Tiptree Financial Inc. (NASDAQ:TIPT) (“Tiptree Financial”), a
diversified holding company which operates in the insurance and
insurance services, specialty finance, asset management and real estate
industries, today announced its financial results for the quarter ended
March 31, 2015. Tiptree Financial operates its business through Tiptree
Operating Company, LLC (“Tiptree” or the “Company”), which is owned 77%
by Tiptree Financial and 23% by Tiptree Financial Partners, L.P.
(“TFP”). This release reports both the results of Tiptree and the
results available to Tiptree Financial’s Class A stockholders.
First Quarter 2015 Highlights
-
Care completed the purchase of six seniors housing communities for
$54.8 million and entered into a joint venture to acquire, own and
operate five seniors housing communities for $30.1 million.
-
First full quarter of Fortegra contributed $4.0 million to Tiptree’s
consolidated results.
-
Fortegra acquired the remainder of ProtectCELL, which is now 100%
owned by Fortegra.
-
Tiptree amended its existing credit facility with Fortress to borrow
an additional $25 million on the same terms (but repayable on
completion of Tiptree’s sale of Philadelphia Financial Group, Inc.
(“PFG”)).
-
Declared a dividend of $0.025 per share to Class A stockholders and
TFP limited partners on an as exchanged basis with a record date of
May 25, 2015, and a payment date of June 1, 2015.
Geoffrey Kauffman, Co-Chief Executive Officer of Tiptree Financial,
commented, “Despite weak valuations in the CLO market, we posted a
strong $12.9 million of adjusted EBITDA for the quarter and are
expecting positive results over the rest of the year.”
First Quarter 2015 Financial Overview
GAAP Results
Net loss before noncontrolling interests of Tiptree for the quarter
ended March 31, 2015 was $2.0 million compared with net income of $3.6
million from the comparable prior year quarter, a decrease of $5.6
million. The change in net income from the prior year period is the
result of a number of factors, including:
-
A $4.0 million increase in net income from Fortegra which was not
owned by Tiptree in the first quarter of 2014.
-
A $1.0 million increase in net income of discontinued operations at
PFG ($2.3 million in 2015 vs. $1.3 million in 2014).
-
A $3.9 million decrease in net revenues from the CLO business ($742
thousand in 2015 vs. $4.6 million in 2014), due primarily to negative
changes in mark-to-market valuations.
-
A $2.6 million decrease in interest income primarily due to the
warehouse activity included in the first quarter of 2014, which was
not replicated in the first quarter of 2015.
-
A $3.4 million decrease in net income at Care (loss of $4.2 million in
2015 vs. loss of $764 thousand in 2014) due to acquisitions in the
first quarter of 2015, which resulted in higher acquisition costs,
depreciation and amortization and other expenses.
-
A $1.2 million increase in net income in our specialty finance
businesses, Siena and Luxury ($435 thousand in 2015 vs. loss of $736
thousand in 2014).
Net loss to Class A common stockholders for the quarter ended March 31,
2015 was $979 thousand compared to net income of $1.6 million for the
same period in 2014. The decrease is primarily a result of an increase
of $844 thousand in the tax provision benefit and a decrease of $3.0
million in noncontrolling interests.
Non-GAAP Financial Measures: EBITDA and Adjusted EBITDA
Adjusted EBITDA for Tiptree was $12.9 million for the quarter ended
March 31, 2015 compared with $10.6 million for the comparable prior year
quarter. See page 9 for a reconciliation of EBITDA and Adjusted EBITDA
to GAAP net income.
EBITDA and Adjusted EBITDA are non-GAAP financial measures. We believe
that EBITDA and Adjusted EBITDA provide supplemental information useful
to investors as it is frequently used by the financial community to
analyze performance period to period, to analyze a company’s ability to
service its debt and to facilitate comparison among companies. EBITDA
and Adjusted EBITDA are not a measurement of financial performance or
liquidity under GAAP; therefore, EBITDA and Adjusted EBITDA should not
be considered as an alternative or substitute for GAAP. Our presentation
of EBITDA and Adjusted EBITDA may differ from similarly titled non-GAAP
financial measures used by other companies. We define EBITDA as GAAP net
income of the Company adjusted to add consolidated interest expense,
consolidated income taxes and consolidated depreciation and amortization
expense as presented in our financial statements and Adjusted EBITDA as
EBITDA adjusted to (i) subtract interest expense on asset-specific debt
incurred in the ordinary course of our subsidiaries business operations,
(ii) adjust for the effect of purchase accounting and (iii) add
significant acquisition related costs.
