Resource America, Inc. Reports Operating Results for the Third Fiscal Quarter Ended June 30, 2011
(firmenpresse) - PHILADELPHIA, PA -- (Marketwire) -- 08/02/11 -- (NASDAQ: REXI) reported adjusted income from continuing operations attributable to common shareholders, a non-GAAP measure, of $3.5 million, or $0.17 per common share-diluted, and $3.9 million, or $0.19 per common share-diluted, for the third fiscal quarter and nine months ended June 30, 2011, respectively, as compared to adjusted income from continuing operations attributable to common shareholders of $813,000, or $0.04 per common share-diluted, and $592,000, or $0.03 per common share-diluted, for the third fiscal quarter and nine months ended June 30, 2010. A reconciliation of the Company's reported GAAP loss from continuing operations attributable to common shareholders to adjusted income from continuing operations attributable to common shareholders, a non-GAAP measure, is included as Schedule I to this release.
For the third fiscal quarter and nine months ended June 30, 2011, the Company reported a GAAP net loss attributable to common shareholders of $411,000, or $0.02 per common share-diluted, and $5.2 million, or $0.27 per common share-diluted, respectively, as compared to $5.3 million, or $0.28 per common share-diluted, and $5.6 million, or $0.29 per common share-diluted, for the third fiscal quarter and nine months ended June 30, 2010, respectively.
As of June 30, 2011, the Company's book value per common share was $6.64 per share. Total stockholders' equity was $126.4 million as of June 30, 2011 as compared to $138.0 million as of June 30, 2010. Total common shares outstanding were 19,029,751 as of June 30, 2011 as compared to 18,261,250 as of June 30, 2010.
Jonathan Cohen, CEO and President, commented, "We continued to make solid progress in executing our business plan during our third fiscal quarter. Not only has our balance sheet improved markedly over the last 12 months, we are now cash flow positive, have significant liquidity, and growing revenues. Both our financial fund management business as well as our real estate asset management business continue to grow nicely and we should start to see incremental revenue turn mostly into profit. While we grow our leasing balance sheet, we are pleased with how LEAF is now positioned and expect it could start to turn a profit within the next few quarters. With assets under management increasing in our most profitable areas, we are positioned to capitalize on our long term track record in the real estate and leveraged loan businesses."
The following table details the Company's assets under management by operating segment, which increased by $718.0 million (6%) from June 30, 2010 to June 30, 2011:
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, 2010.
Sale of Legacy Asset: Resource Real Estate, Inc. ("RRE"), the Company's real estate operating segment, received net proceeds of approximately $16.6 million in connection with the sale of a property in Washington, DC by its owner, and realized a gain of $7.6 million. The Company had a 25% equity interest in this investment.
Fundraising: RRE 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. Through July 31, 2011, RRE Opportunity REIT has raised approximately $54.0 million, including $15.1 million during the third fiscal quarter ended June 30, 2011.
RRE Acquisitions made on behalf of RRE Opportunity REIT:
In May 2011, a non-performing loan for $7.1 million secured by a first priority mortgage on a multifamily residential apartment community in Dayton, OH. In connection with this purchase, the Company received a $147,000 acquisition fee and will receive management fees in the future.
In June 2011, a non-performing loan for $12.0 million secured by a first priority mortgage on a multifamily residential apartment community in Philadelphia, PA. In connection with this purchase, the Company received a $245,000 acquisition fee and will receive management fees in the future.
Other Acquisitions:
In May 2011, RRE purchased a loan for $3.8 million on behalf of Resource Capital Corp. ("RSO") with an existing joint venture partner. The loan is secured by a multifamily residential apartment community in Houston, TX. In connection with this purchase, the Company received a $39,000 acquisition fee and will receive asset management fees in the future.
In June 2011, RRE purchased two loans for $30.0 million on behalf of a joint venture between RSO and an unaffiliated third party. These loans are secured by a first mortgage lien on a multifamily residential apartment community in Philadelphia, PA. In connection with this purchase, the Company received a $300,000 acquisition fee and will receive asset management fees in the future.
Property Management: Resource Real Estate Management, Inc., the Company's property management subsidiary, increased the apartment units it manages to 14,833 units at 52 properties as of June 30, 2011 from 13,724 units at 51 properties as of June 30, 2010.
Increased Assets Under Management: The Company's financial fund management operating segment increased its assets under management at June 30, 2011 to $11.2 billion, an increase of $1.1 billion, or 11%, from June 30, 2010.
