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| 8-K - FORM 8-K - EMERGENT CAPITAL, INC. | d33067d8k.htm |
Exhibit 99.1
Imperial Holdings, Inc. Announces Second Quarter 2015 Results
Company Reports Book Value of $8.90 per Share
Quarterly Maturities Total $36.6 million
Boca Raton, Fla., August 4, 2015 – 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, 2015.
Three Months Ended June 30, 2015
Total income from continuing operations was $28.0 million for the three months ended June 30, 2015 compared to total income from continuing operations of $9.0 million for the same period in 2014. This increase was primarily from the realized gains of seven life settlement policies during the period.
The following table provides a summary of the components of income from the changes in fair value of life settlements.
| For the Three Months Ended June 30, 2015 |
For the Three Months Ended June 30, 2014 |
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| Change in present value of probabilistic cash flows |
19,624,181 | 18,029,760 | ||||||
| Premiums paid during period |
(15,889,078 | ) | (13,622,205 | ) | ||||
| Change in life expectancy evaluation |
(3,350,156 | ) | 4,592,542 | |||||
| Change in discount rates |
507,832 | — | ||||||
| Unrealized gain on acquisitions |
974,857 | — | ||||||
| Realized gain on maturities |
26,134,366 | — | ||||||
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| Change in fair value of life settlements |
28,002,002 | 9,000,098 | ||||||
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Total expenses were $27.4 million for the three months ended June 30, 2015 compared to $19.5 million for the same period in 2014. The increase was primarily driven by a non-cash change in the fair value (liability) of the Company’s revolving credit facility of $13.6 million due to projected early repayment of the Revolving Credit Facility given earlier than projected maturities during the second quarter and increased borrowings.
The Company reported net income from continuing operations of $966,000, or $.04 per fully diluted share, for the three months ended June 30, 2015, compared to a net loss of $6.3 million, or ($.29) per fully diluted share, for the same period in 2014. The fully diluted share count includes approximately 6.69 million shares issued in the second quarter of 2015 as part of the Company’s equity rights offering.
Six Months Ended June 30, 2015
Total income from continuing operations was $41.0 million for the six months ended June 30, 2015 compared to total income from continuing operations of $22.6 million for the same period in 2014. The increase was primarily due to realized gains of 12 life settlement policies totaling $37.8 million which occurred during the first half of 2015.
The following table provides a summary of the components of income from the changes in fair value of life settlements.
| For the Six Months Ended June 30, 2015 |
For the Six Months Ended June 30, 2014 |
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| Change in estimated probabilistic cash flows |
40,717,779 | 35,747,610 | ||||||
| Premiums paid during period |
(31,417,233 | ) | (26,886,477 | ) | ||||
| Change in life expectancy evaluation |
(14,442,245 | ) | 3,526,527 | |||||
| Change in discount rates |
3,840,503 | — | ||||||
| Unrealized gain on acquisitions |
4,395,751 | — | ||||||
| Realized gain on maturities |
37,819,749 | 10,609,292 | ||||||
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| Change in fair value of life settlements |
40,914,304 | 22,956,982 | ||||||
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Total expenses were $46.5 million for the six months ended June 30, 2015 compared to $32.4 million for the same period in 2014. The increase was primarily due to an increase in the fair value (liability) of the Company’s revolving credit facility of $13.9 million and higher interest expense of $6.0 million.
The Company reported a net loss from continuing operations of $3.2 million, or ($.15) per fully diluted share, for the six months ended June 30, 2015, compared to a net loss of $9.6 million, or ($.45) per fully diluted share, for the same period in 2014.
As of June 30, 2015, the Company had cash and cash equivalents of approximately $55.6 million. The Company had 28,130,508 shares outstanding at June 30, 2015 and a book value of $8.90 per share.
Life Settlements Portfolio Highlights
At June 30, 2015, the estimated fair value of the Company’s 633 life insurance policies was $439.0 million compared to $388.9 million for 607 life insurance policies at December 31, 2014. The weighted average discount rate was 17.13% at June 30, 2015 compared to 17.77% at December 31, 2014. The aggregate face value of the Company’s portfolio of life insurance policies was approximately $3.0 billion at June 30, 2015. During the quarter, seven life settlement policies matured totaling $36.6 million. For the first six months of 2015, 12 life settlement policies matured totaling $49.8 million.
