DALLAS--(BUSINESS WIRE)--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, 2018. For the three months ended September 30, 2018, we reported a net income applicable to common shares of $5.9 million or $1.44 per diluted share for the three months ended September 30, 2018, as compared to net income of $0.6 million or $0.15 per diluted share for the same period ended 2017.
Our primary business is investing in real estate and mortgage note receivables. Land held for development or sale has been our sole operating segment.
Revenues
Land held subject to a sales contract has been our sole operating segment. There was no operating revenue generated from this segment for the three months ended September 30, 2018, as well as the similar period in 2017. As of September 30, 2018, all land was sold and in the three months ended September 30, 2018 a gain in the amount of $7.3 million was recognized.
Expenses
There were no property operating expenses for the three months ended September 30, 2018 as well as in the similar period in 2017.
General and administrative expenses were $83,000 for the three months ended September 30, 2018. This represents a decrease of $10,000, as compared to the prior period general and administrative expenses of $93,000. This decrease was primarily due to an increase in audit fees and cost reimbursements to our Advisor of approximately $2,000 offset by a decrease in legal fees of approximately $12,000.
Advisory fees were $168,000 for the three months ended September 30, 2018 compared to $166,000 for the same period of 2017 for an increase of $2,000. 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.
Net income fee to related party increased $330,000 to $383,000 for the three months ended September 30, 2018 compared to the prior period. The net income fee paid to our Advisor is calculated at 7.5% of net income.
Other income (expense)
Interest income increased to $1.2 million for the three months ended September 30, 2018 compared to $0.9 million for the same period of 2017. The increase of $0.3 million was due primarily to increase in advisory fee balance.
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, | |||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||||
| (dollars in thousands, except per share amounts) | ||||||||||||||||||
| Revenues: | ||||||||||||||||||
| Rental and other property revenues | $ | - | $ | - | $ | - | $ | - | ||||||||||
| Expenses: | ||||||||||||||||||
| Property operating expenses | - | - | - | - | ||||||||||||||
| General and administrative (including $67 and $63 for the three months and $201 and $174 for the nine months ended 2018 and 2017, respectively, to related parties) | 83 | 93 | 359 | 342 | ||||||||||||||
| Net income fee to related party | 383 | 53 | 489 | 189 | ||||||||||||||
| Advisory fee to related party | 168 | 166 | 500 | 493 | ||||||||||||||
| Total operating expenses | 634 | 312 | 1,348 | 1,024 | ||||||||||||||
| Net operating loss | (634 | ) | (312 | ) | (1,348 | ) | (1,024 | ) | ||||||||||
| Other income (expenses): | ||||||||||||||||||
| Interest income from related parties | 1,201 | 924 | 3,324 | 3,133 | ||||||||||||||
| Other Income | - | - | - | 250 | ||||||||||||||
| Total other income | 1,201 | 924 | 3,324 | 3,383 | ||||||||||||||
| Income before gain on sale of real estate land | 567 | 612 | 1,976 | 2,359 | ||||||||||||||
| Gain on sale of real estate land | 7,323 | - | 7,323 | - | ||||||||||||||
| Income before taxes | 7,890 | 612 | 9,299 | 2,359 | ||||||||||||||
| Income tax (expense) - current | (1,902 | ) | - | (1,902 | ) | - | ||||||||||||
| Net income | $ | 5,988 | $ | 612 | $ | 7,397 | $ | 2,359 | ||||||||||
| Earnings per share - basic and diluted | ||||||||||||||||||
| Net income | $ | 1.44 | $ | 0.15 | $ | 1.77 | $ | 0.57 | ||||||||||
| 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, | |||||||||
| 2018 | 2017 | |||||||||
| (unaudited) | (audited) | |||||||||
| (dollars in thousands, except par value amount) | ||||||||||
| Assets | ||||||||||
| Real estate land holdings subject to sales contract, at cost | $ | - | $ | 22,717 | ||||||
| Total real estate | - | 22,717 | ||||||||
| Notes and interest receivable from related parties | 13,577 | 14,030 | ||||||||
| Total notes and interest receivable | 13,577 | 14,030 | ||||||||
| Cash and cash equivalents | 1 | 2 | ||||||||
| Receivable and accrued interest from related parties | 81,720 | 49,631 | ||||||||
| Other assets | - | 1,517 | ||||||||
| Total assets | $ | 95,298 | $ | 87,897 | ||||||
| Liabilities and Shareholders’ Equity | ||||||||||
| Liabilities: | ||||||||||
| Accounts payable and other liabilities | $ | 14 | $ | 10 | ||||||
| Total liabilities | 14 | 10 | ||||||||
| Shareholders’ equity: | ||||||||||
| Common stock, $0.01 par value, authorized 10,000,000 shares; issued 4,173,675 and outstanding 4,168,214 shares in 2018 and 2017 | 42 | 42 | ||||||||
| Treasury stock at cost, 5,461 shares in 2018 and 2017 | (39 | ) | (39 | ) | ||||||
| Paid-in capital | 61,955 | 61,955 | ||||||||
| Retained earnings | 33,326 | 25,929 | ||||||||
| Total shareholders' equity | 95,284 | 87,887 | ||||||||
| Total liabilities and shareholders' equity | $ | 95,298 | $ | 87,897 | ||||||
