DALLAS, Nov. 13, 2023 (GLOBE NEWSWIRE) -- Beneficient (NASDAQ: BENF) (“Ben” or the “Company”), a technology-enabled financial services holding company that provides liquidity and related trust and custody services to holders of alternative assets, today reported its financial results for second quarter fiscal 2024.
“We are excited by the progress we have made in our second quarter since the Company’s successful public listing. These positive efforts and results are a testament to our unique business model, innovative product offerings and execution by our team to deliver liquidity solutions to customers,” stated Brad K. Heppner, Ben's Chief Executive Officer & Chairman. “We remain committed and laser focused on innovation and expanding our product offerings to provide end-to-end regulated transactions that are swift, secure, and price-certain. We continue to execute on our long-term strategic priorities to drive long-term shareholder value and growth.”
Business Segments: Second Quarter Fiscal 2024
Ben Liquidity
- New liquidity transactions closed during the period totaled a net asset value of $44.4 million, which represents 9.1% in growth compared to the net asset value existing as of the end of the prior quarter.
- Revenues of $13.0 million, up 19.5% from the prior year period, driven primarily by an increase in interest earned on new liquidity transactions originating during the period.
- Operating loss for the period was $(272.1) million, compared to operating income of $24.2 million in the prior year period. The change was primarily due to non-cash goodwill impairment and negative credit loss adjustments, principally related to securities of our former parent company in the current period.
- Adjusted operating loss(1) for the period was $4.7 million, compared to a loss of $1.4 million in the prior year period. The change was primarily due to additional interest expense.
Ben Custody
- Total new assets held in custody during the period grew by $44.4 million, which represents 9.1% in growth compared to the net asset value existing as of the end of the prior quarter. The growth was driven by the new liquidity transactions of Ben Liquidity.
- Net asset value of alternative assets and other securities held in custody during the period was $457.5 million, compared to $491.9 million as of March 31, 2023. The change was driven by unrealized losses on existing assets, principally related to interests in a wind down trust for a bankrupt entity related to our former parent company, and distributions offset by the new liquidity transactions during the period.
- Revenues of $6.5 million for the period, compared to $7.8 million in the prior year period. The change was as a result of lower net asset values held in custody.
- Operating loss for the period was $(80.8) million, compared to operating income of $6.3 million in the prior year period. The change was primarily due to non-cash goodwill impairment in the current period.
- Adjusted operating income(1) for the period was $5.6 million, compared to $6.3 million in the prior year period. The change was primarily due to a change in revenue due to lower net asset values held in custody.
Capital and Liquidity
- At September 30, 2023, the Company had cash and cash equivalents of $2.4 million and total debt of $150.8 million.
- Distributions received from alternative assets and other securities held in custody totaled $26.3 million for the six months ended September 30, 2023, compared to $27.5 million for the six months ended September 30, 2022.
(1) Represents a non-GAAP financial measure.For reconciliations of our non-GAAP measures to the most directly comparable GAAP financial measures and for the reasons we believe the non-GAAP measures provide useful information, see Non-GAAP Reconciliations.
Consolidated Fiscal Second Quarter Results
Table 1 below presents a summary of selected unaudited consolidated operating financial information.
Consolidated Fiscal Second Quarter Results
($ in thousands, except share and per share amounts) |
Fiscal 2Q24
Three Months Ended
September 30, 2023 |
Fiscal 2Q23
Three Months Ended
September 30, 2022 |
Change % |
| GAAP Revenues |
$ |
(42,761 |
) |
$ |
(37,945 |
) |
(12.7)% |
| Adjusted GAAP Revenues (1) |
|
(801 |
) |
|
(10,186 |
) |
92.1% |
| GAAP Operating Loss |
|
(381,764 |
) |
|
(73,000 |
) |
NM |
| Adjusted GAAP Operating Loss (1) |
|
(21,170 |
) |
|
(33,949 |
) |
37.6% |
| Diluted Class A EPS |
$ |
(1.45 |
) |
$ |
(0.03 |
) |
NM |
| Segment Revenues attributable to Ben's Equity Holders (2) |
|
18,629 |
|
|
14,196 |
|
31.2% |
| Adjusted Segment Revenues attributable to Ben's Equity Holders (1)(2) |
|
19,066 |
|
|
19,821 |
|
(3.8)% |
| Segment Operating Income (Loss) attributable to Ben's Equity Holders |
|
(378,172 |
) |
|
736 |
|
NM |
| Adjusted Segment Operating Loss attributable to Ben's Equity Holders (1)(2) |
$ |
(11,960 |
) |
$ |
(7,951 |
) |
(50.4)% |
NM - Not meaningful.
