Attached files
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| 8-K - TRANSCONTINENTAL REALTY - TRANSCONTINENTAL REALTY INVESTORS INC | tci8k111314.htm |
EXHIBIT "99.1"
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NEWS RELEASE
FOR IMMEDIATE RELEASE
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Contact:
Transcontinental Realty Investors, Inc.
Investors Relations
Gene Bertcher (800) 400-6407
investor.relations®transconrealty-invest.com
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Transcontinental Realty Investors, Inc. Reports Third Quarter 2014 Results
DALLAS (November 13, 2014) — Transcontinental Realty Investors, Inc. (NYSE: TCI), a Dallas-based real estate investment company, today reported results of operations for the third quarter ended September 30, 2014. ICI announced today that the Company reported a net loss applicable to common shares of $2.6 million or $0.29 per diluted earnings per share, as compared to a net loss applicable to common shares of $6.2 million or $0.74 per diluted earnings per share for the same period ended 2013.
Management's efforts to enhance the value of our overall portfolio has resulted in the continuing improvement in the Company's results of operations. We continue to see growth in the multifamily market with increasing rents, stable operating expenses, and an occupancy rate over 93%. We are diligent in our mission to provide high-quality living opportunities to our tenants.
In our commercial portfolio, we are seeing the benefit of our efforts with new leases executed and increasing rents as first year concessions expire. We believe that we will continue to see growth in our commercial portfolio as the economic conditions improve and we capitalize on the influx of attractive prospects in the pipeline.
Our ability to take advantage of lower-interest rate mortgages available has reduced our monthly obligations and increased cash flow within our multifamily portfolio.
The positive results of operations has allowed the Company to invest in mortgage receivables in various multifamily projects not under the Company's ownership. We will continue to invest in the multifamily market, as conditions are optimal for achieving a high return on our investment.
Rental and other property revenues were slightly lower for the three months ended September 30, 2014, as compared to the same period in the prior year. This was mainly attributable to our commercial portfolio which was lower in the current period related to some prior year larger square-foot tenants down-sizing or moving out and first year lease specials for new tenants. Rental revenue from our apartment portfolio increased in the current period as we continue to excel with high occupancy rates and increasing rental rates.
Property operating expenses were $10.1 million for the three months ended September 30, 2014, representing an increase of $0.6 million as compared to the same period in the previous year. Operating expenses have remained consistent with prior periods due to labor efficiencies and improvements in preventative maintenance across the portfolio, with only an increase in real estate taxes as a result of the increase in the value of our portfolio and some non-recurring repair projects completed in the current period.
General and administrative expenses decreased $0.4 million for the three months ended September 30, 2014, as compared to the same period in prior year. The majority of this decrease was in the land portfolio which was mainly due to a reduction in legal fees.
Interest income was $3.1 million for the three months ended September 30, 2014, representing an increase of $1.0 million as compared to the same period in the prior year. During the current quarter, we invested $17.3 million in mortgage receivables which would increase the basis for our interest income.
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.
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TRANSCONTINENTAL REALTY INVESTORS, INC.
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CONSOLIDATED STATEMENTS OF OPERATIONS
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(unaudited)
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For the Three Months Ended
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For the Nine Months Ended
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September 30,
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September 30,
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2014
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2013
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2014
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2013
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(dollars in thousands, except per share amounts)
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Revenues:
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Rental and other property revenues (including $175 and $165 for the three months and $526 and
$497 for the nine months ended 2014 and 2013, respectively, from related parties)
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$ | 18,466 | $ | 18,663 | $ | 55,281 | $ | 55,257 | ||||||||
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Expenses:
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Property operating expenses (including $161 and $169 for the three months and $454 and $522 for
the nine months ended 2014 and 2013, respectively, from related parties)
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10,077 | 9,543 | 28,640 | 27,041 | ||||||||||||
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Depreciation and amortization
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4,415 | 4,024 | 12,967 | 11,737 | ||||||||||||
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General and administrative (including $714 and $665 for the three months and $2,114 and $2,105 for
the nine months ended 2014 and 2013, respectively, from related parties)
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1,131 | 1,468 | 5,417 | 4,696 | ||||||||||||
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Provision on impairment of notes receivable and real estate assets
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- | 214 | - | 214 | ||||||||||||
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Net income fee to related party
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(186 | ) | 55 | 514 | 159 | |||||||||||
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Advisory fee to related party
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1,826 | 2,168 | 5,490 | 6,377 | ||||||||||||
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Total operating expenses
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17,263 | 17,472 | 53,028 | 50,224 | ||||||||||||
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Net operating income
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1,203 | 1,191 | 2,253 | 5,033 | ||||||||||||
