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 May 10, 2016, 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: May 10, 2016 |
Exhibit No. | Description | |
99.1 | Press Release, dated May 10, 2016, issued by The J.G. Wentworth Company |
• | Consolidated revenues were $66.6 million, a decrease of $20.2 million from the $86.8 million reported in the first quarter 2015. The decrease was due to a $42.1 million decline in the Structured Settlement Payments segment’s (“Structured Settlements”) revenue that was primarily the result of a decline in realized and unrealized gains on VIE and other finance receivables, long-term debt and derivatives. The decline was partially offset by $21.9 million in revenue generated by the Home Lending segment (“Home Lending”) that we acquired on July 31, 2015. |
▪ | The Company had $4.4 billion in VIE and other finance receivables, at fair value and $4.0 billion in VIE long-term debt issued by securitization and permanent financing trusts, at fair value as of March 31, 2016. |
• | Consolidated net loss was $35.1 million compared to the $5.5 million consolidated net loss in the first quarter 2015. The $29.6 million unfavorable change was principally due to a $38.5 million increase in Structured Settlement's pre-tax loss driven by the $42.1 million decline in the segment's revenue, partially offset by a net $3.6 million reduction in Structured Settlement's operating expenses that have begun to reflect the benefits of our recently implemented cost savings initiatives. Partially offsetting the increase in Structured Settlement's pre-tax loss was Home Lending's $5.5 million in pre-tax income driven by $1.1 billion of locked loan volume and a $3.5 million favorable change in our consolidated provision (benefit) for income taxes. |
• | Consolidated adjusted total revenues* were $57.1 million, a decrease of $5.3 million from $62.4 million in the first quarter 2015. The decrease was primarily due to a $26.8 million decline in Structured Settlement's Spread Revenue* (i.e., realized & unrealized gains on unsecuritized finance receivables and related derivatives adjusted for the impact of prefundings) resulting from a decrease in Total Receivable Balances (“TRB”) purchases and a combination of changes in cost of funds and purchase yields. Partially offsetting the decline in Structured Settlement's Spread Revenue* was $21.9 million in revenue generated by Home Lending. |
▪ | Structured Settlement's guaranteed and life contingent structured settlement, annuity and lottery TRB purchases were $203.7 million in the first quarter of 2016, a $50.8 million decrease from $254.5 million in the first quarter of 2015. |
▪ | Home Lending generated mortgage lock volume of $1,077.1 million and closed loan volume of $568.3 million in the first quarter of 2016. |
• | Consolidated Adjusted Net Income (“ANI”)* was a loss of $4.1 million compared to ANI* of $8.2 million in the first quarter 2015. The $12.3 million unfavorable change was due to an $18.2 million decline in Structured Settlement's ANI* that was principally the result of the $26.8 million decline in Spread Revenue*. Partially offsetting the decline in Structured Settlement's ANI* was $5.9 million in ANI* generated by Home Lending. |
▪ | Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA*”) was $8.0 million for the first quarter of 2016 compared to $21.9 million for the first quarter of 2015. |
• | For the three months ended March 31, 2016, the Company generated Adjusted EBITDA* of $8.0 million and had cash and cash equivalents of $26.5 million as of March 31, 2016. |
