<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 1, 2000
Resource America, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-4408 72-0654145
(State or Other (Commission (I.R.S. Employer
Jurisdiction of Incorporation) File Number) Identification No.)
1521 Locust Street, 4th Floor, Philadelphia, PA 19102
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (215) 546-5005
<PAGE>
Item 2: Acquisition or Disposition of Assets.
On August 1, 2000, Resource America, Inc. completed the sale of all of
the outstanding capital stock of Fidelity Leasing, Inc., Resource's small ticket
equipment leasing subsidiary, to European American Bank and AEL Leasing Co.,
Inc., subsidiaries of ABN AMRO Bank, N.V. Total consideration received by
Resource, including repayment of certain intercompany indebtedness, was $152.2
million. The purchase price was paid in cash, except for approximately $16.0
million that was paid by a non-interest bearing promissory note. The promissory
note will be payable to the extent that payments are received on a pool of
Fidelity Leasing's lease receivables comprised of those that are aged more than
90 days, are on Fidelity Leasing's credit watch list or have an outstanding
balance of $200,000 or more and would be risk rated "not pass" under the
purchasers' credit policies. In addition, $10.0 million of the total
consideration received by Resource will be held in escrow until March 31, 2004
as security for Resource's indemnification obligations to the purchasers. The
purchasers assumed approximately $431.0 million in debt payable to third parties
and other liabilities, resulting in a total consideration of $583.0 million.
For further terms and conditions of the sale, reference is made to the
Stock Purchase Agreement, a copy of which is attached as an exhibit to the
Registrant's Current Report on Form 8-K dated May 17, 2000 and which is
incorporated by reference in this Current Report, and to the amendment to the
Stock Purchase Agreement, a copy of which is attached as an exhibit to this
Current Report.
Item 7: Financial Statements and Exhibits
Page
----
(b) Pro Forma Financial Information.
(1) Unaudited Pro Forma Consolidated Financial Information of
Resource America, Inc.................................. 3
Unaudited Pro Forma Consolidated Balance Sheet at
March 31, 2000.................................... 4
Unaudited Pro Forma Consolidated Statement of
Income for the six months ended March 31, 2000.... 5
Unaudited Pro Forma Consolidated Statement of
Income for the year ended September 30, 1999...... 6
Notes to Unaudited Pro Forma Consolidated Financial
Information....................................... 7
(c) Exhibits
(2) Amendment to Stock Purchase Agreement among European American
Bank and AEL Leasing, Inc., Resource America, Inc. and FLI
Holdings, Inc.
2
<PAGE>
RESOURCE AMERICA, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA FINANCIAL INFORMATION OF RESOURCE
The following statements set forth unaudited pro forma financial
information of Resource giving effect to the sale of its wholly-owned
subsidiary, Fidelity Leasing, to European American Bank and AEL Leasing Co.,
Inc. for cash, a note and assumption by the purchasers of Fidelity Leasing debt.
The statements also reflect the cash escrow securing Resource's indemnification
obligations. The statements give effect to the sale as if it had occurred on
March 31, 2000 (with respect to balance sheet data) and as of the beginning of
each period presented (with respect to income statement data). These statements
do not purport to be indicative of the financial position or results of
operations for future periods or indicative of the results that actually would
have been realized had the sale taken place at March 31, 2000 or during the
periods covered by the income statements.
