Exhibit 99.1
GLADSTONE COMMERCIAL CORPORATION ANNOUNCES FINANCIAL RESULTS
FOR THE YEAR ENDED DECEMBER 31, 2004: NET INCOME OF $0.21
PER WEIGHTED AVERAGE COMMON SHARE AND FUNDS FROM OPERATIONS OF
$0.34 PER DILUTED WEIGHTED AVERAGE COMMON SHARE
MCLEAN, Va., March 8 /PRNewswire-FirstCall/ -- Gladstone Commercial Corp.
(Nasdaq: GOOD) (the "Company") reported today financial results for the quarter
and year ended December 31, 2004. Net income for the year ended December 31,
2004 was $1,623,928, or $0.21 per basic and diluted weighted average common
share, compared to a net loss for the period from February 14, 2003 (inception)
through December 31, 2003 of $240,871, or $0.07 per basic and diluted weighted
average common share. Funds from Operations ("FFO") for the year ended December
31, 2004 was $2,597,273 or $0.34 per diluted weighted average common share.
Net Income for the three months ended December 31, 2004 was $999,920, or
$0.13 per basic and diluted weighted average common share, compared to a net
loss of $126,009, or $0.02 per basic and diluted weighted average common share
for the three months ended December 31, 2003. FFO for the three months ended
December 31, 2004 was $1,454,132 or $0.19 per diluted weighted average common
share.
In the fourth quarter of 2004, the Company added four additional properties
to its portfolio, for an aggregate purchase price of approximately $12.8
million. At December 31, 2004, the Company had approximately $75.8 million
invested from its initial public offering in twelve real properties and one
mortgage loan. Subsequent to December 31, 2004, the Company acquired two
properties for an aggregate cost of $12.4 million. Also subsequent to the year
end the company announced that it had arranged a warehouse line of credit with
BB&T Bank for up to $50 million.
"The fourth quarter showed positive growth and results for the Company, and
we look forward to 2005. We have a backlog of new purchases that we believe will
permit us to increase our future dividend. We also expect to receive long-term
mortgages on some of our investments and expect to begin using our new warehouse
line of credit to make new investments," said a spokesperson for the Company.
The National Association of Real Estate Investment Trusts (NAREIT) developed
FFO, as a relative non-GAAP (Generally Accepted Accounting Principles)
supplemental measure of operating performance of an equity REIT in order to
recognize that income-producing real estate historically has not depreciated on
the basis determined under GAAP. FFO, as defined by NAREIT, is net income (loss)
(computed in accordance with GAAP), excluding gains (or losses) from sales of
property, plus depreciation and amortization of real estate assets, and after
adjustments for unconsolidated partnerships and joint ventures. FFO does not
represent cash flows from operating activities in accordance with GAAP (which,
unlike FFO, generally reflects all cash effects of transactions and other events
in the determination of net income (loss)), and should not be considered an
alternative to either net income (loss) as an indication of our performance or
to cash flow from operations as a measure of liquidity or ability to make
distributions.
A reconciliation of net income, which we believe is the most directly
comparable GAAP measure, to FFO is set forth below:
For the
period
February 14,
Year ended 2003
through (inception)
December 31, December 31,
2004 2003
------------ ------------
Net income $ 1,623,928 $ (240,871)
Real estate depreciation and
amortization 973,345 5,827
Funds from operations 2,597,273 (235,044)
Weighted average shares outstanding -
diluted 7,708,534 3,229,119
Diluted net income (loss) per
weighted average common share $ 0.21 $ (0.07)
Diluted funds from operations per
weighted average common share $ 0.34 $ (0.07)
For the three For the three
months ended months ended
December 31, December 31,
2004 2003
------------- -------------
Net income (loss) $ 999,920 $ (126,009)
Real estate depreciation and
amortization 454,212 5,827
Funds from operations 1,454,132 (120,182)
Weighted average shares outstanding -
diluted 7,725,434 7,674,455
Diluted net income (loss) per
weighted average common share $ 0.13 $ (0.02)
Diluted funds from operations per
weighted average common share $ 0.19 $ (0.02)
To learn more about our FFO please refer to our Annual Report on Form 10-K
for the year ended December 31, 2004 filed with the Securities and Exchange
Commission ("SEC") today and on our web site at
http://www.GladstoneCommercial.com.
