DALLAS, Nov. 4, 1999 (PRIMEZONE) -- Income Opportunity Realty Investors, Inc. (AMEX:IOT) Thursday announced increased rental rates at its commercial properties and the initial leasing of a newly constructed office building generated higher revenue and profits for the third quarter and nine months of 1999.
Third quarter 1999 net income was $779,000, or $.51 per share, on revenue of $4.2 million, as compared to a net loss of $556,000, or $.37 per share, on revenue of $3.4 million for the three months ended September 30, 1998. For the first nine months of 1999, net income was $805,000, or $.53 per share, on revenue of $12 million as compared to a net loss of $513,000, or $.34 per share, on revenue of $10.7 million for the corresponding period in 1998.
Rental income increased to $4.2 million and $12 million in third quarter and first nine months of 1999, as compared to $3.3 million and $10.5 million in the same periods in 1998. Contributing to the increases were higher commercial property rental rates, a decrease in lost rents and the initial leasing of a new office building completed late in 1998.
Interest income was $10,000 and $23,000 for the three and nine months ended Sept. 30, 1999, as compared to $33,000 and $158,000 in the same periods in 1998 due to the collection of IOT's last remaining mortgage note receivable. No gains from the sale of real estate were recorded for either three-month or nine-month period in 1999 or 1998.
Total expenses increased to $4.2 million, from $3.9 million for the three months, and increased to $12.4 million from $11.4 million for the nine months ended September 30, 1999 and 1998, respectively. Of the increases, property operations expense rose to $1.8 million and $5.1 million, as compared to $1.6 million and $4.5 million, and depreciation increased to $690,000 and $2 million as compared to $551,000 and $1.6 million for the three and nine months ended September 30, 1999 and 1998. IOT experienced increased property taxes and higher repair and maintenance costs at its commercial properties and had additional costs related to the leasing of the new office building. Increased depreciation expense was due to the increased depreciation of capital and tenant improvements at commercial properties, rising to $690,000 and $2 million in the third quarter and nine months in 1999 from $551,000 and $1.6 million in 1998. General and administrative expense was for the third quarter approximated that of the same period in 1998, but decreased by $55,000 for the nine-month period in 1999. All other expenses were comparable to the three months and nine months 1998 levels.
Funds from operations (FFO) increased to $1.5 million in the third quarter in 1999, up from a negative $5,000 in 1998 and increased to $2.8 million from $1.1 million for the first nine months of 1999 and 1998, respectively. FFO is defined as net income less gains from the sale of property, plus depreciation and amortization.
Income Opportunity Realty Investors, Inc. is a Dallas-based real estate investment trust. IOT primarily invests in equity interest in real estate through direct ownership and partnerships.
FINANCIAL HIGHLIGHTS
(dollars in thousands, except share and per share data)
For the 3 months For the 9 months
ended Sept. 30, ended Sept. 30,
1999 1998 1999 1998
Revenue $ 4,209 $ 3,354 $12,039 $10,669
Expenses 4,280 3,898 12,389 11,431
Loss from operations (71) (544) (350) (762)
Equity in income
of partnerships 850 (12) 1,155 249
Net income (loss) $ 779 $ (556) $ 805 $ (513)
Earnings per share
Net income (loss) $ .51 $ (.37) $ .53 $ (.34)
Weighted average common shares
used to compute earnings
per share 1,527,751 1,522,49 1,526,873 1,520,976
Funds from operations $ 1,469 $ (5) $ 2,813 $ 1,060
CONTACT: Phyllis J. Wolper
(214) 692-4902 / (800) 400-6407
investor.relations@bcminc.com