SOURCE: Resource America, Inc.

Resource America, Inc.

December 07, 2009 20:54 ET

Resource America, Inc. Reports Operating Results for the Fourth Fiscal Quarter and Fiscal Year Ended September 30, 2009

PHILADELPHIA, PA--(Marketwire - December 7, 2009) - Resource America, Inc. (NASDAQ: REXI) (the "Company") reported adjusted income from continuing operations, a non-GAAP measure of $1.5 million, or $0.08 per common share-diluted, and $2.2 million, or $0.12 per common share-diluted, for the fourth fiscal quarter and fiscal year ended September 30, 2009, respectively, as compared to $539,000, or $0.03 per common share-diluted, and $11.5 million, or $0.62 per common share-diluted for the fourth fiscal quarter and fiscal year ended September 30, 2008, respectively. A reconciliation of the Company's reported GAAP income (loss) from continuing operations to adjusted income from continuing operations, a non-GAAP measure, is included as Schedule I to this release.

Jonathan Cohen, CEO and President, commented, "Our financial results demonstrate that we have returned to GAAP profitability this quarter. This is a result of adjustments that we have made to conform our businesses to a changed and changing environment. We also have made great strides in reducing our costs and obtaining flexibility on our debt. We continue to work on becoming as efficient as possible and we are excited to position the Company to benefit from opportunities that are developing in areas where we have great experience and a successful track record."

The Company reported income from continuing operations of $404,000, or $0.02 per common share-diluted, and a loss from continuing operations of $14.5 million, or $0.81 per common share-diluted, for the fourth fiscal quarter and fiscal year ended September 30, 2009, respectively, as compared to a loss from continuing operations of $8.3 million, or $0.47 per common share-diluted, and $24.9 million, or $1.42 per common share-diluted, for the fourth fiscal quarter and fiscal year ended September 30, 2008, respectively.

The Company reported net income of $126,000, or $0.01 per common share-diluted, and a net loss of $14.9 million, or $0.84 per common share-diluted, for the fourth fiscal quarter and fiscal year ended September 30, 2009, respectively, as compared to a net loss of $9.2 million, or $0.52 per common share-diluted, and $26.2 million, or $1.50 per common share-diluted, for the fourth fiscal quarter and fiscal year ended September 30, 2008, respectively. The loss recorded for the fiscal year ended September 30, 2009 was primarily the result of $17.9 million of non-cash charges, net of tax, including a $7.2 million loss related to the sale of the Company's interest in Apidos CDO VI.

The Company also reports:

--  Resource Capital Corp. Follow-On Offering.

      --  Resource Capital Corp. (NYSE: RSO) ("RCC"), a real estate
          investment trust, for which the Company is the external manager
          and a shareholder, announced that it has priced a public offering
          of 10 million shares of its common stock at a price of $4.50 per
          share. The underwriters have been granted an over-allotment
          option for an additional 1.5 million shares of common stock. RCC
          expects to receive net proceeds, after underwriting discounts but
          before expenses, of $48.9 million, including the over-allotment.

--  Capital Fundraising.

      -- The Company continued to see strong demand within this channel,
         resulting in the completion of both Resource Real Estate
         Investors 7, L.P. ("RREI 7") in September 2009 ($32.5 million
         raised) and LEAF Equipment Finance Fund 4, L.P. ("LEAF 4") in
         October 2009 ($125.7 million raised). In addition, Resource Real
         Estate Holdings, Inc. ("Resource Real Estate") has raised
         $37.3 million through its real estate opportunity fund which is
         focused on acquiring discounted real estate assets. The Company
         has raised a total of $180.2 million of investment funds during
         fiscal 2009 for funds sponsored and managed primarily by Resource
         Real Estate and LEAF Financial Corp. ("LEAF").

      -- Resource Real Estate filed a $750.0 million registration statement
         with the Securities and Exchange Commission on July 7, 2009 for
         Resource Real Estate Opportunity REIT, Inc. of which Resource
         Real Estate will be the external manager. Resource Real Estate
         recently filed a second amendment to the originally filed
         registration statement.

--  Debt Refinancing. On October 6, 2009, the Company completed a private
    placement offering of senior notes. In connection with this offering,
    the Company refinanced its line of credit with TD Bank, principally
    extending the maturity an additional year to October 2011, reducing the
    interest rate on borrowings to a floor of between 7.0% and 7.5% (varies
    depending on type of borrowing) from 10% and reducing the required
    monthly principal payments from $850,000 per month to $150,000.

