SOURCE: Resource America, Inc.

Resource America, Inc.

March 10, 2014 18:19 ET

Resource America, Inc. Reports Operating Results for the Fourth Quarter and Year Ended December 31, 2013

PHILADELPHIA, PA--(Marketwired - Mar 10, 2014) - 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 Information

  • 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)