arl-202305110001102238false00011022382023-05-112023-05-11
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
| | | | | |
| Date of Report (Date of earliest event reported) | May 11, 2023 |
American Realty Investors, Inc.
(Exact name of registrant as specified in its charter)
| | | | | | | | | | | | | | | | | |
| Nevada | | 001-15663 | | 75-2847135 |
(State or other jurisdiction of
Incorporation or organization) | | (Commission File Number) | | (IRS Employer Identification Number) |
| | | | | |
| 1603 LBJ Freeway, | Suite 800 | Dallas | TX | | 75234 |
| (Address of principal executive offices) | | (Zip Code) |
(469) 522-4200
Registrant’s Telephone Number, including area code
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR 230.425)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Securities Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Securities Act (17 CFR 240.413e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
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| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock | ARL | NYSE |
Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 ((17 CFR 230.405 of or Rule 12b-2 of the Securities Act of 1934 (17 CFR 230.405):
☐ Emerging growth company
If an emerging growth company indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Section 2 – Financial Information
Item 2.02. Results of Operations and Financial Condition
On May 11, 2023, American Realty Investors, Inc. (“ARL” or the “Company”) announced its operational results for the quarter ended March 31, 2023. A copy of the announcement is attached as Exhibit “99.1.”
The information furnished pursuant to Item 2.02 in this Form 8-K, including Exhibit “99.1” attached hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, unless we specifically incorporate it by reference in a document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934. We undertake no duty or obligation to publicly update or revise the information furnished pursuant to Item 2.02 of this Current Report on Form 8-K.
Section 9 – Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
The following exhibit is furnished with this Report:
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| Exhibit No. | | Description | |
| | Press release dated | May 11, 2023 |
_________________________
* Furnished herewith
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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| | AMERICAN REALTY INVESTORS, INC. |
| | |
| Dated: November 10, 2022 | By: | /s/ ERIK L. JOHNSON |
| | Erik L. Johnson |
| | Executive Vice President and Chief Financial Officer |
| | | | | | | | |
| NEWS RELEASE | | Contact: |
| | American Realty Investors, Inc. Investor Relations |
| FOR IMMEDIATE RELEASE | | |
American Realty Investors, Inc. reports Earnings for Q1 2023
DALLAS (May 11, 2023) -- American Realty Investors, Inc. (NYSE:ARL) is reporting its results of operations for the quarter ended March 31, 2023. For the three months ended March 31, 2023, we reported net income attributable to common shares of $3.0 million or $0.18 per diluted share, compared to net income attributable to common shares of $11.3 million or $0.70 per diluted share for the same period in 2022.
Financial Highlights
•Total occupancy was 80% at March 31, 2023, which includes 92% at our multifamily properties and 59% at our commercial properties.
•On January 31, 2023, we paid off our $67.4 million Series C bonds from cash received from the sale of the VAA Sale Portfolio.
•On March 15, 2023, we entered into an agreement to develop a 240 unit multifamily property in Lake Wales, Florida that is expected to be completed in 2025 for a total cost of approximately $55.3 million. The cost of construction will be funded in part by a $33.0 million construction loan. As of March 31, 2023, we have incurred a total of $10.1 million in development costs.
•On May 4, 2023, we paid off the remaining $43.1 million balances of the Series A and Series B Bonds. In connection with the repayment of the bonds, our wholly-owned subsidiary, Southern Properties Capital Ltd. withdrew from the Tel-Aviv Stock Exchange.
Financial Results
Rental revenues increased $3.5 million from $7.5 million for the three months ended March 31, 2022 to $11.0 million for the three months ended March 31, 2023. The increase in rental revenue is primarily due to $4.1 million increase at our multifamily properties offset in part by a decrease of $0.6 million from the commercial properties. The increase in revenue from the multifamily properties is primarily due to the acquisition of the VAA Holdback Portfolio in 2022.
Net operating loss decreased $1.4 million from $4.5 million for three months ended March 31, 2022 to $3.1 million for the three months ended March 31, 2023. The decrease in net operating loss is primarily due to the $3.5 million increase in rental revenue as noted above offset in part by an increase of $2.8 million in property operating and depreciation expenses. The increase in property and depreciation expenses is due to the acquisition of the VAA Holdback Portfolio.
Net income attributable to common shares decreased $8.3 million from $11.3 million for the three months ended March 31, 2022 to $3.0 million for the three months ended March 31, 2023. The decrease in net income is primarily attributed to $11.1 million gain on sale or write down of assets in 2022, offset in part by approximately $2.0 million of noncontrolling interest. The gain on sale or write down of assets is primarily due to the sale of Toulon, a 240 unit multifamily property in Gautier, Mississippi, in 2022.
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)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended March 31, |
| | | | | 2023 | | 2022 |
| Revenues: | | | | | | | |
| Rental revenues | | | | | $ | 11,009 | | | $ | 7,481 | |
| Other income | | | | | 679 | | | 306 | |
| Total revenue | | | | | 11,688 | | | 7,787 | |
| Expenses: | | | | | | | |
| Property operating expenses | | | | | 6,106 | | | 4,028 | |
| Depreciation and amortization | | | | | 3,102 | | | 2,349 | |
| General and administrative | | | | | 3,161 | | | 2,720 | |
| Advisory fee to related party | | | | | 2,405 | | | 3,185 | |
| Total operating expenses | | | | | 14,774 | | | 12,282 | |
| Net operating loss | | | | | (3,086) | | | (4,495) | |
| Interest income | | | | | 11,503 | | | 6,782 | |
| Interest expense | | | | | (6,348) | | | (6,167) | |
| Gain on foreign currency transactions | | | | | 971 | | | 3,772 | |
| Loss on early extinguishment of debt | | | | | — | | | (1,639) | |
| Equity in income from unconsolidated joint ventures | | | | | 2,419 | | | 5,194 | |
| Gain on sale or write-down of assets, net | | | | | — | | | 11,148 | |
| Income tax provision | | | | | (1,240) | | | (28) | |
| Net income | | | | | 4,219 | | | 14,567 | |
| Net income attributable to noncontrolling interest | | | | | (1,241) | | | (3,253) | |
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| Net income attributable to common shares | | | | | $ | 2,978 | | | $ | 11,314 | |
| Earnings per share - basic | | | | | | | |
| Basic and diluted | | | | | $ | 0.18 | | | $ | 0.70 | |
| Weighted average common shares used in computing earnings per share | | | | | | | |
| Basic and diluted | | | | | 16,152,043 | | | 16,152,043 | |