Attached files
| file | filename |
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| 8-K - 8-K - RESOURCE AMERICA, INC. | rexi-20140630x8k.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
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) | ||
RESOURCE AMERICA, INC.
REPORTS OPERATING RESULTS
FOR THE SECOND QUARTER ENDED JUNE 30, 2014
Philadelphia, PA - August 6, 2014 - Resource America, Inc. (NASDAQ: REXI)
Second Quarter 2014 Highlights
•Adjusted net income attributable to common shareholders of $4.6 million (see Schedule I)
•Stand-alone operating income of $4.8 million as compared to a $97,000 loss for the prior year period
•Increased gross assets under management by 17% to $18.9 billion since June 30, 2013
•Book value per common share of $7.88
Second Quarter 2014 Results
Resource America, Inc. (NASDAQ: REXI) (the "Company") reported adjusted net income attributable to common shareholders, a non-GAAP measure, of $4.6 million, or $0.21 per common share-diluted, and $7.0 million, or $0.32 per common share-diluted, for the three and six months ended June 30, 2014 as compared to adjusted net income attributable to common shareholders of $502,000, or $0.02 per common share-diluted, and $3.0 million, or $0.14 per common share-diluted, for the three and six months ended June 30, 2013, respectively. A reconciliation of the Company's reported GAAP net income 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 $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, respectively, as compared to GAAP net income attributable to common shareholders of $1.1 million, or $0.05 per common share-diluted, and $1.6 million, or $0.07 per common share-diluted, for the three and six months ended June 30, 2013, respectively.
Assets Under Management
The following table details the Company's gross assets under management by operating segment, which increased by $2.8 billion (17%) from June 30, 2013 to 2014 (in billions):
June 30, | |||||||
2014 | 2013 | ||||||
Financial fund management | $ | 15.5 | $ | 13.6 | |||
Real estate | 2.8 | 1.9 | |||||
Commercial finance | 0.6 | 0.6 | |||||
$ | 18.9 | $ | 16.1 | ||||
Net assets under management (1) | $ | 8.8 | $ | 7.1 | |||
(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, 2013.
Highlights for the Second Quarter Ended June 30, 2014 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 $951.2 million at June 30, 2014, an increase of $662.4 million, or 229%, from $288.8 million at June 30, 2013. |
◦ | Acquired four multifamily assets for $112.4 million, placed $120.4 million of financing on these assets and disposed of one additional asset for $10.5 million during the three months ended June 30, 2014. |
In February 2014, Resource Real Estate Opportunity REIT II, Inc. ("Opportunity REIT II") commenced its initial public offering of common stock and will focus on acquiring multifamily rental properties and selected loans. Opportunity REIT II is offering up to $1 billion in common stock at a maximum price of $10 per share. The Company is the external manager. Through August 5, 2014, Opportunity REIT II has raised $8.1 million.
• | In June 2014, Opportunity REIT II acquired its first asset, a multifamily apartment complex, for $9.5 million, financing $7.5 million of the purchase price. |
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:
• | During the quarter, raised $147.7 million in equity capital, including $116.2 million, net of underwriting discounts and expenses, in connection with the June 2014 Series C preferred stock offering of 4.8 million shares at a net price of $24.2125 (8.625% coupon) per share. |
• | Originated $181.0 million of commercial real estate whole loans during the three months ended June 30, 2014. |
• | In July 2014, completed a $354.0 million commercial real estate securitization that issued $235.0 million of floating-rate notes at a weighted average coupon of LIBOR plus 1.29%. |
The following additional highlights contributed to the Company's real estate asset management operations:
• | The Company's real estate operating segment increased its assets under management at June 30, 2014 to $2.8 billion, an increase of $908.7 million, or 47%, from June 30, 2013. |
• | Real estate revenues increased 11% and 14% to $13.4 million and $26.7 million, for the three and six months ended June 30, 2014, respectively, as compared to $12.2 million and $23.5 million for the three and six months ended June 30, 2013, respectively. |
FINANCIAL FUND MANAGEMENT:
Credit Asset Management
CVC Credit Partners, L.P. ("CCP"), the Company's global joint venture, closed Apidos CLO XVII, Ltd. (issuing notes with a par value of $500.0 million), Apidos CLO XVIII, Ltd. (issuing notes with a par value of $700.0 million) and CVC Cordatus Loan Fund III Limited (issuing notes with a par value of €436.0 million). Since creating this joint venture in April 2012, CCP has closed 10 collateralized loan obligation issuers (issuing notes with a total par value of $5.3 billion) and expects to receive approximately $24.9 million in fees on an annual run rate basis. The Company has a 33% interest in this joint venture.
