8-K

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): August 2, 2006

Resource America, Inc.

(Exact name of registrant as specified in its chapter)

Delaware	0-4408	72-0654145
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)
1845 Walnut Street, Suite 1000 Philadelphia, PA		19103
(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:

oWritten 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))

oPre-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 August 2, 2006, Resource America, Inc. (the "Company") issued an earnings release announcing its financial results for the third fiscal quarter ended June 30, 2006.  A copy of the earnings release is included as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01   Financial Statements and Exhibits

  (c)Exhibits

     99.1 Press Release dated August 2, 2006

SIGNATURES

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, thereunto duly authorized.

	Resource America, Inc.
Date:  August 2, 2006	/s/ Steven J. Kessler Steven J. Kessler Executive Vice President and Chief Financial Officer

EX-99.1

FOR IMMEDIATE RELEASE

CONTACT:          STEVEN KESSLER

CHIEF FINANCIAL OFFICER

RESOURCE AMERICA, INC.

1845 WALNUT STREET, SUITE 1000

PHILADELPHIA, PA 19103

215/546-5005, 215/546-4785 (fax)

RESOURCE AMERICA, INC.

REPORTS OPERATING RESULTS

FOR THE THIRD FISCAL QUARTER ENDED JUNE 30, 2006

Philadelphia, PA August 2, 2006 - Resource America, Inc. (Nasdaq: REXI) (the "Company") reported income from continuing operations of $3.1 million and $13.4 million for the third fiscal quarter and nine months ended June 30, 2006, as compared to $3.5 million and $4.6 million for the third fiscal quarter and nine months ended June 30, 2005, a decrease of $398,000 and an increase of $8.8 million, respectively. Income from continuing operations per common share-diluted was $0.16 and $0.67 per common share for the third fiscal quarter and nine months ended June 30, 2006, as compared to income from continuing operations per common share-diluted of $0.19 and $0.24 per common share for the third fiscal quarter and nine months ended June 30, 2005. In the third fiscal quarter ended June 30, 2005, the Company recorded one time gains of $5.2 million related to the refinancing and foreclosure of two of its legacy real estate assets. Without these two items, income from continuing operations would have been $494,000 or $0.03 per common share diluted for the third fiscal quarter ended June 30, 2005.

Assets under management increased to $10.5 billion at June 30, 2006 from $5.7 billion at June 30, 2005, an increase of $4.7 billion (82%), as follows:

	At June 30,
	2006			2005
Financial fund management	$	9.2 billion	(1)	$	4.9 billion
Real estate		0.7 billion			0.5 billion
Equipment finance		0.6 billion			0.3 billion
	$	10.5 billion		$	5.7 billion

(1)   Includes assets under management of $775.0 million on warehouse facilities for which the Company has been engaged as the collateral manager for CDOs not yet closed.

Operating income as adjusted, before depreciation and amortization, was $5.7 million and $21.5 million for the third fiscal quarter and nine months ended June 30, 2006 as compared to $7.5 million and $8.1 million for the third fiscal quarter and nine months ended June 30, 2005, respectively, a decrease of $1.8 million and an increase $13.4 million, respectively. Operating income as adjusted and reflecting the one time gains discussed above would have been $2.3 million for the third fiscal quarter ended June 30, 2005.

The following reconciles operating income as adjusted to our operating income for the third fiscal quarter and nine months ended June 30, 2006 and 2005 (in thousands):

	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2006		2005		2006		2005
Operating income	$	5,033	$	6,805	$	19,089	$	6,656
Plus:
Depreciation and amortization		704		668		2,424		1,471
Operating income as adjusted	$	5,737	$	7,473	$	21,513	$	8,127

Management of the Company believes that operating income as adjusted provides additional information with respect to the Company’s ability to meet its debt service, capital expenditures and working capital requirements. This measure is similar to earnings before interest, taxes, depreciation and amortization, or EBITDA, a commonly used measure of a business’ ability to generate cash flow without consideration of its financing structure. EBITDA is widely used by commercial banks, investment bankers, rating agencies and investors in evaluating performance relative to peers and pre-set performance standards. Neither adjusted operating income nor EBITDA are measures of financial performance under GAAP and, accordingly, should not be considered as a substitute for net income or cash flows from operating activities prepared in accordance with GAAP.

Net income was $3.0 million and $15.8 million for the third fiscal quarter and nine months ended June 30, 2006, respectively, as compared to net income of $1.6 million and $17.6 million for the third fiscal quarter and nine months ended June 30, 2005, respectively. Net income per common share-diluted was $0.15 and $0.79 per common share for the third fiscal quarter and nine months ended June 30, 2006, respectively, as compared to net income per common share-diluted of $0.09 and $0.93 per common share for the third fiscal quarter and nine months ended June 30, 2005, respectively.

