Attached files
| file | filename |
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| 8-K - 8-K - RESULTS 093015 - RESOURCE AMERICA, INC. | rexi-20150930x8k.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 | ||
RESOURCE AMERICA, INC.
REPORTS OPERATING RESULTS
FOR THE THIRD QUARTER ENDED SEPTEMBER 30, 2015
Philadelphia, PA - November 5, 2015 - Resource America, Inc. (NASDAQ: REXI)
Third Quarter 2015 Highlights
•Adjusted net income attributable to common shareholders of $762,000 (see Schedule I)
•Increased gross assets under management by 12% to $21.7 billion since September 30, 2014
•Book value per common share of $7.20
•Repurchased 1,306,301 shares at an average price of $7.91
Third Quarter 2015 Results
Resource America, Inc. (NASDAQ: REXI) (the "Company") reported adjusted net income attributable to common shareholders, a non-GAAP measure, of $762,000, or $0.03 per common share-diluted, and $6.4 million, or $0.28 per common share-diluted, for the three and nine months ended September 30, 2015 as compared to adjusted net income attributable to common shareholders of $2.8 million, or $0.13 per common share-diluted, and $10.2 million, or $0.46 per common share-diluted, for the three and nine months ended September 30, 2014, 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 a GAAP net loss attributable to common shareholders of $1.1 million, or $0.05 per common share-diluted, and $2.4 million, or $0.11 per common share-diluted, for the three and nine months ended September 30, 2015 as compared to GAAP net income attributable to common shareholders of $1.5 million, or $0.07 per common share-diluted, and $5.2 million, or $0.24 per common share-diluted, for the three and nine months ended September 30, 2014.
Assets Under Management
The following table details the Company's gross assets under management by operating segment, which increased by $2.3 billion (12%) from September 30, 2014 to 2015 (in billions):
September 30, | |||||||
2015 | 2014 | ||||||
Financial fund management | $ | 16.9 | $ | 15.7 | |||
Real estate | 4.0 | 3.1 | |||||
Commercial finance | 0.8 | 0.6 | |||||
$ | 21.7 | $ | 19.4 | ||||
Net assets under management (1) | $ | 9.6 | $ | 9.2 | |||
(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 Third Quarter Ended September 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, increased total assets to $1.1 billion at September 30, 2015, an increase of 16%, from $956.0 million at September 30, 2014.
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 had the following highlights:
• | Raised $82.9 million during the three months ended September 30, 2015 and a total of $352.4 million since inception. |
• | Acquired $110.9 million of assets and placed $53.5 million of financing during the three months ended September 30, 2015. |
• | Increased total assets to $382.0 million at September 30, 2015. |
Resource Real Estate Diversified Income Fund, a public closed-end real estate focused investment company managed by the Company, has raised $78.0 million since inception.
On October 5, 2015, Resource Innovation Office REIT, Inc. commenced its $1.1 billion initial public offering of common stock. Resource Innovation Office Advisor, LLC, a subsidiary of Resource Real Estate, will be the external manager.
Resource Apartment REIT III, Inc. filed a registration statement with the SEC on November 2, 2015 to raise up to $1.0 billion.
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 $147.8 million in new commercial real estate loans during the three months ended September 30, 2015. |
• | In August 2015, completed a $312.9 million commercial real estate securitization that issued $223.7 million of floating-rate notes at a weighted average coupon of LIBOR plus 1.71% basis points. |
• | In September 2015, closed a new three-year, $250.0 million commercial real estate term facility with Morgan Stanley Bank, N.A. to finance the continued expansion of RSO’s core commercial real estate lending business. |
The following additional highlights contributed to the Company's real estate asset management operations:
• | The Company's real estate operating segment increased its gross assets under management at September 30, 2015 to $4.0 billion, an increase of $953.0 million, or 31%, from September 30, 2014. |
• | Real estate revenues increased 13% and 32% to $16.2 million and $54.3 million for the three and nine months ended September 30, 2015, respectively, as compared to $14.3 million and $41.0 million for the three and nine months ended September 30, 2014. |
• | Resource Real Estate Management, Inc., the Company's property management subsidiary, managed 19,211 apartment units as of September 30, 2015 as compared to 20,740 units as of September 30, 2014. |
FINANCIAL FUND MANAGEMENT:
Credit Asset Management
CVC Credit Partners, L.P. ("CCP"), the Company's global joint venture, closed Apidos CLO XXII, Ltd. in October 2015. CCP has now closed CLOs issuing notes with a total par value of $8.3 billion. 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. At September 30, 2015, the Company had a 24% interest in this joint venture.
