PHILADELPHIA, PA--(Marketwired - Aug 6, 2015) - Resource America, Inc. (
Second Quarter 2015 Highlights
- Adjusted net income attributable to common shareholders of $3.4 million (see Schedule I)
- Increased gross assets under management by 15% to $21.8 billion since June 30, 2014
- Net assets under management increased 20% to $10.6 billion
- Book value per common share of $7.28
- Repurchased 302,767 shares at an average price of $8.40
Second Quarter 2015 Results
Resource America, Inc. (
The Company reported a GAAP net loss attributable to common shareholders of $1.7 million, or $0.07 per common share-diluted, and $1.3 million, or $0.06 per common share-diluted, for the three and six months ended June 30, 2015 as compared to GAAP net income attributable to common shareholders of $2.7 million, or $0.12 per common share-diluted, and $3.7 million, or $0.17 per common share-diluted, for the three and six months ended June 30, 2014.
Included in GAAP net loss attributable to common shareholders for the second fiscal quarter and six months ended June 30, 2015 is a $4.3 million impairment related to the sale of a 9% interest in CVC Credit Partners, L.P. ("CCP") to the Company's joint venture partner, pursuant to an option provided in connection with the sale of Apidos Capital Management in April 2012. The Company received $4.9 million from the sale after quarter end and continues to own 24% of the joint venture.
Assets Under Management
The following table details the Company's gross assets under management by operating segment, which increased by $2.9 billion (15%) from June 30, 2014 to 2015 (in billions):
| June 30, | |||||||
| 2015 | 2014 | ||||||
| Financial fund management | $ | 17.3 | $ | 15.5 | |||
| Real estate | 3.8 | 2.8 | |||||
| Commercial finance | 0.7 | 0.6 | |||||
| $ | 21.8 | $ | 18.9 | ||||
| Net assets under management (1) | $ | 10.6 | $ | 8.8 | |||
| (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 for the year ended December 31, 2014.
Highlights for the Second Quarter Ended June 30, 2015 and Recent Developments
REAL ESTATE ASSET MANAGEMENT:
Equity Asset Management
Resource Real Estate Opportunity REIT, Inc. ("Opportunity REIT I"), 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:
- Increased total assets to $1.1 billion at June 30, 2015, an increase of 29%, from $843.0 million at June 30, 2014.
- Acquired $183.0 million of assets, placed or assumed financing of $94.8 million and disposed of $13.5 million of multifamily assets during the three months ended June 30, 2015.
Resource Real Estate Opportunity REIT II, Inc. ("Opportunity REIT II"), a public non-traded REIT managed by the Company that specializes in acquiring multifamily rental properties and selected loans, is offering up to $1.0 billion in common stock. Opportunity REIT II had the following highlights:
- Raised a record $96.6 million during the three months ended June 30, 2015 and a total of $266.4 million since inception.
- Acquired $54.7 million of assets and placed $20.2 million of financing during the three months ended June 30, 2015.
Creation of Real Estate Joint Venture: On June 25, 2015, the Company formed Pearlmark Real Estate, L.L.C, a joint venture between the Company and the principals of Pearlmark Real Estate Partners, L.L.C. ("Pearlmark Partners"), focusing on the management of institutional real estate investments. Based in Chicago, the Pearlmark team has successfully committed $4.5 billion of equity capital from a varied investor base that includes Fortune 500 companies to public and private pension funds to high net worth families.
Debt Asset Management
Resource Capital Corp. ("RSO"), a publicly-traded REIT managed by the Company which focuses on commercial real estate assets, originated $184.5 million in new commercial real estate loans during the three months ended June 30, 2015.
The following additional highlights contributed to our real estate asset management operations:
- The Company's real estate operating segment increased its gross assets under management at June 30, 2015 to $3.8 billion, an increase of $1.0 billion, or 35%, from June 30, 2014.
- Real estate revenues increased 57% and 43% to $21.1 million and $38.1 million, for the three and six months ended June 30, 2015, respectively, as compared to $13.4 million and $26.7 million for the three and six months ended June 30, 2014.
- Resource Real Estate Management, Inc., the Company's property management subsidiary managed 19,321 apartment units as of June 30, 2015 as compared to 19,636 units as of June 30, 2014.