The financial statements attached below are without footnotes so readers
should obtain and carefully review our Form 10-K for the year ended December 31,
2004, including the footnotes to the financial statements contained therein. We
have filed the Form 10-K today with the SEC and the Form 10-K can be retrieved
at the SEC website at http://www.SEC.gov or the website for Gladstone Commercial
at http://www.GladstoneCommercial.com.
Gladstone Commercial will have a conference call at 10:30 am EST, March 9,
2005. To enter the call please dial 866-244-4526 and use the confirmation code
658722. An operator will monitor the call and set a queue for questions. To hear
the replay of the call please dial 888-266-2081 and use the confirmation code
658722. The replay will be available until April 9, 2005.
For further information contact our Chief Financial Officer, Harry Brill, at
703-286-7000.
This press release may include statements that may constitute "forward-
looking statements" within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, including statements with regard to the future performance of the
Company and the closing of any transaction. Words such as "believes," "intend,"
"expects," "projects" and "future" or similar expressions are intended to
identify forward-looking statements. These forward-looking statements inherently
involve certain risks and uncertainties, although they are based on the
Company's current plans that are believed to be reasonable as of the date of
this press release. Factors that may cause the Company's actual results, levels
of activity, performance or achievements to be materially different from any
future results, levels of activity, performance or achievements expressed or
implied by such forward-looking statements include, among others, those factors
listed under the caption "Risk factors" of the Company's Annual Report on Form
10-K for the year ended, December 31, 2004, as filed with the Securities and
Exchange Commission on March 8, 2005. The Company undertakes no obligation to
publicly update or revise any forward- looking statements, whether as a result
of new information, future events or otherwise.
Gladstone Commercial Corporation
Consolidated Balance Sheets
December 31, December 31,
2004 2003
------------ ------------
ASSETS
Real estate, net $ 60,466,330 $ 5,436,153
Mortgage note receivable 11,107,717 -
Cash and cash equivalents 29,153,987 99,075,765
Funds held in escrow 1,060,977 -
Interest receivable - mortgage note 64,795 -
Interest receivable - employees 4,792 -
Deferred rent receivable 210,846 -
Prepaid expenses 170,685 191,432
Other assets 114,819 -
Lease intangibles, net of accumulated
amortization of $194,047 and $1,208,
respectively 3,230,146 358,020
TOTAL ASSETS 105,585,094 105,061,370
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Due to Adviser 129,231 234,295
Accounts payable and accrued expenses 168,389 -
Dividends payable 920,040 76,420
Rent received in advance, security
deposits and funds held in escrow 1,674,741 -
Total Liabilities 2,892,401 310,715
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value,
20,000,000 shares authorized and
7,667,000 and 7,642,000 shares
issued and outstanding, respectively 7,667 7,642
Additional paid in capital 105,427,549 105,060,304
Notes receivable - employees (375,000) -
Distributions in excess of
accumulated earnings (2,367,523) (317,291)
Total Stockholders' Equity 102,692,693 104,750,655
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $105,585,094 $105,061,370
Gladstone Commercial Corporation
Consolidated Statements of Operations
For the
period
February 14,
2003
For the (inception)
Year ended through
December 31, December 31,
2004 2003
------------ ------------
OPERATING REVENUES