Lease Origination/Platform Growth: LEAF Financial Corporation ("LFC"), the Company's commercial finance operating segment, continued to grow its lease origination and servicing subsidiary, LEAF Commercial Capital, Inc. ("LEAF"). LEAF is a joint venture among LFC, RSO and Guggenheim Securities, LLC ("Guggenheim"). LEAF focuses its origination efforts on equipment vendor customers and supports independent equipment dealers and manufacturer branch networks through its full service processing center in Moberly, MO. In addition, through its Philadelphia, PA processing center, LEAF supports the captive finance arms of manufacturers, as well as bank outsourcing and direct marketing to end users in select vertical markets.
At our LEAF Business Capital unit in Philadelphia, PA, we have recently signed three major private label program agreements to support the captive finance units of a multibillion dollar industrial control and HVAC manufacturer, a multi-line industrial distributor to support their telephony product lines and a market leading distributor of medical products for physician based practices.
At our Moberly, MO, based LEAF Dealer Solutions unit, during the third fiscal quarter ended June 30, 2011, we added 104 new dealers as active users of our leasing programs and 116 additional dealers have enrolled in our enhanced lease origination online portal MyLeaseLink.com. The portal allows dealers to manage their financing transactions in real time.
Increased Key Metrics: Since its capital raise announced in January 2011, LEAF has been monitoring certain data to measure its performance versus previous periods. Data such as new applications for credit, originations (dollar value of new leases funded) and backlog (approved credit applications that are expected to fund in the next 90 days) are key measures to the growth trajectory of the business. As a result of the refocusing of resources on the expansion of the platform, LEAF has shown continued increases in key business metrics for the third fiscal quarter ended June 30, 2011 as compared to the second fiscal quarter ended March 31, 2011:
Credit Applications - up 20%
Lease Originations - up 23%
Approved Backlog - up 51%
Expanded Senior Credit: In April 2011, Wells Fargo Lender Finance ("Wells") joined as a participant in LEAF's revolving senior debt facility arranged and managed by Guggenheim. This additional $60 million commitment from Wells will be used by LEAF to fund new lease originations. LEAF is in discussion to expand this facility further over the coming quarters.
Securitizations: DBRS, Inc. (DBRS.com) on July 16, 2011 reaffirmed the credit rating of the five securitization transactions totaling $700 million that LEAF arranged for its funds since May 2010.
Debt Repayment on Legacy Sale: In June 2011, in connection with the sale of a legacy asset, the Company reduced its corporate credit facility outstanding borrowings with TD Bank by $3.0 million. As of June 30, 2011, the Company has reduced its corporate revolving debt by $5.2 million, or 37%, to $8.9 million from $14.1 million at September 30, 2010.
Dividends: The Company's Board of Directors authorized the payment on July 29, 2011 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 July 25, 2011. RSO declared a cash dividend of $0.25 per common share for its second fiscal quarter ended June 30, 2011.
RSO Capital Raised: Since April 1, 2011, RSO has raised an additional $24.6 million through its dividend reinvestment program.
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, commercial finance and financial fund management sectors.
For more information, please visit our website at 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 Chadwick Securities, Inc., 2005 Market Street, 15th Floor, Philadelphia, PA 19102.
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, consolidated statements of cash flows, and reconciliation of GAAP loss from continuing operations attributable to common shareholders to adjusted income from continuing operations attributable to common shareholders.
(1) Adjusted income from continuing operations attributable to common shareholders presents the Company's operations without the effect of its commercial finance operations. 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 June 30, 2011 and 2010 separately from its commercial finance operations. Adjusted income from continuing operations attributable to common shareholders should not be considered as an alternative to loss from continuing operations attributable to common shareholders (computed in accordance with GAAP). Instead, adjusted income from continuing operations attributable to common shareholders should be reviewed in connection with loss from continuing operations attributable to common shareholders in the Company's consolidated financial statements, to help analyze how the Company's business is performing.
(2) Loss from commercial finance operations consists of revenues and expenses from commercial finance operations (including gains or losses from the sale of leases and loans, provision for credit losses and depreciation and amortization) net of applicable tax benefits and non-controlling interests.
(3) Dilutive shares used in the calculation of adjusted income from continuing operations attributable to common shareholders per common share-diluted includes an additional 1.1 million and 1.3 million shares for the three and nine months ended June 30, 2011, respectively, and 372,000 and 331,000 shares for the three and nine months ended June 30, 2010, respectively, which were anti-dilutive 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.
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Datum: 02.08.2011 - 18:00 Uhr
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