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Other income (expenses):
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Interest income (including $2,718 and $2,168 for the three months and $8,835 and $6,456 for the nine
months ended 2014 and 2013, respectively, from related parties)
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3,064 | 2,131 | 9,181 | 6,427 | ||||||||||||
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Other income
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344 | 72 | 741 | 242 | ||||||||||||
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Mortgage and loan interest (including $0 and $397 for the three months and $31 and $1,323 for the
nine months ended 2014 and 2013, respectively, from related parties)
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(7,214 | ) | (7,280 | ) | (21,286 | ) | (22,380 | ) | ||||||||
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Deferred borrowing costs amortization
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(829 | ) | (72 | ) | (2,043 | ) | (2,440 | ) | ||||||||
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Loan charges and prepayment penalties
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(1,044 | ) | - | (2,626 | ) | (3,963 | ) | |||||||||
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Loss on the sale of investments
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- | (275 | ) | - | (283 | ) | ||||||||||
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Earnings (losses) from unconsolidated joint ventures and investees
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10 | (30 | ) | (5 | ) | (28 | ) | |||||||||
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Litigation settlement
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(86 | ) | (2,739 | ) | 3,666 | (2,727 | ) | |||||||||
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Total other expenses
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(5,755 | ) | (8,193 | ) | (12,372 | ) | (25,152 | ) | ||||||||
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Loss before gain on land sales, non-controlling interest, and taxes
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(4,552 | ) | (7,002 | ) | (10,119 | ) | (20,119 | ) | ||||||||
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Gain (loss) on land sales
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40 | - | 634 | (48 | ) | |||||||||||
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Net loss from continuing operations before taxes
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(4,512 | ) | (7,002 | ) | (9,485 | ) | (20,167 | ) | ||||||||
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Income tax benefit
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786 | 402 | 5,030 | 8,210 | ||||||||||||
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Net loss from continuing operations
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(3,726 | ) | (6,600 | ) | (4,455 | ) | (11,957 | ) | ||||||||
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Discontinued operations:
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Net gain (loss) from discontinued operations
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477 | 1,021 | (454 | ) | (935 | ) | ||||||||||
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Gain on sale of real estate from discontinued operations
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1,770 | 127 | 14,826 | 24,392 | ||||||||||||
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Income tax expense from discontinued operations
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(786 | ) | (402 | ) | (5,030 | ) | (8,210 | ) | ||||||||
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Net income from discontinued operations
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1,461 | 746 | 9,342 | 15,247 | ||||||||||||
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Net income (loss)
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(2,265 | ) | (5,854 | ) | 4,887 | 3,290 | ||||||||||
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Net income attributable to non-controlling interest
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(81 | ) | (97 | ) | (292 | ) | (323 | ) | ||||||||
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Net income (loss) attributable to Transcontinental Realty Investors, Inc.
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(2,346 | ) | (5,951 | ) | 4,595 | 2,967 | ||||||||||
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Preferred dividend requirement
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(227 | ) | (279 | ) | (778 | ) | (830 | ) | ||||||||
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Net income (loss) applicable to common shares
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$ | (2,573 | ) | $ | (6,230 | ) | $ | 3,817 | $ | 2,137 | ||||||
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Earnings per share - basic
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Net loss from continuing operations
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$ | (0.46 | ) | $ | (0.83 | ) | $ | (0.65 | ) | $ | (1.56 | ) | ||||
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Net income from discontinued operations
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0.17 | 0.09 | 1.10 | 1.81 | ||||||||||||
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Net income (loss) applicable to common shares
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$ | (0.29 | ) | $ | (0.74 | ) | $ | 0.45 | $ | 0.25 | ||||||
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Earnings per share - diluted
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Net loss from continuing operations
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$ | (0.46 | ) | $ | (0.83 | ) | $ | (0.65 | ) | $ | (1.56 | ) | ||||
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Net income from discontinued operations
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0.17 | 0.09 | 1.10 | 1.81 | ||||||||||||
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Net income (loss) applicable to common shares
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$ | (0.29 | ) | $ | (0.74 | ) | $ | 0.45 | $ | 0.25 | ||||||
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Weighted average common shares used in computing earnings per share
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8,688,018 | 8,413,469 | 8,505,991 | 8,413,469 | ||||||||||||
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Weighted average common shares used in computing diluted earnings per share
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8,688,018 | 8,413,469 | 8,505,991 | 8,413,469 | ||||||||||||
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Amounts attributable to Transcontinental Realty Investors, Inc.
