Exhibit 99.1
Imperial Holdings, Inc. Announces First Quarter 2014 Results
Company Reports Book Value of $9.23 per Share
Boca Raton, FL, May 8, 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 months ended March 31, 2014.
Three Months Ended March 31, 2014
Total income from continuing operations was $13.6 million for the three months ended March 31, 2014 compared to a total income from continuing operations of $3.3 million for the same period in 2013. The increase in income was primarily a result of a $12.1 million improvement in the fair value of the Company’s investment in life settlements. Total expenses were $12.9 million for the three months ended March 31, 2014 compared to $8.6 million for the same period in 2013. The increase in expenses was primarily due to a $2.7 million increase in interest expenses relating to the Company’s recent convertible notes issuance and increased borrowing of revolving credit facility debt. Additionally, the fair value of the revolving credit facility debt increased by $1.1 million during the quarter and the Company assumed a $2.1 million increase in conversion derivative liability, which is embedded in the convertible notes between inception date and the quarter end. These increases were partially offset by a decrease of $2.0 million in legal fees.
The Company reported a net loss from continuing operations of $3.3 million, or ($.16) per fully diluted share, for the three months ended March 31, 2014, compared to a net loss of $5.3 million, or ($0.25) per fully diluted share, for the same period in 2013. The net loss was impacted by a one-time provision for income taxes of $3.7 million as a result of a recent accounting pronouncement that was adopted by the Company as of January 1, 2014.
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As of March 31, 2014, the Company had cash and cash equivalents of approximately $81.9 million. As of May 8, 2014, the Company had 21,362,794 shares outstanding and a book value of $9.23 per share.
Life Settlements Portfolio Highlights
At March 31, 2014, the estimated fair value of the Company’s 601 life insurance policies was $315.5 million compared to $303.0 million for 614 life insurance policies at December 31, 2013. The weighted average discount rate was 19.05% at March 31, 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 March 31, 2014.
Antony Mitchell, Chief Executive Officer of Imperial, commented: “With the recent capital raise behind us, we are focused on sourcing accretive lending and investment opportunities within the life finance space. Our current pipeline looks encouraging and we expect to deploy capital later this year.”
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 32093012 when prompted.
The conference call will also be broadcast live through a link on the Investor Relations section of the Company’s website atwww.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 atwww.imperial.com.
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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
-SELECTED FINANCIAL TABLES FOLLOW-
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Imperial Holdings, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
| | | | | | | | |
| | | March 31, | | | December 31, | |
| | | 2014 | | | 2013* | |
| | | (Unaudited) | | | | |
| | | (In thousands except share data) | |
ASSETS | | | | | | | | |
Assets | | | | | | | | |
Cash and cash equivalents | | $ | 79,061 | | | $ | 14,722 | |
Cash and cash equivalents (VIE Note 4) | | | 2,869 | | | | 7,977 | |
Restricted cash | | | — | | | | 13,506 | |
Prepaid expenses and other assets | | | 2,492 | | | | 1,331 | |
Deposits – other | | | 1,347 | | | | 1,597 | |
Structured settlement receivables, at estimated fair value | | | 388 | | | | 660 | |
Structured settlement receivables at cost, net | | | 545 | | | | 797 | |
Investment in life settlements, at estimated fair value | | | 46,887 | | | | 48,442 | |
Investment in life settlements, at estimated fair value (VIE Note 4) | | | 268,577 | | | | 254,519 | |
Receivable for maturity of life settlements (VIE Note 4) | | | 13,641 | | | | 2,100 | |
Fixed assets, net | | | 53 | | | | 74 | |
Investment in affiliates | | | 2,384 | | | | 2,378 | |
Deferred debt costs, net | | | 3,251 | | | | — | |
| | | | | | | | |
Total assets | | $ | 421,495 | | | $ | 348,103 | |
| | | | | | | | |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY | |
Liabilities | | | | | | | | |
Accounts payable and accrued expenses | | $ | 5,415 | | | $ | 2,977 | |
Accounts payable and accrued expenses (VIE Note 4) | | | 267 | | | | 341 | |
Other liabilities | | | 6,912 | | | | 21,221 | |
Interest payable – senior unsecured convertible notes | | | 668 | | | | — | |
Revolving Credit Facility debt, at estimated fair value (VIE Note 4) | | | 133,952 | | | | 123,847 | |
Senior unsecured convertible notes, net of discount (Note 10) | | | 54,092 | | | | — | |
Conversion derivative liability, at estimated fair value (Note 10) | | | 18,963 | | | | — | |
Income taxes payable | | | — | | | | 6,295 | |
Deferred tax liability | | | 3,976 | | | | — | |
| | | | | | | | |
Total liabilities | | | 224,245 | | | | 154,681 | |
Commitments and Contingencies (Note 13) | | | | | | | | |
Stockholders’ Equity | | | | | | | | |
| | |
Common stock (par value $0.01 per share, 80,000,000 authorized; 21,362,794 and 21,237,166 issued and outstanding as of March 31, 2014 and December 31, 2013, respectively) | | | 213 | | | | 212 | |
Additional paid-in-capital | | | 246,670 | | | | 239,506 | |
Accumulated deficit | | | (49,633 | ) | | | (46,296 | ) |
| | | | | | | | |
Total stockholders’ equity | | | 197,250 | | | | 193,422 | |
| | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 421,495 | | | $ | 348,103 | |
| | | | | | | | |
* Derived from audited consolidated financial statements.
