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PHILADELPHIA, PA--(Marketwired - Mar 1, 2016) - Resource America, Inc. (
Fourth Quarter 2015 Highlights
Fourth Quarter 2015 Results
Resource America, Inc. (
The Company reported GAAP net income attributable to common shareholders of $3.7 million, or $0.17 per common share-diluted, and $5.3 million, or $0.24 per common share-diluted, for the three months and year ended December 31, 2015, respectively, as compared to GAAP net income attributable to common shareholders of $2.2 million, or $0.09 per common share-diluted, and $9.0 million, or $0.40 per common share-diluted, for the three months and year ended December 31, 2014.
Assets Under Management
The following table details the Company's assets under management by operating segment which, in gross, increased by $1.5 billion (8%) from December 31, 2014 to 2015 (in billions):
|Financial fund management||$||16.8||$||16.1|
|Net assets under management (1)||$||9.4||$||9.7|
|(1)||Net assets under management represents the proportionate share of assets managed by the Company after reflecting joint venture arrangements. As of December 31, 2015 and 2014, net assets reflect the Company's 24% and 33% interests, respectively, in its CVC Credit Partners joint venture.|
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.
The consolidated financial statements included herein reflect the deconsolidation of Resource Capital Corp. ("RSO"), a publicly-traded REIT managed by the Company, for all prior periods presented, in connection with the Company's election to early adopt the latest accounting guidance regarding consolidations.
On January 29, 2016, the Company announced that it would be evaluating its current strategic position and seeking to identify and evaluate strategic and financial alternatives for the Company to enhance shareholder value, and that it had engaged Evercore to advise the Company. The Company is in the process of conducting this evaluation; however, the Company has not set a definitive timetable for completion of its evaluation, and there can be no assurances that the process will result in any transaction being announced or completed. The Company does not intend to provide updates or make any further comment until the outcome of the process is determined or until there are significant developments.
Highlights for the Fourth Quarter and Year Ended December 31, 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 for the year ended December 31, 2015:
Resource Real Estate Opportunity REIT II, Inc. ("Opportunity REIT II"), a public non-traded REIT managed by the Company, which specializes in acquiring multifamily rental properties and selected loans, had the following highlights:
Resource Real Estate Diversified Income Fund, a public closed-end real estate focused investment fund managed by the Company, has raised $100.4 million since inception, including $65.2 million during the year ended December 31, 2015.
On February 16, 2016, Resource Innovation Office REIT, Inc., a company-sponsored REIT that will focus on acquiring office buildings, broke escrow. Resource Innovation Office Advisor, LLC, a subsidiary of Resource Real Estate, Inc, which is a wholly-owned subsidiary of the Company, will be the external manager.
Resource Apartment REIT III, Inc. filed a registration statement with the U.S. Securities and Exchange Commission on November 2, 2015 to raise up to $1.0 billion.
Debt Asset Management
RSO originated $255.1 million and $744.2 million in new commercial real estate loans during the three months and year ended December 31, 2015.
The following additional highlights contributed to our real estate asset management operations:
FINANCIAL FUND MANAGEMENT:
Credit Asset Management
CVC Credit Partners, L.P. ("CCP"), the Company's global joint venture, closed Apidos CLO XXIII, Ltd. in January 2016. CCP has now closed CLOs issuing notes with a total par value of $8.8 billion. At December 31, 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:
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.