The following additional highlights contributed to the Company's financial fund asset management operations:
• | The Company's financial fund management operating segment increased its assets under management at June 30, 2014 to $15.5 billion, an increase of $1.9 billion, or 13%, from June 30, 2013. |
• | Financial fund management revenues increased 233% and 126% to $8.1 million and $15.2 million, for the three and six months ended June 30, 2014, respectively, as compared to $2.4 million and $6.7 million for the three and six months ended June 30, 2013, respectively. |
CORPORATE/OTHER:
Corporate Credit Facility Modification
• | In April 2014, the Company increased its revolving credit facility with TD Bank, N.A. to $11.5 million and extended the maturity from December 2014 to December 2017. |
Share Repurchases
• | The Company repurchased 233,891 of its shares during the second quarter ended June 30, 2014 at an average price of $8.91 per share. |
Dividends
• | The Company's Board of Directors authorized a cash dividend of $0.05 per share on the Company’s common stock paid on July 31, 2014 to holders of record as of the close of business on July 17, 2014. |
• | RSO's Board of Directors declared a cash dividend of $0.20 per common share for its quarter ended June 30, 2014. |
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 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 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, 2014 | December 31, 2013 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Cash | $ | 11,858 | $ | 19,853 | |||
Restricted cash | 654 | 571 | |||||
Receivables | 3,400 | 541 | |||||
Loans and receivables from managed entities and related parties, net | 32,586 | 30,923 | |||||
Investments in real estate, net | 17,084 | 17,696 | |||||
Investment securities, at fair value | 12,590 | 7,839 | |||||
Investments in unconsolidated loan manager | 38,461 | 37,821 | |||||
Investments in unconsolidated entities | 13,448 | 14,342 | |||||
Assets of consolidated variable interest entity ("VIE") - RSO: | |||||||
Cash and cash equivalents (including restricted cash) | 313,528 | 325,579 | |||||
Investments, at fair value | 273,454 | 226,764 | |||||
Loans | 1,785,135 | 1,397,458 | |||||
Investments in real estate and unconsolidated entities | 89,989 | 124,193 | |||||
Other assets | 96,062 | 76,467 | |||||
Total assets of consolidated VIE - RSO | 2,558,168 | 2,150,461 | |||||
Property and equipment, net | 5,378 | 5,844 | |||||
Deferred tax assets, net | 24,607 | 27,769 | |||||
Other assets | 5,212 | 4,791 | |||||
Total assets | $ | 2,723,446 | $ | 2,318,451 | |||
LIABILITIES AND EQUITY | |||||||
Liabilities: | |||||||
Accrued expenses and other liabilities | $ | 16,846 | $ | 22,134 | |||
Payables to managed entities and related parties | 3,608 | 3,110 | |||||
Borrowings | 20,558 | 20,619 | |||||
Liabilities of consolidated VIE - RSO: | |||||||
Borrowings | 1,579,985 | 1,320,015 | |||||
Other liabilities | 54,342 | 55,247 | |||||
Total liabilities of consolidated VIE - RSO | 1,634,327 | 1,375,262 | |||||
Total liabilities | 1,675,339 | 1,421,125 | |||||
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; 31,111,667 and 30,378,339 shares issued (including nonvested restricted stock of 674,701 and 400,194), respectively | 304 | 299 | |||||
Additional paid-in capital | 290,947 | 288,555 | |||||
Accumulated deficit | (24,290 | ) | (26,025 | ) | |||
Treasury stock, at cost; 10,667,202 and 10,434,436 shares, respectively | (109,906 | ) | (107,874 | ) | |||
Accumulated other comprehensive loss | (1,257 | ) | (1,231 | ) | |||