- Adjusted GAAP Revenues, Adjusted GAAP Operating Income (Loss), Adjusted Segment Revenues attributable to Ben's Equity Holders and Adjusted Segment Operating Income (Loss) attributable to Ben's Equity Holders are non-GAAP financial measures. For reconciliations of our non-GAAP measures to the most directly comparable GAAP financial measures and for the reasons we believe the non-GAAP measures provide useful information, see Non-GAAP Reconciliations.
- Segment financial information attributable to Ben’s equity holders is presented to provide users of our financial information an understanding and visual aide of the segment information (revenues, operating income (loss), adjusted operating income (loss)) that impacts Ben’s Equity Holders. Ben’s Equity Holders refers to the holders of Beneficient Class A and Class B common stock and Series B-1 Preferred Stock as well as holders of interests in BCH which represent noncontrolling interests. For a description of noncontrolling interests, see Item 2 of our Quarterly Report on Form 10-Q for the six months ended September 30, 2023, and Reconciliation of Business Segment Information Attributable to Ben’s Equity Holders to Net Income Attributable to Ben Common Holders. Such information is computed as the sum of the Ben Liquidity, Ben Custody and Corp/Other segments since it is the operating results of those segments that determines the net income (loss) attributable to Ben’s Equity Holders. See further information in table 5 and Non-GAAP Reconciliations.
Table 2 below presents a summary of selected unaudited consolidated balance sheet information.
Consolidated Fiscal Second Quarter Results
($ in thousands) |
Fiscal 2Q24
As of
September 30, 2023 |
Fiscal 4Q23
As of
March 31, 2023 |
Change % |
| Investments, at Fair Value |
$ |
457,771 |
$ |
497,221 |
(7.9)% |
| Other Assets |
|
31,197 |
|
42,448 |
(26.5)% |
| Goodwill and Intangible Assets, Net |
|
968,037 |
|
2,371,026 |
(59.2)% |
| Total Assets |
$ |
1,457,005 |
$ |
2,910,695 |
(49.9)% |
Business Segment Information Attributable to Ben's Equity Holders(1)
Table 3 below presents unaudited segment revenues and segment operating income (loss) for business segments attributable to Ben's equity holders.
Segment Revenues Attributable to Ben's Equity Holders(1)
($ in thousands) |
Fiscal 2Q24
Three Months Ended
September 30, 2023 |
Fiscal 2Q23
Three Months Ended
September 30, 2022 |
Change % |
| Ben Liquidity |
$ |
13,022 |
|
$ |
10,894 |
|
19.5% |
| Ben Custody |
|
6,490 |
|
|
7,775 |
|
(16.5)% |
| Corporate & Other |
|
(883 |
) |
|
(4,473 |
) |
80.3% |
| Total Segment Revenues Attributable to Ben's Equity Holders(1) |
$ |
18,629 |
|
$ |
14,196 |
|
31.2% |
Segment Operating Income (Loss) Attributable to Ben's Equity Holders(1)
($ in thousands) |
Fiscal 2Q24
Three Months Ended
September 30, 2023 |
Fiscal 2Q23
Three Months Ended
September 30, 2022 |
Change % |
| Ben Liquidity |
$ |
(272,091 |
) |
$ |
24,211 |
|
NM |
| Ben Custody |
|
(80,847 |
) |
|
6,274 |
|
NM |
| Corporate & Other |
|
(25,234 |
) |
|
(29,749 |
) |
15.2% |
| Total Segment Operating Income (Loss) Attributable to Ben's Equity Holders(1) |
$ |
(378,172 |
) |
$ |
736 |
|
NM |
NM - Not meaningful.