FINANCIAL FUND MANAGEMENT:
Credit Asset Management
CVC Credit Partners, L.P. ("CCP"), the Company's global joint venture created in April 2012, closed Apidos CLO XXI, Ltd. and CVC Cordatus Loan Fund V Limited. CCP has now closed CLOs issuing notes with a total par value of $7.8 billion. At June 30, 2015, the Company had a 33% interest in this joint venture.
On July 2, 2015, CVC Capital Partners SICAV-FIS, S.A., the Company's joint venture partner, exercised its option to buy down the Company's interest by 9% for $4.9 million.
The following additional highlight contributed to our financial fund asset management operations:
- The Company's financial fund management operating segment increased its gross assets under management at June 30, 2015 to $17.3 billion, an increase of $1.8 billion, or 12%, from June 30, 2014.
CORPORATE/OTHER:
Share Repurchases
- The Company repurchased 302,767 of its shares during the second quarter ended June 30, 2015 at an average price of $8.40 per share.
Dividends
- The Company's Board of Directors authorized a cash dividend of $0.06 per share on the Company's common stock which was paid on July 31, 2015 to holders of record as of the close of business on July 17, 2015.
- RSO's Board of Directors declared a cash dividend of $0.16 per common share for its three months ended June 30, 2015.
Other
- On August 3, 2015, RSO's Board of Directors approved a one-for-four reverse stock split which is expected to be effective on August 31, 2015.
- On August 3, 2015, RSO's Board of Directors also authorized RSO to repurchase up to $50 million of its outstanding equity and debt securities.
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, for 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 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) | |||||||||||
| June 30, 2015 |
December 31, 2014 |
||||||||||
| (unaudited) | |||||||||||
| ASSETS | |||||||||||
| Cash | $ | 23,760 | $ | 27,542 | |||||||
| Restricted cash | 886 | 725 | |||||||||
| Receivables | 1,061 | 636 | |||||||||
| Loans and receivables from managed entities and related parties, net | 26,520 | 30,303 | |||||||||
| Investments in real estate, net | 17,040 | 17,097 | |||||||||
| Investment securities, at fair value | 10,870 | 9,540 | |||||||||
| Investments in unconsolidated loan manager | 36,526 | 39,655 | |||||||||
| Investments in unconsolidated entities | 16,884 | 13,089 | |||||||||
| Assets of consolidated variable interest entity ("VIE")-RSO: | |||||||||||
| Cash and cash equivalents (including restricted cash) | 190,765 | 202,043 | |||||||||
| Investments, at fair value | 286,108 | 296,506 | |||||||||
| Loans | 2,154,007 | 2,038,435 | |||||||||
| Investments in real estate and unconsolidated entities | 56,330 | 60,007 | |||||||||
| Other assets | 87,014 | 131,481 | |||||||||
| Total assets of consolidated VIE-RSO | 2,774,224 | 2,728,472 | |||||||||
| Property and equipment, net | 5,622 | 5,063 | |||||||||
| Deferred tax assets, net | 20,920 | 23,304 | |||||||||
| Other assets | 8,392 | 5,416 | |||||||||
| Total assets | $ | 2,942,705 | $ | 2,900,842 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Liabilities: | |||||||||||
| Accrued expenses and other liabilities | $ | 21,241 | $ | 22,279 | |||||||
| Payables to managed entities and related parties | 4,748 | 3,015 | |||||||||
| Borrowings | 21,029 | 20,412 | |||||||||
| Liabilities of consolidated VIE-RSO: | |||||||||||
| Borrowings | 1,827,793 | 1,717,132 | |||||||||
| Other liabilities | 51,640 | 57,561 | |||||||||
