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
June 30, 2018, we reported a net income applicable to common shares
of $5.6 million or ($0.35) per diluted loss per share compared to a
net loss applicable to common shares of $11.2 million or ($0.72)
per diluted loss per share for the same period ended 2017.
The Company maintained its overall focus on growing its
portfolio and is working on several strategic initiatives that we
previously announced earlier this year. Overall, management remains
very encouraged about the overall performance of the company;
especially tied to the quality of our assets in our portfolio, and
the new multifamily apartment projects under various stages of
development.
Revenues
Rental and other property revenues were $31.6 million for the
three months ended June 30, 2018 and 2017. The change by segment
was an increase in revenues in the apartment portfolio of
approximately $1.2 million, offset by a decrease in revenues in the
commercial portfolio of $1.2 million.
Expense
Property operating expenses were $15.5 million for the three
months ended June 30, 2018. This represents an increase of $0.1
million compared to the prior period operating expenses of $15.4
million. This increase is driven primarily by an increase in
property operating expenses in the apartment portfolio of $1.0
million offset by a decrease in operating expenses from our
commercial portfolio of $0.7 million and $0.2 million from the
other portfolio.
Depreciation and amortization expense was $6.5 million for the
three months ended June 30, 2018, as compared to $6.4 million in
the same period of 2017. This increase was due primarily to the
growth in our apartment portfolio, which resulted in a $0.1 million
increase in the expense year over year.
General and Administrative expense was $2.9 million for the
three months ended June 30, 2018. This represents an increase of
$1.0 million compared to the prior period expense of $1.9 million.
The increase is due to an increase in expense reimbursements
paid to our advisor of approximately $0.7 million and professional
fees for consulting, audit and tax services of approximately $0.3
million.
Other income (expense)
Mortgage and loan interest expense was $15.9 million for the
three months ended June 30, 2018. This represents a decrease of
$1.4 million compared to the prior period expense of $17.3 million.
The change by segment represents a decrease in the other portfolio
of $1.0 million, $0.5 million in the land portfolio and $0.2
million in the commercial portfolio offset by an increase of $0.3
million in the apartment portfolio. Within the other portfolio the
decrease is primarily due to $1.2 million of interest expense
savings related to maturing notes payable paid during the first
quarter of 2018.
Other income was $7.5 million for the three months ended June
30, 2018. This represents an increase of $7.6 million as compared
to prior period other expense of $0.1 million. The increase is the
result of insurance proceeds of approximately $6.6 million received
subsequent to the "as is" sale of a property damaged by a
hurricane, and other miscellaneous income of approximately $1.0
million.
Foreign currency transaction was a gain of $5.9 million for the
three months ended June 30, 2018. This represents an increase of
$9.3 million compared to prior period foreign currency transaction
loss of $3.4 million. The increase is the result of a gain in
foreign currency exchange as a result of the favorable exchange
rate between the Israel Shekels and the U.S. Dollar related to our
Bond program.
For the three months ended June 30, 2018, we sold a golf course
for a total sales price of $2.3 million and recorded no gain or
loss on the sale. For the same period in 2017, the Company recorded
a loss of approximately $0.5 million from the sale of 8.3 acres of
land for a sales price of $0.5 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)
Three Months Ended Six Months
Ended June 30, June 30, 2018
2017 2018 2017 (dollars in
thousands, except per share amounts) Revenues: Rental
and other property revenues (including $208 and $199 for the three
months and $415 and $389 for the six months ended 2018 and 2017,
respectively, from related parties) $ 31,607 $ 31,587 $ 62,690 $
63,409
Expenses: Property operating expenses
(including $231 and $239 for the three months and $458 and 476 for
the six months ended 2018 and 2017, respectively, from related
parties) 15,550 15,429 29,974 31,693 Depreciation and amortization
