Exhibit 99.1
AmREIT REPORTS FIRST QUARTER RESULTS; ON TRACK WITH 2005 GUIDANCE
- Revenues Increased 87.9% to $8.2 million
- Loss Per Share of $0.08
- Funds From Operations of $0.13 Per Share
HOUSTON, April 27 /PRNewswire-FirstCall/ -- AmREIT (Amex: AMY), a
Houston-based real estate investment trust, reported financial results for the
first quarter of 2005 today.
Revenues for the first quarter increased 87.9 percent to $8.2 million
compared to $4.4 million for the first quarter of 2004. This increase was due
to additional portfolio revenue of $2.9 million (attributed to property
acquisitions made in the third and fourth quarters of 2004), additional real
estate operating, and development revenue of $627,000, additional securities
commission income of $218,000 and additional retail partnership revenue of
$42,000. AmREIT reported a net loss attributable to class A shareholders of
$274,000 for the quarter compared to a loss of $1.2 million for the first
quarter of last year (which was attributed to the $1.3 million deferred merger
charge).
For the first quarter, AmREIT's loss before discontinued operations per
class A common share was $0.18 compared to a loss of $0.66 per share for the
first quarter of 2004. The income from discontinued operations for the quarter
was $0.10 per class A common share compared with income of $0.26 per class A
common share for the first quarter of 2004. The company's net loss per class
A common share for the quarter was $0.08 compared to a net loss of $0.40 for
the same period last year. Diluted earnings per share information is not
applicable due to the anti-dilutive nature of the class B, C and D common
shares.
Funds From Operations (FFO) for the first quarter were $444,000, or
$0.13 per class A common share. This compares to FFO of ($0.32) per class A
common share including a non-cash deferred merger charge of $0.45 per share
for the first quarter of 2004. Because there were no non-operational,
non-cash charges to earnings during the first quarter 2005, there are no
adjustments to FFO. The reported first quarter 2005 FFO remains in line with
the previously announced management guidance range of $0.68 to $0.72 per share
for the full year 2005. A reconciliation of net income to FFO is included in
the financial tables accompanying this press release.
During the quarter, total assets increased slightly to $205 million from
$203 million reported on December 31, 2004. Total liabilities decreased
13 percent to $99.4 million during the first quarter, from $113.7 million at
year-end.
"We set forth specific, growth oriented goals for 2005. We have built a
quality team of individuals that have produced results quarter over quarter,"
said Chad Braun, AmREIT's executive vice president and chief financial
officer. "Our commitment to Irreplaceable Corners and focus on fundamental
real estate quality, combined with powerful business structure should allow us
to accomplish our goals as we continue to execute our business plan."
Outlook for 2005
In their annual report, AmREIT set forth four key goals and expectations
for this year:
-- The first goal is continued per share growth in FFO with a target range
of 8-14 percent. Supported by the increase in rental revenue generated
by the acquisitions made during the third and fourth quarters 2004, as
well as the increase in fees and profits generated from supporting
business segments, the annual target FFO guidance remains $0.68 to
$0.72 per class A share. Dividends declared for class A common shares
during the first and second quarter of 2005 were $0.124 and $0.124
respectively, which is line with managements 2005 guidance of $0.50 to
$0.52 per share.
-- The second goal is to have total asset growth of $200 million within a
12 to 18 month period. The real estate pipeline remains robust, and
AmREIT remains on track to achieve 100 percent growth between December
2005 and June 2006. AmREIT's strategy is to expand holdings of multi-
tenant properties and today, a majority of rental revenue is generated
from multi-tenant shopping centers. As this strategy is executed, the
company will continue to evaluate and dispose of those assets that are
no longer core assets, replacing them with multi-tenant shopping
centers, lifestyle and grocery-anchored centers and single tenant
leases on what are believed to be Irreplaceable Corners.
-- The third goal is to raise $125 to $150 million for our REIT and an
additional $35 million in private equity. Through March 31, 2005, the
company raised approximately $20 million through its class D common
share offering, which is on track with its 2005 goals.
-- The fourth goal is to continue to strengthen portfolio quality by
selling non-core assets and keeping debt to total assets under
55 percent. During the first quarter of 2004, AmREIT sold $940,000 in
non-core assets helping to reduce tenant concentration and increase the
dependability of rental income. As of March 31, 2005, no single tenant
represented more than 10 percent of total revenue, and the company's
total liability to total asset ratio was approximately 48.4 percent.
