PHILADELPHIA, PA -- (Marketwired) -- 03/10/14 --Resource America, Inc. (NASDAQ: REXI)
Fourth Quarter 2013 Highlights
- Adjusted net income attributable to common shareholders of $3.6 million (see Schedule I)
- Stand-alone operating income of $4.0 million as compared to a $1.1 million loss for the prior year period
- Increased assets under management by 13% during the year to $17.3 billion
- Record fund raising of $194.5 million for Resource Real Estate Opportunity REIT, Inc.
- Book value per common share of $7.87
- Repurchased 324,000 shares at $9.28
- Increased fourth quarter cash dividend by 25% to $.05 from $.04
Fourth Quarter 2013 Results
Resource America, Inc. (NASDAQ: REXI) (the "Company") reported adjusted net income attributable to common shareholders, a non-GAAP measure, of $3.6 million, or $0.16 per common share-diluted, and $11.9 million, or $0.54 per common share-diluted, for the three months and year ended December 31, 2013, respectively, as compared to adjusted net income attributable to common shareholders of $1.3 million, or $0.06 per common share-diluted, and $335,000, or $0.02 per common share-diluted, for the three months and year ended December 31, 2012, respectively. A reconciliation of the Company's reported GAAP net income (loss) attributable to common shareholders to adjusted net income attributable to common shareholders, a non-GAAP measure, is included as Schedule I to this release.
The Company reported GAAP net income attributable to common shareholders of $1.4 million, or $0.06 per common share-diluted, and $6.4 million, or $0.29 per common share-diluted, for the three months and year ended December 31, 2013, respectively, as compared to a GAAP net loss attributable to common shareholders of $1.5 million, or $0.08 per common share-diluted, for the three months ended December 31, 2012, and GAAP net income attributable to common shareholders of $24.0 million, or $1.14 per common share-diluted, for the year ended December 31, 2012. Included in GAAP net income attributable to common shareholders for the year ended December 31, 2012 was a $36.4 million gain, net of tax, on the sale of the Company's credit loan manager.
Assets Under Management
The following table details the Company's assets under management by operating segment, which increased by $2.0 billion (13%) from December 31, 2012 to 2013 (in billions):
December 31,
-------------------
2013 2012
--------- ---------
Financial fund management $ 14.2 $ 13.0
Real estate 2.5 1.8
Commercial finance 0.6 0.5
--------- ---------
$ 17.3 $ 15.3
========= =========
Net assets under management (1) $ 7.9 $ 6.8
========= =========
------
(1) Net assets under management represents the proportionate share of
assets managed by the Company after reflecting joint venture
arrangements.
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/A for the fiscal year ended September 30, 2012.
Highlights for the Fourth Quarter and Year Ended December 31, 2013 and Recent Developments
REAL ESTATE ASSET MANAGEMENT:
Equity Asset Management
Resource Real Estate Opportunity REIT, Inc, a public non-traded real estate investment trust ("REIT") managed by the Company, which specializes in acquiring and managing distressed real estate assets, had the following highlights:
- Raised a record $194.5 million during the three months ended December 31, 2013 and completed fundraising for this fund with a total equity capital raise of $635.0 million.
- Increased total assets to $678.6 million at December 31, 2013, an increase of $496.4 million, or 272%, from December 31, 2012, including the acquisition during the three months ended December 31, 2013 of three multifamily assets for $98.3 million located in Alpharetta, GA, San Antonio, TX and Burnsville, MN.
- In January 2014, acquired 10 multifamily assets totaling 2,513 units and two office properties that contain 75,518 rentable square feet for $51.2 million.
For the year ended December 31, 2013, the Company's real estate operating segment acquired 12 properties for $317.9 million, financed 11 properties for $147.8 million and disposed of six properties for $52.1 million.
On February 6, 2014, Resource Real Estate Opportunity REIT II, Inc. ("Opportunity REIT II") commenced its initial public offering of common stock and will focus on acquiring under-performing multifamily rental properties, distressed real estate and performing loans. Opportunity REIT II is offering up to $1 billion in common stock at a maximum price of $10 per share. Resource Real Estate will be the external manager.
