-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HkdR4h9g0YjYIo+B0yJxEtFa/kyaE2+8Z4Z0PJwz7+UK8TqhtmwYGPmccNVt6W0T Cd7lR1Ixl/Wwc0eigg46Vw== 0000950134-97-009347.txt : 19971217 0000950134-97-009347.hdr.sgml : 19971217 ACCESSION NUMBER: 0000950134-97-009347 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971016 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971216 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN REALTY TRUST INC CENTRAL INDEX KEY: 0000827165 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE OPERATORS (NO DEVELOPERS) & LESSORS [6510] IRS NUMBER: 540697989 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 001-09948 FILM NUMBER: 97738745 BUSINESS ADDRESS: STREET 1: 10670 N CENTRAL EXPRESSWAY STREET 2: STE 300 CITY: DALLAS STATE: TX ZIP: 75231 BUSINESS PHONE: 214-692-47 MAIL ADDRESS: STREET 1: 10670 N CENTRAL EXPRESSWAY STREET 2: SUITE 600 CITY: DALLAS STATE: TX ZIP: 75231 8-K/A 1 AMENDMENT TO FORM 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 October 16, 1997 ------------------------------------------------------------- Date of Report (Date of Earliest Event Reported) AMERICAN REALTY TRUST, INC. ------------------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) Georgia 1-9948 54-0697989 - -------------------------------------------------------------------------------- (State of Incorporation) (Commission (IRS Employer File No.) Identification No.) 10670 North Central Expressway, Suite 300, Dallas, TX 75231 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code: (214) 692-4700 Not Applicable ------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) 1 2 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS On September 16, 1997, American Realty Trust, Inc. (the "Company") purchased the Collection, a retail and commercial center consisting of four buildings in Denver, Colorado for $19.5 million (8.3% of the Company's assets at December 31, 1996). The sellers of the property were DDC One Properties, Ltd., a Colorado limited partnership, Interplaza Retail Limited Liability Company, a Colorado limited liability company and HTDC, Inc., a Colorado corporation. The property was constructed in 1987 and contains approximately 267,812 square feet. On October 16, 1997, the Company purchased in a single transaction four hotels, the Piccadilly Inn Shaw with 194 rooms, constructed in 1973, Piccadilly Inn University with 190 rooms, constructed in 1984, Piccadilly Inn Airport with 185 rooms, constructed in 1970 and the Chateau Inn with 78 rooms, constructed in 1989 (collectively the "Piccadilly Inns"). The Piccadilly Inns are all in Fresno, California. The Company paid $33.0 million (14.0% of the Company's assets at December 31, 1996) consisting of $19.8 million in new mortgage debt and 1.6 million shares of Series F Preferred Stock. The Company received net cash proceeds of $2.1 million from the new mortgage debt. The seller of the property was the Fansler Foundation, a California non-for-profit corporation. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Pro forma financial information: Pro forma statements of operations are presented for the year ended December 31, 1996 and the nine months ended September 30, 1997. A pro forma balance sheet as of September 30, 1997 is also presented. A summary of the pro forma transaction follows: On September 16, 1997, the Company purchased the Collection a retail and commercial center totaling 267,812 square feet in Denver, Colorado for $19.5 million. The Company acquired the property through two wholly owned subsidiaries ART Collection, Inc. ("ART Collection"), a Georgia corporation and ART Blessin, Inc. ("ART Blessin"), a Georgia corporation. The Company paid $791,000 in cash and assumed existing mortgages totaling $14.7 million and issued 400,000 shares of the Company's Series F Cumulative Convertible Preferred Stock with a liquidation value of $10.00 per share. The holders are entitled to dividends at a rate of $10.00 per year or $2.50 per quarter on the 15th day of each March, June, September and December when and as declared by the Board of Directors of the Company accruing cumulatively from August 16, 1998 and commencing on October 15, 1998. The Series F Preferred Stock may be converted into Common Stock of the Company at 90% of the market value of the Company's Common Stock after August 15, 2003. The first lien mortgage in the amount of $14.2 million bears interest at 8.64% per annum, requires monthly principal and interest payments of $116,000 and matures May 31, 2017. The second lien mortgage in the amount of $580,000 bears interest at 7% per annum from April 1996 to April 2001, 7.5% per annum from May 2001 to May 2010, requires monthly principal and interest payments of $3,000 and matures May 31, 2010. 