DALLAS, March 29, 2000 (PRIMEZONE) -- American Realty Trust, Inc. (NYSE:ARB) Wednesday reported gains on the sale of real estate, increased rental and interest income, greater pizza sales and the consolidation of property operations with National Realty, L.P. (ASE:NLP) boosted 1999 net income to $10.3 million, or $.75 per share, on revenue of $194 million compared to a net loss of $22.8 million, or $2.24 per share, on revenue of $87.1 million in 1998. Fourth quarter 1999 net income was $8.4 million, or $.73 per share, on revenue of $44.8 million compared to a 1998 net loss of $24.9 million, or $2.38 per share, on revenue of $22.9 million.
Total 1999 revenue rose to $194 million from $87.1 million in 1998. The increase was due to improvements in sales, rental, interest and other income, as well as the 1999 consolidation of National Realty, L.P. ART holds approximately 55.4 percent of the outstanding partnership units of NLP.
-- Rental income growth, from $63.5 million in 1998 to $157.6
million in 1999, was due to the 1998 acquisition of 36 apartments,
a 1999 office building acquisition and the consolidation of NLP.
-- Sales at Pizza World Supreme contributed an additional $1.9
million in 1999 revenue over 1998. Sales and cost of sales
related to pizza parlor operations were $30.8 million and $26.3
million in 1999 compared to $28.9 million and $24.8 million in
1998. Higher profit margins in 1999 were the result of lower
pizza ingredient costs, mainly cheese that reached historic high
prices in 1998.
-- Interest income moved upward from $188, 000 in 1998 to $6.4
million in 1999 due to the consolidation of NLP.
-- Other income improved to a 1999 loss of $846,000, up from a 1998
loss of $5.5 million, due to increased dividend income, net gains
on sales of marketable equity securities and lower unrealized
losses.
Selective property sales produced gains of $129.3 million in 1999 as compared to $17.3 million in 1998. Gains were realized on the 1999 sales of 14 apartments, seven tracts of land and one hotel, as well as one previously deferred gain from land sold in 1997.
Equity in income of investees decreased to $11.9 million in 1999 from $38 million in 1998. The decrease is primarily attributable the consolidation of National Realty, L.P.
Total expenses in 1999 rose to $324.8 million, from $165.1 million in 1998. The increase, attributable to higher property operations, interest and general and administrative expenses; higher advisory and mortgage servicing fees and increased depreciation and amortization, is primarily due to the consolidation of NLP.
-- Property operations expense was $106.6 million in 1999 compared to $49.2 million in 1998. Other factors contributing to the apartments. Hotel operating expenses declined by $600,000. -- Interest expense was $91.5 million in 1999 compared to $51.6 million in 1998 due to the purchase of eight land parcels in 1999, 16 land parcels in 1998 and the consolidation of NLP. -- Advisory and mortgage servicing fees were $5.5 million in 1999 compared to $3.8 million in 1998, as a result of an increase in ART's gross assets. NLP's assets were not included in the 1999 advisory fee calculations. -- General and administrative expense was $17.1 million compared to $8.5 million in 1998. -- Depreciation and amortization were $17.4 million in 1999 compared to $7 million in 1998.
Provisions for losses of $3.1 million recognized in 1999 related to ART's relinquishment of interests in a partnership that owned two apartments approximated the $3 million and $916,000 1998 write downs to decrease a property's value due to increased flood plain designation.
American Realty Trust is a real estate investment company primarily investing in real estate and real estate-related entities. As previously announced, at a special meeting held March 21, 2000, ART shareholders and NLP unitholders approved the combination of ART and NLP under ownership of a new company to be named American Realty Investors, Inc. In a tax-free exchange, ART holders will receive 0.91 shares of the new company's common stock for each ART common share held; NLP unitholders will receive one share of the new common stock for each NLP partnership unit held. The reorganization an exchange of units is expected to occur in the next few weeks when American Realty Investors begins trading on the New York Stock Exchange under the symbol "ARL." For more information, go to the company's Web site at www.amrealtytrust.com.
FINANCIAL HIGHLIGHTS
(in thousands, except share and per share data)
For the year For the quarter
ended Dec. 31, ended Dec. 31,
1999 1998 1999 1998
-------- --------- --------- --------
Revenue $ 193,980 $ 87,087 $ 44,813 $ 22,856
Expenses 324,789 165,111 84,923 60,861
(Loss) from Operations (130,809) (78,025) (40,110) (38,005)
Equity in income of investees 11,847 37,966 6,577 10,537
Gain on sale of real estate 129,260 17,254 41,953 2,562
Net income (loss) 10,298 (22,805) 8,415 (24,906)
Preferred dividend requirement (2,281) (1,177) (577) (540)
Net income (loss)
applicable to common shares $ 8,017 $(23,982) $ 7,843 $(25,446)
Earnings per share
Net income (loss) $ .75 $ (2.24) $ .73 $ (2.38)
Weighted average shares of
Common stock computing
earnings per share 10,759,416 10,695,388 10,795,472 10,689,777