Debt Asset Management
Resource Capital Corp. ("RSO"), a publicly-traded REIT managed by the Company which focuses on commercial real estate assets, had the following highlights:
- Originated $97.4 million and $344.3 million of commercial real estate whole loans during the three months and year ended December 31, 2013, respectively.
- In December 2013, completed a $307.8 million commercial real estate securitization that issued $260.8 million of floating-rate notes at a weighted average coupon of LIBOR plus 1.86%.
- In October 2013, acquired Primary Capital Advisors, a residential mortgage origination company, for $8.4 million.
- In October 2013, completed a $115.0 million public offering of its 6.00% convertible senior notes due 2018.
The following additional highlights contributed to our real estate asset management operations:
- The Company's real estate operating segment increased its assets under management at December 31, 2013 to $2.5 billion, an increase of $709.0 million, or 39%, from December 31, 2012.
- Real estate revenues increased 34% and 27%, to $17.7 million and $57.1 million, for the three months and year ended December 31, 2013, respectively, as compared to $13.2 million and $45.1 million for the three months and year ended December 31, 2012, respectively.
FINANCIAL FUND MANAGEMENT:
Credit Asset Management
CVC Credit Partners, L.P. ("CCP"), the Company's global joint venture, closed Apidos CLO XV, Ltd. (issuing notes with a par value of $500.0 million) and Apidos CLO XVI, Ltd. (issuing notes with a par value of $600.0 million) in October 2013 and January 2014, respectively. Since creating this joint venture in April 2012, CCP has closed seven collateralized loan obligation issuers (issuing notes with a total par value of $3.5 billion) and expects to receive approximately $15.9 million in fees on an annual run rate basis. The Company has a 33% interest in this joint venture.
The following additional highlight contributed to our financial fund asset management operations:
The Company's financial fund management operating segment increased its assets under management at December 31, 2013 to $14.2 billion, an increase of $1.1 billion, or 9%, from December 31, 2012.
CORPORATE/OTHER:
Share Repurchases
- In November 2013, the Company repurchased 324,000 of its shares at $9.28 per share. From August 2012 to December 2013, the Company repurchased over 912,000 shares at an average price of $7.73 per share under its share repurchase program.
- In December 2013, the Company's Board of Directors authorized the repurchase of up to one million shares of common stock, which replaced the August 2012 repurchase program.
Corporate Credit Facility Modification
- In November 2013, the Company extended the maturity of its $3.5 million revolving credit facility with Republic Bank from December 2014 to December 2016.
Dividends
- The Company's Board of Directors authorized an increase in the Company's cash dividend from $0.04 to $0.05 per share on the Company's common stock and payment on January 31, 2014 to holders of record as of the close of business on January 17, 2014.
- RSO's Board of Directors declared a cash dividend of $0.20 per common share for its three months ended December 31, 2013.
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, its joint ventures, and for outside investors in the real estate, financial fund management and commercial finance sectors.
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, or SEC. 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/A and in other of its public filings with the SEC. 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 Opportunity REIT II was declared effective by the SEC on February 6, 2014. A written prospectus relating to these securities may be obtained by contacting Resource Securities, Inc., 1845 Walnut Street, 18th 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, consolidating statements of operations and reconciliation of GAAP net income (loss) attributable to common shareholders to adjusted net income attributable to common shareholders.
