CLEVELAND, Nov. 12, 2004 (PRIMEZONE) -- Paragon Real Estate Equity and Investment Trust (AMEX:PRG) announced operating results for the third quarter and nine months ended September 30, 2004. For the third quarter of 2004, net loss attributable to common shares was $241,000, or $0.01 loss per share, compared to net income of $35,000, or $0.00 per share for 2003. For the nine months ended September 30, 2004, net loss attributable to common shares was $587,000, or $0.02 loss per share, compared to a net loss of $1,076,000, or $0.08 loss per share, for the same period in 2003.
In the nine months ended September 30, 2004, Paragon's continuing operations include nine months of Richton Trail Apartments, whereas in the same period ended September 30, 2003, Richton Trail is included for only three months because it was acquired on July 1, 2003. In addition, the nine month 2003 net loss included non-comparable items for loss from discontinued operations of the commercial properties of $495,000 that were sold in October 2003 and gain on sale of marketable securities of $105,000. When properties are sold, their operating revenue and expenses are reclassified to "discontinued operations." The third quarter 2003 net income also included non-comparable items for gain on sale of marketable securities of $105,000 and income from discontinued operations of the commercial properties of $55,000.
During 2004, the company continues to actively pursue its value-added investment strategy and has been analyzing numerous portfolios. James C. Mastandrea, Chief Executive Officer and President, commented, "We have found capital generally to be available to do deals and remain optimistic towards meeting our objectives of acquiring value-added apartment properties."
-- Financial Statements Follow --
Forward-Looking Statements
Certain matters discussed within this press release may be deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Paragon Real Estate Equity and Investment Trust believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that the planned implementation of a national real estate acquisition, development and re-development strategy will be completed in whole or in part. Factors that could cause actual results to differ materially from Paragon's expectations include changes in local or national economic or real estate conditions, the ability to meet competition, loss of existing key personnel, ability to hire and retain future personnel and other risks detailed from time to time in Paragon's SEC reports and filings, including its annual report on Form 10-K, quarterly reports on Form 10-Q and periodic reports on Form 8-K. Paragon assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
Paragon Real Estate Equity and Investment Trust and Subsidiaries
Consolidated Statements of Operations
(unaudited)
For the three months ended
September 30,
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2004 2003
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Revenues
Rental revenue $ 160,130 $ 144,408
Interest and other 11,054 4,347
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Total revenues 171,184 148,755
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Expenses
Property operating, taxes,
insurance 89,081 62,384
Depreciation and amortization 21,997 26,743
Interest 41,760 27,975
General and administrative 253,024 155,277
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Total expenses 405,862 272,379
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Loss from operations before minority
interests (234,678) (123,624)
Income allocated to minority
interests (5,859) (1,125)
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Loss from operations (240,537) (124,749)
Gain on sale of marketable
securities -- 105,421
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Loss from continuing operations (240,537) (19,328)
Income from discontinued operations (1) -- 54,811
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Net (loss) income attributable to
Common Shareholders $ (240,537) $ 35,483
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Net loss attributable to Common
Shareholders per Common
Share: Basic and Diluted ($0.01) $0.00
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Weighted average number of Common
Shares outstanding: Basic
and Diluted 33,342,790 31,382,566
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(1) The company sold its interest in four commercial properties
on 10/1/03. Revenues and expenses for those properties were
reclassified to discontinued operations for 2003. Revenues
and expenses from operations for 2004 and 2003 are for an
apartment complex purchased on 7/1/03.
Paragon Real Estate Equity and Investment Trust and Subsidiaries
Consolidated Statements of Operations
(unaudited)
For the nine months ended
September 30,
--------------------------
2004 2003
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Revenues
Rental revenue $ 455,741 $ 144,408
Interest and other 38,511 7,570
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Total revenues 494,252 151,978
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Expenses
Property operating, taxes,
insurance 249,526 62,384
Depreciation and amortization 65,006 35,812
Interest 124,912 27,975
General and administrative 717,386 754,027
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Total expenses 1,156,830 880,198
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Loss from operations before minority
interests (662,578) (728,220)
Loss allocated to minority interests 75,158 41,445
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Loss from operations (587,420) (686,775)
Gain on sale of marketable
securities -- 105,421
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Loss from continuing operations (587,420) (581,354)
Loss from discontinued operations (1) -- (495,158)
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Net loss attributable to Common
Shareholders (587,420) (1,076,512)
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Net loss attributable to Common
Shareholders per Common
Share: Basic and Diluted ($0.02) ($0.08)
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Weighted average number of Common
Shares outstanding:
Basic and Diluted (2) 32,899,490 13,669,351
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(1) The company sold its interest in four commercial properties
on 10/1/03. Revenues and expenses for those properties were
reclassified to discontinued operations for 2003. Revenues
and expenses from operations for 2004 and 2003 are for an
apartment complex purchased on 7/1/03.
(2) The weighted average number of common shares increased in 2004
due to the one-time incentive exchange offer, which ended on
6/30/03, providing for each preferred share to be exchanged
for 22.881 common shares. Preferred shareholders exchanged
1,174,120 preferred shares, or nearly 81%, for 26,865,042
common shares.
Paragon Real Estate Equity and Investment Trust and Subsidiaries
Consolidated Balance Sheet
(unaudited)
As of
September 30, 2004
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ASSETS
Investments in real estate, net $ 3,910,396
Cash and restricted cash 2,069,965
Marketable securities, net 78,328
Other assets, net 94,585
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Total Assets $ 6,153,274
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LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage loan payable $ 2,775,535
Other liabilities 247,046
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Total Liabilities 3,022,581
Minority interests in consolidated subsidiary 2,174,339
Shareholders' equity 956,354
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Total Liabilities and Shareholders' Equity $ 6,153,274
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