American Realty Investors, Inc. Reports First Quarter 2014 Results

  American Realty Investors, Inc. Reports First Quarter 2014 Results  Business Wire  DALLAS -- May 15, 2014  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, 2014. ARL announced today that the Company reported net income applicable to common shares of $2.9 million or $0.25 per diluted earnings per share, as compared to a net loss applicable to common shares of $0.2 million or $0.02 per diluted earnings per share for the same period ended 2013.  The Company continues to demonstrate our unwavering commitment to fortify our portfolio and streamline our operational activity, while at the same time maintaining our commitment to creating value. We are pleased that we are seeing 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.  Our apartment portfolio continues to thrive in the current economic conditions with occupancies averaging over 95%. We continue to work aggressively to attract new tenants and strive for continuous improvement of our properties in order to maintain our existing tenants.  Rental and other property revenues were $20.6 million for the three months ended March 31, 2014. This represents an increase of $0.2 million, as compared to the prior period revenues of $20.4 million. This change, by segment, is an increase in the apartment portfolio of $0.7 million, offset by a decrease in the commercial portfolio of $0.5 million. Within the apartment portfolio there was an increase of $0.7 million in the same property portfolio. Our apartment portfolio continues to thrive in the current economic conditions with occupancies averaging 95%. Our existing commercial portfolio decreased by $0.5 million in the same store properties. This decrease is due to lost rents from tenant vacancies. 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 $10.3 million for the three months ended March 31, 2014. This represents an increase of $0.3 million, as compared to the prior period operating expenses of $10.0 million. This change, by segment, is an increase in the apartment portfolio of $0.4 million, offset by a decrease in the commercial portfolio of $0.1 million. Within the apartment portfolio, the increase relates to general repair and maintenance expense and real estate taxes.  Depreciation and amortization expense was $4.5 million for the three months ended March 31, 2014. This represents an increase of $0.7 million, as compared to the prior period expense of $3.8 million. This change is attributable to the commercial portfolio due to new assets placed in service in the current period.  Mortgage and loan interest expense was $8.5 million for the three months ended March 31, 2014. This represents a decrease of $0.9 million, as compared to the prior year expense of $9.4 million. This change by segment is a decrease in the apartment portfolio of $0.4 million, a decrease in the land portfolio of $0.5 million, a decrease in the other portfolio of $0.1 million, offset by an increase in the commercial portfolio of $0.1 million. Within the apartment portfolio, the majority of the decrease relates to the same apartment portfolio due to the refinances closed with long-term, low interest rates. The decrease in the land portfolio was due to land sales.  Deferred borrowing costs amortization was $0.9 million for the three months ended March 31, 2014. This represents a decrease of $1.6 million, as compared to the prior period expense of $2.5 million. The majority of the decrease is in the same store apartment portfolio due to the write off in the prior period loan deferred borrowing costs upon the refinance into a new mortgage note.  Loan charges and prepayment penalties were $1.6 million for the three months ended March 31, 2014. This represents a decrease of $2.3 million, as compared to the prior period expense of $3.9 million. There were fewer refinances completed in the current period than in the prior period.  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,                                                2014             2013                                                (dollars in thousands,                                                except per share amounts) Revenues: Rental and other property revenues (including $175 and $165 for the three         $ 20,583         $ 20,350 months ended 2014 and 2013, respectively, from related parties)                                                                  Expenses: Property operating expenses (including $156 and $204 for the three months ended         10,317           9,982 2014 and 2013, respectively, from related parties) Depreciation and amortization                    4,476            3,755 General and administrative (including $918 and $890 for the three months ended 2014         1,994            2,012 and 2013, respectively, from related parties) Provision on impairment of notes                 -                - receivable and real estate assets Net income fee to related party                  490              56 Advisory fee to related party                   2,242          2,554       Total operating expenses                        19,519         18,359      Operating income                                 1,064            1,991                                                                  Other income (expenses): Interest income (including $3,797 and $3,410 for the three months ended 2014 and       4,117            3,541 2013, respectively, from related parties) Other income                                     178              2,536 Mortgage and loan interest (including $798 and $910 for the three months ended 2014         (8,474     )     (9,444     ) and 2013, respectively, from related parties) Deferred borrowing costs amortization            (939       )     (2,461     ) Loan charges and prepayment penalties            (1,582     )     (3,937     ) Gain (loss) on sale of investments               -                (8         ) Earnings from unconsolidated subsidiaries        70               213 and investees Litigation settlement                           3,839          (45        ) Total other expenses                            (2,791     )    (9,605     ) Loss before gain on land sales,                  (1,727     )     (7,614     ) non-controlling interest, and taxes Gain (loss) on land sales                       753            (35        ) Net loss from continuing operations before       (974       )     (7,649     ) taxes Income tax benefit                              1,870          2,673       Net income (loss) from continuing                896              (4,976     ) operations Discontinued operations: Net income (loss) from discontinued              (710       )     411 operations Gain on sale of real estate from                 6,053            7,227 discontinued operations Income tax expense from discontinued            (1,870     )    (2,673     ) operations Net income from discontinued operations          3,473            4,965 Net income (loss)                                4,369            (11        ) Net (income) loss attributable to               (819       )    385         non-controlling interest Net income attributable to American Realty       3,550            374 Investors, Inc. Preferred dividend requirement                  (613       )    (613       ) Net income (loss) applicable to common         $ 2,937         $ (239       ) shares                                                                  Earnings per share - basic Net loss from continuing operations            $ (0.05      )   $ (0.45      ) Net income from discontinued operations         0.30           0.43        Net income (loss) applicable to common         $ 0.25          $ (0.02      ) shares                                                                  Earnings per share - diluted Net loss from continuing operations            $ (0.05      )   $ (0.45      ) Net income from discontinued operations         0.30           0.43        Net income (loss) applicable to common         $ 0.25          $ (0.02      ) shares                                                                  Weighted average common shares used in           11,525,389       11,525,389 computing earnings per share Weighted average common shares used in           11,525,389       11,525,389 computing diluted earnings per share                                                                                                                                   Amounts attributable to American Realty Investors, Inc. Net income (loss) from continuing              $ 77             $ (4,591     ) operations Net income from discontinued operations         3,473          4,965       Net income applicable to American Realty       $ 3,550         $ 374         Investors, Inc.                                                                                                                             AMERICAN REALTY INVESTORS, INC. CONSOLIDATED BALANCE SHEETS (unaudited)                                                                                                            March 31,           December 31,                                            2014                2013                                            (dollars in thousands, except share                                            and par value amounts) Assets Real estate, at cost                       $   770,960         $  799,698 Real estate held for sale at cost, net of depreciation ($27,282 for 2014 and          9,787              16,427 $2,390 for 2013) Real estate subject to sales contracts at cost, net of depreciation ($2,036           23,335             27,598 for 2014 and $1,949 for 2013) Less accumulated depreciation                 (120,468  )       (143,429  ) Total real estate                              683,614            700,294 Notes and interest receivable Performing (including $138,086 in 2014 and $145,754 in 2013 from related              145,670            153,275 parties) Non-performing                                 3,129              3,140 Less allowance for doubtful accounts (including $15,809 in 2014 and 2013           (19,579   )       (19,600   ) from related parties) Total notes and interest receivable            129,220            136,815 Cash and cash equivalents                      18,384             16,437 Restricted cash                                27,736             32,929 Investments in unconsolidated                  3,990              3,789 subsidiaries and investees Receivable from related party                  34,751             14,086 Other assets                                  42,461           38,972     Total assets                               $   940,156        $  943,322                                                                    Liabilities and Shareholders’ Equity Liabilities: Notes and interest payable                 $   629,364         $  618,930 Notes related to assets held for sale          15,717             17,100 Notes related to subject to sales              20,991             23,012 contracts Deferred revenue (including $74,303 in 2014 and 2013 from sales to related            76,148             76,148 parties) Accounts payable and other liabilities (including $15,954 in 2014 and $15,394        59,400           73,271     in 2013 to related parties)                                                801,620            808,461                                                                 Shareholders’ equity: Preferred stock, Series A: $2.00 par value, authorized 15,000,000 shares, issued and outstanding 3,353,954 shares in 2014 and 2013 (liquidation preference $10 per share), including 900,000 shares in 2014 and 2013 held           4,908              4,908 by subsidiaries. Series K: $2.00 par value, authorized, issued and outstanding 135,000 shares in 2014 and 2013, respectively (liquidation preference $22 per share) Common stock, $0.01 par value, authorized 100,000,000 shares; issued          115                115 11,941,174 shares and outstanding 11,525,389 shares in 2014 and 2013 Treasury stock at cost; 415,785 shares in 2014 and 2013 and 229,214 shares            (6,395    )        (6,395    ) held by TCI (consolidated) as of 2014 and 2013 Paid-in capital                                102,280            102,974 Retained earnings                             (8,245    )       (11,795   ) Total American Realty Investors, Inc.          92,663             89,807 shareholders' equity Non-controlling interest                      45,873           45,054     Total equity                                  138,536          134,861    Total liabilities and equity               $   940,156        $  943,322     Contact:  American Realty Investors, Inc. Investor Relations Gene Bertcher, 800-400-6407 investor.relations@americanrealtyinvest.com  
Press spacebar to pause and continue. Press esc to stop.