Earnings Conference Call
Tiptree Financial will host a conference call on Monday, May 18, 2015 at
11:00 a.m. Eastern Time to discuss its first quarter 2015 financial
results. A copy of this press release will be available in the Investor
Relations section of the Company’s website, located at www.tiptreefinancial.com.
The conference call will be available via live or archived webcast at http://www.investors.tiptreefinancial.com.
To listen to a live broadcast, go to the site at least 15 minutes prior
to the scheduled start time in order to register, download and install
any necessary audio software.
To participate in the telephone conference call, please dial
1-877-407-4018 (domestic) or 1-201-689-8471 (international). Please dial
in at least five minutes prior to the start time.
A replay of the call will be available from Monday, May 18, 2015 at
12:00 p.m. Eastern Time, until midnight Eastern on Monday, May 25, 2015.
To listen to the replay, please dial 1-877-870-5176 (domestic) or
1-858-384-5517 (international), Passcode 13609841.
About Tiptree
Tiptree is a diversified holding company engaged through its
consolidated subsidiaries in a number of businesses and is an active
acquirer of new businesses. Tiptree, whose operations date back to 2007,
currently has subsidiaries that operate in five segments: insurance and
insurance services, specialty finance, asset management, real estate and
corporate and other (which includes Tiptree’s principal investments).
Forward-Looking Statements
This release contains “forward-looking statements” which involve risks,
uncertainties and contingencies, many of which are beyond the Company’s
control, which may cause actual results, performance, or achievements to
differ materially from anticipated results, performance, or
achievements. All statements contained in this release that are not
clearly historical in nature are forward-looking, and the words
“anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,”
“plan,” “project,” “should,” “target,” “will,” or similar expressions
are intended to identify forward-looking statements. Such
forward-looking statements include, but are not limited to, statements
about the Company’s plans, objectives, expectations and intentions. The
forward-looking statements are not guarantees of future performance and
are subject to risks, uncertainties and other factors, many of which are
beyond our control, are difficult to predict and could cause actual
results to differ materially from those expressed or forecast in the
forward-looking statements. Our actual results could differ materially
from those anticipated in these forward-looking statements as a result
of various factors, including, but not limited to those described in the
section entitled “Risk Factors” in the Company’s Annual Report on Form
10-K, and as described in the Company’s other filings with the
Securities and Exchange Commission. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as
to the date of this release. The factors described therein are not
necessarily all of the important factors that could cause actual results
or developments to differ materially from those expressed in any of our
forward-looking statements. Other unknown or unpredictable factors also
could affect our forward-looking statements. Consequently, our actual
performance could be materially different from the results described or
anticipated by our forward-looking statements. Given these
uncertainties, you should not place undue reliance on these
forward-looking statements. Except as required by the federal securities
laws, we undertake no obligation to update any forward-looking
statements.
|
|
|
|
|
|
Tiptree Financial Inc.
|
|
|
As of
|
|
