The J.G. Wentworth Company® Reports Third Quarter 2015 Results
Diversification Strategy Surpasses Another Milestone with Establishment of J.G. Wentworth Home Lending
Reports Adjusted Total Revenue of $65.9 Million, Adjusted Net Income of $5.2 Million
RADNOR, Pa.--(BUSINESS WIRE)-- November 9, 2015 The J.G. Wentworth Company® (‘J.G. Wentworth’ or the ‘Company’) ( NYSE: JGW), a diversified consumer financial services company specializing in structured settlement payment purchasing, home lending, prepaid cards, and personal lending, today reported financial results for the third quarter of 2015.
Third Quarter Highlights
| |
| • | J.G. Wentworth became a more diversified consumer financial services company by acquiring WestStar Mortgage Inc. and establishing the J.G. Wentworth Home Lending (‘Home Lending’) segment on July 31, 2015 which represents the accomplishment of a significant step in our strategy. The overall strategy continues to build on our recognizable brand and direct-to-consumer experience by expanding into growth markets. |
| |
| • | Key integration tasks have been completed in the quarter. The 300+ employees now in our J.G. Wentworth Home Lending division operating in 39 states and the District of Columbia bring a wealth of deep mortgage industry experience. For the two months of the quarter, post acquisition, they contributed $2.0 Million of Adjusted Net Income (‘ANI’). |
| |
| • | The Company completed the initial close of the 2015-2 securitization on July 28, 2015 which consisted of approximately $158.5 Million of fixed rate notes with an average annual yield of 4.18%. |
| |
| • | The Structured Settlement and Annuity Purchasing (‘Structured Settlements’) segment reported Total Receivables Balance (‘TRB’) Purchases of $240.4 Million, Adjusted Total Revenues* of $54.1 Million, and $3.2 Million of ANI*. |
"Closing of the acquisition and the establishment of J.G. Wentworth Home Lending was a significant milestone in our vision to diversify the company," said Stewart A. Stockdale, Chief Executive Officer, The J.G. Wentworth Company®. “We are excited to have such a talented group of mortgage professionals helping to drive business growth. In our Structured Settlements segment, focused TRB production and close attention on expense management generated positive ANI for the quarter. As we continue to assess and manage through the segment’s changing and highly competitive nature, we look to refine our strategy and take out cost from the operation and focus on overall profitability."
GAAP Third Quarter 2015 Results:
| |
| • | Consolidated Revenues were $63.5 Million, a decrease of $43.5 Million in third quarter when compared to the third quarter 2014 of $107.0 Million. The decrease was primarily due to a $56.2 Million decline in our Structured Settlements segment unrealized gains on VIE and other finance receivables, long-term debt and derivatives (totaling $4.6 Billion), and a $4.3 Million increase in realized and unrealized losses on marketable securities which were partially offset by a $5.2 Million increase in interest income, and $11.7 Million increase in our Home Lending segment. |
| |
| • | Consolidated Net Income decreased to a loss of $57.6 Million, a decrease of $70.3 Million in third quarter compared to the third quarter 2014. In our Structured Settlements segment the decline was primarily due to a |
$56.2 Million decrease in unrealized gains on VIE and other finance receivables, long term debt and derivatives that resulted from a decrease in spread margin and TRB purchases from the prior year, and a $29.9 Million third quarter 2015 non-cash impairment charge to reduce a trade name intangible asset that had been acquired in
connection with the prior Peachtree acquisition to its fair value. This was partially offset by an increase of $5.2 Million in Structured Settlements interest income, $2.0 Million increase in pre-tax income generated by our Home Lending segment, and by a $9.4 Million reduction in our consolidated tax provision expense.
Adjusted Non-GAAP* Third Quarter 2015 Results:
| |
| • | Consolidated Adjusted Total Revenues* were $65.9 Million, an increase of $2.9 Million when compared to the third quarter 2014 of $63.0 Million. The increase in revenue was due to the addition of our Home Lending segment which contributed $11.7 Million in Adjusted Total Revenues* for August and September. Total Adjusted Revenue* declined for the Structured Settlements segment primarily due to a decline in Spread Revenue* (Adjusted unrealized gains on VIE and other finance receivables, long term debt and derivatives, net of the gain (loss) on swap terminations) which decreased to $42.6 Million, as compared to the third quarter 2014 of $51.3 Million which was driven by a decrease in TRB Purchases and spread margin. |
| |
| • | Consolidated ANI* decreased to $5.2 Million from $7.2 Million, a decrease of $2.0 Million in the third quarter when compared to the third quarter 2014. In our Structured Settlements segment the decrease was due to the $8.7 Million decline in unrealized revenue on unsecuritized finance receivables which resulted from a reduction in spread margin and a decrease in TRB Purchases. This was partially offset by a $4.9 Million decrease in Adjusted Total Expenses*. In addition, our Home Lending segment contributed $2.0 Million in ANI*. |
| |
| • | Structured Settlements segment: TRB Purchases were $240.4 Million, as compared to $263.3 Million in the third quarter of 2014. TRB Purchases declined primarily due to a selective reduction of pre-settlement and wholesale purchases. |
| |
| • | J.G. Wentworth Home Lending: Closed mortgage loan origination volume was $522.0 Million for the third quarter of 2015 with $352.6 Million for August and September of 2015. |
Other Items:
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| • | The company is targeting $12 to $15 Million in cost savings next year from marketing and other operational efficiencies while investing in growth at the newly acquired Home Lending division. |
| |
| • | The Company named Scott Stevens as its new Executive Vice President and Chief Financial Officer on October 5, 2015. |
Scott Stevens, J.G. Wentworth's Chief Financial Officer, said, "I am pleased to be joining Stewart and the entire J.G. Wentworth team as we implement our strategy to diversify into adjacent consumer financial services markets. We believe the strategy is built on a strong funding platform and capital markets success. While the Structured Settlements business continues to operate in a highly competitive and rate sensitive industry, one of my first initiatives is to complement Home Lending's interest rate hedging program. We believe that once implemented, the new strategic Structured Settlements interest rate hedging program will reduce earnings volatility by partially mitigating the general level of interest rates."
Stockdale concluded, "We are confident 'J.G. Wentworth Cash Now' is a strong, overarching brand positioning that resonates with consumers across all our markets. For years it has performed well in Structured Settlements, and all indications suggest it is now being embraced by consumers of Home Lending."
