American Realty Investors, Inc. (NYSE:ARL) is reporting its
results of operations for the quarter ended June 30, 2020. For the
three months ended June 30, 2020, The Company reported a net loss
applicable to common shares of $2.3 million or $0.14 per diluted
share, compared to a net loss applicable to common shares of $2.8
million or $0.17 per diluted share for the same period in 2019.
COVID-19
The Company continues to closely monitor the impact of the
COVID-19 pandemic on all aspects of its business. COVID-19 did not
have a significant on the Company’s results of operations or cash
flows during the three months ended June 30, 2020.
- The Company collected approximately 97% of its second quarter
rents, comprised of approximately 95% from multi-family tenants and
approximately 98% from office tenants.
- The Company did not grant any abatements or significant
deferments of rents.
- Occupancy at its non-lease up properties remains stable at 87%
at June 30, 2020 in comparison to 89% at June 30, 2019.
- The Company continued to obtain positive leasing spreads for
new leases and renewals at it properties.
- Ongoing development projects continued during the quarter
unabated without work stoppages. In addition, the Company is
evaluating several new development projects.
The future impact of COVID-19 on the Company’s business and
financial activities will depend on future developments, which at
this stage are unpredictable considering the fluctuations of
COVID-19 outbreaks and the resulting changes in the markets.
Financial Results
Rental and other property revenues were $11.9 million for the
three months ended June 30, 2020 and 2019. For the quarter ended
June 30, 2020, the Company generated revenues of $7.9 million and
$4.0 million from its commercial and residential segments,
respectively.
Property operating expenses decreased to $5.8 million for the
three months ended June 30, 2020 from $7.3 million for the same
period in 2019. The decrease of $1.5 million in property operating
expenses was primarily due to a reduction in property taxes and
maintenance costs.
General and administrative expense decreased to $1.7 million for
the three months ended June 30, 2020 from $2.4 million for the same
period in 2019. The decrease of $0.7 million in general and
administrative expenses was primarily due to a reduction in
professional fees.
Interest income decreased to $5.3 million for the three months
ended June 30, 2020 from $6.5 million for the same period in 2019.
The decrease of $1.2 million in interest income was primarily due
to a decrease in notes receivable from related parties.
Other income decreased to $2.8 million for the three months
ended June 30, 2020 from $3.4 million for the same period in 2019.
The decrease of $0.6 million in other income was primarily due to a
decrease in tax incentive finance proceeds.
Foreign currency transaction was a loss of $5.6 million for the
three months ended June 30, 2020 as compared to a loss of $2.3
million for the same period in 2019. The increase is foreign
currency loss was due to a decrease in the exchange rate from U.S.
Dollars to the Israel Shekel offset in part by a reduction in the
bonds outstanding.
Loss from unconsolidated investments was $0.7 million for the
three months ended June 30, 2020, compared to a loss of $0.2
million for the same period in 2019. The increase in loss from
unconsolidated investments during the quarter was primarily due to
an increase in depreciation and amortization expense related to the
VAA Joint Venture.
Gain on land sales was $5.3 million for the three months ended
June 30, 2020, compared to $2.1 million for the same period in
2019. In the current period the Company sold approximately 25.9
acres of land for an aggregate sales price of $6.6 million which
resulted in a gain of $5.3 million. For the same period in 2019,
the Company sold approximately 41.6 acres of land for an aggregate
sales price of $7.6 million which resulted in a gain of $2.5
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. The Company’s primary
asset and source of its operating results is its investment in
Transcontinental Realty Investors, Inc. (NYSE:TCI). 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
June 30,
For the Six Months Ended June
30,
2020
2019
2020
2019
(dollars in thousands, except
per share amounts)
Revenues: Rental and other property revenues (including $280
and $202 for the three months and $546 and $413 for the six months
ended 2020 and 2019, respectively, from related parties)
$
11,947
$
11,840
$
23,865
$
23,769
Expenses: Property operating expenses (including $254
and $246 for the three months ended and $496 and $504 for the six
months ended 2020 and 2019, respectively, from related parties)
5,810
7,323
12,120
13,320
Depreciation and amortization
3,418
3,439
6,812
6,548
General and administrative (including $765 and $985 for the three
months ended and $1,898 and $2,582 for the six months ended 2020
and 2019, respectively, from related parties)
1,669
2,419
4,464
5,024
Franchise taxes and other expenses
-
585
1,496
585
Net income fee to related party
112
90
198
190
Advisory fee to related party
2,241
2,361
4,528
4,214
Total operating expenses
13,250
16,217
29,618
29,881
Net operating loss
(1,303
)
(4,377
)
(5,753
)
(6,112
)
Other income (expenses): Interest income (including
$5,129 and $6,207 for the three months ended and $9,755 and $12,304
for the six months ended 2020 and 2019, respectively, from related
parties)
5,284
6,505
11,038
12,658
Other income
2,794
3,364
4,006
7,031
Mortgage and loan interest (including $1,543 and $2,385 for the
three months ended and $3,458 and $4,692 for the six months ended
2020 and 2019, respectively, from related parties)
(9,071
)
(9,408
)
(18,673
)
(19,376
)
Foreign currency transaction (loss) gain
(5,599
)
(2,325
)
2,244
(8,143
)
Equity loss from VAA
(735
)
(236
)
(1,111
)
(1,291
)
Earnings from unconsolidated subsidiaries and investees
16
173
132
231
Total other income (expenses)
(7,311
)
(1,927
)
(2,364
)
(8,890
)
Income (loss) before gain on land sales, non-controlling interest,
and taxes
(8,614
)
(6,304
)
(8,117
)
(15,002
)
Loss on sale of income producing properties
-
(80
)
-
(80
)
Gain on land sales
5,339
2,517
9,477
4,733
Net income (loss) before taxes
(3,275
)
(3,867
)
1,360
(10,349
)
State income tax expense
(49
)
-
(296
)
-
Net income (loss)
(3,324
)
(3,867
)
1,064
(10,349
)
Net (income) loss attributable to non-controlling interest
1,018
1,089
(424
)
1,424
Net income (loss) attributable to American Realty Investors, Inc.