• | Expense initiatives are on target to realize $25-$30 million of annual savings; Structured Settlements' adjusted total expenses* decreased $9.0 million in the first quarter of 2016 from the first quarter of 2015. |
• | In February 2016, we executed a direct asset sale of $161.3 million in discounted TRB purchases based on a discount rate of 5.02% that consisted of two pools. The first pool closed on February 18, 2016, consisted of $91.3 million of discounted TRB purchases and generated net cash proceeds to us of $27.0 million. The second pool closed on April 21, 2016, consisted of $70.0 million of discounted TRB purchases and generated net cash proceeds to us of $21.6 million. |
March 31, 2016 | December 31, 2015 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 26,465 | $ | 57,322 | |||
Restricted cash and investments | 131,534 | 136,780 | |||||
VIE finance receivables, at fair value | 4,439,811 | 4,376,458 | |||||
Other finance receivables, at fair value | 23,263 | 9,689 | |||||
VIE finance receivables, net of allowances for losses of $8,759 and $8,659, respectively | 95,534 | 99,874 | |||||
Other finance receivables, net of allowances for losses of $1,551 and $1,707, respectively | 9,450 | 10,468 | |||||
Other receivables, net of allowances for losses of $273 and $273, respectively | 16,755 | 16,285 | |||||
Mortgage loans held for sale, at fair value | 187,146 | 124,508 | |||||
Mortgage servicing rights, at fair value | 30,164 | 29,287 | |||||
Premises and equipment, net of accumulated depreciation of $9,219 and $7,961, respectively | 5,262 | 5,674 | |||||
Intangible assets, net of accumulated amortization of $21,330 and $20,700, respectively | 29,799 | 30,429 | |||||
Goodwill | 8,369 | 8,369 | |||||
Marketable securities | 79,414 | 84,994 | |||||
Deferred tax assets, net | — | 2,250 | |||||
Other assets | 78,162 | 82,577 | |||||
Total Assets | $ | 5,161,128 | $ | 5,074,964 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Accrued expenses and accounts payable | $ | 22,902 | $ | 21,548 | |||
Accrued interest | 23,944 | 22,380 | |||||
Term loan payable | 440,930 | 440,181 | |||||
VIE derivative liabilities, at fair value | 72,363 | 66,519 | |||||
VIE borrowings under revolving credit facilities and other similar borrowings | 38,191 | 48,828 | |||||
Other borrowings under revolving credit facilities and other similar borrowings | 181,526 | 122,243 | |||||
VIE long-term debt | 198,133 | 199,363 | |||||
VIE long-term debt issued by securitization and permanent financing trusts, at fair value | 4,016,993 | 3,928,818 | |||||
Other liabilities | 55,380 | 65,106 | |||||
Deferred tax liabilities, net | 9,936 | 18,825 | |||||
Installment obligations payable | 79,414 | 84,994 | |||||
Total Liabilities | $ | 5,139,712 | $ | 5,018,805 | |||
Class A common stock, par value $0.00001 per share; 500,000,000 shares authorized, 16,270,113 issued and 15,728,041 outstanding as of March 31, 2016, 16,076,444 issued and 15,534,372 outstanding as of December 31, 2015. | $ | — | $ | — | |||
Class B common stock, par value $0.00001 per share; 500,000,000 shares authorized, 8,715,029 issued and outstanding as of March 31, 2016, 8,908,698 issued and outstanding as of December 31, 2015, respectively. | — | — | |||||
Class C common stock, par value $0.00001 per share; 500,000,000 shares authorized, 0 issued and outstanding as of March 31, 2016 and December 31, 2015, respectively. | — | — | |||||
Additional paid-in-capital | 105,200 | 104,713 | |||||
Accumulated deficit | (86,852 | ) | (70,765 | ) | |||
18,348 | 33,948 | ||||||
Less: treasury stock at cost, 542,072 shares as of March 31, 2016 and December 31, 2015, respectively. | (2,138 | ) | (2,138 | ) | |||
