Income Opportunity Realty Investors, Inc. (NYSE MKT: IOT), a Dallas-based real estate investment company, today reported results of operations for the third quarter ended September 30, 2014. IOT announced today that the Company reported net income applicable to common shares of $623,000 or $0.15 per diluted earnings per share for the period ended September 30, 2014, as compared to net income applicable to common shares of $625,000 or $0.15 per diluted earnings per share for the same period ended 2013.
Our primary business is investing in real estate and mortgage receivables. Land held for development or sale is our sole operating segment and as of September 30, 2014, our land consisted of approximately 170 acres of contiguous land in the Mercer Crossing development located in Farmers Branch, Texas. The Mercer Crossing development is a 1,200 acre assembly of properties at the demographic center of the Dallas – Fort Worth Metroplex. Surrounded by three major highways and adjacent to current and future public transportation systems, Mercer Crossing is in a prime location for future growth and development.
There was no income generated from the land segment for the three months ended September 30, 2014, nor for the prior period ended 2013, as we continue to hold the land for development or sale.
The principal source of revenue for the Company is interest income on over $25.4 million of note receivables due from related parties. Interest income for the three months ended September 30, 2014, was $1.2 million, representing a $0.2 million decrease as compared to the same period in the previous year mainly due to a decrease in the receivable amount.
Expenses were lower for the three months ended September 30, 2014, as compared to the same period in the previous year. The largest decrease was in the Mortgage and Loan Interest expense category which was $176,000 for the current period, representing a decrease of $121,000. This decrease was due to the Mercer/Travelers land $27.7 million mortgage note buyout in December 2013 that was replaced with a new note with a principal balance of $12.4 million.
Operating expenses and General and Administrative expenses were both lower in the current period primarily due to a decrease in legal fees and professional fees.
About Income Opportunity Realty Investors, Inc.
Income Opportunity Realty Investors, Inc., a Dallas-based real estate investment company, holds a portfolio of equity real estate in Texas, including undeveloped land. The Company invests in real estate through direct equity ownership and partnerships. For more information, visit the Company’s website at www.incomeopp-realty.com.
| INCOME OPPORTUNITY REALTY INVESTORS, INC. | |||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
| (dollars in thousands, except per share amounts) | |||||||||||||||||||||
| Revenues: | |||||||||||||||||||||
| Rental and other property revenues | $ | - | $ | - | $ | - | $ | - | |||||||||||||
| Expenses: | |||||||||||||||||||||
| Property operating expenses (including $13 and $13 for the three months and $37 and $36 for the nine months ended 2014 and 2013, respectively, from related parties) | 13 | 49 | 42 | 72 | |||||||||||||||||
| General and administrative (including $61 and $60 for the three months and $181 and $178 for the nine months ended 2014 and 2013, respectively, from related parties) | 143 | 192 | 422 | 536 | |||||||||||||||||
| Net income fee to related party | 51 | 55 | 152 | 159 | |||||||||||||||||
| Advisory fee to related party | 173 | 209 | 516 | 621 | |||||||||||||||||
| Total operating expenses | 380 | 505 | 1,132 | 1,388 | |||||||||||||||||
| Net operating loss | (380 | ) | (505 | ) | (1,132 | ) | (1,388 | ) | |||||||||||||
| Other income (expenses): | |||||||||||||||||||||
| Interest income from related parties | 1,179 | 1,427 | 3,547 | 4,251 | |||||||||||||||||
| Mortgage and loan interest | (176 | ) | (297 | ) | (538 | ) | (879 | ) | |||||||||||||
| Total other income | 1,003 | 1,130 | 3,009 | 3,372 | |||||||||||||||||
| Net income from continuing operations before tax | 623 | 625 | 1,877 | 1,984 | |||||||||||||||||
| Income tax expense | - | - | - | (6 | ) | ||||||||||||||||
| Net income from continuing operations | 623 | 625 | 1,877 | 1,978 | |||||||||||||||||
| Discontinued operations: | |||||||||||||||||||||
| Net loss from discontinued operations | - | - | - | (18 | ) | ||||||||||||||||
| Gain (loss) on the sale of real estate from discontinued operations | - | - | - | - | |||||||||||||||||
| Income tax benefit from discontinued operations | - | - | - | 6 | |||||||||||||||||
| Net loss from discontinued operations | - | - | - | (12 | ) | ||||||||||||||||
| Net income | $ | 623 | $ | 625 | $ | 1,877 | $ | 1,966 | |||||||||||||
| Earnings per share - basic | |||||||||||||||||||||
| Net income from continuing operations | $ | 0.15 | $ | 0.15 | $ | 0.45 | $ | 0.47 | |||||||||||||
| Net income from discontinued operations | - | - | - | - | |||||||||||||||||
| Net income applicable to common shares | $ | 0.15 | $ | 0.15 | $ | 0.45 | $ | 0.47 | |||||||||||||
| Earnings per share - diluted | |||||||||||||||||||||
| Net income from continuing operations | $ | 0.15 | $ | 0.15 | $ | 0.45 | $ | 0.47 | |||||||||||||
| Net income from discontinued operations | - | - | - | - | |||||||||||||||||
| Net income applicable to common shares | $ | 0.15 | $ | 0.15 | $ | 0.45 | $ | 0.47 | |||||||||||||
| Weighted average common shares used in computing earnings per share | 4,168,214 | 4,168,214 | 4,168,214 | 4,168,214 | |||||||||||||||||
| Weighted average common shares used in computing diluted earnings per share | 4,168,214 | 4,168,214 | 4,168,214 | 4,168,214 | |||||||||||||||||
| INCOME OPPORTUNITY REALTY INVESTORS, INC. | ||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
| (unaudited) | ||||||||||
| September 30, | December 31, | |||||||||
| 2014 | 2013 | |||||||||
| (dollars in thousands, except par value amount) | ||||||||||
| Assets | ||||||||||
| Real estate land holdings, at cost | $ | 24,515 | $ | 24,511 | ||||||
| Total real estate | 24,515 | 24,511 | ||||||||
| Notes and interest receivable from related parties | 26,691 | 30,693 | ||||||||
| Less allowance for doubtful accounts | (1,826 | ) | (1,826 | ) | ||||||
| Total notes and interest receivable | 24,865 | 28,867 | ||||||||
| Cash and cash equivalents | 3 | 3 | ||||||||
| Receivable and accrued interest from related parties | 42,753 | 39,207 | ||||||||
| Other assets | 1,260 | 1,225 | ||||||||
| Total assets | $ | 93,396 | $ | 93,813 | ||||||
| Liabilities and Shareholders’ Equity | ||||||||||
| Liabilities: | ||||||||||
| Notes and interest payable - related parties | $ | 10,240 | $ | 12,357 | ||||||
| Accounts payable and other liabilities | 39 | 216 | ||||||||
| Total liabilities | 10,279 | 12,573 | ||||||||
| Shareholders’ equity: | ||||||||||
| Common stock, $0.01 par value, authorized 10,000,000. issued 4,173,675 and outstanding 4,168,214 shares in 2014 and 2013 | 42 | 42 | ||||||||
| Treasury stock at cost, 5,461 shares in 2014 and 2013 | (39 | ) | (39 | ) | ||||||
| Paid-in capital | 61,955 | 61,955 | ||||||||
| Retained earnings | 21,159 | 19,282 | ||||||||
| Total shareholders' equity | 83,117 | 81,240 | ||||||||
| Total liabilities and shareholders' equity | $ | 93,396 | $ | 93,813 | ||||||
Contacts:
Investor
Relations
Gene Bertcher, 800-400-6407
investor.relations@incomeopp-realty.com
