EX-99 3 ex-99.txt EXHIBIT 99 [GRAPHIC OMITTED] Resource America, Inc. 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 SECOND FISCAL QUARTER ENDED MARCH 31, 2003 Philadelphia, PA May 8, 2003 - Resource America, Inc. (NASDAQ: REXI) (the "Company") reported net income of $3.1 million or $.18 per common share diluted for the second fiscal quarter ended March 31, 2003 as compared to net income of $3.1 million or $.18 per common share diluted for the second fiscal quarter ended March 31, 2002. Included in net income in the second fiscal quarter ended March 31, 2003 was a $1.2 million charge (including the Company's legal fees) resulting from the settlement of a lawsuit. The Company has filed a claim against its insurance carrier to recover this amount. Without this charge, the Company would have earned $3.9 million or $.22 per common share diluted for the second fiscal quarter ended March 31, 2003. Earnings before interest, taxes, depreciation, depletion and amortization (EBITDDA) was $10.7 million for the second fiscal quarter ended March 31, 2003 as compared to $10.6 million for the second fiscal quarter ended March 31, 2002, an increase of $114,000 (1%). The following reconciles EBITDDA to our income from continuing operations for the second fiscal quarters ended March 31, 2003 and 2002.
Three Months Ended March 31 ------------------ 2003 2002 -------- ------- (in thousands) Income from continuing operations........................... $ 3,095 $ 3,313 Plus: Interest expense......................................... 3,071 3,077 Income taxes............................................. 1,458 1,640 Depreciation, depletion and amortization................. 3,103 2,583 ------- ------- EBITDDA..................................................... $10,727 $10,613 ======= =======
Net Income for the six months ended March 31, 2003 was $4.9 million as compared to net income of $5.3 million for the six months ended March 31, 2002, a decrease of $451,000. Net income per common share diluted was $.28 per common share for the six months ended March 31, 2003 as compared to $.30 per common share for the second quarter ended March 31, 2002, a decrease of $.02 (7%). Without the legal settlement referred to above, the Company would have earned $5.7 million or $.32 per common share diluted for the six months ended March 31, 2003. At March 31, 2003, the Company managed approximately $1.8 billion in these sectors as follows: Energy assets.............................. $363 million Real Estate finance assets................. $632 million Financial services assets.................. $761 million Energy revenues, however, were 87% of total revenues for the quarter ended March 31, 2003. Highlights for the Second Fiscal Quarter Ended March 31, 2003 and Recent Developments >> The Company increased its managed assets to $1.8 billion at March 31, 2003 from $1.6 billion at December 31, 2002, an increase of 12%. >> The Company's energy division drilled and substantially completed 123 net wells during the second fiscal quarter ended March 31, 2003, as compared to 86 net wells during the second fiscal quarter ended March 31, 2002. >> Natural gas revenues were $9.4 million in the second fiscal quarter ended March 31, 2003, as compared to $6.6 million in the second fiscal quarter ended March 31, 2002, an increase of $2.8 million (43%). >> Atlas Pipeline Partners, L.P., (AMEX:APL) a publicly traded natural gas pipeline limited partnership of which the Company is the general partner and principal owner, completed a public offering of 950,000 common units of limited partner interest. The net proceeds after underwriting discounts and commissions will be approximately $22.2 million. >> The Company and an unaffiliated partner closed its second Collateralized Debt Obligation secured by $400.0 million of trust preferred securities bringing total issuance of such pools to $730.0 million. The Company expects to close, in the quarter ending June 30, 2003, the third secured CDO issuance collateralized by a pool of approximately $300.0 million of diversified trust preferred securities. >> The Company repurchased 191,500 shares of its common stock at an average price of $8.76 at a range of $7.95 to $9.15 for the second fiscal quarter ended March 31, 2003. >> The Company's leasing division, LEAF Financial Corp., entered into an agreement to originate and service leases relating to a diversified portfolio of business essential equipment on behalf of Merrill Lynch. >> The Company closed its first real estate investment partnership, SR Real Estate Investors, LP, a joint venture with an unaffiliated partner focusing on the acquisition of multi-family properties. The partnership was oversubscribed and has already begun to acquire property. >> The Company entered into a Letter of Intent to recapitalize its loan position in the Evening Star building. After expenses of the transaction, the Company anticipates realizing proceeds of approximately $30.0 million in cash while retaining a loan receivable of approximately $15.5 million. >> The Company engaged Cushman & Wakefield to explore the potential recapitalization of the Alex. Brown building, a 475,000 square foot, class `A' office building located in Baltimore Maryland and entered into agreements to sell a property located in Pittsburgh, PA and a loan secured by a property in Bucks County, PA. The Company has also engaged a broker to sell or recapitalize a loan on a property located in Washington, DC. Resource America, Inc. is a proprietary asset management company that uses industry specific expertise to generate and administer investment opportunities for its own account and for outside investors in energy, real estate and financial services. For additional information visit our website at www.resourceamerica.com or contact investor relations at pschreiber@resourceamerica.com. 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/A. The remainder of this release contains the Company's unaudited consolidated balance sheets, statements of income and certain information relating to the revenues recognized and costs and expenses incurred in the Company's energy and real estate finance operations during the periods indicated. RESOURCE AMERICA, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share data)