RESOURCE AMERICA, INC
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
December 31,
------------------------
2013 2012
----------- -----------
ASSETS
Cash $ 19,853 $ 11,899
Restricted cash 571 638
Receivables 541 468
Receivables from managed entities and related
parties, net 30,923 30,618
Investments in real estate, net 17,696 18,041
Investment securities, at fair value 7,839 10,576
Investments in unconsolidated loan manager 37,821 37,221
Investments in unconsolidated entities 14,342 13,156
Assets of consolidated variable interest entity
("VIE") - RSO
Cash and cash equivalents (including
restricted cash) 325,579 179,390
Investments, at fair value 221,395 256,433
Loans 1,397,458 1,849,428
Investments in real estate and consolidated
entities 129,562 120,706
Other assets 76,467 70,600
----------- -----------
Total assets of consolidated VIE - RSO 2,150,461 2,476,557
----------- -----------
Property and equipment, net 5,844 2,590
Deferred tax assets, net 27,769 28,274
Other assets 4,791 6,726
----------- -----------
Total assets $ 2,318,451 $ 2,636,764
=========== ===========
LIABILITIES AND EQUITY
Liabilities:
Accrued expenses and other liabilities $ 22,134 $ 21,864
Payables to managed entities and related parties 3,110 3,536
Borrowings 20,619 20,735
Liabilities of consolidated VIE - RSO
Borrowings 1,320,015 1,785,600
Other liabilities 55,247 71,239
----------- -----------
Total liabilities of consolidated VIE - RSO 1,375,262 1,856,839
----------- -----------
Total liabilities 1,421,125 1,902,974
----------- -----------
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;30,378,339 and 30,069,822 shares
issued (including nonvested restricted stock of
400,194 and 604,353), respectively 299 295
Additional paid-in capital 288,555 286,048
Accumulated deficit (26,025) (29,486)
Treasury stock, at cost; 10,434,436 and
9,914,090 shares, respectively (107,874) (103,472)
Accumulated other comprehensive loss (1,231) (2,197)
----------- -----------
Total stockholders' equity 153,724 151,188
Noncontrolling interests 238 279
Noncontrolling interests attributable to RSO 743,364 582,323
----------- -----------
Total equity 897,326 733,790
----------- -----------
$ 2,318,451 $ 2,636,764
=========== ===========
RESOURCE AMERICA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended Years Ended
December 31, December 31,
-------------------- --------------------
2013 2012 2013 2012
--------- --------- --------- ---------
REVENUES:
Real estate (includes revenues
of $2,806, $4,787, $12,600 and
$13,956 related to RSO) $ 17,700 $ 13,154 $ 57,143 $ 45,083
Financial fund management
(includes revenues of $400,
$(8), $1,120 and $4,894 related
to RSO) 4,539 2,675 19,773 18,053
Commercial finance (no revenues
related to RSO) (98) (124) (341) (1,659)
--------- --------- --------- ---------
22,141 15,705 76,575 61,477
Revenues from consolidated VIE -
RSO 14,996 33,041 91,007 123,698
Elimination of consolidated VIE
revenues attributed to
operating segments (3,226) (4,811) (13,834) (17,544)
--------- --------- --------- ---------
Total revenues 33,911 43,935 153,748 167,631
--------- --------- --------- ---------
COSTS AND EXPENSES:
Real estate 11,098 7,998 40,612 30,475
Financial fund management 2,386 1,017 10,155 12,299
Commercial finance 155 (49) 56 402
Restructuring expenses - - - 365
General and administrative 3,461 2,228 10,268 9,792
Impairment charges - - - 2,280
Provision for credit losses 472 5,152 4,265 20,148
Depreciation and amortization 618 492 1,936 2,084
--------- --------- --------- ---------
18,190 16,838 67,292 77,845
Expenses from consolidated VIE -
RSO 19,492 24,098 62,602 63,850
Elimination of consolidated VIE
expenses attributed to
operating segments (3,037) (4,762) (13,215) (17,351)
--------- --------- --------- ---------
Total expenses 34,645 36,174 116,679 124,344
--------- --------- --------- ---------
OPERATING (LOSS) INCOME (734) 7,761 37,069 43,287
--------- --------- --------- ---------
OTHER INCOME (EXPENSE):