Total stockholders’ equity | 155,798 | 153,724 | |||||
Noncontrolling interests | 306 | 238 | |||||
Noncontrolling interests attributable to RSO | 892,003 | 743,364 | |||||
Total equity | 1,048,107 | 897,326 | |||||
$ | 2,723,446 | $ | 2,318,451 | ||||
RESOURCE AMERICA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
REVENUES: | |||||||||||||||
Real estate (includes revenues of $2,302, $2,805, $4,985 and $5,093 related to RSO) | $ | 13,448 | $ | 12,153 | $ | 26,723 | $ | 23,493 | |||||||
Financial fund management (includes revenues of $753, $(111), $960 and $270 related to RSO) | 8,141 | 2,445 | 15,216 | 6,732 | |||||||||||
Commercial finance (includes no revenue related to RSO) | (42 | ) | (35 | ) | (141 | ) | (213 | ) | |||||||
21,547 | 14,563 | 41,798 | 30,012 | ||||||||||||
Revenues from consolidated VIE - RSO | 34,608 | 21,647 | 66,539 | 52,225 | |||||||||||
Elimination of consolidated VIE revenues attributed to operating segments | (3,040 | ) | (2,725 | ) | (5,920 | ) | (5,425 | ) | |||||||
Total revenues | 53,115 | 33,485 | 102,417 | 76,812 | |||||||||||
COSTS AND EXPENSES: | |||||||||||||||
Real estate | 9,105 | 8,896 | 17,980 | 18,336 | |||||||||||
Financial fund management | 2,779 | 1,694 | 7,168 | 4,222 | |||||||||||
Commercial finance | 123 | (219 | ) | 226 | (174 | ) | |||||||||
General and administrative | 2,729 | 2,149 | 5,883 | 4,302 | |||||||||||
Provision for credit losses | 1,575 | 1,647 | 2,783 | 1,985 | |||||||||||
Depreciation and amortization | 465 | 489 | 916 | 905 | |||||||||||
16,776 | 14,656 | 34,956 | 29,576 | ||||||||||||
Expenses from consolidated VIE - RSO | 19,861 | 11,368 | 32,985 | 27,556 | |||||||||||
Elimination of consolidated VIE expenses attributed to operating segments | (3,053 | ) | (2,663 | ) | (5,872 | ) | (5,317 | ) | |||||||
Total expenses | 33,584 | 23,361 | 62,069 | 51,815 | |||||||||||
OPERATING INCOME | 19,531 | 10,124 | 40,348 | 24,997 | |||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Gain on sale of investment securities, net | 370 | — | 370 | — | |||||||||||
Other-than-temporary impairment on investments | — | — | — | (214 | ) | ||||||||||
Interest expense | (497 | ) | (501 | ) | (980 | ) | (995 | ) | |||||||
Other income, net | 18 | 83 | 183 | 272 | |||||||||||
(109 | ) | (418 | ) | (427 | ) | (937 | ) | ||||||||
Other income, net, from consolidated VIE - RSO | 2,509 | — | 1,178 | — | |||||||||||
Elimination of consolidated VIE other income attributed to operating segments | 11 | 31 | 29 | 62 | |||||||||||
2,411 | (387 | ) | 780 | (875 | ) | ||||||||||
Income from continuing operations before taxes | 21,942 | 9,737 | 41,128 | 24,122 | |||||||||||
Income tax provision (benefit) | 2,181 | (1,511 | ) | 3,250 | (1,657 | ) | |||||||||
Income tax (benefit) provision - RSO | (446 | ) | 1,737 | (430 | ) | 3,499 | |||||||||
Income from continuing operations | 20,207 | 9,511 | 38,308 | 22,280 | |||||||||||
Loss from discontinued operations, net of tax | — | — | — | (2 | ) | ||||||||||
Net income | 20,207 | 9,511 | 38,308 | 22,278 | |||||||||||
Net (income) loss attributable to noncontrolling interests | (84 | ) | (26 | ) | (44 | ) | 17 | ||||||||
Net income attributable to noncontrolling interests of consolidated VIE - RSO | (17,405 | ) | (8,372 | ) | (34,556 | ) | (20,686 | ) | |||||||
Net income attributable to common shareholders | $ | 2,718 | $ | 1,113 | $ | 3,708 | $ | 1,609 | |||||||
Amounts attributable to common shareholders: | |||||||||||||||
Income from continuing operations | $ | 2,718 | $ | 1,113 | $ | 3,708 | $ | 1,611 | |||||||
