| NEWS RELEASE | |
| | |
| FOR IMMEDIATE RELEASE | Contact: |
| | Income Opportunity Realty Investors, Inc. |
| | Investor Relations |
| | (800) 400-6407 |
| | investor.relations@incomeopp-realty.com |
Income Opportunity Realty Investors, Inc. Reports First Quarter 2012 Results
DALLAS (May 15, 2012) Income Opportunity Realty Investors, Inc. (AMEX:IOT), a Dallas-based real estate investment company, today reported results of operations for the first quarter ended March 31, 2012. IOT announced today that the Company reported net income applicable to common shares of $507,000 or $0.12 per diluted earnings per share for the period ended March 31, 2012, as compared to a net loss applicable to common shares of $307,000 or $0.07 per diluted earnings per share for the same period ended 2011.
Land held for development or sale is our sole operating segment. There was no income generated from this segment for the three months ended March 31, 2012, nor for the prior period ended March 31, 2011. Our primary source of revenue is from the interest income on $26.3 million of notes receivable due from affiliated and/or related parties.
Interest income was $1.2 million for the three months ended March 31, 2012. This represents an increase of $0.9 million as compared to the prior period interest income of $0.3 million. The increase was related to the note receivables from Unified Housing Foundation, an affiliated entity. Prior to January I, 2012, on cash flow notes where payments are based upon surplus cash from operations, accrued but unpaid interest income was only recognized to the extent that cash was received. As of January 1, 2012, due to the consistency of cash received on the surplus cash notes over the past several years, we are recording interest as earned.
Property operating expenses were 531,000 for the three months ended March 31, 2012. This represents an increase of $22,000, as compared to the prior period operating expenses of $9,000. There was an increase in the land portfolio of $27,000 and a decrease in the other portfolio of $5,000. The increase in the land portfolio was due to an increase in POA fees billed for 1st quarter and the 2nd half of 2011. The decrease in the other portfolio was due to a decrease in professional fees.
General and administrative expenses were $ 154,000 for the three months ended March 31, 2012. This represents an increase of $60,000 as compared to the prior period general and administrative expenses of $94,000. This increase was related to the $42,000 net income fee due to our Advisor for the current period and an increase in professional services.
Mortgage loan and interest expense was $276,000 for the three months ended March 31, 2012. This represents a decrease of $4,000 as compared to the prior period expense of $280,000.
Earnings from unconsolidated subsidiaries and investees relate to 10T's 10.0% investment in TCI Eton Square, LP. This investment is accounted for under the equity method and recognizes its portion of the current period earnings.
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-realtv.com.
| INCOME OPPORTUNITY REALTY INVESTORS, INC | |
| CONSOLIDATED STATEMENTS OF OPERATIONS | |
| (unaudited) | |
| | | For the Three Months Ended March 31, | |
| | | 2012 | | | 2011 | |
| | | (dollars in thousands, except share and per share amounts) | |
| Revenues: | | | | | | |
| Rental and other property revenues | | $ | - | | | $ | - | |
| | | | | | | | | |
| Expenses: | | | | | | | | |
Property operating expenses (including $29 and $2 for the three months ended 2012 and 2011 respectively from affiliates and related parties) | | | 31 | | | | 9 | |
General and administrative (including $83 and $55 for the three months ended 2012 and 2011 respectively from affiliates and related parties) | | | 154 | | | | 94 | |
