Income Opportunity Realty Investors, Inc. (AMEX:IOT), a Dallas-based real estate investment company, today reported a net loss applicable to common shares of ($1.2) million or ($0.27) per diluted earnings per share for the nine months ended September 30, 2009, as compared to a net income of $26.2 million or $6.30 per diluted earnings per share which includes a $29.8 million gain on sale from discontinued operations before tax expense for the same period ended 2008.
Our net loss applicable to common shares for the three months ended September 30, 2009 was ($399,000) or ($.09) per diluted earnings per shares as compared to a net income of $6.4 million or $1.54 diluted earnings per share for the same period ended 2008.
Results of operations for the three months ended September 30, 2009 as compared to the same period ended 2008
Rental and other property revenues decreased $47,000 due to an $18,000 decrease within our storage property and in other miscellaneous income fees in 2008 of $29,000.
Property operating expenses increased by $43,000 as compared to the same period ended 2008. The increase is principally due to a third quarter refund of prior year's real estate taxes in 2008.
Interest income decreased by $121,000 as compared to the same period ended 2008. The decrease is due to the receipt of cash on the receivables from Unified Housing Foundation, Inc. The notes are excess cash flow notes. Interest on the notes is recorded as cash is received. Less cash was received in the current period as compared to the prior period.
Mortgage loan and interest expense decreased by $68,000 as compared to prior year. The decrease is due to the continued pay down on the mortgage balance and thus effectively reducing the interest expense.
Gain on involuntary conversion in 2008 was due to insurance proceeds received from the claim filed for tornado damage incurred.
Discontinued operations relate to seven apartment complexes sold in 2008, an office building and a shopping center held for sale during the three months ended September 30, 2009.
Results of operations for the nine months ended September 30, 2009 as compared to the same period ended 2008
Rental and other property revenues decreased by $39,000 due to an increase of $15,000 within our storage property and a decrease of $54,000 in other miscellaneous fee income.
Property operating expenses decreased by $180,000 as compared to the same period ended 2008. The decrease is principally due to property tax refunds received in 2009 for taxes paid in 2008 and electricity was $10,000 higher in 2008 than 2009.
General and administration expenses decreased by $86,000. The decrease was due to accounting and professional fees less in 2009.
Interest income decreased by $904,000 as compared to the same period ended 2008. The decrease is due to the receipt of cash on the receivables from Unified Housing Foundation, Inc. The notes are excess cash flow notes. Interest on the notes is recorded as cash is received. Less cash was received in the current period as compared to the prior period.
Mortgage loan and interest expense decreased by $787,000 as compared to the prior year. The decrease is due to the continued pay down on the mortgage balance and thus effectively reducing the interest expense.
Net income fee to affiliates for 2008 was due to net income and sale of properties in 2008. No fee is booked in 2009 due to a net loss as of October 2009.
Gain on involuntary conversion in 2008 was due to insurance proceeds received from the claim filed for tornado damage incurred.
Discontinued operations relate to seven apartment complexes sold in 2008 and an office building and a shopping center held for sale during the nine months ended September 30, 2009.
Income Opportunity Realty Investors, Inc., a Dallas-based real estate investment company, holds a portfolio of equity real estate in Texas, including office buildings, and undeveloped land. For more information, go to IOT's website at www.incomeopp-realty.com.
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| INCOME OPPORTUNITY REALTY INVESTORS, INC. | |||||||||
| BALANCE SHEETS | |||||||||
| (unaudited) | |||||||||
| September 30, | December 31, | ||||||||
| Â | 2009 | Â | Â | 2008 | Â | ||||
| (dollars in thousands, except share and par value amounts) | |||||||||
| Assets | |||||||||
| Real estate, at cost | $ | 29,504 | $ | 31,765 | |||||
| Less accumulated depreciation | Â | - | Â | Â | (250 | ) | |||
| Total real estate | 29,504 | 31,515 | |||||||
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| Real estate held for sale at cost, net of depreciation | 5,375 | 5,427 | |||||||
| Notes and interest receivable from related parties | 38,971 | 41,432 | |||||||
| Less allowance for doubtful accounts | Â | (1,826 | ) | Â | (1,826 | ) | |||
| Total notes and interest receivable | 37,145 | 39,606 | |||||||
| Cash and cash equivalents | 108 | 52 | |||||||
| Investments in unconsolidated subsidiaries and investees | 74 | 74 | |||||||
| Receivable and accrued interest from related parties | 42,082 | 38,203 | |||||||
| Other assets | Â | 3,363 | Â | Â | 676 | Â | |||
