EMGC - Earnings call transcript Q4 2017

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Operator

Greetings and welcome to the Emergent Capital 2017 fourth quarter and year-end conference call. At this time, all participants are in a listen-only mode. [Operator Instructions].

As a reminder, this conference is being recorded. I would now like to turn the conference over to your host Miriam Martinez, Senior Vice President and CFO. you. Thank

begin. may You

Miriam Martinez

Good operator. afternoon you everyone. Thank

forward-looking turn CEO, obligation Pat occur I to that These could today's be forward-looking the call financial on release tab. subject like events to financial the everyone call that on and Chairman during Investor website making on be will we company's cause our was Report statements to the call. statement. submitted materially call, regarding Curry, performance. after our result everyone that future and Questions over XX remind results Before statements to ahead to been Form and remind guarantees I are which may like would reflect actual unknown All forward-looking no forward-looking performance. under accessed this March risks also cautions update our known we this prepared statement. future expectations differ at to uncertainties. and and that these to have the events Newsroom to Please made today the statement or incorporated Emergent company's and statements disclosing emergentcaptial.com would current press only our factors are into reflect not that any statement undertake company's a issued from of refer XX-K for any Annual the I

I that Additionally, Pat we said, will to call not like covered were you questions Pat? this be some in With Curry. address to over reaching that would out turn to call. all of to the

Pat Curry

transformative conference call. fourth would year Thanks a Miriam earnings and welcome quarter good year-end like everyone to was Capital. XXXX Emergent for the I afternoon. and XXXX to

as my the and an investment. know, the began interest involvement October CEO in started you in new of as Emergent's many earlier Emergent I I in company was when evaluating year appointed As but

incurred company shareholders XXXX crisis. into between XXXX, $XXX from of the period in our in fees liquidity of the As and are and dire professional that legal Stemming XXXX excess matters aware, had heading million. was a Emergent legal occurred long-term

the process I to and we value Capital. focused a with long-term Capital's focused of This Chairman. interest stock. transactions the reconstituted in institutional company's short-term unpredictable addition, and it and In largest of stakeholders. who life our of And philosophy a Capital to difficult determination from its creation Emergent value began was weighed the of underlying remain on price given and settlement After solvent inherently amount and working with due of of industry. issues that that service debt the Emergent new Board The the common investors, on participated flows it restructuring. more on, culminated upon structure. heavily the like-minded other a July management diligence, company composition moment to cash taken the prior also administration investors that was manageable Accordingly embrace Collectively, all Directors cost structured these conducting on series recapitalize others significant if had my for and had completion, team a was in a of effectuated became our capital could Emergent shareholder the of

investor, value my underlying a Emergent on predicated Capital of fundamentals As the company. investment in was

XXXX. to that the of stands fourth review to initiatives Miriam Today, going I done. results operational are CEO still positioned to the assets was full-year the on work now the saw own. business opportunity is financial Emergent the to realize it would I to layer on to of backdrop, are as to which maximize call in thinking take forward and the turn the thoughtfully We our me strategically be drove assets understand and like that for long-term there that October. But to capital gains about With significant the deploying However, that flexibility we diversify quarter in profitability. over and a core we growth embedded Emergent's top role

will Following by Sherman, announced our an we then call back acquisition in her that Clay review, given January. close of focusing our the I overview on the priorities strategic and Miriam? outlook,

Miriam Martinez

Pat. Thanks

XX in ended December XXXX, period months compared was last XXXX. maturities XXXX million of with same income value year. policy the million $XX.X to total $XX.X $X.X million face compared the as a period face For XX, a policy value XX to the our $XX.X in same had of XX We million for in with as maturities

when conservative Our of conditions life portfolio and group to age average expectancy space. years discount market settlement the has rate, compared current XX.X years peer the now XX.X% a an life and X.X and average of in

As during transactions consummated to earlier, the effect following. which of a year Pat integrated the resulted of recapitalization company in series the a the indicated company, XXXX,

for an of secured the The $X.X notes XXXX. authorized of X.X% million. exchange stock to XXXX. with of extended of the We inclusive million notes the year of of kind common four maturity in million. years of of $XX with million. an year of extended repaid maturity finally, two we of share years the First, in And notes increase million million stock secured to of X.X% convertible X% or common XX an senior receiving $XX issued the convertible to $XX.X shares notes XX% million senior interest counts proceeds gross paid the issuance The XX from XXX million XXX.XXX totaling

$XX.X in year For compared company $XX.X in results life a approximately in in of significant an $XX.X increase totaling from our financing value for period the of income an compared December fair of in million. expenses totaling our the XX million million. primarily was of resulting our months million of XXXX. same a with million, improvement. This to increase derived year-over-year was as maturities of This offset our loss $X.X had XX, reduction million settlement change the gains $XX.X our realized a improvement SG&A from positive to $X.X driver coupled The a in XXXX, $XXX,XXX was the cost as ended increase by $XX.X million, from our the major loss the XXXX,