- Segment financial information attributable to Ben’s equity holders is presented to provide users of our financial information an understanding and visual aide of the segment information (revenues, operating income (loss), adjusted operating income (loss)) that impacts Ben’s Equity Holders. Ben’s Equity Holders refers to the holders of Beneficient Class A and Class B common stock and Series B-1 Preferred Stock as well as holders of interests in BCH which represent noncontrolling interests. For a description of noncontrolling interests, see Item 2 of our Quarterly Report on Form 10-Q for the six months ended September 30, 2023, and Reconciliation of Business Segment Information Attributable to Ben’s Equity Holders to Net Income Attributable to Ben Common Holders. Such information is computed as the sum of the Ben Liquidity, Ben Custody and Corp/Other segments since it is the operating results of those segments that determines the net income (loss) attributable to Ben’s Equity Holders. See further information in table 5 and Non-GAAP Reconciliations.
Adjusted Business Segment Information Attributable to Ben's Equity Holders(2)
Table 4 below presents unaudited adjusted segment revenue and adjusted segment operating income (loss) for business segments attributable to Ben's equity holders.
Adjusted Segment Revenues Attributable to Ben's Equity Holders(1)(2)
($ in thousands) |
Fiscal 2Q24
Three Months Ended
September 30, 2023 |
Fiscal 2Q23
Three Months Ended
September 30, 2022 |
Change % |
| Ben Liquidity |
$ |
13,022 |
|
$ |
10,894 |
19.5% |
| Ben Custody |
|
6,490 |
|
|
7,775 |
(16.5)% |
| Corporate & Other |
|
(446 |
) |
|
1,152 |
NM |
| Total Adjusted Segment Revenues Attributable to Ben's Equity Holders(1)(2) |
$ |
19,066 |
|
$ |
19,821 |
(3.8)% |
Adjusted Segment Operating Income (Loss) Attributable to Ben's Equity Holders(1)(2)
($ in thousands) |
Fiscal 2Q24
Three Months Ended
September 30, 2023 |
Fiscal 2Q23
Three Months Ended
September 30, 2022 |
Change % |
| Ben Liquidity |
$ |
(4,738 |
) |
$ |
(1,393 |
) |
NM |
| Ben Custody |
|
5,625 |
|
|
6,274 |
|
(10.3)% |
| Corporate & Other |
|
(12,847 |
) |
|
(12,832 |
) |
(0.1)% |
| Total Adjusted Segment Operating Income (Loss) Attributable to Ben's Equity Holders(1)(2) |
$ |
(11,960 |
) |
$ |
(7,951 |
) |
(50.4)% |
NM - Not meaningful.
- Adjusted GAAP Revenues, Adjusted GAAP Operating Income (Loss), Adjusted Segment Revenues attributable to Ben's Equity Holders and Adjusted Segment Operating Income (Loss) attributable to Ben's Equity Holders are non-GAAP financial measures. For reconciliations of our non-GAAP measures to the most directly comparable GAAP financial measures and for the reasons we believe the non-GAAP measures provide useful information, see Non-GAAP Reconciliations.
- Segment financial information attributable to Ben’s equity holders is presented to provide users of our financial information an understanding and visual aide of the segment information (revenues, operating income (loss), adjusted operating income (loss)) that impacts Ben’s Equity Holders. Ben’s Equity Holders refers to the holders of Beneficient Class A and Class B common stock and Series B-1 Preferred Stock as well as holders of interests in BCH which represent noncontrolling interests. For a description of noncontrolling interests, see Item 2 of our Quarterly Report on Form 10-Q for the six months ended September 30, 2023, and Reconciliation of Business Segment Information Attributable to Ben’s Equity Holders to Net Income Attributable to Ben Common Holders. Such information is computed as the sum of the Ben Liquidity, Ben Custody and Corp/Other segments since it is the operating results of those segments that determines the net income (loss) attributable to Ben’s Equity Holders. See further information in table 5 and Non-GAAP Reconciliations.
Reconciliation of Business Segment Information Attributable to Ben's Equity Holders to Net Income Attributable to Ben Common Shareholders
Table 5 below presents reconciliation of operating income (loss) by business segment attributable to Ben's Equity Holders to net income (loss) attributable to Ben common shareholders.
