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Form 8-K RESOURCE AMERICA, INC. For: May 04

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May 5, 2016 6:01 AM EDT




UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 4, 2016

Resource America, Inc.
(Exact name of registrant as specified in its charter)
Delaware
 
0-4408
 
72-0654145
(State or other jurisdiction
 
(Commission
 
(IRS Employer
of incorporation)
 
File Number)
 
Identification No.)
 
 
 
 
 
One Crescent Drive, Suite 203,
Navy Yard Corporate Center
Philadelphia, PA
 
 
 
19112
(Address of principal executive
offices)
 
 
 
(Zip Code)

Registrant's telephone number, including area code: 215-546-5005

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





Item 2.02     Results of Operations and Financial Condition

On May 4, 2016, Resource America, Inc. (the "Company") issued a press release regarding its operating results for the three months ended March 31, 2016. A copy of this press release is furnished with this report as an exhibit. The information in this Current Report, including the exhibit hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.


Item 9.01     Financial Statements and Exhibits
 
(d)
 
The exhibit furnished as part of this report is identified in the Exhibit Index immediately following the signature page of this report. Such Exhibit Index is incorporated herein by this reference.




SIGNATURE(S)

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
Resource America, Inc.
 
 
 
 
 
Date:
May 4, 2016
 
By:
/s/ Thomas C. Elliott
 
 
 
 
Thomas C. Elliott
 
 
 
 
Senior Vice President and Chief Financial Officer










Exhibit Index
 
Exhibit No.
 
Description
 
 
Ex 99.1
 
Press Release
 








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 FIRST QUARTER ENDED MARCH 31, 2016

Philadelphia, PA - May 4, 2016 - Resource America, Inc. (NASDAQ: REXI)
First Quarter 2016 Highlights
•Adjusted net income attributable to common shareholders of $3.5 million, or $0.17 per common share-diluted         (see Schedule I)
•Closed Opportunity REIT II with a total of $556.0 million raised
•Increased real estate assets under management by 12% to $4.0 billion since March 31, 2015
•Book value per common share of $7.13
•Repurchased 561,134 shares at an average price of $6.19 per share

First Quarter 2016 Results
Resource America, Inc. (NASDAQ: REXI) (the "Company") reported adjusted net income attributable to common shareholders, a non-GAAP measure, of $3.5 million, or $0.17 per common share-diluted, for the three months ended March 31, 2016 as compared to adjusted net income attributable to common shareholders of $2.2 million, or $0.10 per common share-diluted, for the three months ended March 31, 2015. 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 $3.0 million, or $0.15 per common share-diluted, for the three months ended March 31, 2016 as compared to GAAP net income attributable to common shareholders of $1.5 million, or $0.07 per common share-diluted, for the three months ended March 31, 2015.
Assets Under Management
The following table details the Company's gross assets under management by operating segment, which increased by $1.8 billion (9%) from March 31, 2015 to 2016 (in billions):
 
March 31,
 
2016
 
2015
Financial fund management
$
17.6

 
$
16.3

Real estate
4.0

 
3.6

Commercial finance
0.8

 
0.7

 
$
22.4

 
$
20.6

 
 
 
 
Net assets under management (1)
$
9.5

 
$
10.0

 
(1)
Net assets under management represents the proportionate share of assets managed by the Company after reflecting joint venture arrangements.    At March 31, 2016, net assets reflect the Company's 24% interest in CVC Credit Partners, L.P. ("CCP"), the Company's global joint venture, while net assets as of March 31, 2015 reflect the Company's 33% interest in CCP.
    
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, 2015.




Highlights for the First Quarter Ended March 31, 2016 and Recent Developments
REAL ESTATE ASSET MANAGEMENT:
Equity Asset Management
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 $43.3 million during the three months ended March 31, 2016 and closed with a total of $556.0 million.
•
Acquired $149.9 million of assets and placed $28.8 million of financing during the three months ended March 31, 2016.
•
Increased total assets to $634.9 million at March 31, 2016.
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 $1.0 billion in total assets at March 31, 2016.
Resource Real Estate Diversified Income Fund ("DIF"), a public closed-end real estate focused investment company managed by the Company, has raised $110.2 million since inception.
    
On February 16, 2016, Resource Innovation Office REIT, Inc. ("Innovation Office REIT"), a company-sponsored REIT that will focus on acquiring office buildings, commenced an initial public offering of its common stock. 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.
On April 28, 2016, Resource Apartment REIT III, Inc., ("Apartment REIT III"), a company-sponsored REIT that will focus on acquiring under-performing apartment communities for renovation, commenced an initial public offering of its common stock. Resource Apartment Advisor III, LLC, a subsidiary of Resource Real Estate, Inc, will be the external manager.
Debt Asset Management
Resource Capital Corp. ("RSO"), a publicly-traded REIT managed by the Company which focuses on commercial real estate assets, originated $49.1 million in new commercial real estate loans during the three months ended March 31, 2016.
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 March 31, 2016 to $4.0 billion, an increase of $437.0 million, or 12%, from March 31, 2015.
•
Real estate revenues increased 13% to $19.2 million for the three months ended March 31, 2016 as compared to $17.0 million for the three months ended March 31, 2015.
FINANCIAL FUND MANAGEMENT:
Credit Asset Management
•CCP closed Apidos CLO XXIII, Ltd. in January 2016 and CVC Cordatus Loan Fund VI Limited in March 2016.
•Since its formation, CCP has closed CLOs issuing notes with a total par value of $9.2 billion.
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 March 31, 2016 to $17.6 billion, an increase of $1.3 billion, or 8%, from March 31, 2015.