2 3 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Continued) On October 16, 1997, the Company purchased the Piccadilly Inns, four hotels in Fresno, California, for $33.0 million. The Company acquired the Piccadilly Inns through four wholly-owned subsidiaries: ART Piccadilly Shaw Corporation, a Nevada corporation; ART Piccadilly University Corporation, a Nevada corporation; ART Piccadilly Airport Corporation, a Nevada corporation; and ART Piccadilly Chateau Corporation, a Nevada corporation. The Company issued 1.6 million shares of Series F Cumulative Convertible Preferred Stock having a liquidation value of $10.00 per share or a total of $16.0 million and obtained mortgage financing of $19.8 million. The holders are entitled to dividends at a rate of $10.00 per year or $2.50 per quarter on the 15th day of each March, June, September and December when and as declared by the Board of Directors of the Company accruing cumulatively from August 16, 1998 and commencing on October 15, 1998. The Series F Preferred Stock may be converted into Common Stock of the Company at 90% of the market value of the Company's Common Stock after August 15, 2003. The Company received net financing proceeds of $2.2 million after the payment of various closing costs associated with the financing. The mortgage bears interest at 8.40% per annum, requires monthly principal and interest payments of $158,000 and matures October 2013. The pro forma statements of operations present the Company's operations as if the transaction described above had occurred at the beginning of each of the periods presented. [THIS SPACE INTENTIONALLY LEFT BLANK.] 3 4 AMERICAN REALTY TRUST, INC. PRO FORMA CONSOLIDATED BALANCE SHEET SEPTEMBER 30, 1997
Piccadilly Actual(1) Inns Pro forma -------- ---------- --------- (dollars in thousands) Assets Notes and interest receivable Performing .......................... $ 4,182 $ -- $ 4,182 Nonperforming, nonaccruing .......... 18,954 -- 18,954 -------- -------- -------- 23,136 -- 23,136 Less - allowance for estimated losses ... (2,398) -- (2,398) -------- -------- -------- 20,738 -- 20,738 Real estate held for sale, net of accumulated depreciation ............ 149,127 -- 149,127 Real estate held for investment, net of accumulated depreciation ............ 84,898 33,000 117,898 Plant and equipment, net of accumulated depreciation ........................ 5,809 -- 5,809 Investments in marketable equity securities, at market ............... 7,425 -- 7,425 Investments in equity investees ......... 46,266 -- 46,266 Intangibles, net of accumulated amortization ........................ 15,309 -- 15,309 Cash and cash equivalents ............... 2,031 2,200 4,231 Other assets ............................ 23,015 600 23,615 -------- -------- -------- $354,618 $ 35,800 $390,418 ======== ======== ========
- ---------------- (1) Includes the Collection acquired September 16, 1997. 4 5 AMERICAN REALTY TRUST, INC. PRO FORMA CONSOLIDATED BALANCE SHEET SEPTEMBER 30, 1997
Piccadilly Actual(1) Inns Pro forma --------- ---------- --------- (dollars in thousands) Liabilities and Shareholders' Equity Liabilities Notes and interest payable .............. $213,293 $ 19,800 $233,093 Margin borrowings ....................... 52,071 -- 52,071 Other liabilities ....................... 31,456 -- 31,456 -------- -------- -------- 296,820 19,800 316,620 Minority interest ....................... 10,742 -- 10,742 Commitments and contingencies Shareholders' equity Preferred Stock, $2.00 par value authorized 20,000,000 shares 4,000 shares Series B, 10% cumulative, $2.00 par value .... 8 -- 8 16,681 shares Series C, 10% cumulative, $2.00 par value ... 33 -- 33 2,000,000 shares Series F 10% Cumulative, $2.00 par value ... 800 3,200 4,000 Common Stock, $.01 par value; authorized 16,667,000 shares, 13,497,348 shares in 1997 and 1996 issued ............. 120 -- 120 Paid-in capital ......................... 72,147 12,800 84,947 Accumulated distributions in excess of accumulated earnings ................ (26,037) -- (26,037) Treasury stock at cost, 1,503,427 ....... (15) -- (15) -------- -------- -------- 47,056 16,000 63,056 -------- -------- -------- $354,618 $ 35,800 $390,418 ======== ======== ========