Total stockholders’ equity, The J.G. Wentworth Company | 16,210 | 31,810 | |||||
Non-controlling interests | 5,206 | 24,349 | |||||
Total Stockholders’ Equity | $ | 21,416 | $ | 56,159 | |||
Total Liabilities and Stockholders’ Equity | $ | 5,161,128 | $ | 5,074,964 |
Three Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
REVENUES | ||||||||
Interest income | $ | 53,659 | $ | 44,392 | ||||
Realized and unrealized (losses) gains on VIE and other finance receivables, long-term debt and derivatives | (9,857 | ) | 39,739 | |||||
Realized and unrealized gains on sale of mortgage loans held for sale, net of direct costs | 16,656 | — | ||||||
Changes in mortgage servicing rights, net | 877 | — | ||||||
Servicing, broker, and other fees | 3,469 | 869 | ||||||
Loan origination fees | 1,636 | — | ||||||
Realized and unrealized gains on marketable securities, net | 137 | 1,830 | ||||||
Total Revenues | $ | 66,577 | $ | 86,830 | ||||
EXPENSES | ||||||||
Advertising | $ | 13,975 | $ | 15,840 | ||||
Interest expense | 59,500 | 48,835 | ||||||
Compensation and benefits | 18,545 | 12,798 | ||||||
General and administrative | 7,109 | 4,639 | ||||||
Professional and consulting | 3,657 | 4,438 | ||||||
Debt issuance | 3 | 2,749 | ||||||
Securitization debt maintenance | 1,432 | 1,496 | ||||||
Provision for losses | 1,588 | 1,339 | ||||||
Direct subservicing costs | 640 | — | ||||||
Depreciation and amortization | 1,302 | 991 | ||||||
Installment obligations expense, net | 515 | 2,320 | ||||||
Total Expenses | $ | 108,266 | $ | 95,445 | ||||
Loss before income taxes | (41,689 | ) | (8,615 | ) | ||||
Benefit for income taxes | (6,639 | ) | (3,155 | ) | ||||
Net Loss | $ | (35,050 | ) | $ | (5,460 | ) | ||
Less net loss attributable to non-controlling interests | (18,963 | ) | (4,115 | ) | ||||
Net loss attributable to The J.G. Wentworth Company | $ | (16,087 | ) | $ | (1,345 | ) | ||
Three Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
Weighted average shares of Class A common stock outstanding: | ||||||||
Basic | 15,574,746 | 14,271,842 | ||||||
Diluted | 15,574,746 | 14,271,842 | ||||||
Net loss per share attributable to stockholders of Class A common stock of The J.G. Wentworth Company | ||||||||
Basic | $ | (1.03 | ) | $ | (0.09 | ) | ||
Diluted | $ | (1.03 | ) | $ | (0.09 | ) |
Three Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
Net Loss | $ | (35,050 | ) | $ | (5,460 | ) | ||
Adjustments to reflect de-consolidation of securitizations: | ||||||||
Elimination of unrealized gain/loss on finance receivables, long-term debt and derivatives post securitization due to changes in interest rates | 34,838 | 9,129 | ||||||
Elimination of interest income from securitized finance receivables | (49,815 | ) | (39,969 | ) | ||||
Interest income on retained interests in finance receivables | 5,834 | 5,166 | ||||||
Servicing income on securitized finance receivables | 1,339 | 1,315 | ||||||
Elimination of interest expense on long-term debt related to securitization and permanent financing trusts | 43,036 | 34,208 | ||||||
Swap termination expense related to securitization entities | 3,053 | — | ||||||
Professional fees relating to securitizations | 1,432 | 1,496 | ||||||
Other adjustments: | ||||||||
Share based compensation | 307 | 410 | ||||||
Income tax benefit | (6,639 | ) | (3,155 | ) | ||||
Impact of prefunding on unsecuritized finance receivables | (4,253 | ) | 2,272 | |||||
Severance, mergers and acquisitions and other non-routine expenses | 1,794 | 2,834 | ||||||
Adjusted Net (Loss) Income* | $ | (4,124 | ) | $ | 8,246 | |||
Term loan interest expense | 10,087 | 9,957 | ||||||
