American Realty Investors, Inc. (NYSE:ARL), a Dallas-based real
estate investment company, today reported results of operations for
the first quarter ended March 31, 2018. For the three months ended
March 31, 2018, we reported a net loss applicable to common shares
of $0.9 million or ($0.06) per diluted loss per share compared to a
net loss applicable to common shares of $6.0 million or ($0.39) per
diluted loss per share for the same period ended 2017.
During this period the company adhered to its overall business
strategy to focus only on high value assets and with this in mind,
we disposed of several underperforming properties. Though this
created a slight reduction in revenue, the overall operating income
was virtually consistent with the first quarter of 2017. As the
company has been redeploying capital in new residential apartment
properties, we fully anticipate increases in both revenue and
operating income.
Going forward we further believe that operating expenses should
remain very manageable as we continue to replace older
underperforming assets with newer class A properties.
Revenues
Rental and other property revenues were $31.1 million for the
three months ended March 31, 2018. This represents a decrease of
$0.7 million, as compared to the prior period revenues of $31.8
million. This change, by segment, is an increase in the apartment
portfolio of $0.8 million, and a decrease in the commercial
portfolio of $1.6 million.
Expense
Property operating expenses were $14.4 million for the three
months ended March 31, 2018. This represents a decrease of $1.8
million, as compared to the prior period operating expenses of
$16.2 million. This change, by segment, is a decrease in the
apartment portfolio of $0.2 million, and a decrease in the
commercial portfolio of $1.2 million and a decrease in the land
portfolio of $0.3 million.
Depreciation and amortization expense was $6.4 million for the
three months ended March 31, 2018. This represents an increase of
$0.1 million, as compared to the prior period expense of $6.3
million. This change by segment is a decrease of $0.1 million in
the apartment portfolio.
Other income (expense)
Mortgage and loan interest expense was $15.7 million for the
three months ended March 31, 2018. This represents a decrease of
$1.1 million as compared to the prior period expense of $16.8
million. The change by segment is an increase in the other
portfolio of $0.5 million, a decrease in the apartment portfolio of
$1.3 million, a decrease in the land portfolio of $0.5 million, and
an increase in the commercial portfolio of $0.2 million. Within the
other portfolio, the increase is primarily due to $2.7 million of
interest expense related to the Israeli bond sale. The increase
within the apartment portfolio is primarily due to loan charges and
prepayment penalties for the refinancing of two mortgage loans at
lower rates and the increase within the land portfolio is due to a
loan payoff.
Other income was $3.7 million for the three months ended March
31, 2018. This represents an increase of $2.6 million as compared
to prior period other income of $1.1 million. This increase is due
to forgiveness of debt of $1.5 million during the first quarter and
$1.8 million of foreign currency translation gain due to change in
currency exchange rate.
Gain on land sales increased for the three months ended March
31, 2018, compared to the prior period. In the current period, we
sold 112.2 acres of land for a sales price of $7.2 million and
recorded a gain of $1.3 million. For the same period in 2017, we
sold 2.49 acres of land for a sales price of $1.1 million and
recorded a total gain of $0.4 million.
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 March
31, 2018 2017 (dollars in
thousands, except per share amounts) Revenues: Rental
and other property revenues (including $208 and $190 for the three
months ended 2018 and 2017, respectively, from related parties) $
31,083 $ 31,822
Expenses: Property operating expenses
(including $227 and $237 for the three months ended 2018 and 2017,
respectively, from related parties) 14,424 16,265 Depreciation and
amortization 6,391 6,330 General and administrative (including
$1,140 and $962 for the three months ended 2018 and 2017,
respectively, from related parties) 2,341 2,031 Net income fee to
related party 53 60 Advisory fee to related party 2,956
2,659 Total operating expenses 26,165
27,345 Net operating income 4,918 4,477
Other income (expenses): Interest income (including $4,426
and $4,476 for the three months ended 2018 and 2017, respectively,
from related parties) 5,109 4,792 Other income 1,901 1,443 Mortgage
and loan interest (including $1,799 and $1,511 for the three months
ended 2018 and 2017, respectively, from related parties) (15,724 )
(16,796 ) Foreign currency transaction loss 1,756 (323 ) Earnings
from unconsolidated subsidiaries and investees 320
55 Total other expenses (6,638 )
(10,829 ) Loss before gain on land sales, non-controlling interest,
and taxes (1,720 ) (6,352 ) Gain on land sales 1,335
445 Net loss from continuing operations before taxes
(385 ) (5,907 ) Net loss from continuing operations
(385 ) (5,907 ) Net loss (385 ) (5,907 ) Net (income) loss
attributable to non-controlling interest (275 ) 193
Net loss attributable to American Realty Investors, Inc.
