RED BANK, N.J., Aug. 9, 2016 /PRNewswire/ -- ZAIS Group
Holdings, Inc. (NASDAQ: ZAIS) ("ZAIS"), today reported financial
results for the three and six months ended June 30, 2016. ZAIS conducts substantially
all of its operations through ZAIS Group, LLC ("ZAIS Group").
ZAIS Group provides investment advisory and asset management
services to private funds, separately managed accounts, structured
vehicles and ZAIS Financial Corp., a publicly traded real estate
investment trust (collectively, the "ZAIS Managed Entities").
References to the "Company" herein refer to ZAIS, together with its
consolidated subsidiaries and affiliates.
Michael F. Szymanski, Chief
Executive Officer, said, "We continue to seek business development
opportunities and remain active in the development of new products
to meet investor interest in the structured credit market. We
are pleased to have closed the $280
million ZAIS CLO 4, Limited in the 2nd quarter."
CONSOLIDATED GAAP RESULTS
The Company recorded a GAAP net loss for the three months ended
June 30, 2016 of $(4.9) million compared with a GAAP net loss of
$(5.2) million for the three months
ended June 30, 2015. The
decrease in the net loss of $0.3
million was driven primarily by a decrease in revenue of
$1.6 million which was largely offset
by a decrease in expenses of $1.2
million, a net gain in consolidated funds in the current
period of $2.2 million and a
$1.7 million decrease in the tax
benefit due to the establishment of a full tax valuation allowance
at December 31, 2015. The
Company recorded a pre-tax GAAP net loss for the three months ended
June 30, 2016 of $(4.9) million compared with a pre-tax GAAP net
loss for the three months ended June 30,
2015 of $(6.9) million.
The consolidated financial statements include non-controlling
interests of the members of ZAIS Group Parent, LLC ("ZGP") other
than ZAIS (the "ZGP Founder Members") which represent Class A Units
of ZGP held by the ZGP Founder Members. ZGP, a majority-owned
consolidated subsidiary of ZAIS, is the sole member, and owns all
of the equity, of ZAIS Group.
CONSOLIDATED NON-GAAP RESULTS
The Company recorded a net loss (excluding Consolidated Funds of
ZAIS Group) for the three months ended June
30, 2016 of $(6.0) million, or
$(0.29) per diluted weighted average
Class A common share outstanding, compared with a net loss
(excluding Consolidated Funds of ZAIS Group) of $(5.2) million, or $(0.21) per diluted weighted average Class A
common share outstanding for the three months ended June 30, 2015. The Company's earnings per share
for all periods prior to the business combination ZAIS completed in
March 2015 (the "Business
Combination") were calculated on the basis of 7,000,000 shares of
common stock with reference to the equity interests of the ZGP
Founder Members.
The increase in the Company's net loss (excluding Consolidated
Funds of ZAIS Group) for the three months ended June 30, 2016 was driven by a $1.6 million reduction in both management and
incentive fees. The year over year decrease was due to the
reduction of average AUM relating to reduced performance and prior
year liquidations of ZAIS Managed Entities, and residual
payments received in 2015 for ZAIS Managed Entities which are no
longer under management. This revenue decrease was partially
offset by a decrease in expenses of $1.3
million, driven by a decrease in general, administrative and
other expenses of $1.8 million,
partially offset by an increase in compensation of $0.6 million. Net loss (excluding
Consolidated Funds of ZAIS Group) for the quarter ended
June 30, 2016 as compared to the same
period last year was also impacted by an increase in other income
of $1.2 million driven by the
performance of the risk retention fund CLO warehouse investments,
which was more than offset by a $1.7
million decrease in deferred tax assets due to the
establishment of a full valuation allowance at December 31, 2015.
For the three months ended June 30,
2016, the Company reported negative Adjusted EBITDA of
$(4.5) million, compared with
negative Adjusted EBITDA of $(4.1)
million for the three months ended June 30, 2015.
Please see the discussion of "Non-GAAP Financial Measures",
including the definitions of net income (loss) (excluding
Consolidating Funds of ZAIS Group) and Adjusted EBITDA, and
reconciliations of such Non-GAAP financial measures to the
respective GAAP net income (loss) and pre-tax GAAP net income
(loss) measures for the periods discussed above at the end of this
press release.
The Company's GAAP net income (loss) and non-GAAP measures of
income (loss) may fluctuate materially depending upon the
performance of ZAIS Managed Entities as well as other factors.
Accordingly, the GAAP net income (loss) and non-GAAP measures of
income (loss) in any particular period should not be expected to be
indicative of future results.
