Exhibit 99.1

 

NEWS RELEASE

 

FOR IMMEDIATE RELEASE

 

 

Contact:

Income Opportunity Realty Investors, Inc. Investor Relations

Gene Bertcher (800) 400-6407 investor.relations@transconrealty-invest.com

 

Transcontinental Realty Investors, Inc. reports full year results for 2018

 

DALLAS (March 29, 2019) Income Opportunity Realty Investors, Inc. (NYSE AMERICAN: IOR), a Dallas-based real estate investment company, today reported results of operations for the year ended December 31, 2018. For the year ended December 31, 2018, the Company reported net income of $8.2 million or ($1.97) per diluted earnings per share for the period ended December 31, 2018, as compared to a net income of $1.5 million or ($0.36) per share for the same period ended 2017.

Land held subject to a sales contract is our sole operating segment. There was no income generated from this segment for the years ended December 31, 2018 and December 31, 2017.

General and administrative expenses were $494,000 for the year ended December 31, 2018. This represents an increase of $56,000 compared to general and administrative expenses of $438,000 for the year ended December 31, 2017. This increase was primarily due to an increase in reimbursements for expenses paid for by IOR’s financial advisor and stock transfer agent fees of approximately $50,000 and $9,000, respectively.

Net income fee to the financial advisor was $631,000 for the year ended December 31, 2018. This represents an increase of $381,000, compared to the net income fee of $250,000 for the year ended December 31, 2017. The net income fee paid is calculated at the rate of 7.5% of net income.

Advisory fees were $685,000 for the year ended December 31, 2018. This represents an increase of $25,000 compared to advisory fees of $660,000 for the year ended December 31, 2017. 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 $4.9 million for the year ended December 31, 2018. This represents an increase of $0.7 million, compared to interest income of $4.2 million for the year ended December 31, 2017. This increase was primarily due to an increase in the receivable amount owed from our Advisor.

Income tax expense was $2.2 million for the year ended December 31, 2018 compared to income tax expense of $1.6 million for the year ended December 31, 2017. Net income before taxes was $10.4 million for the year ended December 31, 2018. This represents an increase of $7.2 million compared to net income before taxes of $3.2 million for the year ended December 31, 2017.

Gain on land sales increased by $7.3 million for the year ended December 31, 2018, compared to the same period a year ago, as a result of the sale of real estate holdings during the third quarter for approximately $22.5 million.

About Transcontinental 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.

1 
 

INCOME OPPORTUNITY REALTY INVESTORS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

 

   For the Years Ended December 31,
   2018   2017   2016
   (dollars in thousands, except per share amounts)

Revenues:

Rental and other property revenues  $—     $—     $—   

Expenses:

Property operating expenses - General and administrative (including $84, $234 and $213 for the year ended 2018, 2017 and 2016, respectively, from related parties)   494    438    396 
Net income fee to related party   631    250    257 
Advisory fee to related party   685    660    639 
Total operating expenses   1,810    1,348    1,292 
Net operating income   (1,810)   (1,348)   (1,292)

Other income (expenses):

Interest income from related parties   4,880    4,237    4,494 
Other income   —      250    —   
Total other income   4,880    4,487    4,494 
Income before gain on sale of real estate land   3,070    3,139    3,202 
Gain on sale of real estate land   7,323    —      —   
Income before taxes   10,393    3,139    3,202 
Income tax (expense) - current   (1,391)   (1,098)   (1,121)
Income tax expense - deferred   (792)   (533)   —   
Net income   $8,210   $1,508   $2,081 

Earnings per share - basic and diluted:

Net income  $1.97   $0.36   $0.50 
Weighted average common shares used in computing earnings per share   4,168,214   $4,168,214   $4,168,214 
2 
 

INCOME OPPORTUNITY REALTY INVESTORS, INC.

CONSOLIDATED BALANCE SHEETS

(Audited) 

 

   December 31,  December 31,
   2018  2017
   (dollars in thousands, except share and par value)
    
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   14,030    14,030 
Total notes and interest receivable   14,030    14,030 
Cash and cash equivalents   4    2 
Receivable and accrued interest from related parties   82,089    49,631 
Other assets   —      1,517 
Total assets  $96,123   $87,897 
           
Liabilities and Shareholders’ Equity          
Liabilities:          
Accounts payable and other liabilities   26    10 
Total liabilities   26    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, 5,641 shares in 2018 and 2017   (39)   (39)
Paid-in capital   61,955    61,955 
Retained earnings   34,139    25,929 
Total shareholders' equity   96,097    87,897 
Total liabilities and shareholders' equity  $96,123   $87,897 

 

 

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