3
<PAGE>
RESOURCE AMERICA, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AT MARCH 31, 2000
(in thousands, except share data)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
Assets
<S> <C> <C> <C>
Cash...................................................................... $ 19,220 $ 109,099 A $ 128,319
Cash - escrow............................................................. - 10,000 B 10,000
Accounts and notes receivable and other prepaid expenses.................. 12,645 6,185 C 18,830
Net assets of discontinued operations..................................... 97,537 (95,018)D 2,519
Investments in real estate loans (less allowance for possible
losses of $1,705)...................................................... 183,599 183,599
Investments in real estate ventures....................................... 17,546 17,546
Investment in Resource Asset Investment Trust ("RAIT").................... 8,986 8,986
Property and equipment:
Oil and gas properties and equipment (successful efforts).............. 83,725 83,725
Gas gathering and transmission facilities.............................. 18,265 18,265
Other.................................................................. 6,934 6,934
----------- ---------- -----------
108,924 - 108,924
Less-accumulated depreciation, depletion & amortization................... (23,511) (23,511)
----------- ---------- -----------
Net property and equipment......................................... 85,413 - 85,413
Other assets (less accumulated amortization of $8,360).................... 53,236 53,236
----------- ---------- -----------
Total assets....................................................... $ 478,182 $ 30,266 $ 508,448
=========== ========== ===========
Liabilities and Stockholders' Equity
Debt:
Warehouse debt......................................................... $ - $ $ -
Non-recourse debt...................................................... 53,290 53,290
Senior debt............................................................ 99,100 99,100
Other debt............................................................. 5,649 5,649
----------- ---------- -----------
Total debt......................................................... 158,039 - 158,039
----------- ---------- -----------
Other liabilities:
Accounts payable....................................................... 11,106 11,106
Accrued liabilities.................................................... 13,206 13,206
Estimated income taxes................................................. 4,000 11,501E 15,501
Deferred income taxes.................................................. 7,700 7,700
----------- ---------- -----------
Total liabilities.................................................. 194,051 11,501 205,552
----------- ---------- -----------
Minority interest in Atlas Pipeline Partners, L.P......................... 17,699 - 17,699
----------- ---------- -----------
Commitments and contingencies............................................. - - -
----------- ---------- -----------
Stockholder's equity:
Preferred stock, $1.00 par value: 1,000,000 authorized shares.......... - -
Common stock, $0.01 par value: 49,000,000 authorized shares............ 244 244
Accumulated other comprehensive loss................................... (1,974) (1,974)
Additional paid-in capital............................................. 221,022 221,022
Less treasury stock, at cost........................................... (16,507) (16,507)
Less loan receivable from Employee Stock Ownership Plan
("ESOP")............................................................. (1,440) (1,440)
Retained earnings...................................................... 65,087 18,765F 83,852
----------- ---------- -----------
Total stockholders' equity........................................... 266,432 18,765 285,197
----------- ---------- -----------
Total liabilities, equity and minority interest........................... $ 478,182 $ 30,266 $ 508,448
=========== ========== ===========
</TABLE>
See accompanying notes to pro forma consolidated financial information
4
<PAGE>
RESOURCE AMERICA, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED MARCH 31, 2000
(in thousands, except share data)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C> <C> <C>
REVENUES:
Real estate finance....................................................... $ 10,414 $ $ 10,414
Energy.................................................................... 39,257 39,257
Interest and other........................................................ 4,579 (3,046)G 1,533
----------- ----------- -----------
54,250 (3,046) 51,204
COSTS AND EXPENSES:
Real estate finance....................................................... 1,455 1,455
Energy.................................................................... 28,356 28,356
General and administrative................................................ 3,845 3,845
Depreciation, depletion and amortization.................................. 5,099 5,099
Interest.................................................................. 9,210 9,210
Provision for possible losses............................................. 445 445
Minority interest in Atlas Pipeline Partners, L.P......................... 360 360
----------- ----------- -----------
48,770 - 48,770
----------- ----------- -----------
Income from continuing operations before taxes............................ 5,480 (3,046) 2,434
Provision for income taxes................................................ 1,753 (974)H 779
----------- ----------- -----------
Income from continuing operations......................................... $ 3,727 $ (2,072)O $ 1,655
=========== =========== ===========
Net income per common share - basic:
From continuing operations............................................. $ 0.16 $ 0.07