Antony Mitchell, Chief Executive Officer of Imperial, commented: “Income in the second quarter was strong with $36.6 million in maturities, bringing first half maturities to $49.8 million. To put this in perspective, maturities in the first half of 2015 exceeded all of 2013 and 2014 combined.” Mr. Mitchell concluded, “We are also very pleased to have recently closed a second revolving credit facility on favorable terms allowing us to meaningfully reduce our cash outlay and lock in the value of virtually our entire balance sheet.”
Conference Call
The Company will host a conference call today at 5:00 P.M ET. To join the call please dial Toll Free (877) 870-4263 or from Outside of the US (412) 317-0790.
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.
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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.
– SELECTED FINANCIAL TABLES FOLLOW –
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Imperial Holdings, Inc. and Subsidiary Companies
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
| For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
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| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| (in thousands, except share and per share data) | ||||||||||||||||
| Income |
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| Interest income |
$ | 4 | $ | 11 | $ | 10 | $ | 13 | ||||||||
| Loss on life settlements, net |
— | (67 | ) | — | (426 | ) | ||||||||||
| Change in fair value of life settlements |
28,002 | 9,000 | 40,914 | 22,956 | ||||||||||||
| Other income |
28 | 52 | 91 | 55 | ||||||||||||
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| Total income |
28,034 | 8,996 | 41,015 | 22,598 | ||||||||||||
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| Expenses |
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| Interest expense |
6,600 | 4,061 | 12,877 | 6,862 | ||||||||||||
| Change in fair value of Revolving Credit Facility debt |
13,552 | 2,689 | 17,692 | 3,818 | ||||||||||||
| Change in fair value of conversion derivative liability |
— | 4,697 | — | 6,759 | ||||||||||||
| Personnel costs |
1,752 | 2,548 | 3,480 | 4,716 | ||||||||||||
| Legal fees |
3,214 | 3,335 | 6,975 | 6,179 | ||||||||||||
| Professional fees |
1,382 | 1,248 | 3,705 | 2,420 | ||||||||||||
| Insurance |
312 | 416 | 658 | 839 | ||||||||||||
| Other selling, general and administrative expenses |
578 | 476 | 1,086 | 822 | ||||||||||||
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| Total expenses |
27,390 | 19,470 | 46,473 | 32,415 | ||||||||||||
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| Income (loss) from continuing operations before income taxes |
644 | (10,474 | ) | (5,458 | ) | (9,817 | ) | |||||||||
| Benefit for income taxes |
322 | 4,193 | 2,260 | 217 | ||||||||||||
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| Net income (loss) from continuing operations |
$ | 966 | $ | (6,281 | ) | $ | (3,198 | ) | $ | (9,600 | ) | |||||
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| Discontinued Operations: |
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| Loss from discontinued operations |
(236 | ) | (185 | ) | (492 | ) | (204 | ) | ||||||||
| Benefit for income taxes |
91 | — | 190 | — | ||||||||||||
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| Net loss from discontinued operations |
$ | (145 | ) | $ | (185 | ) | $ | (302 | ) | $ | (204 | ) | ||||
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| Net income (loss) |
$ | 821 | $ | (6,466 | ) | $ | (3,500 | ) | $ | (9,804 | ) | |||||
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| Basic and diluted income (loss) per share: |
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| Continuing operations |
$ | 0.04 | $ | (0.29 | ) | $ | (0.15 | ) | $ | (0.45 | ) | |||||
| Discontinued operations |
$ | — | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | |||||
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| Net income (loss) from continuing operations |
$ | 0.04 | $ | (0.30 | ) | $ | (0.16 | ) | $ | (0.46 | ) | |||||
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| Weighted average shares outstanding: |
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| Basic |
21,961,034 | 21,350,200 | 21,663,137 | 21,347,173 | ||||||||||||
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| Diluted |