Consolidated Statements of Financial Condition (GAAP)
|
|
|
March 31,
|
|
|
December 31,
|
|
(in thousands except per share amounts)
|
|
|
2015
|
|
|
2014
|
|
|
|
|
(Unaudited)
|
|
|
As adjusted
|
|
Cash and cash equivalents – unrestricted
|
|
|
$
|
46,420
|
|
|
|
$
|
52,987
|
|
|
Cash and cash equivalents – restricted
|
|
|
27,701
|
|
|
|
28,045
|
|
|
Trading assets, at fair value
|
|
|
27,490
|
|
|
|
30,163
|
|
|
Investments in available for sale securities, at fair value
|
|
|
176,567
|
|
|
|
171,128
|
|
|
Mortgage loans held for sale, at fair value
|
|
|
51,962
|
|
|
|
28,661
|
|
|
Investments in loans, at fair value
|
|
|
2,545
|
|
|
|
2,601
|
|
|
Loans owned, at amortized cost – net of allowance
|
|
|
43,220
|
|
|
|
36,095
|
|
|
Notes receivable, net
|
|
|
22,030
|
|
|
|
21,916
|
|
|
Accounts and premiums receivable, net
|
|
|
52,104
|
|
|
|
39,666
|
|
|
Reinsurance receivables
|
|
|
276,118
|
|
|
|
264,776
|
|
|
Investments in partially-owned entities
|
|
|
157
|
|
|
|
2,451
|
|
|
Real estate
|
|
|
209,079
|
|
|
|
131,308
|
|
|
Intangible assets
|
|
|
112,981
|
|
|
|
120,394
|
|
|
Other receivables
|
|
|
37,243
|
|
|
|
36,068
|
|
|
Goodwill
|
|
|
92,118
|
|
|
|
92,118
|
|
|
Other assets
|
|
|
58,919
|
|
|
|
36,875
|
|
|
Assets of consolidated CLOs
|
|
|
1,890,002
|
|
|
|
1,978,094
|
|
|
Assets held for sale
|
|
|
5,330,151
|
|
|
|
5,129,745
|
|
|
Total assets
|
|
|
$
|
8,456,807
|
|
|
|
$
|
8,203,091
|
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
Trading liabilities, at fair value
|
|
|
$
|
23,428
|
|
|
|
$
|
22,573
|
|
|
Debt
|
|
|
473,640
|
|
|
|
363,199
|
|
|
Unearned premiums
|
|
|
307,056
|
|
|
|
299,826
|
|
|
Policy liabilities
|
|
|
66,070
|
|
|
|
63,365
|
|
|
Deferred revenue
|
|
|
58,972
|
|
|
|
45,393
|
|
|
Deferred tax liabilities
|
|
|
43,403
|
|
|
|
45,925
|
|
|
Commissions payable
|
|
|
9,950
|
|
|
|
12,983
|
|
|
Other liabilities and accrued expenses
|
|
|
77,848
|
|
|
|
63,928
|
|
|
Liabilities of consolidated CLOs
|
|
|
1,795,415
|
|
|
|
1,877,377
|
|
|
Liabilities held for sale and discontinued operations
|
|
|
5,203,782
|
|
|
|
5,006,901
|
|
|
Total liabilities
|
|
|
$
|
8,059,564
|
|
|
|
$
|
7,801,470
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity:
|
|
|
|
|
|
|
|
Preferred stock
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
Common stock - Class A
|
|
|
32
|
|
|
|
32
|
|
|
Common stock - Class B
|
|
|
10
|
|
|
|
10
|
|
|
Additional paid-in capital
|
|
|
273,014
|
|
|
|
271,090
|
|
|
Accumulated other comprehensive income
|
|
|
1,034
|
|
|
|
(49
|
)
|
|
Retained earnings
|
|
|
11,597
|
|
|
|
13,379
|
|
|
Total stockholders’ equity of Tiptree Financial Inc.
|
|
|
285,687
|
|
|
|
284,462
|
|
|
Non-controlling interests (including $88,341 and $90,144
attributable to Tiptree Financial Partners, L.P., respectively)
|
|
|
111,556
|
|
|
|
117,159
|
|
|
Total stockholders’ equity
|
|
|
397,243
|
|
|
|
401,621
|
|
|
Total liabilities and stockholders’ equity
|
|
|
$
|
8,456,807
|
|
|
|
$
|
8,203,091
|
|
|
|
|
|
|
|
|
|
|
Book Value Per Share - Tiptree Financial Inc.
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
|
2015
|
|
|
2014
|
|
Total stockholders’ equity of Tiptree Financial Inc.
|
|
|
$
|
285,687
|
|
|
|
$
|
284,462
|
|
|
Class A common stock outstanding
|
|
|
31,992
|
|
|
|
31,830
|
|
|
Class A book value per common share (1)
|
|
|
$
|
8.93
|
|
|
|
$
|
8.94
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: (1) See page 10 of this
earnings release for further discussion of book value per common
share.
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|
|
|
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|
|
|
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|
Tiptree Financial Inc.