| Advisory fee to affiliates | | | 198 | | | | 221 | |
| Total operating expenses | | | 383 | | | | 324 | |
| Operating loss | | | (383 | ) | | | (324 | ) |
| | | | | | | | | |
| Other income (expense): | | | | | | | | |
Interest income (including $1,183 and $294 for the three months ended 2012 and 2011 respectively from affiliates and related parties) | | | 1,183 | | | | 294 | |
| Mortgage and loan interest | | | (276 | ) | | | (280 | ) |
| Earnings from unconsolidated subsidiaries and investees | | | (10 | ) | | | - | |
| Total other income | | | 897 | | | | 14 | |
| Income (loss) from continuing operations before tax | | | 514 | | | | (310 | ) |
| Income tax benefit (expense) | | | (2 | ) | | | 1 | |
| Net income (loss) from continuing operations | | | 512 | | | | (309 | ) |
| Discontinued operations: | | | | | | | | |
| Income (loss) from discontinued operations | | | (7 | ) | | | 3 | |
| Income tax benefit (expense) from discontinued operations | | | 2 | | | | (1 | ) |
| Net income (loss) from discontinued operations | | | (5 | ) | | | 2 | |
| Net income (loss) | | | 507 | | | | (307 | ) |
| | | | | | | | | |
| Earnings per share - basic | | | | | | | | |
| Income (loss) from continuing operations | | $ | 0.12 | | | $ | (0.07 | ) |
| Income (loss) from discontinued operations | | | - | | | | - | |
| Net income (loss) applicable to common shares | | $ | 0.12 | | | $ | (0.07 | ) |
| | | | | | | | | |
| Earnings per share - diluted | | | | | | | | |
| Income (loss) from continuing operations | | $ | 0.12 | | | $ | (0.07 | ) |
| Income (loss) from discontinued operations | | | - | | | | - | |
| Net income (loss) applicable to common shares | | $ | 0.12 | | | $ | (0.07 | ) |
| | | | | | | | | |
| Weighted average common share used in computing earnings per share | | | 4,168,214 | | | | 4,168,214 | |
| Weighted average common share used in computing diluted earnings per share | | | 4,168,214 | | | | 4,168,214 | |
| INCOME OPPORTUNITY REALTY INVESTORS, INC. | |
| CONSOLIDATED BALANCE SHEETS | |
| (unaudited) | |
| | | March 31, | | | December 31, | |
| | | 2012 | | | 2011 | |
| | | (dollars in thousands, except share and par value amounts) | |
| Assets | | | | | | |
| Real estate land holdings, at cost | | $ | 24,511 | | | $ | 24,511 | |
| Total real estate | | | 24,511 | | | | 24,511 | |
| | | | | | | | | |
| Notes and interest receivable from related parties | | | 26,296 | | | | 31,612 | |
| Less allowance for doubtful accounts | | | (1,826 | ) | | | (1,826 | ) |
| Total notes and interest receivable | | | 24,470 | | | | 29,786 | |
| Cash and cash equivalents | | | 12 | | | | 1 | |
| Investments in unconsolidated subsidiaries and investees, subject to sales contract | | | 27 | | | | 37 | |
| Receivable and accrued interest from related parties | | | 57,949 | | | | 52,160 | |
| Other assets | | | 1,545 | | | | 1,546 | |
| Total assets | | $ | 108,514 | | | $ | 108,041 | |
| | | | | | | | | |
| Liabilities and Shareholders’ Equity | | | | | | | | |
| Liabilities: | | | | | | | | |
| Notes and interest payable | | $ | 28,534 | | | $ | 28,588 | |
| Deferred gain (from sales to related parties) | | | 5,127 | | | | 5,127 | |
| Accounts payable and other liabilities | | | 145 | | | | 125 | |
| | | | 33,806 | | | | 33,840 | |
| Commitments and contingencies: | | | | | | | | |
| Shareholders’ equity: | | | | | | | | |
| Common stock, $.01 par value, authorized 10,000,000 shares; issued 4,173,675 shares in 2012 and 2011 | | | 42 | | | | 42 | |
| Treasury stock at cost, 5,461 in 2012 and 2011 | | | (39 | ) | | | (39 | ) |
| Paid-in capital | | | 61,955 | | | | 61,955 | |
| Retained earnings | | | 12,750 | | | | 12,243 | |
| Total shareholders' equity | | | 74,708 | | | | 74,201 | |
| Total liabilities and shareholders' equity | | $ | 108,514 | | | $ | 108,041 | |