--  Debt Reduction. As of September 30, 2009, the Company reduced its
    consolidated borrowings outstanding by $362.7 million, or 65%, to
    $191.4 million from $554.1 million at September 30, 2008. Borrowings
    at September 30, 2009 include a $136.5 million non-recourse revolving
    credit facility at LEAF and $54.9 million of other debt, of which,
    $14.7 million is in mortgage debt secured by the underlying properties.

--  Adjusted Revenues and Adjusted Operating Income - Non-GAAP Measures.
    For the fourth fiscal quarter and fiscal year ended September 30, 2009,
    the Company reported adjusted revenues of $26.6 million and
    $108.4 million, respectively, as compared to $38.0 million and
    $179.4 million for the fourth fiscal quarter and fiscal year ended
    September 30, 2008, respectively. For the fourth fiscal quarter and
    fiscal year ended September 30, 2009, the Company reported adjusted
    operating income of $3.4 million and $10.8 million, respectively, as
    compared to adjusted operating income of $2.5 million and $55.0 million
    for the fourth fiscal quarter and fiscal year ended September 30, 2008,
    respectively. Adjusted revenues and adjusted operating income include
    $492,000 and $266,000 of pre-tax fair value adjustments on equity
    investments for the fourth fiscal quarter and fiscal year ended
    September 30, 2009, respectively, as compared to adjustments of
    $6.0 million and $23.5 million for fourth fiscal quarter and fiscal
    year ended September 30, 2008, respectively. A reconciliation of the
    Company's total GAAP revenues and GAAP operating income (loss) to
    adjusted revenues and adjusted operating income is included as
    Schedule II to this release.

Assets Under Management

The following table sets forth information relating to our assets under management by operating segment, which decreased by $4.3 billion (24%) from September 30, 2008 to September 30, 2009:

                                     At September 30,
                               ------------------------------
                                   2009            2008
                               --------------  --------------
Financial fund management      $ 10.6 billion  $ 14.7 billion
Real estate                       1.7 billion     1.7 billion
Commercial finance                1.4 billion     1.6 billion
                               --------------  --------------
                               $ 13.7 billion  $ 18.0 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, 2008.

Book Value

As of September 30, 2009, the Company's book value per common share was $7.77. Total stockholders' equity was $139.8 million as of September 30, 2009 as compared to $143.7 million as of September 30, 2008. Total common shares outstanding were 17,991,723 as of September 30, 2009 as compared to 17,595,934 as of September 30, 2008.

Highlights for the Fourth Fiscal Quarter and Fiscal Year Ended September 30, 2009 and Recent Developments

--  The Company has reduced its total borrowings to $191.4 million at
    September 30, 2009, a decrease of $362.7 million from September 30, 2008.
    
--  The Company issued $18.8 million of senior notes in a private
    placement to institutional investors in September and October, 2009. The
    proceeds were primarily used to reduce the Company's corporate borrowings.
    Accordingly, the Company has reduced its recourse corporate borrowings,
    excluding the senior notes, by $23.0 million to $28.7 million at September
    30, 2009 from $51.7 million at September 30, 2008 and further reduced it by
    $7.3 million to $21.4 million as of December 7, 2009.
    
--  Resource Real Estate continued fundraising for Resource Real Estate
    Opportunity Fund, L.P. ("RREI Opportunity Fund"), a $40.0 million offering
    that invests in discounted real estate. The Company has raised
    approximately $37.3 million as of December 4, 2009 and anticipates closing
    this fund by December 31, 2009.
    
--  Resource Real Estate increased the apartment and condominium units it
    manages or whose management it supervises to 16,724 at September 30, 2009
    from 15,758 at September 30, 2008. This includes a portfolio of 49
    multifamily properties representing 12,794 apartment units managed by
    Resource Real Estate Management, Inc. ("Resource Residential"), the
    Company's property management subsidiary.
    
--  RREI Opportunity Fund acquired and will manage a 568 unit multifamily
    rental property in Memphis, Tennessee, and financed the acquisition of the
    property with a $13.0 million loan, of which the fund has a 30%
    participation interest. The fund also acquired ownership of 49 condominium
    units in an upscale condominium development in Kansas City, Missouri, by
    foreclosing on the first mortgage on the property that it acquired.
    
--  LEAF completed in October 2009 the offering of its fourth public
    investment partnership, LEAF 4, which raised a record amount of $125.7
    million.
    
