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Resource America, Inc. Reports Operating Results for the First Fiscal Quarter Ended December 31, 2012

Resource America, Inc. Reports Operating Results for the First Fiscal Quarter 
Ended December 31, 2012 
PHILADELPHIA, PA -- (Marketwire) -- 02/05/13 --  Resource America,
Inc. (NASDAQ: REXI) (the "Company") reported adjusted income from
continuing operations attributable to common shareholders, net of
tax, a non-GAAP measure, of $1.4 million, or $0.06 per common
share-diluted, for the first fiscal quarter ended December 31, 2012
as compared to an adjusted loss from continuing operations
attributable to common shareholders, net of tax, of $2.6 million, or
$0.13 per common share-diluted, for the first fiscal quarter ended
December 31, 2011. A reconciliation of the Company's reported GAAP
(loss) income from continuing operations before taxes to adjusted
income (loss) from continuing operations attributable to common
shareholders, net of tax, a non-GAAP measure, is included as Schedule
I to this release.  
The Company reported a GAAP net loss attributable to common
shareholders of $1.4 million, or $0.07 per common share-diluted, for
the first fiscal quarter ended December 31, 2012 as compared to net
income attributable to common shareholders of $185,000, or $0.01 per
common share-diluted, for the first fiscal quarter ended December 31,
2011. 
Jonathan Cohen, CEO and President, commented, "Resource America's
first fiscal quarter that ended December 31, 2012 was a solid one
that reflects our progress and makes us excited about our prospects.
Compared to just a year ago, our assets under management have
increased by $2.0 billion, from $13.3 billion to $15.3 billion. In
the first fiscal quarter, Resource Capital Corp and Resource Real
Estate Opportunity REIT collectively raised over $90.0 million in new
capital, which builds those companies and provides us with
substantial future management fees. CVC Credit Partners, our
corporate credit joint venture, closed a $450.0 million CLO during
the first fiscal quarter and another $400.0 million CLO in January
2013, growing that business which is a top performer in a booming
industry. Our balance sheet remains solid, with substantial liquidity
and little debt, and we are generating positive adjusted operating
cash earnings. All of these are positive trends that we expect to
build upon." 
Assets Under Management 
Th
e following table details the Company's assets under management by
operating segment, which increased by $2.0 billion (15%) from
December 31, 2011 to December 31, 2012: 


 
                                                                      
                                       December 31,      December 31, 
                                           2012              2011     
                                     ---------------   ---------------
      Financial fund management      $  13.0 billion   $  11.1 billion
      Real estate                        1.8 billion       1.6 billion
      Commercial finance                 0.5 billion       0.6 billion
                                     -------           -------        
                                     $  15.3 billion   $  13.3 billion
                                     =======           =======        

 
A description of how the Company calculates assets under management is
set forth in Item 1 of the Company's Annual Report on Form 10-K for
the fiscal year ended September 30, 2012. 
Highlights for the First Fiscal Quarter Ended December 31, 2012 and
Recent Developments 
REAL ESTATE: 


 
--  Fundraising:
    --  Resource Real Estate Opportunity REIT, Inc. ("RRE Opportunity
        REIT") raised a record $42.2 million during the first fiscal
        quarter ended December 31, 2012. Through January 31, 2013, RRE
        Opportunity REIT has raised approximately $224.8 million in total
        equity capital.
    --  Resource Capital Corp. ("RSO") raised $49.8 million of common and
        preferred equity capital during the first fiscal quarter ended
        December 31, 2012.
--  First Fiscal Quarter RRE Activity:
    --  In October 2012, RRE sold a $16.1 million multifamily property on
        behalf of a joint venture with an existing partner in which RSO is
        a member. In connection with this sale, the Company received a
        $114,000 disposition fee.
    --  In November 2012, on behalf of one of RRE's sponsored limited
        partnerships, acquired a multifamily rental property for $4.6
        million. In connection with this purchase, the Company received a
        $47,000 acquisition fee and will receive asset and property
        management fees in the future.
    --  In December 2012, on behalf of RRE Opportunity REIT, acquired four
        multifamily rental apartment properties for $24.3 million. In
        connection with this purchase, the Company received $493,000 in
        acquisition fees and will receive asset and property management
        fees in the future.
    --  In December 2012, in connection with an additional $8.0 million of
        capital funding for a property acquired in June 2012 on behalf of
        RRE Opportunity REIT, the Company received an additional
        acquisition fee totaling $159,000.
--  Property Management: Resource Real Estate Management, Inc., the
    Company's property management subsidiary, increased the apartment
    units it manages to 19,267 units at 66 properties as of December 31,
    2012 from 15,204 units at 55 properties as of December 31, 2011.
--  Increased Assets Under Management: The Company's real estate operating
    segment increased its assets under management at December 31, 2012 to
    $1.8 billion, an increase of $185.0 million, or 11%, from December 31,
    2011.
--  Increased Revenues: Real estate revenues increased 52% to $13.2
    million for the first fiscal quarter ended December 31, 2012 as
    compared to $8.7 million for the first fiscal quarter ended December
    31, 2011.

