UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act


Date of Report (Date of earliest event reported):    November 13, 2015



AMERICAN REALTY INVESTORS, INC.

(Exact Name of Registrant as Specified in its Charter)

 
Nevada
 
001-15663
 
75-2847135
(State or other
jurisdiction of incorporation)
(Commission
File No.)
(I.R.S. Employer
Identification No.)
     
   
1603 LBJ Freeway, Suite 800
Dallas, Texas
75234
(Address of principal executive offices)
(Zip Code)

Registrant’s telephone number, including area code   469-522-4200



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



 
 
 

Section 2 – Financial Information

Item 2.02.  Results of Operations and Financial Condition

On November 13, 2015, American Realty Investors, Inc. (“ARL” or the “Company”) announced its operational results for the quarter ended September 30, 2015.  A copy of the announcement is attached as Exhibit “99.1.”

The information furnished pursuant to Item 2.02 in this Form 8-K, including Exhibit “99.1” attached hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, unless we specifically incorporate it by reference in a document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934.  We undertake no duty or obligation to publicly update or revise the information furnished pursuant to Item 2.02 of this Current Report on Form 8-K.

Section 9 – Financial Statements and Exhibits

Item 9.01.  Financial Statements and Exhibits

 
(d)
Exhibits.

The following exhibit is furnished with this Report:

 
Exhibit Designation
 
 
Description of Exhibit
 
99.1*
 
Press Release dated November 13, 2015
 
_____________________
*Furnished herewith.
 
 
 
 
2
 
 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.

  Dated: November 16, 2015
 
 
 
AMERICAN REALTY INVESTORS, INC.


By: /s/ Gene S. Bertcher
Gene S. Bertcher, Executive Vice
President and Chief Financial Officer
 

 
3
 


 
 
 
 
 
 
 
 
 
 
 
AMERICAN REALTY INVESTORS, INC.
  
CONSOLIDATED STATEMENTS OF OPERATIONS
  
(unaudited)
  
   
For the Three Months Ended
    
For the Nine Months Ended
  
   
September 30,
    
September 30,
  
   
2015
   
2014
    
2015
    
2014
  
   
(dollars in thousands, except per share amounts)
  
Revenues:
                        
Rental and other property revenues (including $211 and $175 for the three months and
$591 and $526 for the nine months ended 2015 and 2014, respectively, from related parties)
   $ 27,826     $ 19,326     $ 75,223     $ 57,986  
                                 
Expenses:
                                
Property operating expenses (including $202 and $172 for the three months and $551 and
$511 for the nine months ended 2015 and 2014, respectively, from related parties)
     14,499       10,766       37,467       30,677  
Depreciation and amortization
     6,569       4,463       16,410       13,099  
General and administrative (including $634 and $926 for the three months and $2,554 and
$2,686 for the nine months ended 2015 and 2014, respectively, from related parties)
     1,417       1,590       5,215       6,770  
Net income fee to related party
     232       (186 )     567       514  
Advisory fee to related party
     3,024       2,225       7,625       6,670  
     Total operating expenses
     25,741       18,858       67,284       57,730  
Net operating income (loss)
     2,085       468       7,939       256  
Other income (expenses):
                                
Interest income (including $3,886 and $4,699 for the three months and $13,190 and
$14,692 for the nine months ended 2015 and 2014, respectively, from related parties)
     3,950       5,106       13,722       15,264  
Other income
     (72 )     1,332       4,040       1,738  
Mortgage and loan interest (including $982 and $978 for the three months and $2,797  
and $2,709 for the nine months ended 2015 and 2014, respectively, from related parties)
     (13,481 )     (9,901 )     (34,203 )     (28,651 )
Loan charges and prepayment penalties
     (1,545 )     (1,044 )     (2,260 )     (2,626 )
Earnings from unconsolidated subsidiaries and investees
     81       320       276       266  
Litigation settlement (expense)
     (85 )     (86 )     (203 )     3,666  
        Total other expenses
     (11,152 )     (4,273 )     (18,628 )     (10,343 )
Loss before gain on land sales, non-controlling interest, and taxes
     (9,067 )     (3,805 )     (10,689 )     (10,087 )
Gain on sale of income producing properties
     735       -       735       -  
Gain on land sales
     1,958       40       7,861       634  
Net income (loss) from continuing operations before taxes
     (6,374 )     (3,765 )     (2,093 )     (9,453 )
   Income tax benefit (expense)
     16       786       107       5,030  
Net income (loss) from continuing operations
     (6,358 )     (2,979 )     (1,986 )     (4,423 )
Discontinued operations:
                                