- ----------- (1) Includes the Collection acquired September 16, 1997. 5 6 AMERICAN REALTY TRUST, INC. PRO FORMA STATEMENT OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 1997
Piccadilly Actual Collection(1) Inns(1) Proforma --------- ------------- ------------ -------- (dollars in thousands, except per share) Income Sales ............................... $ 10,828 $ -- $ -- $ 10,828 Rents ............................... 18,725 1,879 10,769 31,373 Interest ............................ 2,769 -- -- 2,769 Other ............................... (117) -- -- (117) ------------ -------- ------------ ------------ 32,205 1,879 10,769 44,853 Expenses Cost of sales ....................... 8,672 -- -- 8,672 Property operations ................. 13,501 308 6,493 20,302 Interest ............................ 20,425 947 1,247 22,619 Depreciation and amortization ....... 1,902 -- -- 1,902 Advisory fee to affiliate ........... 1,639 -- -- 1,639 Incentive compensation .............. 299 -- -- 299 General and administrative .......... 4,654 -- -- 4,654 Minority interest ................... 959 -- -- 959 ------------ -------- ------------ ------------ 52,051 1,255 7,740 61,046 ------------ -------- ------------ ------------ Income (loss) from operations ........... (19,846) 624 3,029 (16,193) Equity in income (losses) of investees .. 5,106 -- -- 5,106 Gain on sale of real estate ............. 11,354 -- -- 11,354 ------------ -------- ------------ ------------ Income (loss) before extraordinary gain . (3,386) 624 3,029 (267) Extraordinary gain ...................... -- -- -- -- ------------ -------- ------------ ------------ Net income (loss) ....................... (3,386) 624 3,029 (267) Preferred dividend requirement .......... (151) (60) (240) (451) ------------ -------- ------------ ------------ Net income (loss) applicable to Common shares .............................. $ (3,537) $ 564 $ 2,789 $ (184) ============ ======== ============ ============ Earnings per share Income before extraordinary gain .... $ (.29) $ (.02) Extraordinary gain .................. -- -- ------------ ------------ Net (loss) .......................... $ (.29) $ (.02) ============ ============ Weighted average shares of Common Stock used in computing earnings per share 12,041,252 12,041,252 ============ ============
- ---------------- (1) Assumes acquisition by the Company on January 1, 1997. 6 7 AMERICAN REALTY TRUST, INC. PRO FORMA STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1996
Piccadilly Actual Collection(1) Inns(1) Proforma ------ ------------- ---------- -------- (dollars in thousands, except per share) Income Rents ................. $ 20,658 $ 1,886 $ 12,930 $ 35,474 Interest .............. 4,724 -- 3 4,727 Other ................. 1,597 356 -- 1,953 ------------ ------------ ------------ ------------ 26,979 2,242 12,933 42,154 Expenses Property operations ... 15,874 381 9,719 25,974 Interest .............. 16,450 124 16,574 Depreciation and amortization ....... 2,002 -- 549 2,551 Advisory fee to affiliate .......... 1,539 -- -- 1,539 General and administrative ..... 2,712 3,168 5,880 ------------ ------------ ------------ ------------ 38,577 381 13,560 52,518 ------------ ------------ ------------ ------------ Income (loss) from operations ............ (11,598) 1,861 (627) (10,364) Equity in income of investees .......... 2,004 -- -- 2,004 Gain on sale of real estate ............. 3,659 -- -- 3,659 ------------ ------------ ------------ ------------ Income (loss) before extraordinary gain .... (5,935) 1,861 (627) (4,701) Extraordinary gain ........ 381 -- -- 381 ------------ ------------ ------------ ------------ Net income (loss) ......... (5,554) 1,861 (627) (4,320) Preferred dividend requirement ........... (113) (80) (320) (513) ------------ ------------ ------------ ------------ Net income (loss) applicable to Common Shares $ 5,667 $ 1,781 $ (947) $ 4,833 ============ ============ ============ ============ Earnings per share Income (loss) before extraordinary gain . $ (.46) $ (.41) Extraordinary gain .... .03 .03 ------------ ------------ Net (loss) ............ $ (.43) $ (.38) ============ ============ Weighted average shares of Common Stock used in computing earnings per share ................. 12,765,082 12,765,082 ============ ============
