DALLAS, Aug. 14, 2002 (PRIMEZONE) -- American Realty Investors, Inc. (NYSE:ARL) announced Wednesday that the company posted second quarter and six months net losses of $14.70 million and $14.11 million, or $(1.29) and $(1.24) per share, on revenues of $38.64 million and $76.92 million, respectively, as compared to net incomes of $7.93 million and $9.68 million, or $.78 and $.96 per share, on revenues of $48.09 million and $89.54 million, respectively, in the 2001 comparable periods.
Income and sales and related expenses and costs for the second quarter and six months of 2002 resulted in increased income from continuing operations of $11.33 million and $23.93 million, up from $6.32 million and $19.01 million in the 2001 comparable periods, and included:
-- Income from rents increased to $28.71 million and $56.84 million,
up from $27.27 million and $53.83 million in the 2001 comparable
periods, due to higher occupancy at the commercial properties and
the opening of a hotel in 2001.
-- Property operations expense decreased to $20.48 million and $39.80
million, from $23.49 million and $42.54 million in the 2001
comparable periods.
-- Pizza parlor sales increased to $9.74 million and $18.28 million,
from $8.73 million and $16.56 million in the 2001 comparable
periods, due to three new stores opening in 2001 and a 10.4
percent increase in same-store sales. Cost of sales increased to
$7.79 million and $14.75 million, from $7.13 million and $13.55
million in the 2001 comparable periods. Gross margins increased
to $1.94 million and $3.53 million, up from $1.60 million and
$3.01 million in the 2001 comparable periods.
-- Land sales, cost of sales and gain on land sales increased to
$15.12 million, $13.96 million and $1.16 million in second quarter
2002, compared to $13.09 million, $12.16 million and $924,000 in
second quarter 2001. Land sales, cost of sales and gain on land
sales decreased to $20.70 million, $17.34 million and $3.36
million in six months 2002, compared to $33.58 million, $28.86
million and $4.71 million in six months 2001. Twelve land parcels
were sold in the first six months of 2002.
Other income (loss) decreased to losses of ($4.29) million and ($8.04) million in the second quarter and six months of 2002, from losses of ($3.41) million and ($4.44) million in the 2001 comparable periods, and included:
-- Equity in the loss of investees increased to ($5.22) million and
($9.23) million in the second quarter and six months of 2002, from
($3.84) million and ($5.29) million in the 2001 comparable periods
due to increased losses by affiliates.
-- Other income increased to $142,000 and $326,000 in the second
quarter and six months of 2002, from $44,000 and $77,000 in the
2001 comparable periods, due to service fee income, stock
dividends and stock redemption.
Other expenses (excluding property operations expenses and costs of sales for pizza and land) decreased in the second quarter and six months of 2002 to $27.46 million and $55.47, from $30.15 million and $56.40 million in the 2001 comparable periods, and included:
-- Interest expense increased in the second quarter and six months of
2002 to $18.07 million and $36.27 million, compared to $16.09
million and $31.54 million in the 2001 comparable periods, due to
increased balances and higher interest rates on stock loans.
-- General and administrative expenses increased to $3.17 million and
$6.48 million in the second quarter and six months of 2002, from
$1.56 million and $4.47 million in the 2001 comparable periods,
due to higher legal fees and cost reimbursements paid to the
advisor.
-- Advisory, net income and incentive fees decreased to a total of
$990,000 and $3.25 million in the second quarter and six months of
2002, from $8.37 million and $11.14 million in the 2001 comparable
periods, due to a reduction in total assets and 2002 net income
not meeting the threshold of 10 percent of annualized net income
in excess of a 10 percent return on shareholders' equity. No
incentive fee is paid unless net income has met the 10 percent
threshold.
-- Minority interest expense increased to $773,000 and $1.56 million
in second quarter and six months 2002, from ($95,000) and $1.48
million in the 2001 comparable periods. The three month increase
was due to corrections made in the second quarter of 2001,
eliminating the expense for that quarter.
Net income on discontinued operations (non-land properties that were sold) in the second quarter and six months of 2002 decreased to $6.31 million and $26.67 million, from $35.77 million and $52.76 million in the 2001 comparable periods, and included:
-- Gains on the sale of real estate decreased to $2.15 million and
$18.43 million in the second quarter and six months of 2002 on the
sale of five apartments, a shopping center and an office building,
from $25.84 million and $42.27 million in the 2001 comparable
periods.
-- Equity in investees' gains on the sale of real estate decreased to
$4.15 million and $8.28 million in the second quarter and six
months of 2002, from $9.94 million and $11.38 million in the 2001
comparable periods.
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 ARI's web site at www.amrealtytrust.com .
FINANCIAL HIGHLIGHTS
(dollars in thousands, except share and per share data)
Three months ended Six months ended
June 30, June 30,
2002 2001 2002 2001
----------- ----------- ----------- -----------
Income from rents $ 28,705 $ 27,273 $ 56,842 $ 53,830
Expense from
operations 20,481 23,486 39,800 42,543
----------- ----------- ----------- -----------
Operating income 8,224 3,787 17,042 11,287
Land sales 15,121 13,087 20,701 33,577
Cost of sales 13,957 12,163 17,338 28,864
----------- ----------- ----------- -----------
Gain on land
sales 1,164 924 3,363 4,713
Pizza sales 9,736 8,733 18,276 16,559
Cost of sales 7,794 7,129 14,747 13,551
----------- ----------- ----------- -----------
Gross margin 1,942 1,604 3,529 3,008
Income from
operations $ 11,330 $ 6,315 $ 23,934 $ 19,008
Other income
(loss) (4,294) (3,408) (8,041) (4,438)
Other expense 27,461 30,146 55,471 56,404
----------- ----------- ----------- -----------
Net loss from
continuing
operations (20,425) (27,239) (39,578) (41,834)
Income (loss) from
discontinued
operations 14 (6) (42) (889)
Gain on sale of
real estate 2,150 25,840 18,433 42,266
Equity in gain on
sale of real estate
by equity investees 4,149 9,938 8,280 11,380
----------- ----------- ----------- -----------
Net income from
discontinued
operations 6,313 35,772 26,671 52,757
Net income (loss) $ (14,112) $ 8,533 $ (12,907) $ 10,923
Preferred dividend
requirement (589) (606) (1,200) (1,248)
----------- ----------- ----------- -----------
Net income (loss)
applicable to
Common shares $ (14,701) $ 7,927 $ (14,107) $ 9,675
=========== =========== =========== ===========
Earnings Per Share
Net loss from
continuing
operations $ (1.85) $ (2.75) $ (3.58) $ (4.26)
Discontinued
operations .56 3.53 2.34 5.22
----------- ----------- ----------- -----------
Net income (loss)
applicable to
Common shares $ (1.29) $ .78 $ (1.24) $ .96
=========== =========== =========== ===========
Weighted average
common shares
used to compute
earnings per
share 11,375,127 10,128,124 11,375,127 10,116,196