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 Office 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 Diversified 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, 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)|
|Loans and receivables from managed entities and related parties, net||26,667||32,745|
|Investments in real estate, net||16,022||17,097|
|Investment securities, at fair value||45,672||41,383|
|Investments in unconsolidated loan manager||32,616||39,655|
|Investments in unconsolidated entities||17,553||16,024|
|Property and equipment, net||5,371||5,063|
|Deferred tax assets, net||29,264||32,818|
|LIABILITIES AND EQUITY|
|Accrued expenses and other liabilities||$||27,184||$||22,474|
|Payables to managed entities and related parties||3,145||3,124|
|Commitments and contingencies|
|Preferred stock, $1.00 par value, 1,000,000 shares authorized; none outstanding||--||--|
|Common stock, $.01 par value, 49,000,000 shares authorized; 34,973,987 and 34,489,568 shares issued (including nonvested restricted stock of 1,095,238 and 833,082), respectively||339||335|
|Additional paid-in capital||311,491||308,134|
|Treasury stock, at cost; 14,460,024 and 11,764,417 shares, respectively||(139,858||)||(120,182||)|
|Accumulated other comprehensive income (loss)||(2,526||)||3,025|
|Total stockholders' equity||137,763||159,261|
|Total liabilities and equity||$||211,195||$||226,427|
|RESOURCE AMERICA, INC.|
|CONSOLIDATED STATEMENTS OF OPERATIONS|
|(in thousands, except per share data)|
|Three Months Ended||Years Ended|
|December 31,||December 31,|
|Financial fund management||2,694||7,627||20,411||29,118|
|COSTS AND EXPENSES:|
|Financial fund management||3,923||4,844||13,687||14,902|
|General and administrative||4,294||3,041||15,825||11,118|
|Provision for credit losses||2||(284||)||280||3,058|
|Depreciation and amortization||485||450||1,961||1,819|
|OPERATING INCOME (LOSS)||6,087||2,976||18,823||14,528|
|OTHER INCOME (EXPENSE):|
|Gain (loss) on sale of investment securities, net||--||6||--||445|
|Other-than-temporary impairment on investments||(180||)||--||(4,677||)||--|
|Other income, net||329||553||1,718||2,532|
|Income (loss) from continuing operations before taxes||5,787||3,077||14,089||15,600|
|Income tax provision (benefit)||3,289||862||6,745||5,853|
|Net income (loss)||2,498||2,215||7,344||9,747|
|Net (income) loss attributable to noncontrolling interest||1,188||(56||)||(2,044||)||(729||)|
|Net income (loss) attributable to common shareholders||$||3,686||$||2,159||$||5,300||$||9,018|
|Basic earnings per share:|
|Net income (loss)||$||0.18||$||0.09||$||0.24||$||0.43|
|Weighted average shares outstanding||20,998||22,817||22,218||21,148|
|Diluted earnings per share:|
|Net income (loss)||$||0.17||$||0.09||$||0.24||$||0.40|
|Weighted average shares outstanding||21,272||23,094||22,489||22,371|
|RECONCILIATION OF GAAP NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS TO|
|ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS(1)|
|(in thousands, except per share data)|
|Three Months Ended||Years Ended|
|December 31,||December 31,|
|Net income (loss) attributable to common shareholders - GAAP||$||3,686||$||2,159||$||5,300||$||9,018|
|Adjustments, net of tax:|
|Impairment of investment in unconsolidated loan manager||--||--||2,539||--|
|Loss attributable to commercial finance||123||81||1,078||2,661|
|Deferred tax provision (benefit)||398||(105||)||1,686||380|
|Adjusted net income (loss) attributable to common shareholders||$||4,207||$||2,135||$||10,603||$||12,059|
|Weighted average diluted shares outstanding||21,272||23,094||22,489||22,371|
|Adjusted net income attributable to common shareholders per common per share-diluted||$||0.20||$||0.09||$||0.47||$||0.54|
|(1)||Adjusted net income attributable to common shareholders presents the Company's operations without the effect of the impairment of its investment in unconsolidated loan manager, 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 in both its real estate and financial fund management segments for the three months and year ended December 31, 2015 and 2014 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 (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.|
Thomas C. Elliott
Chief Financial Officer
Resource America, Inc.
One Crescent Drive, Suite 203
Philadelphia, PA 19112
(215) 546-5005; (215) 640-6357 (fax)