EX-99.1 2 a14-19071_1ex99d1.htm EX-99.1

Exhibit 99.1

 

JGWPT Reports Second Quarter TRB of $288 Million; Adjusted Net Income Increases to $17 Million

 

RADNOR, Pa.—(BUSINESS WIRE)—8.14.14 — JGWPT Holdings Inc. (“JGWPT” or the “Company”) (NYSE:JGW), a leading purchaser of structured settlement payments, annuity payments, lottery payments and other receivables through its J.G. Wentworth and Peachtree brands, today reports financial results for the second quarter of 2014. “We look forward to capitalizing on the strong results for the second quarter by leveraging our capabilities to strengthen our core business for future growth and diversification,” said Stewart A. Stockdale, Chief Executive Officer, JGWPT Holdings Inc.

 

The following are highlights from the second quarter results:

 

Second Quarter Highlights

 

·                  Total Receivables Balance, or TRB, purchases were $287.7 million, as compared to $294.8 million in the second quarter of 2013 and $260.6 million in the first quarter of 2014.

·                  Adjusted Net Income*, or ANI, increased to $17.2 million, as compared to $10.5 million in the second quarter of 2013 and $10.1 million in the first quarter of 2014, driven primarily by lower cost of funds.

·                  Adjusted unrealized gains on VIE and other finance receivables, long term debt and derivatives, net of the loss on swap termination*, was $58.0 million in the second quarter, as compared to $52.3 million in the second quarter of 2013 and $51.8 million in the first quarter of 2014.  The second quarter 2014 unrealized gain includes approximately $2 million related to the purchase of an asset portfolio.

·                  Revenues were $123.5 million, an increase of 85.2% from revenues of $66.7 million in the second quarter of 2013, due primarily to the impact of decreasing cost of funds on unrealized gains on VIE and other finance receivables, long-term debt and derivatives.

·                  Net income increased to $21.7 million, as compared to a loss of $21.6 million in the second quarter of 2013, due primarily to decreasing cost of funds.

 

John Schwab, JGWPT’s Chief Financial Officer, said, “The second quarter results reflect the sequential improvement in our TRB as well as adjusted net income and our continued focus on cost control.  In addition, subsequent to quarter-end, we successfully completed our 2014-2 securitization which further strengthens our balance sheet.”

 


*Results for the three and six month periods ended June 30, 2014 and 2013, as well as our reconciliation of non-GAAP measures, and historic financial information from 2013 to the present, are included in the accompanying financial information.

 

About JGWPT Holdings Inc.

 

JGWPT focuses on key sectors, including structured settlement payment purchasing, annuity payment purchasing, lottery payment purchasing and pre-settlement funding. Through our two market-leading and highly recognizable brands, J.G. Wentworth and Peachtree Financial Solutions, we purchase future structured settlement payment streams from our customers.  For more information about JGWPT, visit www.jgwpt.com or use the contact information provided below.

 

Conference Call and Webcast

 

Management will host a webcast to discuss the second quarter 2014 financial results today, August 14, 2014, at 10:00 AM Eastern time. The webcast will include remarks from JGWPT’s Chief Executive Officer, Stewart Stockdale, and Chief Financial Officer, John Schwab. A webcast of the conference call will be available live on the Investor Relations section of the Company’s website:

 

JGWPT Holdings Inc. Second Quarter 2014 Financial Results Webcast

 

Interested parties unable to access the conference call via the webcast may dial (877) 201-0168 and reference conference ID 79341678.  A playback of the call is available until August 21, 2014 at (855) 859-2056 with conference ID 79341678.