* This earnings press release contains non-GAAP measures, which as calculated by the Company are not necessarily comparable to similarly titled measures reported by other companies. Results for the three and nine month periods ended September 30, 2015 and 2014, as well as our reconciliation of non-GAAP measures and historic financial information from 2014 to the present, are included in the accompanying financial information.
About The J.G. Wentworth Company®
The J.G. Wentworth Company ® is a diversified consumer financial services company. The Company is focused on providing direct-to-consumer access to financing needs through a variety of solutions, including: mortgage lending and refinancing, personal lending, structured settlements payment purchasing, and prepaid cards. Through the J.G. Wentworth, Peachtree Financial Solutions, and Olive Branch Funding brands, the Company is the leading purchaser of structured settlement payments.
Mortgage loans are offered by J.G. Wentworth Home Lending, Inc. NMLS ID # 2925 (www.nmlsconsumeraccess.org), 3350 Commission Court, Woodbridge, VA 22192; 888-349-3773.
For more information about The J.G. Wentworth Company ®, visit www.jgw.com or use the information provided below.
Conference Call and Webcast
Management will host a webcast to discuss the third quarter 2015 financial results at 10:00 AM Eastern Time today, November 9, 2015. The webcast will include remarks from J.G. Wentworth's Chief Executive Officer, Stewart Stockdale, and Chief Financial Officer, Scott Stevens.
This call will be accompanied by a presentation and will be available via a webcast of the conference call live on the Investor Relations section of the Company's website: The J.G. Wentworth Company® Third Quarter 2015 Webcast.
Interested parties unable to access the conference call and view the presentation via the webcast through this link: The J.G. Wentworth Company® Third Quarter 2015 Webcast, may dial Participant conference number: (877) 201-0168, Conference ID: 64752683.
Please dial in at least 10 minutes before the call to ensure timely participation.
A playback will be available through Monday, November 16th, 2015. To participate, utilize the dial-in information listed below:
Playback conference number: (855) 859-2056, Conference ID: 64752683. The presentation will be posted to the Company's website after the call.
Forward-Looking Statements
Certain statements in this press release constitute forward-looking statements. All statements, other than statements of historical fact, are forward-looking statements. You can identify such statements because they contain words such as plans, expects, or does expect, budget, forecasts, anticipates, or does not anticipate, believes, intends, and similar expressions or statements that certain actions, events or results may, could, would, might, or will, be taken, occur or be achieved. Any statements that refer to expectations or other characterizations of future events, circumstances or results are forward- looking statements.
A number of factors could cause actual results, performance or achievements to differ materially from the results expressed or implied in the forward-looking statements. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. Forward-looking statements necessarily involve significant known and unknown risks, assumptions and uncertainties that may cause our actual results, performance and opportunities in future periods to differ materially from those expressed or implied by such forward-looking statements. Consideration should also be given to the areas of risk set forth under the heading Risk Factors in our filings with the Securities and Exchange Commission, and as set forth more fully under Part 1, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2014 and in Part 2, Item 1A. Risk Factors in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2015. These risks and uncertainties include, among other things: the effects of local and national economic, credit and capital market conditions on the economy in general and on the mortgage industry in particular, and the effects of interest rates; future opportunities of the combined company; our anticipated needs for working capital; our ability to implement our business strategy; our ability to continue to purchase structured settlement payments and other assets; the compression of the yield spread between the price we pay for and the price at which we sell assets due to changes in interest rates and/or other factors; changes in tax or accounting policies or changes in interpretation of those policies as applicable to our business; changes in current tax law relating to the tax treatment of structured settlements; our ability to complete future securitizations or other financings on beneficial terms; our dependence on the opinions of certain rating agencies; our dependence on outside parties to conduct our transactions including the court system, insurance companies, outside counsel, delivery services and notaries; our ability to remain in compliance with the terms of our substantial indebtedness; changes in existing state laws governing the transfer of structured settlement payments or the interpretation thereof; availability of or increases in the cost of our financing sources
relative to our purchase discount rate; changes to state or federal, licensing and regulatory regimes; unfavorable press reports about our business model; our dependence on the effectiveness of our direct response marketing; adverse judicial developments; our ability to successfully enter new lines of business and broaden the scope of our business; potential litigation and regulatory proceedings; changes in our expectations regarding the likelihood, timing or terms of any potential acquisitions described herein; the lack of an established market for the subordinated interest in the receivables that we retain after a securitization is executed; the impact of the Consumer Financial Protection Bureau inquiries and any findings or regulations it issues as related to us, our industries, or products in general; our dependence on a small number of key personnel; our exposure to underwriting risk; our access to personally identifiable confidential information of current and prospective customers and the improper use or failure to protect that information; our computer systems being subject to security and privacy breaches; the public disclosure of the identities of structured settlement holders; our business model being susceptible to litigation; the insolvency of a material number of structured settlement issuers; infringement of our trademarks or service marks; our ability to integrate the Home Lending business, and the costs associated with such integration; adverse changes in the residential mortgage market; our ability to maintain sufficient capital to meet the financing requirements of our business; our ability to grow our loan originations volume; changes in prevailing interest rates and our ability to mitigate interest rate risk through hedging strategies; increases in delinquencies and defaults for the loans we service, especially in geographic areas where our loans are concentrated; changes in prepayments rates; changes in, and our ability to comply with, federal, state and local laws and regulations governing us; change in the guidelines of government-sponsored entities or any discontinuation of, or significant reduction in, the operation of government-sponsored entities; our ability to maintain our state licenses or obtain new licenses in new markets; our ability to originate and/or acquire additional mortgage servicing rights; the accuracy of the estimates and assumptions of our financial models; our ability to recapture loans from borrowers who refinance; potential misrepresentations by borrowers, counterparties and other third-parties; costs and potential liabilities resulting from state or federal examinations, legal proceedings, enforcement actions and foreclosure proceedings; changes in government mortgage modification programs; our ability to obtain adequate insurance; indemnification obligations to mortgage loan purchasers; our ability to timely recover servicing advances; illiquidity in our portfolio; challenges to the MERS system; technology failures; our ability to satisfy our financial covenants with our lenders; and our ability to successfully compete in the mortgage industry and real estate services business.
Except for our ongoing obligations to disclose material information under the federal securities laws, we undertake no obligation to publicly revise any forward-looking statements, to report events or to report the occurrence of unanticipated events unless we are required to do so by law.