| Total assets | $ | 117,651 | Â | $ | 115,553 | Â | |||
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| Liabilities and Shareholders' Equity | |||||||||
| Liabilities: | |||||||||
| Notes and interest payable | $ | 37,440 | $ | 37,618 | |||||
| Liabilities related to assets held for sale | 4,646 | 4,701 | |||||||
| Accounts payable and other liabilities | Â | 5,944 | Â | Â | 2,460 | Â | |||
| 48,030 | 44,779 | ||||||||
| Commitments and contingencies: | |||||||||
| Shareholders' equity: | |||||||||
| Common Stock, $.01 par value, authorized 10,000,000 shares; issued 4,173,675 shares in 2009 and 2008 | 42 | 42 | |||||||
| Treasury Stock at cost | (39 | ) | (39 | ) | |||||
| Paid-in capital | 61,955 | 61,955 | |||||||
| Retained earnings | Â | 7,663 | Â | Â | 8,816 | Â | |||
| Total shareholders' equity | Â | 69,621 | Â | Â | 70,774 | Â | |||
| Total liabilities and equity | $ | 117,651 | Â | $ | 115,553 | Â | |||
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| INCOME OPPORTUNITY REALTY INVESTORS, INC | |||||||||||||||||||
| STATEMENTS OF OPERATIONS | |||||||||||||||||||
| (unaudited) | |||||||||||||||||||
| Â | Â | Â | For the Three Months Ended | Â | For the Nine Months Ended | ||||||||||||||
| Â | 2009 | Â | Â | Â | 2008 | Â | Â | 2009 | Â | Â | Â | 2008 | Â | ||||||
| (dollars in thousands, except share and per share amounts) | |||||||||||||||||||
| Revenues: | |||||||||||||||||||
| Rental and other property revenues | $ | 68 | $ | 115 | $ | 208 | $ | 247 | |||||||||||
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| Expenses: | |||||||||||||||||||
| Property operating expenses | 65 | 22 | 148 | 328 | |||||||||||||||
| Depreciation and amortization | - | 12 | 40 | 36 | |||||||||||||||
| General and administrative | 31 | 4 | 189 | 275 | |||||||||||||||
| Advisory fee to affiliates | Â | 213 | Â | Â | 218 | Â | Â | 660 | Â | Â | 667 | Â | |||||||
| Total operating expenses | Â | 309 | Â | Â | 256 | Â | Â | 1,037 | Â | Â | 1,306 | Â | |||||||
| Operating loss | (241 | ) | (141 | ) | (829 | ) | (1,059 | ) | |||||||||||
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| Other income (expense): | |||||||||||||||||||
| Interest income | 364 | 485 | 1,115 | 2,019 | |||||||||||||||
| Mortgage and loan interest | (507 | ) | (575 | ) | (1,608 | ) | (2,395 | ) | |||||||||||
| Gain on involuntary conversion | - | 7,434 | - | 7,434 | |||||||||||||||
| Earnings from unconsolidated subsidiaries and investees | - | (2 | ) | - | (434 | ) | |||||||||||||
| Net income fee to affiliates | Â | - | Â | Â | (1,055 | ) | Â | - | Â | Â | (873 | ) | |||||||
| Total other income (expenses) | Â | (143 | ) | Â | 6,287 | Â | Â | (493 | ) | Â | 5,751 | Â | |||||||
| Income (loss) before gain on land sales, non-controlling interest, and taxes | Â | (384 | ) | Â | 6,146 | Â | Â | (1,322 | ) | Â | 4,692 | Â | |||||||
| Income (loss) from continuing operations before tax | (384 | ) | 6,146 | (1,322 | ) | 4,692 | |||||||||||||
| Income tax benefit (expense) | Â | (5 | ) | Â | 86 | Â | Â | 66 | Â | Â | 7,538 | Â | |||||||
| Net income (loss) from continuing operations | Â | (389 | ) | Â | 6,232 | Â | Â | (1,256 | ) | Â | 12,230 | Â | |||||||
| Discontinued operations: | |||||||||||||||||||
| Income (loss) from discontinued operations | (15 | ) | 248 | 159 | (8,251 | ) | |||||||||||||
| Gain on sale of real estate from discontinued operations | - | - | - | 29,789 | |||||||||||||||
| Income tax benefit (expense) from discontinued operations | Â | 5 | Â | Â | (87 | ) | Â | (56 | ) | Â | (7,538 | ) | |||||||
| Net income (loss) | (399 | ) | 6,393 | (1,153 | ) | 26,230 | |||||||||||||
| Preferred dividend requirement | Â | - | Â | Â | - | Â | Â | - | Â | Â | - | Â | |||||||
| Net income (loss) applicable to common shares | $ | (399 | ) | $ | 6,393 | Â | $ | (1,153 | ) | $ | 26,230 | Â | |||||||
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| Earnings per share - basic | |||||||||||||||||||
| Income (loss) from continuing operations | $ | (0.09 | ) | $ | 1.50 | $ | (0.29 | ) | $ | 2.94 | |||||||||
| Discontinued operations | Â | - | Â | Â | 0.04 | Â | Â | 0.02 | Â | Â | 3.36 | Â | |||||||
| Net income (loss) applicable to common shares | $ | (0.09 | ) | $ | 1.54 | Â | $ | (0.27 | ) | $ | 6.30 | Â | |||||||
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| Earnings per share - diluted | |||||||||||||||||||
| Income (loss) from continuing operations | $ | (0.09 | ) | $ | 1.50 | $ | (0.29 | ) | $ | 2.94 | |||||||||
| Discontinued operations | Â | - | Â | Â | 0.04 | Â | Â | 0.02 | Â | Â | 3.36 | Â | |||||||
| Net income (loss) applicable to common shares | $ | (0.09 | ) | $ | 1.54 | Â | $ | (0.27 | ) | $ | 6.30 | Â | |||||||
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| Weighted average common share used in computing earnings per share | 4,168,214 | 4,162,574 | 4,168,214 | 4,162,640 | |||||||||||||||
| Weighted average common share used in computing diluted earnings per share | 4,168,214 | 4,162,574 | 4,168,214 | 4,162,640 | |||||||||||||||
Contacts:
Income Opportunity Realty Investors, Inc.
Investor
Relations, 800-400-6407
investor.relations@primeasset.com