Discontinued operations | — | — | — | (2 | ) | ||||||||||
Net income | $ | 2,718 | $ | 1,113 | $ | 3,708 | $ | 1,609 | |||||||
Basic earnings per share: | |||||||||||||||
Continuing operations | $ | 0.13 | $ | 0.05 | $ | 0.18 | $ | 0.08 | |||||||
Discontinued operations | — | — | — | — | |||||||||||
Net income | $ | 0.13 | $ | 0.05 | $ | 0.18 | $ | 0.08 | |||||||
Weighted average shares outstanding | 20,386 | 20,297 | 20,320 | 20,219 | |||||||||||
Diluted earnings per share: | |||||||||||||||
Continuing operations | $ | 0.12 | $ | 0.05 | $ | 0.17 | $ | 0.07 | |||||||
Discontinued operations | — | — | — | — | |||||||||||
Net income | $ | 0.12 | $ | 0.05 | $ | 0.17 | $ | 0.07 | |||||||
Weighted average shares outstanding | 22,032 | 22,106 | 22,031 | 21,969 | |||||||||||
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 | — | 34,608 | — | 34,608 | |||||||||||
Elimination of consolidated VIE revenues attributed to operating segments | — | — | (3,040 | ) | (3,040 | ) | |||||||||
Total revenues | 21,547 | 34,608 | (3,040 | ) | 53,115 | ||||||||||
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 | — | 19,415 | 446 | 19,861 | |||||||||||
Elimination of consolidated VIE expenses attributed to operating segments | — | — | (3,053 | ) | (3,053 | ) | |||||||||
Total expenses | 16,776 | 19,415 | (2,607 | ) | 33,584 | ||||||||||
OPERATING INCOME | 4,771 | 15,193 | (433 | ) | 19,531 | ||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Gain on sale of investment securities, net | 370 | — | — | 370 | |||||||||||
Interest expense | (497 | ) | — | — | (497 | ) | |||||||||
Other income, net | 590 | — | (572 | ) | 18 | ||||||||||
Other income, net, from consolidated VIE - RSO | — | 2,509 | — | 2,509 | |||||||||||
Elimination of consolidated VIE other expense, net | — | — | 11 | 11 | |||||||||||
463 | 2,509 | (561 | ) | 2,411 | |||||||||||
Income from continuing operations before taxes | 5,234 | 17,702 | (994 | ) | 21,942 | ||||||||||
Income tax provision | 2,181 | — | (446 | ) | 1,735 | ||||||||||
Net income | 3,053 | 17,702 | (548 | ) | 20,207 | ||||||||||
Net income attributable to noncontrolling interests | (84 | ) | — | — | (84 | ) | |||||||||
Net income attributable to noncontrolling interests - RSO | — | (3,025 | ) | (14,380 | ) | (17,405 | ) | ||||||||
Net income 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 three months ended June 30, 2013:
RAI | RSO | Eliminations | Consolidated | ||||||||||||
REVENUES: | |||||||||||||||
Real estate | $ | 12,153 | $ | — | $ | — | $ | 12,153 | |||||||
Financial fund management | 2,445 | — | — | 2,445 | |||||||||||
Commercial finance | (35 | ) | — | — | (35 | ) | |||||||||
14,563 | — | — | 14,563 | ||||||||||||
Revenues from consolidated VIE - RSO | — | 21,647 | — | 21,647 | |||||||||||
Elimination of consolidated VIE revenues attributed to operating segments | — | — | (2,725 | ) | (2,725 | ) | |||||||||
Total revenues | 14,563 | 21,647 | (2,725 | ) | 33,485 | ||||||||||
COSTS AND EXPENSES: | |||||||||||||||
Real estate | 8,896 | — | — | 8,896 | |||||||||||
Financial fund management | 1,694 | — | — | 1,694 | |||||||||||
Commercial finance | (219 | ) | — | — | (219 | ) | |||||||||
General and administrative | 2,153 | — | (4 | ) | 2,149 | ||||||||||
Provision for credit losses | 1,647 | — | — | 1,647 | |||||||||||
Depreciation and amortization | 489 | — | — | 489 | |||||||||||
14,660 | — | (4 | ) | 14,656 | |||||||||||
Expenses of consolidated VIE - RSO | — | 13,105 | (1,737 | ) | 11,368 | ||||||||||