| Total liabilities of consolidated VIE-RSO | 1,879,433 | 1,774,693 | |||||||||
| Total liabilities | 1,926,451 | 1,820,399 | |||||||||
| 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; 34,958,477 and 34,489,568 shares issued (including nonvested restricted stock of 1,143,547 and 833,082), respectively | 338 | 335 | |||||||||
| Additional paid-in capital | 309,736 | 308,134 | |||||||||
| Accumulated deficit | (27,643 | ) | (23,663 | ) | |||||||
| Treasury stock, at cost; 12,293,346 and 11,764,417 shares, respectively | (124,736 | ) | (120,182 | ) | |||||||
| Accumulated other comprehensive loss | (915 | ) | (1,030 | ) | |||||||
| Total stockholders' equity | 156,780 | 163,594 | |||||||||
| Noncontrolling interests | 376 | 306 | |||||||||
| Noncontrolling interests attributable to consolidated VIE-RSO | 859,098 | 916,543 | |||||||||
| Total equity | 1,016,254 | 1,080,443 | |||||||||
| Total liabilities and equity | $ | 2,942,705 | $ | 2,900,842 | |||||||
| RESOURCE AMERICA, INC. | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| REVENUES: | ||||||||||||||||
| Real estate (includes revenues of $2,751, $2,302, $5,503 and $4,985 related to RSO) | $ | 21,116 | $ | 13,448 | $ | 38,082 | $ | 26,723 | ||||||||
| Financial fund management (includes revenues of $617, $753, $1,233 and $960 related to RSO) | 4,781 | 8,141 | 9,918 | 15,216 | ||||||||||||
| Commercial finance (includes no revenues related to RSO) | 2 | (42 | ) | - | (141 | ) | ||||||||||
| 25,899 | 21,547 | 48,000 | 41,798 | |||||||||||||
| Revenues from consolidated VIE-RSO | 24,201 | 23,828 | 48,562 | 49,073 | ||||||||||||
| Elimination of consolidated VIE-RSO revenues attributed to operating segments | (4,104 | ) | (3,040 | ) | (8,377 | ) | (5,920 | ) | ||||||||
| Total revenues | 45,996 | 42,335 | 88,185 | 84,951 | ||||||||||||
| COSTS AND EXPENSES: | ||||||||||||||||
| Real estate | 12,082 | 9,105 | 23,581 | 17,980 | ||||||||||||
| Financial fund management | 3,154 | 2,779 | 6,144 | 7,168 | ||||||||||||
| Commercial finance | 458 | 123 | 1,037 | 226 | ||||||||||||
| General and administrative | 4,181 | 2,729 | 7,478 | 5,883 | ||||||||||||
| Provision for credit losses | 276 | 1,575 | 678 | 2,783 | ||||||||||||
| Depreciation and amortization | 515 | 465 | 972 | 916 | ||||||||||||
| 20,666 | 16,776 | 39,890 | 34,956 | |||||||||||||
| Expenses from consolidated VIE-RSO | 54,535 | 16,853 | 75,595 | 28,138 | ||||||||||||
| Elimination of consolidated VIE-RSO expenses attributed to operating segments | (3,368 | ) | (3,053 | ) | (6,736 | ) | (5,872 | ) | ||||||||
| Total expenses | 71,833 | 30,576 | 108,749 | 57,222 | ||||||||||||
| OPERATING INCOME (LOSS) | (25,837 | ) | 11,759 | (20,564 | ) | 27,729 | ||||||||||
| OTHER INCOME (EXPENSE): | ||||||||||||||||
| Gain (loss) on sale of investment securities, net | - | 370 | - | 370 | ||||||||||||
| Other-than-temporary impairment on investments | (4,346 | ) | - | (4,346 | ) | - | ||||||||||
| Interest expense | (455 | ) | (497 | ) | (876 | ) | (980 | ) | ||||||||
| Other income (expense), net | 231 | 18 | 67 | 183 | ||||||||||||
| (4,570 | ) | (109 | ) | (5,155 | ) | (427 | ) | |||||||||
| Other income (expense), net, from consolidated VIE-RSO | 10,537 | 10,281 | 27,053 | 13,797 | ||||||||||||
| Elimination of consolidated VIE-RSO other income, net attributed to operating segments | 4 | 11 | 15 | 29 | ||||||||||||
| 5,971 | 10,183 | 21,913 | 13,399 | |||||||||||||
| Income (loss) from continuing operations before taxes | (19,866 | ) | 21,942 | 1,349 | 41,128 | |||||||||||
