Delaware | 001-36170 | 46-3037859 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
201 King of Prussia Road, Suite 501, Radnor, Pennsylvania | 19087-5148 | |||
(Address of principal executive offices) | (Zip Code) |
Exhibit No. | Description | |
99.1 | Press Release, dated November 9, 2015, issued by The J.G. Wentworth Company |
THE J.G. WENTWORTH COMPANY | |||
By: | /s/ Scott E. Stevens | ||
Name: | Scott E. Stevens | ||
Title: | Executive Vice President & Chief Financial Officer | ||
Dated: November 9, 2015 |
Exhibit No. | Description | |
99.1 | Press Release, dated November 9, 2015, issued by The J.G. Wentworth Company |
• | 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*. |
• | 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 |
• | 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. |
• | 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. |
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 | $ | 5,051,350 | $ | 4,782,469 | |||
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 | 5,215,078 | 5,036,104 |
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 |
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 |
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 |
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 |
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 |
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 |
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 |