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, 2016. For the three months ended December 31, 2016, the Company reported net loss of $0.3 million or a loss of ($0.07) per share for the period ended December 31, 2016, as compared to a net loss of $0.3 million or a loss of ($0.08) per share for the same period ended 2015.
We had net income applicable to common shares of $2.1 million or $0.50 per diluted earnings per share for the year ended December 31, 2016 compared to a net income applicable to common shares of $1.5 million or $0.36 per diluted earnings per share for the same period ended 2015.
Land held subject to sales contract is our sole operating segment. In November 2015, the Company entered into a sales contract with an unrelated party. The contract was for all of the developable land owned by the Company. Due to the continuing involvement of the seller, including the level of seller financing involved, the transaction is being accounted for under the deposit method. Under the deposit method, no revenue is recognized and the asset remains on the books until the criteria for full revenue recognition are met. There was no income generated from this segment for the years ended December 31, 2016 and December 31, 2015.
The Company incurred no property operating expenses for the year ended December 31, 2016 compared to property operating expenses of $61,000 for the year ended December 31, 2015. This decrease was a direct result of the sale of the land in 2015.
General and administrative expenses were $396,000 for the year ended December 31, 2016. This represents a decrease of $70,000 compared to general and administrative expenses of $466,000 for the year ended December 31, 2015. This decrease was primarily due to a decrease in legal expenses.
Net income fee to related party was $257,000 for the year ended December 31, 2016. This represents an increase of $70,000, as compared to the net income fee of $187,000 for the year ended December 31, 2015. The net income fee paid is calculated at the rate of 7.5% of net income.
Advisory fees were $639,000 for the year ended December 31, 2016, for a decrease of $65,000 compared to advisory fees of $704,000 for the year ended December 31, 2015. 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.
Interest income was $4.5 million for the year ended December 31, 2016, an increase of $0.1 million compared to interest income of $4.4 million for the year ended December 31, 2015.
The Company incurred no mortgage and loan interest expense for the year ended December 31, 2016 compared to $652,000 for the year ended December 31, 2015. This decrease was due to the payoff of the mortgage obligations during 2015.
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, | |||||||||||||||
| 2016 | 2015 | 2014 | |||||||||||||
| (dollars in thousands, except per share amounts) | |||||||||||||||
| Revenues: | |||||||||||||||
| Rental and other property revenues | $ | - | $ | - | $ | - | |||||||||
| Expenses: | |||||||||||||||
| Property operating expenses (including $0 ,$10 and $46 for the year ended 2016, 2015 and 2014, respectively, from related parties) | - | 61 | 50 | ||||||||||||
| General and administrative (including $213, $240 and $237 for the year ended 2016, 2015 and 2014, respectively, from related parties) | 396 | 466 | 573 | ||||||||||||
| Net income fee to related party | 257 | 187 | 203 | ||||||||||||
| Advisory fee to related party | 639 | 704 | 692 | ||||||||||||
| Total operating expenses | 1,292 | 1,418 | 1,518 | ||||||||||||
| Net operating loss | (1,292 | ) | (1,418 | ) | (1,518 | ) | |||||||||
| Other income (expenses): | |||||||||||||||
| Interest income from related parties | 4,494 | 4,376 | 4,729 | ||||||||||||
| Mortgage and loan interest | - | (652 | ) | (706 | ) | ||||||||||
| Total other income | 4,494 | 3,724 | 4,023 | ||||||||||||
| Income before taxes | 3,202 | 2,306 | 2,505 | ||||||||||||
| Income tax expense | (1,121 | ) | (807 | ) | (946 | ) | |||||||||
| Net income | $ | 2,081 | $ | 1,499 | $ | 1,559 | |||||||||
| Earnings per share - basic and diluted | |||||||||||||||
| Net income | $ | 0.50 | $ | 0.36 | $ | 0.37 | |||||||||
| Weighted average common shares used in computing earnings per share | 4,168,214 | 4,168,214 | 4,168,214 | ||||||||||||
| INCOME OPPORTUNITY REALTY INVESTORS, INC. | ||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
| December 31, | December 31, | |||||||||
| 2016 | 2015 | |||||||||
| (dollars in thousands, except par value amount) | ||||||||||
| Assets | ||||||||||
| Real estate land holdings subject to sales contract, at cost | $ | 22,717 | $ | 22,717 | ||||||
| Total real estate | 22,717 | 22,717 | ||||||||
| Notes and interest receivable from related parties | 25,485 | 26,708 | ||||||||
| Less allowance for doubtful accounts | (1,826 | ) | (1,826 | ) | ||||||
| Total notes and interest receivable | 23,659 | 24,882 | ||||||||
| Cash and cash equivalents | 1 | 2 | ||||||||
| Receivable and accrued interest from related parties | 37,768 | 34,313 | ||||||||
| Other assets | 2,257 | 2,390 | ||||||||
| Total assets | $ | 86,402 | $ | 84,304 | ||||||
| Liabilities and Shareholders’ Equity | ||||||||||
| Liabilities: | ||||||||||
| Accounts payable and other liabilities | $ | 23 | $ | 6 | ||||||
| Total liabilities | 23 | 6 | ||||||||
| Shareholders’ equity: | ||||||||||
| Common stock, $0.01 par value, authorized 10,000,000 shares; issued 4,173,675 and outstanding 4,168,214 shares in 2016 and 2015 | 42 | 42 | ||||||||
| Treasury stock at cost, 5,461 shares in 2016 and 2015 | (39 | ) | (39 | ) | ||||||
| Paid-in capital | 61,955 | 61,955 | ||||||||
| Retained earnings | 24,421 | 22,340 | ||||||||
| Total shareholders' equity | 86,379 | 84,298 | ||||||||
| Total liabilities and shareholders' equity | $ | 86,402 | $ | 84,304 | ||||||
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