Net income for the third fiscal quarter and nine months ended June 30, 2005 includes $2.9 million and $16.6 million, respectively, of income from discontinued operations, net of tax from Atlas America, Inc. (Nasdaq: ATLS), the Company’s former 80% owned subsidiary that was spun-off at June 30, 2005. Excluding the operations of Atlas America, net (loss) income per common share-diluted would have been ($0.07) and $0.05 per common share for the third fiscal quarter and nine months ended June 30, 2005, respectively, as compared to net income per common share-diluted for the third fiscal quarter and nine months ended June 30, 2006 of $0.15 and $0.79, respectively.

Resource America, Inc. is a specialized asset management company that uses industry specific expertise to generate and administer investment opportunities for its own account and for outside investors in the financial fund management, real estate and equipment finance sectors.

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, 2005.

For more information, please visit our website at www.resourceamerica.com or contact investor relations at pschreiber@resourceamerica.com.

Highlights for the Third Fiscal Quarter Ended June 30, 2006 and Recent Developments

CORPORATE:

®   The Company increased its managed assets to $10.5 billion at June 30, 2006 from $5.7 billion at June 30, 2005 an increase of $4.7 billion (82%). The Company expects to close one CDO in the fourth quarter of fiscal 2006 (of which $128.5 million is currently included in our assets under management) for which it has been engaged as the collateral manager, at which time the Company will begin to earn management fees on those assets.

®   In the third fiscal quarter ended June 30, 2006, the Company purchased 277,414 shares of its common stock for $5.1 million under its current board authorization at an average price of $18.41. The Company’s cash position as of June 30, 2006 was $29.2 million.

®   The Company extended its revolving line of credit with Sovereign Bank at $14.0 million for a three year period.

FINANCIAL FUND MANAGEMENT:

®   Financial fund management segment increased its revenues to $7.4 million at June 30, 2006 from $4.8 million (53%) at June 30, 2005.

®   Trapeza Capital Management (“Trapeza”), the Company’s fund manager that invests in and manages trust preferred securities of banks, bank holding companies, insurance companies and REITs, increased its managed assets to $3.8 billion at June 30, 2006 from $2.6 billion (44%) at June 30, 2005.

®   Ischus Capital Management, LLC (“Ischus”), the Company’s wholly-owned subsidiary focusing on selecting, investing in and managing primarily real estate related asset-backed securities, increased its managed assets to $4.2 billion at June 30, 2006 from $2.1 billion (97%) at June 30, 2005.

®   Apidos Capital Management, LLC (“Apidos”), the Company’s wholly-owned subsidiary focusing on selecting, investing in and managing syndicated loans, increased its managed assets to $1.2 billion at June 30, 2006 from $189.0 million (516%) at June 30, 2005.

®   Trapeza closed Trapeza X, a $500.0 million CDO.

®   Ischus closed Ischus Mezzanine III, a $600.0 million CDO.

®   Apidos closed Apidos III, a $280.0 million CLO, on behalf of Resource Capital Corp.

®   The Company formed Resource Europe Limited and Resource Europe Management Limited based in London, UK, to manage a portfolio of European leveraged loans. The Company hired Rob Reynolds and four other professionals to manage and develop these operations and opened an office in London, UK.

REAL ESTATE:

®   Resource Real Estate Holdings, Inc. (“RRE”), the Company’s real estate asset manager that invests in and manages investment vehicles that manage real estate assets, increased its assets under management to $707.3 million as of June 30, 2006, an increase of $200.5 million (40%) from $506.8 million as of June 30, 2005.  Included in assets under management are $314.3 million of properties purchased for investment partnerships and investors, an increase of $139.5 million (80%) from June 30, 2005.

®   RRE increased its management of commercial real estate mezzanine loans and B notes to $293.0 million from $25.0 million, an increase of $268.0 million.

®   RRE closed its latest limited partnership, Resource Real Estate Investors III, with $25.0 million of capital.

®   Kyle Geoghegan and Darryl Myrose joined Resource Real Estate Funding, Inc. (“RREF”), an indirect wholly-owned subsidiary of the Company, as Managing Directors in the Los Angeles office. At RREF, Mr. Geoghegan and Mr. Myrose will focus on the direct origination of floating rate commercial mortgages for Resource Capital Corp.

