Transcontinental Realty Investors, Inc. Reports Third Quarter 2016 Results
Transcontinental Realty Investors, Inc. (NYSE: TCI), a Dallas-based real estate investment company, reported results of
operations for the third quarter ended September 30, 2016. TCI announced today that the Company reported net loss applicable to
common shares of approximately $4.8 million, or $0.55 per diluted earnings per share, for the three months ended September 30,
2016, as compared to a net loss applicable to common shares of $6.8 million, or $0.79 per diluted earnings per share for the same
period ended 2015.
“The Company believes there is no reason to adjust our strategic posture of maintaining a strong focus on our multi-family
portfolio. We will also continue to solidify the portfolio and pay close attention to all operational details, while at the same
time maintaining our commitment to creating value. We believe our third quarter 2016 operating results, combined with our recent
acquisitions, demonstrates yet another quarter of stabilized performance for the Company. We believe the portfolio is well
positioned to deliver solid financial returns for the remainder of 2016,” said Danny Moos, the Company’s Chief Executive Officer
and President. “We are pleased that we are seeing continued improvements in our operations from these endeavors and will continue
to adapt to market challenges with an eye on both near term economic challenges and long-term prospects as the real estate market
improves.”
Rental and other property revenues were $29.8 million for the three months ended September 30, 2016. This represents an increase
of $2.2 million compared to the prior period revenues of $27.5 million. The change by segment is an increase in the apartment
portfolio of approximately $2.7 million and a decrease in the commercial portfolio of $0.5 million. During the three months ended
September 30, 2016, we recorded $2.1 million rental revenue for five apartment communities purchased since September 30, 2015 and
had a decrease in rental revenue of $0.4 million for one apartment community sold since September 30, 2015, for a net increase of
$1.7 million. The $0.5 million decrease in revenues for the commercial portfolio was primarily due to a decrease of $0.4 million in
revenues for the Mahogany Run Golf Course in the third quarter of 2016 as compared to the third quarter of 2015.
Property operating expenses were $15.4 million for the three months ended September 30, 2016, an increase of $1.2 million
compared to the prior period expense of $14.2 million. Property operating expenses increased $1.3 million for our apartment
portfolio and $0.3 million for the commercial portfolio. The primary reason for the increase in property operating expenses for the
Company’s apartment portfolio was the purchase of five communities with a total of 777 units, net of one community sold with a
total of 160 units since September 30, 2015, for a net increase of 617 units.
Mortgage and loan interest expense was $13.6 million for each of the three months ended September 30, 2016 and 2015. There were
increases of $0.9 million and $0.1 million for the other and apartment segments, respectively, with decreases of $0.8 million and
$0.2 million in our land and commercial properties segments, respectively. The $0.9 million increase in the other segment was due
primarily to securing a new mezzanine debt obligation in the third quarter of 2016. The decrease in the land portfolio of $0.8
million was due to the transfer of mortgage obligations related to land sold.
Gain on land sales was $0.6 million for the three months ended September 30, 2016 compared to $1.0 million for the three months
ended September 30, 2015. In the current period we sold 4.8 acres of land for a total sales price of $0.8 million and recorded a
gain of $0.6 million. In 2015, we sold 154.6 acres of land for a total sales price of $2.9 million and recorded a gain of $1.0
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 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. For
more information, visit the Company’s website at www.transconrealty-invest.com.