The following additional highlight contributed to the Company's financial fund asset management operations:
• | The Company's financial fund management operating segment increased its gross assets under management at September 30, 2015 to $16.9 billion, an increase of $1.2 billion, or 8%, from September 30, 2014. |
CORPORATE:
Share Repurchases
• | On August 13, 2015, the Company's Board of Directors authorized the repurchase of $25.0 million of its common stock. $14.6 million remains available for repurchase under this plan. |
• | The Company repurchased 1,306,301 of its shares during the third quarter ended September 30, 2015 at an average price of $7.91 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 October 30, 2015 to holders of record as of the close of business on October 19, 2015. |
• | RSO's Board of Directors declared a cash dividend of $0.64 per common share for its three months ended September 30, 2015. |
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 Innovation REIT was declared effective by the SEC on October 5, 2015. A written prospectus relating to these securities may be obtained by contacting Resource Securities, Inc., 1845 Walnut Street, 18th Floor, Philadelphia, PA 19103.
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.
A registration statement relating to securities offered by Income Fund was declared effective by the SEC on November 3, 2013. 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)
September 30, 2015 | December 31, 2014 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Cash | $ | 18,102 | $ | 27,542 | |||
Restricted cash | 941 | 725 | |||||
Receivables | 1,020 | 636 | |||||
Loans and receivables from managed entities and related parties, net | 25,138 | 30,303 | |||||
Investments in real estate, net | 16,191 | 17,097 | |||||
Investment securities, at fair value | 10,218 | 9,540 | |||||
Investments in unconsolidated loan manager | 32,082 | 39,655 | |||||
Investments in unconsolidated entities | 18,349 | 13,089 | |||||
Assets of consolidated variable interest entity ("VIE")-RSO: | |||||||
Cash and cash equivalents (including restricted cash) | 128,845 | 202,043 | |||||
Investments, at fair value | 260,315 | 296,506 | |||||
Loans | 2,234,979 | 2,039,655 | |||||
Investments in real estate and unconsolidated entities | 56,038 | 60,007 | |||||
Other assets | 105,865 | 129,801 | |||||
Total assets of consolidated VIE-RSO | 2,786,042 | 2,728,012 | |||||
Property and equipment, net | 5,533 | 5,063 | |||||
Deferred tax assets, net | 19,449 | 23,304 | |||||
Other assets | 10,929 | 5,416 | |||||
Total assets | $ | 2,943,994 | $ | 2,900,382 | |||
LIABILITIES AND EQUITY | |||||||
Liabilities: | |||||||
Accrued expenses and other liabilities | $ | 20,429 | $ | 22,279 | |||
Payables to managed entities and related parties | 4,417 | 3,015 | |||||
Borrowings | 20,896 | 20,412 | |||||
Liabilities of consolidated VIE-RSO: | |||||||
Borrowings | 1,881,240 | 1,717,132 | |||||
Other liabilities | 49,451 | 57,101 | |||||
Total liabilities of consolidated VIE-RSO | 1,930,691 | 1,774,233 | |||||
Total liabilities | 1,976,433 | 1,819,939 | |||||
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 1,143,242 and 833,082), respectively | 338 | 335 | |||||
Additional paid-in capital | 310,663 | 308,134 | |||||
Accumulated deficit | (28,676 | ) | (23,663 | ) | |||