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Net loss from continuing operations
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$ | (3,807 | ) | $ | (6,697 | ) | $ | (4,747 | ) | $ | (12,280 | ) | ||||
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Net income from discontinued operations
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1,461 | 746 | 9,342 | 15,247 | ||||||||||||
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Net income (loss)
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$ | (2,346 | ) | $ | (5,951 | ) | $ | 4,595 | $ | 2,967 | ||||||
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TRANSCONTINENTAL REALTY INVESTORS, INC.
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CONSOLIDATED BALANCE SHEETS
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(unaudited)
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September 30,
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December 31,
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2014
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2013
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(dollars in thousands, except
share and par value amounts)
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Assets
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Real estate, at cost
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$ | 717,575 | $ | 777,974 | ||||
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Real estate held for sale at cost, net of depreciation ($2,066 for 2014 and $2,390 for 2013)
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44,289 | 16,427 | ||||||
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Real estate subject to sales contracts at cost, net of depreciation ($2,212 for 2014 and $1,949 for 2013)
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20,963 | 29,353 | ||||||
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Less accumulated depreciation
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(109,004 | ) | (127,952 | ) | ||||
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Total real estate
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673,823 | 695,802 | ||||||
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Notes and interest receivable:
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Performing (including $69,854 in 2014 and $66,431 in 2013 from related parties)
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82,204 | 69,626 | ||||||
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Non-performing
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574 | 543 | ||||||
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Less allowance for doubtful accounts (including $1,825 in 2014 and $2,098 in 2013 from related
parties)
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(1,990 | ) | (2,262 | ) | ||||
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Total notes and interest receivable
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80,788 | 67,907 | ||||||
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Cash and cash equivalents
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4,285 | 16,086 | ||||||
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Restricted cash
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27,811 | 31,799 | ||||||
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Investments in unconsolidated joint ventures and investees
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1,503 | 1,697 | ||||||
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Receivable from related party
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71,066 | 52,380 | ||||||
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Other assets
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36,714 | 32,000 | ||||||
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Total assets
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$ | 895,990 | $ | 897,671 | ||||
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Liabilities and Shareholders’ Equity
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Liabilities:
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Notes and interest payable
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$ | 545,338 | $ | 562,734 | ||||
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Notes related to real estate held for sale
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42,883 | 17,100 | ||||||
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Notes related to real estate subject to sales contracts
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18,769 | 23,011 | ||||||
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Deferred gain (from sales to related parties)
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53,096 | 53,096 | ||||||
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Accounts payable and other liabilities (including $4,327 in 2014 and $4,697 in 2013 to related parties)
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39,319 | 50,160 | ||||||
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Total liabilities
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699,405 | 706,101 | ||||||
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Shareholders’ equity:
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Preferred stock, Series C: $0.01 par value, authorized 10,000,000 shares; issued and outstanding zero
shares in 2014 and 30,000 shares in 2013 (liquidation preference $100 per share). Series D: $0.01 par
value, authorized, issued and outstanding 100,000 shares in 2014 and 2013 (liquidation preference $100
per share)
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1 | 1 | ||||||
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Common stock, $0.01 par value, authorized 10,000,000 shares; issued 8,717,967 and 8,413,669 shares in
2014 and 2013, respectively; outstanding 8,717,767 and 8,413,469 shares in 2014 and 2013, respectively
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87 | 84 | ||||||
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Treasury stock at cost, 200 shares in 2014 and 2013
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(2 | ) | (2 | ) | ||||
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Paid-in capital
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271,876 | 271,720 | ||||||
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Retained earnings
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(93,434 | ) | (98,029 | ) | ||||
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Total Transcontinental Realty Investors, Inc. shareholders' equity
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178,528 | 173,774 | ||||||
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Non-controlling interest
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18,057 | 17,796 | ||||||
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Total shareholders' equity
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196,585 | 191,570 | ||||||
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Total liabilities and shareholders' equity
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$ | 895,990 | $ | 897,671 | ||||