| Income tax provision (benefit) | 857 | 2,181 | 2,101 | 3,250 | ||||||||||||
| Income tax provision (benefit) -RSO | 2,918 | (446 | ) | 4,765 | (430 | ) | ||||||||||
| Net income (loss) | (23,641 | ) | 20,207 | (5,517 | ) | 38,308 | ||||||||||
| Net (income) loss attributable to noncontrolling interests | (63 | ) | (84 | ) | (55 | ) | (44 | ) | ||||||||
| Net (income) loss attributable to noncontrolling interests of consolidated VIE-RSO | 22,052 | (17,405 | ) | 4,257 | (34,556 | ) | ||||||||||
| Net income (loss) attributable to common shareholders | $ | (1,652 | ) | $ | 2,718 | $ | (1,315 | ) | $ | 3,708 | ||||||
| Basic earnings (loss) per share: | ||||||||||||||||
| Net income (loss) | $ | (0.07 | ) | $ | 0.13 | $ | (0.06 | ) | $ | 0.18 | ||||||
| Weighted average shares outstanding | 22,867 | 20,386 | 22,915 | 20,320 | ||||||||||||
| Diluted earnings (loss) per share: | ||||||||||||||||
| Net income (loss) | $ | (0.07 | ) | $ | 0.12 | $ | (0.06 | ) | $ | 0.17 | ||||||
| Weighted average shares outstanding | 22,867 | 22,032 | 22,915 | 22,031 | ||||||||||||
| RESOURCE AMERICA, INC. |
| CONSOLIDATING STATEMENT OF OPERATIONS |
| (in thousands) |
| (unaudited) |
The following table presents the consolidating statement of operations for the three months ended June 30, 2015:
| RAI | RSO | Eliminations | Consolidated | |||||||||||||
| REVENUES: | ||||||||||||||||
| Real estate | $ | 21,116 | $ | - | $ | - | $ | 21,116 | ||||||||
| Financial fund management | 4,781 | - | - | 4,781 | ||||||||||||
| Commercial finance | 2 | - | - | 2 | ||||||||||||
| 25,899 | - | - | 25,899 | |||||||||||||
| Revenues from consolidated VIE-RSO | - | 24,201 | - | 24,201 | ||||||||||||
| Elimination of consolidated VIE-RSO revenues attributed to operating segments | - | - | (4,104 | ) | (4,104 | ) | ||||||||||
| Total revenues | 25,899 | 24,201 | (4,104 | ) | 45,996 | |||||||||||
| COSTS AND EXPENSES: | ||||||||||||||||
| Real estate | 12,082 | - | - | 12,082 | ||||||||||||
| Financial fund management | 3,154 | - | - | 3,154 | ||||||||||||
| Commercial finance | 458 | - | - | 458 | ||||||||||||
| General and administrative | 4,181 | - | - | 4,181 | ||||||||||||
| Provision for credit losses | 276 | - | - | 276 | ||||||||||||
| Depreciation and amortization | 515 | - | - | 515 | ||||||||||||
| 20,666 | - | - | 20,666 | |||||||||||||
| Expenses of consolidated VIE-RSO | - | 54,535 | - | 54,535 | ||||||||||||
| Elimination of consolidated VIE-RSO expenses attributed to operating segments | - | - | (3,368 | ) | (3,368 | ) | ||||||||||
| Total expenses | 20,666 | 54,535 | (3,368 | ) | 71,833 | |||||||||||
| OPERATING INCOME (LOSS) | 5,233 | (30,334 | ) | (736 | ) | (25,837 | ) | |||||||||
| OTHER INCOME (EXPENSE): | ||||||||||||||||
| Other-than-temporary impairment on investment | (4,346 | ) | - | - | (4,346 | ) | ||||||||||
| Interest expense | (455 | ) | - | - | (455 | ) | ||||||||||
| Other income (expense), net | 689 | - | (458 | ) | 231 | |||||||||||
| Other income (expense), net, from consolidated VIE-RSO | - | 10,537 | - | 10,537 | ||||||||||||
| Elimination of consolidated VIE-RSO other income, net | - | - | 4 | 4 | ||||||||||||
| Total other income (expense) | (4,112 | ) | 10,537 | (454 | ) | 5,971 | ||||||||||
| Income (loss) from continuing operations before taxes | 1,121 | (19,797 | ) | (1,190 | ) | (19,866 | ) | |||||||||
| Income tax provision (benefit) | 857 | 2,918 | - | 3,775 | ||||||||||||
| Net income (loss) | 264 | (22,715 | ) | (1,190 | ) | (23,641 | ) | |||||||||