 



 

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, 2013, these risks and uncertainties include, among other things:  our ability to continue to purchase structured settlement payments and other assets; our ability to complete future securitizations or other financings on beneficial terms; availability of or increases in the cost of our financing sources relative to our purchase discount rate; 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 dependence on the effectiveness of our direct response marketing; the compression of the yield spread between the price we pay for and the price at which we sell assets; changes in tax or accounting policies or changes in interpretation of those policies as applicable to our business; the lack of an established market for the subordinated interest in the receivables that we retain after a securitization is executed; our exposure to underwriting risk; 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; the insolvency or downgrade of a material number of structured settlement issuers; changes in current tax law relating to the tax treatment of structured settlements; changes to state or federal, licensing and regulatory regimes; the impact of the March 2014 Consumer Financial Protection Bureau inquiry and any findings or regulations it issues as related to us, our industries, or products or in general; adverse judicial developments; potential litigation and regulatory proceedings; unfavorable press reports about our business model; our access to personally identifiable confidential information of current and prospective customers and the improper use or failure to protect that information; the public disclosure of the identities of structured settlement holders; our business model being susceptible to litigation; our dependence on a small number of key personnel; our ability to successfully enter new lines of business and broaden the scope of our business; changes in our expectations regarding the likelihood, timing or terms of any potential acquisitions described herein; our computer systems being subject to security and privacy breaches; and infringement of our trademarks or service marks.

 

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.

 



 

JGWPT Holdings Inc.

(Prior to November 14, 2013, J.G. Wentworth, LLC and Subsidiaries)

Condensed Consolidated Balance Sheets

(In thousands, except for shares and per share data)

 

 

 

June 30,

 

December 31,

 

 

 

2014

 

2013

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

Cash and cash equivalents

 

$

35,412

 

$

39,061

 

Restricted cash and investments

 

112,499

 

109,338

 

VIE finance receivables, at fair market value

 

4,208,144

 

3,818,704

 

Other finance receivables, at fair market value

 

79,581

 

51,945

 

VIE finance receivables, net of allowances for losses of $7,143 and $6,443, respectively

 

116,147

 

117,826

 

Other finance receivables, net of allowances for losses of $1,841 and $1,899, respectively

 

18,892

 

15,166

 

Notes receivable, at fair market value

 

 

5,610

 

Other receivables, net of allowances for losses of $252 and $243, respectively

 

12,748

 

13,529

 

Fixed assets, net of accumulated depreciation of $5,108 and $4,544, respectively

 

3,581

 

3,112

 

Intangible assets, net of accumulated amortization of $19,166 and $17,781, respectively

 

46,493

 

47,878

 

Goodwill

 

84,993

 

84,993

 

Marketable securities

 

115,981

 

121,954

 

Deferred tax assets, net

 

 

1,830

 

Other assets

 

37,312

 

41,151

 

Total Assets

 

$

4,871,783

 

$

4,472,097

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Accounts payable

 

$

9,127

 

$

3,903

 

Accrued expenses

 

14,131

 

21,181

 

Accrued interest

 

16,483

 

14,485

 

VIE derivative liabilities, at fair market value

 

74,542

 

70,296

 

VIE borrowings under revolving credit facilities and other similar borrowings

 

73,767

 

41,274

 

VIE long-term debt

 

184,676

 

150,802

 

VIE long-term debt issued by securitization and permanent financing trusts, at fair market value

 

3,698,500

 

3,431,283

 

Term loan payable

 

435,683

 

434,184

 

Other liabilities

 

7,551

 

7,646

 

Deferred tax liabilities, net

 

13,625

 

1,707

 

Installment obligations payable

 

115,981

 

121,954

 

Total Liabilities

 

$

4,644,066

 

$

4,298,715

 

 

 

 

 

 

 

Class A common stock, par value $0.00001 per share; 500,000,000 shares authorized; Issued and outstanding at June 30, 2014 - 12,885,225 and 12,793,276; December 31, 2013 - 11,220,358 and 11,216,429

 

 

 

Class B common stock, par value $0.00001 per share; 500,000,000 shares authorized; Issued and outstanding at June 30, 2014 - 12,266,967; December 31, 2013 - 14,001,583 and 13,984,065

 

 

 

Class C common stock, par value $0.00001 per share; 500,000,000 shares authorized; Issued and outstanding at June 30, 2014 and December 31, 2013 - 0

 

 

 

Additional paid-in-capital

 

81,796

 

70,236

 

Retained earnings (accumulated deficit)

 

9,713

 

(5,577

)

Accumulated other comprehensive income

 

 

612

 

 

 

$

91,509

 

$

65,271

 

Less: Treasury stock at cost; purchased at June 30, 2014 - 91,949; December 31, 2013 - 3,929

 

(139

)

 

Total stockholders’ equity, JGWPT Holdings Inc.