  
FINANCIAL FUND MANAGEMENT: 


 
--  New Collateralized Loan Obligation ("CLO"): In November 2012, CVC
    Credit Partners, L.P., ("CCP"), the Company's global joint venture
    with CVC Capital Partners SICAV-FIS, S.A. ("CVC"), closed Apidos CLO X
    (par value $450.0 million). In January 2013, CCP closed Apidos CLO XI
    (par value $400.0 million). In connection with these CLOs, CCP expects
    to receive approximately $5.9 million annually in asset management
    fees in the future.
--  Increased Assets Under Management: The Company's financial fund
    management operating segment increased its assets under management at
    December 31, 2012 to $13.0 billion, an increase of $1.9 billion, or
    17%, from December 31, 2011.

  
COMMERCIAL FINANCE: 


 
--  Lease Origination/Platform Growth. LEAF Commercial Capital, Inc.
    ("LEAF"), the Company's equipment leasing joint venture, continued to
    grow its lease origination and servicing operations during the first
    fiscal quarter ended December 31, 2012.
    --  Lease and loan origination volume increased by 55% compared to the
        first fiscal quarter ended December 31, 2011; and
    --  LEAF's commercial finance assets as of December 31, 2012 increased
        by 69% from December 31, 2011.
--  Increased Warehouse Capacity: LEAF expanded and renewed for two years,
    its Guggenheim Securities arranged revolving warehouse line as of
    December 31, 2012. This revolving line of credit was expanded to
    $192.0 million with the other existing facility participants, Well
    Fargo Capital Finance
 and Natixis increasing their commitment to LEAF
    as well. This renewal increases LEAF's overall warehouse capacity to
    over $340.0 million and these lines of credit provide liquidity to
    fund lease originations prior to utilizing the term securitization
    market for permanent financing.

  
CORPORATE/OTHER: 


 
--  Share Repurchase Plan: In August 2012, the Company's Board of
    Directors authorized the Company to repurchase up to 5% of the
    Company's outstanding common shares. Since August 2012, the Company
    has repurchased over 382,000 shares at an average price of $6.53 under
    this plan.
--  Senior Note Modification: In December 2012, the Company modified $10.0
    million of outstanding senior notes to extend the maturity date to
    March 31, 2015.
--  Corporate Credit Facility Modifications: In October 2012, the Company
    extended the maturity of its existing $3.5 million revolving credit
    facility with Republic Bank from December 2013 to December 2014. In
    November 2012, the Company extended the maturity of its revolving
    credit facility with TD Bank from August 2013 to December 2014 and
    eliminated the 6% interest rate floor.
--  Dividends: The Company's Board of Directors authorized the payment on
    January 31, 2013 of a $0.03 cash dividend per share on the Company's
    common stock to holders of record as of the close of business on
    January 18, 2013. RSO declared a cash dividend of $0.20 per common
    share for its fourth fiscal quarter ended December 31, 2012.

  
Resource America, Inc. is a specialized asset management company that
uses industry specific expertise to evaluate, originate, service and
manage investment opportunities for its own account and for outside
investors in the real estate, financial fund management and
commercial finance sectors as well as our joint ventures. 
For more information, please visit our website at
www.resourceamerica.com or contact investor relations at
pkamdar@resourceamerica.com. 
Statements made in this release include forward-looking statements,
which involve substantial risks and uncertainties. The Company's
actual results, performance or achievements could differ materially
from those expressed or implied in this release and its other reports
filed with the Securities and Exchange Commission. For information
pertaining to risks relating to these forward-looking statements,
reference is made to the section "Risk Factors" contained in Item 1A
of the Company's Annual Report on Form 10-K and in other of its
public filings with the Securities and Exchange Commission. The
Company undertakes no obligation to update or revise any
forward-looking statements to reflect new or changing information or
events except as may be required by law. 
A registration statement relating to securities offered by RRE
Opportunity REIT was declared effective by the SEC on June 16, 2010.
A written prospectus relating to these securities may be obtained by
contacting Resource Securities, Inc., 2005 Market Street, 15th Floor,
Philadelphia, PA 19103. 
This press release shall not constitute an offer to sell or a
solicitation of an offer to buy any of the securities described
herein, nor shall there be any sale of these securities in any state
or jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities
laws of any such state or jurisdiction. 
The remainder of this release contains the Company's unaudited
consolidated balance sheets, consolidated statements of operations
and consolidated statements of cash flows and reconciliation of GAAP
(loss) income from continuing operations before taxes to adjusted
income (loss) from continuing operations attributable to common
shareholders, net of tax. 