| |
| |
| TRANSCONTINENTAL REALTY INVESTORS, INC. |
| CONSOLIDATED STATEMENTS OF OPERATIONS |
| (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
|
Nine Months Ended September 30, |
|
|
|
2016 |
|
|
2015 |
|
|
|
2016 |
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Rental and other property revenues (including $174 and $211 for the three months and
$521 and $591 for the nine months ended 2016 and 2015, respectively, from related parties) |
|
|
$ |
29,776 |
|
|
|
$ |
27,539 |
|
|
|
|
$ |
89,200 |
|
|
|
$ |
73,599 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Property operating expenses (including $221 and $192 for the three months and $644
and $522 for the nine months ended 2016 and 2015, respectively, from related parties) |
|
|
|
15,413 |
|
|
|
|
14,195 |
|
|
|
|
|
45,295 |
|
|
|
|
35,987 |
|
| Depreciation and amortization |
|
|
|
6,014 |
|
|
|
|
6,555 |
|
|
|
|
|
17,665 |
|
|
|
|
16,305 |
|
| General and administrative (including $753 and $730 for the three months and $1,501
and $1,547 for the nine months ended 2016 and 2015, respectively, from related parties) |
|
|
|
1,541 |
|
|
|
|
1,146 |
|
|
|
|
|
4,754 |
|
|
|
|
4,191 |
|
| Net income fee to related party |
|
|
|
67 |
|
|
|
|
51 |
|
|
|
|
|
193 |
|
|
|
|
142 |
|
| Advisory fee to related party |
|
|
|
2,394 |
|
|
|
|
2,666 |
|
|
|
|
|
7,096 |
|
|
|
|
6,561 |
|
| Total operating expenses |
|
|
|
25,429 |
|
|
|
|
24,613 |
|
|
|
|
|
75,003 |
|
|
|
|
63,186 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net operating income |
|
|
|
4,347 |
|
|
|
|
2,926 |
|
|
|
|
|
14,197 |
|
|
|
|
10,413 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other income (expenses): |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest income (including $4,249 and $2,503 for the three months and $10,269 and
$8,861 for the nine months ended 2016 and 2015, respectively, from related parties) |
|
|
|
4,251 |
|
|
|
|
2,505 |
|
|
|
|
|
11,386 |
|
|
|
|
9,260 |
|
| Other income |
|
|
|
8 |
|
|
|
|
(77 |
) |
|
|
|
|
1,178 |
|
|
|
|
4 |
|
| Mortgage and loan interest (including $212 and $0 for the three months and $437 and
$31 for the nine months ended 2016 and 2015, respectively, from related parties) |
|
|
|
(13,568 |
) |
|
|
|
(13,550 |
) |
|
|
|
|
(38,826 |
) |
|
|
|
(31,953 |
) |
| Earnings (losses) from unconsolidated joint ventures and investees |
|
|
|
- |
|
|
|
|
(4 |
) |
|
|
|
|
(2 |
) |
|
|
|
39 |
|
| Litigation expense |
|
|
|
- |
|
|
|
|
(85 |
) |
|
|
|
|
- |
|
|
|
|
(203 |
) |
| Total other expenses |
|
|
|
(9,309 |
) |
|
|
|
(11,211 |
) |
|
|
|
|
(26,264 |
) |
|
|
|
(22,853 |
) |
| Loss before gain on sale of income-producing properties, loss on land sales,
non-controlling interest, and taxes |
|
|
|
(4,962 |
) |
|
|
|
(8,285 |
) |
|
|
|
|
(12,067 |
) |
|
|
|
(12,440 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gain on sale of income-producing properties |
|
|
|
- |
|
|
|
|
735 |
|
|
|
|
|
4,925 |
|
|
|
|
735 |
|
| Gain on land sales |
|
|
|
555 |
|
|
|
|
997 |
|
|
|
|
|
3,925 |
|
|
|
|
5,124 |
|
| Net loss from continuing operations before taxes |
|
|
|
(4,407 |
) |
|
|
|