| Net (income) loss attributable to noncontrolling interests | (63 | ) | - | - | (63 | ) | ||||||||||
| Net (income) loss attributable to noncontrolling interests-RSO | - | (8,296 | ) | 30,348 | 22,052 | |||||||||||
| Net income (loss) attributable to common shareholders | $ | 201 | $ | (31,011 | ) | $ | 29,158 | $ | (1,652 | ) | ||||||
| RESOURCE AMERICA, INC. |
| CONSOLIDATING STATEMENT OF OPERATIONS |
| (in thousands) |
| (unaudited) |
The following table presents the consolidating statement of operations for the three months ended June 30, 2014:
| RAI | RSO | Eliminations | Consolidated | |||||||||||||
| REVENUES: | ||||||||||||||||
| Real estate | $ | 13,448 | $ | - | $ | - | $ | 13,448 | ||||||||
| Financial fund management | 8,141 | - | - | 8,141 | ||||||||||||
| Commercial finance | (42 | ) | - | - | (42 | ) | ||||||||||
| 21,547 | - | - | 21,547 | |||||||||||||
| Revenues from consolidated VIE-RSO | - | 23,828 | - | 23,828 | ||||||||||||
| Elimination of consolidated VIE-RSO revenues attributed to operating segments | - | - | (3,040 | ) | (3,040 | ) | ||||||||||
| Total revenues | 21,547 | 23,828 | (3,040 | ) | 42,335 | |||||||||||
| COSTS AND EXPENSES: | ||||||||||||||||
| Real estate | 9,105 | - | - | 9,105 | ||||||||||||
| Financial fund management | 2,779 | - | - | 2,779 | ||||||||||||
| Commercial finance | 123 | - | - | 123 | ||||||||||||
| General and administrative | 2,729 | - | - | 2,729 | ||||||||||||
| Provision for credit losses | 1,575 | - | - | 1,575 | ||||||||||||
| Depreciation and amortization | 465 | - | - | 465 | ||||||||||||
| 16,776 | - | - | 16,776 | |||||||||||||
| Expenses of consolidated VIE-RSO | - | 16,853 | 16,853 | |||||||||||||
| Elimination of consolidated VIE-RSO expenses attributed to operating segments | - | - | (3,053 | ) | (3,053 | ) | ||||||||||
| Total expenses | 16,776 | 16,853 | (3,053 | ) | 30,576 | |||||||||||
| OPERATING INCOME (LOSS) | 4,771 | 6,975 | 13 | 11,759 | ||||||||||||
| OTHER INCOME (EXPENSE): | ||||||||||||||||
| Gain (loss) on sale of investment securities, net | 370 | - | - | 370 | ||||||||||||
| Interest expense | (497 | ) | - | - | (497 | ) | ||||||||||
| Other income (expense), net | 590 | - | (572 | ) | 18 | |||||||||||
| Other income (expense), net, from consolidated VIE-RSO | - | 10,281 | - | 10,281 | ||||||||||||
| Elimination of consolidated VIE-RSO other income, net | - | - | 11 | 11 | ||||||||||||
| Total other income (expense) | 463 | 10,281 | (561 | ) | 10,183 | |||||||||||
| Income (loss) from continuing operations before taxes | 5,234 | 17,256 | (548 | ) | 21,942 | |||||||||||
| Income tax provision (benefit) | 2,181 | (446 | ) | - | 1,735 | |||||||||||
| Net income (loss) | 3,053 | 17,702 | (548 | ) | 20,207 | |||||||||||
| Income (loss) from continuing operations before taxes | (84 | ) | - | - | (84 | ) | ||||||||||
| Net (income) loss attributable to noncontrolling interests-RSO | - | (3,025 | ) | (14,380 | ) | (17,405 | ) | |||||||||
| Net income (loss) attributable to common shareholders | $ | 2,969 | $ | 14,677 | $ | (14,928 | ) | $ | 2,718 | |||||||
| RESOURCE AMERICA, INC. |
| CONSOLIDATING STATEMENT OF OPERATIONS |
| (in thousands) |
| (unaudited) |
The following table presents the consolidating statement of operations for the six months ended June 30, 2015:
| RAI | RSO | Eliminations | Consolidated | |||||||||||||
| REVENUES: | ||||||||||||||||
| Real estate | $ | 38,082 | $ | - | $ | - | $ | 38,082 | ||||||||
| Financial fund management | 9,918 | - | - | 9,918 | ||||||||||||