Gain on deconsolidation and sale
of subsidiary - - - 54,542
Other-than-temporary impairment
on investments - - (214) (74)
Interest expense (511) (522) (2,036) (2,289)
Other income, net 175 106 575 112
Other income, net, from
consolidated VIE - RSO 400 13,733 17,007 19,197
Elimination of consolidated VIE
other income attributed to
operating segments 20 32 244 133
--------- --------- --------- ---------
84 13,349 15,576 71,621
--------- --------- --------- ---------
(Loss) income from continuing
operations before taxes (650) 21,110 52,645 114,908
Income tax provision (benefit) 2,053 (241) 1,657 13,117
Income tax (benefit) provision -
RSO (5,262) 7,624 (1,041) 14,602
--------- --------- --------- ---------
Income from continuing
operations 2,559 13,727 52,029 87,189
Loss from discontinued
operations, net of tax - (6) (2) (44)
--------- --------- --------- ---------
Net income 2,559 13,721 52,027 87,145
Net loss (income) attributable
to noncontrolling interests 3 (587) (20) (557)
Net income attributable to
noncontrolling interests of
consolidated VIE - RSO (1,187) (14,668) (45,581) (62,560)
--------- --------- --------- ---------
Net income (loss) attributable
to common shareholders $ 1,375 $ (1,534) $ 6,426 $ 24,028
========= ========= ========= =========
Amounts attributable to common
shareholders:
Income (loss) from continuing
operations $ 1,375 $ (1,528) $ 6,428 $ 24,072
Discontinued operations - (6) (2) (44)
--------- --------- --------- ---------
Net income (loss) $ 1,375 $ (1,534) $ 6,426 $ 24,028
========= ========= ========= =========
RESOURCE AMERICA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS - (Continued)
(in thousands, except per share data)
(unaudited)
Three Months Ended Years Ended
December 31, December 31,
------------------- -------------------
2013 2012 2013 2012
--------- --------- --------- ---------
Basic earnings (loss) per share:
Continuing operations $ 0.07 $ (0.08) $ 0.32 $ 1.21
Discontinued operations - - - -
--------- --------- --------- ---------
Net income (loss) $ 0.07 $ (0.08) $ 0.32 $ 1.21
--------- --------- --------- ---------
Weighted average shares outstanding 20,104 20,077 20,217 19,919
========= ========= ========= =========
Diluted earnings (loss) per share:
Continuing operations $ 0.06 $ (0.08) $ 0.29 $ 1.14
Discontinued operations - - - -
--------- --------- --------- ---------
Net income (loss) $ 0.06 $ (0.08) $ 0.29 $ 1.14
========= ========= ========= =========
Weighted average shares outstanding 21,828 20,077 21,905 20,994
========= ========= ========= =========
RESOURCE AMERICA, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS
(in thousands)
(unaudited)
The following table presents the consolidating statement of operations for the fourth quarter ended December 31, 2013:
RAI RSO Eliminations Consolidated
-------- -------- ------------ ------------
REVENUES:
Real estate $ 17,700 $ - $ - $ 17,700
Financial fund management 4,539 - - 4,539
Commercial finance (98) - - (98)
-------- -------- ------------ ------------
22,141 - - 22,141
-------- -------- ------------ ------------
Revenues from consolidated
VIE - RSO - 14,996 - 14,996
Elimination of consolidated
VIE revenues attributed to
operating segments - - (3,226) (3,226)
-------- -------- ------------ ------------
Total revenues 22,141 14,996 (3,226) 33,911
COSTS AND EXPENSES:
Real estate 11,098 - - 11,098
Financial fund management 2,386 - - 2,386
Commercial finance 155 - - 155
General and administrative 3,461 - - 3,461
Provision for credit losses 472 - - 472
Depreciation and
amortization 618 - - 618
-------- -------- ------------ ------------
18,190 - - 18,190
Expenses from consolidated
VIE - RSO - 14,230 5,262 19,492
Elimination of consolidated
VIE expenses attributed to
operating segments - - (3,037) (3,037)
-------- -------- ------------ ------------
Total expenses 18,190 14,230 2,225 34,645
-------- -------- ------------ ------------
OPERATING INCOME (LOSS) 3,951 766 (5,451) (734)
-------- -------- ------------ ------------