AmREIT updates earnings guidance on a quarterly basis.
Conference Call
AmREIT will hold its quarterly conference call to discuss first quarter
results Thursday, April 28, at 10:00 am Central Time (11:00 am Eastern Time).
Interested parties are encouraged to access the live webcast by visiting the
investor relations page of AmREIT's website at http://www.amreit.com. The
dial-in number for the call is 1-800-299-7098, passcode AmREIT. The call will
also be available for replay for 30 days by dialing 1-888-286-8010, passcode
25044753, or by going to the investor relations events page of the company's
Web site.
The company has published additional forward-looking statements in its
first quarter 2005 supplemental information package that may help investors
estimate earnings for 2005. A copy of the company's first quarter 2005
supplemental information will be available on the company's web site at
http://www.amreit.com or by written request to Robyn Walden, Investor
Relations, AmREIT, 8 Greenway Plaza, Suite 1000, Houston, Texas, 77046. The
information provided in the supplemental package is unaudited and there can be
no assurance that the information will not vary from the final information for
the quarter ended March 31, 2005. AmREIT may, but assumes no obligation to,
update information in the supplemental package from time to time.
About AmREIT
AmREIT (Amex: AMY) is a real estate investment trust ("REIT") focused on
the ownership, development and management of Irreplaceable Corners(TM) -
defined as premier retail frontage properties typically located on "Main &
Main" intersections in highly populated, high-traffic, affluent areas. Our
portfolio consists of shopping centers anchored by market dominant tenants
such as Kroger, Barnes & Noble and Walgreens and are supported by specialty
retailers such as GAP, Starbucks, Hallmark and Verizon. Our business
structure is unique within the REIT community and consists of a real estate
operating and development business, a securities company and a merchant
development retail partnership business. These synergistic businesses support
our portfolio of Irreplaceable Corners, and, along with our deep professional
talent pool, allow the company access to multiple avenues of low-cost capital
which can then be deployed efficiently and accretively for our shareholders.
Through the retail partnership funds, AmREIT captures recurring development,
leasing, property management, and asset management fees for services performed
while maintaining an ownership interest and profit participation. Our
business structure allows the company to expand both internally and
externally, distinguishing AmREIT as a value creator, a growth company, and a
source of dependable, monthly income.
In addition to historical information, this press release contains
forward-looking statements under the federal securities law. These statements
are based on current expectations, estimates and projections about the
industry and markets in which AmREIT operates, management's beliefs and
assumptions made by management. Past performance is not indicative of future
returns. Forward-looking statements are not guarantees of future performance
and involve certain risks and uncertainties, which are difficult to predict.
This press release does not constitute an offer to sell, or the
solicitation of an offer to buy any public or private securities from the
Company. The purchase of any securities may only be made pursuant to a
prospectus. A copy of any available prospectus and the related subscription
documents are available to qualified potential investors on request.
For more information, call Robyn Walden, Vice President Investor Relations
of AmREIT, at (713) 850-1400, or Chad Braun, Chief Financial Officer of
AmREIT, 713-850-1400. AmREIT is online at http://www.amreit.com.