Investor Relations:
Erik Hartwell, VP Investor Relations
866-386-3853
investor@jgwentworth.com
or
Media Inquiries:
Makovsky for The J.G. Wentworth Company®
Michael Goodwin, 212-508-9639
mgoodwin@makovsky.com
The J.G. Wentworth Company
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
|
| | | | | | | |
| | September 30, 2015 | | December 31, 2014 |
| | (Unaudited) | | |
| ASSETS | |
| | |
|
| Cash and cash equivalents | $ | 35,697 |
| | $ | 41,648 |
|
| Restricted cash and investments | 198,374 |
| | 198,206 |
|
VIE finance receivables, at fair market value | 4,521,327 |
| | 4,422,033 |
|
| Other finance receivables, at fair market value | 33,800 |
| | 101,802 |
|
| VIE finance receivables, net of allowances for losses of $8,560 and $7,674, respectively | 106,513 |
| | 113,489 |
|
| Other finance receivables, net of allowances for losses of $2,539 and $2,454, respectively | 11,725 |
| | 17,803 |
|
| Other receivables, net of allowances for losses of $273 and $204, respectively | 16,124 |
| | 14,165 |
|
Mortgage loans held for sale, at fair value | 130,189 |
| | - |
|
| Mortgage servicing rights, at fair value | 28,186 |
| | - |
|
| Premises and equipment, net of accumulated depreciation of $7,274 and $5,976, respectively | 5,860 |
| | 3,758 |
|
| Intangible assets, net of accumulated amortization of $21,556 and $20,273, respectively | 32,292 |
| | 45,436 |
|
| Goodwill | 98,008 |
| | 84,993 |
|
| Marketable securities | 85,879 |
| | 103,419 |
|
| Deferred tax assets, net | — |
| | 2,170 |
|
| Other assets | 75,192 |
| | 33,787 |
|
| Total Assets | $ | 5,379,166 |
| | $ | 5,182,709 |
|
| | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |
| | |
|
| Accrued expenses and account payables | $ | 30,497 |
| | $ | 19,256 |
|
| Accrued interest | 21,416 |
| | 17,416 |
|
| Term loan payable | 439,431 |
| | 437,183 |
|
| VIE derivative liabilities, at fair market value | 74,687 |
| | 75,706 |
|
| VIE borrowings under revolving credit facilities and other similar borrowings | 82,987 |
| | 19,339 |
|
| Other borrowings under revolving credit facilities and other similar borrowings | 126,494 |
| | — |
|
| VIE long-term debt | 201,464 |
| | 181,558 |
|
| VIE long-term debt issued by securitization and permanent financing trusts, at fair value | 4,074,210 |
| | 4,031,864 |
|
| Other liabilities | 59,585 |
| | 6,677 |
|
| Deferred tax liabilities, net | 18,788 |
| | 36,656 |
|
| Installment obligations payable | 85,879 |
| | 103,419 |
|
| Total Liabilities | $ | 5,215,438 |
| | $ | 4,929,074 |
|
| Class A common stock, par value $0.00001 per share; 500,000,000 shares authorized, 15,972,555 and 15,430,483 issued and outstanding as of September 30, 2015, respectively, 15,021,147 and 14,420,392 issued and outstanding as of December 31, 2014, respectively | — |
| | — |
|
| Class B common stock, par value $0.00001 per share; 500,000,000 shares authorized, 8,997,232 issued and outstanding as of September 30, 2015, 9,963,750 issued and outstanding as of December 31, 2014, respectively | — |
| | — |
|
| Class C common stock, par value $0.00001 per share; 500,000,000 shares authorized, 0 issued and outstanding as of September 30, 2015 and December 31, 2014, respectively | — |
| | — |
|
| Additional paid-in-capital | 104,575 |
| | 95,453 |
|
| Retained earnings (accumulated deficit) | (15,791 | ) | | 25,634 |
|
| | 88,784 |
| | 121,087 |
|
| Less: treasury stock at cost, 542,072 and 600,755 shares as of September 30, 2015 and December 31, 2014, respectively | (2,138 | ) | | (2,443 | ) |
| Total stockholders’ equity, The J.G. Wentworth Company | 86,646 |
| | 118,644 |
|
| Non-controlling interests | 77,082 |
| | 134,991 |
|
| Total Stockholders’ Equity | 163,728 |
| | 253,635 |
|
| Total Liabilities and Stockholders’ Equity | 5,379,166 |
| | 5,182,709 |
|
The J.G. Wentworth Company
Condensed Consolidated Statements of Operations - Unaudited
(In thousands, except share and per share data)
|
| | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended
September 30, |
| | 2015 | | 2014 | | 2015 | | 2014 |
| REVENUES | |
| | |
| | | | |
| Interest income | $ | 50,170 |
| | $ | 44,644 |
| | $ | 140,129 |
| | $ | 139,104 |
|
| Unrealized gains on VIE and other finance receivables, long-term debt and derivatives | 7,556 |
| | 63,731 |
| | 62,559 |
| | 221,359 |
|
| Realized and unrealized gains on sale of mortgage loans held for sale, net of direct costs | 8,946 |
| | — |
| | 8,946 |
| | — |
|
| Changes in mortgage servicing rights, net | 548 |
| | — |
| | 548 |
| | — |
|
| Loss on swap terminations, net | — |
| | (54 | ) | | (275 | ) | | (628 | ) |
| Servicing, broker, and other fees, net of direct costs | 2,144 |
| | 1,049 |
| | 4,153 |
| | 3,221 |
|
| Loan origination fees | 1,032 |
| | — |
| | 1,032 |
| | — |
|