Reconciliation of Business Segments to Net Income (Loss) to Ben Common Shareholders
($ in thousands) |
Fiscal 2Q24
September 30, 2023 |
Fiscal 2Q23
September 30, 2022 |
| Ben Liquidity |
$ |
(272,091 |
) |
$ |
24,211 |
|
| Ben Custody |
|
(80,847 |
) |
|
6,274 |
|
| Corporate & Other |
|
(25,234 |
) |
|
(29,749 |
) |
| Less: Income Tax Expense (Benefit) |
|
0 |
|
|
887 |
|
| Less: Net (income) loss attributable to noncontrolling interests - Ben |
|
10,604 |
|
|
(192 |
) |
| Less: Net income attributable to noncontrolling interests - CT |
|
0 |
|
|
(893 |
) |
| Less: Noncontrolling interest guaranteed payment |
|
(4,167 |
) |
|
(3,926 |
) |
| Net loss attributable to Ben's common shareholders |
$ |
(371,735 |
) |
$ |
(5,162 |
) |
Earnings Webcast
Beneficient will host a webcast and conference call to review its second-quarter financial results today, November 13, 2023, at 5:00 pm eastern time. The webcast will be available via live webcast from the Investor Relations section of the Company’s website at https://shareholders.trustben.com under Events.
Replay
The webcast will be archived on the Company’s website in the investor relations section for replay.
About Beneficient
Beneficient (Nasdaq: BENF) – Ben, for short – is on a mission to democratize the global alternative asset investment market by providing traditionally underserved investors − mid-to-high net worth individuals, small-to-midsized institutions and General Partners seeking exit options, anchor commitments and valued-added services for their funds − with solutions that could help them unlock the value in their alternative assets. Ben’s AltQuote™ tool provides customers with a range of potential exit options within minutes, while customers can log on to the AltAccess® portal to explore opportunities and receive proposals in a secure online environment.
Its subsidiary, Beneficient Fiduciary Financial, L.L.C., received its charter under the State of Kansas’ Technology-Enabled Fiduciary Financial Institution (TEFFI) Act and is subject to regulatory oversight by the Office of the State Bank Commissioner.
For more information, visit www.trustben.com or follow us on LinkedIn.
Investors
investors@beneficient.com
Media
Longacre Square Partners
Greg Marose / Dan Zacchei
beneficient@longacresquare.com
Disclaimer and Cautionary Note Regarding Forward-Looking Statements
Some of the statements contained in this press release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are generally identified by the use of words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and, in each case, their negative or other various or comparable terminology. These forward-looking statements reflect our views with respect to future events as of the date of this document and are based on our management’s current expectations, estimates, forecasts, projections, assumptions, beliefs and information. Although management believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. All such forward-looking statements are subject to risks and uncertainties, many of which are outside of our control, and could cause future events or results to be materially different from those stated or implied in this document. It is not possible to predict or identify all such risks. These risks include, but are not limited to, our ability to consummate liquidity transactions on terms desirable for the Company, or at all, and the risk factors that are described under the section titled “Risk Factors” in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other filings with the Securities and Exchange Commission (the “SEC”). These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this document and in our SEC filings. We expressly disclaim any obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law.