Elimination of consolidated VIE expenses attributed to operating segments | — | — | (2,663 | ) | (2,663 | ) | |||||||||
Total expenses | 14,660 | 13,105 | (4,404 | ) | 23,361 | ||||||||||
OPERATING (LOSS) INCOME | (97 | ) | 8,542 | 1,679 | 10,124 | ||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Interest expense | (501 | ) | — | — | (501 | ) | |||||||||
Other income, net | 640 | — | (557 | ) | 83 | ||||||||||
Elimination of consolidated VIE other expense, net | — | — | 31 | 31 | |||||||||||
139 | — | (526 | ) | (387 | ) | ||||||||||
Income from continuing operations before taxes | 42 | 8,542 | 1,153 | 9,737 | |||||||||||
Income tax benefit | (1,511 | ) | — | 1,737 | 226 | ||||||||||
Net income | 1,553 | 8,542 | (584 | ) | 9,511 | ||||||||||
Net income attributable to noncontrolling interests | (26 | ) | — | — | (26 | ) | |||||||||
Net income attributable to noncontrolling interests - RSO | — | (1,800 | ) | (6,572 | ) | (8,372 | ) | ||||||||
Net income attributable to common shareholders | $ | 1,527 | $ | 6,742 | $ | (7,156 | ) | $ | 1,113 | ||||||
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 | — | 66,539 | — | 66,539 | |||||||||||
Elimination of consolidated VIE revenues attributed to operating segments | — | — | (5,920 | ) | (5,920 | ) | |||||||||
Total revenues | 41,798 | 66,539 | (5,920 | ) | 102,417 | ||||||||||
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 | — | 32,555 | 430 | 32,985 | |||||||||||
Elimination of consolidated VIE expenses attributed to operating segments | — | — | (5,872 | ) | (5,872 | ) | |||||||||
Total expenses | 34,956 | 32,555 | (5,442 | ) | 62,069 | ||||||||||
OPERATING INCOME | 6,842 | 33,984 | (478 | ) | 40,348 | ||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Gain on sale of investment securities, net | 370 | — | — | 370 | |||||||||||
Interest expense | (980 | ) | — | — | (980 | ) | |||||||||
Other income, net | 1,327 | — | (1,144 | ) | 183 | ||||||||||
Other income, net, from consolidated VIE - RSO | — | 1,178 | — | 1,178 | |||||||||||
Elimination of consolidated VIE other income, net | — | — | 29 | 29 | |||||||||||
717 | 1,178 | (1,115 | ) | 780 | |||||||||||
Income from continuing operations before taxes | 7,559 | 35,162 | (1,593 | ) | 41,128 | ||||||||||
Income tax provision | 3,250 | — | (430 | ) | 2,820 | ||||||||||
Net income | 4,309 | 35,162 | (1,163 | ) | 38,308 | ||||||||||
Net income attributable to noncontrolling interests | (44 | ) | — | — | (44 | ) | |||||||||
Net income attributable to noncontrolling interests - RSO | — | (5,369 | ) | (29,187 | ) | (34,556 | ) | ||||||||
Net income attributable to common shareholders | $ | 4,265 | $ | 29,793 | $ | (30,350 | ) | $ | 3,708 | ||||||
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, 2013:
RAI | RSO | Eliminations | Consolidated | ||||||||||||
REVENUES: | |||||||||||||||
Real estate | $ | 23,493 | $ | — | $ | — | $ | 23,493 | |||||||
Financial fund management | 6,732 | — | — | 6,732 | |||||||||||
Commercial finance | (213 | ) | — | — | (213 | ) | |||||||||
30,012 | — | — | 30,012 | ||||||||||||
Revenues from consolidated VIE - RSO | — | 52,225 | — | 52,225 | |||||||||||
Elimination of consolidated VIE revenues attributed to operating segments | — | — | (5,425 | ) | (5,425 | ) | |||||||||
Total revenues | 30,012 | 52,225 | (5,425 | ) | 76,812 | ||||||||||
COSTS AND EXPENSES: | |||||||||||||||
Real estate | 18,336 | — | — | 18,336 | |||||||||||
Financial fund management | 4,222 | — | — | 4,222 | |||||||||||
Commercial finance | (174 | ) | — | — | (174 | ) | |||||||||
General and administrative | 4,310 | — | (8 | ) | 4,302 | ||||||||||