| Realized and unrealized (losses) gains on marketable securities, net | (6,871 | ) | | (2,615 | ) | | (5,957 | ) | | 1,741 |
|
| Realized gain on notes receivable, at fair value | — |
| | — |
| | — |
| | 2,098 |
|
| Gain on extinguishment of debt | — |
| | 270 |
| | 593 |
| | 270 |
|
| Other | (3 | ) | | (1 | ) | | (11 | ) | | (63 | ) |
| Total Revenues | $ | 63,522 |
|
| $ | 107,024 |
|
| $ | 211,717 |
|
| $ | 367,102 |
|
| | | | | | | | |
| EXPENSES | |
| | |
| | | | |
| Advertising | $ | 16,946 |
| | $ | 18,416 |
| | $ | 49,728 |
| | $ | 52,341 |
|
| Interest expense | 55,606 |
| | 48,813 |
| | 154,509 |
| | 150,743 |
|
| Compensation and benefits | 14,210 |
| | 11,096 |
| | 36,426 |
| | 30,865 |
|
| General and administrative | 5,307 |
| | 4,858 |
| | 14,679 |
| | 13,941 |
|
| Professional and consulting | 6,542 |
| | 4,520 |
| | 15,841 |
| | 13,482 |
|
| Debt issuance | 2,220 |
| | 2,936 |
| | 5,092 |
| | 5,956 |
|
| Securitization debt maintenance | 1,463 |
| | 1,551 |
| | 4,453 |
| | 4,672 |
|
| Provision for losses | 1,653 |
| | 1,055 |
| | 4,610 |
| | 3,273 |
|
| Depreciation and amortization | 966 |
| | 961 |
| | 2,961 |
| | 3,163 |
|
| Impairment charges | 29,860 |
| | — |
| | 29,860 |
| | — |
|
| Installment obligations (income) expense, net | (6,372 | ) | | (2,047 | ) | | (4,300 | ) | | 3,567 |
|
| Total Expenses | $ | 128,401 |
| | $ | 92,159 |
| | $ | 313,859 |
| | $ | 282,003 |
|
| (Loss) income before income taxes | (64,879 | ) | | 14,865 |
| | (102,142 | ) | | 85,099 |
|
| (Benefit) provision for income taxes | (7,252 | ) | | 2,176 |
| | (12,422 | ) | | 16,169 |
|
| Net (Loss) Income | $ | (57,627 | ) | | $ | 12,689 |
| | $ | (89,720 | ) | | $ | 68,930 |
|
| Less net (loss) income attributable to non-controlling interests | (30,930 | ) | | 8,597 |
| | (49,382 | ) | | 49,548 |
|
| Net (loss) income attributable to The J.G. Wentworth Company | $ | (26,697 | ) | | $ | 4,092 |
| | $ | (40,338 | ) | | $ | 19,382 |
|
| | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | 2015 | | 2014 | | 2015 | | 2014 |
| Weighted average shares of Class A common stock outstanding: | |
| | |
| | |
| | |
|
| Basic | 14,918,415 |
| | 13,095,194 |
| | 14,437,117 |
| | 12,438,143 |
|
| Diluted | 14,918,415 |
| | 13,098,995 |
| | 14,437,117 |
| | 12,440,327 |
|
| Net (loss) income per share attributable to stockholders of Class A common stock of The J.G. Wentworth Company | |
| | |
| | |
| | |
|
| Basic | $ | (1.79 | ) | | $ | 0.31 |
| | $ | (2.79 | ) | | $ | 1.56 |
|
| Diluted | $ | (1.79 | ) | | $ | 0.31 |
| | $ | (2.79 | ) | | $ | 1.56 |
|
ANI Bridge - Unaudited
The J.G. Wentworth Company and Subsidiaries
Reconciliation of Net (Loss) Income to Adjusted Net Income and other Non-GAAP Measures Used in this Release and the Related Presentation
We use Adjusted Net Income (a non-GAAP financial measure) as a measure of our results from operations, which we define as our net income (loss) under U.S. GAAP before non-cash compensation expenses, certain other expenses, provision for or benefit from income taxes and for our Structured Settlement and Annuity Purchasing segment amounts related to the consolidation of the securitization and permanent financing trusts we use to finance the segment's business. We use Adjusted Net Income (Loss) to measure our overall performance because we believe it represents the best measure of our operating performance, as the operations of the associated variable interest entities do not impact the Structured Settlement and Annuity Purchasing segment's performance. In addition, the add-backs described above are consistent with adjustments permitted under our Term Loan agreement.
We also use the non-GAAP measures of Total Adjusted Revenue and adjusted unrealized gains on VIE and other finance receivables, long term debt and derivatives, net of the loss on swap termination, net ("Spread Revenue"), as measures of our revenues, which we define as those measures under U.S. GAAP before the amounts related to the consolidation of the securitization and permanent financing trusts we use to finance our business. We use these measures to measure our revenues because we believe they represent better measures of our revenues, as the operations of these variable interest entities do not impact business performance.
You should not consider Adjusted Net Income, Total Adjusted Revenue or Spread Revenue in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Because not all companies use identical calculations, our presentation of Adjusted Net Income, Total Adjusted Revenue and Spread Revenue may not be comparable to other similarly titled measures of other companies.
A reconciliation of Net Income (Loss) to Adjusted Net Income, which includes line items for Total Adjusted Revenue and Spread Revenue, for the three and nine months ended September 30, 2015 and 2014, respectively, is provided below.