Treasury stock, at cost; 13,590,239 and 11,764,417 shares, respectively | (134,969 | ) | (120,182 | ) | |||
Accumulated other comprehensive loss | (1,696 | ) | (1,030 | ) | |||
Total stockholders’ equity | 145,660 | 163,594 | |||||
Noncontrolling interests | 315 | 306 | |||||
Noncontrolling interests attributable to consolidated VIE-RSO | 821,586 | 916,543 | |||||
Total equity | 967,561 | 1,080,443 | |||||
Total liabilities and equity | $ | 2,943,994 | $ | 2,900,382 | |||
RESOURCE AMERICA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
REVENUES: | |||||||||||||||
Real estate (includes revenues of $2,422, $2,643, $7,925 and $7,628 related to RSO) | $ | 16,195 | $ | 14,289 | $ | 54,277 | $ | 41,012 | |||||||
Financial fund management (includes revenues of $1,372, $1,525, $4,260 and $2,485 related to RSO) | 4,408 | 5,557 | 14,326 | 20,773 | |||||||||||
Commercial finance (includes no revenues related to RSO) | 66 | (17 | ) | 66 | (158 | ) | |||||||||
20,669 | 19,829 | 68,669 | 61,627 | ||||||||||||
Revenues from consolidated VIE-RSO | 23,705 | 25,811 | 72,267 | 74,884 | |||||||||||
Elimination of consolidated VIE-RSO revenues attributed to operating segments | (3,697 | ) | (4,136 | ) | (12,074 | ) | (10,056 | ) | |||||||
Total revenues | 40,677 | 41,504 | 128,862 | 126,455 | |||||||||||
COSTS AND EXPENSES: | |||||||||||||||
Real estate | 11,223 | 9,384 | 34,804 | 27,364 | |||||||||||
Financial fund management | 3,369 | 2,812 | 9,513 | 9,980 | |||||||||||
Commercial finance | 434 | 125 | 1,471 | 351 | |||||||||||
General and administrative | 4,053 | 2,426 | 11,531 | 8,309 | |||||||||||
Provision for credit losses | (400 | ) | 559 | 278 | 3,342 | ||||||||||
Depreciation and amortization | 504 | 453 | 1,476 | 1,369 | |||||||||||
19,183 | 15,759 | 59,073 | 50,715 | ||||||||||||
Expenses from consolidated VIE-RSO | 15,994 | 15,447 | 91,589 | 43,585 | |||||||||||
Elimination of consolidated VIE-RSO expenses attributed to operating segments | (3,077 | ) | (3,502 | ) | (9,813 | ) | (9,374 | ) | |||||||
Total expenses | 32,100 | 27,704 | 140,849 | 84,926 | |||||||||||
OPERATING INCOME (LOSS) | 8,577 | 13,800 | (11,987 | ) | 41,529 | ||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Gain (loss) on sale of investment securities, net | — | 69 | — | 439 | |||||||||||
Impairment on investments in unconsolidated entities | (151 | ) | — | (4,497 | ) | — | |||||||||
Interest expense | (450 | ) | (467 | ) | (1,326 | ) | (1,447 | ) | |||||||
Other income (expense), net | (52 | ) | 80 | 15 | 263 | ||||||||||
(653 | ) | (318 | ) | (5,808 | ) | (745 | ) | ||||||||
Other income (expense), net, from consolidated VIE-RSO | 5,215 | 3,730 | 32,268 | 17,527 | |||||||||||
Elimination of consolidated VIE-RSO other income, net attributed to operating segments | — | 11 | 15 | 29 | |||||||||||
4,562 | 3,423 | 26,475 | 16,811 | ||||||||||||
Income (loss) from continuing operations before taxes | 13,139 | 17,223 | 14,488 | 58,340 | |||||||||||
Income tax provision (benefit) | 1,355 | 1,741 | 3,456 | 4,991 | |||||||||||
Income tax provision (benefit) of consolidated VIE-RSO (see Note 19) | (1,796 | ) | (237 | ) | 2,969 | (667 | ) | ||||||||
Net income (loss) | 13,580 | 15,719 | 8,063 | 54,016 | |||||||||||
Net (income) loss attributable to noncontrolling interests | (37 | ) | 11 | (92 | ) | (33 | ) | ||||||||