OTHER INCOME (EXPENSE):
Interest expense (511) - - (511)
Other income, net 747 - (572) 175
Other income, net, from
consolidated VIE - RSO - 400 - 400
Elimination of consolidated
VIE other income, net - - 20 20
-------- -------- ------------ ------------
236 400 (552) 84
-------- -------- ------------ ------------
Income (loss) from
continuing operations
before taxes 4,187 1,166 (6,003) (650)
Income tax provision
(benefit) 2,053 - (5,262) (3,209)
-------- -------- ------------ ------------
Net income (loss) 2,134 1,166 (741) 2,559
Net loss attributable to
noncontrolling interests 3 - - 3
Net income attributable to
noncontrolling interests -
RSO - (2,114) 927 (1,187)
-------- -------- ------------ ------------
Net income attributable to
common shareholders $ 2,137 $ (948) $ 186 $ 1,375
======== ======== ============ ============
RESOURCE AMERICA, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS
(in thousands)
(unaudited)
The following table presents the consolidating statement of operations for the fourth quarter ended December 31, 2012:
RAI RSO Eliminations Consolidated
-------- -------- ------------ ------------
REVENUES:
Real estate $ 13,154 $ - $ - $ 13,154
Financial fund management 2,675 - - 2,675
Commercial finance (124) - - (124)
-------- -------- ------------ ------------
15,705 - - 15,705
Revenues from consolidated
VIE - RSO - 33,041 - 33,041
Elimination of consolidated
VIE revenues attributed to
operating segments - - (4,811) (4,811)
-------- -------- ------------ ------------
Total revenues 15,705 33,041 (4,811) 43,935
-------- -------- ------------ ------------
COSTS AND EXPENSES:
Real estate 7,998 - - 7,998
Financial fund management 1,017 - - 1,017
Commercial finance (49) - - (49)
General and administrative 2,228 - - 2,228
Provision for credit losses 5,152 - - 5,152
Depreciation and
amortization 492 - - 492
-------- -------- ------------ ------------
16,838 - - 16,838
Expenses from consolidated
VIE - RSO - 31,722 (7,624) 24,098
Elimination of consolidated
VIE expenses attributed to
operating segments - - (4,762) (4,762)
-------- -------- ------------ ------------
Total expenses 16,838 31,722 (12,386) 36,174
-------- -------- ------------ ------------
OPERATING (LOSS) INCOME (1,133) 1,319 7,575 7,761
-------- -------- ------------ ------------
OTHER INCOME (EXPENSE):
Interest expense (522) - - (522)
Other income, net 640 - (534) 106
Other income, net, from
consolidated VIE - RSO - 13,733 - 13,733
Elimination of consolidated
VIE other income, net - - 32 32
-------- -------- ------------ ------------
118 13,733 (502) 13,349
-------- -------- ------------ ------------
(Loss) income from
continuing operations
before taxes (1,015) 15,052 7,073 21,110
Income tax (benefit)
provision (241) - 7,624 7,383
-------- -------- ------------ ------------
(Loss) income from
continuing operations (774) 15,052 (551) 13,727
Loss from discontinued
operations, net of tax (6) - - (6)
-------- -------- ------------ ------------
Net (loss) income (780) 15,052 (551) 13,721
Net income attributable to
noncontrolling interests (587) - - (587)
Net income attributable to
noncontrolling interests -
RSO - (911) (13,757) (14,668)
-------- -------- ------------ ------------
Net (loss) income
attributable to common
shareholders $ (1,367) $ 14,141 $ (14,308) $ (1,534)
======== ======== ============ ============
Amounts attributable to
common shareholders:
(Loss) income from
continuing operations $ (1,361) $ 14,141 $ (14,308) $ (1,528)
Discontinued operations (6) - - (6)
-------- -------- ------------ ------------
Net (loss) income $ (1,367) $ 14,141 $ (14,308) $ (1,534)
======== ======== ============ ============
RESOURCE AMERICA, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS
(in thousands)
(unaudited)
The following table presents the consolidating statement of operations for the year ended December 31, 2013:
RAI RSO Eliminations Consolidated
-------- -------- ------------ ------------
REVENUES:
Real estate $ 57,143 $ - $ - $ 57,143
