UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 10, 2004
Gladstone Commercial Corporation
(Exact name of registrant as specified in its chapter)
Maryland 0-50363 020681276
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1616 Anderson Road, Suite 208
McLean, Virginia 22102
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703) 286-7000
Item 7. Financial Statements and Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
Exhibit No. Description
----------- -----------
99.1 Press release dated May 10, 2004
Item 12. Results of Operations and Financial Condition.
On May 10, 2004, Gladstone Commercial Corporation issued a press release
announcing its financial results for the first quarter ended March 31, 2004. The
press release includes our Funds from Operations (FFO), which is a relative
non-GAAP (Generally Accepted Accounting Principles in the United States)
financial measure of an equity Real Estate Investment Trust developed by the
National Association of Real Estate Investment Trusts (NAREIT). NAREIT developed
FFO 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 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. Comparison of FFO, using the NAREIT definition,
to similarly titled measures for other REITs may not necessarily be meaningful
due to possible differences in the application of the NAREIT definition used by
such REITs.
Diluted funds from operations per share ("Diluted FFO per share") is FFO
divided by weighted average common shares outstanding on a diluted basis during
a period. We believe that Diluted FFO per share is useful to investors because
it provides investors with a further context for evaluating our FFO results in
the same manner that investors use earnings per share ("EPS") in evaluating net
income available to common shareholders. In addition, since most REITs provide
Diluted FFO per share information to the investment community, we believe
Diluted FFO per share is a useful supplemental measure for comparing us to other
REITs. We believe that diluted EPS is the most directly comparable GAAP measure
to Diluted FFO per share.
The following table provides a reconciliation of our FFO for the three
months ended March 31, 2004 to the most directly comparable GAAP measure, net
income (loss) and a computation of diluted FFO per weighed average common share
to diluted net income (loss) per weighted average common share.
Three Months
Ended
March 31, 2004
--------------
Net loss $ (193,305)
Real estate depreciation and amortization 79,330
-----------
Funds from operations $ (113,975)
===========
Weighted average shares outstanding - diluted 7,642,000
===========
Diluted net loss per weighted average common share $ (0.03)
===========
Diluted funds from operations per
weighted average common share $ (0.01)
===========
The text of the press release is included as an exhibit to this Form 8-K.
Pursuant to the rules and regulations of the Securities and Exchange Commission,
such exhibit and the information set forth therein and herein is deemed to be
furnished and shall not be deemed to be filed.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Gladstone Commercial Corporation
(Registrant)
May 10, 2004 By:/s/ Harry Brill
-------------------------------------
(Harry Brill, Chief Financial Officer)