 

91,370

 

65,271

 

Non-controlling interests

 

136,347

 

108,111

 

Total Stockholders’ Equity

 

$

227,717

 

$

173,382

 

Total Liabilities and Stockholders’ Equity

 

$

4,871,783

 

$

4,472,097

 

 



 

JGWPT Holdings Inc.

(Prior to November 14, 2013, J.G. Wentworth, LLC and Subsidiaries)

Condensed Consolidated Statements of Operations - Unaudited

(In thousands, except for shares and per share data)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

REVENUES

 

 

 

 

 

 

 

 

 

Interest income

 

$

46,638

 

$

37,943

 

$

94,460

 

$

80,582

 

Unrealized gains on VIE and other finance receivables, long-term debt, and derivatives

 

70,317

 

30,245

 

157,628

 

163,843

 

Loss on swap terminations, net

 

 

 

(574

)

(174

)

Servicing, broker, and other fees

 

1,030

 

1,423

 

2,172

 

2,536

 

Realized and unrealized gains (losses) on marketable securities, net

 

3,467

 

(1,080

)

4,356

 

4,997

 

Realized gain (loss) on notes receivable, at fair value

 

2,098

 

(1,862

)

2,098

 

(1,862

)

Other

 

(62

)

(8

)

(62

)

(53

)

Total Revenues

 

$

123,488

 

$

66,661

 

$

260,078

 

$

249,869

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

Advertising

 

$

16,432

 

$

17,349

 

$

33,925

 

$

33,803

 

Interest expense

 

50,700

 

43,346

 

101,930

 

85,970

 

Compensation and benefits

 

10,483

 

11,551

 

19,769

 

23,396

 

General and administrative

 

4,613

 

6,226

 

9,083

 

10,361

 

Professional and consulting

 

5,518

 

4,975

 

8,962

 

9,098

 

Debt issuance

 

19

 

44

 

3,020

 

3,072

 

Securitization debt maintenance

 

1,564

 

1,544

 

3,121

 

2,984

 

Provision for losses on finance receivables

 

1,127

 

1,587

 

2,218

 

2,683

 

Depreciation and amortization

 

1,121

 

1,386

 

2,202

 

2,763

 

Installment obligations expense (income), net

 

4,122

 

(231

)

5,614

 

6,519

 

Total Expenses

 

$

95,699

 

$

87,777

 

$

189,844

 

$

180,649

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

$

27,789

 

$

(21,116

)

$

70,234

 

$

69,220

 

Provision for income taxes

 

6,081

 

524

 

13,993

 

1,155

 

Net Income (Loss)

 

21,708

 

$

(21,640

)

56,241

 

$

68,065

 

Less: Net income attributable to non-controlling interests

 

15,440

 

 

 

40,951

 

 

 

Net Income Attributable to JGWPT Holdings Inc.

 

$

6,268

 

 

 

$

15,290

 

 

 

 

Weighted average shares of Class A common stock outstanding:

 

Basic

 

12,559,957

 

12,104,172

 

Diluted

 

12,562,042

 

12,105,548

 

 

Net income per share attributable to stockholders of Class A common stock of JGWPT Holdings Inc.

 

Basic

 

$

0.50

 

$

1.26

 

Diluted

 

$

0.50

 

$

1.26

 

 



 

ANI Bridge - Unaudited

 

J.G. Wentworth, LLC and Subsidiaries

 

Reconciliation of Net Income to Adjusted Net Income

 

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 under U.S. GAAP before non-cash compensation expenses, certain other expenses, provision for or benefit from income taxes and the amounts related to the consolidation of the securitization and permanent financing trusts we use to finance our business. We use Adjusted Net Income to measure our overall performance because we believe it represents the best measure of our operating performance, as the operations of the variable interest entities do not impact business performance. In addition, the add-backs described above are consistent with adjustments permitted under our Term Loan agreement.  You should not consider Adjusted Net Income 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 may not be comparable to other similarly titled measures of other companies.