Debt issuance | 3 | 2,749 | ||||||
Broker and legal fees incurred in connection with sale of finance receivables | 714 | — | ||||||
Depreciation and amortization | 1,302 | 991 | ||||||
Adjusted EBITDA* | $ | 7,982 | $ | 21,943 |
GAAP Results | Deconsolidation of Securitizations | Impact of Prefunding on Unsecuritized Finance Receivables | Interest Income on Retained Interests | Share Based Compensation | Income Tax | Severance, Mergers and Acquisitions, and Other Non-Routine Expenses | Reclassification for Installment Obligation Payable | ANI* | Term Loan Interest Expense | Debt Issuance | Broker and Legal Fees Incurred in Connection with Sale of Finance Receivables | Depreciation and Amortization | Adjusted EBITDA* | |||||||||||||||||||||||||||||||||||||||||||
REVENUES | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest income | $ | 53,659 | $ | (49,815 | ) | $ | — | $ | 5,834 | $ | — | $ | — | $ | — | $ | (378 | ) | $ | 9,300 | $ | — | $ | — | $ | — | $ | — | $ | 9,300 | ||||||||||||||||||||||||||
Realized and unrealized (losses) gains on VIE and other finance receivables, long-term debt and derivatives | (9,857 | ) | 37,891 | (4,253 | ) | — | — | — | — | — | 23,781 | — | — | — | — | 23,781 | ||||||||||||||||||||||||||||||||||||||||
Realized and unrealized gains on sale of mortgage loans held for sale, net of direct costs | 16,656 | — | — | — | — | — | — | — | 16,656 | — | — | — | — | 16,656 | ||||||||||||||||||||||||||||||||||||||||||
Changes in mortgage servicing rights, net | 877 | — | — | — | — | — | — | — | 877 | — | — | — | — | 877 | ||||||||||||||||||||||||||||||||||||||||||
Servicing, broker, and other fees | 3,469 | 1,339 | — | — | — | — | — | — | 4,808 | — | — | — | — | 4,808 | ||||||||||||||||||||||||||||||||||||||||||
Loan origination fees | 1,636 | — | — | — | — | — | — | — | 1,636 | — | — | — | — | 1,636 | ||||||||||||||||||||||||||||||||||||||||||
Realized and unrealized gains on marketable securities, net | 137 | — | — | — | — | — | — | (137 | ) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Total Revenues | $ | 66,577 | $ | (10,585 | ) | $ | (4,253 | ) | $ | 5,834 | $ | — | $ | — | $ | — | $ | (515 | ) | $ | 57,058 | $ | — | $ | — | $ | — | $ | — | $ | 57,058 | |||||||||||||||||||||||||
EXPENSES | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advertising | $ | 13,975 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 13,975 | $ | — | $ | — | $ | — | $ | — | $ | 13,975 | ||||||||||||||||||||||||||||
Interest expense | 59,500 | (43,036 | ) | — | — | — | — | (549 | ) | — | 15,915 | (10,087 | ) | — | — | — | 5,828 | |||||||||||||||||||||||||||||||||||||||
Compensation and benefits | 18,545 | — | — | — | (307 | ) | — | (1,245 | ) | — | 16,993 | — | — | — | — | 16,993 | ||||||||||||||||||||||||||||||||||||||||
General and administrative | 7,109 | — | — | — | — | — | — | — | 7,109 | — | — | (639 | ) | — | 6,470 | |||||||||||||||||||||||||||||||||||||||||
Professional and consulting | 3,657 | — | — | — | — | — | — | — | 3,657 | — | — | (75 | ) | — | 3,582 | |||||||||||||||||||||||||||||||||||||||||
Debt issuance | 3 | — | — | — | — | — | — | — | 3 | — | (3 | ) | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Securitization debt maintenance | 1,432 | (1,432 | ) | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Provision for losses | 1,588 | — | — | — | — | — | — | — | 1,588 | — | — | — | — | 1,588 | ||||||||||||||||||||||||||||||||||||||||||
Direct subservicing costs | 640 | — | — | — | — | — | — | — | 640 | — | — | — | — | 640 | ||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 1,302 | — | — | — | — | — | — | — | 1,302 | — | — | — | (1,302 | ) | — | |||||||||||||||||||||||||||||||||||||||||
