American Realty Investors(US:ARL)2019-05-15 18:41Financial Performance - Rental and other property revenues for the three months ended March 31, 2019 were $11,929,000, down 61.6% from $31,083,000 for the same period in 2018[8] - Total operating expenses decreased from $26,165,000 in Q1 2018 to $13,664,000 in Q1 2019, a reduction of approximately 47.8%[8] - Net loss attributable to American Realty Investors, Inc. was $6,147,000 for the three months ended March 31, 2019, compared to a net loss of $660,000 for the same period in 2018[8] - Earnings per share - basic for the three months ended March 31, 2019 was $(0.38), compared to $(0.06) for the same period in 2018[8] - The company reported a net operating loss of $1,735,000 for the three months ended March 31, 2019, compared to a net operating income of $4,918,000 for the same period in 2018[8] - For the three months ended March 31, 2019, the net loss was $6,482,000 compared to a net loss of $385,000 for the same period in 2018, indicating a significant increase in losses[11] - Total comprehensive loss for the same period was $6,482,000, up from a comprehensive loss of $385,000 in 2018, reflecting a worsening financial position[11] Assets and Liabilities - Total assets decreased from $826,149,000 in December 31, 2018 to $814,813,000 as of March 31, 2019, a decline of approximately 1.6%[5] - Total liabilities decreased from $505,022,000 in December 31, 2018 to $500,235,000 as of March 31, 2019, a decline of approximately 1.4%[5] - Shareholders' equity decreased from $321,127,000 as of December 31, 2018 to $314,578,000 as of March 31, 2019, a decrease of approximately 2.4%[6] - Cash and cash equivalents decreased from $36,428,000 in 2018 to $28,163,000 in 2019, a decline of approximately 22.7%[5] - Cash and cash equivalents at the end of the period were $81,127,000, down from $96,282,000 at the end of the previous year[14] - Total notes and interest payable as of March 31, 2019, amounted to $302.6 million, with accrued interest of $1.2 million[67] Cash Flow and Investments - The company reported a net cash used in operating activities of $16,449,000 for the three months ended March 31, 2019, compared to net cash provided of $3,505,000 in the prior year[14] - Cash flow from investing activities resulted in a net cash outflow of $7,838,000 for the three months ended March 31, 2019, compared to $20,117,000 for the same period in 2018[14] - Cash flow from financing activities showed a net cash outflow of $3,608,000 for the three months ended March 31, 2019, compared to a net cash inflow of $30,330,000 for the same period in 2018[14] - The company invested $7.6 million in the construction or predevelopment of various apartment complexes during the same period[52] - The company drew down $7.5 million in construction loans during the three months ended March 31, 2019, to support various apartment projects[70] Real Estate and Development - The company has approximately 1.7 million square feet of commercial properties and 1,489 residential units, excluding those under development, as of March 31, 2019[24] - The joint venture, Victory Abode Apartments, LLC, was formed with a cash consideration of $236.8 million, contributing a portfolio of 49 income-producing apartment complexes and 3 development projects[22] - The company is in the predevelopment process for several residential apartment communities, indicating ongoing market expansion efforts[25] - Real estate assets classified as "held for sale" include Vista Ridge Apartments, indicating ongoing strategic asset management[52] - The company sold 76 land parcels for a total sales price of $8.7 million, recognizing a gain of approximately $2.2 million[50] Interest and Financing - The company paid interest expenses of $10.9 million for the three months ended March 31, 2019, compared to $13.4 million in the prior year[54] - The company capitalized interest costs of $0.2 million related to the development projects during the three months ended March 31, 2019[52] - The company has various land mortgages in the process of modification or extension, indicating ongoing negotiations with lenders[69] Legal Matters - The company is actively pursuing additional claims against Dynex Capital, Inc. related to the Final Judgment[98] - The company intends to vigorously defend against the allegations in the recent lawsuit filed by a stockholder of Income Opportunity Realty Investors, Inc.[99] - Dynex Commercial, Inc. was ordered to pay a total of $24.8 million to American Realty Trust, including $14.2 million in damages and $10.6 million in pre-judgment interest[97] - The company intends to vigorously defend against allegations in the Berger Litigation, which claims breach of fiduciary duty related to transactions with Income Opportunity Realty Investors, Inc.[99] Summary of Financial Position - As of March 31, 2019, total real estate assets amounted to $467.2 million, with net real estate after depreciation at $386.5 million[50] - The company reported real estate assets totaling $386.5 million as of March 31, 2019, down from $979.1 million a year earlier[86] - The company expects to generate excess cash flow from property operations in 2019, but this will not be sufficient to meet all obligations as they become due[87] - The company intends to sell land and income-producing real estate to meet liquidity requirements in 2019[87]