The J.G. Wentworth Company
Consolidated Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) - Unaudited
(In thousands)
|
| | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | 2015 | | 2014 | | 2015 | | 2014 |
| Net income (loss) attributable to J.G. Wentworth, LLC | $ | (57,627 | ) | | $ | 12,689 |
| | $ | (89,720 | ) | | $ | 68,930 |
|
| Elimination of unrealized gain (loss) on finance receivables, long-term debt and derivatives from post securitization due to changes in interest rates | 35,063 |
| | (12,392 | ) | | 67,254 |
| | (59,649 | ) |
| Elimination of interest income from securitized finance receivables | (45,823 | ) | | (40,188 | ) | | (127,059 | ) | | (125,532 | ) |
| Interest income on retained interests in finance receivables | 5,436 |
| | 5,168 |
| | 15,869 |
| | 15,138 |
|
| Servicing income on securitized finance receivables | 1,336 |
| | 1,323 |
| | 3,967 |
| | 3,823 |
|
| Elimination of interest expense on long-term debt related to securitization and permanent financing trusts | 40,036 |
| | 34,162 |
| | 109,923 |
| | 107,660 |
|
| Professional fees relating to securitizations | 1,464 |
| | 1,551 |
| | 4,453 |
| | 4,672 |
|
| Share based compensation | 273 |
| | 431 |
| | 1,389 |
| | 1,731 |
|
| Income tax provision (benefit) | (7,252 | ) | | 2,176 |
| | (12,422 | ) | | 16,169 |
|
| Impact of prefundings on unsecuritized finance receivables | (24 | ) | | — |
| | 1,594 |
| | — |
|
| Impairment charges | 29,860 |
| | — |
| | 29,860 |
| | — |
|
| Other non-recurring expenses | 792 |
| | — |
| | 792 |
| | (1,401 | ) |
| Severance and M&A expenses | 1,664 |
| | 2,296 |
| | 5,228 |
| | 2,971 |
|
| Adjusted Net Income | $ | 5,198 |
|
| $ | 7,216 |
|
| $ | 11,128 |
|
| $ | 34,512 |
|
|
| | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| Other Data: | | | | | | | |
| Securitized Product Total Receivables Balance (TRB) Purchases (1) | $ | 211,876 |
| | $ | 228,915 |
| | $ | 678,502 |
| | $ | 704,966 |
|
| Life Contingent Purchases | 28,537 |
| | 28,471 |
| | 74,843 |
| | 86,483 |
|
| Pre-settlement Fundings | — |
| | 5,910 |
| | 10,764 |
| | 20,134 |
|
| Total TRB Purchases | $ | 240,413 |
| | $ | 263,296 |
| | $ | 764,109 |
| | $ | 811,583 |
|
| Consolidated Adjusted Net Income (Loss) | 5,198 |
| | 7,216 |
| | 11,128 |
| | 34,512 |
|
| Consolidated Adjusted Net Income Margin (2) | 2.2 | % | | 2.7 | % | | 1.5 | % | | 4.3 | % |
| | | | | | | | |
| Company Retained interests in finance receivables at fair market value | $ | 269,221 |
| | $ | 304,022 |
| | | | |
(1) Securitized product TRB purchases includes purchases during the period of assets that are expected to be securitized (guaranteed structured settlements, annuities, and lottery payment streams).
(2) Adjusted Net Income (Loss) TRB Margin is Adjusted Net Income (Loss) divided by Total TRB Purchases during the period.
The J.G. Wentworth Company
Consolidated Reconciliation of Net (Loss) Income to Adjusted Net Income - Unaudited
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Q3 2015 GAAP Results | | Adjustments to reflect deconsolidation of securitizations | | Impact of Prefundings on Unsecuritized Finance Receivables | | Interest Income on Retained Interests | | Share Based Compensation | | Income Tax | | Severance and
M&A
Expenses | | Impairment Charges | | Reclassification Associated with Installment Obligation Payable | | Other Nonrecurring Items | | Q3 2015 Adjusted Results |
| | | | | | | | | | | | | | | | | | | | | | |
| REVENUES | |
| | | | | | |
| | |
| | |
| | |
| | | | |
| | | | |
|
| Interest income | $ | 50,170 |
| | $ | (45,823 | ) | | $ | — |
| | $ | 5,436 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | (499 | ) | | $ | — |
| | $ | 9,284 |
|
Unrealized gains on VIE and other finance receivables, long-term debt and derivatives
| 7,556 |
| | 35,063 |
| | (24 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 42,595 |
|
| Servicing, broker, and other Fees, net of direct costs | 2,144 |
| | 1,336 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 3,480 |
|
| Other | (3 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (3 | ) |
| Realized and unrealized gains on sale of mortgage loans held for sale, net of direct costs | 8,946 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 8,946 |
|
| Changes in mortgage servicing rights, net | 548 |
| | | | | | | | | | | | | | | | | | | | 548 |
|
| Loan origination fees | 1,032 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 1,032 |
|
| Realized and unrealized losses on marketable securities, net | (6,871 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 6,871 |
| | — |
| | — |
|
| Total Revenues | $ | 63,522 |
|
| $ | (9,424 | ) | | $ | (24 | ) | | $ | 5,436 |
| | $ | — |
| | $ | — |
| | $ | — |
|
| $ | — |
| | $ | 6,372 |
|
| $ | — |
| | $ | 65,882 |
|
| | | | | | | | | | | | | | | | | | | | | | |
| EXPENSES | |
| | | | | | |
| | |
| | |
| | |
| | | | |
| | | | |
|
| Advertising | $ | 16,946 |
| | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | 16,946 |
|
| Interest expense | 55,606 |
| | (40,036 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | $ | — |
| | — |
| | 15,570 |
|
| Compensation and benefits | 14,210 |
| | — |
| | — |
| | — |
| | (273 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | 13,937 |
|
| General and administrative | 5,307 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (5 | ) | | — |
| | — |
| | — |
| | 5,302 |
|
| Professional and consulting | 6,542 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (1,659 | ) | | — |
| | — |
| | (792 | ) | | 4,091 |
|
| Debt issuance | 2,220 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 2,220 |
|
| Securitization debt maintenance | 1,463 |
| | (1,464 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (1 | ) |
| Provision for losses on finance receivables | 1,653 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 1,653 |
|
