American Spectrum Realty Reports Second Quarter Results; Rental Revenue Increased 25% for Quarter.HOUSTON Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837. Economy The fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; -- American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of 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. ("the Company") (AMEX AMEX See: American Stock Exchange :AQQ AQQ Annual Qualifications Questionnaire ), a real estate investment and management company located in Houston, Texas “Houston” redirects here. For other uses, see Houston (disambiguation). Houston (pronounced /'hjuːstən/) is the largest city in the state of Texas and the , announced today its results for the second quarter of 2006. Rental revenue increased 25% for the quarter ended June June: see month. 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 continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the 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 The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. 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 Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. 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 REIT See: Real Estate Investment Trust REIT See real estate investment trust (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 a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. its charter to eliminate certain stock ownership restrictions. The effect of this amendment was to preclude pre·clude tr.v. pre·clud·ed, pre·clud·ing, pre·cludes 1. To make impossible, as by action taken in advance; prevent. See Synonyms at prevent. 2. 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 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, 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). , 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 Midwest or Middle West, region of the United States centered on the western Great Lakes and the upper-middle Mississippi valley. It is a somewhat imprecise term that has been applied to the northern section of the land between the Appalachians . 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 November: see month. 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.
- 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
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