|
|
|
Three months ended March 31,
|
|
Consolidated Condensed Statements of Operations (GAAP)
|
|
|
2015
|
|
|
2014
|
|
(in thousands, except share and per share data)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
As adjusted
|
|
Revenues:
|
|
|
|
|
|
|
|
Net realized and unrealized gains on investments
|
|
|
$
|
130
|
|
|
|
$
|
989
|
|
|
Interest income
|
|
|
2,296
|
|
|
|
3,992
|
|
|
Net credit derivative loss
|
|
|
(90
|
)
|
|
|
(264
|
)
|
|
Service and administrative fees
|
|
|
21,927
|
|
|
|
—
|
|
|
Ceding commissions
|
|
|
9,937
|
|
|
|
—
|
|
|
Earned premiums, net
|
|
|
37,353
|
|
|
|
—
|
|
|
Gain on sale of loans held for sale, net
|
|
|
2,593
|
|
|
|
975
|
|
|
Loan fee income
|
|
|
1,399
|
|
|
|
429
|
|
|
Rental revenue
|
|
|
9,369
|
|
|
|
4,456
|
|
|
Other income
|
|
|
3,096
|
|
|
|
289
|
|
|
Total revenue
|
|
|
88,010
|
|
|
|
10,866
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
Interest expense
|
|
|
5,129
|
|
|
|
2,814
|
|
|
Payroll and employee commissions
|
|
|
20,341
|
|
|
|
5,715
|
|
|
Commission expense
|
|
|
16,528
|
|
|
|
—
|
|
|
Member benefit claims
|
|
|
7,579
|
|
|
|
—
|
|
|
Net losses and loss adjustment expenses
|
|
|
12,450
|
|
|
|
—
|
|
|
Professional fees
|
|
|
4,628
|
|
|
|
1,074
|
|
|
Depreciation and amortization expenses
|
|
|
15,464
|
|
|
|
1,668
|
|
|
Acquisition costs
|
|
|
1,349
|
|
|
|
—
|
|
|
Other expenses
|
|
|
11,144
|
|
|
|
2,578
|
|
|
Total expense
|
|
|
94,612
|
|
|
|
13,849
|
|
|
|
|
|
|
|
|
|
|
Results of consolidated CLOs:
|
|
|
|
|
|
|
|
Income attributable to consolidated CLOs
|
|
|
15,663
|
|
|
|
14,615
|
|
|
Expenses attributable to consolidated CLOs
|
|
|
14,921
|
|
|
|
9,972
|
|
|
Net Income attributable to consolidated CLOs
|
|
|
742
|
|
|
|
4,643
|
|
|
(Loss) income before taxes from continuing operations
|
|
|
(5,860
|
)
|
|
|
1,660
|
|
|
Less: Provision for income taxes
|
|
|
(1,496
|
)
|
|
|
(652
|
)
|
|
(Loss) income from continuing operations
|
|
|
(4,364
|
)
|
|
|
2,312
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations:
|
|
|
|
|
|
|
|
Income from discontinued operations, net
|
|
|
2,345
|
|
|
|
1,290
|
|
|
Discontinued operations, net
|
|
|
2,345
|
|
|
|
1,290
|
|
|
Net (loss) income before non-controlling interests
|
|
|
(2,019
|
)
|
|
|
3,602
|
|
|
Less: net (loss) income attributable to noncontrolling interests -
Tiptree Financial Partners, L.P.
|
|
|
(860
|
)
|
|
|
2,306
|
|
|
Less: net (loss) attributable to noncontrolling interests - Other
|
|
|
(180
|
)
|
|
|
(330
|
)
|
|
Net (loss) income available to common stockholders
|
|
|
$
|
(979
|
)
|
|
|
$
|
1,626
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per Class A common
share:
|
|
|
|
|
|
|
|
Basic, continuing operations, net
|
|
|
$
|
(0.08
|
)
|
|
|
$
|
0.12
|
|
|
Basic, discontinued operations, net
|
|
|
0.05
|
|
|
|
0.03
|
|
|
Net income basic
|
|
|
(0.03
|
)
|
|
|
0.15
|
|
|
|
|
|
|
|
|
|
|
Diluted, continuing operations, net
|
|
|
(0.08
|
)
|
|
|
0.12
|
|
|
Diluted, discontinued operations, net
|
|
|
0.05
|
|
|
|
0.03
|
|
|
Net income dilutive
|
|
|
$
|
(0.03
|
)
|
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of Class A common
shares:
|
|
|
|
|
|
|
|
Basic
|
|
|
32,138,455
|
|
|
|
10,586,587
|
|
|
Diluted
|
|
|
32,138,455
|
|
|
|
10,586,587
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tiptree Financial Inc.