EQUIPMENT FINANCE:

®   LEAF Financial Corporation (“LEAF”), the Company’s equipment finance fund manager, increased its assets under management to $549.4 million as of June 30, 2006, an increase of $258.7 million (89%) from June 30, 2005.

®   LEAF’s lease originations increased to $117.7 million in the third fiscal quarter ended June 30, 2006, an increase of $60.9 million (107%) from the third fiscal quarter ended June 30, 2005.

®   LEAF’s revenues increased to $5.9 million in the third fiscal quarter ended June 30, 2006, an increase of $2.4 million (69%) from the third fiscal quarter ended June 30, 2005.

®   Subsequent to the end of the third fiscal quarter of 2006, LEAF entered into a three year $150.0 million syndicated bank warehouse revolving credit facility. National City Bank acted as agent for the bank group.

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. For information pertaining to risks relating to these forward-looking statements, reference is made to the section “Risk Factors” contained in Item 1 of the Company’s Annual Report on Form 10-K.

The remainder of this release contains the Company’s unaudited consolidated balance sheets, consolidated statements of income, consolidated statements of cash flows and a reconciliation of net cash (used in) or provided by operating activities of continuing operations to net cash provided by operating activities of continuing operations as adjusted.

RESOURCE AMERICA, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

	June 30,			September 30,
	2006			2005
	(unaudited)
ASSETS
Current assets:
Cash	$	24,223		$	30,353
Restricted cash		5,002			5,000
Investments in equipment finance		90,006			41,394
Accounts receivable		10,933			10,677
Receivables from managed entities		8,357			4,280
Prepaid expenses and other current assets		18,954			10,473
Assets held for sale		1,306			107,520
Total current assets		158,781			209,697
Loans held for investment - financial fund management		170,636			97,752
Investments in real estate		52,182			46,049
Investment in Resource Capital Corp.		24,629			15,000
Investments in Trapeza entities		14,497			10,457
Investments in financial fund management entities		13,052			13,312
Property and equipment, net		9,744			30,521
Other assets, net		54,410			34,680
	$	497,931		$	457,468
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	3,247		$	1,543
Secured warehouse credit facilities - financial fund management		168,050			97,751
Secured warehouse credit facilities - equipment finance		74,721			30,942
Payables to managed entities		1,916			591
Accounts payable, accrued expenses and other current liabilities		22,547			19,797
Liabilities associated with assets held for sale		1,148			74,438
Total current liabilities		271,629			225,062
Long-term debt		15,865			17,066
Deferred revenue and other liabilities		12,465			11,590
Minority interests		10,168			16,614
Commitments and contingencies		−			−
Stockholders’ equity:
Preferred stock, $1.00 par value, 1,000,000 shares authorized; none outstanding		-			-
Common stock, $.01 par value, 49,000,000 shares authorized; 26,400,647 and 26,371,780 shares issued, respectively		264			264
Additional paid-in capital		259,051			258,019
Retained earnings		22,401			9,845
Treasury stock, at cost; 9,054,731 and 8,312,760 shares, respectively		(95,834	)		(82,556	)
ESOP loan receivable		(471	)		(488	)
Accumulated other comprehensive income		2,393			2,052
Total stockholders’ equity		187,804			187,136
	$	497,931		$	457,468

RESOURCE AMERICA, INC.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

(unaudited)

	Three Months Ended						Nine Months Ended
	June 30,						June 30,
	2006			2005			2006			2005
REVENUES
Financial fund management	$	7,376		$	4,828		$	20,629		$	10,908
Real estate		4,500			9,269			18,360			14,538
Equipment finance		5,885			3,481			16,483			9,190
		17,761			17,578			55,472			34,636
COSTS AND EXPENSES
Financial fund management		2,402			2,572			7,295			5,852
Real estate		3,286			3,224			8,265			8,042
Equipment finance		3,911			2,467			10,382			6,976
General and administrative		2,425			1,842			8,017			5,639
Depreciation and amortization		704			668			2,424			1,471
		12,728			10,773			36,383			27,980
OPERATING INCOME		5,033			6,805			19,089			6,656
OTHER INCOME (EXPENSE)
Interest expense		(1,871	)		(648	)		(5,490	)		(1,523	)
Minority interests		(465	)		(415	)		(1,236	)		(1,158	)
Other income, net		809			310			3,644			3,788
		(1,527	)		(753	)		(3,082	)		1,107
Income from continuingoperations before taxes and cumulative effect of accounting change		3,506			6,052			16,007			7,763
Provision for income taxes		393			2,541			2,579			3,168
Income from continuing operations before cumulative effect of accounting change		3,113			3,511			13,428			4,595
(Loss) income from discontinued operations, net of tax		(113	)		(1,901	)		977			13,044
Cumulative effect of accounting change, net of tax		−			−			1,357			−
Net income	$	3,000		$	1,610		$	15,762		$	17,639
Basic earnings (loss) per common share:
Continuing operations	$	0.18		$	0.20		$	0.76		$	0.26
Discontinued operations		(0.01	)		(0.11	)		0.05			0.74
Cumulative effect of accounting change		−			−			0.08			−
Net income	$	0.17		$	0.09		$	0.89		$	1.00
Weighted average shares outstanding		17,536			17,716			17,727			17,582
Diluted earnings (loss) per common share:
Continuing operations	$	0.16		$	0.19		$	0.67		$	0.24
Discontinued operations		(0.01	)		(0.10	)		0.05			0.69
Cumulative effect of accounting change		−			−			0.07			−
Net income	$	0.15		$	0.09		$	0.79		$	0.93
Weighted average shares outstanding		19,744			18,926			19,796			18,819
Dividends declared per common share	$	0.06		$	0.05		$	0.18		$	0.15

