American Spectrum Realty Reports Second Quarter Results; Refocusing Strategy on Target.Business Editors IRVINE, Calif.--(BUSINESS WIRE)--Aug. 7, 2003 American Spectrum Realty realty n. a short form of "real estate." (See: real estate) REALTY. An abstract of real, as distinguished from personalty. Realty relates to lands and tenements, rents or other hereditaments. Vide Real Property. , Inc. (AMEX AMEX See: American Stock Exchange :AQQ AQQ Annual Qualifications Questionnaire ) announced today its results for the second quarter and six months ended June 30, 2003, which reflected the continuation of the Company's strategy to strengthen its property portfolio. Rental revenue from real estate held for investment totaled $7.0 million for the second quarter of 2003, compared with $7.8 million for the same prior-year quarter. This reduction primarily reflected a decrease in occupancy in properties located in San Diego, California “San Diego” redirects here. For other uses, see San Diego (disambiguation). San Diego is a coastal Southern California city located in the southwestern corner of the continental United States. As of 2006, the city has a population of 1,256,951. , where three major tenants vacated at the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of their leases, partially off-set by a revenue increase resulting from acquired properties. Second quarter 2003 net loss was $4.4 million, or $0.74 per common share, versus $1.5 million, or $0.27 per common share, for second quarter 2002. Included in the net loss is an impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge of $4.0 million for three properties held for sale. Two of these properties were sold in July 2003, and the other one is expected to be sold prior to the end of the third quarter. The weighted average occupancy of the Company's properties held for investment at June 30, 2003 and 2002 was 76% and 86%, respectively. William J. Carden, President of American Spectrum, commented, "We are making progress in strategically recasting re·cast tr.v. re·cast, re·cast·ing, re·casts 1. To mold again: recast a bell. 2. our property portfolio to concentrate on the office and industrial segments in targeted markets in California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). , Texas and Arizona Arizona (âr'əzō`nə), state in the southwestern United States. It is bordered by Utah (N), New Mexico (E), Mexico (S), and, across the Colorado R., Nevada and California (W). . As expected, this process is taking time, and in the short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. has resulted in softer figures than we would like. However, we are confident that these sacrifices will put the Company on a better footing for future growth and profitability." Carden added, "In the second half of the year, we expect to close on a number of properties currently for sale, and we intend to replace them with properties that are in keeping with our strategic shift." For the six months ended June 30, 2003, revenue was $14.6 million compared with $15.4 million in the first half of 2002. The 2003 first half net loss was $6.7 million, or $1.15 per common share, versus $3.6 million, or $0.65 per common share, for the same period in 2002. Results for the first six months of 2003 and 2002, respectively, reflect the following non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. : depreciation and amortization from real estate held for investment of $5.2 million and $4.6 million; impairment of real estate held for sale of $4.0 million and nothing; deferred compensation expense of $157,000 and $515,000, mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. adjustments on interest rate protection agreements of $244,000 and $89,000; and the following non-cash items: deferred rental income Noun 1. rental income - income received from rental properties income - the financial gain (earned or unearned) accruing over a given period of time of $229,000 and $208,000, minority interest of $915,000 and $470,000, and amortization of loan premiums of $283,000 and $294,000. Rental revenues for 2003 include revenues from an office building acquired in May 2003 and three office buildings acquired in the second and third quarter of 2002. Rental revenues for 2003 and 2002 do not include revenues from properties (eight properties for 2003 and 10 properties for 2002) which are reported as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting , the results of operations of the acquired properties are included in the Company's results since acquisition and the results of the properties considered held for sale are included in the Company's financial statements as discontinued operations. American Spectrum Realty, Inc. is a diversified diversified (di·verˑ·s real estate investment and management company that owns 28 office, industrial, apartment and retail properties aggregating over 3.0 million square feet in California, Texas, Arizona, South Carolina South Carolina, state of the SE United States. It is bordered by North Carolina (N), the Atlantic Ocean (SE), and Georgia (SW). Facts and Figures Area, 31,055 sq mi (80,432 sq km). Pop. (2000) 4,012,012, a 15. and the Midwest. Publicly traded on the American Stock Exchange American Stock Exchange (AMEX) Stock exchange in the U.S. Originally known as “the Curb,” it began as an outdoor marketplace in New York City c. 1850. It moved indoors to its present location in the Wall Street area in 1921. 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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.
AMERICAN SPECTRUM REALTY, INC.
FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share amounts)
Quarter Ended
June 30,
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2003 2002
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REVENUES:
Rental revenue $ 7,015 $ 7,849
Interest and other income 33 72
Total revenues 7,048 7,921
EXPENSES:
Property operating expense 3,100 2,974
General and administrative 1,709 1,812
Depreciation and amortization 2,582 2,221
Interest expense 2,948 3,031
Total expenses 10,339 10,038
OTHER INCOME:
Net gain on sale of real estate assets - 84
Net gain on extinguishment of debt - 38
Total other income - 122
Net loss before minority interest and
discontinued operations (3,291) (1,995)
Minority interest 621 194
Net loss before discontinued operations (2,670) (1,801)
(Loss) income from discontinued operations (1,725) 319
Net loss (4,395) (1,482)
BASIC AND DILUTED PER SHARE DATE
Net loss before discontinued operations $ (0.45) $ (0.33)
(Loss) income from discontinued operations $ (0.29) $ 0.06
Net loss $ (0.74) $ (0.27)
Six Months Ended
June 30,
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2003 2002
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REVENUES:
Rental revenue $ 14,550 $ 15,435
Interest and other income 43 151
Total revenues 14,593 15,586
EXPENSES:
Property operating expense 6,213 5,761
General and administrative 3,302 4,229
Depreciation and amortization 5,156 4,559
Interest expense 5,851 5,653
Total expenses 20,522 20,202
OTHER INCOME:
Net gain on sale of real estate assets - 84
Net gain on extinguishment of debt - 38
Total other income - 122
Net loss before minority interest and
discontinued operations (5,929) (4,494)
Minority interest 915 470
Net loss before discontinued operations (5,014) (4,024)
Income from discontinued operations (1,657) 441
Net loss (6,671) (3,583)
BASIC AND DILUTED PER SHARE DATE
Net loss before discontinued operations $ (0.87) $ (0.73)
(Loss) income from discontinued operations $ (0.28) $ 0.08
Net loss $ (1.15) $ (0.65)
June 30, Dec. 31,
2003 2002
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Real estate held for investment, net $ 194,715 $ 194,437
Cash 1,839 788
Total assets 238,059 253,557
Notes payable, net of premiums 153,369 152,694
Total liabilities 202,371 213,081
Total stockholders' equity 26,906 30,857
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