   Net income (loss) from discontinued operations
     47       477       306       (454 )
   Gain on sale of real estate from discontinued operations
     -       1,770       -       14,826  
   Income tax benefit (expense) from discontinued operations
     (16 )     (786 )     (107 )     (5,030 )
Net income (loss) from discontinued operations
     31       1,461       199       9,342  
Net income (loss)
     (6,327 )     (1,518 )     (1,787 )     4,919  
Net income (loss) attributable to non-controlling interest
     1,164       200       1,132       (1,170 )
Net income attributable to American Realty Investors, Inc.
     (5,163 )     (1,318 )     (655 )     3,749  
Preferred dividend requirement
     (275 )     (428 )     (941 )     (1,653 )
Net income applicable to common shares
   $ (5,438 )   $ (1,746 )   $ (1,596 )   $ 2,096  
Earnings per share - basic
                                
   Net income (loss) from continuing operations
   $ (0.35 )   $ (0.24 )   $ (0.12 )   $ (0.59 )
   Net income from discontinued operations
     -       0.11       0.01       0.76  
   Net income applicable to common shares
   $ (0.35 )   $ (0.13 )   $ (0.11 )   $ 0.17  
                                 
Earnings per share - diluted
                                
   Net income (loss) from continuing operations
   $ (0.35 )   $ (0.24 )   $ (0.12 )   $ (0.59 )
   Net income (loss) from discontinued operations
     -       0.11       0.01       0.76  
   Net income applicable to common shares
   $ (0.35 )   $ (0.13 )   $ (0.11 )   $ 0.17  
                                 
Weighted average common shares used in computing earnings per share
     15,514,360       13,619,647       14,975,212       12,231,146  
Weighted average common shares used in computing diluted earnings per share
     15,514,360       13,619,646       14,975,212       12,231,146  
                                 
Amounts attributable to American Realty Investors, Inc.
                                
Net income (loss) from continuing operations
   $ (5,194 )   $ (2,779 )   $ (854 )   $ (5,593 )
Net income (loss) from discontinued operations
     31       1,461       199       9,342  
Net income applicable to American Realty Investors, Inc.
   $ (5,163 )   $ (1,318 )   $ (655 )   $ 3,749  
 
 
 
 
 
 
AMERICAN REALTY INVESTORS, INC.
  
CONSOLIDATED BALANCE SHEETS
  
(unaudited)
  
             
   
September 30,
    
December 31,
  
   
2015
    
2014
  
   
(dollars in thousands, except share
and par value amounts)
  
Assets
            
Real estate, at cost
   $ 961,099     $ 810,214  
Real estate subject to sales contracts at cost, net of depreciation ($194 for 2015 and $2,300 for 2014)
     9,213       19,026  
Less accumulated depreciation
     (145,101 )     (129,477 )
Total real estate
     825,211       699,763  
Notes and interest receivable
                
Performing (including $121,099 in 2015 and $139,466 in 2014 from related parties)
     132,452       149,484  
Non-performing
     -       3,161  
Less allowance for doubtful accounts (including $15,537 in 2015 and 2014 from related parties)
     (17,037 )     (18,279 )
Total notes and interest receivable
     115,415       134,366  
Cash and cash equivalents
     11,989       12,299  
Restricted cash
     42,214       49,266  
Investments in unconsolidated subsidiaries and investees
     5,152       4,279  
Receivable from related party
     43,301       21,414  
Other assets
     43,829       44,111  
Total assets
   $ 1,087,111     $ 965,498  
                 
Liabilities and Shareholders’ Equity
                
Liabilities:
                
Notes and interest payable
   $ 782,570     $ 638,891  
Notes related to subject to sales contracts
     7,793       20,168  
Deferred revenue (including $71,603 in 2015 and $72,564 in 2014 from sales to related parties)
     71,672       74,409  
Accounts payable and other liabilities (including $7,001 in 2015 and $11,024 in 2014 to related parties)
     46,412       52,442  
      908,447       785,910  
                 
Shareholders’ equity:
                
Preferred stock, Series A: $2.00 par value, authorized 15,000,000 shares, issued and outstanding
2,000,614 and 2,461,252 shares in 2015 and 2014 (liquidation preference $10 per share), including
900,000 shares in 2015 and 2014 held by ARL or subsidiaries.
     2,205       3,126  
Common stock, $0.01 par value, authorized 100,000,000 shares; issued 15,930,145 and 14,443,404
shares; outstanding 15,514,360 and 14,027,619 shares in 2015 and 2014, respectively; including
140,000 shares held by TCI (consolidated) in 2015 and 2014.
     156       141  
Treasury stock at cost; 415,785 shares
     (6,395 )     (6,395 )
Paid-in capital
     110,136       108,378  
Retained earnings
     18,435       19,090  
Total American Realty Investors, Inc. shareholders' equity
     124,537       124,340  
Non-controlling interest
     54,127       55,248  
Total shareholders' equity
     178,664       179,588  
Total liabilities and shareholders' equity
   $ 1,087,111     $ 965,498  
 
 
 
 
 
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