| Commercial finance | - | - | - | - | ||||||||||||
| 48,000 | - | - | 48,000 | |||||||||||||
| Revenues from consolidated VIE-RSO | - | 48,562 | - | 48,562 | ||||||||||||
| Elimination of consolidated VIE-RSO revenues attributed to operating segments | - | - | (8,377 | ) | (8,377 | ) | ||||||||||
| Total revenues | 48,000 | 48,562 | (8,377 | ) | 88,185 | |||||||||||
| COSTS AND EXPENSES: | ||||||||||||||||
| Real estate | 23,581 | - | - | 23,581 | ||||||||||||
| Financial fund management | 6,144 | - | - | 6,144 | ||||||||||||
| Commercial finance | 1,037 | - | - | 1,037 | ||||||||||||
| General and administrative | 7,478 | - | - | 7,478 | ||||||||||||
| Provision for credit losses | 678 | - | - | 678 | ||||||||||||
| Depreciation and amortization | 972 | - | - | 972 | ||||||||||||
| 39,890 | - | - | 39,890 | |||||||||||||
| Expenses of consolidated VIE-RSO | - | 75,595 | - | 75,595 | ||||||||||||
| Elimination of consolidated VIE-RSO expenses attributed to operating segments | - | - | (6,736 | ) | (6,736 | ) | ||||||||||
| Total expenses | 39,890 | 75,595 | (6,736 | ) | 108,749 | |||||||||||
| OPERATING INCOME (LOSS) | 8,110 | (27,033 | ) | (1,641 | ) | (20,564 | ) | |||||||||
| OTHER INCOME (EXPENSE): | ||||||||||||||||
| Other-than-temporary impairment on investments | (4,346 | ) | - | - | (4,346 | ) | ||||||||||
| Interest expense | (876 | ) | - | - | (876 | ) | ||||||||||
| Other income (expense), net | 1,003 | - | (936 | ) | 67 | |||||||||||
| Other income (expense), net, from consolidated VIE-RSO | - | 27,053 | - | 27,053 | ||||||||||||
| Elimination of consolidated VIE-RSO other income, net | - | - | 15 | 15 | ||||||||||||
| Total other income (expense) | (4,219 | ) | 27,053 | (921 | ) | 21,913 | ||||||||||
| Income (loss) from continuing operations before taxes | 3,891 | 20 | (2,562 | ) | 1,349 | |||||||||||
| Income tax provision (benefit) | 2,101 | 4,765 | - | 6,866 | ||||||||||||
| Net income (loss) | 1,790 | (4,745 | ) | (2,562 | ) | (5,517 | ) | |||||||||
| Net (income) loss attributable to noncontrolling interests | (55 | ) | - | - | (55 | ) | ||||||||||
| Net (income) loss attributable to noncontrolling interests-RSO | - | (16,864 | ) | 21,121 | 4,257 | |||||||||||
| Net income (loss) attributable to common shareholders | $ | 1,735 | $ | (21,609 | ) | $ | 18,559 | $ | (1,315 | ) | ||||||
| RESOURCE AMERICA, INC. |
| CONSOLIDATING STATEMENT OF OPERATIONS |
| (in thousands) |
| (unaudited) |
The following table presents the consolidating statement of operations for the six months ended June 30, 2014:
| RAI | RSO | Eliminations | Consolidated | |||||||||||||
| REVENUES: | ||||||||||||||||
| Real estate | $ | 26,723 | $ | - | $ | - | $ | 26,723 | ||||||||
| Financial fund management | 15,216 | - | - | 15,216 | ||||||||||||
| Commercial finance | (141 | ) | - | - | (141 | ) | ||||||||||
| 41,798 | - | - | 41,798 | |||||||||||||
| Revenues from consolidated VIE-RSO | - | 49,073 | - | 49,073 | ||||||||||||
| Elimination of consolidated VIE-RSO revenues attributed to operating segments | - | - | (5,920 | ) | (5,920 | ) | ||||||||||
| Total revenues | 41,798 | 49,073 | (5,920 | ) | 84,951 | |||||||||||
| COSTS AND EXPENSES: | ||||||||||||||||
| Real estate | 17,980 | - | - | 17,980 | ||||||||||||
| Financial fund management | 7,168 | - | - | 7,168 | ||||||||||||
| Commercial finance | 226 | - | - | 226 | ||||||||||||
| General and administrative | 5,883 | - | - | 5,883 | ||||||||||||
| Provision for credit losses | 2,783 | - | - | 2,783 | ||||||||||||