 
                                                                            
                           RESOURCE AMERICA, INC.                           
                        CONSOLIDATED BALANCE SHEETS                         
                     (in thousands, except share data)                      
                                                                            
                                               December 31,   September 30, 
                                                    2012           2012     
                                               -------------  ------------- 
                                                (unaudited)                 
ASSETS                                                                      
  Cash                                         $      11,899  $      19,393 
  Restricted cash                                        638            642 
  Receivables                                            468          3,554 
  Receivables from managed entities and                                     
   related parties, net                               38,685         41,051 
  Investments in real estate, net                     18,041         19,149 
  Investment securities, at fair value                25,533         22,532 
  Investments in unconsolidated loan manager          37,221         36,356 
  Investments in unconsolidated entities              13,156         12,993 
  Property and equipment, net                          2,590          2,732 
  Deferred tax assets, net                            35,373         34,565 
  Other assets                                         6,726          3,776 
                                               -------------  ------------- 
    Total assets                               $     190,330  $     196,743 
                                               =============  ============= 
                                                                            
LIABILITIES AND EQUITY                                                      
Liabilities:                                                                
  Accrued expenses and other liabilities       $      21,556  $      23,042 
  Payables to managed entities and related                                  
   parties                                             3,567          4,380 
  Borrowings                                          22,610         23,020 
                                               -------------  ------------- 
    Total liabilities                                 47,733         50,442 
                                               -------------  ------------- 
                                                                            
Commitments and contingencies                                               
                                                                            
Equity:                                                                     
  Preferred stock, $1.00 par value, 1,000,000                               
   shares authorized; none outstanding                    --             -- 
  Common stock, $.01 par value, 49,000,000                                  
   shares authorized; 30,069,822 and                                        
   29,866,664 shares issued (including                                      
   nonvested restricted stock of 604,353 and                                
   403,195), respectively                                295            294 
  Additional paid-in capital                         286,048        285,844 
  Accumulated deficit                                (27,137)       (24,508)
  Treasury stock, at cost; 9,914,090 and                                    
   9,756,955 shares, respectively                   (103,472)      (102,457)
  Accumulated other comprehensive loss               (13,416)       (13,080)
                                               -------------  ------------- 
    Total stockholders' equity                       142,318        146,093 
  Noncontrolling interests                               279            208 
                                               -------------  ------------- 
    Total equity                                     142,597        146,301 
                                               -------------  ------------- 
                                               $     190,330  $     196,743 
                                               =============  ============= 
                                                        
                    
                                                                            
                                                                            
                           RESOURCE AMERICA, INC.                           
                   CONSOLIDATED STATEMENTS OF OPERATIONS                    
                   (in thousands, except per share data)                    
                                (unaudited)                                 
                                                                            
                                                    Three Months Ended      
                                                       December 31,         
                                               ---------------------------- 
                                                    2012           2011     
                                               -------------  ------------- 
REVENUES:                                                                   
Real estate                                    $      13,154  $       8,666 
Financial fund management                              2,675          6,579 
Commercial finance                                      (124)         3,419 
                                               -------------  ------------- 
                                                      15,705         18,664 
                                               -------------  ------------- 
COSTS AND EXPENSES:                                                         
Real estate                                            7,998          7,192 
Financial fund management                              1,017          5,804 
Commercial finance                                       (49)         1,963 
General and administrative                             2,256          2,896 
Gain on sale of leases and loans                          --            (37)
Provision for credit losses                            5,152          2,250 
Depreciation and amortization                            492          2,061 
                                               -------------  ------------- 
                                                      16,866         22,129 
                                               -------------  ------------- 
OPERATING LOSS                                        (1,161)        (3,465)
                                               -------------  ------------- 
                                                                            