| Depreciation and amortization | 966 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 966 |
|
| Impairment charges | 29,860 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (29,860 | ) | | — |
| | — |
| | — |
|
| Installment obligations income, net | (6,372 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 6,372 |
| | — |
| | — |
|
| Total Expenses | $128,401 | | $ | (41,500 | ) |
| $0 | | $0 | | $ | (273 | ) | | $0 | | $ | (1,664 | ) | | $ | (29,860 | ) | | $6,372 |
| $ | (792 | ) | | $60,684 |
| | | | | | | | | | | | | | | | | | | | | | |
| Income before taxes | $ | (64,879 | ) | | $ | 32,076 |
|
| $ | (24 | ) | | $ | 5,436 |
| | $ | 273 |
| | $ | — |
| | $ | 1,664 |
| | $ | 29,860 |
| | $ | — |
|
| $ | 792 |
| | $ | 5,198 |
|
| Benefit for income taxes | (7,252 | ) | | — |
| | — |
| | — |
| | — |
| | 7,252 |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Net Loss | $ | (57,627 | ) | | $ | 32,076 |
|
| $ | (24 | ) | | $ | 5,436 |
| | $ | 273 |
| | $ | (7,252 | ) | | $ | 1,664 |
| | $ | 29,860 |
| | $ | — |
|
| $ | 792 |
| | $ | 5,198 |
|
The J.G. Wentworth Company
Consolidated Reconciliation of Net Income to Adjusted Net Income - Unaudited
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Q3 2014 GAAP Results | | Adjustments to reflect deconsolidation of securitizations | | Interest Income on Retained Interests | | Share Based Compensation | | Income Tax | | Severance and M&A Expenses | | Reclassification
Associated with
Installment
Obligation Payable | | Other Nonrecurring Items | | Q3 2014 Adjusted Results |
| | | | | | | | | | | | | | | | | | |
| REVENUES | |
| | |
| | |
| | |
| | |
| | |
| | |
| | | | |
|
| Interest income | $ | 44,644 |
| | $ | (40,188 | ) | | $ | 5,168 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | (568 | ) | | $ | — |
| | $ | 9,056 |
|
| Unrealized gains on VIE and other finance receivables, long-term debt and derivatives | 63,731 |
| | (12,392 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 51,339 |
|
| Loss on swap terminations, net | (54 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (54 | ) |
| Servicing, broker, and other | 1,049 |
| | 1,323 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 2,372 |
|
| Realized and unrealized losses on marketable securities, net | (2,615 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | 2,615 |
| | — |
| | — |
|
| Realized gain on notes receivable | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Gain on debt extinguishment | $ | 270 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | 270 |
|
| Other | $ | (1 | ) | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | (1 | ) |
| Total Revenues | $ | 107,024 |
| | $ | (51,257 | ) | | $ | 5,168 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 2,047 |
| | $ | — |
| | $ | 62,982 |
|
| | | | | | | | | | | | | | | | | | |
| EXPENSES | |
| | |
| | |
| | |
| | |
| | |
| | |
| | | | |
|
| Advertising | $ | 18,416 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 18,416 |
|
| Interest expense | 48,813 |
| | (34,162 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 14,651 |
|
| Compensation and benefits | 11,096 |
| | — |
| | — |
| | (431 | ) | | — |
| | (1,787 | ) | | — |
| | — |
| | 8,878 |
|
| General and administrative | 4,858 |
| | — |
| | — |
| | — |
| | — |
| | (320 | ) | | — |
| | — |
| | 4,538 |
|
| Professional and consulting | 4,520 |
| | — |
| | — |
| | — |
| | — |
| | (189 | ) | | — |
| | | | 4,331 |
|
| Debt issuance | 2,936 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 2,936 |
|
| Securitization debt maintenance | 1,551 |
| | (1,551 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Provision for losses on finance receivables | 1,055 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 1,055 |
|
| Depreciation and amortization | 961 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 961 |
|
| Installment obligations expense, net | (2,047 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | 2,047 |
| | — |
| | — |
|
| Total Expenses | $92,159 | | $ | (35,713 | ) | | $0 | | $ | (431 | ) | | $0 | | $ | (2,296 | ) | | $ | 2,047 |
| | $ | — |
| | $55,766 |
| | | | | | | | | | | | | | | | | | |
| Income before income taxes | $ | 14,865 |
| | $ | (15,544 | ) | | $ | 5,168 |
| | $ | 431 |
| | $ | — |
| | $ | 2,296 |
| | $ | — |
| | $ | — |
| | $ | 7,216 |
|
| Provision for income taxes | 2,176 |
| | — |
| | — |
| | — |
| | (2,176 | ) | | — |
| | — |
| | — |
| | — |
|
| Net Income | $ | 12,689 |
| | $ | (15,544 | ) | | $ | 5,168 |
| | $ | 431 |
| | $ | 2,176 |
| | $ | 2,296 |
| | $ | — |
| | $ | — |
| | $ | 7,216 |
|
The J.G. Wentworth Company
Consolidated Reconciliation of Net Income to Adjusted Net Income - Unaudited
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | YTD 2015 GAAP Results | | Adjustments to reflect deconsolidation of securitizations | | Impact of Prefundings on Unsecuritized Finance receivables | | Interest Income on Retained Interests | | Share Based Compensation | | Income Tax | | Severance and M&A Expenses | | Impairment | | Reclassification
Associated with
Installment
Obligation Payable | | Other Nonrecurring Items | | YTD 2015 Adjusted Results |
| | | | | | | | | | | | | | | | | | | | | | |
| REVENUES | |
| | |
| | | | |
| | |
| | |
| | |
| | | | |
| | | | |
|
| Interest income | $ | 140,129 |
| | $ | (127,059 | ) | | $ | — |
| | $ | 15,869 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | (1,657 | ) | | $ | — |
| | $ | 27,282 |
|
| Unrealized gains on VIE and other finance receivables, long-term debt and derivatives | 62,559 |
| | 67,254 |
| | 1,594 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 131,407 |
|
| Loss on swap terminations, net | (275 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (275 | ) |
| Servicing, broker, and other Fees, net of direct costs | 4,153 |
| | 3,967 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 8,120 |
|
| Realized and unrealized losses on marketable securities, net | (5,957 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 5,957 |
