269 19,733
---------- ---------- ---------- ----------
EXPENSES:
Property operating
expense 2,273 1,826 8,716 7,113
Corporate general and
administrative 958 887 3,703 4,438
Depreciation and
amortization 2,222 1,985 8,464 7,534
Interest expense 2,184 2,338 8,824 9,273
---------- ---------- ---------- ----------
Total expenses 7,637 7,036 29,707 28,358
---------- ---------- ---------- ----------
OTHER INCOME (LOSS):
Net (loss) gain on
extinguishment of debt (95) 98 (95) (116)
---------- ---------- ---------- ----------
Total other income (loss) (95) 98 (95) (116)
---------- ---------- ---------- ----------
Net loss before deferred
income tax benefit and
minority interest (2,728) (1,788) (9,533) (8,741)
Deferred income tax
benefit 3,360 2,222 3,360 2,222
---------- ---------- ---------- ----------
Net loss before minority
interest 632 434 (6,173) (6,519)
Minority interest (235) (91) 320 1,299
---------- ---------- ---------- ----------
Net income (loss) from
continuing operations 397 343 (5,853) (5,220)
Discontinued operations:
Loss from operations (560) (719) (2,110) (2,574)
Gain (loss) on sale of
discontinued
operations 3,900 - 7,895 (2,298)
Income tax (expense)
benefit (2,198) 985 (2,198) 985
---------- ---------- ---------- ----------
Income (loss) income
from discontinued
operations: 1,142 266 3,587 (3,887)
---------- ---------- ---------- ----------
Net income (loss) $1,539 $609 $(2,266) $(9,107)
========== ========== ========== ==========
Basic and diluted per
share data:
Net income (loss) from
continuing operations $0.28 $0.23 $(4.02) $(3.37)
Income (loss) from
discontinued
operations 0.81 0.17 2.46 (2.50)
---------- ---------- ---------- ----------
Net income (loss) $1.09 $0.40 $(1.56) $(5.87)
========== ========== ========== ==========
Basic weighted average
shares used 1,410,670 1,534,846 1,457,079 1,551,189
December 31, December 31,
2005 2004
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Real estate held for investment, net $126,711 $130,630
Cash 300 589
Total assets 169,185 187,545
Notes payable, net of premiums 114,543 113,230
Total liabilities 155,035 170,626
Total stockholders' equity 9,014 11,427
CONTACT: American Spectrum Realty, Inc., Houston
William J. Carden, 713-706-6200