American Realty Investors, Inc. (NYSE:ARL), a Dallas-based real
estate investment company, reported results of operations for the
second quarter ended June 30, 2015. ARL announced today that the
Company reported net income applicable to common shares of $0.9
million, including $3.0 million in gains on the sale of land, or
$0.05 per diluted earnings per share, as compared to net income
applicable to common shares of $0.9 million, including $7.0 million
in gains on the sale of income-producing properties or $0.07 per
diluted earnings per share for the same period ended 2014.
For the six months ended June 30, 2015, we reported a net income
applicable to common shares of $3.8 million or $0.22 per diluted
earnings per share, as compared to a net income applicable to
common shares of $3.8 million or $0.33 per diluted earnings per
share for the same period ended 2014.
During the three months ended June 30, 2015, we acquired five
income-producing properties. We are diligent in our mission to
provide high-quality living opportunities to our tenants as
reflected in our occupancy rates being over 95%. The Company
continues to demonstrate an unwavering commitment to fortify the
portfolio and streamline operational activity, while at the same
time maintaining our commitment to creating value. “We believe our
second quarter 2015 operating results, combined with our recent
acquisitions, demonstrates another quarter of stabilized
performance for the Company. We believe the portfolio is well
positioned to deliver solid financial returns for the remainder of
2015,” said Danny Moos, the Company’s Chief Executive Officer and
President. We are pleased that we are seeing continued improvements
in our operations from these endeavors and will continue to adapt
to market challenges with an eye on both near-term economic
challenges and long-term prospects as the real estate market
improves.
In the Company’s commercial portfolio, we are seeing the benefit
of our efforts with new leases executed and increasing rents as
first year concessions expire. The Company also acquired a new
commercial property during the three months ended June 30, 2015. We
believe that we will continue to see growth in our commercial
portfolio as the economic conditions improve and we capitalize on
the influx of attractive prospects in the pipeline.
Rental and other property revenues were $24.2 million for the
three months ended June 30, 2015. This represents an increase of
$4.7 million, as compared to the prior period revenues of $19.5
million. This change, by segment, is an increase in the apartment
portfolio of $2.5 million, and an increase in the commercial
portfolio of $2.2 million. Within the apartment portfolio there was
an increase of $2.2 million in the acquired property portfolio and
an increase of $0.3 million in the same property portfolio. The
apartment portfolio continues to thrive in the current economic
conditions with occupancies averaging over 95%. We have been able
to surpass expectations due to the high-quality product offered,
strength of our management team and our commitment to our tenants.
This increase in apartment portfolio is also due to the acquisition
of new properties. Within the commercial portfolio, there was an
increase of $0.2 million in the acquired property portfolio and
increase of $2.0 million in the same store properties. We are
continuing to market our properties aggressively to attract new
tenants and strive for continuous improvement of our properties in
order to maintain our existing tenants.
Property operating expenses were $11.3 million for the three
months ended June 30, 2015. This represents an increase of $1.3
million, as compared to the prior period operating expenses of $10
million. This change, by segment, is an increase in the apartment
portfolio of $1.2 million, and an increase in the commercial
portfolio of $0.1 million. Within the apartment portfolio there was
an increase of $0.9 million in the acquired properties portfolio
and an increase of $0.3 million in the same property portfolio.
Within the commercial portfolio, there was an increase of $0.1
million in the same store properties.
General and administrative expenses were $1.6 million dollars
for the three months ended June 30, 2015. This represents a
decrease of $1.6 million, as compared to the prior period general
and administrative expenses of $3.2 million. This change, by
segment, is a decrease in the other portfolio of $1.4 million, and
a decrease in the land portfolio of $0.2 million. Within the other
portfolio, the decrease of $1.4 million was mainly due to lower
professional fees.
Mortgage and loan interest expense, including deferred borrowing
costs amortization, was $9.8 million for the three months ended
June 30, 2015. This represents an increase of $0.1 million, as
compared to the prior period expense of $9.7 million. This change
by segment is an increase in the other portfolio of $0.8 million,
and a decrease in the apartment portfolio of $0.7 million. Within
the other portfolio, the majority of this increase is due to the
securing of a new loan in the current period, which was utilized to
drive the acquisition and development activities of the Company.
The decrease in the apartment portfolio is the result of mortgage
refinances to lower interest rates.
Interest income was $4.5 million for the three months ended June
30, 2015. This represents a decrease of $1.5 million, as compared
to the prior year income of $6.0 million due to principal pay downs
made during the period on our outstanding notes and interest
receivable.
About American Realty Investors, Inc.
American Realty Investors, Inc., a Dallas-based real estate
investment company, holds a diverse portfolio of equity real estate
located across the U.S., including office buildings, apartments,
shopping centers and developed and undeveloped land. The Company
invests in real estate through direct ownership, leases and
partnerships and invests in mortgage loans on real estate. The
Company also holds mortgage receivables. For more information,
visit the Company’s website at www.americanrealtyinvest.com.