LIQUIDITY & CAPITAL RESOURCES
As of June 30, 2016, the Company
had cash and cash equivalents of $32.1
million and debt obligations of $1.3
million.
SECOND QUARTER 2016 SUPPLEMENTAL INFORMATION
The Company's Second Quarter 2016 Supplemental Information –
June 30, 2016, is available on ZAIS's
website at www.zaisgroupholdings.com. To access the information, go
to the "ZAIS Shareholders" section of the website.
USE OF NON-GAAP FINANCIAL INFORMATION
In addition to the results presented in accordance with
generally accepted accounting principles ("GAAP"), this press
release includes certain non-GAAP financial information, including
net income (loss) (excluding Consolidated Funds of ZAIS Group) and
Adjusted EBITDA (and per share measures). Net income (loss)
(excluding Consolidated Funds of ZAIS Group) is a non-GAAP
financial measure that the Company defines as GAAP net income
(loss) excluding the consolidating effects of the Consolidated
Funds of ZAIS Group. Adjusted EBITDA is a non-GAAP financial
measure that the Company defines as GAAP net income (loss),
excluding consolidating effects of Consolidated Funds of ZAIS
Group, compensation expense related to a portion of net operating
income of ZAIS Group payable to certain employees of ZAIS Group,
compensation expense related to incentive income in the form of
percentage interests being recorded before related incentive income
is recognized, equity-based compensation, severance, taxes,
interest expense, depreciation and amortization expenses, goodwill
impairment, foreign currency and certain other non-cash and
non-operating items.
The Company believes that providing investors with this non-GAAP
financial information, in addition to the related GAAP measures,
gives investors greater transparency to the information used by
management in its financial and operational decision-making.
However, because net income (loss) (excluding Consolidated Funds of
ZAIS Group) and Adjusted EBITDA are incomplete measures of the
Company's financial performance and involve differences from net
income (loss) computed in accordance with GAAP, they should be
considered along with, but not as alternatives to, the Company's
net income (loss) computed in accordance with GAAP as a measure of
the Company's financial performance. In addition, because not all
companies use identical calculations, the Company's presentation of
net income (loss) (excluding Consolidated Funds of ZAIS Group) and
Adjusted EBITDA may not be comparable to other similarly-titled
measures of other companies.
The following table presents the reconciliation of the Company's
GAAP net income (loss) to its non-GAAP financial measure of net
income (loss) (excluding Consolidated Funds of ZAIS Group) for the
periods presented in this Earnings Release.
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
(Dollars in
thousands)
|
|
Consolidated net
income, net of tax (GAAP Net Income)
|
$
|
(4,935)
|
|
|
$
|
(5,178)
|
|
|
$
|
(11,334)
|
|
|
$
|
(10,514)
|
|
Addback: Elimination of
net gain (loss) on investments
|
|
1,095
|
|
|
|
—
|
|
|
|
1,859
|
|
|
|
—
|
|
Addback: Expenses of
Consolidated Funds
|
|
29
|
|
|
|
—
|
|
|
|
48
|
|
|
|
—
|
|
Net (gain) loss on
Consolidated Funds' investments
|
|
(2,176)
|
|
|
|
—
|
|
|
|
(3,693)
|
|
|
|
—
|
|
Net income (loss)
(excluding Consolidated Funds of
ZAIS Group) – Non-GAAP
|
$
|
(5,987)
|
|
|
$
|
(5,178)
|
|
|
$
|
(13,120)
|
|
|
$
|
(10,514)
|
|
The following tables present the reconciliations of the
Company's GAAP pre-tax consolidated net income (loss) to its
non-GAAP financial measure of Adjusted EBITDA for the periods
presented in this Earnings Release.
