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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED MARCH 31, 1997
Commission File Number 1-9948
AMERICAN REALTY TRUST, INC.
------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Georgia 54-0697989
- ---------------------------------------- -----------------------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
10670 North Central Expressway,
Suite 300, Dallas, Texas 75231
- ---------------------------------------- -----------------------------------
(Address of Principal Executive Offices) (Zip Code)
(214) 692-4700
----------------------------------
(Registrant's Telephone Number,
Including Area Code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
Common Stock, $.01 par value 12,194,644
- ---------------------------------------- ----------------------------------
(Class) (Outstanding at April 30, 1997)
1
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This Form 10-Q/A amends the Registrant's quarterly report on Form 10-Q for the
quarter ended March 31, 1997 as follows:
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS - pages 3, 4, 5 and 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - page 22
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - EXHIBIT 27.0 FINANCIAL DATA
SCHEDULE - page 54
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AMERICAN REALTY TRUST, INC.
CONSOLIDATED BALANCE SHEETS - Continued
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
--------- ------------
(dollars in thousands)
<S> <C> <C>
Liabilities and Stockholders' Equity
Liabilities
Notes and interest payable ($9,078 in 1997 and
$8,973 in 1996 to affiliates) ..................... $ 129,660 $ 127,863
Margin borrowings ..................................... 42,609 40,044
Accounts payable and other liabilities (including
$4,730 in 1997 to affiliate) ...................... 11,880 8,433
--------- ---------
184,149 176,340
Minority interest ..................................... 10,810 10,911
Commitments and contingencies
Stockholders' equity
Preferred Stock, $2.00 par value, authorized
20,000,000 shares, issued and outstanding
4,000 shares Series B .......................... 8 8
16,274 shares Series C ......................... 33 32
Common stock, $.01 par value; authorized
16,667,000 shares, issued 13,479,348 shares
in 1997 and 1996 .................................. 134 129
Paid-in capital ....................................... 68,642 68,601
Accumulated (deficit) ................................. (21,263) (20,978)
Treasury stock at cost, 1,284,704 shares in 1997
and 564,704 shares in 1996 ........................ (13) (6)
--------- ---------
47,541 47,786
--------- ---------
$ 242,500 $ 235,037
========= =========
</TABLE>
The accompanying notes are an integral part of
these Consolidated Financial Statements.
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AMERICAN REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
---------------------------------
1997 1996
------------ ------------
(dollars in thousands,
except per share)
<S> <C> <C>
Income
Rents ............................................... $ 5,908 $ 5,310
Interest ............................................ 1,121 1,138
Other ............................................... 470 342
------------ ------------
7,499 6,790
Expenses
Property operations ................................. 4,453 3,710
Interest ............................................ 5,204 3,146
Advisory and servicing fees to affiliate ............ 424 320
General and administrative .......................... 795 642
Depreciation ........................................ 547 437
Minority interest ................................... 372 --
------------ ------------
11,795 8,255
------------ ------------
(Loss) from operations ................................. (4,296) (1,465)
Equity in income of investees .......................... 280 678
Gain on sale of real estate ............................ 4,287 559
------------ ------------
Income (loss) before extraordinary gain ................ 271 (228)
Extraordinary gain ..................................... -- 13
------------ ------------
Net income (loss) ...................................... 271 (215)
Preferred dividend requirement ......................... 50 --
------------ ------------
Net income (loss) applicable to Common shares .......... $ 221 $ (215)
============ ============
Earnings per share
Net income (loss) .................................. $ .02 $ (.02)
============ ============
Weighted average Common shares used in computing
earnings per share ................................. 12,194,644 11,716,656
============ ============
</TABLE>
The accompanying notes are an integral part of
these Consolidated Financial Statements.
4
<PAGE> 5
AMERICAN REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Three Months Ended March 31, 1997
<TABLE>
<CAPTION>
Series B Series C
Preferred Preferred Common Treasury Paid-in Accumulated Stockholders'
Stock Stock Stock Stock Capital (Deficit) Equity
--------- --------- ------ -------- ------- ----------- -------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1997 ..... $ 8 $ 32 $ 129 $ (6) $ 68,601 $ (20,978) $ 47,786
Dividends
Common Stock ................. -- -- -- -- -- (506) (506)
Series B Preferred Stock ..... -- -- -- -- -- (10) (10)
Series C Preferred Stock ..... -- 1 -- -- 39 (40) --
Treasury stock, at cost ...... -- -- 5 (7) 2 -- --
Net income ................... -- -- -- -- -- 271 271
Balance, March 31, 1997 ...... $ 8 $ 33 $ 134 $ (13) $ 68,642 $ (21,263) $ 47,541
======== ======== ======== ======== ======== =========== ========
</TABLE>
The accompanying notes are an integral part of
these Consolidated Financial Statements.
