American Realty Investors(ARL) - 2025 Q2 - Quarterly Results

Q2 2025 Financial and Operational Highlights American Realty Investors achieved significant net income growth in Q2 2025, driven by increased rental revenue and strategic asset sales, while maintaining strong portfolio occupancy Financial Performance Net income significantly increased in Q2 2025 due to higher rental revenues and a gain on real estate transactions, alongside a narrowed net operating loss Q2 2025 vs Q2 2024 Key Earnings Metrics (Amounts in millions, except EPS) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income (Common Shares) | $2.8 million | $1.2 million | | Diluted EPS | $0.18 | $0.07 | Q2 2025 vs Q2 2024 Revenue and Operating Loss (Amounts in millions) | Metric | Q2 2025 | Q2 2024 | Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Rental Revenue | $11.5 million | $11.2 million | +$0.3 million | Increased occupancy at Stanford Center | | Net Operating Loss | $1.0 million | $1.3 million | -$0.3 million | Decrease in insurance and property tax costs | - The increase in net income is primarily attributed to a gain on real estate transactions, which was partially offset by a decrease in interest income and an increase in the tax provision for the quarter[6] Operational Highlights The company maintained an 82% portfolio occupancy as of June 30, 2025, successfully selling single-family lots and repaying a $10.8 million loan - Total portfolio occupancy was 82% as of June 30, 2025, which includes 94% at multifamily properties and 57% at commercial properties[9] - During Q2 2025, the company sold 30 single-family lots from its Windmill Farms holdings for $1.4 million, resulting in a gain on sale of $1.1 million[9] - On May 30, 2025, the company paid off the $10.8 million loan on its 770 South Post Oak property with cash on hand[9] Company Overview American Realty Investors, Inc. is a Dallas-based real estate investment company with a diverse U.S. portfolio, primarily driven by its investment in Transcontinental Realty Investors, Inc - ARL's portfolio includes office buildings, apartments, shopping centers, and both developed and undeveloped land across the U.S. The company invests through direct ownership, leases, partnerships, and mortgage loans[7] - The company's primary asset and source of operating results is its investment in Transcontinental Realty Investors, Inc. (NYSE:TCI)[7] Consolidated Statements of Operations This section presents the detailed consolidated financial results for Q2 and H1 2025, highlighting revenue, expenses, and net income trends Detailed Financial Results (Q2 & H1 2025 vs 2024) The detailed consolidated statements reveal increased total revenue and a significant rise in net income for Q2 and H1 2025, largely driven by real estate transaction gains Consolidated Statements of Operations (Unaudited, in thousands, except per share amounts) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | | | 2025 | 2024 | 2025 | 2024 | | Revenues: | | | | | | Rental revenues | $11,510 | $11,188 | $22,937 | $22,467 | | Other income | $650 | $585 | $1,231 | $1,205 | | Total revenue | $12,160 | $11,773 | $24,168 | $23,672 | | Expenses: | | | | | | Property operating expenses | $6,535 | $6,624 | $12,512 | $13,258 | | Depreciation and amortization | $3,062 | $3,137 | $5,945 | $6,309 | | General and administrative | $1,534 | $1,552 | $3,026 | $2,960 | | Advisory fee to related party | $2,042 | $1,737 | $4,511 | $3,939 | | Total operating expenses | $13,173 | $13,050 | $25,994 | $26,466 | | Net operating loss | ($1,013) | ($1,277) | ($1,826) | ($2,794) | | Interest income | $3,353 | $4,794 | $7,363 | $10,527 | | Interest expense | ($1,777) | ($1,913) | ($3,597) | ($3,835) | | Equity in income from unconsolidated joint ventures | $19 | $501 | ($140) | $984 | | Gain on real estate transactions | $947 | $— | $4,838 | $— | | Income tax provision | $1,335 | ($614) | $189 | ($1,089) | | Net income | $2,864 | $1,491 | $6,827 | $3,793 | | Net income attributable to noncontrolling interest | ($37) | ($324) | ($1,035) | ($875) | | Net income attributable to common shares | $2,827 | $1,167 | $5,792 | $2,918 | | Earnings per share (Basic and diluted) | $0.18 | $0.07 | $0.36 | $0.18 |