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
(Dollars in
thousands)
|
|
Adjusted
EBITDA - Non GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Consolidated
Net Income (loss) (GAAP pre-tax
net income (loss))
|
$
|
(4,931)
|
|
|
$
|
(6,860)
|
|
|
$
|
(11,325)
|
|
|
$
|
(13,098)
|
|
Addback: Elimination of
Net gain (loss) on investments
|
|
1,095
|
|
|
|
—
|
|
|
|
1,859
|
|
|
|
—
|
|
Addback: Expenses of
Consolidated Funds
|
|
29
|
|
|
|
—
|
|
|
|
48
|
|
|
|
—
|
|
Net (gain) loss on
Consolidated Funds' investments
|
|
(2,176)
|
|
|
|
—
|
|
|
|
(3,693)
|
|
|
|
—
|
|
Addback: Compensation
attributable to equity compensation
|
|
1,339
|
|
|
|
1,616
|
|
|
|
1,682
|
|
|
|
1,878
|
|
Addback: Severance
costs
|
|
119
|
|
|
|
974
|
|
|
|
762
|
|
|
|
974
|
|
Addback: Depreciation
and amortization
|
|
64
|
|
|
|
146
|
|
|
|
127
|
|
|
|
208
|
|
Adjusted EBITDA –
Non-GAAP
|
$
|
(4,461)
|
|
|
$
|
(4,124)
|
|
|
$
|
(10,540)
|
|
|
$
|
(10,038)
|
|
ZAIS GROUP
HOLDINGS, INC. AND SUBSIDIARIES
|
|
Consolidated
Statements of Financial Condition
|
(Dollars in
thousands)
|
|
|
|
June 30,
2016
|
|
|
December 31,
2015
|
|
|
|
(Unaudited)
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
32,064
|
|
|
$
|
44,351
|
|
Income and fees
receivable
|
|
|
1,655
|
|
|
|
2,529
|
|
Investments, at fair
value
|
|
|
—
|
|
|
|
8,169
|
|
Investments in
affiliates, at fair value
|
|
|
5,207
|
|
|
|
5,242
|
|
Due from related
parties
|
|
|
1,382
|
|
|
|
748
|
|
Prepaid
expenses
|
|
|
1,946
|
|
|
|
776
|
|
Other
assets
|
|
|
301
|
|
|
|
310
|
|
Fixed assets,
net
|
|
|
422
|
|
|
|
544
|
|
Assets of
Consolidated Funds
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
—
|
|
|
|
33
|
|
Investments, at fair
value
|
|
|
44,201
|
|
|
|
30,509
|
|
Total
Assets
|
|
$
|
87,178
|
|
|
$
|
93,211
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Notes
payable
|
|
$
|
1,259
|
|
|
$
|
1,255
|
|
Compensation
payable
|
|
|
4,303
|
|
|
|
3,575
|
|
Due to related
parties
|
|
|
142
|
|
|
|
175
|
|
Fees
payable
|
|
|
2
|
|
|
|
756
|
|
Other
liabilities
|
|
|
798
|
|
|
|
1,546
|
|
Liabilities of
Consolidated Funds
|
|
|
|
|
|
|
|
|
Other
liabilities
|
|
|
101
|
|
|
|
101
|
|
Total
Liabilities
|
|
|
6,605
|
|
|
|
7,408
|
|
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies (Note 12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Preferred Stock,
$0.0001 par value; 2,000,000 shares authorized; 0 shares issued
and
outstanding.
|
|
|
—
|
|
|
|
—
|
|
Class A Common Stock,
$0.0001 par value; 180,000,000 shares authorized;
13,900,917 and
13,870,917 shares issued and
outstanding at June 30, 2016 and December 31, 2015,
respectively.
|
|
|
1
|
|
|
|
1
|
|
Class B Common Stock,
$0.000001 par value; 20,000,000 shares authorized;
20,000,000
shares issued and outstanding at June
30, 2016 and December 31, 2015, respectively.
|
|
|
—
|
|
|
|
—
|
|
Additional paid-in
capital
|
|
|
61,965
|
|
|
|
60,817
|
|
Retained earnings
(Accumulated deficit)
|
|
|
(22,715)
|
|
|
|
(13,805)
|
|
Accumulated other
comprehensive income (loss)
|
|
|
24
|
|
|
|
158
|
|
Total stockholders'
equity, ZAIS Group Holdings, Inc.