- ---------------- (1) Assumes acquisition by the Company on January 1, 1996. 7 8 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Continued) (b) Financial statements of properties acquired:
Exhibit Number Description - ------- --------------------------------------------------------------------- 99.0 The Collection Audited Statement of Revenues and Direct Operating Expenses for the year ended December 31, 1996. 99.1 The Piccadilly Inns Audited Statement of Revenues and Direct Operating Expenses for the year ended June 30, 1997.
---------------------------------- SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereto duly authorized. AMERICAN REALTY TRUST, INC. Date: December 16, 1997 By: /s/ Thomas A. Holland -------------------------- ------------------------------- Thomas A. Holland Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) 8 9 AMERICAN REALTY TRUST, INC. EXHIBIT TO ITS CURRENT REPORT ON FORM 8-K Dated October 16, 1997
Exhibit Number Description - ------- --------------------------------------------------------- 99.0 The Collection Audited Statement of Revenues and Direct Operating Expenses for the year ended December 31, 1996. 99.1 The Piccadilly Inns Audited Statement of Revenues and Direct Operating Expenses for the year ended June 30, 1997.
9 EX-99.0 2 THE COLLECTION AUDITED STATEMENT OF REVENUES 1 EXHIBIT 99.0 THE COLLECTION RETAIL CENTER STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES YEAR ENDED DECEMBER 31, 1996 2 Independent Auditors' Report To the Board of Trustees American Realty Trust We have audited the accompanying statement of revenues and direct operating expenses of The Collection Retail Center for the year ended December 31, 1996. This statement of revenues and direct operating expenses is the responsibility of the Property's management. Our responsibility is to express an opinion on this statement of revenues and direct operating expenses based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of revenues and direct operating expenses is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement of revenues and direct operating expenses. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall statement of revenues and direct operating expenses presentation. We believe that our audit provides a reasonable basis for our opinion. The accompanying financial statement is prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in Form 8-K of American Realty Trust) and, as described in Note 1, is not intended to be a complete presentation of the results of operations. In our opinion, the statement of revenues and direct operating expenses referred to above presents fairly, in all material respects, the revenues and direct operating expenses of The Collection Retail Center for the year ended December 31, 1996, in conformity with generally accepted accounting principles. Farmer, Fuqua, Hunt & Munselle, P.C. Dallas, Texas December 9, 1997 3 THE COLLECTION RETAIL CENTER STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES Year Ended December 31, 1996 REVENUES Net rental revenues $ 1,886,095 Other revenues 356,383 -------------- Total revenues 2,242,478 DIRECT OPERATING EXPENSES Property taxes 149,965 Repairs and maintenance 108,991 Utilities 46,556 Insurance 45,194 Salaries and benefits 30,643 -------------- Total direct operating expenses 381,349 -------------- REVENUES IN EXCESS OF DIRECT OPERATING EXPENSES $ 1,861,129 ==============
The accompanying notes are an integral part of this statement. 4 THE COLLECTION RETAIL CENTER NOTES TO STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES December 31, 1996 NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION The Collection Retail Center (the Center) is a 267,812 square foot wholesale and retail complex consisting of four buildings, located in Denver, Colorado. During 1996, the property was owned by DDC One Properties, Ltd., Interplaza Retail Limited Liability Company and HTDC, Inc. The accompanying financial statement does not include a provision for depreciation and amortization, bad debt expense, interest expense or income taxes. Accordingly, this statement is not intended to be a complete presentation of the results of operations. NOTE 2: ACCOUNTING ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE 3: OTHER REVENUES Other revenues consist of the following: Common area maintenance charges $346,255 Miscellaneous 10,128 -------- $356,383 ========