--  Financial fund management revenues increased 63% to $7.9 million for
    the fourth fiscal quarter ended September 30, 2009 as compared to $4.9
    million for the fourth fiscal quarter ended September 30, 2008.
    
--  The Company's Board of Directors authorized the payment of a cash
    dividend paid on October 15, 2009 in the amount of $0.03 per share on the
    Company's common stock to all holders of record at the close of business on
    September 15, 2009.
    
--  RCC paid a cash dividend of $0.30 per common share for its third
    quarter ended September 30, 2009.
    
--  The Company generated $32.8 million of cash from operating activities
    of continuing operations as adjusted for the fiscal year ended September
    30, 2009. A reconciliation of net cash (used in) provided by operating
    activities of continuing operations to net cash provided by operating
    activities of continuing operations as adjusted, a non-GAAP measure, is
    included as Schedule III to this release.
    

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 commercial finance, real estate and financial fund management 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. 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. 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.

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, consolidated statements of cash flows, and reconciliations of GAAP income (loss) from continuing operations to adjusted income from continuing operations, GAAP revenue to adjusted revenue and GAAP operating income (loss) to adjusted operating income and net cash (used in) provided by operating activities of continuing operations to net cash provided by operating activities of continuing operations as adjusted.


                      RESOURCE AMERICA, INC.
                   CONSOLIDATED BALANCE SHEETS
                (in thousands, except share data)

                                                        September 30,
                                                  ------------------------
                                                      2009         2008
                                                  -----------  -----------
                                                  (unaudited)
ASSETS
  Cash                                            $    26,197  $    14,910
  Restricted cash                                       2,741       23,689
  Receivables                                           1,358        2,014
  Receivables from managed entities and related
   parties, net                                        55,047       35,674
  Loans sold, not settled, at fair value                    -          662
  Loans held for investment, net                            -      219,664
  Investments in commercial finance - held for
   investment, net                                      2,429      182,315
  Investments in commercial finance - held for
   sale, net                                          142,701      110,773
  Investments in real estate, net                      27,313       37,972
  Investment securities available-for-sale, at
   fair value                                          19,500       22,746
  Investments in unconsolidated entities               16,241       18,523
  Property and equipment, net                          13,435       16,886
  Deferred tax assets                                  45,656       44,467
  Goodwill                                              7,969        7,969
  Intangible assets, net                                3,637        4,329
  Other assets                                         11,616       15,764
                                                  -----------  -----------
    Total assets                                  $   375,840  $   758,357
                                                  ===========  ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Accrued expenses and other liabilities          $    40,986  $    56,309
  Payables to managed entities and related
   parties                                              1,284          586
  Borrowings                                          191,383      554,059
  Deferred tax liabilities                              2,046        1,060
  Minority interests                                      323        2,610
                                                  -----------  -----------
    Total liabilities                                 236,022      614,624
                                                  -----------  -----------

Commitments and contingencies

Stockholders' equity:
  Preferred stock, $1.00 par value, 1,000,000
   shares authorized; none outstanding                      -            -
  Common stock, $.01 par value, 49,000,000 shares
   authorized; 27,757,849 and 27,421,552 shares
   issued, respectively (including nonvested
   restricted stock of 552,461 and 513,386,
   respectively)                                          272          269
  Additional paid-in capital                          277,944      269,689
  Accumulated deficit                                 (22,471)      (3,980)
  Treasury stock, at cost; 9,213,665 and
   9,312,232 shares, respectively                    (100,367)    (101,440)
  Accumulated other comprehensive loss                (15,560)     (20,805)
                                                  -----------  -----------
    Total stockholders' equity                        139,818      143,733
                                                  -----------  -----------
                                                  $   375,840  $   758,357
                                                  ===========  ===========




                      RESOURCE AMERICA, INC.
               CONSOLIDATED STATEMENTS OF OPERATIONS
               (in thousands, except per share data)