Installment obligations expense, net | 515 | — | — | — | — | — | — | (515 | ) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Total Expenses | $ | 108,266 | $ | (44,468 | ) | $ | — | $ | — | $ | (307 | ) | $ | — | $ | (1,794 | ) | $ | (515 | ) | $ | 61,182 | $ | (10,087 | ) | $ | (3 | ) | $ | (714 | ) | $ | (1,302 | ) | $ | 49,076 | ||||||||||||||||||||
(Loss) income before income taxes | (41,689 | ) | 33,883 | (4,253 | ) | 5,834 | 307 | — | 1,794 | — | (4,124 | ) | 10,087 | 3 | 714 | 1,302 | 7,982 | |||||||||||||||||||||||||||||||||||||||
Benefit for income taxes | (6,639 | ) | — | — | — | — | 6,639 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Net (Loss) Income | $ | (35,050 | ) | $ | 33,883 | $ | (4,253 | ) | $ | 5,834 | $ | 307 | $ | (6,639 | ) | $ | 1,794 | $ | — | $ | (4,124 | ) | $ | 10,087 | $ | 3 | $ | 714 | $ | 1,302 | $ | 7,982 |
GAAP Results | Deconsolidation of Securitizations | Impact of Prefunding on Unsecuritized Finance Receivables | Interest Income on Retained Interests | Share Based Compensation | Income Tax | Severance, Mergers and Acquisitions, and Other Non-Routine Expenses | Reclassification for Installment Obligation Payable | ANI* | Term Loan Interest Expense | Debt Issuance | Broker and Legal Fees Incurred in Connection with Sale of Finance Receivables | Depreciation and Amortization | Adjusted EBITDA* | |||||||||||||||||||||||||||||||||||||||||||
REVENUES | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest income | $ | 53,002 | $ | (49,815 | ) | $ | — | $ | 5,834 | $ | — | $ | — | $ | — | $ | (378 | ) | $ | 8,643 | $ | — | $ | — | $ | — | $ | — | $ | 8,643 | ||||||||||||||||||||||||||
Realized and unrealized (losses) gains on VIE and other finance receivables, long-term debt and derivatives | (9,857 | ) | 37,891 | (4,253 | ) | — | — | — | — | — | 23,781 | — | — | — | — | 23,781 | ||||||||||||||||||||||||||||||||||||||||
Servicing, broker, and other fees | 1,417 | 1,339 | — | — | — | — | — | — | 2,756 | — | — | — | — | 2,756 | ||||||||||||||||||||||||||||||||||||||||||
Realized and unrealized gains on marketable securities, net | 137 | — | — | — | — | — | — | (137 | ) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Total Revenues | $ | 44,699 | $ | (10,585 | ) | $ | (4,253 | ) | $ | 5,834 | $ | — | $ | — | $ | — | $ | (515 | ) | $ | 35,180 | $ | — | $ | — | $ | — | $ | — | $ | 35,180 | |||||||||||||||||||||||||
EXPENSES | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advertising | $ | 12,033 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 12,033 | $ | — | $ | — | $ | — | $ | — | $ | 12,033 | ||||||||||||||||||||||||||||
Interest expense | 58,375 | (43,036 | ) | — | — | — | — | (549 | ) | — | 14,790 | (10,087 | ) | — | — | — | 4,703 | |||||||||||||||||||||||||||||||||||||||
Compensation and benefits | 9,197 | — | — | — | (307 | ) | — | (865 | ) | — | 8,025 | — | — | — | — | 8,025 | ||||||||||||||||||||||||||||||||||||||||
General and administrative | 5,345 | — | — | — | — | — | — | — | 5,345 | — | — | (639 | ) | — | 4,706 | |||||||||||||||||||||||||||||||||||||||||
Professional and consulting | 3,187 | — | — | — | — | — | — | — | 3,187 | — | — | (75 | ) | — | 3,112 | |||||||||||||||||||||||||||||||||||||||||
Debt issuance | 3 | — | — | — | — | — | — | — | 3 | — | (3 | ) | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Securitization debt maintenance | 1,432 | (1,432 | ) | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Provision for losses | 897 | — | — | — | — | — | — | — | 897 | — | — | — | — | 897 | ||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 876 | — | — | — | — | — | — | — | 876 | — | — | — | (876 | ) | — | |||||||||||||||||||||||||||||||||||||||||