CORPORATE:
Share Repurchases
•
The Company repurchased 561,134 of its shares during the first quarter ended March 31, 2016 at an average price of $6.19 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 April 29, 2016 to holders of record as of the close of business on April 15, 2016.
•
RSO's Board of Directors declared a cash dividend of $0.42 per share on its common stock for the three months ended March 31, 2016.
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 [email protected].
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 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 post-effective amendment relating to securities offered by Innovation Office REIT was declared effective by the SEC on March 7, 2016.  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 Apartment REIT III was declared effective by the SEC on April 28, 2016.  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 DIF was declared effective by the SEC on March 11, 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 attributable to common shareholders to adjusted net income attributable to common shareholders.





RESOURCE AMERICA, INC
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
 
March 31,
2016
 
December 31,
2015
 
(unaudited)
 
 
ASSETS
 
 
 
Cash
$
18,348

 
$
24,132

Restricted cash
1,044

 
937

Receivables
3,082

 
3,228

Loans and receivables from managed entities and related parties, net
22,427

 
26,667

Investments in real estate, net
15,752

 
16,022

Investment securities, at fair value
44,758

 
45,672

Investments in unconsolidated loan manager
31,512

 
32,616

Investments in unconsolidated entities
21,168

 
17,553

Property and equipment, net
5,061

 
5,371

Deferred tax assets, net
27,653

 
29,264

Other assets
13,781

 
9,733

Total assets
$
204,586

 
$
211,195

 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Liabilities:
 
 
 
Accrued expenses and other liabilities
$
22,502

 
$
27,184

Payables to managed entities and related parties
2,811

 
3,145

Borrowings
20,597

 
20,747

Total liabilities
45,910

 
51,076

 
 
 
 
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; 35,866,472 and 34,973,987 shares issued (including nonvested restricted stock of 1,778,341 and 1,095,238), respectively
348

 
339

Additional paid-in capital
312,432

 
311,491

Accumulated deficit
(28,783
)
 
(30,676
)
Treasury stock, at cost; 15,029,534 and 14,460,024 shares, respectively
(143,204
)
 
(139,858
)
Accumulated other comprehensive loss
(4,853
)
 
(3,533
)
Total stockholders’ equity
135,940

 
137,763

Noncontrolling interests
22,736

 
22,356




 


Total equity
158,676

 
160,119

Total liabilities and equity
$
204,586

 
$
211,195






RESOURCE AMERICA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
 
Three Months Ended
 
March 31,
 
2016
 
2015
REVENUES:
 
 
 
Real estate
$
19,163

 
$
16,966

Financial fund management
6,729

 
6,875

Commercial finance
76

 
(2
)
Total revenues
25,968

 
23,839

COSTS AND EXPENSES:
 
 
 
Real estate
11,018

 
11,499

Financial fund management
3,680

 
3,063

Commercial finance
392

 
579

General and administrative
4,883

 
3,297

Provision for credit losses
109

 
402

Depreciation and amortization
504

 
457

Total expenses
20,586

 
19,297

OPERATING INCOME (LOSS)
5,382

 
4,542

 
 
 
 
OTHER INCOME (EXPENSE):
 
 
 
Gain (loss) on sale of investment securities, net
498

 
—

Impairment on investments in available for sale securities
(98
)
 
—

Interest expense
(440
)
 
(421
)
Other income (expense), net
507

 
314

 
467

 
(107
)
Income (loss) from continuing operations before taxes
5,849

 
4,435

Income tax provision (benefit)
2,446

 
1,244

Net income (loss)
3,403

 
3,191

Net (income) loss attributable to noncontrolling interests
(366
)
 
(1,657
)
Net income (loss) attributable to common shareholders
$
3,037

 
$
1,534

 
 
 
 
Basic earnings (loss) per share:
 
 
 
Net income (loss)
$
0.15

 
$
0.07

Weighted average shares outstanding
20,611

 
22,965

 
 
 
 
Diluted earnings (loss) per share:
 
 
 
Net income (loss)
$
0.15

 
$
0.07

Weighted average shares outstanding
20,889

 
23,239





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
 
March 31,
 
2016
 
2015
Net income (loss) attributable to common shareholders - GAAP
$
3,037

 
$
1,534

 
 
 
 
Adjustments, net of tax:
 
 
 
Loss attributable to commercial finance
242

 
526

Deferred tax provision
177

 
151

Adjusted net income attributable to common shareholders
$
3,456

 
$
2,211

 
 
 
 
Adjusted weighted average diluted shares outstanding
20,889

 
23,239

 
 
 
 
Adjusted net income attributable to common shareholders per common per share-diluted
$
0.17

 
$
0.10

 
(1)
Adjusted net income attributable to common shareholders presents the Company's operations without the effect of 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 months ended March 31, 2016 and 2015 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.





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