Income Opportunity Realty Investors, Inc. (NYSE American: IOR), a Dallas-based real estate investment company, today reported results of operations for the third quarter ended September 30, 2019. For the three months ended September 30, 2019, we reported a net income applicable to common shares of $ 1.0 million or $0.25 per share, as compared to net income of $6 million or $1.44 per diluted share for the same period ended 2018.
Our primary business is investing in real estate and mortgage note receivables. Land held for development or sale has been our sole operating segment.
Expenses
General and administrative expenses were $99 thousand for the three months ended September 30, 2019. This represents an increase of $16 thousand, compared to general and administrative expenses of $83 thousand for the three months ended September 30, 2018. This increase was primarily driven by an increase in legal fees of approximately $17 thousand.
Net income fee to related party was $83 thousand for the three months ended September 30, 2019. This represents a decrease of $299 thousand, compared to the net income fee of $382 thousand for the three months ended September 30, 2018. The net income fee paid to our Advisor is calculated at 7.5% of net income.
Advisory fees were $186 thousand for the three months ended September 30, 2019 compared to $168 thousand for the same period in 2018 for an increase of $18 thousand. Advisory fees are computed based on a gross asset fee of 0.0625% per month (0.75% per annum) of the average of the gross asset value.
Other income (expense)
Interest income increased to $1.7 million for the three months ended September 30, 2019 compared to $1.2 million for the same period in 2018. The increase of $500 thousand was primarily due to an increase in the receivable amount owed from our Advisor and other related parties. In the third quarter of 2018, we sold our interest in a land development project which resulted in a pre-income tax gain of $7.3 million and an income tax expense of $1.6 million.
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) | ||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||||
(dollars in thousands, except per share amounts) | ||||||||||||||||||||
Expenses: | ||||||||||||||||||||
General and administrative (including $61 and $67 for the three months and $209 and $201 for the nine months ended 2019 and 2018, respectively, to related parties) | $ | 99 | $ | 83 | $ | 407 | $ | 359 | ||||||||||||
Net income fee to related party | 83 | 383 | 273 | 489 | ||||||||||||||||
Advisory fee to related party | 186 | 168 | 550 | 500 | ||||||||||||||||
Total operating expenses | 368 | 634 | 1,230 | 1,348 | ||||||||||||||||
Net operating loss | (368 | ) | (634 | ) | (1,230 | ) | (1,348 | ) | ||||||||||||
Other income (expenses): | ||||||||||||||||||||
Interest income from related parties | 1,672 | 1,201 | 4,991 | 3,324 | ||||||||||||||||
Other Income | - | - | 147 | - | ||||||||||||||||
Total other income | 1,672 | 1,201 | 5,138 | 3,324 | ||||||||||||||||
Income before gain on sale of real estate land | 1,304 | 567 | 3,908 | 1,976 | ||||||||||||||||
Gain on sale of real estate land | - | 7,323 | - | 7,323 | ||||||||||||||||
Income before income taxes | 1,304 | 7,890 | 3,908 | 9,299 | ||||||||||||||||
Income tax expense | 274 | 1,902 | 821 | 1,902 | ||||||||||||||||
Net income | $ | 1,030 | $ | 5,988 | $ | 3,087 | $ | 7,397 | ||||||||||||
Earnings per share - basic and diluted | ||||||||||||||||||||
Net income | $ | 0.25 | $ | 1.44 | $ | 0.74 | $ | 1.77 | ||||||||||||
Weighted average common shares used in computing earnings per share | 4,168,214 | 4,168,214 | 4,168,214 | 4,168,214 |
INCOME OPPORTUNITY REALTY INVESTORS, INC. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
September 30, | December 31, | |||||||
2019 | 2018 | |||||||
(Unaudited) | (Audited) | |||||||
(dollars in thousands, except par value amount) | ||||||||
Assets | ||||||||
Notes and interest receivable from related parties | $ | 13,578 | $ | 14,030 | ||||
Total notes and interest receivable | 13,578 | 14,030 | ||||||
Cash and cash equivalents | 1 | 4 | ||||||
Receivable and accrued interest from related parties | 85,629 | 82,089 | ||||||
Total assets | $ | 99,208 | $ | 96,123 | ||||
Liabilities and Shareholders’ Equity | ||||||||
Liabilities: | ||||||||
Accounts payable and other liabilities | $ | 24 | $ | 26 | ||||
Total liabilities | 24 | 26 | ||||||
Shareholders’ equity: | ||||||||
Common stock, $0.01 par value, authorized 10,000,000 shares; issued 4,173,675 and outstanding 4,168,214 shares in 2019 and 2018 | 42 | 42 | ||||||
Treasury stock at cost, 5,461 shares in 2019 and 2018 | (39 | ) | (39 | ) | ||||
Paid-in capital | 61,955 | 61,955 | ||||||
Retained earnings | 37,226 | 34,139 | ||||||
Total shareholders' equity | 99,184 | 96,097 | ||||||
Total liabilities and shareholders' equity | $ | 99,208 | $ | 96,123 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20191114005717/en/
Contacts:
Investor Relations
Gene Bertcher (800) 400-6407
investor.relations@incomeopp-realty.com