BOCA RATON, Fla., March 5, 2015 /PRNewswire/ -- Imperial Holdings, Inc. (NYSE: IFT) ("Imperial" or the "Company"), a specialty finance company with a focus on providing liquidity solutions to owners of illiquid financial assets, announced today its financial results for the three months and year ended December 31, 2014.
Three Months Ended December 31, 2014
Total income from continuing operations was $24.8 million for the three months ended December 31, 2014 compared to a total income from continuing operations of $6.5 million for the same period in 2013. The increase was primarily due to the gain associated with the purchase of 14 policies during the quarter and an improvement in the fair value of the Company's investments in life settlements. Total expenses were $13.5 million for the three months ended December 31, 2014 compared to $2.6 million for the same period in 2013. The increase was primarily due to higher interest expense and legal fees of $3.4 million and $4.1 million respectively.
The Company reported net income from continuing operations of $8.7 million, or $.32 per fully diluted share using the "if-converted" method for the additional 10,464,941 shares underlying the Company's convertible notes, for the three months ended December 31, 2014, compared to a net income of $3.9 million, or $0.18 per fully diluted share, for the same period in 2013.
Year Ended December 31, 2014
Total income from continuing operations was $43.8 million for the twelve months ended December 31, 2014, compared to $89.1 million for the same period in 2013. Total income in 2013 was driven by a $71.5 million unrealized gain in investments in life settlements associated with a one-time acquisition of 416 life insurance policies during the quarter ended June 30, 2013. Total expenses were $48.8 million for the twelve months ended December 31, 2014 compared to $37.2 million for the same period in 2013. The increase was primarily due to higher interest expense of $2.6 million and a $6.8 million conversion liability embedded in the Company's convertible notes.
The Company reported a net loss from continuing operations of ($5.2 million), or ($0.24) per fully diluted share, for the year ended December 31, 2014, compared to net income of $51.8 million or $2.44 per fully diluted share for the same period in 2013.
As of December 31, 2014, the Company had $54.9 million of cash and cash equivalents. As of December 31, 2014, the Company had 21,402,990 shares outstanding and an undiluted book value of $10.05 per share.
Life Settlements Portfolio Highlights
At December 31, 2014, the aggregate face value of the Company's portfolio of 607 life insurance policies was approximately $2.9 billion with an estimated fair value of $388.9 million. The weighted average discount rate used in the Company's fair value model was 17.77% at December 31, 2014 compared to 19.14% at December 31, 2013. During the fourth quarter the Company experienced two policy maturities totaling $14 million. To date in 2015, the Company experienced two additional policy maturities totaling $9 million. All of the policies associated with these maturities were pledged as collateral under the Company's revolving credit facility and the related policy proceeds will be used to pay down outstanding debt.
Antony Mitchell, Chief Executive Officer of Imperial, commented, "The Life Settlements market remains robust. We have been able to deploy capital to make strategic acquisitions of policies. To date, we have added policies having an aggregate face value of $143 million. As a result, our non-financed portfolio has now grown to $751 million in face value. We believe our non-financed portfolio has reached a meaningful size allowing us to pursue various strategic opportunities going forward."
Conference Call
The Company will host a conference call today at 5:00 P.M. ET. To join the call please dial US Toll Free (877) 312-5529 or from Outside of the US (253) 237-1147 and provide Conference ID 90948492 when prompted.
The conference call will also be broadcast live through a link on the Investor Relations section of the Company's website at www.imperial.com. Please visit the website at least 10 minutes prior to the call to register, download and install any necessary audio software.
About Imperial Holdings, Inc.
Imperial is a leading specialty finance company that provides customized liquidity solutions to owners of illiquid financial assets. More information about Imperial can be found at www.imperial.com.
Safe Harbor Statement
This press release may contain certain "forward-looking statements" relating to the business of Imperial Holdings, Inc. and its subsidiary companies. All statements, other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, and involve known and unknown risks and uncertainties. Although Imperial believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required under the securities laws, Imperial does not assume a duty to update these forward-looking statements.