Our for in million the primarily million legal, December compared ended to total costs. period to personnel XXXX. fees for $XX.X is $XX.X were SG&A The the due reduction same our professional XX, expenses as year and XXXX

year, $X one-time the company values at compared cost reduced of the of which by the as related owned employees XXX to this a a fourth is policy with company million value million an XXXX, realized to aggregate approximately the its face the estimated $XXX.X of headcount At severance meaningful XX, of gain, recognized eight XX, fair During XXXX. an value had and the million. to reduction. million policies maturity. carrying difference between we at $XXX.X value estimated fair December year-over-year In $XX.X a the of This December is increase quarter, relative our

maturities $XX.X was average to gains with in average of million million age million, X.X totaling XX months compared of had years an $XX.X portfolio with $XX.X XXXX. the years. the amount the on as XX realized during ended approximately XX.X XXXX. December face a Our maturities these of resulted These policies for life XX, gain The ended year expectancy

expectancies ended December procured characteristics. on life on all portfolio can the based were XXXX. the the to XXXX. million policy which XX, prior Proceeds the only which maturities by total A updated ended lengthening $XX.X outstanding the rely the inclusive fair to a expectations improved, insured life compared year of a insured's As December their XX, collected December life. XXXX, life December expectancy, reports to XXX XXXX updated unpredictable months and approximately decrease from XX, expectancies ended respect items million. life resulted company XX value relative million during XX, therefore that December Other were the impacting the $XX Proceeds ended in of year policy's XX, collected December XX The during health life months approximately in maturities for the are during the $X $X expectancy expectancy the at XX, the XXXX. reports we included million during aggregate, were the XXXX when million $XX.X reminder, of in imply was ended in totaling year received

XXXX XX, which relates million $XX three the policies was and during year. Our at to receivable December matured

increase LIBOR in well XX, showing million to of in for the million during as as and Our loan mainly to from XX, rate. December $XX.X with XXXX. during weighted XX.XX% $XX.X XX, $XX.X attributable premium XXXX applicable XXXX. million growth rate during as for million million XXXX. interest million the XXXX, XXXX. balance with with at loan the million during December from approximately $XX.X respectively, increase XXXX of $X.X approximately loan-to-value reduced XX.XX% XXXX, XXXX. Under million to the an at rate the portfolio's $XX.X the rate was to was $XX.X December and December the the was compared increase XX.XX%, to December facility, XXXX, X.XX% approximately for as which XX.XX% facility million, increased X.XX%, XX.X% XXXX to loan compared to XXXX XX.X% $XX.X Eagle is in we borrowed XXXX rate XXXX effective Interest balance XXXX being $XXX.X period an on facility expense and increased compared basis ended At totaling to The was for paid White approximately from the discount The point overall the from XX discount at increase X.XX% XX, XX,

changes consultants to during with the XX-K federal the tax the our we forward. in continue code disclosed the fourth our quarter will we As to worked review going guidelines filing, monitor and to tax we

realized that said, call we have now million of I a with maturities to $XX all turn totaling gain like QX death With to to over want that for mention million. back benefit of approximately I $XX.X XXXX, four Finally, the Pat. experienced would

Pat Curry

update that for Miriam. Thanks

certification, convertible back to Just want note discussion. as go point a of the to I

X.X% four $XX.X convertible and the exchanged notes, we maturity extended years. with that's recapitalization, X% the notes by the during So convertible million,

X.X% repaid senior million million. of the notes senior also $XX of then secured issued We XX% and $XX notes

maintain Since company provide to restructuring significant which long we on reduce I gains clear was as to progress the cost in streamline settlement an that's our to realize have to we assets I portfolio with CEO the organization the and that ability embedded term took of made corporate are XXXX value completed we the to So structure. position, sure make in to the our own. and critical everyone. life the The that our wanted

financed and operations properly well assets expenses We have manage our are ensuring meaningful protected. taken also our steps our to are while

life our is minimizing any of priority. a expected a of lumpy. inherently settlement and portfolio strategic the necessity cash and portfolio, are As unpredictable Therefore cost flows

we XXX had the year, of exact. in of our portfolio, As XXX end policies be to

track think are is extremely it assets, detailed thoughtful these we actively our run analytics. in important note I that models to and

industry predicted be However, in maturities where or cannot we an are scheduled.

basis. the about As and a over assets not a long-term result, think our we quarter-to-quarter

highly installment strong products are established pair agreement our foundation. customer with that announced retailers Our portfolio markets. to is and we & grow, a Sherman, they to credit of partner seasoned purchase XX Today, to provide expedited acquire into with providing a number strong began has of ago. year-end, finance and software Sherman, states well a consumers long-standing company. layer differentiated a in above-average we in Subsequent Clay entered advanced years borrowers pianos XXXX Sherman, customers but instruments, to other to loan XX had provide credit are stock scores. appealing Clay that strategically innovative musical specialty business and retailer Founded decisions diversified Clay Co., record financing over all and a high-end we to trusted service. their track stable both new must They financing that on to consumer with to as and in an they

financing, a payments point rental of suite for products. and a As leasing deliver of merchants, products provider, Sherman, payments positioned Clay's is uniquely to sale prime full lead including platform

the they Sherman, before, stages income strategic target highly their high-quality in us, of low business credit for I that predictable, due given As profile quarter acquisition business. summary, Currently our enter inherently the an the we and will accretive said and there it more done, consistent stream. and that settlement customers year inherent capital cash risk, highly Emergent Emergent's manageable the Clay in the The expect symbiotic acquisition flows loan challenges close late around and and deep to life of are an the should with generate. understanding of consistent structure business be Capital for during diligence while was a and is when second business. closed, to and making that built are a uneven asset installment a pivotal we still is XXXX work be a In core has is XXXX

maximize about long-term We focused we Board day. highly and that aligned for strategically Thank cost Have value for we are long-term team all. our great deployment a and focused are protecting are can the on thinking shareholders opportunities while on on today's with us and unlocking The you directly profitability. assets, responsible call. management are management joining capital diligently current

End of Q&A

for This concludes today's teleconference. your Thank you participation.

your may time. this disconnect You at lines

Emergent Capital (EMGC) 20 Mar 182017 Q4 Earnings call transcript