| | — |
| | — |
|
| Realized and unrealized gains on sale of mortgage loans held for sale, net of direct costs | 8,946 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 8,946 |
|
| Gain on extinguishment on debt | 593 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 593 |
|
| Change in mortgage servicing rights, net | 548 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 548 |
|
| Loan origination fees | 1,032 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 1,032 |
|
| Other | (11 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (11 | ) |
| Total Revenues | $ | 211,717 |
| | $ | (55,838 | ) | | $ | 1,594 |
| | $ | 15,869 |
| | $ | — |
| | $ | — |
| | $ | — |
|
| $ | — |
| | $ | 4,300 |
|
| $ | — |
| | $ | 177,642 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | |
|
|
| | |
|
|
| EXPENSES | |
| | |
| | | | |
| | |
| | |
| | |
| | | | |
| | | | |
|
| Advertising | $ | 49,728 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 49,728 |
|
| Interest expense | 154,509 |
| | (109,923 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 44,586 |
|
| Compensation and benefits | 36,426 |
| | — |
| | — |
| | | | (1,389 | ) | | — |
| | (2,272 | ) | | — |
| | — |
| | — |
| | 32,765 |
|
| General and administrative | 14,679 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (18 | ) | | — |
| | — |
| | — |
| | 14,661 |
|
| Professional and consulting | 15,841 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (2,938 | ) | | — |
| | — |
| | (792 | ) | | 12,111 |
|
| Debt issuance | 5,092 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 5,092 |
|
| Securitization debt maintenance | 4,453 |
| | (4,453 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Provision for losses on finance receivables | 4,610 |
| | | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 4,610 |
|
| Depreciation and amortization | 2,961 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 2,961 |
|
| Impairment charges | 29,860 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (29,860 | ) | | — |
| | — |
| | — |
|
| Installment obligations income, net | (4,300 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 4,300 |
| | — |
| | — |
|
| Total Expenses | $ | 313,859 |
|
| $ | (114,376 | ) |
| $ | — |
|
| $ | — |
|
| $ | (1,389 | ) |
| $ | — |
|
| $ | (5,228 | ) |
| $ | (29,860 | ) | | $ | 4,300 |
|
| $ | (792 | ) | | $ | 166,514 |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| | | |
|
| | | |
|
|
| Loss before income taxes | $ | (102,142 | ) | | $ | 58,538 |
|
| $ | 1,594 |
|
| $ | 15,869 |
|
| $ | 1,389 |
|
| $ | — |
|
| $ | 5,228 |
|
| $ | 29,860 |
|
| $ | — |
|
| $ | 792 |
| | $ | 11,128 |
|
| Benefit for income taxes | (12,422 | ) | | — |
| | — |
| | — |
| | — |
| | 12,422 |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Net Loss | $ | (89,720 | ) | | $ | 58,538 |
|
| $ | 1,594 |
|
| $ | 15,869 |
|
| $ | 1,389 |
|
| $ | (12,422 | ) |
| $ | 5,228 |
|
| $ | 29,860 |
| | $ | — |
|
| $ | 792 |
| | $ | 11,128 |
|
The J.G. Wentworth Company
Consolidated Reconciliation of Net Income to Adjusted Net Income - Unaudited
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | YTD 2014 GAAP Results | | Adjustments to reflect deconsolidation of securitizations | | Interest Income on Retained Interests | | Share Based Compensation | | Income Tax | | Severance and M&A Expenses | | Reclassification
Associated with
Installment
Obligation Payable | | Other Nonrecurring Items | | YTD 2014 Adjusted Results |
| | | | | | | | | | | | | | | | | | |
| REVENUES | |
| | |
| | |
| | |
| | |
| | |
| | |
| | | | |
|
| Interest income | $ | 139,104 |
| | $ | (125,532 | ) | | $ | 15,138 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | (1,826 | ) | | $ | 6 |
| | $ | 26,890 |
|
| Unrealized gains on VIE and other finance receivables, long-term debt and derivatives | 221,359 |
| | (59,649 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 161,710 |
|
| Loss on swap terminations, net | (628 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (628 | ) |
| Servicing, broker, and other | 3,221 |
| | 3,823 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 7,044 |
|
| Realized and unrealized gains on marketable securities, net | 1,741 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (1,741 | ) | | — |
| | — |
|
| Realized gain on notes receivable, at fair value | 2,098 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (2,098 | ) | | — |
|
| Gain on debt extinguishment | 270 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 270 |
|
| Other | (63 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (63 | ) |
| Total Revenues | $ | 367,102 |
| | $ | (181,358 | ) | | $ | 15,138 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | (3,567 | ) | | $ | (2,092 | ) | | $ | 195,223 |
|
| | | | | | | | | | | | | | | | | | |
| EXPENSES | |
| | |
| | |
| | |
| | |
| | |
| | |
| | | | |
|
| Advertising | $ | 52,341 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 52,341 |
|
| Interest expense | 150,743 |
| | (107,660 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 43,083 |
|
| Compensation and benefits | 30,865 |
| | — |
| | — |
| | (1,731 | ) | | — |
| | (1,900 | ) | | — |
| | — |
| | 27,234 |
|
| General and administrative | 13,941 |
| | — |
| | — |
| | — |
| | — |
| | (234 | ) | | — |
| | — |
| | 13,707 |
|
| Professional and consulting | 13,482 |
| | — |
| | — |
| | — |
| | — |
| | (837 | ) | | — |
| | (691 | ) | | 11,954 |
|
| Debt issuance | 5,956 |
| | |
| | |
| | |
| | |
| | |
| | |
| | | | 5,956 |
|
| Securitization debt maintenance | 4,672 |
| | (4,672 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Provision for losses on finance receivables | 3,273 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 3,273 |
|
| Depreciation and amortization | 3,163 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 3,163 |
|