|
|
|
39,275
|
|
|
|
47,171
|
|
Non-controlling
interests in ZAIS Group Parent, LLC
|
|
|
19,689
|
|
|
|
23,716
|
|
Non-controlling
interests in Consolidated Funds
|
|
|
21,609
|
|
|
|
14,916
|
|
Total
Equity
|
|
|
80,573
|
|
|
|
85,803
|
|
Total Liabilities
and Equity
|
|
$
|
87,178
|
|
|
$
|
93,211
|
|
ZAIS GROUP
HOLDINGS, INC. AND SUBSIDIARIES
|
|
Consolidated
Statements of Comprehensive Income (Loss)
(Unaudited)
|
(Dollars in
thousands)
|
|
|
|
Three
Months Ended
June 30,
2016
|
|
|
Three
Months Ended
June 30,
2015 (1)
|
|
|
Six
Months Ended
June 30,
2016
|
|
|
Six
Months Ended
June 30,
2015 (1)
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fee
income
|
|
$
|
3,571
|
|
|
$
|
4,081
|
|
|
$
|
7,140
|
|
|
$
|
7,834
|
|
Incentive
income
|
|
|
143
|
|
|
|
1,213
|
|
|
|
295
|
|
|
|
2,121
|
|
Other
revenues
|
|
|
79
|
|
|
|
106
|
|
|
|
159
|
|
|
|
137
|
|
Total
Revenues
|
|
|
3,793
|
|
|
|
5,400
|
|
|
|
7,594
|
|
|
|
10,092
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
|
7,999
|
|
|
|
7,361
|
|
|
|
17,006
|
|
|
|
13,931
|
|
General,
administrative and other
|
|
|
2,950
|
|
|
|
4,764
|
|
|
|
6,160
|
|
|
|
9,101
|
|
Depreciation and
amortization
|
|
|
64
|
|
|
|
146
|
|
|
|
127
|
|
|
|
208
|
|
Expenses of
Consolidated Funds
|
|
|
29
|
|
|
|
—
|
|
|
|
48
|
|
|
|
—
|
|
Total
Expenses
|
|
|
11,042
|
|
|
|
12,271
|
|
|
|
23,341
|
|
|
|
23,240
|
|
Other income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gain (loss) on
investments
|
|
|
55
|
|
|
|
2
|
|
|
|
37
|
|
|
|
45
|
|
Other income
(expense)
|
|
|
87
|
|
|
|
9
|
|
|
|
692
|
|
|
|
5
|
|
Net gains (losses) of
Consolidated Funds' investments
|
|
|
2,176
|
|
|
|
—
|
|
|
|
3,693
|
|
|
|
—
|
|
Total Other Income
(Loss)
|
|
|
2,318
|
|
|
|
11
|
|
|
|
4,422
|
|
|
|
50
|
|
Income (loss)
before income taxes
|
|
|
(4,931)
|
|
|
|
(6,860)
|
|
|
|
(11,325)
|
|
|
|
(13,098)
|
|
Income tax (benefit)
expense
|
|
|
4
|
|
|
|
(1,682)
|
|
|
|
9
|
|
|
|
(2,584)
|
|
Consolidated net
income (loss), net of tax
|
|
|
(4,935)
|
|
|
|
(5,178)
|
|
|
|
(11,334)
|
|
|
|
(10,514)
|
|
Other comprehensive
income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
(147)
|
|
|
|
291
|
|
|
|
(201)
|
|
|
|
483
|
|
Total Comprehensive
Income (Loss)
|
|
$
|
(5,082)
|
|
|
$
|
(4,887)
|
|
|
$
|
(11,535)
|
|
|
$
|
(10,031)
|
|
Allocation of
Consolidated Net Income (Loss), net of
tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests in Consolidated Funds
|
|
$
|
1,052
|
|
|
$
|
—
|
|
|
$
|
1,786
|
|
|
$
|
—
|
|
Stockholders' equity,
ZAIS Group Holdings, Inc.
|
|
|
(4,076)
|
|
|
|
(2,947)
|
|
|
|
(8,910)
|
|
|
|
(3,769)
|
|
Non-controlling
interests in ZAIS Group Parent, LLC
|
|
|
(1,911)
|
|
|
|
(2,231)
|
|
|
|
(4,210)
|
|
|
|
(6,745)
|
|
|
|
$
|
(4,935)
|
|
|
$
|
(5,178)
|
|
|
$
|
(11,334)
|
|
|
$
|
(10,514)
|
|
Allocation of
Total Comprehensive Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests in Consolidated Funds
|
|
$
|
1,052
|
|
|
$
|
—
|
|
|
$
|
1,786
|
|
|
$
|
—
|
|
Stockholders' equity,
ZAIS Group Holdings, Inc.
