EXHIBIT 99.1
NEWS RELEASE FOR IMMEDIATE RELEASE | Contact: Income Opportunity Realty Investors, Inc. Investors Relations
(800) 400-6407
investor.relations@primeasset.com |
Income Opportunity Realty Investors, Inc. Reports 2005 Results
DALLAS (March 31, 2006) -- Income Opportunity Realty Investors, Inc. (AMEX: IOT), a Dallas-based real estate investment company, today reported net income of $1.4 million or $0.33 per share for the twelve months ended December 31, 2005, compared to $5.4 million and $1.30 per share for the same period in 2004. 2004 results included net income from discontinued operations of $5.5 million, on $1.29 per share.
Key items for the twelve months ended December 31, 2005, compared to the same period in 2004 included:
- Rents were $6.4 million in 2005 and $5.9 million in 2004. The increase is due to a combination of increased occupancy as well as increased rental rates.
- Operating expenses were $3.4 million in 2005 and $3.1 million in 2004. The increase is due to slightly higher rental expenses and general and administrative costs.
- Interest income was $4.1 million in 2005 and $3.3 million in 2004. The increase is due to a full year of interest in 2005 for notes acquired during the first half of 2004 and $218,000 interest on a $7.0 million loan made in August 2005 to Transcontinental Realty Investors, Inc., a related party.
- Interest expense was $3.6 million in both 2005 and 2004.
- Depreciation expense was $691,000 in 2005 and $740,000 in 2004. The decrease was due to the sale of properties in 2004 as well as fully depreciated tenant improvements in 2005 and 2004.
- The advisory fee to affiliate was $738,000 in 2005 and $741,000 in 2004 and the net income fee was $109,000 in 2005 as compared to $440,000 in 2004.
- General and administrative expense was $615,000 in 2005 and $563,000 in 2004. The increase was due principally to professional fees paid in 2005.
- Equity losses in partnerships were $57,000 in 2005 and $3,000 in 2004. IORI is a non-controlling partner in two partnerships.
Income Opportunity Realty Investors, Inc., a Dallas-based real estate investment company, holds a diverse portfolio of real estate properties located in Texas, including office buildings, apartments, and undeveloped land. For more information, go to IORI's website at www.incomeopp-realty.com.
INCOME OPPORTUNITY REALTY INVESTORS, INC.
CONSOLIDATED SATEMENTS OF OPERATIONS
| Years Ended December 31, |
| | 2005 | 2004 | 2003 |
| | (dollars in thousands) |
Property revenue | | | |
Rents and other property revenues | $ 6,447 | $ 5,905 | $ 5,224 |
| | | | |
Operating expenses: | | | |
Property operations | 3,388 | 3,129 | 3,331 |
Depreciation and amortization | 691 | 740 | 816 |
General and administrative | 615 | 563 | 779 |
Advisory fees | 738 | 741 | 424 |
Total operating expenses | 5,432 | 5,173 | 5,350 |
| | | | |
Operating income (loss) | 1,015 | 732 | (126) |
| | | | |
Other income (expense): | | | |
Interest income | 4,135 | 3,325 | 626 |
Mortgage and loan interest | (3,569) | (3,570) | (1,812) |
Provision for asset impairment | -- | -- | (848) |
Recovery of loss provision on receivable from related party | -- | -- | 1,569 |
Net income fee | (109) | (440) | (109) |
Total other income(expense) | 457 | (685) | (574) |
| | | | |
Loss before gain on land sales, equity in earnings of investees and minority interest | 1,472 | 47 | (700) |
| | | | |
Equity in earnings (loss) of investees | (57) | (3) | (7) |
Minority interests | (38) | -- | -- |
| | | | |
Net income (loss) from continuing operations | 1,377 | 44 | (707) |
| | | | |
Income from discontinued operations | -- | 5,384 | 2,053 |
| | | | |
Net income | $ 1,377 | $ 5,428 | $ 1,346 |
| | | | |
Earnings per share | | | |
Net income (loss) from continuing operations | $ 0.33 | $ 0.01 | $ (0.16) |
Discontinued operations | -- | 1.29 | 0.47 |
Net income | $ 0.33 | $ 1.30 | $ 0.31 |
Weighted average Common shares used in computing earnings per share | 4,168,035 | 4,168,035 | 4,316,835 |
INCOME OPPORTUNITY REALTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS
| | December 31, 2005 | December 31, 2004 |
| | (dollars in thousands) |
Assets | |
Real estate held for investment | $ 35,083 | $ 34,988 |
Less--accumulated depreciation | (4,311) | (3,620) |
| | 30,772 | 31,368 |
| | | |
Notes and interest receivable | 63,230 | 54,911 |
Investment in real estate partnerships | 547 | 604 |
Cash and cash equivalents | 201 | 399 |
Receivables from affiliates | 1,853 | 261 |
Other assets | 2,738 | 3,095 |
| | $ 99,341 | $ 90,638 |
| | | |
| | | |
Liabilities and Stockholders' Equity | | |
Liabilities | | |
Notes and interest payable | $ 52,817 | $ 44,571 |
Payables to affiliates | -- | 1,248 |
Other liabilities | 1,344 | 1,529 |
| | 54,161 | 47,348 |
| | | |
Commitments and contingencies | | |
| | | |
Minority interest | 513 | -- |
| | | |
Stockholders' equity | | |
Common Stock, $.01 par value, authorized 10,000,000 shares; issued and outstanding 4,168,035 shares in 2005 and in 2004 | 42 | 42 |
Paid-in capital | 61,955 | 61,955 |
Accumulated deficit | (17,330) | (18,707) |
| | 44,667 | 43,290 |
| | $ 99,341 | $ 90,638 |