Financial fund management 19,773 - - 19,773
Commercial finance (341) - - (341)
-------- -------- ------------ ------------
76,575 - - 76,575
Revenues from consolidated
VIE - RSO - 91,007 - 91,007
Elimination of consolidated
VIE revenues attributed to
operating segments - - (13,834) (13,834)
-------- -------- ------------ ------------
Total revenues 76,575 91,007 (13,834) 153,748
-------- -------- ------------ ------------
COSTS AND EXPENSES:
Real estate 40,612 - - 40,612
Financial fund management 10,155 - - 10,155
Commercial finance 56 - - 56
General and administrative 10,268 - - 10,268
Provision for credit losses 4,265 - - 4,265
Depreciation and
amortization 1,936 - - 1,936
-------- -------- ------------ ------------
67,292 - - 67,292
Expenses from consolidated
VIE - RSO - 61,561 1,041 62,602
Elimination of consolidated
VIE expenses attributed to
operating segments - - (13,215) (13,215)
-------- -------- ------------ ------------
Total expenses 67,292 61,561 (12,174) 116,679
-------- -------- ------------ ------------
OPERATING INCOME 9,283 29,446 (1,660) 37,069
-------- -------- ------------ ------------
OTHER INCOME (EXPENSE):
Other-than-temporary
impairment on investments (214) - - (214)
Interest expense (2,036) - - (2,036)
Other income, net 2,816 - (2,241) 575
Other income, net, from
consolidated VIE - RSO - 17,007 - 17,007
Elimination of consolidated
VIE other income, net - - 244 244
-------- -------- ------------ ------------
566 17,007 (1,997) 15,576
-------- -------- ------------ ------------
Income from continuing
operations before taxes 9,849 46,453 (3,657) 52,645
Income tax provision 1,657 - (1,041) 616
-------- -------- ------------ ------------
Income from continuing
operations 8,192 46,453 (2,616) 52,029
Loss from discontinued
operations, net of tax (2) - - (2)
-------- -------- ------------ ------------
Net income 8,190 46,453 (2,616) 52,027
Net income attributable to
noncontrolling interests (20) - - (20)
Net income attributable to
noncontrolling interests -
RSO - (7,221) (38,360) (45,581)
-------- -------- ------------ ------------
Net income attributable to
common shareholders $ 8,170 $ 39,232 $ (40,976) $ 6,426
======== ======== ============ ============
Amounts attributable to
common shareholders:
Income from continuing
operations $ 8,172 $ 39,232 $ (40,976) $ 6,428
Discontinued operations (2) - - (2)
-------- -------- ------------ ------------
Net income $ 8,170 $ 39,232 $ (40,976) $ 6,426
======== ======== ============ ============
RESOURCE AMERICA, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS
(in thousands)
(unaudited)
The following table presents the consolidating statement of operations for the year ended December 31, 2012:
RAI RSO Eliminations Consolidated
-------- -------- ------------ ------------
REVENUES:
Real estate $ 45,083 $ - $ - $ 45,083
Financial fund management 18,053 - - 18,053
Commercial finance (1,659) - - (1,659)
-------- -------- ------------ ------------
61,477 - - 61,477
Revenues from consolidated
VIE - RSO - 123,698 - 123,698
Elimination of consolidated
VIE revenues attributed to
operating segments - - (17,544) (17,544)
-------- -------- ------------ ------------
Total revenues 61,477 123,698 (17,544) 167,631
-------- -------- ------------ ------------
COSTS AND EXPENSES:
Real estate 30,475 - - 30,475
Financial fund management 12,299 - - 12,299
Commercial finance 402 - - 402
Restructuring expenses 365 - - 365
General and administrative 9,792 - - 9,792
Impairment charges 2,280 - - 2,280
Provision for credit losses 20,148 - - 20,148
Depreciation and
amortization 2,084 - - 2,084
-------- -------- ------------ ------------
77,845 - - 77,845
Expenses from consolidated
VIE - RSO - 78,452 (14,602) 63,850
Elimination of consolidated
VIE expenses attributed to
operating segments - - (17,351) (17,351)
-------- -------- ------------ ------------
Total expenses 77,845 78,452 (31,953) 124,344
-------- -------- ------------ ------------
OPERATING (LOSS) INCOME (16,368) 45,246 14,409 43,287