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Imperial Holdings, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
| | | | | | | | |
| | | For the Three Months Ended | |
| | | March 31, | |
| | | 2014 | | | 2013 | |
| Income | | (in thousands, except share and
per share data) | |
Interest income | | $ | 2 | | | $ | 20 | |
Interest and dividends on investment securities available for sale | | | — | | | | 14 | |
Loss on life settlements, net | | | (360 | ) | | | — | |
Change in fair value of life settlements (Notes 8 & 11) | | | 13,956 | | | | 1,840 | |
Servicing fee income | | | — | | | | 234 | |
Other income | | | 4 | | | | 1,153 | |
| | | | | | | | |
Total income (loss) | | | 13,602 | | | | 3,261 | |
| | | | | | | | |
Expenses | | | | | | | | |
Interest expense | | | 2,801 | | | | 103 | |
Change in fair value of Revolving Credit Facility debt (Notes 9 & 11) | | | 1,129 | | | | — | |
Change in fair value of conversion derivative liability (Notes 10 & 11) | | | 2,062 | | | | — | |
Amortization of deferred costs | | | — | | | | 7 | |
Personnel costs | | | 2,168 | | | | 1,863 | |
Legal fees | | | 2,844 | | | | 4,843 | |
Professional fees | | | 1,171 | | | | 802 | |
Insurance | | | 423 | | | | 519 | |
Other selling, general and administrative expenses | | | 346 | | | | 420 | |
| | | | | | | | |
Total expenses | | | 12,944 | | | | 8,557 | |
| | | | | | | | |
Income (loss) from continuing operations before income taxes | | | 658 | | | | (5,296 | ) |
Provision for income taxes | | | 3,976 | | | | 40 | |
| | | | | | | | |
Net income (loss) from continuing operations | | $ | (3,318 | ) | | $ | (5,336 | ) |
| | | | | | | | |
Discontinued Operations: | | | | | | | | |
Income (loss) from discontinued operations, net of income taxes | | $ | (19 | ) | | $ | 1,005 | |
| | | | | | | | |
Net income (loss) | | $ | (3,337 | ) | | $ | (4,331 | ) |
| | | | | | | | |
Earnings per share: | | | | | | | | |
Basic and diluted earnings per common share | | | | | | | | |
Continuing operations | | $ | (0.16 | ) | | $ | (0.25 | ) |
Discontinued operations | | $ | — | | | $ | 0.05 | |
| | | | | | | | |
Net income (loss) | | $ | (0.16 | ) | | $ | (0.20 | ) |
| | | | | | | | |
Weighted average shares outstanding: | | | | | | | | |
| | | | | | | | |
Basic and diluted | | | 21,344,112 | | | | 21,206,121 | |
| | | | | | | | |
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Life Finance Business Segment
| | | | | | | | |
| | | For the Three Months Ended | |
| | | March 31, | |
| | | 2014 | | | 2013 | |
Period Acquisitions – Policies Owned | | | | | | | | |
Number of policies acquired | | | — | | | | 8 | |
Average age of insured at acquisition | | | — | | | | 76.8 | |
Average life expectancy – Calculated LE (Years) | | | — | | | | 12.3 | |
Average death benefit | | $ | — | | | $ | 4,094 | |
Aggregate purchase price | | $ | — | | | $ | 1,524 | |
| | |
End of Period – Policies Owned | | | | | | | | |
Number of policies owned | | | 601 | | | | 220 | |
Average Life Expectancy – Calculated LE (Years) | | | 11.4 | | | | 10.8 | |
Aggregate Death Benefit | | $ | 2,920,399 | | | $ | 1,099,906 | |
Aggregate fair value | | $ | 315,464 | | | $ | 117,732 | |
Monthly premium – average per policy | | $ | 7.5 | | | $ | 10.4 | |
| | |
End of Period Loan Portfolio | | | | | | | | |
Loans receivable, net | | $ | — | | | $ | 1,769 | |
Number of policies underlying loans receivable | | | — | | | | 14 | |
Aggregate death benefit of policies underlying loans receivable | | $ | — | | | $ | 56,900 | |
Number of loans with insurance protection | | | — | | | | 5 | |
Loans receivable, net (insured loans only) | | $ | — | | | $ | 93 | |
Average Per Loan: | | | | | | | | |
Age of insured in loans receivable | | | — | | | | 75.8 | |
Life expectancy of insured (years) | | | — | | | | 15.6 | |
Monthly premium | | $ | — | | | $ | 5 | |
Loan receivable, net | | $ | — | | | $ | 126 | |
Interest rate | | | — | | | | 12.5 | % |
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