DALLAS, Nov. 12, 1999 (PRIMEZONE) -- American Realty Trust, Inc. (NYSE:ARB) Friday announced that increased gains on sale of real estate, improved pizza sales, and higher interest income, as well as the consolidation of property operations with National Realty, L.P. (ASE: NLP) produced third quarter 1999 net income of $10.1 million or $.88 per share on revenue of $49.7 million as compared with a net loss of $3.6 million or $.38 per share on revenue of $23.3 million for 1998.
Net income for the nine months ended Sept. 30, 1999, was $1.9 million or $.02 per share on revenue of $149.2 million as compared to net income of $2.1 million or $.14 per share on revenue of $66.2 million for 1998.
-- Rental income increased to $40.3 million and $122.1 million in the three and nine months ended Sept. 30, 1999, from $15.5 million and $45.1 million in the same periods in 1998. Most of the increases are attributable to the 36 apartments ART acquired in 1998, as well as the January 1, 1999, consolidation of National Realty, L.P. (ASE: NLP) operations into those of American Realty Trust.
-- Interest income increased to $1.3 million and $5 million in the three and nine months ended Sept. 30, 1999, from $15,000 and $169,000 for the 1998 comparable periods. The increases are from loans funded by NLP in 1998.
-- Pizza sales and cost of sales continued to increase. Third quarter 1999 sales and costs of sales rose to $7.8 million and $6.7 million, from $7.3 million and $6.3 million in third quarter 1998. Similarly, nine month 1999 sales and cost of sales grew to $22.8 million and $19.5 million compared to $21.3 million and $18.3 million in 1998. The growth in sales was due to aggressive marketing. But, the record high cheese prices experienced in January 1999 that returned to more historic levels in February again rose to record levels in September to partially offset the growth in sales. Cheese prices declined after the close of third quarter 1999.
Total expenses, excluding cost of sales, for the three and nine months ended Sept. 30, 1999, increased to $83.4 million and $220.4 million, from $32.4 million and $87.8 million for the 1998 comparable period. Most increases were due to the acquisitions of 22 land parcels in 1998 and 1999 and 36 apartments in 1998 on a leveraged basis, as well as the consolidation of NLP in December 1998. Details are as follows:
-- Property operations expense increased to $27.4 million
and $80.8 million for the three and nine months ended
Sept. 30, 1999, from $12 million and $34.2 million in
the same periods in 1998.
-- Interest expense increased to $23 million and $68.5
million in the three and nine months ended Sept. 30,
1999, from $12.4 million and $35.7 million in 1998.
-- Depreciation, advisory fees, general and administrative
expenses and minority interest increased. In the third
quarter and nine months ended Sept. 30, 1999,
depreciation rose by $3 million and $8.8 million,
advisory fees by $414,000 and $1.2 million, general
and administrative expenses by $2.1 million and $6.8
million and minority interest by $22.5 million and
$37 million.
-- A provision for losses of $45,000 and $2.1 million were
recognized in the three and nine months ended Sept. 30,
1999, relating to ART relinquishing in June 1999 its
general and limited partner interests in a controlled
partnership that owned two apartments. In three and nine
months in 1998, a $3 million loss provision was
recognized to write down a land parcel to its estimated
realizable value less costs of sale, necessitated by an
increase in the acreage designated as flood plain.
Equity in income of investees decreased to $1.9 million and $5.3 million in the three and nine months ended Sept. 30, 1999, from income of $6.1 million and $27.4 million in 1998 due to the consolidation of NLP.
Gains on sales of real estate were $48.6 million in third quarter 1999 and $5.7 million in 1998. Nine-month gains on the sale of real estate were $87.3 million in 1999 and $14.7 million in 1998.
As previously announced, American Realty Trust. has signed an agreement to combine with National Realty, L.P. in a tax-free reorganization into a holding company structure to be named American Realty Investors, Inc. The combination, subject to the approval of American Realty Trust stockholders and NLP unitholders and customary closing conditions, is expected to close during the first quarter of 2000. American Realty Investors is expected to trade on the New York Stock Exchange. Under the agreement:
-- Each American Realty Trust share will be exchanged
for 0.91 shares of the new common stock.
-- American Realty Trust preferred stock will be exchanged
for the new preferred stock on a one-for-one basis.
-- The new company will exchange one share of its
common stock with the holders of National Realty
for each partnership unit held, except for the NLP
units owned by American Realty Trust.
American Realty Trust, Inc., a Dallas-based real estate investment company, holds a diverse portfolio of equity real estate located across the U.S. ART also has interests in mortgage loans and real estate-related entities. More information on ART and NLP, including SEC filings, is available at www.amrealtytrust.com and www.nationalrealty-lp.com
FINANCIAL HIGHLIGHTS
(dollars in thousands, except share and per share data)
For the three months For the nine months
ended Sept. 30, ended Sept. 30,
1999 1998 1999 1998
--------------- ----------------
Revenue $ 49,691 $ 23,291 $149,167 $66,157
Expenses 90,099 38,676 239,866 106,177
--------- ------- --------- --------
Loss from operations (40,408) (15,385) (90,699) (40,020)
Equity in income of
investees 1,874 6,099 5,270 27,429
Gain on sale of
real estate 48,590 5,718 87,307 14,692
Net income (loss) $ 10,056 $(3,568) $ 1,878 $ 2,101
Preferred dividend
requirement (570) (502) (1,704) (595)
--------- --------- -------- --------
Net income (loss) applicable
to common shares $ 9,486 $ 4,070) $ 174 $ 1,506
--------- --------- ------- -------
Earnings per share
Net income (loss) $ .88 $ (.38) $ .02 $ .14
--------- --------- -------- -------
Weighted average common
shares used to
compute earnings
per share 10,759,309 10,755,584 10,753,600 10,741,137