Transcontinental Realty Investors, Inc. (NYSE: TCI), a
Dallas-based real estate investment company, today reported results
of operations for the first quarter ended March 31, 2017. For the
three months ended March 31, 2017, we reported a net loss
applicable to common shares of $5.4 million or ($0.61) per diluted
loss per share compared to a net loss applicable to common shares
of $3.8 million or ($0.43) per diluted loss per share for the same
period ended 2016. Included in the net loss from operations are
non-cash expenses of depreciation and amortization of $6.3 million
and $5.8 million for the three months ended March 31, 2017 and 2016
respectively.
The growth in revenue and corresponding improvement in Net
Operating Income for the three months ended March 31, 2017
demonstrates the viability of our business strategy. Management
will continue its plan for growth from its operating properties and
expects to reinvest in areas that will complement this growth;
further, management will maintain strong attention to all details
of its operations including appropriate expense controls.
Our ability to take advantage of lower-interest rate mortgages
available has reduced our monthly obligations and increased cash
flow within our multifamily portfolio.
Revenues
Rental and other property revenues were $31.5 million for the
three months ended March 31, 2017. This represents an increase of
$2.6 million compared to the prior period revenues of $28.9
million. This change, by segment, is an increase in the apartment
and commercial portfolios of $1.3 million each. Our apartment
portfolio continues to thrive in the current economic conditions
with occupancies averaging 95%. We have been able to surpass
expectations due to the high-quality product offered, strength of
our management team and our commitment to our tenants. We are
continuing to market our properties aggressively to attract new
tenants and strive for continuous improvement of our properties in
order to maintain our existing tenants.
Expense
Property operating expenses were $15.9 million for the three
months ended March 31, 2017. This represents an increase of $0.9
million compared to the prior period operating expenses of $15.0
million. This change, by segment, is an increase in the apartment
portfolio of $1.4 million, due to the acquisition of 4 properties
during the year offset by sales of 2 properties for a net increase
of 203 units. We also had an increase in the commercial portfolio
of $0.2 million, partially offset by a decrease in the land
portfolio of $0.6 million.
Depreciation and amortization expenses were $6.3 million for the
three months ended March 31, 2017. This represents an increase of
$0.5 million as compared to prior period depreciation of $5.8
million.
Advisory fees decreased less than $0.1 million for the three
months ended March 31, 2017 compared to the prior period. Advisory
fees are computed based on a gross asset fee of 0.0625% per month
(0.75% per annum) of the weighted average of the gross asset
value.
Other income (expense)
Mortgage and loan interest expense was $15.2 million for the
three months ended March 31, 2017. This represents an increase of
$2.0 million compared to the prior period expense of $13.2 million.
The change by segment is an increase in the other portfolio of $1.7
million and an increase in the apartment portfolio of $0.6 million,
partially offset by a decrease in the commercial portfolio of $0.3
million. Within the other portfolio, the increase is primarily due
to $1.3 million of interest expense related to the Israeli bond
sale, which closed in the first quarter of 2017. In addition, we
secured a new mezzanine debt obligation in the third quarter of
2016. The increase within the apartment portfolio is primarily due
to loan charges and prepayment penalties for the refinancing of two
mortgage loans at lower interest rates.
Gain on land sales decreased for the three months ended March
31, 2017 compared to the prior period. In the current period we
sold 2.49 acres of land for a sales price of $1.1 million and
recorded a gain of $0.4 million. For the same period in 2016, we
sold 40.9 acres of land for a sales price of $4.2 million and
recorded a gain of $1.7 million.
About Transcontinental Realty Investors, Inc.
Transcontinental Realty Investors, Inc., a Dallas-based real
estate investment company, holds a diverse portfolio of equity real
estate located across the U.S., including apartments, office
buildings, 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. For
more information, visit the Company’s website at
www.transconrealty-invest.com.