Segment Statement of Operations
(unaudited)
(in thousands)
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2015
|
|
|
|
|
Insurance and insurance services(1)
|
|
|
Specialty finance
|
|
|
Asset management
|
|
|
Real estate
|
|
|
Corporate and other
|
|
|
Totals
|
|
Net realized and unrealized gains on investments
|
|
|
$
|
(5
|
)
|
|
|
$
|
853
|
|
|
|
$
|
—
|
|
|
|
$
|
(485
|
)
|
|
|
$
|
(233
|
)
|
|
|
$
|
130
|
|
|
Interest income
|
|
|
712
|
|
|
|
1,353
|
|
|
|
—
|
|
|
|
19
|
|
|
|
212
|
|
|
|
2,296
|
|
|
Net credit derivative loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(90
|
)
|
|
|
(90
|
)
|
|
Service and administrative fees
|
|
|
21,927
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
21,927
|
|
|
Ceding commissions
|
|
|
9,937
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
9,937
|
|
|
Earned premiums, net
|
|
|
37,353
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
37,353
|
|
|
Gain on sale of loans held for sale, net
|
|
|
—
|
|
|
|
2,593
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,593
|
|
|
Loan fee income
|
|
|
—
|
|
|
|
1,399
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,399
|
|
|
Rental revenue
|
|
|
—
|
|
|
|
17
|
|
|
|
—
|
|
|
|
9,352
|
|
|
|
—
|
|
|
|
9,369
|
|
|
Other income
|
|
|
2,455
|
|
|
|
40
|
|
|
|
63
|
|
|
|
538
|
|
|
|
—
|
|
|
|
3,096
|
|
|
Total revenue
|
|
|
$
|
72,379
|
|
|
|
$
|
6,255
|
|
|
|
$
|
63
|
|
|
|
$
|
9,424
|
|
|
|
$
|
(111
|
)
|
|
|
$
|
88,010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
$
|
1,739
|
|
|
|
$
|
511
|
|
|
|
$
|
—
|
|
|
|
$
|
1,330
|
|
|
|
$
|
1,549
|
|
|
|
$
|
5,129
|
|
|
Payroll and employee commissions
|
|
|
10,405
|
|
|
|
3,724
|
|
|
|
548
|
|
|
|
3,923
|
|
|
|
1,741
|
|
|
|
20,341
|
|
|
Commission expense
|
|
|
16,528
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
16,528
|
|
|
Member benefit claims
|
|
|
7,579
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7,579
|
|
|
Net losses and loss adjustment expenses
|
|
|
12,450
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
12,450
|
|
|
Professional fees
|
|
|
1,984
|
|
|
|
257
|
|
|
|
38
|
|
|
|
179
|
|
|
|
2,170
|
|
|
|
4,628
|
|
|
Depreciation and amortization expenses
|
|
|
11,954
|
|
|
|
122
|
|
|
|
—
|
|
|
|
3,388
|
|
|
|
—
|
|
|
|
15,464
|
|
|
Acquisition costs
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,349
|
|
|
|
—
|
|
|
|
1,349
|
|
|
Other expenses
|
|
|
5,714
|
|
|
|
1,206
|
|
|
|
124
|
|
|
|
3,436
|
|
|
|
664
|
|
|
|
11,144
|
|
|
Total expense
|
|
|
68,353
|
|
|
|
5,820
|
|
|
|
710
|
|
|
|
13,605
|
|
|
|
6,124
|
|
|
|
94,612
|
|
|
Net income attributable to consolidated CLOs(2)
|
|
|
—
|
|
|
|
—
|
|
|
|
2,821
|
|
|
|
—
|
|
|
|
(2,079
|
)
|
|
|
742
|
|
|
Segment profit/(loss)
|
|
|
$
|
4,026
|
|
|
|
$
|
435
|
|
|
|
$
|
2,174
|
|
|
|
$
|
(4,181
|
)
|
|
|
$
|
(8,314
|
)
|
|
|
$
|
(5,860
|
)
|
|
Less: Provision for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,496
|
)
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,345
|
|
|
Net income before non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(2,019
|
)
|
|
Less: net (loss) attributable to noncontrolling interests from
continuing operations and discontinued operations - Tiptree
Financial Partners, L.P.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(860
|
)
|
|
Less: net (loss) attributable to noncontrolling interests from
continuing operations and discontinued operations - Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(180
|
)
|
|
Net (loss) income available to common stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(979
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Assets as of March 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment assets
|
|
|
$
|
795,071
|
|
|
|
$
|
108,905
|
|
|
|
$
|
2,985
|
|
|
|
$
|
265,661
|
|
|
|
$
|
64,032
|
|
|
|
$
|
1,236,654
|
|
|
Assets of consolidated CLOs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,890,002
|
|
|
Assets held for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,330,151
|
|
|
Total assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
8,456,807
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
|
|
|
(1) The revenues and expenses associated with PFG are reported in
Discontinued Operations.
|
|
|
|
(2) Net income attributable to CLO’s represents the Company’s
interest in the CLOs it manages. These interests have been allocated
to asset management fees of $2.8 million earned by the Company and
net realized and unrealized gains/losses and distributions of $(2.1)
million received from the subordinated notes and interest-only
positions of the CLOs held by the Company.
|
|
|
|
|
|
|
|
|
Tiptree Financial Inc.