-SELECTED FINANCIAL TABLES FOLLOW-
|
Imperial Holdings, Inc. and Subsidiaries | |||||
|
CONSOLIDATED BALANCE SHEETS | |||||
|
December 31, | |||||
|
2014 |
2013 | ||||
|
(In thousands except share data) | |||||
|
ASSETS |
|||||
|
Assets |
|||||
|
Cash and cash equivalents |
$ 51,166 |
$ 14,722 | |||
|
Cash and cash equivalents (VIE) |
3,751 |
7,977 | |||
|
Restricted cash |
- |
13,506 | |||
|
Prepaid expenses and other assets |
1,502 |
1,331 | |||
|
Deposits - other |
1,340 |
1,597 | |||
|
Deposits on purchase of life settlements |
1,630 |
- | |||
|
Structured settlement receivables, at estimated fair value |
384 |
660 | |||
|
Structured settlement receivables at cost, net |
597 |
797 | |||
|
Investment in life settlements, at estimated fair value |
82,575 |
48,442 | |||
|
Investment in life settlements, at estimated fair value (VIE) |
306,311 |
254,519 | |||
|
Receivable for maturity of life settlements (VIE) |
4,000 |
2,100 | |||
|
Fixed assets, net |
355 |
74 | |||
|
Investment in affiliates |
2,384 |
2,378 | |||
|
Deferred debt costs, net |
3,936 |
- | |||
|
Total assets |
$ 459,931 |
$ 348,103 | |||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||
|
Liabilities |
|||||
|
Accounts payable and accrued expenses |
$ 6,140 |
$ 2,977 | |||
|
Accounts payable and accrued expenses (VIE) |
423 |
341 | |||
|
Other liabilities |
1,256 |
21,221 | |||
|
Interest payable - senior unsecured convertible notes |
2,272 |
- | |||
|
Senior unsecured convertible notes, net of discount |
55,881 |
- | |||
|
Interest payable - senior secured notes |
261 |
- | |||
|
Senior secured notes, net of discount |
24,036 |
- | |||
|
Revolving Credit Facility debt, at estimated fair value (VIE) |
145,831 |
123,847 | |||
|
Income taxes payable |
- |
6,295 | |||
|
Deferred tax liability |
8,728 |
- | |||
|
Total liabilities |
244,828 |
154,681 | |||
|
Commitments and Contingencies |
|||||
|
Stockholders' Equity |
|||||
|
Common stock, $0.01 par value (80,000,000 authorized; 21,402,990 and 21,237,166 |
|||||
|
issued and outstanding as of December 31, 2014 and 2013, respectively) |
214 |
212 | |||
|
Preferred stock, $0.01 par value (40,000,000 authorized; 0 issued and outstanding as |
|||||
|
of December 31, 2014 and 2013) |
- |
- | |||
|
Additional paid-in-capital |
266,705 |
239,506 | |||
|
Accumulated deficit |
(51,816) |
(46,296) | |||
|
Total stockholders' equity |
215,103 |
193,422 | |||
|
Total liabilities and stockholders' equity |
$ 459,931 |
$ 348,103 | |||
|
Imperial Holdings, Inc. and Subsidiaries | |||||||
|
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
|
For the Years Ended December 31, | |||||||
|
2014 |
2013 |
||||||
|
Income |
(in thousands, except share and per share data) |
||||||
|
Interest income |
29 |
28 |
|||||
|
Interest and dividends on investment securities available for sale |
- |
14 |
|||||
|
Origination fee income |
- |
- |
|||||
|
Loss on life settlements, net |
(426) |
(1,990) |
|||||
|
Change in fair value of life settlements |
44,128 |
88,686 |
|||||
|
Servicing fee income |
- |
310 |
|||||
|
Gain on maturities of life settlements with subrogation rights, net |
- |
- |
|||||
|
Other income |
85 |
2,030 |
|||||
|
9 |
|||||||
|
Total income |
43,816 |
89,078 |
|||||
|
Expenses |
|||||||
|
Interest expense |
16,245 |
13,657 |
|||||
|
Change in fair value of Revolving Credit Facility debt |
(5,472) |
(9,373) |
|||||
|
Loss on extinguishment of Bridge Facility |
- |
3,991 |
|||||
|
Change in fair value of conversion derivative liability |
6,759 |
- |
|||||
|
Provision for losses on loans receivable |
- |
- |
|||||
|
Gain on loan payoffs and settlements, net |
- |
(65) |
|||||
|
Amortization of deferred costs |
- |
7 |
|||||
|
Personnel costs |
8,763 |
8,177 |
|||||
|
Legal fees |
13,620 |
11,701 |
|||||
|
Professional fees |
5,254 |
5,281 |
|||||
|
Insurance |
1,667 |
1,953 |
|||||
|
Other selling, general and administrative expenses |
2,006 |
1,887 |
|||||
|
Total expenses |
48,842 |
37,216 |
|||||
|
(Loss) income from continuing operations before income taxes |
(5,026) |
51,862 |
|||||
|
Provision for income taxes |
125 |
39 |
|||||
|
Net (loss) income from continuing operations |
$ (5,151) |
$ 51,823 |
|||||
|
Discontinued Operations: |
|||||||
|
(Loss) income from discontinued operations, net of income taxes |
(369) |
2,198 |
|||||
|
Gain on disposal of discontinued operations, net of income taxes |
- |
11,311 |
|||||
|
Net (loss) income from discontinued operations |
(369) |
13,509 |
|||||
|
Net (loss) income |
$ (5,520) |
$ 65,332 |