OTHER INCOME (EXPENSE):                                                     
Gain on deconsolidation and sale of                                         
 subsidiaries                                             --          8,749 
Loss on extinguishment of debt                            --         (2,190)
Gain on sale of investment securities, net                --             58 
Interest expense                                        (522)        (2,974)
Other income, net                                        588            559 
                                               -------------  ------------- 
                                                          66          4,202 
                                               -------------  ------------- 
(Loss) income from continuing operations                                    
 before taxes                                         (1,095)           737 
Income tax (benefit) provision                          (241)           154 
                                               -------------  ------------- 
(Loss) income from continuing operations                (854)           583 
Loss from discontinued operations, net of tax             (6)           (20)
                                               -------------  ------------- 
Net (loss) income                                       (860)           563 
Add: net income attributable to noncontrolling                              
 interests                                              (587)          (378)
                                               -------------  ------------- 
Net (loss) income attributable to common                                    
 shareholders                                  $      (1,447) $         185 
                                               =============  ============= 
                                                                            
Amounts attributable to common shareholders:                                
(Loss) income from continuing operations       $      (1,441) $         205 
Discontinued operations                                   (6)           (20)
                                               -------------  ------------- 
Net (loss) income                              $      (1,447) $         185 
                                               =============  ============= 
                                                                            
Basic (loss) earnings per share:                                            
Continuing operations                          $       (0.07) $        0.01 
Discontinued operations                                   --             -- 
                                               -------------  ------------- 
Net (loss) income                              $       (0.07) $        0.01 
                                               =============  ============= 
Weighted average shares outstanding                   20,077         19,641 
                                               =============  ============= 
                                                                            
Diluted (loss) earnings per share:                                          
Continuing operations                          $       (0.07) $        0.01 
Discontinued operations                                   --             -- 
                                               -------------  ------------- 
Net (loss) income                              $       (0.07) $        0.01 
                                               =============  ============= 
Weighted average shares outstanding                   20,077         20,039 
                                               =============  ============= 
                                                                            
                                                                            
                                                                            
                           RESOURCE AMERICA, INC.                           
                   CONSOLIDATED STATEMENTS OF CASH FLOWS                    
                               (in thousands)                               
                                                                            
                                                    Three Months Ended      
                                                       December 31,         
                                               ---------------------------- 
                                                    2012           2011     
                                               -------------  ------------- 
CASH FLOWS FROM OPERATING ACTIVITIES:                                       
Net (loss) income                              $        (860) $         563 
Adjustments to reconcile net (loss) income to                               
 net cash used in operating activities:                                     
  Depreciation and amortization                          550          3,087 
  Provision for credit losses                          5,152          2,250 
  Unrealized gain on trading securities                 (164)            -- 
  Equity in earnings of unconsolidated                                      
   entities                                           (1,201)          (557)
  Distributions from unconsolidated entities           1,011          1,163 
  Gain on sale of leases and loans                        --            (37)
  Gain on sale of investment securities, net            (307)           (58)
  Gain on sale of assets                                (831)            -- 
  Gain on sale and deconsolidation of                                       
   subsidiaries                                           --         (8,749)
  Loss on extinguishment of debt                          --          2,190 
  Deferred income tax (benefit) provision               (241)           154 
  Equity-based compensation issued                       205            498 
  Equity-based compensation received                    (206)            -- 
Trading securities purchases and sales, net           (1,828)            -- 
Loss from discontinued operations                          6             20 
Changes in operating assets and liabilities           (4,666)        (1,432)
                                               -------------  ------------- 
Net cash used in operating activities                 (3,380)       
   (908)
                                               -------------  ------------- 
                                                                            
CASH FLOWS FROM INVESTING ACTIVITIES:                                       
Capital expenditures                                     (80)          (106)
Payments received on real estate loans and                                  
 real estate                                             712          1,550 
Investments in real estate and unconsolidated                               
 real estate entities                                 (1,012)          (127)
Purchase of commercial finance assets                     --        (18,483)
Principal payments received on leases and                                   
 loans                                                     3          9,031 
Cash divested on deconsolidation of LEAF                  --         (2,284)
Purchase of investments                               (1,323)          (600)
Proceeds from sale of loans and investments               --            207 
                                               -------------  ------------- 
Net cash used in investing activities                 (1,700)       (10,812)
                                               -------------  ------------- 
                                                                            
CASH FLOWS FROM FINANCING ACTIVITIES:                                       
Increase in borrowings                                    --        128,845 
Principal payments on borrowings                        (229)      (123,823)
Dividends paid                                          (593)          (569)
Repurchase of common stock                            (1,078)          (939)
Preferred stock dividends paid by LEAF to RSO             --           (188)
Decrease (increase) in restricted cash                     3           (633)
Other                                                   (150)        (2,250)
                                               -------------  ------------- 
Net cash (used in) provided by financing                                    
 activities                                           (2,047)           443 
                                               -------------  ------------- 
                                                                            