                            Three Months Ended          Years Ended
                              September 30,            September 30,
                        ------------------------  ------------------------
                            2009         2008         2009         2008
                        -----------  -----------  -----------  -----------
                              (unaudited)         (unaudited)
REVENUES:
Commercial finance      $    10,043  $    14,449  $    49,395  $    96,881
Real estate                   8,156       12,729       25,417       31,519
Financial fund
 management                   7,930        4,874       33,344       27,536
                        -----------  -----------  -----------  -----------
                             26,129       32,052      108,156      155,936
                        -----------  -----------  -----------  -----------
COSTS AND EXPENSES:
Commercial finance            5,115       10,528       25,179       42,741
Real estate                   4,929        6,138       22,038       22,602
Financial fund
 management                   4,936        7,717       20,468       27,737
General and
 administrative               3,320        4,911       14,369       16,080
Provision for credit
 losses                       2,959        4,857        8,604       10,627
Depreciation and
 amortization                 1,941        1,409        6,922        4,660
                        -----------  -----------  -----------  -----------
                             23,200       35,560       97,580      124,447
                        -----------  -----------  -----------  -----------
OPERATING INCOME (LOSS)       2,929       (3,508)      10,576       31,489
                        -----------  -----------  -----------  -----------
OTHER (EXPENSE) INCOME:
Impairment losses on
 investment securities         (577)           -       (9,827)           -
Recognized in other
 comprehensive loss               -            -        1,288            -
                        -----------  -----------  -----------  -----------
Net impairment loss
 recognized in earnings        (577)      (6,344)      (8,539)     (14,467)
                        -----------  -----------  -----------  -----------
Interest expense             (3,242)      (8,218)     (20,199)     (47,266)
Minority interest
 income, net                     77        4,920        1,603        4,243
Loss on sale of loans
 and investment
 securities, net                  -            -      (11,588)     (17,674)
Other (expense) income,
 net                            (68)        (155)       3,156        3,036
                        -----------  -----------  -----------  -----------
                             (3,810)      (9,797)     (35,567)     (72,128)
                        -----------  -----------  -----------  -----------
Income (loss) from
 continuing operations
 before taxes                  (881)     (13,305)     (24,991)     (40,639)
Benefit for income
 taxes                       (1,285)      (5,035)     (10,504)     (15,695)
                        -----------  -----------  -----------  -----------
Income (loss) from
 continuing operations          404       (8,270)     (14,487)     (24,944)
Loss from discontinued
 operations, net of tax        (278)        (954)        (444)      (1,299)
                        -----------  -----------  -----------  -----------
NET INCOME (LOSS)       $       126  $    (9,224) $   (14,931) $   (26,243)
                        ===========  ===========  ===========  ===========
Basic income (loss)
 earnings per common
 share:
Continuing operations   $      0.02  $     (0.47) $     (0.81) $     (1.42)
Discontinued operations       (0.01)       (0.05)       (0.03)       (0.08)
                        -----------  -----------  -----------  -----------
Net income (loss)       $      0.01  $     (0.52) $     (0.84) $     (1.50)
                        ===========  ===========  ===========  ===========
Weighted average shares
 outstanding                 17,973       17,591       17,835       17,518
                        ===========  ===========  ===========  ===========
Diluted income (loss)
 earnings per common
 share:
Continuing operations   $      0.02  $     (0.47) $     (0.81) $     (1.42)
Discontinued operations       (0.01)       (0.05)       (0.03)       (0.08)
                        -----------  -----------  -----------  -----------
Net income (loss)       $      0.01  $     (0.52) $     (0.84) $     (1.50)
                        ===========  ===========  ===========  ===========
Weighted average shares
 outstanding                 18,605       17,591       17,835       17,518
                        ===========  ===========  ===========  ===========

Dividends declared per
 common share           $      0.03  $      0.07  $      0.20  $      0.28
                        ===========  ===========  ===========  ===========




                      RESOURCE AMERICA, INC.
              CONSOLIDATED STATEMENTS OF CASH FLOWS
                        (in thousands)