Net (income) loss attributable to noncontrolling interests of consolidated VIE-RSO (see Note 19) | (14,643 | ) | (14,214 | ) | (10,388 | ) | (48,759 | ) | |||||||
Net income (loss) attributable to common shareholders | $ | (1,100 | ) | $ | 1,516 | $ | (2,417 | ) | $ | 5,224 | |||||
Basic earnings (loss) per share: | |||||||||||||||
Net income (loss) | $ | (0.05 | ) | $ | 0.07 | $ | (0.11 | ) | $ | 0.25 | |||||
Weighted average shares outstanding | 22,067 | 21,109 | 22,629 | 20,586 | |||||||||||
Diluted earnings (loss) per share: | |||||||||||||||
Net income (loss) | $ | (0.05 | ) | $ | 0.07 | $ | (0.11 | ) | $ | 0.24 | |||||
Weighted average shares outstanding | 22,067 | 22,301 | 22,629 | 22,124 | |||||||||||
RESOURCE AMERICA, INC.
CONSOLIDATING STATEMENT OF OPERATIONS
(in thousands)
(unaudited)
The following table presents the consolidating statement of operations for the three months ended September 30, 2015:
RAI | RSO | Eliminations | Consolidated | ||||||||||||
REVENUES: | |||||||||||||||
Real estate | $ | 16,195 | $ | — | $ | — | $ | 16,195 | |||||||
Financial fund management | 4,408 | — | — | 4,408 | |||||||||||
Commercial finance | 66 | — | — | 66 | |||||||||||
20,669 | — | — | 20,669 | ||||||||||||
Revenues from consolidated VIE-RSO | — | 23,705 | — | 23,705 | |||||||||||
Elimination of consolidated VIE-RSO revenues attributed to operating segments | — | — | (3,697 | ) | (3,697 | ) | |||||||||
Total revenues | 20,669 | 23,705 | (3,697 | ) | 40,677 | ||||||||||
COSTS AND EXPENSES: | |||||||||||||||
Real estate | 11,223 | — | — | 11,223 | |||||||||||
Financial fund management | 3,369 | — | — | 3,369 | |||||||||||
Commercial finance | 434 | — | — | 434 | |||||||||||
General and administrative | 4,053 | — | — | 4,053 | |||||||||||
Provision for credit losses | (400 | ) | — | — | (400 | ) | |||||||||
Depreciation and amortization | 504 | — | — | 504 | |||||||||||
19,183 | — | — | 19,183 | ||||||||||||
Expenses of consolidated VIE-RSO | — | 15,994 | — | 15,994 | |||||||||||
Elimination of consolidated VIE-RSO expenses attributed to operating segments | — | — | (3,077 | ) | (3,077 | ) | |||||||||
Total expenses | 19,183 | 15,994 | (3,077 | ) | 32,100 | ||||||||||
OPERATING INCOME (LOSS) | 1,486 | 7,711 | (620 | ) | 8,577 | ||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Impairment on investments in unconsolidated entities | (151 | ) | — | — | (151 | ) | |||||||||
Interest expense | (450 | ) | — | — | (450 | ) | |||||||||
Other income (expense), net | 386 | — | (438 | ) | (52 | ) | |||||||||
Other income (expense), net, from consolidated VIE-RSO | — | 5,215 | — | 5,215 | |||||||||||
Total other income (expense) | (215 | ) | 5,215 | (438 | ) | 4,562 | |||||||||
Net income (loss) attributable to noncontrolling interest | 1,271 | 12,926 | (1,058 | ) | 13,139 | ||||||||||
Income tax provision (benefit) | 1,355 | (1,796 | ) | — | (441 | ) | |||||||||
Net income (loss) | (84 | ) | 14,722 | (1,058 | ) | 13,580 | |||||||||
Net (income) loss attributable to noncontrolling interests | (37 | ) | — | — | (37 | ) | |||||||||
Net (income) loss attributable to noncontrolling interests-RSO | — | (7,944 | ) | (6,699 | ) | (14,643 | ) | ||||||||
Net income (loss) attributable to common shareholders | $ | (121 | ) | $ | 6,778 | $ | (7,757 | ) | $ | (1,100 | ) | ||||
RESOURCE AMERICA, INC.
