American Realty Investors Reports First Quarter 2002 Net Income of $.05 vs. $.17 in 2001


DALLAS, May 15, 2002 (PRIMEZONE) -- American Realty Investors, Inc. (NYSE:ARL) Wednesday announced first quarter 2002 net income of $594,000, or $.05 per share, on revenue of $38.28 million, as compared to net income of $1.75 million, or $.17 per share, on revenue of $41.45 million in the comparable period of 2001. The decreased income resulted from lower rental income due to property sales and reduced gains on land sales.

Details of income and expense of operations and sales and cost of sales for first quarter 2002 are as follows:


 * Rents decreased to $29.35 million, from $33.21 million in 2001, due to
   the sale of 17 apartments in 2001.  The decrease in apartment rent was
   partially offset by increased occupancy at the commercial properties.
 
 * Property operations expenses decreased to $19.89 million, from $23.45
   million in 2001, mostly due to apartments sold in 2001 and lower 
   expenses at the hotels, which partially offset increased taxes on land.

 * Pizza parlor sales increased to $8.54 million, from $7.83 million. Cost
   of sales increased to $6.95 million from $6.42 million in 2001.  Gross
   margins rose to $1.59 million, from $1.40 million in 2001, due to
   opening three new stores in 2001 and an 8.75 percent increase in
   same-store sales.

 * Land sales and cost of sales decreased to $5.58 million and $3.38 
   million, from $20.49 million and $16.70 million in 2001. Gains on sales
   were $2.20 million, compared to $3.79 million in 2001.  

 Other first quarter 2002 income included:

 * Interest income from notes receivable increased to $612,000, from
   $384,000 in 2001, due to funding of mortgage notes receivable in 2001.

 * Equity in the income of investees increased to $119,000, from a loss of
   $5,000 in 2001, due to increased net income of affiliates.

 * Minority interest decreased to $787,000, from $1.58 million in 2001,
   due to the repurchase of partnership units in 2001.

 * Loss on sale of investments in equity investees was $531,000, compared
   to no loss in 2001.

Expenses (excluding operations expenses and cost of sales) decreased to $28.71 million, from $29.40 million in 2001. Details on expenses in 2002 are:


 * Interest expense increased to $18.79 million, from $18.07 million in
   2001, due to higher balances and interest rates on stock loans.
  
 * Depreciation, depletion and amortization decreased to $3.56 million,
   from $4.08 million in 2001, due to sales of 17 apartments and one
   commercial property in 2001

 * Incentive fee decreased to $152,000, from $1.52 million in 2001.

 * Net income fee was $374,000, compared to no fee in 2001.

 * General and administrative expenses increased to $3.31 million, from
   $2.40 million in 2001, due to increased legal fees.

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, hotels, shopping centers, and developed and undeveloped land. For more information, go to the web site at www.amrealtytrust.com.


                          FINANCIAL HIGHLIGHTS
       (dollars in thousands, except share and per share data)

                                               Three months ended
                                                    March 31,
                                               2002           2001

 Income from rents                        $    29,352    $    33,213
 Expense from operations                       19,892         23,451
 Operating income                               9,460          9,762

 Land sales                                     5,580         20,490
 Cost of sales                                  3,381         16,701
 Gain on land sales                             2,199          3,789

 Pizza sales                                    8,540          7,826
 Cost of sales                                  6,953          6,422
 Gross margin                                   1,587          1,404

 Income from operations                   $    13,246    $    14,955

 Other income                                     384            412
 Gain on sale of real estate                   16,283         16,426
 Other expense                                 28,708         29,403

 Net income                               $     1,205    $     2,390
 Preferred dividend requirement                  (611)          (642)

 Net income applicable to Common shares   $       594    $     1,748
 Earnings Per Share
   Net income                             $       .05    $       .17

 Weighted average common shares
   used to compute earnings per share      11,375,127     10,104,268

            

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