=========== ===========
Weighted average common shares outstanding................................ 23,350 23,350
=========== ===========
Net income per common share - diluted:
From continuing operations............................................. $ 0.16 $ 0.07
=========== ===========
Weighted average common shares............................................ 23,768 23,768
=========== ===========
</TABLE>
See accompanying notes to pro forma consolidated financial information
5
<PAGE>
RESOURCE AMERICA, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED SEPTEMBER 30, 1999
(in thousands, except share data)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C> <C> <C>
REVENUES:
Real estate finance....................................................... $ 45,907 $ $ 45,907
Equipment leasing......................................................... 41,129 (39,036)I 2,093
Energy.................................................................... 54,493 54,493
Interest and other........................................................ 3,560 3,560
----------- ----------- -----------
145,089 (39,036) 106,053
COSTS AND EXPENSES:
Real estate finance....................................................... 3,102 3,102
Equipment leasing......................................................... 13,156 (10,954)J 2,202
Energy.................................................................... 38,477 38,477
General and administrative................................................ 4,859 4,859
Depreciation, depletion and amortization.................................. 7,643 (1,657)K 5,986
Interest.................................................................. 33,696 (13,470)L 20,226
Provision for possible losses............................................. 4,617 (4,117)M 500
----------- ----------- -----------
105,550 (30,198) 75,352
------------ ------------ -----------
Income from continuing operations before taxes............................ 39,539 (8,838) 30,701
Provision for income taxes................................................ 12,847 (2,828)N 10,019
------------ ----------- -----------
Income from continuing operations......................................... $ 26,692 $ (6,010)O $ 20,682
=========== =========== ===========
Net income per common share - basic:
From continuing operations............................................. $ 1.21 $ 0.94
=========== ===========
Weighted average common shares outstanding................................ 22,108 22,108
=========== ===========
Net income per common share - diluted:
From continuing operations............................................. $ 1.17 $ 0.91
=========== ===========
Weighted average common shares............................................ 22,803 22,803
=========== ===========
</TABLE>
See accompanying notes to pro forma consolidated financial information
6
<PAGE>
RESOURCE AMERICA, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
A. Reflects the net cash proceeds to Resource from the sale of its
small ticket leasing subsidiary of $152.2 million less $15.4
million of payments made by Resource to the management of Fidelity
Leasing, $1.8 million of estimated expenses in connection with
closing the transaction, $10.0 million of cash being held in escrow
(see Note B) and a $16.0 million note receivable.
B. Reflects a $10.0 million cash escrow which will be held until
March 31, 2004 as security for Resource's indemnification
obligations to the purchasers.
C. Reflects a $16.0 million non-interest bearing note receivable net
of a $9.8 million allowance for possible losses and imputed
interest.
D. Reflects the net assets of Fidelity Leasing sold at March 31, 2000.
E. Reflects the estimated tax liability on the gain from the sale of
Fidelity Leasing.
F. Reflects the estimated net after-tax gain from the sale of Fidelity
Leasing.
G. Reflects the adjustment of intercompany interest income which had
been accrued by Resource. Fidelity Leasing, which was presented as
a discontinued operation in Resource's consolidated financial
statements for the six months ended March 31, 2000, had a
corresponding accrual of interest expense charged to its operations
for that period.
H. Pro forma adjustments have been effected at Resource's historical
effective tax rate which was 32% for the six months ended
March 31, 2000.
I. Reflects revenues related to Fidelity Leasing.
J. Reflects costs and expenses related to Fidelity Leasing.
K. Reflects depreciation and amortization related to Fidelity Leasing.
L. Reflects interest expense related to Fidelity Leasing.
M. Reflects the provision for possible losses related to Fidelity
Leasing.
N. Pro forma adjustments have been effected at Resource's historical
effective tax rate which was 32% for the fiscal year ended
September 30, 1999.
O. No effect has been given in the pro forma consolidated statements
of income for the effect of interest income or other results from
the use of the proceeds from this transaction.
7
<PAGE>
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 hereunto duly authorized.
August 10, 2000 RESOURCE AMERICA, INC.
By: /s/ Steven J. Kessler
---------------------------
Steven J. Kessler
Senior Vice President and
Chief Financial Officer
8
<PAGE>
(c) Exhibits
(2) Amendment to Stock Purchase Agreement among European American Bank and
AEL Leasing, Inc., Resource America, Inc. and FLI Holdings, Inc.
<PAGE>
AMENDMENT TO STOCK PURCHASE AGREEMENT
This Amendment (this "Amendment") to the Stock Purchase Agreement dated
May 17, 200 (the "Agreement") among European American Bank and AEL Leasing Co.,
Inc. ("Purchasers") and RESOURCE America, Inc. and FLI Holdings, Inc.
("Sellers") for the sale of the outstanding capital stock of Fidelity Leasing,
Inc. (the "Company") is made between the Purchasers and the Sellers as of August
1, 2000.