(660 ) (5,714 ) Preferred dividend requirement (225 )
(275 ) Net loss applicable to common shares $ (885 ) $ (5,989 )
Earnings per share - basic Net loss from continuing
operations $ (0.06 ) $ (0.39 )
Earnings per share -
diluted Net loss from continuing operations $ (0.06 ) $ (0.39 )
Weighted average common shares used in computing earnings
per share 15,938,077 15,514,360 Weighted average common shares used
in computing diluted earnings per share 15,938,077 15,514,360
Amounts attributable to American Realty Investors,
Inc. Net loss from continuing operations $ (660 ) $ (5,714 )
Net loss applicable to American Realty Investors, Inc. $ (660 ) $
(5,714 )
AMERICAN REALTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS March
31, December 31, 2018 2017
(unaudited) (audited) (dollars in thousands,
except share and par value amounts) Assets Real estate,
at cost $ 1,108,903 $ 1,117,429 Real estate subject to sales
contracts at cost 48,234 48,234 Less accumulated depreciation
(178,007 ) (177,546 ) Total real estate 979,130
988,117 Notes and interest receivable: Performing (including
$105,566 in 2018 and $99,410 in 2017 from related parties) 144,526
127,865 Less allowance for estimated losses (including $14,269 in
2018 and 2017 from related parties) (15,770 ) (15,770
) Total notes and interest receivable 128,756 112,095 Cash and cash
equivalents 40,899 42,920 Restricted cash 55,383 45,618 Investments
in unconsolidated joint ventures and investees 6,716 6,396
Receivable from related party 44,332 38,311 Other assets
57,107 63,263 Total assets $ 1,312,323
$ 1,296,720
Liabilities and Shareholders’
Equity Liabilities: Notes and interest payable $ 892,191 $
898,750 Notes related to real estate held for sale 376 376 Notes
related to real estate subject to sales contracts 347 1,957 Bond
and interest payable 146,888 113,049 Deferred revenue (including
$56,966 in 2018 and $56,887 in 2017 to related parties) 77,342
77,332 Accounts payable and other liabilities (including $11,357 in
2018 and $11,893 in 2017 to related parties) 28,082
39,373 Total liabilities 1,145,226 1,130,837
Shareholders’ equity: Preferred stock, Series A: $2.00 par value,
authorized 15,000,000 shares, issued and outstanding 1,800,614 and
2,000,614 shares in 2018 and 2017 (liquidation preference $10 per
share), including 900,000 shares in 2018 and 2017 held by ARL.
1,805 2,205 Common stock, $0.01 par value, 100,000,000 shares
authorized; 16,412,861 shares issued and 15,997,076 outstanding as
of 2018 and 15,930,145 shares issued and 15,514,360 outstanding as
of 2017, including 140,000 shares held by TCI (consolidated) in
2018 and 2017. 164 159 Treasury stock at cost; 415,785 shares in
2018 and 2017, and 140,000 shares held by TCI (consolidated) as of
2018 and 2017 (6,395 ) (6,395 ) Paid-in capital 112,132 110,138
Retained earnings 5,307 5,967 Total
American Realty Investors, Inc. shareholders' equity 113,013
112,074 Non-controlling interest 54,084 53,809
Total shareholders' equity 167,097
165,883 Total liabilities and shareholders' equity $
1,312,323 $ 1,296,720
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version on businesswire.com: https://www.businesswire.com/news/home/20180515006794/en/
American Realty Investors, Inc.Investor
RelationsGene Bertcher,
800-400-6407investor.relations@americanrealtyinvest.com
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