CONSOLIDATING STATEMENT OF OPERATIONS
(in thousands)
(unaudited)
The following table presents the consolidating statement of operations for the three months ended September 30, 2014:
RAI | RSO | Eliminations | Consolidated | ||||||||||||
REVENUES: | |||||||||||||||
Real estate | $ | 14,289 | $ | — | $ | — | $ | 14,289 | |||||||
Financial fund management | 5,557 | — | — | 5,557 | |||||||||||
Commercial finance | (17 | ) | — | — | (17 | ) | |||||||||
19,829 | — | — | 19,829 | ||||||||||||
Revenues from consolidated VIE-RSO | — | 25,811 | — | 25,811 | |||||||||||
Elimination of consolidated VIE-RSO revenues attributed to operating segments | — | — | (4,136 | ) | (4,136 | ) | |||||||||
Total revenues | 19,829 | 25,811 | (4,136 | ) | 41,504 | ||||||||||
COSTS AND EXPENSES: | |||||||||||||||
Real estate | 9,384 | — | — | 9,384 | |||||||||||
Financial fund management | 2,812 | — | — | 2,812 | |||||||||||
Commercial finance | 125 | — | — | 125 | |||||||||||
General and administrative | 2,426 | — | — | 2,426 | |||||||||||
Provision for credit losses | 559 | — | — | 559 | |||||||||||
Depreciation and amortization | 453 | — | — | 453 | |||||||||||
15,759 | — | — | 15,759 | ||||||||||||
Expenses of consolidated VIE-RSO | — | 15,447 | — | 15,447 | |||||||||||
Elimination of consolidated VIE-RSO expenses attributed to operating segments | — | — | (3,502 | ) | (3,502 | ) | |||||||||
Total expenses | 15,759 | 15,447 | (3,502 | ) | 27,704 | ||||||||||
OPERATING INCOME (LOSS) | 4,070 | 10,364 | (634 | ) | 13,800 | ||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Gain (loss) on sale of investment securities, net | 69 | — | — | 69 | |||||||||||
Interest expense | (467 | ) | — | — | (467 | ) | |||||||||
Other income (expense), net | 652 | — | (572 | ) | 80 | ||||||||||
Other income (expense), net, from consolidated VIE-RSO | — | 3,730 | — | 3,730 | |||||||||||
Elimination of consolidated VIE-RSO other income, net | — | — | 11 | 11 | |||||||||||
Total other income (expense) | 254 | 3,730 | (561 | ) | 3,423 | ||||||||||
Income (loss) from continuing operations before taxes | 4,324 | 14,094 | (1,195 | ) | 17,223 | ||||||||||
Income tax provision (benefit) | 1,741 | (237 | ) | — | 1,504 | ||||||||||
Net income (loss) | 2,583 | 14,331 | (1,195 | ) | 15,719 | ||||||||||
Net income (loss) attributable to noncontrolling interest | 11 | — | — | 11 | |||||||||||
Net (income) loss attributable to noncontrolling interests-RSO | — | (7,003 | ) | (7,211 | ) | (14,214 | ) | ||||||||
Net income (loss) attributable to common shareholders | $ | 2,594 | $ | 7,328 | $ | (8,406 | ) | $ | 1,516 | ||||||
RESOURCE AMERICA, INC.