 

A reconciliation of Net Income to Adjusted Net Income for the three and six months ended June 30, 2014 and 2013 is provided below.  Certain prior year numbers have been reclassified to conform with current year presentation.

 



 

JGWPT Holdings Inc.

(Prior to November 14, 2013, J.G. Wentworth, LLC and Subsidiaries)

Reconciliation of Net Income (Loss) to Adjusted Net Income - Unaudited

(In thousands)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$

21,708

 

$

(21,640

)

$

56,241

 

$

68,065

 

 

 

 

 

 

 

 

 

 

 

Adjustments to reflect deconsolidation of securitizations:

 

 

 

 

 

 

 

 

 

Elimination of unrealized gain/loss on finance receivables, long-term debt and derivatives from post securitization due to changes in interest rates

 

(12,366

)

22,036

 

(47,257

)

(46,661

)

Elimination of interest income from securitized finance receivables permanent financing trusts

 

(42,041

)

(32,843

)

(85,344

)

(69,750

)

Interest income on retained interests in finance receivables

 

5,001

 

4,570

 

9,970

 

9,125

 

Servicing income on securitized finance receivables

 

1,242

 

1,416

 

2,500

 

2,857

 

Elimination of interest expense on long-term debt related to securitization and permanent financing trusts

 

36,213

 

27,598

 

73,498

 

57,955

 

Professional fees relating to securitizations

 

1,564

 

1,575

 

3,121

 

3,024

 

 

 

 

 

 

 

 

 

 

 

Other adjustments:

 

 

 

 

 

 

 

 

 

Share based compensation

 

798

 

441

 

1,300

 

1,070

 

Income tax provision

 

6,081

 

524

 

13,993

 

1,155

 

Severance, M & A, and consulting expenses

 

376

 

4,985

 

675

 

5,349

 

Other non-recurring items

 

(1,401

)

1,862

 

(1,401

)

1,862

 

Adjusted Net Income

 

$

17,175

 

$

10,524

 

$

27,296

 

$

34,051

 

 

 

 

 

 

 

 

 

 

 

Other Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securitized Product Total Receivables Balance (TRB) Purchases (1)

 

$

252,544

 

$

246,895

 

$

476,051

 

$

477,600

 

Life Contingent Purchases

 

28,185

 

42,878

 

58,012

 

77,100

 

Presettlement Fundings

 

6,977

 

5,073

 

14,224

 

10,517

 

Total TRB Purchases

 

$

287,706

 

$

294,846

 

$

548,287

 

$

565,217

 

Adjusted Net Income

 

$

17,175

 

$

10,524

 

$

27,296

 

$

34,051

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income TRB Margin (2)

 

5.97

%

3.57

%

4.98

%

6.02

%

 

 

 

 

 

 

 

 

 

 

Company retained interests in finance receivables at fair market value

 

$

294,637

 

$

234,918

 

 

 

 

 

 


(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 TRB Margin is Adjusted Net Income divided by Total TRB Purchases during the period.

 



 

JGWPT Holdings Inc.

(Prior to November 14, 2013, J.G. Wentworth, LLC and Subsidiaries)

Reconciliation of Net Income to Adjusted Net Income - Unaudited

(In thousands)

 

 

 

 

 

Adjustments

 

Interest

 

 

 

 

 

Severance

 

Reclassification

 

 

 

 

 

 

 

Q2 2014

 

to reflect

 

Income on

 

Share

 

 

 

M&A

 

Associated with

 

Other

 

Q2 2014

 

 

 

GAAP

 

deconsolidation

 

Retained

 

Based

 

Income

 

and

 

Installment

 

Nonrecurring

 

Adjusted

 

 

 

Results

 

of securitizations

 

Interests

 

Compensation

 

Tax

 

Consulting

 

Obligation Payable

 

Items

 

Net Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

46,638

 

$

(42,041

)

$

5,001

 

 

 

 

 

 

 

$

(655

)

$

6

 

$

8,949

 

Unrealized gains on VIE and other finance receivables, long-term debt and derivatives

 

70,317

 

(12,366

)

 

 

 

 

 

 

 

 

 

 

 

 

57,951

 

Loss on swap terminations, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Servicing, broker, and other fees

 

1,030

 

1,242

 

 

 

 