6,504 6,409 12,895 12,739 General and administrative (including
$297 and $552 for the three months and $2,437 and $1,295 for the
six months ended 2018 and 2017, respectively, from related parties)
2,954 1,995 5,295 4,026 Net income fee to related party 53 77 106
137 Advisory fee to related party 2,929 2,849
5,885 5,508 Total operating
expenses 27,990 26,759 54,155
54,103 Net operating income 3,617 4,828 8,535
9,306
Other income (expenses): Interest income (including
$4,832 and $4,972 for the three months and $9,311 and $9,092 for
the six months ended 2018 and 2017, respectively, from related
parties) 4,882 5,059 9,991 9,852 Other income 7,537 (116 ) 9,438
1,327 Mortgage and loan interest (including $1,909 and $1,683 for
the three months and $3,708 and $3,195 for the six months ended
2018 and 2017, respectively, from related parties) (15,907 )
(17,347 ) (31,631 ) (34,143 ) Foreign currency transaction gain
(loss) 5,889 (3,425 ) 7,645 (3,747 ) Earnings from unconsolidated
subsidiaries and investees 277 153
597 208 Total other income (expenses)
2,678 (15,676 ) (3,960 ) (26,503
) Income (loss) before gain on land sales, non-controlling
interest, and taxes 6,295 (10,848 ) 4,575 (17,197 ) Gain (loss) on
land sales - (476 ) 1,335
(31 ) Net income (loss) from continuing operations before taxes
6,295 (11,324 ) 5,910
(17,228 ) Net income (loss) from continuing operations 6,295
(11,324 ) 5,910 (17,228 ) Net income (loss) 6,295 (11,324 ) 5,910
(17,228 ) Net (income) loss attributable to non-controlling
interest (441 ) 435 (716 ) 628
Net income (loss) attributable to American Realty Investors,
Inc. 5,854 (10,889 ) 5,194 (16,600 ) Preferred dividend requirement
(225 ) (275 ) (450 ) (550 ) Net income
(loss) applicable to common shares $ 5,629 $ (11,164 ) $
4,744 $ (17,150 )
Earnings per share - basic Net loss
from continuing operations $ 0.35 $ (0.72 ) $ 0.30 $
(1.11 )
Earnings per share - diluted Net income
(loss) from continuing operations $ 0.35 $ (0.72 ) $ 0.30
$ (1.11 ) Weighted average common shares used in
computing earnings per share 15,997,076 15,514,360 15,967,740
15,514,360 Weighted average common shares used in computing diluted
earnings per share 15,997,076 15,514,360 15,967,740 15,514,360
Amounts attributable to American Realty Investors,
Inc. Net income (loss) from continuing operations $ 5,854
$ (10,889 ) $ 5,194 $ (16,600 ) Net income (loss)
applicable to American Realty Investors, Inc. $ 5,854 $
(10,889 ) $ 5,194 $ (16,600 )
AMERICAN REALTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS June 30, December
31, 2018 2017 (unaudited) (audited)
(dollars in thousands, except share and par value amounts)
Assets Real estate, at cost $ 1,147,612 $ 1,117,429 Real
estate subject to sales contracts at cost 46,262 48,234 Less
accumulated depreciation (183,630 ) (177,546 ) Total
real estate 1,010,244 988,117 Notes and interest receivable:
Performing (including $104,665 in 2018 and $99,410 in 2017 from
related parties) 142,277 127,865 Less allowance for estimated
losses (including $14,269 in 2018 and 2017 from related parties)
(15,770 ) (15,770 ) Total notes and interest
receivable 126,507 112,095 Cash and cash equivalents 28,116 42,920
Restricted cash 64,652 45,618 Investments in unconsolidated joint
ventures and investees 6,993 6,396 Receivable from related party
55,987 38,311 Other assets 56,605 63,263
Total assets $ 1,349,104 $ 1,296,720
Liabilities and Shareholders’ Equity Liabilities: Notes and
interest payable $ 921,461 $ 898,750 Notes related to real estate
held for sale 376 376 Notes related to real estate subject to sales
contracts - 1,957 Bond and interest payable 143,897 113,049
Deferred revenue (including $57,289 in 2018 and $56,887 in 2017 to
related parties) 78,548 77,332 Accounts payable and other
liabilities (including $9,764 in 2018 and $11,893 in 2017 to
related parties) 31,655 39,373 Total
liabilities 1,175,937 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 111,907 110,138 Retained earnings
11,161 5,967 Total American Realty
Investors, Inc. shareholders' equity 118,642 112,074
Non-controlling interest 54,525 53,809
Total shareholders' equity 173,167 165,883
Total liabilities and shareholders' equity $ 1,349,104
$ 1,296,720
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version on businesswire.com: https://www.businesswire.com/news/home/20180814005733/en/
American Realty Investors, Inc.Investor
RelationsGene Bertcher,
800-400-6407investor.relations@americanrealtyinvest.com
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