(2,306
)
(2,778
)
640
(8,925
)
Net income (loss) applicable to common shares
$
(2,306
)
$
(2,778
)
$
640
$
(8,925
)
(Loss) earnings per share - basic Net income (loss)
$
(0.21
)
$
(0.24
)
$
0.07
$
(0.65
)
Net income (loss) applicable to common shares
$
(0.14
)
$
(0.17
)
$
0.04
$
(0.56
)
(Loss) earnings per share - diluted Net income (loss)
$
(0.21
)
$
(0.24
)
$
0.07
$
(0.65
)
Net income (loss) applicable to common shares
$
(0.14
)
$
(0.17
)
$
0.04
$
(0.56
)
Weighted average common shares used in computing earnings
per share
15,997,076
15,997,076
15,997,076
15,997,076
Weighted average common shares used in computing diluted earnings
per share
15,997,076
15,997,076
15,997,076
15,997,076
Amounts attributable to American Realty Investors,
Inc. Net income (loss)
$
(3,324
)
$
(3,867
)
$
1,064
$
(10,349
)
Net income (loss) applicable to American Realty Investors, Inc.
$
(2,306
)
$
(2,778
)
$
640
$
(8,925
)
AMERICAN REALTY INVESTORS,
INC.
CONSOLIDATED BALANCE
SHEETS
June 30, 2020
December 31, 2019
(Unaudited)
(Audited)
(dollars in thousands, except
share and par value amounts)
Assets
Real estate, at cost
$
484,639
$
469,997
Real estate subject to sales contracts at cost
6,307
7,966
Less accumulated depreciation
(96,002
)
(90,173
)
Total real estate
394,944
387,790
Notes and interest receivable (including $110,827 in 2020
and $106,081 in 2019 from related parties)
180,146
169,299
Less allowance for estimated losses (including $12,557 and $13,099
in 2020 and 2019 from related parties)
(12,557
)
(13,099
)
Total notes and interest receivable
167,589
156,200
Cash and cash equivalents
42,461
51,228
Restricted cash
30,114
32,083
Investment in VAA
52,773
59,148
Investment in other unconsolidated investees
8,639
8,507
Receivable from related party
75,923
85,996
Other assets
55,846
49,689
Total assets
$
828,289
$
830,641
Liabilities and Shareholders’
Equity
Liabilities: Notes and interest payable
$
263,325
$
254,873
Bond and interest payable
218,216
229,722
Deferred revenue (including $25,660 in 2020 and $24,762 in 2019 to
related parties)
25,660
24,762
Accounts payable and other liabilities (including $12,267 in 2020
and $11,817 in 2019 to related parties)
23,508
24,768
Total liabilities
530,709
534,125
Shareholders’ equity: Preferred stock, Series A:
$2.00 par value, authorized 15,000,000 shares, issued 614 and
outstanding 1,800,614 in 2020 and 2019 (liquidation preference $10
per share), including 1,800,000 shares held by ARL and its
subsidiaries in 2020 and 2019.
5
5
Common stock, $0.01 par value, 100,000,000 shares authorized;
16,412,861 shares issued and 15,997,076 outstanding as of 2020 and
2019, including 140,000 shares held by TCI (consolidated) in 2020
and 2019.
164
164
Treasury stock at cost; 415,785 shares in 2020 and 2019, and
140,000 shares held by TCI (consolidated) as of 2020 and 2019.
(6,395
)
(6,395
)
Paid-in capital
82,017
82,017
Retained earnings
164,348
163,708
Total American Realty Investors, Inc. shareholders' equity
240,139
239,499
Non-controlling interest
57,441
57,017
Total shareholders' equity
297,580
296,516
Total liabilities and shareholders' equity
$
828,289
$
830,641
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200814005400/en/
American Realty Investors, Inc. Investor Relations
Daniel Moos (469) 522-4200
investor.relations@transconrealty-invest.com
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