 

 

 

 

 

 

 

 

 

2,272

 

Realized and unrealized gains on marketable securities, net

 

3,467

 

 

 

 

 

 

 

 

 

 

 

(3,467

)

 

 

 

Realized gain on notes receivable, at fair value

 

2,098

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,098

)

 

Other

 

(62

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(62

)

Total Revenues

 

$

123,488

 

$

(53,165

)

$

5,001

 

$

 

$

 

$

 

$

(4,122

)

$

(2,092

)

$

69,110

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advertising

 

$

16,432

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

16,432

 

Interest expense

 

50,700

 

(36,213

)

 

 

 

 

 

 

 

 

 

 

 

 

14,487

 

Compensation and benefits

 

10,483

 

 

 

 

 

(798

)

 

 

(86

)

 

 

 

 

9,599

 

General and administrative

 

4,613

 

 

 

 

 

 

 

 

 

86

 

 

 

 

 

4,699

 

Professional and consulting

 

5,518

 

 

 

 

 

 

 

 

 

(376

)

 

 

(691

)

4,451

 

Debt issuance

 

19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

19

 

Securitization debt maintenance

 

1,564

 

(1,564

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for losses on finance receivables

 

1,127

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,127

 

Depreciation and amortization

 

1,121

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,121

 

Installment obligations expense, net

 

4,122

 

 

 

 

 

 

 

 

 

 

 

(4,122

)

 

 

 

Total Expenses

 

$

95,699

 

$

(37,777

)

$

 

$

(798

)

$

 

$

(376

)

$

(4,122

)

$

(691

)

$

51,935

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before taxes

 

$

27,789

 

$

(15,388

)

$

5,001

 

$

798

 

$

 

$

376

 

$

 

$

(1,401

)

$

17,175

 

Provision for income taxes

 

6,081

 

 

 

 

 

 

 

(6,081

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

21,708

 

$

(15,388

)

$

5,001

 

$

798

 

$

6,081

 

$

376

 

$

 

$

(1,401

)

$

17,175

 

 



 

JGWPT Holdings Inc.

(Prior to November 14, 2013, J.G. Wentworth, LLC and Subsidiaries)

Reconciliation of Net Income (Loss) to Adjusted Net Income - Unaudited

(In thousands)

 

 

 

 

 

Adjustments

 

Interest

 

 

 

 

 

Severance

 

Reclassification

 

 

 

 

 

 

 

Q2 2013

 

to reflect

 

Income on

 

Share

 

 

 

M&A

 

Associated with

 

Other

 

Q2 2013

 

 

 

GAAP

 

deconsolidation

 

Retained

 

Based

 

Income

 

and

 

Installment

 

Nonrecurring

 

Adjusted

 

 

 

Results

 

of securitizations

 

Interests

 

Compensation

 

Tax

 

Consulting

 

Obligation Payable

 

Items

 

Net Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

37,943

 

$

(32,843

)

$

4,570

 

 

 

 

 

 

 

$

(849

)

 

 

$

8,821

 

Unrealized gains on VIE and other finance receivables, long-term debt and derivatives

 

30,245

 

22,036

 

 

 

 

 

 

 

 

 

 

 

 

 

52,281

 

Loss on swap terminations, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Servicing, broker, and other fees

 

1,423

 

1,416

 

 

 

 

 

 

 

 

 

 

 

 

 

2,839

 

Realized and unrealized losses on marketable securities, net

 

(1,080

)

 

 

 

 

 

 

 

 

 

 

1,080

 

 

 

 

Realized loss on notes receivable, at fair value

 

(1,862

)

 

 

 

 

 

 

 

 

 

 

 

 

1,862

 

 

Other

 

(8

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8

)

Total Revenues

 

$

66,661

 

$

(9,391

)

$

4,570

 

$

 

$

 

$

 

$

231

 

$

1,862

 

$

63,933

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advertising

 

$

17,349

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

17,349

 

Interest expense

 

43,346

 

(27,598

)

 

 

 

 

 

 

 

 

 

 

 

 

15,748

 

Compensation and benefits

 

11,551

 

 

 

 

 

(441

)

 

 

(2,590

)

 

 

 