-------- -------- ------------ ------------
OTHER INCOME (EXPENSE):
Gain on deconsolidation and
sale of subsidiary 54,542 - - 54,542
Other-than-temporary
impairment on investments (74) - - (74)
Interest expense (2,289) - - (2,289)
Other income, net 2,189 - (2,077) 112
Other income, net, from
consolidated VIE - RSO - 19,197 - 19,197
Elimination of consolidated
VIE other income, net - - 133 133
-------- -------- ------------ ------------
54,368 19,197 (1,944) 71,621
-------- -------- ------------ ------------
Income from continuing
operations before taxes 38,000 64,443 12,465 114,908
Income tax provision 13,117 - 14,602 27,719
-------- -------- ------------ ------------
Income from continuing
operations 24,883 64,443 (2,137) 87,189
Loss from discontinued
operations, net of tax (44) - - (44)
-------- -------- ------------ ------------
Net income 24,839 64,443 (2,137) 87,145
Net income attributable to
noncontrolling interests (557) - - (557)
Net income attributable to
noncontrolling interests -
RSO - (1,244) (61,316) (62,560)
-------- -------- ------------ ------------
Net income attributable to
common shareholders $ 24,282 $ 63,199 $ (63,453) $ 24,028
======== ======== ============ ============
Amounts attributable to
common shareholders:
Income from continuing
operations $ 24,326 $ 63,199 $ (63,453) $ 24,072
Discontinued operations (44) - - (44)
-------- -------- ------------ ------------
Net income $ 24,282 $ 63,199 $ (63,453) $ 24,028
======== ======== ============ ============
Schedule I
RECONCILIATION OF GAAP NET INCOME (LOSS) ATTRIBUTABLE TO COMMON
SHAREHOLDERS TO
ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS (1)
(in thousands, except per share data)
(unaudited)
Three Months Ended Years Ended
December 31, December 31,
------------------- --------------------
2013 2012 2013 2012
--------- --------- --------- ---------
Net income (loss) attributable to
common shareholders - GAAP $ 1,375 $ (1,534) $ 6,426 $ 24,028
Adjustments, net of tax:
Loss, net of eliminations,
attributable to consolidation of
RSO 762 167 1,744 254
Loss attributable to commercial
finance 535 2,406 4,545 14,269
Gain on sale of subsidiary - - - (36,394)
Deferred tax provision (benefit) 887 279 (805) (1,822)
--------- --------- --------- ---------
Adjusted net income attributable
to common shareholders $ 3,559 $ 1,318 $ 11,910 $ 335
========= ========= ========= =========
Adjusted weighted average diluted
shares outstanding (2) 21,828 21,199 21,905 20,994
========= ========= ========= =========
Adjusted net income attributable
to common shareholders per
common per share-diluted $ 0.16 $ 0.06 $ 0.54 $ 0.02
========= ========= ========= =========
------
(1) Adjusted net income attributable to common shareholders presents the
Company's operations prior to the consolidation of RSO and without the
effect of its commercial finance operations, gain on the sale of
subsidiary and deferred tax provision (benefit). 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 and year
ended December 31, 2013 and 2012 separately from its commercial finance
operations, gain realized on the sale of a subsidiary and deferred tax
provision (benefit). Adjusted net income attributable to common
shareholders should not be considered as an alternative to net income
(loss) attributable to common shareholders (computed in accordance with
GAAP). Instead, adjusted net income attributable to common shareholders
should be reviewed in connection with net income (loss) attributable to
common shareholders in the Company's consolidated financial statements,
to help analyze how the Company's business is performing.
(2) Dilutive shares used in the calculation of adjusted net income
attributable to common shareholders per common share-diluted included
an additional 1.1 million shares for the three months ended December
31, 2012, which were anti-dilutive for the period and, as such, were
not used in the calculation of GAAP net loss 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)