RESOURCE AMERICA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Nine Months Ended June 30,
	2006			2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	15,762		$	17,639
Adjustments to reconcile net income to net cash used in operating activities:
Cumulative effect of accounting change, net of tax		(1,357	)		−
Depreciation and amortization		2,424			1,471
Equity in earnings of equity investees		(6,497	)		(7,417	)
Minority interest earnings		1,236			1,158
Distributions paid to minority holders		(1,274	)		(1,136	)
Gain from discontinued operations		(977	)		(13,044	)
Gain on sale of RAIT Investment Trust shares		−			(1,459	)
Gain on asset resolutions		(7,252	)		(5,467	)
Deferred income tax provision		1,981			3,921
Non-cash compensation on long-term incentive plans		1,346			375
Non-cash compensation issued		1,614			405
Non-cash compensation received		(1,259	)		(1,018	)
Increase in net assets of FIN 46 entities’ and other assets held for sale		−			(3,461	)
Increase in equipment finance investments		(49,444	)		(31,163	)
Changes in operating assets and liabilities		(13,460	)		(12,130	)
Net cash used in operating activities of continuing operations		(57,157	)		(51,326	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(3,674	)		(1,474	)
Payments received on real estate loans and real estate		30,623			4,848
Investments in real estate		(32,531	)		(3,552	)
Distributions from equity investees		9,824			20,809
Purchase of loans held for investment - financial fund management		(317,597	)		−
Principal payments on loans held for investment		6,702			−
Proceeds from sale of loans held for investment		18,821			1,950
Investments in managed entities		(20,880	)		(8,300	)
Investments in Resource Capital Corp		(13,500	)		(15,000	)
Proceeds from sale of investments		5,415			2,924
Decrease in other assets		(1,676	)		(204	)
Net cash (used in) provided by investing activities of  continuing operations		(318,473	)		2,001
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings		686,934			182,987
Principal payments on borrowings		(336,925	)		(159,355	)
Purchase of treasury stock		(13,458	)		−
Investor contributions to financial fund management investments		−			3,651
Dividends paid		(3,206	)		(2,632	)
Proceeds from issuance of stock		125			4,735
Net cash provided by financing activities of continuing operations		333,470			29,386
Net cash provided by discontinued operations		39,855			22,915
Net cash retained by entities previously consolidated		(3,825	)		(29,192	)
Decrease in cash		(6,130	)		(26,216	)
Cash at beginning of period		30,353			69,099
Cash at end of period	$	24,223		$	42,883

Reconciliation of Net Cash (Used In) Operating Activities of Continuing Operations to Net Cash Provided By Operating Activities of Continuing Operations, As Adjusted

Net cash provided by operating activities of continuing operations as adjusted was $19.6 million for the nine months ended June 30, 2006 an increase of $6.8 million (53%) as compared to $12.8 million for the nine months ended June 30, 2005. The following reconciles net cash provided by continuing operations as adjusted to net cash (used in) operating activities of continuing operations for the nine months ended June 30, 2006 and 2005, respectively (in thousands):

	Nine Months Ended
	June 30,
	2006			2005
Net cash (used in) operating activities of continuing operations	$	(57,157	)	$	(51,326	)
Adjustments:
Increase in equipment finance investments		49,444			31,163
Changes in operating assets and liabilities		13,460			12,130
Distributions from equity investees		9,824			20,809
Cash proceeds from sale of a partial partnership interest in 1845 Walnut Street		4,000			−
Net cash provided by operating activities of continuing operations, as adjusted	$	19,571		$	12,776