 

8,520

 

General and administrative

 

6,226

 

 

 

 

 

 

 

 

 

(373

)

 

 

 

 

5,853

 

Professional and consulting

 

4,975

 

(31

)

 

 

 

 

 

 

(2,022

)

 

 

 

 

2,922

 

Debt issuance

 

44

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

44

 

Securitization debt maintenance

 

1,544

 

(1,544

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for losses on finance receivables

 

1,587

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,587

 

Depreciation and amortization

 

1,386

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,386

 

Installment obligations expense, net

 

(231

)

 

 

 

 

 

 

 

 

 

 

231

 

 

 

 

Total Expenses

 

$

87,777

 

$

(29,173

)

$

 

$

(441

)

$

 

$

(4,985

)

$

231

 

$

 

$

53,409

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before taxes

 

$

(21,116

)

$

19,782

 

$

4,570

 

$

441

 

$

 

$

4,985

 

$

 

$

1,862

 

$

10,524

 

Provision for income taxes

 

524

 

 

 

 

 

 

 

(524

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

(21,640

)

$

19,782

 

$

4,570

 

$

441

 

$

524

 

$

4,985

 

$

 

$

1,862

 

$

10,524

 

 



 

JGWPT Holdings Inc.

(Prior to November 14, 2013, J.G. Wentworth, LLC and Subsidiaries)

Reconciliation of Net Income to Adjusted Net Income - Unaudited

(In thousands)

 

 

 

 

 

Adjustments

 

Interest

 

 

 

 

 

Severance

 

Reclassification

 

 

 

 

 

 

 

YTD 2014

 

to reflect

 

Income on

 

Share

 

 

 

M&A

 

Associated with

 

Other

 

YTD 2014

 

 

 

GAAP

 

deconsolidation

 

Retained

 

Based

 

Income

 

and

 

Installment

 

Nonrecurring

 

Adjusted

 

 

 

Results

 

of securitizations

 

Interests

 

Compensation

 

Tax

 

Consulting

 

Obligation Payable

 

Items

 

Net Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

94,460

 

$

(85,344

)

$

9,970

 

 

 

 

 

 

 

$

(1,258

)

$

6

 

$

17,834

 

Unrealized gains on VIE and other finance receivables, long-term debt and derivatives

 

157,628

 

(47,257

)

 

 

 

 

 

 

 

 

 

 

 

 

110,371

 

Loss on swap terminations, net

 

(574

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(574

)

Servicing, broker, and other fees

 

2,172

 

2,500

 

 

 

 

 

 

 

 

 

 

 

 

 

4,672

 

Realized and unrealized gains on marketable securities, net

 

4,356

 

 

 

 

 

 

 

 

 

 

 

(4,356

)

 

 

 

Realized gain on notes receivable, at fair value

 

2,098

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,098

)

 

 

Other

 

(62

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(62

)

Total Revenues

 

$

260,078

 

$

(130,101

)

$

9,970

 

$

 

$

 

$

 

$

(5,614

)

$

(2,092

)

$

132,241

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advertising

 

$

33,925

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

33,925

 

Interest expense

 

101,930

 

(73,498

)

 

 

 

 

 

 

 

 

 

 

 

 

28,432

 

Compensation and benefits

 

19,769

 

 

 

 

 

(1,300

)

 

 

(113

)

 

 

 

 

18,356

 

General and administrative

 

9,083

 

 

 

 

 

 

 

 

 

86

 

 

 

 

 

9,169

 

Professional and consulting

 

8,962

 

 

 

 

 

 

 

 

 

(648

)

 

 

(691

)

7,623

 

Debt issuance

 

3,020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,020

 

Securitization debt maintenance

 

3,121

 

(3,121

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for losses on finance receivables

 

2,218

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,218

 

Depreciation and amortization

 

2,202

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,202

 

Installment obligations expense, net

 

5,614

 

 

 

 

 

 

 

 

 

 

 

(5,614

)

 

 

 

Total Expenses

 

$

189,844

 

$

(76,619

)

$

 

$

(1,300

)

$

 

$

(675

)

$

(5,614

)

$

(691

)

$

104,945

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before taxes

 

$

70,234

 

$

(53,482

)

$

9,970

 

$

1,300

 

$

 

$

675

 

$

 

$

(1,401

)

$

27,296

 

Provision for income taxes

 

13,993

 

 

 

 

 

 

 

(13,993

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

56,241

 

$

(53,482

)

$

9,970

 

$

1,300

 

$

13,993

 

$

675

 

$

 

$

(1,401

)

$

27,296

 

 



 

JGWPT Holdings Inc.