March 31, September 30, 2003 2002 ---------------- ----------- (unaudited) ASSETS Current assets: Cash and cash equivalents................................................. $ 27,583 $ 25,736 Accounts receivable....................................................... 16,670 16,060 Assets held for disposal.................................................. - 5,488 Prepaid expenses.......................................................... 4,599 2,696 -------------- -------------- Total current assets.................................................... 48,852 49,980 Investments in real estate loans and ventures................................. 201,425 202,423 Investment in RAIT Investment Trust........................................... 24,527 29,580 Property and equipment: Oil and gas properties and equipment (successful efforts)................. 140,482 126,983 Gas gathering and transmission facilities................................. 30,569 28,091 Other..................................................................... 8,715 8,390 -------------- -------------- 179,766 163,464 Less - accumulated depreciation, depletion and amortization................... (49,681) (44,287) --------------- -------------- Net property and equipment.............................................. 130,085 119,177 Goodwill...................................................................... 37,471 37,471 Intangible assets............................................................. 8,971 9,589 Other assets.................................................................. 18,763 19,278 -------------- -------------- $ 470,094 $ 467,498 ============== ============== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt......................................... $ 3,731 $ 4,320 Accounts payable.......................................................... 16,151 12,378 Accrued interest.......................................................... 1,628 1,760 Liabilities associated with assets held for disposal...................... - 11,317 Accrued liabilities....................................................... 11,029 9,808 Estimated income taxes.................................................... 812 893 Deferred revenue on drilling contracts.................................... 9,034 4,948 -------------- -------------- Total current liabilities............................................... 42,385 45,424 Long-term debt: Senior.................................................................... 65,336 65,336 Non-recourse.............................................................. 65,722 68,220 Other..................................................................... 23,283 17,634 -------------- -------------- 154,341 151,190 Liabilities associated with assets held for disposal.......................... - 3,144 Asset retirement obligations.................................................. 3,300 - Deferred revenue and other liabilities........................................ 802 1,074 Deferred income taxes......................................................... 15,943 13,733 Minority interest............................................................. 19,140 19,394 Commitments and contingencies................................................. - - Stockholders' equity: Preferred stock, $1.00 par value: 1,000,000 authorized shares............. - - Common stock, $.01 par value; 49,000,000 authorized shares................ 251 250 Additional paid-in capital................................................ 223,747 223,824 Less treasury stock, at cost.............................................. (77,651) (74,828) Less ESOP loan receivable................................................. (1,185) (1,201) Accumulated other comprehensive income.................................... 5,718 5,911 Retained earnings......................................................... 83,303 79,583 -------------- -------------- Total stockholders' equity.............................................. 234,183 233,539 -------------- -------------- $ 470,094 $ 467,498 ============== ==============
RESOURCE AMERICA, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended Six Months Ended March 31 March 31 --------------------------- -------------------------- 2003 2002 2003 2002 ------------ ------------ ------------ ----------- (in thousands, except per share data) REVENUES: Energy..................................................... $ 36,336 $ 26,670 $ 54,296 $ 55,427 Real estate finance........................................ 3,489 5,620 6,648 9,304 Equity in earnings of unconsolidated investees............. 108 - 108 - Interest and other......................................... 1,736 1,913 4,004 3,254 --------- --------- --------- --------- 41,669 34,203 65,056 67,985 COSTS AND EXPENSES: Energy..................................................... 25,830 20,260 36,816 40,861 Real estate finance........................................ 937 464 1,783 987 General and administrative................................. 1,306 1,574 2,904 2,840 Provision for legal settlement............................. 1,185 - 1,185 - Depreciation, depletion and amortization................... 3,103 2,583 6,086 5,380 Interest................................................... 3,071 3,077 6,409 6,392 Provision for possible losses.............................. 