21,964,904 | 21,350,200 | 21,663,137 | 21,347,173 | ||||||||||||
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Imperial Holdings, Inc. and Subsidiary Companies
CONSOLIDATED BALANCE SHEETS
| June 30, 2015 |
December 31, 2014* |
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| (Unaudited) | ||||||||
| (In thousands except share data) | ||||||||
| ASSETS | ||||||||
| Assets |
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| Cash and cash equivalents |
$ | 52,478 | $ | 51,166 | ||||
| Cash and cash equivalents (VIE) |
3,172 | 3,751 | ||||||
| Prepaid expenses and other assets |
1,776 | 1,502 | ||||||
| Deposits – other |
1,993 | 1,340 | ||||||
| Deposits on purchases of life settlements |
808 | 1,630 | ||||||
| Structured settlement receivables, at estimated fair value |
377 | 384 | ||||||
| Structured settlement receivables at cost, net |
576 | 597 | ||||||
| Life settlements, at estimated fair value |
122,471 | 82,575 | ||||||
| Life settlements, at estimated fair value (VIE) |
316,515 | 306,311 | ||||||
| Receivable for maturity of life settlements (VIE) |
34,668 | 4,000 | ||||||
| Fixed assets, net |
321 | 355 | ||||||
| Investment in affiliates |
2,384 | 2,384 | ||||||
| Deferred debt costs, net |
3,724 | 3,936 | ||||||
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| Total assets |
$ | 541,263 | $ | 459,931 | ||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Liabilities |
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| Accounts payable and accrued expenses |
$ | 4,813 | $ | 6,140 | ||||
| Accounts payable and accrued expenses (VIE) |
441 | 423 | ||||||
| Other liabilities |
433 | 1,256 | ||||||
| Interest payable – senior unsecured convertible notes |
2,272 | 2,272 | ||||||
| Senior unsecured convertible notes, net of discount |
57,156 | 55,881 | ||||||
| Interest payable – senior secured notes |
404 | 261 | ||||||
| Senior secured notes, net of discount |
48,300 | 24,036 | ||||||
| Revolving Credit Facility debt, at estimated fair value (VIE) |
170,858 | 145,831 | ||||||
| Deferred tax liability |
6,279 | 8,728 | ||||||
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| Total liabilities |
290,956 | 244,828 | ||||||
| Stockholders’ Equity |
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| Common stock (par value $0.01 per share, 80,000,000 authorized; 28,130,508 and 21,402,990 issued and outstanding as of June 30, 2015 and December 31, 2014, respectively) |
281 | 214 | ||||||
| Preferred stock (par value $0.01 per share, 40,000,000 authorized; 0 issued and outstanding as of June 30, 2015 and December 31, 2014) |
— | — | ||||||
| Additional paid-in-capital |
305,342 | 266,705 | ||||||
| Accumulated deficit |
(55,316 | ) | (51,816 | ) | ||||
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| Total stockholders’ equity |
250,307 | 215,103 | ||||||
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| Total liabilities and stockholders’ equity |
$ | 541,263 | $ | 459,931 | ||||
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* Derived from audited consolidated financial statements.
Life Finance Segment Data
Selected Operating Data (dollars in thousands):
| For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
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| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Period Acquisitions – Policies Owned |
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| Number of policies acquired |
8 | — | 38 | — | ||||||||||||
| Average age of insured at acquisition |
79.7 | — | 85.0 | — | ||||||||||||
| Average life expectancy – Calculated LE (Years) |
7.2 | — | 5.4 | — | ||||||||||||
| Average death benefit |
$ | 2,105 | $ | — | $ | 2,652 | $ | — | ||||||||
| Aggregate purchase price |
$ | 2,125 | $ | — | $ | 27,535 | $ | — | ||||||||
| End of Period – Policies Owned |
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| Number of policies owned |
633 | 593 | 633 | 593 | ||||||||||||
| Average Life Expectancy – Calculated LE (Years) |
10.2 | 11.1 | 10.2 | 11.1 | ||||||||||||
| Aggregate Death Benefit |
$ | 2,982,416 | $ | 2,873,899 | $ | 2,982,416 | $ | 2,873,899 | ||||||||
| Aggregate fair value |
$ | 438,986 | $ | 336,846 | $ | 438,986 | $ | 336,846 | ||||||||
| Monthly premium – average per policy |
$ | 8.4 | $ | 7.6 | $ | 8.4 | $ | 7.6 | ||||||||
Contact:
David Sasso
Imperial Holdings, Inc.
Senior Vice President, Corporate Development & Investor Relations
561.995.4300
IR@imperial.com