(Prior to November 14, 2013, J.G. Wentworth, LLC and Subsidiaries)

Reconciliation of Net Income to Adjusted Net Income - Unaudited

(In thousands)

 

 

 

 

 

Adjustments

 

Interest

 

 

 

 

 

Severance

 

Reclassification

 

 

 

 

 

 

 

YTD 2013

 

to reflect

 

Income on

 

Share

 

 

 

M&A

 

Associated with

 

Other

 

YTD 2013

 

 

 

GAAP

 

deconsolidation

 

Retained

 

Based

 

Income

 

and

 

Installment

 

Nonrecurring

 

Adjusted

 

 

 

Results

 

of securitizations

 

Interests

 

Compensation

 

Tax

 

Consulting

 

Obligation Payable

 

Items

 

Net Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

80,582

 

$

(69,750

)

$

9,125

 

 

 

 

 

 

 

$

(1,522

)

 

 

$

18,435

 

Unrealized gains on VIE and other finance receivables, long-term debt and derivatives

 

163,843

 

(46,661

)

 

 

 

 

 

 

 

 

 

 

 

 

117,182

 

Loss on swap terminations, net

 

(174

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(174

)

Servicing, broker, and other fees

 

2,536

 

2,857

 

 

 

 

 

 

 

 

 

 

 

 

 

5,393

 

Realized and unrealized gains on marketable securities, net

 

4,997

 

 

 

 

 

 

 

 

 

 

 

(4,997

)

 

 

 

Realized loss on notes receivable, at fair value

 

(1,862

)

 

 

 

 

 

 

 

 

 

 

 

 

1,862

 

 

Other

 

(53

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(53

)

Total Revenues

 

$

249,869

 

$

(113,554

)

$

9,125

 

$

 

$

 

$

 

$

(6,519

)

$

1,862

 

$

140,783

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advertising

 

$

33,803

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

33,803

 

Interest expense

 

85,970

 

(57,955

)

 

 

 

 

 

 

 

 

 

 

 

 

28,015

 

Compensation and benefits

 

23,396

 

 

 

 

 

(1,070

)

 

 

(2,692

)

 

 

 

 

19,634

 

General and administrative

 

10,361

 

 

 

 

 

 

 

 

 

(610

)

 

 

 

 

9,751

 

Professional and consulting

 

9,098

 

(40

)

 

 

 

 

 

 

(2,047

)

 

 

 

 

7,011

 

Debt issuance

 

3,072

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,072

 

Securitization debt maintenance

 

2,984

 

(2,984

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for losses on finance receivables

 

2,683

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,683

 

Depreciation and amortization

 

2,763

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,763

 

Installment obligations expense, net

 

6,519

 

 

 

 

 

 

 

 

 

 

 

(6,519

)

 

 

 

Total Expenses

 

$

180,649

 

$

(60,979

)

$

 

$

(1,070

)

$

 

$

(5,349

)

$

(6,519

)

$

 

$

106,732

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before taxes

 

$

69,220

 

$

(52,575

)

$

9,125

 

$

1,070

 

$

 

$

5,349

 

$

 

$

1,862

 

$

34,051

 

Provision for income taxes

 

1,155

 

 

 

 

 

 

 

(1,155

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

68,065

 

$

(52,575

)

$

9,125

 

$

1,070

 

$

1,155

 

$

5,349

 

$

 

$

1,862

 

$

34,051

 

 



 

JGWPT Holdings Inc.