Segment Statement of Operations
(unaudited)
(in thousands)
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2014 (as adjusted)
|
|
|
|
|
Insurance and insurance services(1)
|
|
|
Specialty finance
|
|
Asset management
|
|
|
Real estate
|
|
|
Corporate and other
|
|
|
Totals
|
|
Net realized and unrealized gains on investments
|
|
|
$
|
—
|
|
|
|
$
|
52
|
|
|
$
|
—
|
|
|
|
$
|
(309
|
)
|
|
|
$
|
1,246
|
|
|
|
$
|
989
|
|
|
Interest income
|
|
|
—
|
|
|
|
454
|
|
|
—
|
|
|
|
683
|
|
|
|
2,855
|
|
|
|
3,992
|
|
|
Net credit derivative loss
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
(264
|
)
|
|
|
(264
|
)
|
|
Gain on sale of loans held for sale, net
|
|
|
—
|
|
|
|
975
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
975
|
|
|
Loan fee income
|
|
|
—
|
|
|
|
429
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
429
|
|
|
Rental revenue
|
|
|
—
|
|
|
|
10
|
|
|
—
|
|
|
|
4,446
|
|
|
|
—
|
|
|
|
4,456
|
|
|
Other income
|
|
|
—
|
|
|
|
1
|
|
|
94
|
|
|
|
194
|
|
|
|
—
|
|
|
|
289
|
|
|
Total revenue
|
|
|
—
|
|
|
|
1,921
|
|
|
94
|
|
|
|
5,014
|
|
|
|
3,837
|
|
|
|
10,866
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
—
|
|
|
|
144
|
|
|
—
|
|
|
|
978
|
|
|
|
1,692
|
|
|
|
2,814
|
|
|
Payroll and employee commissions
|
|
|
—
|
|
|
|
1,593
|
|
|
706
|
|
|
|
1,798
|
|
|
|
1,618
|
|
|
|
5,715
|
|
|
Professional fees
|
|
|
—
|
|
|
|
181
|
|
|
45
|
|
|
|
55
|
|
|
|
793
|
|
|
|
1,074
|
|
|
Depreciation and amortization expenses
|
|
|
—
|
|
|
|
110
|
|
|
—
|
|
|
|
1,558
|
|
|
|
—
|
|
|
|
1,668
|
|
|
Other expenses
|
|
|
—
|
|
|
|
551
|
|
|
145
|
|
|
|
1,389
|
|
|
|
493
|
|
|
|
2,578
|
|
|
Total expense
|
|
|
—
|
|
|
|
2,579
|
|
|
896
|
|
|
|
5,778
|
|
|
|
4,596
|
|
|
|
13,849
|
|
|
Net intersegment revenue/(expense)
|
|
|
—
|
|
|
|
(78
|
)
|
|
—
|
|
|
|
—
|
|
|
|
78
|
|
|
|
—
|
|
|
Net income attributable to consolidated CLOs(2)
|
|
|
—
|
|
|
|
—
|
|
|
3,121
|
|
|
|
—
|
|
|
|
1,522
|
|
|
|
4,643
|
|
|
Segment profit/(loss)
|
|
|
—
|
|
|
|
(736
|
)
|
|
2,319
|
|
|
|
(764
|
)
|
|
|
841
|
|
|
|
1,660
|
|
|
Less: Provision for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(652
|
)
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,290
|
|
|
Net income before non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,602
|
|
|
Less: net income attributable to noncontrolling interests from
continuing operations and discontinued operations - Tiptree
Financial Partners, L.P.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,306
|
|
|
Less: net (loss) attributable to noncontrolling interests from
continuing operations and discontinued operations - Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(330
|
)
|
|
Net income available to common stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,626
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Assets as of December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment assets
|
|
|
$
|
767,914
|
|
|
|
$
|
79,075
|
|
|
$
|
2,871
|
|
|
|
$
|
179,822
|
|
|
|
$
|
65,570
|
|
|
|
$
|
1,095,252
|
|
|
Assets of consolidated CLOs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,978,094
|
|
|
Assets held for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,129,745
|
|
|
Total assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
8,203,091
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
|
|
|
(1) The revenues and expenses associated with PFG are reported in
Discontinued Operations. There is no activity reported in the first
quarter of 2014 for this segment as Tiptree acquired Fortegra on
December 4, 2014.
|
|
|
|
(2) Net income attributable to CLO’s represents the Company’s
interests in the CLOs it manages. These interests have been
allocated to asset management fees of $3.1 million earned by the
Company and the net realized and unrealized gains/losses and
distributions of $1.5 million received from the subordinated notes
of the CLOs and interest-only positions held by the Company.
|
|
|
Tiptree Financial Inc.
