Exhibit 99.1
American Spectrum Realty Reports Third Quarter Results
Rental Revenue Increased 35% for Quarter
Business Editors/Building/Construction Writers
HOUSTON--(BUSINESS WIRE)--Nov. 2, 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 third quarter of 2006.
Rental revenue increased $1.8 million, or 35.3%, for the three
months ended September 30, 2006 in comparison to the three months
ended September 30, 2005. This increase was attributable to revenue
generated from four office properties acquired during the first
quarter of 2006 and three office properties acquired during the second
quarter of 2006. All of the acquired properties are located in Texas,
one of the Company's core-markets. Revenues from properties owned for
the full three months ended September 30, 2006 and September 30, 2005
remained relatively unchanged during the period. The weighted average
occupancy of properties held for investment increased from 87% at
September 30, 2005 to 89% at September 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 for the three months ended
September 30, 2006 was $1.5 million compared to a net loss of $2.2
million for the three months ended September 30, 2005. The net loss
recorded during the three months ended September 30, 2006 included a
deferred income tax benefit of $1.0 million. Due to the uncertainty
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 interim period in the prior year. In
2006, the Company determined that it would not elect to be treated as
a real estate investment trust ("REIT"), as defined under the Internal
Revenue Code of 1986, as amended, 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.
Net loss for the quarter ended September 30, 2006 was $1.5
million, or $1.10 per share, compared to a net loss of $1.3 million,
or $0.92 per share, for the third quarter of 2005. The net loss for
the three months ended September 30, 2005 included income from
discontinued operations of $.9 million. The Company had no income or
losses from discontinued operations for the three months ended
September 30, 2006.
Net income for the nine months ended September 30, 2006 was $8.9
million, or $6.37 per share, compared with a net loss of $3.8 million,
or $2.58 per share, for the nine months ended September 30, 2005. The
net income generated for the nine months ended September 30, 2006
included income from discontinued operations of $12.2 million and a
deferred income tax benefit from continuing operations of $2.2
million. The net loss for the nine months ended September 30, 2005
included income from discontinued operations of $2.1 million. As
mentioned above, due to the uncertainty 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 nine months ended September 30, 2005.
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 Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
REVENUES:
Rental revenue $ 6,832 $ 5,051 $ 18,549 $ 14,928
Interest and other
income 26 80 174 337
---------- ---------- ---------- ----------
Total revenues 6,858 5,131 18,723 15,265
---------- ---------- ---------- ----------
EXPENSES:
Property operating
expense 3,294 2,439 8,644 6,442
General and
administrative 806 901 2,730 2,745
Depreciation and
amortization 2,871 2,132 8,098 6,242
Interest expense 2,657 2,209 7,211 6,640
---------- ---------- ---------- ----------
Total expenses 9,628 7,681 26,683 22,069
---------- ---------- ---------- ----------
OTHER INCOME:
Gain on extinguishment
of debt - - 1,849 -
---------- ---------- ---------- ----------
Total other income - - 1,849 -
---------- ---------- ---------- ----------
Net loss from
continuing operations
before deferred income
tax benefit and
minority interest (2,770) (2,550) (6,111) (6,804)
Deferred income tax
benefit 1,019 - 2,237 -
---------- ---------- ---------- ----------
Net loss from
continuing operations
before minority
interest (1,751) (2,550) (3,874) (6,804)
Minority interest
(share from continuing
operations) 234 328 517 863
---------- ---------- ---------- ----------
Net loss from
continuing operations (1,517) (2,222) (3,357) (5,941)
Discontinued
operations:
Loss from
discontinued
operations - (515) (65) (1,551)
Gain on sale of
discontinued
operations - 1,535 22,349 3,995
Deferred income tax
expense - - (8,196) -
Minority interest - (131) (1,875) (308)
---------- ---------- ---------- ----------
Income from
discontinued
operations - 889 12,213 2,136
---------- ---------- ---------- ----------
Net (loss) income $ (1,517) $ (1,333) $ 8,856 $ (3,805)
========== ========== ========== ==========
Basic and diluted per
share data:
Net loss from
continuing
operations $ (1.10) $ (1.54) $ (2.41) $ (4.03)
Income from
discontinued
operations - 0.62 8.78 1.45
---------- ---------- ---------- ----------
Net (loss) income $ (1.10) $ (0.92) $ 6.37 $ (2.58)
========== ========== ========== ==========
Basic weighted average
shares used 1,383,404 1,441,866 1,388,660 1,472,549
September 30, December 31,
2006 2005
------------- ------------
Real estate held for investment, net of
accumulated depreciation $ 173,638 $ 126,711
Cash 882 300
Total assets 190,643 169,185
Notes payable, net of premiums 153,197 114,543
Total liabilities 166,562 155,035
Total stockholders' equity 17,628 9,014
CONTACT: American Spectrum Realty, Inc., Houston
William J. Carden, Chairman, President and CEO
713-706-6200