Unaudited

(In thousands, except shares and per share data)

 

 

 

Private

 

Public

 

 

 

Q1 2013

 

Q2 2013

 

Q3 2013

 

Q4 2013

 

Q1 2014

 

Q2 2014

 

TRB:

 

 

 

 

 

 

 

 

 

 

 

 

 

Securitized Product Total Receivables Balance (TRB) Purchases (1)

 

$

230,705

 

$

246,895

 

$

254,376

 

$

214,437

 

$

223,507

 

$

252,544

 

Life Contingent Purchases

 

34,222

 

42,878

 

40,165

 

39,054

 

29,827

 

28,185

 

Presettlement Fundings

 

5,444

 

5,073

 

4,785

 

6,997

 

7,247

 

6,977

 

Total

 

$

270,371

 

$

294,846

 

$

299,326

 

$

260,488

 

$

260,581

 

$

287,706

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ANI Basis:

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

$

76,850

 

$

63,933

 

$

60,343

 

$

71,603

 

$

63,131

 

$

69,110

 

Total Expenses

 

$

53,323

 

$

53,409

 

$

58,944

 

$

60,439

 

$

53,010

 

$

51,935

 

ANI

 

$

23,527

 

$

10,524

 

$

1,399

 

$

11,164

 

$

10,121

 

$

17,175

 

ANI Margin (2)

 

30.6

%

16.5

%

2.3

%

15.6

%

16.0

%

24.9

%

ANI TRB Margin (3)

 

8.7

%

3.6

%

0.5

%

4.3

%

3.9

%

6.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Spread Revenue (4)

 

$

64,727

 

$

52,281

 

$

48,998

 

$

44,637

 

$

51,846

 

$

57,951

 

TRB Spread Margin (5)

 

24.4

%

18.0

%

16.6

%

17.6

%

20.5

%

20.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Basis:

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

183,208

 

$

66,661

 

$

103,138

 

$

106,556

 

$

136,590

 

$

123,488

 

Expenses

 

$

93,503

 

$

88,301

 

$

104,023

 

$

111,918

 

$

102,057

 

$

101,780

 

Net Income (Loss)

 

$

89,705

 

$

(21,640

)

$

(885

)

$

(5,362

)

$

34,533

 

$

21,708

 

Net Income (Loss) Attributable to JGWPT Holdings Inc.

 

 

 

 

 

 

 

$

(5,577

)

$

9,022

 

$

6,268

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Diluted Shares

 

 

 

 

 

 

 

10,395,574

 

11,642,283

 

12,562,042

 

All-in Shares (6)

 

 

 

 

 

 

 

14,967,315

 

29,556,961

 

29,507,944

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS

 

 

 

 

 

 

 

$

(0.54

)

$

0.77

 

$

0.50

 

ANI EPS based on All-in Shares (7)

 

 

 

 

 

 

 

$

0.75

 

$

0.34

 

$

0.58

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residual Asset Balance

 

$

249,345

 

$

234,918

 

$

239,770

 

$

239,591

 

$

280,208

 

$

294,637

 

Residual Loan Balance

 

$

70,000

 

$

70,000

 

$

69,560

 

$

68,785

 

$

67,989

 

$

107,540

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10-Year Swap Rate

 

2.01

%

2.70

%

2.77

%

3.09

%

2.84

%

2.63

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Term Loan Interest Expense

 

$

7,673

 

$

12,287

 

$

14,595

 

$

13,457

 

$

9,917

 

$

10,020

 

ANI Interest Expense

 

$

12,267

 

$

15,748

 

$

18,497

 

$

18,298

 

$

13,945

 

$

14,487

 

 


(1) Securitized product TRB purchases includes purchases during the period of assets that will 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

(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 termination

(5) TRB Spread Margin is defined as Spread Revenue / (the sum of Securitized Product TRB Purchases + Life Contingent Purchases)

(6) Represents the weighted average number of outstanding shares of Class A common stock if all Common Interests in JGWPT Holdings, LLC were exchanged.

(7) ANI EPS based on All-in Shares is defined as ANI / All-in Shares

 

Source: JGWPT Holdings Inc.

 

Investor Relations:

Jennifer Gambol

866-386-3853

investor@jgwpt.com

 

Media Inquiries:

866-386-3853

media@jgwpt.com

or

Makovsky for JGWPT Holdings Inc.

Michael Goodwin, 212-508-9639

mgoodwin@makovsky.com