| Installment obligations expense, net | 3,567 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (3,567 | ) | | — |
| | — |
|
| Total Expenses | $ | 282,003 |
| | $ | (112,332 | ) | | $ | — |
| | $ | (1,731 | ) | | $ | — |
| | $ | (2,971 | ) | | $ | (3,567 | ) | | $ | (691 | ) | | $ | 160,711 |
|
| | | | | | | | | | | | | | | | | | |
| Income before income taxes | $ | 85,099 |
| | $ | (69,026 | ) | | $ | 15,138 |
| | $ | 1,731 |
| | $ | — |
| | $ | 2,971 |
| | $ | — |
| | $ | (1,401 | ) | | $ | 34,512 |
|
| Provision for income taxes | 16,169 |
| | — |
| | — |
| | — |
| | (16,169 | ) | | — |
| | — |
| | — |
| | — |
|
| Net Income | $ | 68,930 |
| | $ | (69,026 | ) | | $ | 15,138 |
| | $ | 1,731 |
| | $ | 16,169 |
| | $ | 2,971 |
| | $ | — |
| | $ | (1,401 | ) | | $ | 34,512 |
|
The J.G. Wentworth Company
Consolidated Selected Quarterly Data - Unaudited
(In thousands, except share and per share data)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Q1 2014 | | Q2 2014 | | Q3 2014 | | Q4 2014 | | Q1 2015 | | Q2 2015 | | Q3 2015 |
| Structured Settlements TRB: | |
| | |
| | |
| | | | |
| | |
| | |
Securitized Product Total Receivables Balance (TRB) Purchases (1) | $ | 223,507 |
| | $ | 252,544 |
| | $ | 228,915 |
| | $ | 234,084 |
| | $ | 234,972 |
| | $ | 231,654 |
| | $ | 211,876 |
|
| Life Contingent Purchases | 29,827 |
| | 28,185 |
| | 28,471 |
| | 25,107 |
| | 19,499 |
| | 26,807 |
| | 28,537 |
|
| Pre-settlement Fundings | 7,247 |
| | 6,977 |
| | 5,910 |
| | 7,021 |
| | 6,360 |
| | 4,404 |
| | — |
|
| Total TRB Purchases | $ | 260,581 |
| | $ | 287,706 |
| | $ | 263,296 |
| | $ | 266,212 |
| | $ | 260,830 |
| | $ | 262,865 |
|
| $ | 240,413 |
|
| | | | | | | | | | | | | | |
| Home Lending Originations (2 Months) : | | | | | | | | | | | | | $ | 353,583 |
|
| | | | | | | | | | | | | | |
| ANI Basis: | |
| | |
| | |
| | | | |
| | |
| | |
| Total Revenue | $ | 63,131 |
| | $ | 69,110 |
| | $ | 62,982 |
| | $ | 63,774 |
| | $ | 62,423 |
| | $ | 49,336 |
| | $ | 65,882 |
|
| Total Expenses | $ | 53,010 |
| | $ | 51,935 |
| | $ | 55,766 |
| | $ | 54,693 |
| | $ | 54,177 |
| | $ | 51,652 |
| | $ | 60,684 |
|
| ANI | $ | 10,121 |
| | $ | 17,175 |
| | $ | 7,216 |
| | $ | 9,081 |
| | $ | 8,246 |
| | $ | (2,316 | ) |
| $ | 5,198 |
|
ANI Margin (2) | 16.0 | % | | 24.9 | % | | 11.5 | % | | 14.2 | % | | 13.2 | % | | (4.7 | )% |
| 7.9 | % |
ANI TRB Margin (3) | 3.9 | % | | 6.0 | % | | 2.7 | % | | 3.4 | % | | 3.2 | % | | (0.9 | )% |
| 2.2 | % |
| | | | | | | | | | | | | | |
Spread Revenue (4) | $ | 51,846 |
| | $ | 57,951 |
| | $ | 51,285 |
| | $ | 52,471 |
| | $ | 50,547 |
| | $ | 37,989 |
| | $ | 42,595 |
|
TRB Spread Margin (5) | 20.5 | % | | 20.6 | % | | 19.9 | % | | 20.2 | % | | 19.9 | % | | 14.7 | % |
| 17.7 | % |
| | | | | | | | | | | | | | |
| GAAP Basis: | |
| | |
| | |
| | | | |
| | |
| | |
| Revenue | $ | 136,590 |
| | $ | 123,488 |
| | $ | 107,024 |
| | $ | 127,274 |
| | $ | 86,830 |
| | $ | 61,363 |
| | $ | 63,522 |
|
Expenses (6) | $ | 102,057 |
| | $ | 101,780 |
| | $ | 94,335 |
| | $ | 99,591 |
| | $ | 92,290 |
| | $ | 87,996 |
| | $ | 121,149 |
|
| Net (Loss) Income | $ | 34,533 |
| | $ | 21,708 |
| | $ | 12,689 |
| | $ | 27,683 |
| | $ | (5,460 | ) | | $ | (26,633 | ) | | $ | (57,627 | ) |
| Net (loss) income attributable to The J.G. Wentworth Company | $ | 9,022 |
| | $ | 6,268 |
| | $ | 4,092 |
| | $ | 11,829 |
| | $ | (1,345 | ) | | $ | (12,296 | ) | | $ | (26,697 | ) |
| | | | | | | | | | | | | | |
| Weighted Average Diluted Shares | 11,642,283 |
| | 12,562,042 |
| | 13,098,995 |
| | 14,640,860 |
| | 14,271,842 |
| | 14,113,990 |
| | 14,918,415 |
|
All-in Shares (7) | 29,555,639 |
| | 29,510,029 |
| | 29,335,338 |
| | 29,019,913 |
| | 28,597,051 |
| | 28,033,035 |
| | 28,296,734 |
|
| | | | | | | | | | | | | | |
| Diluted EPS | $ | 0.77 |
| | $ | 0.50 |
| | $ | 0.31 |
| | $ | 0.81 |
| | $ | (0.09 | ) | | $ | (0.87 | ) | | $ | (1.79 | ) |
ANI EPS (8) | $ | 0.34 |
| | $ | 0.58 |
| | $ | 0.25 |
| | $ | 0.31 |
| | $ | 0.29 |
| | $ | (0.08 | ) | | $ | 0.18 |
|
| | | | | | | | | | | | | | |
| Residual Asset Balance | $ | 280,208 |
| | $ | 294,637 |
| | $ | 304,022 |
| | $ | 331,395 |
| | $ | 318,493 |
| | $ | 299,412 |
| | $ | 269,221 |
|
| Residual Loan Balance | $ | 67,989 |
| | $ | 107,540 |
| | $ | 107,329 |
| | $ | 107,043 |
| | $ | 106,748 |
| | $ | 106,465 |
| | $ | 131,096 |
|
| | | | | | | | | | | | | | |
| 10-Year Swap Rate | 2.84 | % | | 2.63 | % | | 2.64 | % | | 2.28 | % | | 2.02 | % | | 2.46 | % | | 2.02 | % |
| | | | | | | | | | | | | | |
| Term Loan Interest Expense | $ | 9,917 |
| | $ | 10,020 |
| | $ | 10,082 |
| | $ | 10,182 |
| | $ | 9,932 |
| | $ | 10,019 |
| | $ | 10,200 |
|
| ANI Interest Expense | $ | 13,945 |
| | $ | 14,487 |
| | $ | 14,651 |
| | $ | 14,808 |
| | $ | 14,627 |
| | $ | 14,389 |
| | $ | 15,570 |
|
| |
| (1) | Securitized product TRB purchases includes purchases during the period of assets that are expected to be securitized (guaranteed structured settlements, annuities, and lottery payment streams) |
| |
| (2) | ANI Margin is defined as ANI / ANI Total Revenue |
| |
| (3) | ANI TRB Margin is defined as ANI / Total TRB Purchases |
| |
| (4) | Spread Revenue is defined as adjusted unrealized gains on VIE and other finance receivables, long term debt and derivatives, net of the loss on swap terminations |
| |
| (5) | TRB Spread Margin is defined as Spread Revenue / (the sum of Securitized Product TRB Purchases + Life Contingent Purchases) |
| |
| (6) | Includes provision (benefit) for income taxes |
| |
| (7) | Represents the weighted average number of outstanding shares of Class A common stock if all Common Interests in The J.G. Wentworth Company, LLC were exchanged. Calculated as the sum of: (a) the weighted average number of Common Interests outstanding and (b) the impact of dilutive potential common shares. |
| |
| (8) | ANI EPS is defined as ANI / All-in Shares |
Source: The J.G. Wentworth Company™