CASH FLOWS FROM DISCONTINUED OPERATIONS:                                    
Operating activities                                    (367)          (375)
                                               -------------  ------------- 
Net cash used in discontinued operations                (367)          (375)
                                               -------------  ------------- 
                                                                            
Decrease in cash                                      (7,494)       (11,652)
Cash, beginning of year                               19,393         24,455 
                                               -------------  ------------- 
Cash, end of period                            $      11,899  $      12,803 
                                               =============  ============= 
                                                                            
                                                                            
                                                                            
Schedule I                                                                  
                                                                            
            RECONCILIATION OF GAAP (LOSS) INCOME FROM CONTINUING            
           OPERATIONS BEFORE TAXES TO ADJUSTED INCOME (LOSS) FROM           
 CONTINUING OPERATIONS ATTRIBUTABLE TO COMMON SHAREHOLDERS, NET OF TAX (1)  
                   (in thousands, except per share data)                    
                                (unaudited)                                 
                                                                            
                                                    Three Months Ended      
                                                       December 31,         
                                               ---------------------------- 
                                                    2012           2011     
                                               -------------  ------------- 
(Loss) income from continuing operations                                    
 before taxes - GAAP                           $      (1,095) $         737 
Income attributable to noncontrolling                                       
 interests - pre-tax                                    (865)          (249)
                                               -------------  ------------- 
(Loss) income from continuing operations                                    
 attributable to common shareholders - pre-tax        (1,960)           488 
                                               -------------  ------------- 
                                                                            
Commercial finance adjustments, pre-tax:                                    
Loss (income) from operations                          4,582         (4,849)
Noncontrolling interests                                  --            223 
                                               -------------  ------------- 
Commercial finance operations                          4,582         (4,626)
                                               -------------  ------------- 
                                                                            
Adjusted income (loss) from continuing                                      
 operations attributable to common                                          
 shareholders - pre-tax                                2,622         (4,138)
Income tax provision (benefit) (2)                     1,245         (1,527)
                                               -------------  ------------- 
Adjusted income (loss) from continuing                                      
 operations attributable to common                                          
 shareholders, net of tax                      $       1,377  $      (2,611)
                                               =============  ============= 
                                                                            
Adjusted weighted average diluted shares                                    
 outstanding (3)                                      21,199         19,641 
                                               =============  ============= 
                                                                            
Adjusted income (loss) from continuing                                      
 operations attributable to common                                          
 shareholders, net of tax, per common per                                   
 share-diluted                                 $        0.06  $       (0.13)
                                               =============  ============= 
                                                                            
1. Adjusted income (loss) from continuing operations attributable to common 
   shareholders, net of tax, presents the Company's operations without the  
   effect of its commercial finance operations. The Company believes that   
   this provides useful information to investors since it allows investors  
   to evaluate the Company's progress in both its real estate and financial 
   fund management segments for the three months ended December 31, 2012 and
   2011 separately from its commercial finance operations. Adjusted income  
   (loss) from continuing operations attributable to common shareholders,   
   net of tax, should not be considered as an alternative to (loss) income  
   from continuing operations before taxes (computed in accordance with     
   GAAP). Instead, adjusted income (loss) from continuing operations  
      
   attributable to common shareholders, net of tax, should be reviewed in   
   connection with (loss) income from continuing operations before taxes in 
   the Company's consolidated financial statements, to help analyze how the 
   Company's business is performing.                                        
                                                                            
2. Income tax provision (benefit) is calculated using the Company's tax rate
   for the period, excluding one-time tax adjustments.                      
                                                                            
3. Dilutive shares used in the calculation of adjusted income from          
   continuing operations attributable to common shareholders per common     
   share-diluted includes an additional 1.1 million shares for the three    
   months ended December 31, 2012, which were antidilutive for the period   
   and, as such, were not used in the calculation of GAAP loss from         
   continuing operations attributable to common shareholders per common     
   share-diluted.                                                           

  
CONTACT: 
THOMAS C. ELLIOTT
CHIEF FINANCIAL OFFICER
RESOURCE AMERICA, INC.
ONE CRESCENT DRIVE, SUITE 203
PHILADELPHIA, PA 19112
(215) 546-5005
(215) 640-6357 (fax) 
 
 
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