Table 6: CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
|
Three Months Ended
September 30, |
|
Six Months Ended
September 30, |
| (Dollars in thousands, except per share amounts) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Revenues |
|
|
|
|
|
|
|
| Investment income (loss), net |
$ |
(13 |
) |
|
$ |
(17,099 |
) |
|
$ |
487 |
|
|
$ |
(42,216 |
) |
| Loss on financial instruments, net (related party of $(41,960), $(27,759), $(45,526), and $(42,564), respectively) |
|
(42,775 |
) |
|
|
(21,037 |
) |
|
|
(46,236 |
) |
|
|
(33,058 |
) |
| Interest and dividend income |
|
114 |
|
|
|
97 |
|
|
|
230 |
|
|
|
182 |
|
| Trust services and administration revenues (related party of $8, $8, $15, and $15, respectively) |
|
(87 |
) |
|
|
8 |
|
|
|
15 |
|
|
|
15 |
|
| Other income |
|
— |
|
|
|
86 |
|
|
|
— |
|
|
|
86 |
|
| Total revenues |
|
(42,761 |
) |
|
|
(37,945 |
) |
|
|
(45,504 |
) |
|
|
(74,991 |
) |
|
|
|
|
|
|
|
|
| Operating expenses |
|
|
|
|
|
|
|
| Employee compensation and benefits |
|
15,398 |
|
|
|
10,517 |
|
|
|
51,221 |
|
|
|
22,082 |
|
| Interest expense (related party of $2,093, $749, $2,825, and $1,357, respectively) |
|
5,114 |
|
|
|
3,590 |
|
|
|
8,898 |
|
|
|
7,209 |
|
| Professional services |
|
6,657 |
|
|
|
14,232 |
|
|
|
17,030 |
|
|
|
22,089 |
|
| Provision (provision credit) for credit losses |
|
— |
|
|
|
(10 |
) |
|
|
— |
|
|
|
18,781 |
|
| Loss on impairment of goodwill |
|
306,684 |
|
|
|
— |
|
|
|
1,402,989 |
|
|
|
— |
|
| Other expenses (related party of $2,105, $2,132, $4,221, and $4,330, respectively) |
|
5,150 |
|
|
|
6,726 |
|
|
|
12,092 |
|
|
|
13,799 |
|
| Total operating expenses |
|
339,003 |
|
|
|
35,055 |
|
|
|
1,492,230 |
|
|
|
83,960 |
|
| Operating loss |
|
(381,764 |
) |
|
|
(73,000 |
) |
|
|
(1,537,734 |
) |
|
|
(158,951 |
) |
| Income tax expense |
|
— |
|
|
|
887 |
|
|
|
— |
|
|
|
1,284 |
|
| Net loss |
|
(381,764 |
) |
|
|
(73,887 |
) |
|
|
(1,537,734 |
) |
|
|
(160,235 |
) |
| Less: Net (income) loss attributable to noncontrolling interests - Customer ExAlt Trusts |
|
3,592 |
|
|
|
72,843 |
|
|
|
17,458 |
|
|
|
101,554 |
|
| Less: Net (income) loss attributable to noncontrolling interests - Ben |
|
10,604 |
|
|
|
(192 |
) |
|
|
41,290 |
|
|
|
7,344 |
|
| Less: Noncontrolling interest guaranteed payment |
|
(4,167 |
) |
|
|
(3,926 |
) |
|
|
(8,272 |
) |
|
|
(7,794 |
) |
| Net loss attributable to Beneficient common shareholders |
$ |
(371,735 |
) |
|
$ |
(5,162 |
) |
|
$ |
(1,487,258 |
) |
|
$ |
(59,131 |
) |
| Other comprehensive income (loss): |
|
|
|
|
|
|
|
| Unrealized gain (loss) on investments in available-for-sale debt securities |
|
(105 |
) |
|
|
9,505 |
|
|
|
4,185 |
|
|
|
7,707 |
|
| Total comprehensive income (loss) |
|
(371,840 |
) |
|
|
4,343 |
|
|
|
(1,483,073 |
) |
|
|
(51,424 |
) |
| Less: comprehensive gain (loss) attributable to noncontrolling interests |
|
(105 |
) |
|
|
9,505 |
|
|
|
4,185 |
|
|
|
7,707 |
|
| Total comprehensive loss attributable to Beneficient |
$ |
(371,735 |
) |
|
$ |
(5,162 |
) |
|
$ |
(1,487,258 |
) |
|
$ |
(59,131 |
) |
|
|
|
|
|
|
|
|
| Net loss per common share - basic and diluted(1) |
|
|
|
|
|
|
|
| Class A |
$ |
(1.45 |
) |
|
$ |
(0.03 |
) |
|
$ |
(6.51 |
) |
|
$ |
(0.30 |
) |
| Class B |
$ |
(1.42 |
) |
|
$ |
(0.03 |
) |
|
$ |
(5.68 |
) |
|
$ |
(0.30 |
) |
|
|
|
|
|
|
|
|
| Weighted average common shares outstanding - basic and diluted(1) |
|
|
|
|
|
|
|
| Class A |
|
237,741,391 |
|
|
|
180,178,268 |
|
|
|
211,618,712 |
|
|
|
180,178,268 |
|
| Class B |
|
19,140,451 |
|
|
|
19,140,451 |
|
|
|
19,140,451 |
|
|
|
19,140,451 |
|
(1) Retroactively adjusted the three months ended June 30, 2022, for the de-SPAC merger transaction.