CONSOLIDATING STATEMENT OF OPERATIONS
(in thousands)
(unaudited)
The following table presents the consolidating statement of operations for the nine months ended September 30, 2015:
RAI | RSO | Eliminations | Consolidated | ||||||||||||
REVENUES: | |||||||||||||||
Real estate | $ | 54,277 | $ | — | $ | — | $ | 54,277 | |||||||
Financial fund management | 14,326 | — | — | 14,326 | |||||||||||
Commercial finance | 66 | — | — | 66 | |||||||||||
68,669 | — | — | 68,669 | ||||||||||||
Revenues from consolidated VIE-RSO | — | 72,267 | — | 72,267 | |||||||||||
Elimination of consolidated VIE-RSO revenues attributed to operating segments | — | — | (12,074 | ) | (12,074 | ) | |||||||||
Total revenues | 68,669 | 72,267 | (12,074 | ) | 128,862 | ||||||||||
COSTS AND EXPENSES: | |||||||||||||||
Real estate | 34,804 | — | — | 34,804 | |||||||||||
Financial fund management | 9,513 | — | — | 9,513 | |||||||||||
Commercial finance | 1,471 | — | — | 1,471 | |||||||||||
General and administrative | 11,531 | — | — | 11,531 | |||||||||||
Provision for credit losses | 278 | — | — | 278 | |||||||||||
Depreciation and amortization | 1,476 | — | — | 1,476 | |||||||||||
59,073 | — | — | 59,073 | ||||||||||||
Expenses of consolidated VIE-RSO | — | 91,589 | — | 91,589 | |||||||||||
Elimination of consolidated VIE-RSO expenses attributed to operating segments | — | — | (9,813 | ) | (9,813 | ) | |||||||||
Total expenses | 59,073 | 91,589 | (9,813 | ) | 140,849 | ||||||||||
OPERATING INCOME (LOSS) | 9,596 | (19,322 | ) | (2,261 | ) | (11,987 | ) | ||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Impairment on investments in unconsolidated entities | (4,497 | ) | — | — | (4,497 | ) | |||||||||
Interest expense | (1,326 | ) | — | — | (1,326 | ) | |||||||||
Other income (expense), net | 1,389 | — | (1,374 | ) | 15 | ||||||||||
Other income (expense), net, from consolidated VIE-RSO | — | 32,268 | — | 32,268 | |||||||||||
Elimination of consolidated VIE-RSO other income, net | — | — | 15 | 15 | |||||||||||
Total other income (expense) | (4,434 | ) | 32,268 | (1,359 | ) | 26,475 | |||||||||
Income (loss) from continuing operations before taxes | 5,162 | 12,946 | (3,620 | ) | 14,488 | ||||||||||
Income tax provision (benefit) | 3,456 | 2,969 | — | 6,425 | |||||||||||
Net income (loss) | 1,706 | 9,977 | (3,620 | ) | 8,063 | ||||||||||
Net (income) loss attributable to noncontrolling interests | (92 | ) | — | — | (92 | ) | |||||||||
Net (income) loss attributable to noncontrolling interests-RSO | — | (24,808 | ) | 14,420 | (10,388 | ) | |||||||||
Net income (loss) attributable to common shareholders | $ | 1,614 | $ | (14,831 | ) | $ | 10,800 | $ | (2,417 | ) | |||||
RESOURCE AMERICA, INC.