TRANSCONTINENTAL REALTY
INVESTORS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited) For the Three Months Ended
March 31, 2017 2016 (dollars in thousands,
except share and par value amounts) Revenues: Rental and
other property revenues (including $190 and $173 for the three
months ended 2017 and 2016, respectively, from related parties) $
31,535 $ 28,903
Expenses: Property operating expenses
(including $228 and $201 for the three months ended 2017 and 2016,
respectively, from related parties) 15,889 14,963 Depreciation and
amortization 6,303 5,808 General and administrative (including $732
and $749 for the three months ended 2017 and 2016, respectively,
from related parties) 1,780 1,609 Net income fee to related party
60 72 Advisory fee to related party 2,305
2,371 Total operating expenses 26,337
24,823 Net operating income 5,198 4,080
Other
income (expenses): Interest income (including $3,169 and $3,150
for the three months ended 2017 and 2016, respectively, from
related parties) 3,421 3,847 Other income (expense) 1,442 267
Mortgage and loan interest (including $151 and $61 for the three
months ended 2017 and 2016, respectively, from related parties)
(15,190 ) (13,166 ) Foreign currency translation loss (323 ) -
Earnings (losses) from unconsolidated joint ventures and investees
(8 ) (2 ) Total other expenses (10,658 )
(9,054 ) Loss before gain on land sales, non-controlling
interest, and taxes (5,460 ) (4,974 ) Loss on sale of income
producing properties - (244 ) Gain on land sales 445
1,652 Net loss from continuing operations before
taxes (5,015 ) (3,566 ) Income tax benefit - 1
Net loss from continuing operations (5,015 ) (3,565 )
Discontinued operations: Net income (loss) from discontinued
operations - 3 Income tax benefit (expense) from discontinued
operations - (1 ) Net income (loss) from
discontinued operations - 2 Net loss
(5,015 ) (3,563 ) Net income (loss) attributable to non-controlling
interest (119 ) 23 Net loss attributable to
Transcontinental Realty Investors, Inc. (5,134 ) (3,540 ) Preferred
dividend requirement (222 ) (222 ) Net loss
applicable to common shares $ (5,356 ) $ (3,762 )
Earnings per share - basic Net loss from
continuing operations $ (0.61 ) $ (0.43 )
Earnings per
share - diluted Net loss from continuing
operations $ (0.61 ) $ (0.43 ) Weighted average common
shares used in computing earnings per share 8,717,767 8,717,767
Weighted average common shares used in computing diluted earnings
per share 8,717,767 8,717,767
Amounts attributable
to Transcontinental Realty Investors, Inc. Net loss from
continuing operations $ (5,134 ) $ (3,542 ) Net income from
discontinued operations - 2 Net loss
from continuing operations $ (5,134 ) $ (3,540 )
TRANSCONTINENTAL REALTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS March 31,
December 31, 2017 2016 (dollars in
thousands, except share and par value amounts) Assets
Real estate, at cost $ 1,015,791 $ 998,498 Real estate subject to
sales contracts at cost 46,360 46,956 Less accumulated depreciation
(160,269 ) (154,281 ) Total real estate 901,882
891,173 Notes and interest receivable: Performing (including
$65,289 in 2017 and $67,912 in 2016 from related parties) 78,681
81,133 Less allowance for doubtful accounts (including $1,825 in
2017 and 2016 from related parties) (1,825 ) (1,825 )
Total notes and interest receivable 76,856 79,308 Cash and cash
equivalents 55,282 17,506 Restricted cash 31,045 38,227 Investments
in unconsolidated joint ventures and investees 2,438 2,446
Receivable from related party 99,714 101,649 Other assets
60,498 55,605 Total assets $ 1,227,715
$ 1,185,914
Liabilities and Shareholders’
Equity Liabilities: Notes and interest payable $ 822,922 $
835,528 Notes related to real estate held for sale 376 376 Notes
related to real estate subject to sales contracts 4,177 5,612 Bond
and bond interest payable 71,975 - Deferred revenue (including
$50,699 in 2017 and $50,689 in 2016 to related parties) 71,075
71,065 Accounts payable and other liabilities (including $6,647 in
2017 and $6,487 in 2016 to related parties) 37,950
48,856 Total liabilities 1,008,475 961,437
Shareholders’ equity: Preferred stock, Series C: $0.01 par value,
authorized 10,000,000 shares; issued and outstanding zero shares in
2017 and 2016. Series D: $0.01 par value, authorized, issued and
outstanding 100,000 shares in 2017 and 2016 (liquidation preference
$100 per share) 1 1 Common stock, $0.01 par value, authorized
10,000,000 shares; issued 8,717,967 shares in 2017 and 2016;
outstanding 8,717,767 shares in 2017 and 2016 87 87 Treasury stock
at cost, 200 shares in 2017 and 2016 (2 ) (2 ) Paid-in capital
269,627 269,849 Retained earnings (69,184 ) (64,050 )
Total Transcontinental Realty Investors, Inc. shareholders' equity
200,529 205,885 Non-controlling interest 18,711
18,592 Total shareholders' equity 219,240
224,477 Total liabilities and shareholders'
equity $ 1,227,715 $ 1,185,914
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version on businesswire.com: http://www.businesswire.com/news/home/20170517006303/en/
Transcontinental Realty Investors, Inc.Investor
RelationsGene Bertcher,
800-400-6407investor.relations@transconrealty-invest.com
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