PHILADELPHIA, PA, May 03, 2012 (MARKETWIRE via COMTEX) --
Resource America, Inc.
(the "Company") reported
adjusted income from continuing operations attributable to common
shareholders, a non-GAAP measure, of $726,000, or $0.04 per common
share-diluted, for the second fiscal quarter ended March 31, 2012 as
compared to an adjusted loss from continuing operations attributable
to common shareholders of $1.7 million, or $0.09 per common share
diluted, for the second fiscal quarter ended March 31, 2011. A
reconciliation of the Company's reported GAAP loss from continuing
operations attributable to common shareholders to adjusted income
(loss) from continuing operations attributable to common
shareholders, a non-GAAP measure, is included as Schedule I to this
For the second fiscal quarter and six months ended March 31, 2012,
the Company reported a GAAP net loss attributable to common
shareholders of $2.3 million, or $0.12 per common share-diluted, and
$2.1 million, or $0.11 per common share-diluted, respectively, as
compared to $4.3 million, or $0.22 per common share-diluted, and $4.8
million, or $0.25 per common share-diluted, for the second fiscal
quarter and six months ended March 31, 2011, respectively.
Jonathan Cohen, CEO and President, commented, "The recent completion
of our transaction creating CVC Credit Partners demonstrates the
quality and value of our asset management platforms. We will
recognize a gain of approximately $53 million, received gross
proceeds of $25 million in cash, retained the right to collect
substantial incentive fees and own 33% of a world-class global credit
management business that we think will grow and prosper. Our other
platforms are also advancing robustly. In real estate, both Resource
Opportunity REIT and Resource Capital Corp. are growing and
performing well. We end our second quarter very strong -- our
businesses are doing well, we are growing, our balance sheet is in
excellent condition and we are exploring opportunities to leverage
those strengths to enhance shareholder value."
Assets Under Management
The following table details the Company's assets under management by
operating segment, which decreased by $636.0 million (5%) from March
31, 2011 to March 31, 2012:
At March 31, At March 31,
Financial fund management $ 10.9 billion $ 11.4 billion
Real estate 1.6 billion 1.6 billion
Commercial finance 0.5 billion 0.7 billion
$ 13.0 billion $ 13.7 billion
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 fiscal year ended September 30, 2011.
Highlights for the Second Fiscal Quarter Ended March 31, 2012 and
-- Fundraising: Resource Real Estate, Inc. ("RRE"), the Company's real
estate operating segment, has sponsored and is the external manager of
Resource Real Estate Opportunity REIT, Inc. ("RRE Opportunity REIT"),
which is a public non-traded real estate program. RRE Opportunity REIT
raised a record $10.6 million and $23.3 million during the month and
second fiscal quarter ended March 31, 2012. Through April 30, 2012,
RRE Opportunity REIT has raised approximately $112.9 million in total
-- Resource Capital Corp. ("RSO") Capital Raised: RSO raised an
additional $24.0 million through its dividend reinvestment program
during the second fiscal quarter ended March 31, 2012.
-- Second Quarter RRE Acquisitions: RRE made the following acquisitions:
-- In January 2012, on behalf of an RSO joint venture, a
non-performing note secured by a multifamily rental property
located in Colorado Springs, CO for $5.0 million. In connection
with this purchase, the Company received a $51,000 acquisition fee
and will receive asset management fees in the future.
-- In March 2012, on behalf of one of RRE's sponsored limited
partnerships, a multifamily rental property located in Columbia,
SC for $11.5 million. In connection with this purchase, the
Company received acquisition fees totaling $368,000 and will
receive both asset management and property management fees in the
-- In March 2012, on behalf of RRE Opportunity REIT, a multifamily
rental property located in Houston, TX for $11.4 million. In
connection with this purchase, the Company received a $234,000
acquisition fee and will receive both asset management and
property management fees in the future.
