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| 8-K - FORM 8-K - EMERGENT CAPITAL, INC. | d764529d8k.htm |
Exhibit 99.1
Imperial Holdings, Inc. Announces Second Quarter 2014 Results
Company Reports Book Value of $9.83 per Share
Boca Raton, FL, July 30, 2014 – Imperial Holdings, Inc. (NYSE: IFT) (“Imperial” or the “Company”), a specialty finance company with a focus on providing liquidity solutions to owners of illiquid financial assets, announced today its financial results for the three and six month periods ended June 30, 2014.
Three Months Ended June 30, 2014
Total income from continuing operations was $9.0 million for the three months ended June 30, 2014 compared to total income from continuing operations of $65.6 million for the same period in 2013. Income for the three months ended June 30, 2013 was primarily driven by the change in fair value associated with the acquisition of 422 life insurance policies, while no policy acquisitions occurred during the same period in 2014. Total expenses were $19.5 million for the three months ended June 30, 2014 compared to $18.5 million for the same period in 2013. The increase was primarily driven by the change in fair value of $4.7 million associated with the conversion derivative liability embedded in the Company’s convertible notes. This change in fair value was driven in large part by the increase in the Company’s stock price during the period from March 31, 2014 through June 5, 2014, the date the Company obtained shareholder approval to issue shares of common stock in excess of certain NYSE limits. As of June 5, 2014, this conversion derivative liability was reclassified to additional paid-in-capital, net of the related tax impact.
The Company reported a net loss from continuing operations of $6.3 million, or ($.29) per fully diluted share, for the three months ended June 30, 2014, compared to net income of $47.2 million, or $2.22 per fully diluted share, for the same period in 2013.
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Six Months Ended June 30, 2014
Total income from continuing operations was $22.6 million for the six months ended June 30, 2014 compared to total income from continuing operations of $67.8 million for the same period in 2013. Income for the six months ended June 30, 2013 was primarily driven by the change in fair value associated with the acquisition of 422 life insurance policies, while no policy acquisitions occurred during the same period in 2014. Total expenses were $32.4 million for the six months ended June 30, 2014 compared to $25.9 million for the same period in 2013. The increase in expenses was primarily due to the change in the fair value of the conversion derivative liability as noted above of $6.8 million and an increase in the fair value of the Company’s revolving credit facility of $3.8 million.
The Company reported a net loss from continuing operations of $9.6 million, or ($.45) per fully diluted share, for the six months ended June 30, 2014, compared to net income of $41.8 million, or $1.97 per fully diluted share, for the same period in 2013. The net loss was impacted by a one-time income tax provision of approximately $3.7 million, which resulted from the adoption of a new accounting pronouncement during the first quarter of 2014.
As of June 30, 2014, the Company had cash and cash equivalents of approximately $82.4 million and had 21,402,990 shares outstanding with a per share book value of $9.83.
Life Settlements Portfolio Highlights
At June 30, 2014, the estimated fair value of the Company’s 593 life insurance policies was $336.8 million compared to $303.0 million for 612 life insurance policies at December 31, 2013. The weighted average discount rate was 18.92% at June 30, 2014 compared to 19.14% at December 31, 2013. The aggregate face value of the Company’s portfolio of life insurance policies was approximately $2.9 billion at June 30, 2014.
Antony Mitchell, Chief Executive Officer of Imperial, commented: “As we enter the second half of 2014, we remain encouraged by the continued interest in our asset class.” Mr. Mitchell concluded, “We expect to execute the first phase of our capital deployment plan during the third quarter and continue through the end of the year.”
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Conference Call
The Company will host a conference call today at 5:00 P.M ET. To join the call please dial US Toll Free (877) 312-5529 or from Outside of the US (253) 237-1147 and provide Conference ID 72177663 when prompted.
The conference call will also be broadcast live through a link on the Investor Relations section of the Company’s website at www.imperial.com. Please visit the website at least 10 minutes prior to the call to register, download and install any necessary audio software.
About Imperial Holdings, Inc.
Imperial is a leading specialty finance company that provides customized liquidity solutions to owners of illiquid financial assets. More information about Imperial can be found at www.imperial.com.
