EXHIBIT 99.1
American Spectrum Realty Reports Second Quarter Results;
Rental Revenue Increased 25% for Quarter
HOUSTON--(BUSINESS WIRE)--Aug. 8, 2006--American Spectrum Realty,
Inc. ("the Company") (AMEX:AQQ), a real estate investment and
management company located in Houston, Texas, announced today its
results for the second quarter of 2006.
Rental revenue increased 25% for the quarter ended June 30, 2006
compared to the same quarter in the prior year. This increase was
primarily attributable to $1,143,000 in revenue generated from seven
office properties acquired during the six months ended June 30, 2006,
in addition to $87,000 in greater revenues from properties owned on
June 30, 2006 and June 30, 2005 ("Same Properties"). Three of the
seven properties were acquired on June 30, 2006. All of the acquired
properties are located in Texas, one of the Company's core-markets.
The increase in Same Properties revenue is primarily due to an
increase in occupancy. The weighted average occupancy of properties
held for investment increased from 85% at June 30, 2005 to 88% at June
30, 2006. Rental revenue from the acquired properties was included in
the Company's results since their respective dates of acquisition.
Net loss from continuing operations before deferred income taxes
and minority interest for the three months ended June 30, 2006 was
$900,000 compared to a net loss of $2.1 million for the three months
ended June 30, 2005. The decrease in loss was principally the result
of a gain on extinguishment of debt of $1.8 million recognized during
the second quarter of 2006.
Net loss for the quarter ended June 30, 2006 was $6.9 million, or
$4.93 per share, compared to a net loss of $2.3 million, or $1.54 per
share, for the second quarter of 2005. The net loss recorded during
the three months ended June 30, 2006 was primarily attributable to
deferred income taxes. A deferred income tax expense of $8.2 million
from discontinued operations and a deferred income tax benefit of 1.2
million from continuing operations were recognized during period.
The deferred income tax expense and benefit was based on the
Company's operating results for the six months ended June 30, 2006.
Due to the uncertainty, as of March 31, 2006, whether the Company
would elect REIT status and due to the uncertainly of gains and losses
that would be recognized on property sales, no tax provision was
recorded during the three months ended March 31, 2006 and interim
period in the prior year. During the first quarter of 2006, the
Company had recognized a gain on sale of real estate assets totaling
$22.3 related to its three first quarter sales. During the second
quarter of 2006, the Company determined that it would not elect REIT
status and, with approval of its stockholders, amended its charter to
eliminate certain stock ownership restrictions. The effect of this
amendment was to preclude the Company from making a REIT election. The
Company has determined that it is appropriate to record the deferred
income tax expense in the second quarter due to the elimination of
this uncertainty.
Net income for the six months ended June 30, 2006 was $10.4
million, or $7.46 per share, compared with a net loss of $2.5 million,
or $1.66 per share, for the six months ended June 30, 2005. The net
income generated for the six months ended June 30, 2006 was primarily
attributable to net income from discontinued operations of $12.2
million.
American Spectrum Realty, Inc. is a real estate investment and
management company that owns 26 office, industrial and retail
properties aggregating approximately 2.1 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)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- ---------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
REVENUES:
Rental revenue $6,140 $4,910 $11,717 $9,877
Interest and other income 74 208 148 257
---------- ---------- ---------- ----------
Total revenues 6,214 5,118 11,865 10,134
---------- ---------- ---------- ----------
EXPENSES:
Property operating expense 2,854 2,041 5,350 4,003
General and administrative 1,004 924 1,924 1,844
Depreciation and
amortization 2,766 2,078 5,227 4,110
Interest expense 2,369 2,183 4,554 4,431
---------- ---------- ---------- ----------
Total expenses 8,993 7,226 17,055 14,388
---------- ---------- ---------- ----------
OTHER INCOME:
Gain on extinguishment of
debt 1,849 - 1,849 -
---------- ---------- ---------- ----------
Total other income 1,849 - 1,849 -
---------- ---------- ---------- ----------
Net loss from continuing
operations before
deferred income tax and
minority interest (930) (2,108) (3,341) (4,254)
Deferred income tax
benefit 1,218 - 1,218 -
---------- ---------- ---------- ----------
Net income (loss) from
continuing operations
before minority interest 288 (2,108) (2,123) (4,254)
Minority interest (share
from continuing
operations) (38) 267 283 535
---------- ---------- ---------- ----------
Net income (loss) from
continuing operations 250 (1,841) (1,840) (3,719)
Discontinued operations:
Loss from discontinued
operations - (494) (65) (1,036)
Gain on sale of
discontinued operations - - 22,349 2,460
Deferred income tax
expense (8,196) - (8,196) -
Minority interest 1,093 62 (1,875) (177)
---------- ---------- ---------- ----------
(Loss) income from
discontinued
operations (7,103) (423) 12,213 1,247
---------- ---------- ---------- ----------
Net (loss) income $(6,853) $(2,273) $10,373 $(2,472)
========== ========== ========== ==========
Basic and diluted per
share data:
Net loss from
continuing operations $.18 $(1.25) $(1.32) $(2.50)
Income from
discontinued
operations (5.11) (0.29) 8.78 .84
---------- ---------- ---------- ----------
Net income (loss) $(4.93) $(1.54) $7.46 $(1.66)
========== ========== ========== ==========
Basic weighted average
shares used 1,390,488 1,476,363 1,391,289 1,487,891
June 30, December 31,
2006 2005
------------ ------------
Real estate held for investment, net of
accumulated depreciation $175,291 $126,711
Cash 1,712 300
Total assets 194,036 169,185
Notes payable, net of premiums 153,705 114,543
Total liabilities 168,000 155,035
Total stockholders' equity 19,327 9,014
CONTACT: American Spectrum Realty, Inc., Houston
William J. Carden, 713-706-6200