WHEREAS, pursuant to Section 14.07 of the Agreement, Purchasers wish to
waive certain obligations of Sellers under the Agreement and Sellers wish to
waive certain obligations of Purchasers under the Agreement and; pursuant to
Section 14.08 of the Agreement the Purchasers and the Sellers wish to amend the
Agreement as set out hereto.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements set forth herein and intending to be legally
bound hereby, the parties hereto hereby agrees as follows:
1. Definitions. Capitalized terms used and not otherwise defined herein
shall have the respective meanings assigned to such terms in the Agreement
unless otherwise stated.
2. Waiver by Purchasers. Purchasers hereby waive the requirement set
forth in Section 4.01(a), 5.02 and 5.06 of the Agreement that Sellers obtain the
consents set forth as items 1, 2, 4, 8, 9, 16 and 17 in Section 2.06 of the
Disclosure Schedule (collectively, the "Third Party Consent") and acknowledge
and agree that they are responsible for any breaches or defaults under the
agreements described by those items as a result of the failure of Sellers to
obtain the Third Party Consent. Further, Purchasers hereby waive the requirement
set forth in Section 4.01(a), 5.02 and 5.05 that Sellers obtain the consent or
approval of the Governmental or Regulatory Authorities set forth in Section 2.07
of the Disclosure Schedule to consummate the transactions contemplated by the
Agreement (the "Waived Approvals").
3. Waiver by Sellers. Sellers hereby waive the requirement set forth in
Section 4.14 and 6.02 of the Agreement that Purchasers secure, prior to or at
the Closing, the release of the guaranties set forth as items 1, 3, 4, 6 and 7
in Section 4.14 of the Disclosure Schedule (collectively, the "Guaranties").
4. Reduction of the Purchase Price. The aggregate purchase price for
the Shares set out in Section 1.02 of the Agreement shall be reduced to
$63,100,000.00 (the "Purchase Price").
5. Amendment to Section 1.03(i) of the Agreement. Section 1.03(i) of
the Agreement is hereby amended and restated as follows.
An amount in cash equal to $53,100,000 less the principal amount of the
Note referred to in clause (iii) below by wire transfer of immediately
available funds to such U.S. dollar account as Sellers may direct by
writ notice to Purchasers, such written notice to be provided at least
two (2) Business Days before the Closing Date;
<PAGE>
6. Amendment to Section 11.02(a) of the Agreement. Section 11.02(a) of
the Agreement is hereby amended and restated as follows:
Purchasers agree to indemnify each Seller and its officers, directors,
employees, agents and Affiliates in respect of, and hold each of them
harmless from and against, any and all Losses suffered, incurred or
sustained by any of them or to which any of them becomes subject,
resulting from, arising out of or relating to (i) any misrepresentation
breach of warranty or non-fulfillment of or failure to perform any
covenant or agreement on the party of Purchasers contained in this
Agreement (determined in all cases as if the terms "material" or
"materially" were not included therein) (ii) the failure of Sellers to
obtain the Third Party Consent and (iii) the Guaranties.
7. Assignment of Canadian Subsidiaries The Purchasers hereby assign
their right to acquire the shares (the "Canada Shares") of Fidelity Leasing
Canada Inc. ("Fidelity Canada") to ABN AMRO Bank Canada ("ABN AMRO"). ABN AMRO
is required to obtain the consent of the Superintendent of Financial
Institutions pursuant to Section 494(4) of the Bank Act (the "Consent") to
permit it to acquire the shares of Fidelity Canada. The Sellers are required to
obtain a Section 116 Certificate (the "Tax Consent") to permit them to transfer
the Canada Shares of Fidelity Canada to ABN AMRO. Purchasers and Sellers agree
to use their commercially reasonable best efforts to obtain the Consent and the
Tax Consent, respectively, as soon as possible. Purchasers shall reimburse
Sellers for all reasonable costs and expenses not to exceed $10,000.00 dollars
incurred by them in obtaining the Tax Consent. Neither the Consent nor the Tax
Consent can be obtained by the closing date under the Agreement which will be
August 1, 2000 (the "Closing").