Safe Harbor Statement
This press release may contain certain “forward-looking statements” relating to the business of Imperial Holdings, Inc. and its subsidiary companies. All statements, other than statements of historical fact included herein are “forward-looking statements.” These forward-looking statements are often identified by the use of forward-looking terminology such as “believes,” “expects” or similar expressions, and involve known and unknown risks and uncertainties. Although Imperial believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required under the securities laws, Imperial does not assume a duty to update these forward-looking statements.
Contact:
David Sasso
Imperial Holdings, Inc.
Director- Investor Relations
561.672.6114
IR@imperial.com
www.imperial.com
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Imperial Holdings, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
| June 30, | December 31, | |||||||
| 2014 | 2013* | |||||||
| (Unaudited) | ||||||||
| (In thousands except share data) | ||||||||
| ASSETS | ||||||||
| Assets |
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| Cash and cash equivalents |
$ | 67,673 | $ | 14,722 | ||||
| Cash and cash equivalents (VIE) |
14,713 | 7,977 | ||||||
| Restricted cash |
— | 13,506 | ||||||
| Prepaid expenses and other assets |
2,003 | 1,331 | ||||||
| Deposits - other |
1,379 | 1,597 | ||||||
| Structured settlement receivables, at estimated fair value |
388 | 660 | ||||||
| Structured settlement receivables at cost, net |
551 | 797 | ||||||
| Investment in life settlements, at estimated fair value |
47,954 | 48,442 | ||||||
| Investment in life settlements, at estimated fair value (VIE) |
288,892 | 254,519 | ||||||
| Receivable for maturity of life settlements (VIE) |
2,100 | 2,100 | ||||||
| Fixed assets, net |
47 | 74 | ||||||
| Investment in affiliates |
2,384 | 2,378 | ||||||
| Deferred debt costs, net |
2,384 | — | ||||||
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| Total assets |
$ | 430,468 | $ | 348,103 | ||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Liabilities |
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| Accounts payable and accrued expenses |
$ | 4,227 | $ | 2,977 | ||||
| Accounts payable and accrued expenses (VIE) |
333 | 341 | ||||||
| Other liabilities |
1,267 | 21,221 | ||||||
| Interest payable - senior unsecured convertible notes (Note 10) |
2,171 | — | ||||||
| Revolving Credit Facility debt, at estimated fair value (VIE) |
148,783 | 123,847 | ||||||
| Senior unsecured convertible notes, net of discount |
54,645 | — | ||||||
| Income taxes payable |
— | 6,295 | ||||||
| Deferred tax liability |
8,618 | — | ||||||
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| Total liabilities |
220,044 | 154,681 | ||||||
| Commitments and Contingencies |
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| Stockholders’ Equity |
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| Common stock (par value $0.01 per share, 80,000,000 authorized; 21,402,990 and 21,237,166 issued and outstanding as of June 30, 2014 and December 31, 2013, respectively) |
213 | 212 | ||||||
| Additional paid-in-capital |
266,311 | 239,506 | ||||||
| Accumulated deficit |
(56,100 | ) | (46,296 | ) | ||||
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| Total stockholders’ equity |
210,424 | 193,422 | ||||||
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| Total liabilities and stockholders’ equity |
$ | 430,468 | $ | 348,103 | ||||
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| * | Derived from audited consolidated financial statements. |
Imperial Holdings, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| (in thousands, except share and per share data) | ||||||||||||||||
| Income |
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| Interest income |
$ | 11 | $ | 10 | $ | 13 | $ | 30 | ||||||||
| Interest and dividends on investment securities available for sale |
— | — | — | 14 | ||||||||||||
| Loss on life settlements, net |
(67 | ) | (1,247 | ) | (426 | ) | (1,247 | ) | ||||||||
| Change in fair value of life settlements |
