<PAGE> 1
- --------------------------------------------------------------------------------
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): August 25, 1997
AMBASSADOR APARTMENTS, INC.
(Exact Name of Registrant as Specified in Charter)
Maryland 1-14132 36-3948161
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification Number)
77 West Wacker Drive, Suite 4040
Chicago, Illinois 60601
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (312) 917-1600
__________________________________________________________________
(Former Name or Former Address, if Changed Since Last Report)
- --------------------------------------------------------------------------------
<PAGE> 2
Item 5. Other Events.
On August 26, 1997, Ambassador Apartments, Inc. held a telephone
conference for analysts and investors to discuss the company's press release
issued August 25, 1997. The press release, which is filed herewith as Exhibit
99.1, stated that Ambassador has become aware that analysts' estimates of the
company's Funds From Operations ("FFO") for 1997 exceed the company's own
internal estimates.
During the telephone discussion, the company was asked about its
expectations for the third and fourth quarters of 1997 compared to the first
and second quarters. In responding, David Glickman, Chairman of the Board and
Chief Executive Officer, stated that the company's intention had been to
indicate to investors that analysts' overall estimates for the balance of 1997
were higher than the company's projections, but not to project individual line
items of financial performance. However, subject to the risks referred to in
the press release and the company's previous filings with the Securities and
Exchange Commission, he stated that the company currently expects that its
revenues will increase somewhat in each of the third and fourth quarters of
1997, but that such increase will be more than offset by increases in expenses,
resulting in a net decline in FFO for those periods in comparison to the first
two quarters of the year, as indicated in the press release.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
Exhibit No. Description
- ----------- -----------
99.1 Press Release of Ambassador Apartments, Inc. dated August 25, 1997
-2-
<PAGE> 3
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 thereunto duly authorized.
AMBASSADOR APARTMENTS, INC.
Date: August 27, 1997 By: /s/ David M. Glickman
------------------------------
Chairman of the Board and
Chief Executive Officer
-3-
<PAGE> 4
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
99.1 Press Release of Ambassador Apartments, Inc. dated August 25, 1997
<PAGE> 1
EXHIBIT 99.1
AMBASSADOR APARTMENTS ANNOUNCES
EARNINGS ESTIMATE FOR 1997 FUNDS FROM OPERATIONS;
WILL ENGAGE ADVISOR TO MAXIMIZE SHAREHOLDER VALUE;
COMMITMENT RECEIVED TO EXTEND SECURED LINE OF CREDIT;
RESIGNATION OF ADAM PETERSON AS CFO; AND
CONFERENCE CALL SCHEDULED FOR 8:00 AM EASTERN TIME, TUESDAY, AUGUST 26
NOTE: EXCEPT FOR HISTORICAL MATTERS, THE MATTERS DISCUSSED IN THIS
RELEASE ARE FORWARD LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES.
THE COMPANY WISHES TO CAUTION READERS THAT IN ADDITION TO THE IMPORTANT FACTORS
DESCRIBED IN ITS 10-K, 10-QS AND OTHER FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION, THE FOLLOWING IMPORTANT FACTORS, AMONG OTHERS, SOMETIMES
HAVE AFFECTED AND IN THE FUTURE COULD AFFECT THE COMPANY'S ACTUAL RESULTS AND
COULD CAUSE THE COMPANY'S ACTUAL RESULTS DURING FISCAL 1997 AND BEYOND TO
DIFFER MATERIALLY FROM THOSE EXPRESSED IN ANY FORWARD LOOKING STATEMENTS MADE
BY OR ON BEHALF OF THE COMPANY. RISKS INCLUDE THE NUMBER AND EXTENT OF FUTURE
ACQUISITIONS AND DISPOSITIONS WHICH THE COMPANY MAY COMPLETE, RISKS OF PROPERTY
OPERATING PERFORMANCE AND RISKS THAT CORPORATE EXPENSES MAY NOT BE AS
ANTICIPATED.
Chicago, August 25, 1997-- It has become apparent to Ambassador
Apartments, Inc. (NYSE:AAH) that the estimates of securities analysts for the
company's Funds From Operations ("FFO") for 1997 are higher than Ambassador's
internal projections.
Normally, Ambassador Apartments, Inc. does not make public announcements
of its earnings projections or comment on analysts' estimates. However, in
this case the company will, as an exception, make a public announcement. For
the calendar year 1997, the company currently anticipates that its FFO per
fully converted, fully diluted average outstanding common share will be in the
range of $1.87-$1.91, without giving effect to any future acquisitions,
dispositions or other capital events. The company does not expect to close any
acquisitions in the third quarter, and does not expect that acquisitions closed
in the fourth quarter, if any, will have a significant effect on 1997 FFO.
Ambassador believes the main difference between its projections and those
of others arises from the fact that the company has made fewer acquisitions
year to date than assumed in the analysts' models. Analysts have also forecast
a pace of additional acquisitions in the third and fourth quarters that is in
excess of the company's current expectations.
Historically, the company has found and purchased apartment communities at
prices which were attractive and that were quickly accretive to earnings per
share. However, prices in many markets for Class B garden apartment
communities have increased to levels that have made acquisition opportunities
less attractive.
A second factor contributing to the difference between the company's
estimate and analysts' projections relates to general and administrative
expenses. The company's forecast for 1997 G & A expenses exceeds analysts'
projections because the company has made greater investments in systems,
marketing, training and personnel in anticipation of managing a larger
portfolio.
As the company evaluated these factors, and considered its own portfolio
of 15,782 apartments and the price of its stock, the company has had contact
with, and expects to retain expeditiously, an investment banker to assist the
company in evaluating and implementing strategies to maximize shareholder
value.
Ambassador also announced that it had received a commitment from Nomura
Asset Capital Corporation to extend its $75 million secured, revolving credit
agreement to December 31, 1998.
<PAGE> 2
The company also announced that it has accepted the resignation of Adam
D. Peterson as Executive Vice President and Chief Financial Officer, effective
immediately. Mr. Peterson resigned to pursue other business opportunities.
Thomas J. Coorsh, Senior Vice President, has been appointed interim Chief
Financial Officer.
A CONFERENCE CALL FOR INVESTORS AND ANALYSTS HAS BEEN SCHEDULED FOR
TUESDAY MORNING, AUGUST 26 AT 8:00 AM EASTERN TIME. TO ATTEND, PLEASE DIAL
1-800-553-0327. A REPLAY OF THE CALL WILL BE AVAILABLE UNTIL FRIDAY, AUGUST
29, 1997 AT 12:00 MIDNIGHT. THE NUMBER TO ACCESS DIAL-IN REPLAY IS (USA)
1-800-475-6701, (INTERNATIONAL) 1-320-365-3844. THE ACCESS CODE IS 352211.
Ambassador Apartments, Inc. is headquartered in Chicago and engaged in the
ownership, management, acquisition and renovation of garden-style multi-family
apartment properties. It is one of the only multifamily REITs to aggressively
pursue and implement the use of investment grade tax-exempt bond financing.
Ambassador Apartments' 52 properties contain 15,782 residences are located in
Texas, Arizona, Illinois, Colorado, Georgia, Tennessee and Florida.
CONTACT: DAVID GLICKMAN, CHAIRMAN & CEO E-mail: [email protected]
312/917-4400
DEBRA CAFARO, PRESIDENT E-mail: [email protected]
312/917-4444