Provision for credit losses | 1,985 | — | — | 1,985 | |||||||||||
Depreciation and amortization | 905 | — | — | 905 | |||||||||||
29,584 | — | (8 | ) | 29,576 | |||||||||||
Expenses from consolidated VIE - RSO | — | 27,556 | — | 27,556 | |||||||||||
Elimination of consolidated VIE expenses attributed to operating segments | — | — | (5,317 | ) | (5,317 | ) | |||||||||
Total expenses | 29,584 | 27,556 | (5,325 | ) | 51,815 | ||||||||||
OPERATING INCOME | 428 | 24,669 | (100 | ) | 24,997 | ||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Other-than-temporary impairment on investments | (214 | ) | — | — | (214 | ) | |||||||||
Interest expense | (995 | ) | — | — | (995 | ) | |||||||||
Other income, net | 1,385 | — | (1,113 | ) | 272 | ||||||||||
Elimination of consolidated VIE other income, net | — | — | 62 | 62 | |||||||||||
176 | — | (1,051 | ) | (875 | ) | ||||||||||
Income from continuing operations before taxes | 604 | 24,669 | (1,151 | ) | 24,122 | ||||||||||
Income tax (benefit) provision | (1,657 | ) | 3,499 | — | 1,842 | ||||||||||
Income from continuing operations | 2,261 | 21,170 | (1,151 | ) | 22,280 | ||||||||||
Loss from discontinued operations, net of tax | (2 | ) | — | — | (2 | ) | |||||||||
Net income | 2,259 | 21,170 | (1,151 | ) | 22,278 | ||||||||||
Net loss attributable to noncontrolling interests | 17 | — | — | 17 | |||||||||||
Net income attributable to noncontrolling interests - RSO | — | (20,686 | ) | — | (20,686 | ) | |||||||||
Net income attributable to common shareholders | $ | 2,276 | $ | 484 | $ | (1,151 | ) | $ | 1,609 | ||||||
Amounts attributable to common shareholders: | |||||||||||||||
Income from continuing operations | $ | 2,278 | $ | 484 | $ | (1,151 | ) | $ | 1,611 | ||||||
Discontinued operations | (2 | ) | — | — | (2 | ) | |||||||||
Net income | $ | 2,276 | $ | 484 | $ | (1,151 | ) | $ | 1,609 | ||||||
Schedule I
RECONCILIATION OF GAAP NET INCOME 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, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Net income attributable to common shareholders - GAAP | $ | 2,718 | $ | 1,113 | $ | 3,708 | $ | 1,609 | ||||||||
Adjustments, net of tax: | ||||||||||||||||
Income, net of eliminations, attributable to consolidation of RSO | 251 | 418 | 557 | 675 | ||||||||||||
Loss attributable to commercial finance | 1,180 | 844 | 2,070 | 2,852 | (2) | |||||||||||
Deferred tax provision (benefit) | 466 | (1,873 | ) | 627 | (2,098 | ) | ||||||||||
Adjusted net income attributable to common shareholders | $ | 4,615 | $ | 502 | $ | 6,962 | $ | 3,038 | ||||||||
Adjusted weighted average diluted shares outstanding | 22,032 | 22,106 | 22,031 | 21,969 | ||||||||||||
Adjusted net income attributable to common shareholders per common per share-diluted | $ | 0.21 | $ | 0.02 | $ | 0.32 | $ | 0.14 | ||||||||
(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 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, excluding the impact of the RSO consolidation, in both its real estate and financial fund management segments for the three and six months ended June 30, 2014 and 2013 separately from its commercial finance operations and deferred tax provision (benefit). Adjusted net income attributable to common shareholders should not be considered as an alternative to net income 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 attributable to common shareholders in the Company's consolidated financial statements to help analyze how the Company's business is performing. |
(2) | Utilizes a full year continuing income tax rate of 35%. |