CLEVELAND, Aug. 19, 2004 (PRIMEZONE) -- Paragon Real Estate Equity and Investment Trust (AMEX:PRG) announced operating results for the second quarter and six months ended June 30, 2004. For the second quarter of 2004, net loss attributable to common shares was $213,000, or $0.01 per share, compared to a net loss of $867,000, or $0.18 per share for 2003. Net loss attributable to common shares was $347,000, or $.01 per share, for the six months ended June 30, 2004, compared to a net loss of $1,112,000, or $0.24 per share, for the same period in 2003.
In 2004, Paragon's continuing operations include Richton Trail Apartments, acquired July 1, 2003. In 2003, the net loss included losses from discontinued operations of $498,000 for the second quarter and $550,000 for six months related to the commercial properties that were sold in the fourth quarter. When properties are sold, their operating revenue and expenses are reclassified to "discontinued operations."
The Paragon Executive Management Team continues to actively pursue assets and portfolios consistent with the company's value-added investment strategy. During 2004, the team has evaluated and analyzed numerous deals. Current endeavors include an acquisition proposal for a portfolio of 14 multi-family properties with approximately 2,000 units. Additionally, the team is engaged in continuing discussions with the owner of a multi-building apartment complex of more than 1,100 units in the Midwest. At this time, the company cannot provide any assurances that these acquisitions will be consummated.
James C. Mastandrea, Chief Executive Officer and President, remarked, "The real estate market continues to be an exceptionally strong sellers' market. Given this 'heated' sellers' market, we remain disciplined in our approach to acquisitions in order to create value for our shareholders."
** 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
June 30,
-------------------------------
2004 2003
----------- ------------
Revenues
Rental revenue $ 145,009 $ --
Interest and other 9,300 794
----------- ------------
Total revenues 154,309 794
----------- ------------
Expenses
Property operating,
taxes, insurance 74,011 --
Depreciation and
amortization 21,578 3,631
Interest 41,485 --
General and administrative 224,769 399,159
----------- ------------
Total expenses 361,843 402,790
----------- ------------
Loss from operations before
minority interests (207,534) (401,996)
(Income) loss allocated
to minority interests (5,879) 32,712
----------- ------------
Loss from continuing
operations (213,413) (369,284)
Loss from discontinued
operations (1) -- (497,513)
----------- ------------
Net loss attributable
to Common Shareholders $ (213,413) $ (866,797)
----------- ------------
Net loss attributable
to Common Shareholders
per Common Share:
Basic and Diluted $ (0.01) $ (0.18)
----------- ------------
Weighted average number
of Common Shares
outstanding:
Basic and Diluted (2) 32,775,781 4,812,744
----------- ------------
(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 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 Statements of Operations
(unaudited)
For the six months ended
June 30,
----------------------------
2004 2003
----------- ------------
Revenues
Rental revenue $ 295,611 $ --
Interest and other 27,457 3,223
----------- ------------
Total revenues 323,068 3,223
----------- ------------
Expenses
Property operating, taxes,
insurance 160,445 --
Depreciation and amortization 43,009 9,069
Interest 83,152 --
General and administrative 464,362 598,750
----------- ------------
Total expenses 750,968 607,819
----------- ------------
Loss from operations before
minority interests (427,900) (604,596)
Loss allocated to minority
interests 81,017 42,570
----------- ------------
Loss from continuing
operations (346,883) (562,026)
Loss from discontinued
operations (1) -- (549,969)
----------- ------------
Net loss attributable
to Common Shareholders $ (346,883) $ (1,111,995)
----------- ------------
Net loss attributable
to Common Shareholders
per Common Share:
Basic and Diluted $ (0.01) $ (0.24)
---------- ------------
Weighted average number
of Common Shares
outstanding:
Basic and Diluted (2) 32,678,378 4,665,950
----------- ------------
(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 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
June 30, 2004
-------------
ASSETS
Investments in real estate, net $ 3,919,091
Cash and restricted cash 2,239,285
Marketable securities, net 86,643
Other assets 116,665
------------
Total Assets $ 6,361,684
------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage loans payable $ 2,787,613
Other liabilities 236,022
------------
Total Liabilities 3,023,635
Minority interest in consolidated
subsidiary 2,168,480
Shareholders' equity 1,169,569
------------
Total Liabilities and Shareholders'
Equity $ 6,361,684
------------