Table 7: CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
|
September 30, 2023 |
|
March 31, 2023 (1) |
| (Dollars and shares in thousands) |
(unaudited) |
|
|
| ASSETS |
|
|
|
| Cash and cash equivalents |
$ |
2,394 |
|
|
$ |
8,726 |
|
| Restricted cash |
|
20 |
|
|
|
819 |
|
| Investments, at fair value: |
|
|
|
| Investments held by Customer ExAlt Trusts (related party of $22,266 and $76,154) |
|
457,548 |
|
|
|
491,859 |
|
| Investments held by Ben (related party of $223 and $1,371) |
|
223 |
|
|
|
5,362 |
|
| Other assets, net (related party of $51 and $2,195) |
|
28,783 |
|
|
|
32,903 |
|
| Intangible assets |
|
3,100 |
|
|
|
3,100 |
|
| Goodwill |
|
964,937 |
|
|
|
2,367,926 |
|
| Total assets |
$ |
1,457,005 |
|
|
$ |
2,910,695 |
|
| LIABILITIES, TEMPORARY EQUITY, AND EQUITY |
|
|
|
| Accounts payable and accrued expenses (related party of $14,549 and $10,485) |
$ |
104,958 |
|
|
$ |
65,724 |
|
| Other liabilities (related party of nil and $100) |
|
16,979 |
|
|
|
14,622 |
|
| Warrant liability |
|
956 |
|
|
|
— |
|
| Customer ExAlt Trusts loan payable, net |
|
48,660 |
|
|
|
52,129 |
|
| Debt due to related party, net |
|
102,141 |
|
|
|
99,314 |
|
| Total liabilities |
|
273,694 |
|
|
|
231,789 |
|
| Redeemable noncontrolling interests |
|
|
|
| Preferred Series A Subclass 0 Unit Accounts, nonunitized |
|
251,052 |
|
|
|
251,052 |
|
| Preferred Series A Subclass 1 Unit Accounts, nonunitized |
|
— |
|
|
|
699,441 |
|
| Total temporary equity |
|
251,052 |
|
|
|
950,493 |
|
| Shareholder’s equity: |
|
|
|
| Preferred stock, par value $0.001 per share, 250,000 shares authorized |
|
|
|
| Series A Preferred stock, 0 and 0 shares issued and outstanding as of September 30, 2023, and March 31, 2023 |
|
— |
|
|
|
— |
|
| Series B Preferred stock, 3,769 and 0 shares issued and outstanding as of September 30, 2023 and March 31, 2023 |
|
4 |
|
|
|
— |
|
Class A common stock, par value $0.001 per share, 1,500,000 shares authorized, 242,884 and 180,178 shares issued as of September 30, 2023 and March 31, 2023, respectively, and 242,340 and 179,634 shares outstanding as of September 30, 2023 and March 31, 2023, respectively
|
|
243 |
|
|
|
180 |
|
| Class B convertible common stock, par value $0.001 per share, 20,000 shares authorized, 19,140 and 19,140 shares issued and outstanding as of September 30, 2023 and March 31, 2023 |
|
19 |
|
|
|
19 |
|
| Additional paid-in capital |
|
1,842,274 |
|
|
|
1,579,545 |
|
| Accumulated deficit |
|
(1,450,826 |
) |
|
|
— |
|
| Stock receivable |
|
(20,038 |
) |
|
|
— |
|
| Treasury stock, at cost (544 shares as of September 30, 2023 and March 31, 2023) |
|
(3,444 |
) |
|
|
(3,444 |
) |
| Accumulated other comprehensive income |
|
391 |
|
|
|
9,900 |
|
| Noncontrolling interests |
|
563,636 |
|
|
|
142,213 |
|
| Total equity |
|
932,259 |
|
|
|
1,728,413 |
|
| Total liabilities, temporary equity, and equity |
$ |
1,457,005 |
|
|
$ |
2,910,695 |
|
(1) Retroactively adjusted March 31, 2023 for the de-SPAC merger transaction. Such adjustments are unaudited.