NOTE 4: SUBSEQUENT EVENT The Center was sold to American Realty Trust, a Georgia corporation, on September 16, 1997. EX-99.1 3 PICADILLY INNS AUDITED STATEMENT OF REVENUES 1 EXHIBIT 99.1 THE PICCADILLY HOTELS STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES YEAR ENDED JUNE 30, 1997 2 Independent Auditors' Report To the Board of Trustees American Realty Trust We have audited the accompanying statement of revenues and direct operating expenses of The Piccadilly Hotels for the year ended June 30, 1997. This statement of revenues and direct operating expenses is the responsibility of the Property's management. Our responsibility is to express an opinion on this statement of revenues and direct operating expenses based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of revenues and direct operating expenses is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement of revenues and direct operating expenses. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall statement of revenues and direct operating expenses presentation. We believe that our audit provides a reasonable basis for our opinion. The accompanying financial statement is prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in Form 8-K of American Realty Trust) and, as described in Note 1, is not intended to be a complete presentation of the results of operations. In our opinion, the statement of revenues and direct operating expenses referred to above presents fairly, in all material respects, the revenues and direct operating expenses of The Piccadilly Hotels for the year ended June 30, 1997, in conformity with generally accepted accounting principles. Farmer, Fuqua, Hunt & Munselle, P.C. Dallas, Texas December 8, 1997 3 THE PICCADILLY HOTELS STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES YEAR ENDED JUNE 30, 1997 REVENUES Room revenues $10,872,023 Food and liquor sales 3,329,040 Other revenues 158,660 ----------- Total revenues 14,359,723 OPERATING EXPENSES Salaries and benefits 4,158,393 Utilities 845,539 Food costs 897,417 Repairs and maintenance 674,063 Direct expenses 612,961 Linens and supplies 526,087 Property taxes 284,953 House laundry 216,726 Insurance 215,730 Liquor costs 182,573 Music 43,227 ----------- Total direct operating expenses 8,637,669 ----------- REVENUES IN EXCESS OF DIRECT OPERATING EXPENSES $ 5,702,054 ===========
The accompanying notes are an integral part of this statement. 4 THE PICCADILLY HOTELS NOTES TO STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES JUNE 30, 1997 NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION The Piccadilly Hotels ("the Hotels") consists of four hotels, two with restaurants, located in Fresno, California. The Hotels are as follows, The Piccadilly Inn - Shaw, a 194-room hotel, which includes Oliver's Restaurant, The Piccadilly Inn - Airport, a 185-room hotel, which includes The Steak & Anchor Restaurant, The Piccadilly Inn - University, a 190-room hotel, which includes its catering and restaurant operation, and The Chateau Inn, a 78-room hotel. During 1997, the Hotels were owned by The Fansler Foundation, a nonprofit public benefit corporation. The accompanying financial statement does not include a provision for depreciation and amortization, bad debt expense, interest expense or income taxes. Accordingly, this statement is not intended to be a complete presentation of the results of operations. NOTE 2: ACCOUNTING ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE 3: OTHER REVENUES Other revenues consist of the following: Miscellaneous hotel revenues $ 78,674 Telephone revenues (net) 74,630 Gift shop income 5,356 ------------ Total $ 158,660 ============
NOTE 4: SUBSEQUENT EVENT The Hotels were sold to American Realty Trust, a Georgia corporation, on October 16, 1997. -----END PRIVACY-ENHANCED MESSAGE-----