CONSOLIDATING STATEMENT OF OPERATIONS
(in thousands)
(unaudited)
The following table presents the consolidating statement of operations for the nine months ended September 30, 2014:
RAI | RSO | Eliminations | Consolidated | ||||||||||||
REVENUES: | |||||||||||||||
Real estate | $ | 41,012 | $ | — | $ | — | $ | 41,012 | |||||||
Financial fund management | 20,773 | — | — | 20,773 | |||||||||||
Commercial finance | (158 | ) | — | — | (158 | ) | |||||||||
61,627 | — | — | 61,627 | ||||||||||||
Revenues from consolidated VIE-RSO | — | 74,884 | — | 74,884 | |||||||||||
Elimination of consolidated VIE-RSO revenues attributed to operating segments | — | — | (10,056 | ) | (10,056 | ) | |||||||||
Total revenues | 61,627 | 74,884 | (10,056 | ) | 126,455 | ||||||||||
COSTS AND EXPENSES: | |||||||||||||||
Real estate | 27,364 | — | — | 27,364 | |||||||||||
Financial fund management | 9,980 | — | — | 9,980 | |||||||||||
Commercial finance | 351 | — | — | 351 | |||||||||||
General and administrative | 8,309 | — | — | 8,309 | |||||||||||
Provision for credit losses | 3,342 | — | — | 3,342 | |||||||||||
Depreciation and amortization | 1,369 | — | — | 1,369 | |||||||||||
50,715 | — | — | 50,715 | ||||||||||||
Expenses of consolidated VIE-RSO | — | 43,585 | — | 43,585 | |||||||||||
Elimination of consolidated VIE-RSO expenses attributed to operating segments | — | — | (9,374 | ) | (9,374 | ) | |||||||||
Total expenses | 50,715 | 43,585 | (9,374 | ) | 84,926 | ||||||||||
OPERATING INCOME (LOSS) | 10,912 | 31,299 | (682 | ) | 41,529 | ||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Gain (loss) on sale of investment securities, net | 439 | — | — | 439 | |||||||||||
Interest expense | (1,447 | ) | — | — | (1,447 | ) | |||||||||
Other income (expense), net | 1,979 | — | (1,716 | ) | 263 | ||||||||||
Other income (expense), net, from consolidated VIE-RSO | — | 17,527 | — | 17,527 | |||||||||||
Elimination of consolidated VIE-RSO other income, net | — | — | 29 | 29 | |||||||||||
Total other income (expense) | 971 | 17,527 | (1,687 | ) | 16,811 | ||||||||||
Income (loss) from continuing operations before taxes | 11,883 | 48,826 | (2,369 | ) | 58,340 | ||||||||||
Income tax provision (benefit) | 4,991 | (667 | ) | — | 4,324 | ||||||||||
Net income (loss) | 6,892 | 49,493 | (2,369 | ) | 54,016 | ||||||||||
Net (income) loss attributable to noncontrolling interests | (33 | ) | — | — | (33 | ) | |||||||||
Net (income) loss attributable to noncontrolling interests-RSO | — | (12,372 | ) | (36,387 | ) | (48,759 | ) | ||||||||
Net income (loss) attributable to common shareholders | $ | 6,859 | $ | 37,121 | $ | (38,756 | ) | $ | 5,224 | ||||||
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 | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Net income (loss) attributable to common shareholders - GAAP | $ | (1,100 | ) | $ | 1,516 | $ | (2,417 | ) | $ | 5,224 | |||||
Adjustments, net of tax: | |||||||||||||||
Reduction of income, net of eliminations, attributable to consolidation of RSO | 979 | 1,078 | 4,031 | 2,065 | |||||||||||
Impairment of investment in unconsolidated loan manager | — | — | 2,520 | — | |||||||||||
Loss attributable to commercial finance | 123 | 382 | 948 | 2,388 | |||||||||||
Deferred tax provision | 760 | (142 | ) | 1,288 | 485 | ||||||||||
Adjusted net income attributable to common shareholders | $ | 762 | $ | 2,834 | $ | 6,370 | $ | 10,162 | |||||||
Adjusted weighted average diluted shares outstanding (2) | 22,337 | 22,301 | 22,900 | 22,124 | |||||||||||
Adjusted net income attributable to common shareholders per common per share-diluted | $ | 0.03 | $ | 0.13 | $ | 0.28 | $ | 0.46 | |||||||
(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 nine months ended September 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 270,000 and 271,000 shares for the three and nine months ended September 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. |