Operating Results
(in thousands, except share and per share data)
(Unaudited)
Three Months Ended
March 31,
-----------------------
2005 2004
---------- ----------
Revenues:
Rental income from operating
leases $ 4,313 $ 1,521
Earned income from direct
financing leases 507 508
Real estate fee income 994 367
Securities commission income 2,123 1,905
Asset management fee income 117 75
Interest and other income 188 11
Total Revenues 8,242 4,387
Expenses:
General operating and
administrative 1,652 1,201
Property expense 729 209
Legal and professional 579 328
Securities commissions 1,633 1,424
Depreciation and amortization 1,097 225
Deferred merger costs - 1,320
Total Expenses 5,690 4,707
Operating Income (loss) 2,552 (320)
Income from retail partnerships
and other affiliates 31 15
Federal income tax expense (34) (171)
Interest expense (1,517) (620)
Minority interest in income of
consolidated joint ventures (15) (44)
Income (loss) before discontinued
operations 1,017 (1,140)
Income from discontinued
operations 341 775
Net income (loss) 1,358 (365)
Distributions paid to class B, C and
D shareholders (1,632) (813)
Net loss available to class A
shareholders $ (274) $ (1,178)
(in thousands, except share and per share data)
(Unaudited)
Three Months Ended
March 31,
-----------------------
2005 2004
---------- ----------
Reconciliation of Net Income
(loss) before discontinued
operations to Funds From
Operations ("FFO"):
Income (loss) before
discontinued operations $ 1,017 $ (1,140)
Income from discontinued
operations 341 775
Depreciation - from operations 955 223
Depreciation - from
discontinued operations 13 21
Gain on sale of real estate held
for investment (250) -
Class B, C and D distributions (1,632) (813)
FFO available to class A shares $ 444 $ (934)
Basic and Diluted Per Class A
Share Data:
Loss before discontinued
operations $ (0.18) $ (0.66)
Income from discontinued
operations $ 0.10 $ 0.26
Net loss $ (0.08) $ (0.40)
FFO $ 0.13 $ (0.32)
Distributions per class A share $ 0.12 $ 0.12
Distributions per class B, C and
D share $ 0.52 $ 0.36
Weighted average class A
common shares used to
compute net income per share,
basic and diluted 3,471,028 2,952,984
Weighted average number of class
B common shares outstanding 2,228,906 2,351,682
Weighted average number of class
C common shares outstanding 4,075,319 2,108,719
Weighted average number of class
D common shares outstanding 3,057,077 -
Balance Sheet Highlights
(in thousands)
(Unaudited)
March 31, December 31,
2005 2004
------------ ------------
Real estate held for investment, net $ 153,387 $ 157,031
Net investment in direct financing leases 19,218 19,219
Real estate held for resale, net 9,925 6,326
Total assets 205,475 203,151
Notes payable 92,751 105,964
Total liabilities 99,373 113,666
Minority interest 1,105 1,115
Total shareholders' equity 104,997 88,370
Non-GAAP Financial Disclosure
This press release contains certain non-GAAP financial measures that
management believes are useful in evaluating an equity REIT's performance.
AmREIT's definitions and calculations of non-GAAP financial measures may
differ from those used by other equity REIT's, and therefore may not be
comparable. The non-GAAP financial measures should not be considered as an
alternative to net income as an indication of our operating results, or to net
cash provided by operating activities as a measure of our liquidity.
AmREIT considers FFO to be an appropriate measure of the operating
performance of an equity REIT. The National Association of Real Estate
Investment Trusts ("NAREIT") defines FFO as net income computed in accordance
with generally accepted accounting principles ("GAAP"), excluding gains or
losses from sales of property, plus real estate depreciation and amortization,
and after adjustments for unconsolidated partnerships and joint ventures.
AmREIT calculates its base FFO in accordance with this definition. AmREIT
adjusts its FFO calculation by adding back non-cash charges to earnings, such
as the issuance of stock in conjunction with the payment of deferred merger
costs and impairment charges on real assets, resulting in its adjusted FFO.
The Company considers FFO to be an appropriate supplemental measure of
operating performance because, by excluding gains or losses on dispositions
and excluding depreciation, FFO is a helpful tool that can assist in the
comparison of the operating performance of a company's real estate between
periods, or as compared to different companies. FFO is not defined by GAAP and
should not be considered as an alternative to net income as an indication of
our operating performance or to net cash provided by operating activities as a
measure of our liquidity. FFO and adjusted FFO as disclosed by other REITs may
not be comparable to AmREIT's calculation.
Projected FFO is calculated in a method consistent with historical FFO,
and AmREIT considers projected FFO to be an appropriate supplemental measure
when compared with projected EPS. A reconciliation of the projected FFO to
projected EPS per share is provided below:
Projected 2005
Range
----------------- Historical
High Low 12/31/04
------- ------- ----------
Net loss available to class A shareholders $ (0.48) $ (0.62) $ (1.19)
Depreciation and amortization 1.35 1.35 0.61
Less loss on sale of real (0.15) (0.05) (0.04)
FFO available to class A shareholders 0.72 0.68 (0.62)
Impairment charges - - 0.74
Deferred merger costs - - 0.51
Adjusted FFO $ 0.72 $ 0.68 $ 0.63
SOURCE AmREIT
-0- 04/27/2005
/CONTACT: Robyn Walden of AmREIT, +1-713-860-4964, rwalden@amreit.com/
/Web site: http://www.amreit.com /