                                                 Years Ended September 30,
                                                --------------------------
                                                    2009          2008
                                                ------------  ------------
                                                (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income                               $    (14,931) $    (26,243)
Adjustments to reconcile net (loss) income to
 net cash (used in) provided by operating
 activities:
  Loss on sale of loans and investment
   securities, net                                    11,588        17,674
  Impairment charges on investment securities
   available-for-sale                                  8,539        14,467
  Depreciation and amortization                        8,876         6,024
  Provision for credit losses                          8,604        10,627
  Minority interest income                            (1,603)       (4,243)
  Equity in (earnings) losses of unconsolidated
   entities                                           (1,279)       15,656
  Distributions from unconsolidated entities           6,128        15,647
  Gain on sale of investments in commercial
   finance assets                                       (628)       (1,956)
  Gain on sale of assets                              (1,041)       (9,488)
  Loss on sale of investment securities
   available-for-sale                                    399             -
  Deferred income tax benefits                       (13,249)      (16,031)
  Non-cash compensation on long-term incentive
   plans                                               4,651         5,572
  Non-cash compensation issued                             3           136
  Non-cash compensation received                        (867)          159
(Increase) decrease in commercial finance
 investments                                         (37,330)       65,297
Changes in operating assets and liabilities          (19,016)      (18,002)
                                                ------------  ------------
Net cash (used in) provided by operating
 activities of continuing operations                 (41,156)       75,296
                                                ------------  ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures                                    (335)       (6,401)
Payments received on real estate loans and real
 estate                                               10,052        23,182
Investments in real estate                            (4,694)       (9,802)
Purchase of commercial finance assets held for
 investment                                          (41,942)     (111,700)
Payments received on commercial finance assets
 held for investment                                  46,246        74,332
Purchase of loans and investment securities          (19,290)     (251,585)
Proceeds from sale of loans and investment
 securities                                            5,367        40,360
Principal payments received on loans                   4,061        13,931
Net cash paid for acquisitions                             -        (8,022)
Other                                                   (477)      (17,050)
                                                ------------  ------------
Net cash used in investing activities of
 continuing operations                                (1,012)     (252,755)
                                                ------------  ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in borrowings                               438,897       930,731
Principal payments on borrowings                    (395,905)     (715,914)
Repayment from managed entity on RCC lease
 portfolio purchase                                    4,500             -
Dividends paid                                        (3,560)       (4,908)
Decrease (increase) in restricted cash                10,297       (31,194)
Proceeds from issuance of stock                            3           182
Purchase of treasury stock                              (264)         (237)
Other                                                    (71)          315
                                                ------------  ------------
Net cash provided by financing activities of
 continuing operations                                53,897       178,975
                                                ------------  ------------
CASH FLOWS FROM DISCONTINUED OPERATIONS:
Operating activities                                      (2)         (494)
Financing activities                                    (440)         (736)
                                                ------------  ------------
Net cash used in discontinued operations                (442)       (1,230)
                                                ------------  ------------
Increase in cash                                      11,287           286
Cash, beginning of year                               14,910        14,624
                                                ------------  ------------
Cash, end of year                               $     26,197  $     14,910
                                                ============  ============


This press release contains supplemental financial information determined by methods other than in accordance with Accounting Principles Generally Accepted in the United States of America ("GAAP"). The Company's management uses these non-GAAP measures in its analysis of the exclusion of certain adjustments recorded in the three months and fiscal year ended September 30, 2009. Management believes the presentation of these financial measures excluding the impact of these items provides useful supplemental information that is essential to a proper understanding of the financial results of the Company. These disclosures should not be viewed as a substitute for results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

SCHEDULE I


     RECONCILIATION OF GAAP INCOME (LOSS) FROM CONTINUING OPERATIONS
           TO ADJUSTED INCOME FROM CONTINUING OPERATIONS
              (in thousands, except per share data)
                        (unaudited)

                                 Three Months Ended       Years Ended
                                    September 30,         September 30,
                                --------------------  --------------------
                                  2009       2008       2009       2008
                                ---------  ---------  ---------  ---------
Income (loss) from continuing
 operations - GAAP              $     404  $  (8,270) $ (14,487) $ (24,944)
Adjustments, net of tax:
  Partnership level adjustments
   (1)                                325      4,260        852     15,811
  Impairment charges on
   investments                        313      1,472      4,234      4,190
  Loan reserves                     1,165          -      2,074          -
  Loss on sales of loans                -        182      7,600     11,415
  Severance costs                      22      1,088      1,217      1,078
  RCC incentive stock                   -        (32)       782      1,510
  Deferred tax asset                 (946)         -       (946)         -
  Other                               225      1,839        835      2,464
                                ---------  ---------  ---------  ---------
Adjusted income from continuing
 operations (2)                 $   1,508  $     539  $   2,161  $  11,524
                                =========  =========  =========  =========

Adjusted weighted average
 diluted shares outstanding (3)    18,605     18,562     18,497     18,553
                                =========  =========  =========  =========

Adjusted income from continuing
 operations per common
 share-diluted                  $    0.08  $    0.03  $    0.12  $    0.62
                                =========  =========  =========  =========

(1) Primarily includes mark-to-market adjustments on investments in
    partnerships that the Company manages.