Prior to Closing, the Company will transfer the Canada Shares to
Fidelity Leasing Holdings, Inc. ("Holdings") and immediately prior to such
transfer the Company will pay U.S.$300,000 to Fidelity Canada for newly issued
common shares of Fidelity Cananda. Fidelity Canada will use the cash from this
stock issuance to repay a portion of its intercompany debt to the Company.
At Closing, Holdings will transfer the Canada Shares to the Escrow
Agent who will hold them under the terms of the Escrow Agreement pending the
obtaining of the Consent and the Tax Consent. When the Consent and the Tax
Consent are obtained the Canada Shares shall forthwith be released by the Escrow
Agent on behalf of the Sellers to ABN AMRO for consideration of $1.
During the period from Closing to the transfer of Fidelity Canada to
ABN AMRO (the "Transitional Period") the Purchasers agree to procure that ABN
AMRO will provide to the Sellers the services necessary for the management
control and operations of Fidelity Canada and its subsidiaries and during the
Transitional Period to operate Fidelity Canada and its subsidiaries in the
ordinary course of business and for the avoidance of doubt from Closing the
Purchasers will be responsible for the funding of Fidelity Canada and its
<PAGE>
subsidiaries. Purchasers agree to indemnify Seller and its officers, directors,
employees, agents and Affiliates in respect of, and hold each of them harmless
from and against, any and all losses suffered, incurred or sustained by any of
them or to which any of them becomes subject, resulting from, arising out of or
relating to actions taken by ABN AMRO in the course of operating Fidelity Canada
and its subsidiaries during the Transitional Period, except for any losses
suffered or incurred in respect of performing the obligations under the
Agreement.
8. Amendment to Section 11.01(a) of the Agreement. Section 11.01(a) of
the Agreement is hereby amended by the addition of the following:
(vii) any of the payments set out in Schedule 11.01(a) which are
not received by the Company by August 1, 2003.
9. Amendment to Schedules. Schedule 11.01(a) shall be added to the
Agreement.
10. Amendment to Section 8.04 of the Agreement Section 8.04 of the
Agreement is hereby amended and restated as follows:
Any refunds received by Purchasers, the Company, any of its
Subsidiaries or their successors of Taxes of the Company or its
Subsidiaries relating to taxable periods or portions thereof ending on
or before the Closing Date (except for the tax refunds included in the
Note) shall be for the account of Sellers, and Purchasers shall pay
over to Sellers any such refund received by Purchasers, the Company,
any of its Subsidiaries or their successors within five (5) business
days of receipt. Purchasers shall, if Sellers so request and at
Sellers' expense, cause the relevant entity to file for and obtain any
refunds to which Sellers are entitled under this Section 8.04.
Purchasers shall permit Sellers to control (at Sellers' expense) the
prosecution of any such refund claimed, and shall cause the relevant
entity to authorize by appropriate power-of-attorney such persons as
Sellers shall designate to represent such entity with respect to such
refund claimed.
11. Deduction for Payments to Employees. All payments made to employees
of the Company on or before the Closing Date, including all amounts paid by
Sellers pursuant to the contracts described in Section 5.11 of the Agreement and
described as the "Initial Bonus" as defined in those contracts, shall be
deducted by Sellers (or the Company) on their tax returns for the period
including the Closing Date and shall not be deducted by the Purchasers (or by
the Company for any period after the Closing Date).
12. Survival. The covenants and agreements of Sellers and Purchasers
contained in this Amendments shall survive the Closing.
13. Effect on the Agreement. Except as set forth herein, all terms and
provisions of the Agreement shall remain in full force and effect in accordance
with the terms thereof.
14. Counterparts. This Amendment may be executed in two or more
counterparty, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have cause this Amendment to be
executed and delivered by their duly authorized representatives as of the date
first written above.
EUROPEAN AMERICAN BANK
By:
---------------------------------
Name:
Title:
AEL LEASING CO., INC.
By:
---------------------------------
Name:
Title:
RESOURCE AMERICA, INC.
By:
---------------------------------
Name:
Title:
FLI HOLDINGS, INC.
By:
---------------------------------
Name:
Title:
Schedule 11.01(a)
Payment due from SPC I TRUST $575,205.22
Payment due from various vendors $215,457.71
as a result of overpayment