Rental income $ 3,331,215 $ 12,180
Interest income from mortgage note
receivable 981,187 -
Total operating revenues 4,312,402 12,180
OPERATING EXPENSES
Management advisory fee 1,187,776 317,188
Depreciation and amortization 973,345 5,827
Insurance 250,816 111,240
Professional Fees 448,969 39,511
General and administrative 442,227 83,382
Total operating expenses 3,303,133 557,148
Net income (loss) from operations 1,009,269 (544,968)
Interest income from temporary
investments 608,617 304,097
Interest income - employee loans 6,042 -
NET INCOME (LOSS) $ 1,623,928 $ (240,871)
Earnings (loss) per weighted average
common share
Basic $ 0.21 $ (0.07)
Diluted $ 0.21 $ (0.07)
Weighted average shares outstanding
Basic 7,649,855 3,229,119
Diluted 7,708,534 3,229,119
Gladstone Commercial Corporation
Consolidated Statements of Operations
For the three For the three
months ended months ended
December 31, December 31,
2004 2003
------------- -------------
OPERATING REVENUES
Rental income $ 1,663,677 $ 12,180
Interest income from mortgage note
receivable 284,128 -
Total operating revenues 1,947,805 12,180
OPERATING EXPENSES
Management advisory fee 344,416 193,092
Depreciation and amortization 454,212 5,827
Insurance 62,262 60,734
Professional Fees 135,165 29,511
General and administrative 76,538 61,590
Total operating expenses 1,072,593 350,754
Net income (loss) from operations 875,212 (338,574)
Interest income from temporary
investments 119,916 212,565
Interest income - employee loans 4,792 -
NET INCOME (LOSS) $ 999,920 $ (126,009)
Earnings (loss) per weighted average
common share
Basic $ 0.13 $ (0.02)
Diluted $ 0.13 $ (0.02)
Weighted average shares outstanding
Basic 7,667,000 7,642,000
Diluted 7,725,434 7,674,455
Gladstone Commercial Corporation
Consolidated Statements of Cash Flows
For the
period
February 14,
2003
For the (inception)
Year ended through
December 31, December 31,
2004 2003
------------ ------------
Cash flows from operating activities:
Net income (loss) $ 1,623,928 $ (240,871)
Adjustments to reconcile net income
(loss) to net cash provided by (used in)
operating activities:
Depreciation and amortization 973,345 5,827
Changes in assets and liabilities:
Increase in mortgage interest
receivable (64,795) -
Increase in employee interest
receivable (4,792) -
Decrease (increase) in prepaid
expenses 20,747 (191,432)
Increase in other assets (64,819) -
Increase in deferred rent receivable (210,846) -
Increase in accounts payable and
accrued expenses 168,389 -
(Decrease) increase in due to Adviser (105,064) 234,295
Increase in rent received in
advance and security deposits 613,764 -
Net cash provided by (used in)
operating activities 2,949,857 (192,181)
Cash flows from investing activities:
Acquisition of real estate (58,875,648) (5,800,000)
Issuance of mortgage note receivable (11,170,000) -
Deposit on future acquisition (50,000)
Principal repayments on mortgage
note receivable 62,283 -
Net cash used in investing
activities (70,033,365) (5,800,000)
Cash flows from financing activities:
Proceeds from share issuance - 105,067,946
Offering costs (7,730) -
Dividends paid (2,830,540) -
Net cash (used in) provided
by financing activities (2,838,270) 105,067,946
Net (decrease) increase in cash and
cash equivalents (69,921,778) 99,075,765
Cash and cash equivalents, beginning
of period 99,075,765 -
Cash and cash equivalents, end of
period $ 29,153,987 $ 99,075,765
Non-cash financing activities:
Notes receivable issued in exchange
for common stock associated with the
exercise of employee stock options $ 375,000 $ -
SOURCE Gladstone Commercial Corporation
-0- 03/08/2005
/CONTACT: Harry Brill, Chief Financial Officer of Gladstone Commercial
Corporation, +1-703-286-7000/
/Web site: http://www.gladstonecommercial.com/
(GOOD)