(2) During the fiscal years ended September 30, 2009 and 2008, in
    connection with substantial volatility and reduction in liquidity in
    the global credit markets, the Company recorded several significant
    adjustments that it believes do not directly impact its continuing
    operations.  For comparability purposes, the Company is presenting
    adjusted income from continuing operations because it facilitates the
    evaluation of the Company's underlying operating performance without
    the effect of adjustments that do not directly relate to that
    performance.  Adjusted income from continuing operations should not
    be considered as an alternative to income (loss) from continuing
    operations (computed in accordance with GAAP).  Instead, adjusted
    income from continuing operations should be reviewed in connection
    with income (loss) from continuing operations in the Company's
    consolidated financial statements, to help analyze how the
    Company's business is performing.

(3) Dilutive shares used in the calculation of adjusted income from
    continuing operations per common share-diluted includes an
    additional 662,000 shares for the fiscal year ended September 30, 2009,
    and 971,000 and 1.0 million shares for the three months and fiscal year
    ended September 30, 2008, respectively, which were not used in the
    calculation of income (loss) from continuing operations per common
    share-diluted.




SCHEDULE II


   RECONCILIATION OF GAAP REVENUE TO ADJUSTED REVENUE AND RECONCILIATION
        OF GAAP OPERATING INCOME (LOSS) TO ADJUSTED OPERATING INCOME
                          (in thousands)
                           (unaudited)

                                    Three Months Ended     Years Ended
                                       September 30,       September 30,
                                    ------------------- -------------------
                                      2009      2008      2009      2008
                                    --------- --------  --------- ---------
Revenues
  Commercial finance                $  10,043 $ 14,449  $  49,395 $  96,881
  Real estate                           8,156   12,729     25,417    31,519
  Financial fund management             7,930    4,874     33,344    27,536
                                    --------- --------  --------- ---------
Total revenues - GAAP                  26,129   32,052    108,156   155,936

Adjustments:
  Fair value adjustments (1)              492    5,982        266    23,483
                                    --------- --------  --------- ---------
Adjusted revenues (2)               $  26,621 $ 38,034  $ 108,422 $ 179,419
                                    ========= ========  ========= =========

Operating income (loss) - GAAP      $   2,929 $ (3,508) $  10,576 $  31,489

Adjustments:
  Fair value adjustments (1)              492    5,982        266    23,483
                                    --------- --------  --------- ---------
Adjusted operating income (2)       $   3,421 $  2,474  $  10,842 $  54,972
                                    ========= ========  ========= =========

(1) Reflects pre-tax fair value adjustments on investments reported under
    the equity method of accounting.

(2) Management of the Company views adjusted revenues and adjusted
    operating income, both non-GAAP measures, as useful and appropriate
    supplements to revenues and operating income (loss) since they exclude
    fair value adjustments related to current credit market conditions and
    are not indicative of the Company's current operating performance.




SCHEDULE III


   RECONCILIATION OF NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES
   OF CONTINUING OPERATIONS TO NET CASH PROVIDED BY OPERATING ACTIVITIES
                 OF CONTINUING OPERATIONS AS ADJUSTED
                         (in thousands)
                           (unaudited)

Net cash provided by operating activities of continuing operations as adjusted was $32.8 million for the fiscal year ended September 30, 2009, an increase of $1.9 million as compared to net cash provided by operating activities of $30.9 million for the fiscal year ended September 30, 2008. The following reconciles net cash (used in) provided by operating activities of continuing operations to net cash provided by operating activities of continuing operations as adjusted (in thousands):

                                                          Years Ended
                                                          September 30,
                                                      --------------------
                                                        2009       2008
                                                      ---------  ---------
Net cash (used in) provided by operating activities
 of continuing operations - GAAP                      $ (41,156) $  75,296
Adjustments:
  Increase (decrease) in commercial finance
   investments held for sale                             37,330    (65,297)
  Changes in operating assets and liabilities            19,016     18,002
  Proceeds from sales of investments                     17,651      2,933
                                                      ---------  ---------
Net cash provided by operating activities of
 continuing operations as adjusted (1)                $  32,841  $  30,934
                                                      =========  =========

(1) Management of the Company believes net cash provided by operating
    activities of continuing operations as adjusted is a useful and
    appropriate supplement to GAAP net cash (used in) provided by operating
    activities of continuing operations since it reflects how management
    views its liquidity and working capital requirements.

Contact Information

  • Contact:
    Steven Kessler
    Chief Financial Officer
    Resource America, Inc.
    One Crescent Drive, Suite 203
    Philadelphia,
    PA 19112
    215/546-5005
    215/640-6354 (fax)