Non-GAAP Financial Measures
(in thousands)
Non-GAAP Financial Measures - EBITDA and
Adjusted EBITDA
In addition to the results of operations presented in accordance with
GAAP, management uses EBITDA and Adjusted EBITDA, which are non-GAAP
financial measures. We believe that EBITDA and Adjusted EBITDA provide
supplemental information useful to investors as it is frequently used by
the financial community to analyze performance period to period, to
analyze a company’s ability to service its debt and to facilitate
comparison among companies. EBITDA and Adjusted EBITDA are not a
measurement of financial performance or liquidity under GAAP; therefore,
EBITDA and Adjusted EBITDA should not be considered as an alternative or
substitute for GAAP. Our presentation of EBITDA and Adjusted EBITDA may
differ from similarly titled non-GAAP financial measures used by other
companies. We define EBITDA as GAAP net income of the Company adjusted
to add consolidated interest expense, consolidated income taxes and
consolidated depreciation and amortization expense as presented in our
financial statements and Adjusted EBITDA as EBITDA adjusted to (i)
subtract interest expense on asset-specific debt incurred in the
ordinary course of our subsidiaries business operations, (ii) adjust for
the effect of purchase accounting and (iii) add significant acquisition
related costs.
|
|
|
Reconciliation from the Company’s GAAP net income to
Non-GAAP financial measures - EBITDA and Adjusted EBITDA
|
|
(in thousands)
|
|
|
Three months ended March 31,
|
|
|
Year ended December 31,
|
|
|
|
|
2015
|
|
|
2014
|
|
|
2014
|
|
Net (loss) income available to Class A common stockholders
|
|
|
$
|
(979
|
)
|
|
|
$
|
1,626
|
|
|
|
$
|
(1,710
|
)
|
|
Add: net (loss) income attributable to noncontrolling interests -
Tiptree Financial Partners, L.P.
|
|
|
(860
|
)
|
|
|
2,306
|
|
|
|
6,791
|
|
|
Add: net (loss) attributable to noncontrolling interests - Other
|
|
|
(180
|
)
|
|
|
(330
|
)
|
|
|
(497
|
)
|
|
Less: net income from discontinued operations
|
|
|
2,345
|
|
|
|
1,290
|
|
|
|
(7,937
|
)
|
|
Income (loss) from Continuing Operations of the Company
|
|
|
$
|
(4,364
|
)
|
|
|
$
|
2,312
|
|
|
|
$
|
(3,353
|
)
|
|
Consolidated interest expense
|
|
|
5,129
|
|
|
|
2,814
|
|
|
|
12,541
|
|
|
Consolidated income taxes
|
|
|
(1,496
|
)
|
|
|
(652
|
)
|
|
|
4,141
|
|
|
Consolidated depreciation and amortization expense
|
|
|
15,464
|
|
|
|
1,668
|
|
|
|
11,945
|
|
|
EBITDA for Continuing Operations
|
|
|
$
|
14,733
|
|
|
|
$
|
6,142
|
|
|
|
$
|
25,274
|
|
|
Consolidated non-corporate and non-acquisition related interest
expense(1)
|
|
|
(1,841
|
)
|
|
|
(1,649
|
)
|
|
|
(7,236
|
)
|
|
Effects of Purchase Accounting related to the Fortegra acquisition(2)
|
|
|
(9,483
|
)
|
|
|
—
|
|
|
|
(4,168
|
)
|
|
Significant acquisition related costs(3)
|
|
|
1,349
|
|
|
|
—
|
|
|
|
6,121
|
|
|
Subtotal Adjusted EBITDA for Continuing Operations of the Company
|
|
|
$
|
4,758
|
|
|
|
$
|
4,493
|
|
|
|
$
|
19,991
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Discontinued Operations of the Company(4)
|
|
|
$
|
2,345
|
|
|
|
$
|
1,290
|
|
|
|
$
|
7,937
|
|
|
Consolidated interest expense
|
|
|
2,654
|
|
|
|
2,914
|
|
|
|
11,475
|
|
|
Consolidated income taxes
|
|
|
2,742
|
|
|
|
1,081
|
|
|
|
5,525
|
|
|
Consolidated depreciation and amortization expense
|
|
|
457
|
|
|
|
803
|
|
|
|
4,379
|
|
|
EBITDA for Discontinued Operations
|
|
|
$
|
8,198
|
|
|
|
$
|
6,088
|
|
|
|
$
|
29,316
|
|
|
Consolidated non-corporate and non-acquisition related interest
expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Significant relocation costs(5)
|
|
|
—
|
|
|
|
—
|
|
|
|
5,477
|
|
|
Subtotal Adjusted EBITDA for Discontinued Operations of the
Company
|
|
|
$
|
8,198
|
|
|
|
$
|
6,088
|
|
|
|
$
|
34,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Adjusted EBITDA of the Company
|
|
|
$
|
12,956
|
|
|
|
$
|
10,581
|
|
|
|
$
|
54,784
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
|
|
|
|
|
(1)
|
|
The consolidated non-corporate and non-acquisition related
interest expense is subtracted from EBITDA to arrive at Adjusted
EBITDA. This includes interest expense associated with
asset-specific debt at subsidiaries in the Specialty Finance and
Real Estate segments. For the quarter ended March 31, 2015,
interest expense for the asset-specific debt was $511 thousand for
Specialty Finance and $1.3 million for Real Estate, totaling $1.8
million (as adjusted above). For the quarter ended March 31, 2014,
interest expense for the asset-specific debt was $144 thousand for
Specialty Finance, $978 thousand for Real Estate, and $527
thousand for Corporate and Other segments, totaling $1.6 million
(as adjusted above).