(6,553 |
) |
|
|
|
|
(3,217 |
) |
|
|
|
(6,581 |
) |
| Income tax benefit (expense) |
|
|
|
(25 |
) |
|
|
|
16 |
|
|
|
|
|
(24 |
) |
|
|
|
107 |
|
| Net loss from continuing operations |
|
|
|
(4,432 |
) |
|
|
|
(6,537 |
) |
|
|
|
|
(3,241 |
) |
|
|
|
(6,474 |
) |
| Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income from discontinued operations |
|
|
|
- |
|
|
|
|
47 |
|
|
|
|
|
3 |
|
|
|
|
306 |
|
| Income tax expense from discontinued operations |
|
|
|
- |
|
|
|
|
(16 |
) |
|
|
|
|
(1 |
) |
|
|
|
(107 |
) |
| Net income from discontinued operations |
|
|
|
- |
|
|
|
|
31 |
|
|
|
|
|
2 |
|
|
|
|
199 |
|
| Net loss |
|
|
|
(4,432 |
) |
|
|
|
(6,506 |
) |
|
|
|
|
(3,239 |
) |
|
|
|
(6,275 |
) |
| Net income attributable to non-controlling interest |
|
|
|
(114 |
) |
|
|
|
(95 |
) |
|
|
|
|
(189 |
) |
|
|
|
(82 |
) |
| Net loss attributable to Transcontinental Realty Investors, Inc. |
|
|
|
(4,546 |
) |
|
|
|
(6,601 |
) |
|
|
|
|
(3,428 |
) |
|
|
|
(6,357 |
) |
| Preferred dividend requirement |
|
|
|
(227 |
) |
|
|
|
(227 |
) |
|
|
|
|
(673 |
) |
|
|
|
(673 |
) |
| Net loss applicable to common shares |
|
|
$ |
(4,773 |
) |
|
|
$ |
(6,828 |
) |
|
|
|
$ |
(4,101 |
) |
|
|
$ |
(7,030 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings per share - basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss from continuing operations |
|
|
$ |
(55.00 |
) |
|
|
$ |
(0.79 |
) |
|
|
|
$ |
(0.47 |
) |
|
|
$ |
(0.83 |
) |
| Net income from discontinued operations |
|
|
|
- |
|
|
|
|
- |
|
|
|
|
|
- |
|
|
|
|
0.02 |
|
| Net loss applicable to common shares |
|
|
$ |
(55.00 |
) |
|
|
$ |
(0.79 |
) |
|
|
|
$ |
(0.47 |
) |
|
|
$ |
(0.81 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings per share - diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss from continuing operations |
|
|
$ |
(0.55 |
) |
|
|
$ |
(0.79 |
) |
|
|
|
$ |
(0.47 |
) |
|
|
$ |
(0.83 |
) |
| Net income from discontinued operations |
|
|
|
- |
|
|
|
|
- |
|
|
|
|
|
- |
|
|
|
|
0.02 |
|
| Net loss applicable to common shares |
|
|
$ |
(0.55 |
) |
|
|
$ |
(0.79 |
) |
|
|
|
$ |
(0.47 |
) |
|
|
$ |
(0.81 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average common shares used in computing earnings per share |
|
|
|
8,717,767 |
|
|
|
|
8,717,767 |
|
|
|
|
|
8,717,767 |
|
|
|
|
8,717,767 |
|
| Weighted average common shares used in computing diluted earnings per share |
|
|
|
8,717,767 |
|
|
|
|
8,717,767 |
|
|
|
|
|
8,717,767 |
|
|
|
|
8,717,767 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Amounts attributable to Transcontinental Realty Investors, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss from continuing operations |
|
|
$ |
(4,546 |
) |
|
|
$ |
(6,632 |
) |
|
|
|
$ |
(3,430 |
) |
|
|
$ |
(6,556 |
) |
| Net income from discontinued operations |
|
|
|
- |
|
|
|
|
31 |
|
|
|
|
|
2 |
|
|
|
|
199 |
|
| Net loss |
|
|
$ |
(4,546 |
) |
|
|
$ |
(6,601 |
) |
|
|
|
$ |
(3,428 |
) |
|
|
$ |
(6,357 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| TRANSCONTINENTAL REALTY INVESTORS, INC. |
| CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
|
|
2016 |
|
|
