The InterGroup(INTG) - 2024 Q3 - Quarterly Report

Financial Performance - The company reported a net loss of $3,861,000 for the three months ended March 31, 2024, compared to a net loss of $614,000 for the same period in 2023, primarily due to a net loss in marketable securities of $811,000 and repayment of an SBA loan of $453,000[100]. - For the nine months ended March 31, 2024, the company reported a net loss of $7,634,000, compared to a net income of $752,000 for the same period in 2023, primarily due to decreased room revenues and increased operating expenses[107]. - Hotel revenues for the nine months ended March 31, 2024, totaled $32,076,000, a decrease from $32,632,000 in the same period in 2023, with room revenues decreasing by $1,038,000[108]. Hotel Operations - Hotel operations generated a net loss of $1,958,000 for the three months ended March 31, 2024, compared to a net loss of $260,000 for the same period in 2023, attributed to increased mortgage interest expense and operating expenses[101]. - Total hotel revenues for the three months ended March 31, 2024, were $10,758,000, a 3% increase from $10,430,000 in the same period in 2023, with room revenues increasing by $50,000 and food and beverage revenues increasing by $180,000[102][103]. - The average daily room rate for the hotel decreased by $2 to $232, while the average occupancy remained at 78%, resulting in a RevPAR decrease of $1 to $182 for the three months ended March 31, 2024[104]. Real Estate Operations - Revenue from real estate operations increased to $4,125,000 for the three months ended March 31, 2024, from $3,932,000 in the same period in 2023, primarily due to decreased vacancy at a Missouri property undergoing renovation[105]. - Revenue from real estate operations for the nine months ended March 31, 2024, increased to $12,638,000 from $11,991,000 in the same period in 2023, while operating expenses increased to $7,774,000 from $7,695,000[111]. Marketable Securities - The company experienced a net loss on marketable securities of $811,000 for the three months ended March 31, 2024, compared to a net gain of $866,000 for the same period in 2023[106]. - The company had a net gain on marketable securities of $164,000 for the nine months ended March 31, 2024, compared to a net gain of $1,440,000 for the same period in 2023[112]. - The net loss on marketable securities for the three months ended March 31, 2024, was $811,000, compared to a gain of $866,000 in the same period of 2023[116]. Cash and Financial Obligations - The company had cash and cash equivalents of $7,763,000 as of March 31, 2024, an increase from $5,960,000 as of June 30, 2023[117]. - The total outstanding balance of the senior mortgage and mezzanine loans as of March 31, 2024, was $106,045,000, which was extended to January 1, 2025[123]. - The company’s total material financial obligations as of March 31, 2024, amounted to $225,018,000, including $195,370,000 in mortgage and subordinated notes payable[130]. Renovations and Future Expectations - The company completed renovations on approximately 402 guestrooms as of March 31, 2024, with plans to finish by mid-June 2024, anticipating increased occupancy and average daily rates[126]. - The company anticipates that total revenues will increase following the completion of renovations, despite having approximately 75 guest rooms out of service since November 2022[126]. Tax and Impairment Considerations - The income tax benefit for the three months ended March 31, 2024, and 2023 is primarily due to Portsmouth's pretax loss, which includes net losses from the Hotel and InterGroup[135]. - The company assesses the realizability of deferred tax assets quarterly, recognizing a valuation allowance when it is more likely than not that some or all deferred tax assets are not realizable[136]. - There were no indicators of impairment on hotel investments or intangible assets, resulting in no impairment losses recorded during the nine months ended March 31, 2024, and 2023[137]. Market Risk and Reporting - The company is not required to provide detailed market risk disclosures as it qualifies as a smaller reporting company[138].