ARL American Realty Investors Inc

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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American Realty Investors, Inc.Investor RelationsGene Bertcher, 800-400-6407investor.relations@americanrealtyinvest.com