Installment obligations expense, net | 515 | — | — | — | — | — | — | (515 | ) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Total Expenses | $ | 91,860 | $ | (44,468 | ) | $ | — | $ | — | $ | (307 | ) | $ | — | $ | (1,414 | ) | $ | (515 | ) | $ | 45,156 | $ | (10,087 | ) | $ | (3 | ) | $ | (714 | ) | $ | (876 | ) | $ | 33,476 | ||||||||||||||||||||
Loss before income taxes | (47,161 | ) | 33,883 | (4,253 | ) | 5,834 | 307 | — | 1,414 | — | (9,976 | ) | 10,087 | 3 | 714 | 876 | 1,704 | |||||||||||||||||||||||||||||||||||||||
Benefit for income taxes | (6,639 | ) | — | — | — | — | 6,639 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Net (Loss) Income | $ | (40,522 | ) | $ | 33,883 | $ | (4,253 | ) | $ | 5,834 | $ | 307 | $ | (6,639 | ) | $ | 1,414 | $ | — | $ | (9,976 | ) | $ | 10,087 | $ | 3 | $ | 714 | $ | 876 | $ | 1,704 |
GAAP Results | Severance, Mergers and Acquisitions, and Other Non-Routine Expenses | ANI* | Depreciation and Amortization | Adjusted EBITDA* | ||||||||||||||||
REVENUES | ||||||||||||||||||||
Interest income | $ | 657 | $ | — | $ | 657 | $ | — | $ | 657 | ||||||||||
Realized and unrealized gains on sale of mortgage loans held for sale, net of direct costs | 16,656 | — | 16,656 | — | 16,656 | |||||||||||||||
Changes in mortgage servicing rights, net | 877 | — | 877 | — | 877 | |||||||||||||||
Servicing, broker, and other fees | 2,052 | — | 2,052 | — | 2,052 | |||||||||||||||
Loan origination fees | 1,636 | — | 1,636 | — | 1,636 | |||||||||||||||
Total Revenues | $ | 21,878 | $ | — | $ | 21,878 | $ | — | $ | 21,878 | ||||||||||
EXPENSES | ||||||||||||||||||||
Advertising | $ | 1,942 | $ | — | $ | 1,942 | $ | — | $ | 1,942 | ||||||||||
Interest expense | 1,125 | — | 1,125 | — | 1,125 | |||||||||||||||
Compensation and benefits | 9,348 | (380 | ) | 8,968 | — | 8,968 | ||||||||||||||
General and administrative | 1,764 | — | 1,764 | — | 1,764 | |||||||||||||||
Professional and consulting | 470 | — | 470 | — | 470 | |||||||||||||||
Provision for losses | 691 | — | 691 | — | 691 | |||||||||||||||
Direct subservicing costs | 640 | — | 640 | — | 640 | |||||||||||||||
Depreciation and amortization | 426 | — | 426 | (426 | ) | — | ||||||||||||||
Total Expenses | $ | 16,406 | $ | (380 | ) | $ | 16,026 | $ | (426 | ) | $ | 15,600 | ||||||||
Income before income taxes | 5,472 | 380 | 5,852 | 426 | 6,278 | |||||||||||||||
Provision for income taxes | — | — | — | — | — | |||||||||||||||
Net Income | $ | 5,472 | $ | 380 | $ | 5,852 | $ | 426 | $ | 6,278 |
GAAP Results | Deconsolidation of Securitizations | Impact of Prefunding on Unsecuritized Finance Receivables | Interest Income on Retained Interests | Share Based Compensation | Income Tax | Severance, Mergers and Acquisitions, and Other Non-Routine Expenses | Reclassification for Installment Obligation Payable | ANI* | Term Loan Interest Expense | Debt Issuance | Depreciation and Amortization | Adjusted EBITDA* | |||||||||||||||||||||||||||||||||||||||
REVENUES | |||||||||||||||||||||||||||||||||||||||||||||||||||
Interest income | $ | 44,392 | $ | (39,969 | ) | $ | — | $ | 5,166 | $ | — | $ | — | $ | — | $ | (490 | ) | $ | 9,099 | $ | — | $ | — | $ | — | $ | 9,099 | |||||||||||||||||||||||
Realized and unrealized (losses) gains on VIE and other finance receivables, long-term debt and derivatives | 39,739 | 9,129 | 2,272 | — | — | — | — | — | 51,140 | — | — | — | 51,140 | ||||||||||||||||||||||||||||||||||||||
Servicing, broker, and other fees | 869 | 1,315 | — | — | — | — | — | — | 2,184 | — | — | — | 2,184 | ||||||||||||||||||||||||||||||||||||||