Table 8: Non-GAAP Reconciliation
| (in thousands) |
Three Months Ended September 30, 2023 |
|
Ben Liquidity |
Ben Custody |
Customer
ExAlt Trusts |
Corporate/
Other |
Consolidating Eliminations |
Consolidated |
| Total revenues |
$ |
13,022 |
|
$ |
6,490 |
|
$ |
(41,886 |
) |
$ |
(883 |
) |
$ |
(19,504 |
) |
$ |
(42,761 |
) |
| Mark to market adjustment on interests in the GWG Wind Down Trust |
|
— |
|
|
— |
|
|
41,523 |
|
|
437 |
|
|
— |
|
|
41,960 |
|
| Adjusted revenues |
$ |
13,022 |
|
$ |
6,490 |
|
$ |
(363 |
) |
$ |
(446 |
) |
$ |
(19,504 |
) |
$ |
(801 |
) |
|
|
|
|
|
|
|
| Operating income (loss) |
$ |
(272,091 |
) |
$ |
(80,847 |
) |
$ |
(78,275 |
) |
$ |
(25,234 |
) |
$ |
74,683 |
|
$ |
(381,764 |
) |
| Mark to market adjustment on interests in the GWG Wind Down Trust |
|
— |
|
|
— |
|
|
41,523 |
|
|
437 |
|
|
— |
|
|
41,960 |
|
| Intersegment reversal of provision for credit losses on collateral comprised of interests in the GWG Wind Down Trust |
|
47,141 |
|
|
— |
|
|
— |
|
|
— |
|
|
(47,141 |
) |
|
— |
|
| Provision for credit losses related to formerly held available-for-sale debt securities of related party |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Provision for credit losses related to receivables from related party |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Goodwill impairment |
|
220,212 |
|
|
86,472 |
|
|
— |
|
|
— |
|
|
— |
|
|
306,684 |
|
| Share-based compensation expense |
|
— |
|
|
— |
|
|
— |
|
|
8,503 |
|
|
— |
|
|
8,503 |
|
| Legal and professional fees(1) |
|
— |
|
|
— |
|
|
— |
|
|
3,447 |
|
|
— |
|
|
3,447 |
|
| Defunct product offering costs |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Adjusted operating income (loss) |
$ |
(4,738 |
) |
$ |
5,625 |
|
$ |
(36,752 |
) |
$ |
(12,847 |
) |
$ |
27,542 |
|
$ |
(21,170 |
) |
(1) Includes legal and professional fees related to GWG Holdings bankruptcy, lawsuits, public relations, and employee matters.
| (in thousands) |
Three Months Ended September 30, 2022 |
|
Ben Liquidity |
Ben Custody |
Customer
ExAlt Trusts |
Corporate/
Other |
Consolidating
Eliminations |
Consolidated |
| Total revenues |
$ |
10,894 |
|
$ |
7,775 |
$ |
(33,480 |
) |
$ |
(4,473 |
) |
$ |
(18,661 |
) |
$ |
(37,945 |
) |
| Mark to market adjustment on equity security of related party |
|
— |
|
|
— |
|
22,134 |
|
|
5,625 |
|
|
— |
|
|
27,759 |
|
| Adjusted revenues |
$ |
10,894 |
|
$ |
7,775 |
$ |
(11,346 |
) |
$ |
1,152 |
|
$ |
(18,661 |
) |
$ |
(10,186 |
) |
|
|
|
|
|
|
|
| Operating income (loss) |
$ |
24,211 |
|
$ |
6,274 |
$ |
(70,059 |
) |
$ |
(29,749 |
) |
$ |
(3,677 |
) |
$ |
(73,000 |
) |
| Mark to market adjustment on equity security of related party |
|
— |
|
|
— |
|
22,134 |
|
|
5,625 |
|
|
— |
|
|
27,759 |
|
| Intersegment reversal of provision for loan losses on collateral comprised of related party equity securities |
|
(25,604 |
) |
|
— |
|
— |
|
|
— |
|
|
25,604 |
|
|
— |
|
| Provision for credit losses related to available-for-sale debt securities of related party |
|
— |
|
|
— |
|
— |
|
|
13 |
|
|
— |
|
|
13 |
|
| Provision for credit losses related to receivables from related party |
|
— |
|
|
— |
|
— |
|
|
(23 |
) |
|
— |
|
|
(23 |
) |
| Goodwill impairment |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Share-based compensation expense |
|
— |
|
|
— |
|
— |
|
|
2,737 |
|
|
— |
|
|
2,737 |
|
| Legal and professional fees(1) |
|
— |
|
|
— |
|
— |
|
|
4,820 |
|
|
— |
|
|
4,820 |
|
| Defunct product offering costs |
|
— |
|
|
— |
|
— |
|
|
3,745 |
|
|
— |
|
|
3,745 |
|
| Adjusted operating income (loss) |
$ |
(1,393 |
) |
$ |
6,274 |
$ |
(47,925 |
) |
$ |
(12,832 |
) |
$ |
21,927 |
|
$ |
(33,949 |
) |
(1) Includes legal and professional fees related to initial registration initiatives, GWG Holdings bankruptcy, lawsuits, public relations and employee matters.