-- In March 2012, on behalf of RRE Opportunity REIT, a non-performing
note secured by a multifamily rental property located in
Hermantown, MN for $10.3 million. In connection with this
purchase, the Company received a $217,000 acquisition fee and will
receive asset management fees in the future.
-- Disposition: In March 2012, RRE sold a $20.0 million multifamily
property in Suitland, MD for a joint venture with an existing partner,
in which RSO is a member. In connection with this sale, the Company
earned a promoted return of $1.2 million and a $144,000 disposition
-- Resolution of Equity Interest: In January 2012, RRE, along with an
existing joint venture partner, sold its interest in a multifamily
property in Cleveland, OH and received proceeds of $327,000.
-- Property Management: Resource Real Estate Management, Inc., the
Company's property management subsidiary, increased the apartment
units it manages to 16,513 units at 59 properties as of March 31, 2012
from 15,204 units at 55 properties as of December 31, 2011.
FINANCIAL FUND MANAGEMENT:
-- Creation of Global Credit Manager: In December 2011, the Company
entered into a definitive agreement with CVC Capital Partners
SICAV-FIS, S.A. ("CVC"), to create CVC Credit Partners, L.P. ("CCP"),
a newly-formed Cayman Islands limited partnership jointly owned by the
Company and CVC. CCP will be a global credit management business with
over $7.5 billion in assets under management and offices in both the
United States and Europe. On April 17, 2012, the Company closed on its
sale of 100% of the common equity interests of Apidos Capital
Management, LLC ("Apidos"). Pursuant to the sale and purchase
agreement and related agreements between the Company and CVC dated as
of December 29, 2011 (collectively, the "SPA"), the Company sold
Apidos in exchange for (i) $25.0 million in cash, (ii) a 33% limited
partner interest in CCP and its general partner. The Company is
retaining certain incentive management fees that may be collected in
the future relating to previously managed portfolios. The Company
anticipates that these fees will begin to be collected in 2013. CVC is
also contributing its existing credit manager, CVC Cordatus, to CCP.
-- Lease Origination/Platform Growth: LEAF Commercial Capital, Inc.
("LEAF") continued to grow its lease origination and servicing
operations during the second fiscal quarter ended March 31, 2012.
-- Lease originations continue to trend upward, having increased by
159% and 26% during the second fiscal quarter ended March 31, 2012
as compared to the second fiscal quarter ended March 31, 2011 and
the first fiscal quarter ended December 31, 2011, respectively.
-- LEAF's commercial finance assets at March 31, 2012 increased by
40% from September 30, 2011.
-- LEAF continues to further expand its field sales presence to
provide dedicated support to its top-priority dealers. Highly
experienced industry experts were added to the Northeastern,
Midwestern, and Southern California market places. LEAF's field
sales team will work with key dealers and branch offices of its
national accounts by developing unique offerings and providing
support to build the relationships with those dealers.
-- LEAF launched its enhanced Cost Per Usage billing product and
announced that it has become a Gold Technology Partner of Digital
Gateway. The LEAF interface streamlines the process of
transferring asset and transactional data from the Digital Gateway
system, thereby reducing meter errors and accelerating the billing
-- Corporate Credit Facility Modification: In January 2012, the Company
extended its existing $3.5 million revolving credit facility with
Republic Bank from December 2012 to December 2013.
-- Dividends: The Company's Board of Directors authorized the payment on
April 30, 2012 of a $0.03 cash dividend per share on the Company's
common stock to holders of record as of the close of business on April
20, 2012. RSO declared a cash dividend of $0.20 per common share for
its first fiscal quarter ended March 31, 2012.
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 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
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. 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 Securities and Exchange Commission. 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 RRE
Opportunity REIT was declared effective by the SEC on June 16, 2010.
A written prospectus relating to these securities may be obtained by
contacting Resource Securities, Inc., 2005 Market Street, 15th 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 consolidated statements of cash flows and reconciliation of GAAP
loss from continuing operations attributable to common shareholders
to adjusted income (loss) from continuing operations attributable to
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