Realized and unrealized gains on marketable securities, net | 1,830 | — | — | — | — | — | — | (1,830 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Total Revenues | $ | 86,830 | $ | (29,525 | ) | $ | 2,272 | $ | 5,166 | $ | — | $ | — | $ | — | $ | (2,320 | ) | $ | 62,423 | $ | — | $ | — | $ | — | $ | 62,423 | |||||||||||||||||||||||
EXPENSES | |||||||||||||||||||||||||||||||||||||||||||||||||||
Advertising | $ | 15,840 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 15,840 | $ | — | $ | — | $ | — | $ | 15,840 | |||||||||||||||||||||||||
Interest expense | 48,835 | (34,208 | ) | — | — | — | — | — | — | 14,627 | (9,957 | ) | — | — | 4,670 | ||||||||||||||||||||||||||||||||||||
Compensation and benefits | 12,798 | — | — | — | (410 | ) | — | (2,237 | ) | — | 10,151 | — | — | — | 10,151 | ||||||||||||||||||||||||||||||||||||
General and administrative | 4,639 | — | — | — | — | — | (3 | ) | — | 4,636 | — | — | — | 4,636 | |||||||||||||||||||||||||||||||||||||
Professional and consulting | 4,438 | — | — | — | — | — | (594 | ) | — | 3,844 | — | — | — | 3,844 | |||||||||||||||||||||||||||||||||||||
Debt issuance | 2,749 | — | — | — | — | — | — | — | 2,749 | — | (2,749 | ) | — | — | |||||||||||||||||||||||||||||||||||||
Securitization debt maintenance | 1,496 | (1,496 | ) | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Provision for losses | 1,339 | — | — | — | — | — | — | — | 1,339 | — | — | — | 1,339 | ||||||||||||||||||||||||||||||||||||||
Direct subservicing costs | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 991 | — | — | — | — | — | — | — | 991 | — | — | (991 | ) | — | |||||||||||||||||||||||||||||||||||||
Installment obligations expense, net | 2,320 | — | — | — | — | — | — | (2,320 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Total Expenses | $ | 95,445 | $ | (35,704 | ) | $ | — | $ | — | $ | (410 | ) | $ | — | $ | (2,834 | ) | $ | (2,320 | ) | $ | 54,177 | $ | (9,957 | ) | $ | (2,749 | ) | $ | (991 | ) | $ | 40,480 | ||||||||||||||||||
(Loss) income before taxes | $ | (8,615 | ) | $ | 6,179 | $ | 2,272 | $ | 5,166 | $ | 410 | $ | — | $ | 2,834 | $ | — | $ | 8,246 | $ | 9,957 | $ | 2,749 | $ | 991 | $ | 21,943 | ||||||||||||||||||||||||
Benefit for income taxes | (3,155 | ) | — | — | — | — | 3,155 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Net (Loss) Income | $ | (5,460 | ) | $ | 6,179 | $ | 2,272 | $ | 5,166 | $ | 410 | $ | (3,155 | ) | $ | 2,834 | $ | — | $ | 8,246 | $ | 9,957 | $ | 2,749 | $ | 991 | $ | 21,943 |
Three Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
Purchases of finance receivables | $ | (71,674 | ) | $ | (106,993 | ) | ||
Gross proceeds from revolving credit facilites | 614,665 | 89,468 | ||||||
Issuance of VIE long-term debt | 2,275 | 216,955 | ||||||
Repayments of revolving credit facilities | (566,019 | ) | (70,092 | ) | ||||
Collections on finance receivables | 133,133 | 128,476 | ||||||
Repayment of long-term debt and derivatives | (86,511 | ) | (84,985 | ) | ||||
Net proceeds from sale of finance receivables | 91,335 | — | ||||||
Changes in restricted cash and investments | 5,246 | (6,052 | ) | |||||
Loss on swap terminations, net | (4,374 | ) | (275 | ) | ||||
Servicing, broker, and other fees | 3,469 | 881 | ||||||
Loan origination fees | 1,636 | — | ||||||
Originations and purchases of mortgage loans held for sale | (574,662 | ) | — | |||||
Proceeds from sale and principal payments on mortgage loans held for sale | 524,130 | — | ||||||
Subtotal | $ | 72,649 | $ | 167,383 | ||||
Advertising | 13,975 | 15,840 | ||||||
Cash paid for interest | 59,609 | 58,322 | ||||||
