DALLAS--(BUSINESS WIRE)--Income Opportunity Realty Investors, Inc. (NYSE MKT: IOT), a Dallas-based real estate investment company, today reported results of operations for the fourth quarter ended December 31, 2014. For the three months ended December 31, 2014, the Company reported net loss of $0.3 million or $0.08 per share for the period ended December 31, 2014, as compared to net income of $3.6 million or $0.86 per share for the same period ended 2013.
We had net income of $1.6 million or $0.37 per diluted earnings per share for the year ended December 31, 2014, as compared to net income applicable to common shares of $5.5 million or $1.33 per diluted earnings per share for the same period ended 2013. The current period net income of $1.6 million includes $0.6 million of general and administrative expenses, $0.2 million of net income fees owed our Advisor and a tax-sharing agreement expense of $0.9 million due to our parent.
Our primary business is investing in real estate and mortgage receivables. The Company has invested in over 150 acres of land held for development or sale 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.
The principal source of revenue for the Company is interest income on over $25.4 million of note receivables due from related parties. During the current period, these notes generated $4.7 million of interest income.
Expenses were lower in the current period with the largest decrease in the Mortgage and Loan Interest expense category. This decrease was due to the Mercer/Travelers land mortgage note buyout in December 2013 that was replaced with a new note with a lower principal balance.
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 | ||||||||||||||||
| For the Years Ended December 31, | ||||||||||||||||
| 2014 | 2013 | 2012 | ||||||||||||||
| (dollars in thousands, except per share amounts) | ||||||||||||||||
| Revenues: | ||||||||||||||||
| Rental and other property revenues | $ | - | $ | - | $ | - | ||||||||||
| Expenses: | ||||||||||||||||
| Property operating expenses (including $46, $51 and $61 for the year ended 2014, 2013 and 2012, respectively, from related parties) | 50 | 87 | 67 | |||||||||||||
| General and administrative (including $237, $234 and $155 for the year ended 2014, 2013 and 2012, respectively, from related parties) | 573 | 734 | 334 | |||||||||||||
| Net income fee to related party | 203 | 695 | 180 | |||||||||||||
| Advisory fee to related party | 692 | 830 | 815 | |||||||||||||
| Total operating expenses | 1,518 | 2,346 | 1,396 | |||||||||||||
| Net operating loss | (1,518 | ) | (2,346 | ) | (1,396 | ) | ||||||||||
| Other income (expenses): | ||||||||||||||||
| Interest income from related parties | 4,729 | 7,129 | 5,183 | |||||||||||||
| Other income | - | 5,804 | - | |||||||||||||
| Mortgage and loan interest | (674 | ) | (1,160 | ) | (1,284 | ) | ||||||||||
| Loan charges | (32 | ) | (830 | ) | - | |||||||||||
| Earnings from unconsolidated subsidiaries and investees | - | - | (37 | ) | ||||||||||||
| Total other income | 4,023 | 10,943 | 3,862 | |||||||||||||
| Income before gain on land sales, non-controlling interest, and taxes | 2,505 | 8,597 | 2,466 | |||||||||||||
| Income from continuing operations before tax | 2,505 | 8,597 | 2,466 | |||||||||||||
| Income tax expense | (946 | ) | (3,063 | ) | (876 | ) | ||||||||||
| Net income from continuing operations | 1,559 | 5,534 | 1,590 | |||||||||||||
| Discontinued operations: | ||||||||||||||||
| Net loss from discontinued operations | - | (24 | ) | (106 | ) | |||||||||||
| Income tax benefit from discontinued operations | - | 8 | 37 | |||||||||||||
| Net loss from discontinued operations | - | (16 | ) | (69 | ) | |||||||||||
| Net income | $ | 1,559 | $ | 5,518 | $ | 1,521 | ||||||||||
| Earnings per share - basic | ||||||||||||||||
| Income from continuing operations | $ | 0.37 | $ | 1.33 | $ | 0.38 | ||||||||||
| Loss from discontinued operations | - | - | (0.02 | ) | ||||||||||||
| Net income | $ | 0.37 | $ | 1.33 | $ | 0.36 | ||||||||||
| Earnings per share - diluted | ||||||||||||||||
| Income from continuing operations | $ | 0.37 | $ | 1.33 | $ | 0.38 | ||||||||||
| Loss from discontinued operations | - | - | (0.02 | ) | ||||||||||||
| Net income | $ | 0.37 | $ | 1.33 | $ | 0.36 | ||||||||||
| Weighted average common shares used in computing earnings per share | 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 | |||||||||||||
| INCOME OPPORTUNITY REALTY INVESTORS, INC. | |||||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||||
| December 31, | December 31, | ||||||||||
| 2014 | 2013 | ||||||||||
| (dollars in thousands, except par value amount) | |||||||||||
| Assets | |||||||||||
| Real estate land holdings, at cost | $ | 25,717 | $ | 24,511 | |||||||
| Total real estate | 25,717 | 24,511 | |||||||||
| Notes and interest receivable from related parties | 27,461 | 30,693 | |||||||||
| Less allowance for doubtful accounts | (1,826 | ) | (1,826 | ) | |||||||
| Total notes and interest receivable | 25,635 | 28,867 | |||||||||
| Cash and cash equivalents | 7 | 3 | |||||||||
| Receivable and accrued interest from related parties | 40,460 | 39,207 | |||||||||
| Other assets | 1,257 | 1,225 | |||||||||
| Total assets | $ | 93,076 | $ | 93,813 | |||||||
| Liabilities and Shareholders’ Equity | |||||||||||
| Liabilities: | |||||||||||
| Notes and interest payable | $ | 10,240 | $ | 12,357 | |||||||
| Accounts payable and other liabilities | 37 | 216 | |||||||||
| Total liabilities | 10,277 | 12,573 | |||||||||
| Shareholders’ equity: | |||||||||||
| Common stock, $0.01 par value, authorized 10,000,000 shares; 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 | 20,841 | 19,282 | |||||||||
| Total shareholders' equity | 82,799 | 81,240 | |||||||||
| Total liabilities and shareholders' equity | $ | 93,076 | $ | 93,813 | |||||||