2015 |
|
|
|
(unaudited) |
|
|
|
|
|
|
(dollars in thousands, except share and par value amounts) |
| Assets |
|
|
|
|
|
|
| Real estate, at cost |
|
|
$ |
1,007,055 |
|
|
|
$ |
935,635 |
|
| Real estate subject to sales contracts at cost |
|
|
|
47,192 |
|
|
|
|
47,192 |
|
| Less accumulated depreciation |
|
|
|
(154,399 |
) |
|
|
|
(138,808 |
) |
| Total real estate |
|
|
|
899,848 |
|
|
|
|
844,019 |
|
| Notes and interest receivable: |
|
|
|
|
|
|
| Performing (including $70,543 in 2016 and $64,181 in 2015 from related parties) |
|
|
|
74,529 |
|
|
|
|
71,376 |
|
| Less allowance for doubtful accounts (including $1,825 in 2016 and 2015 from
related parties) |
|
|
|
(1,825 |
) |
|
|
|
(1,825 |
) |
| Total notes and interest receivable |
|
|
|
72,704 |
|
|
|
|
69,551 |
|
| Cash and cash equivalents |
|
|
|
7,339 |
|
|
|
|
15,171 |
|
| Restricted cash |
|
|
|
33,488 |
|
|
|
|
44,060 |
|
| Investments in unconsolidated joint ventures and investees |
|
|
|
2,469 |
|
|
|
|
5,243 |
|
| Receivable from related party |
|
|
|
91,367 |
|
|
|
|
90,515 |
|
| Other assets |
|
|
|
44,333 |
|
|
|
|
41,645 |
|
| Total assets |
|
|
$ |
1,151,548 |
|
|
|
$ |
1,110,204 |
|
|
|
|
|
|
|
|
| Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
| Liabilities: |
|
|
|
|
|
|
| Notes and interest payable |
|
|
$ |
817,268 |
|
|
|
$ |
772,636 |
|
| Notes related to real estate held for sale |
|
|
|
376 |
|
|
|
|
376 |
|
| Notes related to real estate subject to sales contracts |
|
|
|
5,815 |
|
|
|
|
6,422 |
|
| Deferred revenue (including $50,669 in 2016 and $50,645 in 2015 to related
parties) |
|
|
|
71,054 |
|
|
|
|
71,021 |
|
| Accounts payable and other liabilities (including $6,267 in 2016 and $5,845
in 2015 to related parties) |
|
|
|
35,892 |
|
|
|
|
34,694 |
|
| Total liabilities |
|
|
|
930,405 |
|
|
|
|
885,149 |
|
|
|
|
|
|
|
|
| Shareholders’ equity: |
|
|
|
|
|
|
| Preferred stock, Series C: $0.01 par value, authorized 10,000,000 shares; issued and
outstanding zero shares in 2016 and 2015. Series D: $0.01 par value, authorized, issued and outstanding 100,000 shares in 2016
and 2015 (liquidation preference $100 per share) |
|
|
|
1 |
|
|
|
|
1 |
|
| Common stock, $0.01 par value, authorized 10,000,000 shares; issued 8,717,967 shares
in 2016 and 2015; outstanding 8,717,767 shares in 2016 and 2015 |
|
|
|
87 |
|
|
|
|
87 |
|
| Treasury stock at cost, 200 shares in 2016 and 2015 |
|
|
|
(2 |
) |
|
|
|
(2 |
) |
| Paid-in capital |
|
|
|
270,076 |
|
|
|
|
270,749 |
|
| Retained earnings |
|
|
|
(67,515 |
) |
|
|
|
(64,087 |
) |
| Total Transcontinental Realty Investors, Inc. shareholders' equity |
|
|
|
202,647 |
|
|
|
|
206,748 |
|
| Non-controlling interest |
|
|
|
18,496 |
|
|
|
|
18,307 |
|
| Total shareholders' equity |
|
|
|
221,143 |
|
|
|
|
225,055 |
|
| Total liabilities and shareholders' equity |
|
|
$ |
1,151,548 |
|
|
|
$ |
1,110,204 |
|
Transcontinental Realty Investors, Inc.
Investors Relations
Gene Bertcher, 800-400-6407
investor.relations@transconrealty-invest.com
View source version on businesswire.com: http://www.businesswire.com/news/home/20161115006829/en/