Compensation and benefits | 18,545 | 12,798 | ||||||
General and administrative | 7,109 | 4,639 | ||||||
Professional and consulting | 3,657 | 4,438 | ||||||
Debt issuance | 3 | 2,749 | ||||||
Securitization debt maintenance | 1,432 | 1,496 | ||||||
Direct subservicing costs | 640 | — | ||||||
Subtotal | $ | 104,970 | $ | 100,282 | ||||
Share-based compensation expense included in compensation and benefits | 307 | 410 | ||||||
Adjusted Cash Flow* | $ | (32,014 | ) | $ | 67,511 |
Three Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
Adjusted Cash Flow* | $ | (32,014 | ) | $ | 67,511 | |||
Adjustments to reconcile Adjusted Cash Flow* to net (decrease) increase in cash and cash equivalents per Consolidated Statement of Cash Flows | ||||||||
Purchase of Home Lending, net of cash acquired | (7,630 | ) | — | |||||
Purchases of premises and equipment, net of sales proceeds | (260 | ) | (905 | ) | ||||
Purchases of treasury stock | — | (2,797 | ) | |||||
Subtotal | $ | (7,890 | ) | $ | (3,702 | ) | ||
Changes in other assets | 7,845 | 388 | ||||||
Changes in other receivables | (470 | ) | 2,092 | |||||
Changes in accrued expenses and accounts payable | 1,354 | 5,353 | ||||||
Changes in other liabilities | (620 | ) | 396 | |||||
Other reconciling items | 938 | 173 | ||||||
Subtotal | $ | 9,047 | $ | 8,402 | ||||
Net (decrease) increase in cash and cash equivalents | (30,857 | ) | 72,211 | |||||
Cash and cash equivalents at beginning of period | 57,322 | 41,648 | ||||||
Cash and cash equivalents at end of period | $ | 26,465 | $ | 113,859 | ||||
Restricted cash and investments at end of period | $ | 131,534 | $ | 204,258 |
Three Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
Consolidated | ||||||||
Net Loss | $ | (35,050 | ) | $ | (5,460 | ) | ||
Net loss attributable to The J.G. Wentworth Company | $ | (16,087 | ) | $ | (1,345 | ) | ||
Adjusted Net (Loss) Income* | $ | (4,124 | ) | $ | 8,246 | |||
Adjusted EBITDA* | $ | 7,982 | $ | 21,943 | ||||
Weighted Average Diluted Shares | 15,574,746 | 14,271,842 | ||||||
All-in Shares (1)* | 28,737,655 | 28,597,051 | ||||||
Diluted EPS | $ | (1.03 | ) | $ | (0.09 | ) | ||
ANI EPS (2)* | $ | (0.14 | ) | $ | 0.29 | |||
Structured Settlement Payments Segment | ||||||||
Total Receivables Balance (TRB) Purchases | ||||||||
Guaranteed structured settlements, annuities and lotteries | $ | 166,384 | $ | 234,972 | ||||
Life contingent structured settlements and annuities | 37,300 | 19,499 | ||||||
Pre-settlement fundings | — | 6,360 | ||||||
Total TRB Purchases | $ | 203,684 | $ | 260,831 | ||||
Spread Revenue (3)* | $ | 23,781 | $ | 50,547 | ||||
TRB Spread Margin (4)* | 11.68 | % | 19.86 | % | ||||
Home Lending Segment | ||||||||
Mortgage Originations: | ||||||||
Locked - Units | 3,978 | N/A | ||||||
Locked - Loan Volume | $ | 1,077,097 | N/A | |||||
Closed - Units | 2,064 | N/A | ||||||
Closed - Loan Volume | $ | 568,302 | N/A | |||||
As of: | ||||||||
March 31, 2016 | December 31, 2015 | |||||||
(Dollars in thousands) | ||||||||
Mortgage Servicing: | ||||||||
Loan count - servicing | 13,181 | 12,504 | ||||||
Average loan amount | $ | 239 | $ | 238 | ||||
Average interest rate | 3.72 | % | 3.72 | % |
(1) | 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. |
(2) | ANI EPS is defined as ANI / All-in Shares. |
(3) | Spread Revenue is defined as realized & unrealized gains on unsecuritized finance receivables and related derivatives adjusted for the impact of prefundings. |
(4) | TRB Spread Margin is defined as Spread Revenue / Guaranteed and life contingent structured settlements, annuities and lotteries. |
(5) | N/A - Not applicable |