9,000 | 64,846 | 22,956 | 66,686 | ||||||||||||
| Servicing fee income |
— | 76 | — | 310 | ||||||||||||
| Other income |
52 | 1,952 | 55 | 2,004 | ||||||||||||
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| Total income |
8,996 | 65,637 | 22,598 | 67,797 | ||||||||||||
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| Expenses |
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| Interest expense |
4,061 | 10,759 | 6,862 | 10,861 | ||||||||||||
| Loss on extinguishment of Bridge Facility |
— | 3,991 | — | 3,991 | ||||||||||||
| Change in fair value of Revolving Credit Facility debt |
2,689 | (5,361 | ) | 3,818 | (5,361 | ) | ||||||||||
| Change in fair value of conversion derivative liability |
4,697 | — | 6,759 | — | ||||||||||||
| Gain on loan payoffs and settlements, net |
— | (65 | ) | — | (65 | ) | ||||||||||
| Amortization of deferred costs |
— | — | — | 7 | ||||||||||||
| Personnel costs |
2,548 | 2,428 | 4,716 | 4,292 | ||||||||||||
| Legal fees |
3,335 | 4,240 | 6,179 | 7,983 | ||||||||||||
| Professional fees |
1,248 | 1,259 | 2,420 | 2,062 | ||||||||||||
| Insurance |
416 | 479 | 839 | 998 | ||||||||||||
| Other selling, general and administrative expenses |
476 | 753 | 822 | 1,172 | ||||||||||||
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| Total expenses |
19,470 | 18,483 | 32,415 | 25,940 | ||||||||||||
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| Income (loss) from continuing operations before income taxes |
(10,474 | ) | 47,154 | (9,817 | ) | 41,857 | ||||||||||
| Benefit (provision) for income taxes |
4,193 | — | 217 | (40 | ) | |||||||||||
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| Net income (loss) from continuing operations |
$ | (6,281 | ) | $ | 47,154 | $ | (9,600 | ) | $ | 41,817 | ||||||
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| Discontinued Operations: |
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| Income (loss) from discontinued operations, net of income taxes |
$ | (185 | ) | $ | 567 | $ | (204 | ) | $ | 1,572 | ||||||
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| Net income (loss) |
$ | (6,466 | ) | $ | 47,721 | $ | (9,804 | ) | $ | 43,389 | ||||||
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| Earnings per share: |
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| Basic and diluted earnings per common share |
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| Continuing operations |
$ | (0.29 | ) | $ | 2.22 | $ | (0.45 | ) | $ | 1.97 | ||||||
| Discontinued operations |
$ | (0.01 | ) | $ | 0.03 | $ | (0.01 | ) | $ | 0.07 | ||||||
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| Net income (loss) |
$ | (0.30 | ) | $ | 2.25 | $ | (0.46 | ) | $ | 2.04 | ||||||
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| Weighted average shares outstanding: |
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| Basic and diluted |
21,350,200 | 21,219,880 | 21,347,173 | 21,213,039 | ||||||||||||
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Imperial Holdings, Inc.
Life Finance Business Segment Data
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Period Acquisitions — Policies Owned |
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| Number of policies acquired |
— | 422 | — | 430 | ||||||||||||
| Average age of insured at acquisition |
— | 77.7 | — | 77.7 | ||||||||||||
| Average life expectancy - Calculated LE (Years) |
— | 12.7 | — | 12.7 | ||||||||||||
| Average death benefit |
$ | — | $ | 4,756 | $ | — | $ | 4,744 | ||||||||
| Aggregate purchase price |
$ | — | $ | 56,875 | $ | — | $ | 58,400 | ||||||||
| End of Period — Policies Owned |
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| Number of policies owned |
593 | 627 | 593 | 627 | ||||||||||||
| Average Life Expectancy - Calculated LE (Years) |
11.1 | 11.9 | 11.1 | 11.9 | ||||||||||||
| Aggregate Death Benefit |
$ | 2,873,899 | $ | 3,015,140 | $ | 2,873,899 | $ | 3,015,140 | ||||||||
| Aggregate fair value |
$ | 336,846 | $ | 265,773 | $ | 336,846 | $ | 265,773 | ||||||||
| Monthly premium — average per policy |
$ | 7.6 | $ | 7.8 | $ | 7.6 | $ | 7.8 | ||||||||