|||||
|
(Loss) earnings per share: |
|||||||
|
Basic (loss) earnings per common share |
|||||||
|
Basic (loss) income per share from continuing operations |
$ (0.24) |
$ 2.44 |
|||||
|
Basic (loss) income per share from discontinued operations |
$ (0.02) |
$ 0.64 |
|||||
|
Basic (loss) income per share available to common shareholders |
$ (0.26) |
$ 3.08 |
|||||
|
Diluted (loss) earnings per common share |
|||||||
|
Diluted (loss) income per share from continuing operations |
$ (0.24) |
$ 2.44 |
|||||
|
Diluted (loss) income per share from discontinued operations |
$ (0.02) |
$ 0.64 |
|||||
|
Diluted (loss) income per share available to common shareholders |
$ (0.26) |
$ 3.08 |
|||||
|
Weighted average shares outstanding: |
|||||||
|
Basic |
21,354,567 |
21,216,487 |
|||||
|
Add: Restricted stock |
- |
2,451 |
|||||
|
Diluted |
21,354,567 |
21,218,938 |
|||||
|
Imperial Holdings, Inc. and Subsidiaries | |||||||
|
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
|
For the Three Months Ended December 31, | |||||||
|
2014 |
2013 |
||||||
|
Income |
(in thousands, except share and per share data) |
||||||
|
Interest income |
7 |
1 |
|||||
|
Loss on life settlements, net |
- |
(281) |
|||||
|
Change in fair value of life settlements |
24,815 |
6,737 |
|||||
|
Other income |
13 |
15 |
|||||
|
9 |
|||||||
|
Total income |
24,835 |
6,472 |
|||||
|
Expenses |
|||||||
|
Interest expense |
5,080 |
1,638 |
|||||
|
Change in fair value of Revolving Credit Facility debt |
(915) |
(4,078) |
|||||
|
Personnel costs |
2,136 |
1,963 |
|||||
|
Legal fees |
4,498 |
446 |
|||||
|
Professional fees |
1,692 |
1,717 |
|||||
|
Insurance |
414 |
478 |
|||||
|
Other selling, general and administrative expenses |
641 |
410 |
|||||
|
Total expenses |
13,546 |
2,574 |
|||||
|
Income from continuing operations before income taxes |
11,289 |
3,898 |
|||||
|
Provision (benefit) for income taxes |
2,577 |
(1) |
|||||
|
Net income from continuing operations |
$ 8,712 |
$ 3,899 |
|||||
|
Discontinued Operations: |
|||||||
|
Income from discontinued operations, net of income taxes |
85 |
571 |
|||||
|
Gain on disposal of discontinued operations, net of income taxes |
- |
11,311 |
|||||
|
Net income from discontinued operations |
85 |
11,882 |
|||||
|
Net income |
$ 8,797 |
$ 15,781 |
|||||
|
Earnings per share: |
|||||||
|
Basic earnings per common share |
|||||||
|
Basic income per share from continuing operations |
$ 0.41 |
$ 0.18 |
|||||
|
Basic income per share from discontinued operations |
$ 0.00 |
$ 0.56 |
|||||
|
Basic income per share available to common shareholders |
$ 0.41 |
$ 0.74 |
|||||
|
Diluted earnings per common share |
|||||||
|
Net income from continuing operations |
$ 8,712 |
$ 3,899 |
|||||
|
Add: Interest expense associated with convertible debt, net of tax |
1,448 |
- |
|||||
|
Adjusted net income from continuing operations |
$ 10,160 |
$ 3,899 |
|||||
|
Net income from discontinued operations |
$ 85 |
$ 11,882 |
|||||
|
Diluted income per share from continuing operations |
$ 0.32 |
$ 0.18 |
|||||
|
Diluted income per share from discontinued operations |
$ 0.00 |
$ 0.56 |
|||||
|
Diluted income per share available to common shareholders |
$ 0.32 |
$ 0.74 |
|||||
|
Weighted average shares outstanding: |
|||||||
|
Basic |
21,361,930 |
21,219,880 |
|||||
|
Add: Restricted stock |
26,725 |
10,715 |
|||||
|
Add: Convertible debt using the "if converted" method |
10,464,941 |
- |
|||||
|
Diluted |
31,853,596 |
21,230,595 |
|||||
|
Imperial Holdings, Inc. |
|||||||
|
Life Finance Business Segment |
For the Three Months Ended |
For the Twelve Months Ended | |||||
|
December 31, |
December 31, | ||||||
|
2014 |
2013 |
2014 |
2013 | ||||
|
Period Acquisitions — Policies Owned |
|||||||
|
Number of policies acquired |
14 |
- |
16 |
432 | |||
|
Average age of insured at acquisition |
85.3 |
- |
85.2 |
77.7 | |||
|
Average life expectancy - Calculated LE (Years) |
6.0 |
- |
5.9 |
12.7 | |||
|
Average death benefit |
$ 4,053 |
$ - |
$ 4,444 |
$ 4,749 | |||
|
Aggregate purchase price |
$ 12,807 |
$ - |
$ 16,296 |
$ 58,645 | |||
|
End of Period — Policies Owned |
|||||||
|
Number of policies owned |
607 |
612 |
607 |
612 | |||
|
Average Life Expectancy - Calculated LE (Years) |
10.7 |
11.6 |
10.7 |
11.6 | |||
|
Aggregate Death Benefit |
$ 2,931,066 |
$ 2,954,890 |
$ 2,931,066 |
$ 2,954,890 | |||
|
Aggregate fair value |
$ 388,886 |
$ 302,961 |
$ 388,886 |
$ 302,961 | |||
|
Monthly premium — average per policy |
$ 7.8 |
$ 7.5 |
$ 7.8 |
$ 7.5 | |||
SOURCE Imperial Holdings, Inc.