AMERICAN REALTY INVESTORS, INC. CONSOLIDATED
STATEMENTS OF OPERATIONS (unaudited)
For the Three Months Ended
For the Six Months Ended June 30, June 30,
2015 2014 2015
2014 (dollars in thousands, except per share amounts)
Revenues: Rental and other property revenues (including $173
and $175 for the three months and $343 and $350 for the six months
ended 2015 and 2014, respectively, from related parties) $ 24,241 $
19,500 $ 47,397 $ 38,659
Expenses: Property operating
expenses (including $187 and $158 for the three months and $349 and
$313 for the six months ended 2015 and 2014, respectively, from
related parties) 11,301 9,983 22,969 19,911 Depreciation and
amortization 5,137 4,323 9,841 8,636 General and administrative
(including $912 and $842 for the three months and $1,920 and $1,760
for the six months ended 2015 and 2014, respectively, from related
parties) 1,596 3,195 3,798 5,179 Net income fee to related party 45
210 335 700 Advisory fee to related party 2,309
2,202 4,601 4,445 Total
operating expenses 20,388 19,913
41,544 38,871 Net operating income (loss)
3,853 (413 ) 5,853 (212 )
Other income (expenses):
Interest income (including $4,246 and $5,959 for the three months
and $9,113 and $9,994 for the six months ended 2015 and 2014,
respectively, from related parties) 4,535 6,041 9,772 10,158 Other
income 14 232 4,111 406 Mortgage and loan interest (including $920
and $933 for the three months and $1,815 and $1,730 for the six
ended 2015 and 2014, respectively, from related parties) (9,794 )
(9,693 ) (21,439 ) (20,332 ) Earnings from unconsolidated
subsidiaries and investees 151 (124 ) 196 (54 ) Litigation
settlement (expense) (45 ) (86 ) (117 )
3,752 Total other expenses (5,139 ) (3,630 )
(7,477 ) (6,070 ) Loss before gain on land sales,
non-controlling interest, and taxes (1,286 ) (4,043 ) (1,624 )
(6,282 ) Gain on land sales 3,027 (159 )
5,903 594 Net income (loss) from
continuing operations before taxes 1,741 (4,202 ) 4,279 (5,688 )
Income tax benefit (expense) (12 ) 2,195
91 4,244 Net income (loss) from
continuing operations 1,729 (2,007 ) 4,370 (1,444 ) Discontinued
operations: Net income (loss) from discontinued operations (34 )
(732 ) 260 (931 ) Gain on sale of real estate from discontinued
operations - 7,003 - 13,057 Income tax benefit (expense) from
discontinued operations 12 (2,195 ) (91
) (4,244 ) Net income (loss) from discontinued operations
(22 ) 4,076 169
7,882 Net income 1,707 2,069 4,539 6,438 Net income (loss)
attributable to non-controlling interest (540 ) (551
) (32 ) (1,370 ) Net income attributable to American
Realty Investors, Inc. 1,167 1,518 4,507 5,068 Preferred dividend
requirement (275 ) (613 ) (665 ) (1,226
) Net income applicable to common shares $ 892 $ 905
$ 3,842 $ 3,842
Earnings per share -
basic Net income (loss) from continuing operations $ 0.06 $
(0.28 ) $ 0.25 $ (0.35 ) Net income from discontinued operations
- 0.35 0.01 0.68
Net income applicable to common shares $ 0.06 $ 0.07
$ 0.26 $ 0.33
Earnings per share -
diluted Net income (loss) from continuing operations $ 0.05 $
(0.28 ) $ 0.21 $ (0.35 ) Net income (loss) from discontinued
operations - 0.35 0.01
0.68 Net income applicable to common shares $ 0.05
$ 0.07 $ 0.22 $ 0.33 Weighted
average common shares used in computing earnings per share
15,367,320 11,525,389 14,701,170 11,525,389 Weighted average common
shares used in computing diluted earnings per share 17,844,339
11,525,389 17,178,190 11,525,389
Amounts
attributable to American Realty Investors, Inc. Net income
(loss) from continuing operations $ 1,189 $ (2,558 ) $ 4,338 $
(2,814 ) Net income (loss) from discontinued operations (22
) 4,076 169 7,882 Net
income applicable to American Realty Investors, Inc. $ 1,167
$ 1,518 $ 4,507 $ 5,068
AMERICAN REALTY INVESTORS, INC. CONSOLIDATED BALANCE
SHEETS (unaudited) June 30,
December 31, 2015 2014
(dollars in thousands, except share and par value amounts)
Assets Real estate, at cost $ 921,843 $ 810,214 Real estate
subject to sales contracts at cost, net of depreciation ($2,475 for
2015 and $2,300 for 2014) 19,032 19,026 Less accumulated
depreciation (138,961 ) (129,477 ) Total real estate
801,914 699,763 Notes and interest receivable Performing (including
$130,587 in 2015 and $139,466 in 2014 from related parties) 140,483
149,484 Non-performing 3,181 3,161 Less allowance for doubtful
accounts (including $15,537 in 2015 and 2014 from related parties)
(18,279 ) (18,279 ) Total notes and interest
receivable 125,385 134,366 Cash and cash equivalents 19,157 12,299
Restricted cash 52,183 49,266 Investments in unconsolidated
subsidiaries and investees 1,299 4,279 Receivable from related
party 37,360 21,414 Other assets 39,320 44,111
Total assets $ 1,076,618 $ 965,498
Liabilities and Shareholders’ Equity Liabilities: Notes and
interest payable $ 755,508 $ 638,891 Notes related to assets held
for sale 910 1,552 Notes related to subject to sales contracts
18,251 18,616 Deferred revenue (including $72,564 in 2015 and 2014
from sales to related parties) 72,633 74,409 Accounts payable and
other liabilities (including $6,732 in 2015 and $11,024 in 2014 to
related parties) 43,916 52,442 891,218
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 110,546 108,378 Retained earnings 23,597
19,090 Total American Realty Investors, Inc.
shareholders' equity 130,109 124,340 Non-controlling interest
55,291 55,248 Total shareholders'
equity 185,400 179,588 Total
liabilities and shareholders' equity $ 1,076,618 $ 965,498
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version on businesswire.com: http://www.businesswire.com/news/home/20150812006333/en/
American Realty Investors, Inc.Investor
RelationsGene Bertcher,
800-400-6407investor.relations@americanrealtyinvest.com
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