|
|
|
|
|
|
(2)
|
|
Tiptree’s purchase of Fortegra resulted in a number of purchase
accounting adjustments being made as of the date of acquisition,
which included setting deferred asset costs to a fair value of
zero, modifying deferred revenue liabilities to their respective
fair values, and recording a substantial intangible asset
representing the value of the acquired insurance policies and
contracts reflecting the historical basis of accounting related to
the value of business acquired adjustments.
|
|
|
|
|
|
(3)
|
|
Significant acquisition related costs in connection with Care’s
acquisition of the Royal Portfolio and Greenfield II Portfolio
properties included taxes of $504 thousand, legal costs of $414
thousand and $431 thousand of other property acquisition expenses.
|
|
|
|
|
|
(4)
|
|
See Note 5—Dispositions, Asset Held for Sale and Discontinued
Operations, in the consolidated financial statements contained in
Tiptree Financial’s form 10-Q for the quarter ended March 31,
2015, for further discussion of discontinued operations.
|
|
|
|
|
|
(5)
|
|
Significant relocation costs for discontinued operations included
expenses incurred in connection with the move of PFAS’s physical
location from New Jersey to Philadelphia for the year ended
December 31, 2014.
|
|
|
|
|
Tiptree Financial Inc. and the Company
Book Value Per
Share
(in thousands, except per share amounts)
Tiptree Financial’s book value per share was $8.93 as of March 31, 2015
compared with $8.94 as of December 31, 2014. Total stockholders' equity
for the Company was $377.6 million as of March 31, 2015, which comprised
total stockholders' equity of $397.2 million adjusted for $23.2 million
attributable to non-controlling interest at subsidiaries that are not
wholly owned by the Company, such as Siena, Luxury and Care, and net
liabilities of $3.6 million wholly owned by Tiptree Financial Inc. Total
stockholders' equity for the Company was $381.3 million as of December
31, 2014, which comprised total stockholders' equity of $401.7 million
adjusted for $27.1 million attributable to non-controlling interest at
subsidiaries that are not wholly owned by the Company and net
liabilities of $6.7 million wholly owned by Tiptree Financial Inc.
Additionally, the Company’s book value per share is based upon Class A
common shares outstanding, plus Class A common stock issuable upon
exchange of partnership units of TFP. The total shares as of March 31,
2015 and December 31, 2014 were 41.7 million and 41.6 million,
respectively.
Tiptree Financial’s Class A book value per common share and the
Company’s book value per share are presented below.
|
|
|
Book value per share - Tiptree Financial
|
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
|
2015
|
|
|
2014
|
|
Total stockholders’ equity of Tiptree Financial
|
|
|
$
|
285,687
|
|
|
|
$
|
284,462
|
|
Class A common stock outstanding
|
|
|
31,992
|
|
|
|
31,830
|
|
Class A book value per common share (1)
|
|
|
$
|
8.93
|
|
|
|
$
|
8.94
|
|
|
|
|
|
|
|
|
|
Book value per share - the Company
|
|
|
|
|
|
|
|
Total stockholders’ equity of the Company
|
|
|
$
|
377,607
|
|
|
|
$
|
381,300
|
|
|
|
|
|
|
|
|
|
Class A common stock outstanding
|
|
|
31,992
|
|
|
|
31,830
|
|
Class A common stock issuable upon exchange of partnership units of
TFP
|
|
|
9,770
|
|
|
|
9,770
|
|
Total shares
|
|
|
41,762
|
|
|
|
41,600
|
|
|
|
|
|
|
|
|
|
Company book value per share
|
|
|
$
|
9.04
|
|
|
|
$
|
9.17
|
|
|
Notes:
(1) See Note 24—Earnings per Share, in the Form 10-Q for the quarter
ended March 31, 2015, for further discussion of potential dilution from
warrants.
Copyright Business Wire 2015