Adjusted GAAP Revenues, Adjusted GAAP Operating Income (Loss), Adjusted Segment Revenues attributable to Ben's Equity Holders and Adjusted Segment Operating Income (Loss) attributable to Ben's Equity Holders are non-GAAP financial measures. We present these non-GAAP financial measures because we believe it helps investors understand underlying trends in our business and facilitates an understanding of our operating performance from period to period because it facilitates a comparison of our recurring core business operating results. These non-GAAP financial measures are intended as a supplemental measure of our performance that is neither required by, nor presented in accordance with, U.S. GAAP. Our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of these non-GAAP financial measures may not be comparable to other similarly titled measures computed by other companies, because all companies may not calculate such items in the same way.
We define adjusted GAAP revenues as GAAP revenues adjusted to exclude the effect of mark-to-market adjustments on certain related party equity securities and excludes the effect of interest income on related party available-for-sale debt securities, and income from the forfeiture of vested share-based compensation awards. Adjusted Segment Revenues attributable to Ben's Equity Holders is the same as "adjusted GAAP revenues" related to the aggregate of the Ben Liquidity, Ben Custody, and Corporate/Other Business Segments, which are the segments that impact the net income (loss) attributable to all equity holders of Beneficient, including equity holders of Beneficient's subsidiary, Beneficient Company Holdings, L.P.
Adjusted GAAP operating income (loss) represents GAAP operating income (loss), adjusted to exclude the effect of the adjustments to revenue as described above, credit losses on related party available-for-sale debt securities, and receivables from a related party that filed for bankruptcy, non-cash asset impairment, share-based compensation expense, audit fee normalization, and legal, professional services, and public relations costs related to the GWG Holdings bankruptcy, lawsuits, a defunct product offering, and certain employee matters, including fees incurred in arbitration with a former director. Adjusted Segment Operating Income (Loss) attributable to Ben's Equity Holders is the same as "adjusted GAAP operating income (loss)" related to the aggregate of the Ben Liquidity, Ben Custody, and Corporate/Other Business Segments, which are the segments that impact the net income (loss) attributable to all equity holders of Beneficient, including equity holders of Beneficient's subsidiary, Beneficient Company Holdings, L.P.
These non-GAAP financial measures are not a measure of performance or liquidity calculated in accordance with U.S. GAAP. They are unaudited and should not be considered an alternative to, or more meaningful than, GAAP revenues or GAAP operating income (loss) as an indicator of our operating performance. Uses of cash flows that are not reflected in adjusted GAAP operating income (loss) or adjusted segment operating income (loss) attributable to Ben's Equity Holders include capital expenditures, interest payments, debt principal repayments, and other expenses, which can be significant. As a result, adjusted GAAP operating income (loss) and/or adjusted segment operating income (loss) attributable to Ben's Equity Holders should not be considered as a measure of our liquidity.
Because of these limitations, Adjusted GAAP Revenues, Adjusted GAAP Operating Income (Loss), Adjusted Segment Revenues attributable to Ben's Equity Holders and Adjusted Segment Operating Income (Loss) attributable to Ben's Equity Holders should not be considered in isolation or as a substitute for performance measures calculated in accordance with U.S. GAAP. We compensate for these limitations by relying primarily on our U.S. GAAP results and using Adjusted GAAP Revenues, Adjusted GAAP Operating Income (Loss), Adjusted Segment Revenues attributable to Ben's Equity Holders and Adjusted Segment Operating Income (Loss) attributable to Ben's Equity Holders on a supplemental basis. You should review the reconciliation of these non-GAAP financial measures set forth above and not rely on any single financial measure to evaluate our business.
