American Realty Investors, Inc. (NYSE:ARL) is reporting its
results of operations for the quarter ended September 30, 2020. For
the three months ended September 30, 2020, the Company reported a
net income attributable to common shares of $8.0 million or $0.50
per diluted share, compared to a net loss attributable to common
shares of $7.6 million or $0.47 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 impact on the Company’s results of operations or
cash flows during the three months ended September 30, 2020.
- The Company collected approximately 96% of its second quarter
rents, comprised of approximately 95% from multi-family tenants and
approximately 97% from office tenants.
- The Company did not grant any abatements or significant
deferments of rents.
- Occupancy remains stable at 91% at September 30, 2020 and
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 revenues were $11.5 million for the three months ended
September 30, 2020, compared to $1.14 million for the three months
ended September 30, 2019. For 2020, we generated revenues of $7.8
million and $3.7 million from our commercial and multifamily
segments respectively.
Net operating loss was $2.3 million for the three months ended
September 30, 2020, compared to $0.6 million for the same period in
2019. The $1.7 million increase in net operating loss is primarily
due to the placement in service of two new multifamily apartment
communities in 2020. Operating expense of new properties generally
exceed their rental revenues during initial lease-up.
Interest income was $5.4 million for the three months ended
September 30, 2020, compared to $6.9 million for the same period in
2019. The decrease of $1.5 million in interest income was primarily
due to collection on notes receivable in 2020.
Interest expense was $7.6 million for three months ended
September 30, 2020, compared to $10.4 million for the same period
in 2019. The decrease of $2.8 million in interest expense was
primarily due to the refinancing of the mortgage note payable on
Browning Place in 2019.
Loss on foreign currency transactions was $1.5 million for the
three months ended September 30, 2020 as compared to $5.2 million
for the same period in 2019. The decrease 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.
Gain on sale or write-down of assets increased $10.2 million for
the three months ended September 30, 2020, compared the same period
in 2019. The increase is primarily due to the sales in 2020 of
Bridgeview Plaza for $5.3 million, resulting in a gain of $4.8
million; and the sale of Farnham Park Apartments for $13.3 million,
resulting in a gain of $2.7 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 (dollars in thousands, except per share
amounts) (Unaudited)
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2020
2019
2020
2019
Revenues: Rental revenues (including $262 and $212 for the
three months and $808 and $527for the nine months ended 2020 and
2019, respectively, from related parties)
$
11,453
$
11,407
$
34,460
$
34,352
Other income (loss)
484
1,824
5,348
9,679
Total revenues
11,937
13,231
39,808
44,031
Expenses: Property operating expenses (including $253 and
$237 for the threemonths ended and $750 and $741 for the six months
ended 2020and 2019, respectively, from related parties)
6,387
5,883
18,507
19,203
Depreciation and amortization
3,526
3,416
10,338
9,964
General and administrative (including $1,094 and $1,002 for the
threemonths ended and $2,991 and $3,680 for the six months ended
2020and 2019, respectively, from related parties)
1,998
2,107
7,958
7,716
Advisory fee to related party
2,329
2,403
7,055
6,807
Total operating expenses
14,240
13,809
43,858
43,690
Net operating (loss) income
(2,303
)
(578
)
(4,050
)
341
Interest income (including $4,812 and $6,240 for the three months
ended and $14,566 and $18,328 for the six months ended 2020 and
2019, respectively, from related parties)
5,421
6,856
16,459
19,514
Interest expense (including $1,583 and $2,402 for the three months
ended and $5,040 and $7,094 for the six months ended 2020 and 2019,
respectively, from related parties)
(7,622
)
(10,420
)
(26,295
)
(29,796
)
(Loss) gain on foreign currency transaction
(1,470
)
(5,153
)
774
(13,296
)
Loss on extinguishment of debt
-
(5,219
)
-
(5,219
)
Income (losses) from unconsolidated joint ventures
337
(75
)
(642
)
(1,135
)
Gain on sales or write-down of assets
15,325
5,139
24,802
9,792
Income tax expense
(50
)
-
(346
)
-
Net income (loss)
9,638
(9,450
)
10,702
(19,799
)
Net (income) attributable to non-controlling interest
(1,651
)
1,879
(2,075
)
3,303
Net income (loss) attributable to common shares
$
7,987
$
(7,571
)
$
8,627
$
(16,496
)
Earnings (loss) per share - attributable to common
shares Basic and diluted
$
0.50
$
(0.47
)
$
0.54
$
(1.03
)
Weighted-average number of common shares outstanding: Basic
and diluted
15,997,076
15,997,076
15,997,076
15,997,076
AMERICAN REALTY INVESTORS, INC. CONSOLIDATED
BALANCE SHEETS (dollars in thousands, except share and par
value amounts) (Unaudited) September 30, 2020
December 31, 2019
Assets
Real estate, net
$
380,715
$
387,790
Notes receivable (including $96,181 in 2020 and $93,524 in 2019
from related parties)
151,310
143,086
Cash and cash equivalents
32,986
51,228
Restricted cash
28,030
32,083
Investment in unconsolidated joint ventures
57,144
67,655
Receivable from related party
86,089
85,996
Other assets
71,313
62,803
Total assets
$
807,587
$
830,641
Liabilities and Equity
Liabilities: Mortgages and notes payable
$
248,943
$
254,094
Bonds payable
203,192
223,265
Accounts payable and other liabilities (including $12,495 in 2020
and $11,817 in 2019 to related parties)
23,284
24,769
Accrued interest payable
3,341
7,236
Deferred revenue
21,609
24,761
Total liabilities
500,369
534,125
Equity Shareholders’ equity: Preferred stock, Series A:
$2.00 par value, authorized 15,000,000 shares, issued 1,800,614 and
outstanding 614 at September 30, 2020 and December 31, 2019.
5
5
Common stock, $0.01 par value, 100,000,000 shares authorized;
16,412,861 shares issued and 15,997,076 outstanding at September
30, 2020 and December 31, 2019.
164
164
Treasury stock at cost; 415,785 shares in 2020 and 2019.
(6,395
)
(6,395
)
Paid-in capital
82,017
82,017
Retained earnings
172,335
163,708
Total shareholders' equity
248,126
239,499
Non-controlling interest
59,092
57,017
Total equity
307,218
296,516
Total liabilities and equity
$
807,587
$
830,641
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201112006113/en/
American Realty Investors, Inc. Investor Relations
Erik Johnson (469) 522-4200
investor.relations@transconrealty-invest.com
American Realty Investors (NYSE:ARL)
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