800 650 1,173 800 Minority interest in Atlas Pipeline Partners, L.P.......... 884 642 1,529 1,395 --------- --------- --------- --------- 37,116 29,250 57,885 58,655 --------- --------- --------- --------- Income from continuing operations before income taxes......... 4,553 4,953 7,171 9,330 Provision for income taxes.................................... 1,458 1,640 2,295 3,087 --------- --------- --------- --------- Income from continuing operations............................. 3,095 3,313 4,876 6,243 Discontinued operations: Loss on discontinued operations, net of tax benefit of $94 and $448............................................. - (175) - (916) --------- --------- --------- --------- Net income.................................................... $ 3,095 $ 3,138 $ 4,876 $ 5,327 ========= ========= ========= ========= Net income per common share - basic: From continuing operations................................. $ .18 $ .19 $ .28 $ .36 From discontinued operations............................... - (.01) - (.05) --------- --------- --------- --------- Net income per common share - basic........................... $ .18 $ .18 $ .28 $ .31 ========= ========= ========= ========= Weighted average common shares outstanding.................... 17,118 17,444 17,245 17,438 ========= ========= ========= ========= Net income per common share - diluted: From continuing operations................................. $ .18 $ .19 $ .28 $ .35 From discontinued operations............................... - (.01) - (.05) --------- --------- --------- --------- Net income per common share - diluted......................... $ .18 $ .18 $ .28 $ .30 ========= ========= ========= ========= Weighted average common shares................................ 17,398 17,785 17,524 17,768 ========= ========= ========= =========
Results of Operations: Energy The following tables set forth information relating to revenues recognized and costs and expenses incurred, daily production volumes, average sales prices and production costs per equivalent unit in our energy operations during the periods indicated:
Three Months Ended Six Months Ended March 31, March 31, -------------------------- ------------------------ 2003 2002 2003 2002 ---------- ----------- ---------- ---------- (in thousands, except sales price and production cost data) Revenues: Production................................................ $ 9,416 $ 6,570 $ 17,485 $ 13,896 Well drilling............................................. 23,366 16,758 29,949 34,739 Well services............................................. 2,152 2,020 4,052 4,118 Transportation............................................ 1,402 1,322 2,810 2,674 ---------- ----------- ---------- ---------- $ 36,336 $ 26,670 $ 54,296 $ 55,427 ========== =========== ========== ========== Costs and expenses: Production................................................ $ 1,644 $ 1,676 $ 3,179 $ 3,300 Exploration............................................... 958 238 1,009 656 Well drilling............................................. 20,318 14,775 26,043 30,395 Well services............................................. 1,085 991 1,940 1,908 Transportation............................................ 612 491 1,203 1,058 Non-direct................................................ 1,213 2,089 3,442 3,544 ---------- ----------- ---------- ---------- $ 25,830 $ 20,260 $ 36,816 $ 40,861 ========== =========== ========== ========== Production revenues: Gas (1)................................................... $ 8,231 $ 5,947 $ 15,281 $ 12,360 Oil....................................................... $ 1,187 $ 605 $ 2,203 $ 1,513 Production volume: Gas (mcf/day) (1) (2)..................................... 17,933 18,771 18,648 19,684 Oil (bbls/day) (2)........................................ 410 388 429 461 Average sales prices: Gas (per mcf) (3)........................................ $ 5.10 $ 3.52 $ 4.50 $ 3.45 Oil (per bbl)............................................. $ 32.17 $ 17.32 $ 28.24 $ 18.03 Average production costs: As a percent of production revenues....................... 17% 26% 18% 24% Per mcf equivalent unit (2)............................... $ .90 $ .88 $ .82 $ .81
(1) Excludes sales of residual gas and sales to landowners. (2) As used in this discussion, "mcf" and mmcf" means thousand cubic feet and million cubic feet; "mcfe" and mmcfe" means thousand cubic feet equivalent and million cubic feet equivalent, and "bbls" means barrels. Bbls are converted to mcfs equivalent using the ratio of six bbls to one mcf. (3) Our average sales price per mcf before the effects of hedging was $5.16 and $4.53 for the three months and six months ended March 31, 2003. No contracts were settled during the six months ended March 31, 2002. Results of Operations: Real Estate Finance The following table sets forth certain information relating to the revenues recognized and costs and expenses incurred in our real estate finance operations during the periods indicated:
Three Months Ended Six Months Ended March 31, March 31, -------------------------- ------------------------ 2003 2002 2003 2002 ---------- ----------- ---------- ---------- (in thousands) Revenues: Interest.................................................. $ 1,799 $ 2,677 $ 3,730 $ 5,005 Accreted discount......................................... 714 985 1,409 2,186 Gains on resolution of loans ............................. - 1,641 813 1,641 Equity in earnings of equity investees.................... 387 181 39 268 (net of depreciation of $490 and $219).................... Net rental and fee income................................. 589 136 657 204 ---------- ----------- ---------- ---------- $ 3,489 $ 5,620 $ 6,648 $ 9,304 ========== =========== ========== ========== Costs and expenses............................................ $ 937 $ 464 $ 1,783 $ 987 ========== =========== ========== ==========