| Depreciation and amortization | 916 | - | - | 916 | ||||||||||||
| 34,956 | - | - | 34,956 | |||||||||||||
| Expenses of consolidated VIE-RSO | - | 28,138 | - | 28,138 | ||||||||||||
| Elimination of consolidated VIE-RSO expenses attributed to operating segments | - | - | (5,872 | ) | (5,872 | ) | ||||||||||
| Total expenses | 34,956 | 28,138 | (5,872 | ) | 57,222 | |||||||||||
| OPERATING INCOME (LOSS) | 6,842 | 20,935 | (48 | ) | 27,729 | |||||||||||
| OTHER INCOME (EXPENSE): | ||||||||||||||||
| Gain (loss) on sale of investment securities, net | 370 | - | - | 370 | ||||||||||||
| Interest expense | (980 | ) | - | - | (980 | ) | ||||||||||
| Other income (expense), net | 1,327 | - | (1,144 | ) | 183 | |||||||||||
| Other income (expense), net, from consolidated VIE-RSO | - | 13,797 | - | 13,797 | ||||||||||||
| Elimination of consolidated VIE-RSO other income, net | - | - | 29 | 29 | ||||||||||||
| Total other income (expense) | 717 | 13,797 | (1,115 | ) | 13,399 | |||||||||||
| Income (loss) from continuing operations before taxes | 7,559 | 34,732 | (1,163 | ) | 41,128 | |||||||||||
| Income tax provision (benefit) | 3,250 | (430 | ) | - | 2,820 | |||||||||||
| Net income (loss) | 4,309 | 35,162 | (1,163 | ) | 38,308 | |||||||||||
| Net (income) loss attributable to noncontrolling interests | (44 | ) | - | - | (44 | ) | ||||||||||
| Net (income) loss attributable to noncontrolling interests-RSO | - | (5,369 | ) | (29,187 | ) | (34,556 | ) | |||||||||
| Net income (loss) attributable to common shareholders | $ | 4,265 | $ | 29,793 | $ | (30,350 | ) | $ | 3,708 | |||||||
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 | Six Months Ended | ||||||||||||
| June 30, | June 30, | ||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||
| Net income (loss) attributable to common shareholders - GAAP | $ | (1,652 | ) | $ | 2,718 | $ | (1,315 | ) | $ | 3,708 | |||
| Adjustments, net of tax: | |||||||||||||
| Reduction of income, net of eliminations, attributable to consolidation of RSO | 1,853 | 251 | 3,050 | 541 | |||||||||
| Impairment of investment in unconsolidated loan manager | 2,485 | - | 2,589 | - | |||||||||
| Loss attributable to commercial finance | 305 | 1,180 | 836 | 2,070 | |||||||||
| Deferred tax provision | 377 | 466 | 528 | 627 | |||||||||
| Adjusted net income attributable to common shareholders | $ | 3,368 | $ | 4,615 | $ | 5,688 | $ | 6,946 | |||||
| Adjusted weighted average diluted shares outstanding (2) | 23,135 | 22,032 | 23,186 | 22,031 | |||||||||
| Adjusted net income attributable to common shareholders per common per share-diluted | $ | 0.15 | $ | 0.21 | $ | 0.25 | $ | 0.32 | |||||
| (1) | Adjusted net income attributable to common shareholders presents the Company's operations prior to the consolidation of RSO and without the effect of the impairment of investment in unconsolidated loan manager, its commercial finance operations and deferred tax provision. 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 and six months ended June 30, 2015 and 2014 separately from these items. 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 income from continuing operations attributable to common shareholders per common share-diluted includes an additional 268,000 and 271,000 shares for the three and six months ended June 30, 2015, which were antidilutive for the periods and, as such, were not used in the calculation of GAAP loss from continuing operations 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