5
<PAGE> 6
AMERICAN REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
----------------------------
1997 1996
------------ ------------
(dollars in thousands)
<S> <C> <C>
Reconciliation of net income (loss) to net cash
provided by (used in) operating activities
Net income (loss) ............................................ $ 271 $ (215)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities
Extraordinary gain ....................................... -- (13)
Depreciation ............................................. 547 437
Gain on sale of real estate .............................. (4,287) (559)
Distributions from equity investees' operating
cash flow ............................................. 568 3,986
Equity in (income) of investees .......................... (280) (678)
Unrealized (gain) on marketable equity
securities ............................................ (356) (629)
Decrease in accrued interest receivable .................. 35 49
Decrease in other assets ................................. 2,301 536
Increase in accrued interest payable ..................... 48 60
(Decrease) in accounts payable and other
liabilities ........................................... (1,619) (902)
Other .................................................... (181) 256
------------ ------------
Net cash provided by (used in) operating
activities .......................................... $ (2,953) $ 2,328
============ ============
Schedule on noncash investing and financing
activities
Notes payable from acquisition of real estate ............... $ 5,125 $ --
Stock dividends on Series C Preferred Stock ................. 40 --
</TABLE>
The accompanying notes are an integral part of
these Consolidated Financial Statements.
7
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
Commitments and Contingencies (Continued)
On January 27, 1997, Joseph B. Moorman filed motions to (i) discharge the NRLP
Oversight Committee and (ii) vacate the Court's orders and renewed his prior
motions to compel enforcement of the Moorman Settlement Agreement, appoint a
receiver over the Partnership, and for collateral relief against the Company.
Also on January 27, 1997, Robert A. McNeil filed motions to (i) be installed as
receiver for the Partnership, (ii) vacate the Court's orders, and (iii) disband
the NRLP Oversight Committee.
A hearing on the motions to discharge or disband the Oversight Committee and to
vacate the Court's orders was held on March 21, 1997, and the Supervising Judge
ruled that neither Mr. McNeil nor Mr. Moorman had standing to bring the
motions. The Supervising Judge also set June 27, 1997 as the hearing date for
final approval of the Amended and Restated Implementation Agreement.
Results of Operations
For the three months ended March 31, 1997, the Company reported net income of
$271,000, compared to a net loss of $215,000 for the three months ended March
31, 1996. The Company's 1997 net income includes gains on the sale of real
estate of $4.3 million. The 1996 net loss includes an extraordinary gain of
$13,000 and gains on sales of real estate of $559,000. Fluctuations in these
and other components of the Company's revenues and expenses between the 1996
and 1997 periods are described below.
Net rental income (rents less property operating expenses) decreased from $1.6
million for the three months ended March 31, 1996 to $1.5 million in the same
period of 1997. The decrease is principally due to operating expenses of the
Best Western Oceanside Hotel which was acquired in December 1996.
Interest income from mortgage notes receivable was $1.1 million for the three
months ended March 31, 1996 and the same period of 1997. Interest income for
the remaining quarters of 1997 is expected to approximate that of the first
quarter of 1997.
Other income improved from $342,000 for the three months ended March 31, 1996
to income of $470,000 in the same period of 1997. The increase is primarily due
to a $350,000 unrealized gain on the Company's trading portfolio securities.
See NOTE 6. "MARKETABLE EQUITY SECURITIES - TRADING PORTFOLIO."
Interest expense increased from $3.1 million for the three months ended March
31, 1996 to $5.2 million in the same period of 1997. The increase is primarily
attributable to the debt incurred related to the acquisition of seven parcels
of land and one commercial property subsequent to March 1996. These increases
were offset in part by a
22
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INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT
- ------- -------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 713
<SECURITIES> 3,861
<RECEIVABLES> 50,809
<ALLOWANCES> (3,926)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 133,857
<DEPRECIATION> (9,768)
<TOTAL-ASSETS> 242,500
<CURRENT-LIABILITIES> 0
<BONDS> 129,660
0
41
<COMMON> 134
<OTHER-SE> 47,366
<TOTAL-LIABILITY-AND-EQUITY> 242,500
<SALES> 0
<TOTAL-REVENUES> 5,908
<CGS> 0
<TOTAL-COSTS> 4,453
<OTHER-EXPENSES> 547
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,204
<INCOME-PRETAX> 271
<INCOME-TAX> 0
<INCOME-CONTINUING> 271
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 271
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