|
|
|
(4,174)
|
|
|
|
(2,753)
|
|
|
|
(9,044)
|
|
|
|
(3,448)
|
|
Non-controlling
interests in ZAIS Group Parent, LLC
|
|
|
(1,960)
|
|
|
|
(2,134)
|
|
|
|
(4,277)
|
|
|
|
(6,583)
|
|
|
|
$
|
(5,082)
|
|
|
$
|
(4,887)
|
|
|
$
|
(11,535)
|
|
|
$
|
(10,031)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Net
Income (Loss), net of tax per Class
A common share applicable to ZAIS
Group
Holdings, Inc. – Basic
|
|
$
|
(0.29)
|
|
|
$
|
(0.21)
|
|
|
$
|
(0.64)
|
|
|
$
|
(0.47)
|
|
Consolidated Net
Income (Loss), net of tax per Class
A common share applicable to ZAIS
Group
Holdings, Inc. – Diluted
|
|
$
|
(0.29)
|
|
|
$
|
(0.21)
|
|
|
$
|
(0.64)
|
|
|
$
|
(0.53)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares of Class A common stock
outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
13,892,016
|
|
|
|
13,870,917
|
|
|
|
13,881,466
|
|
|
|
8,046,665
|
(3)
|
Diluted(2)
|
|
|
20,892,016
|
|
|
|
20,870,917
|
|
|
|
20,881,466
|
|
|
|
15,046,665
|
(3)
|
(1)
|
Subsequent to the
filing of the 10-Q for the three months ended March 31, 2015, the
Company elected to early adopt ASU 2015-02 with an effective date
of January 1, 2015. As a result of this adoption, the majority of
the ZAIS Managed Entities which were consolidated in the 10-Q for
the three months ended March 31, 2015 were
deconsolidated. Additionally, subsequent to the filing
of the June 30, 2015 and September 30, 2015 10-Q's, in December
2015 additional interpretations of ASU 2015-02 became available to
the Company. As a result of these new interpretations,
the Company reviewed its previous conclusions and determined that
additional entities should be deconsolidated. There was no
impact on the income (loss) allocated to ZAIS Group Holdings, Inc.
Stockholders Equity as a result of this adoption. The June 30, 2015
figures above reflect the consolidated results of the Company for
the three and six months ended June 30, 2015, subsequent to the
adoption of ASU 2015-02.
|
|
|
(2)
|
Number of diluted
shares outstanding for periods after the Business Combination takes
into account non-controlling interests in ZAIS Group Parent, LLC
that may be exchanged for Class A common stock under certain
circumstances.
|
|
|
(3)
|
Pro-rated based on
the portion of the period preceding and following the Business
Combination
|
The following supplemental financial information illustrates the
consolidating effects of the Consolidated Funds on the Company's
financial position at June 30, 2016
and December 31, 2015, and results of
operations for the three and six months ended June 30, 2016 and June 30,
2015. Subsequent to the filing of the 10-Q for the three
months ended March 31, 2015, the
Company elected to early adopt ASU 2015-02 with an effective date
of January 1, 2015. As a result of
this adoption, the majority of the ZAIS Managed Entities which were
consolidated in the 10-Q for the three months ended March 31, 2015 were
deconsolidated. Additionally, subsequent to the filing
of the June 30, 2015 and September 30, 2015 10-Q's, in December 2015 additional interpretations of ASU
2015-02 became available to the Company. As a result of
these new interpretations, the Company reviewed its previous
conclusions and determined that additional entities should be
deconsolidated. There was no impact on the income (loss)
allocated to ZAIS Group Holdings, Inc. Stockholders Equity as a
result of this adoption. The June 30,
2015 figures below reflect the consolidated results of the
Company for the three and six months ended June 30, 2015, subsequent to the adoption of ASU
2015-02:
|
|
June 30,
2016
|
|
|
|
ZAIS
|
|
|
Consolidated
Funds
|
|
|
Eliminations
|
|
|
Consolidated
|
|
|
|
( Dollars in
thousands )
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
32,064
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32,064
|
|
Income and fees
receivable
|
|
|
1,655
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,655
|
|
Investments in
affiliates, at fair value
|
|
|
27,698
|
|
|
|
—
|
|
|
|
(22,491)
|
|
|
|
5,207
|
|
Due from related
parties
|
|
|
1,382
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,382
|
|
Prepaid
expenses
|
|
|
1,946
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,946
|
|
Other
assets
|
|
|
301
|
|
|
|
—
|
|
|
|
—
|
|
|
|
301
|
|
Fixed assets,
net
|
|
|
422
|
|
|
|
—
|
|
|
|
—
|
|
|
|
422
|
|
Assets of Consolidated
Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments, at fair
value
|
|
|
—
|
|
|
|
44,201
|
|
|
|
—
|
|
|
|
44,201
|
|
Total
Assets
|
|
$
|
65,468
|
|
|
$
|
44,201
|
|
|
$
|
(22,491)
|
|
|
$
|
87,178
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
payable
|
|
$
|
1,259
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,259
|
|
Compensation
payable
|
|
|
4,303
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,303
|
|
Due to related
parties
|
|
|
142
|
|
|
|
—
|
|
|
|
—
|
|
|
|
142
|
|
Fees
payable
|
|
|
2
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2
|
|
Other
liabilities
|
|
|
798
|
|
|
|
—
|
|
|
|
—
|
|
|
|
798
|
|
Liabilities of
Consolidated Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
liabilities
|
|
|
—
|
|
|
|
101
|
|
|
|
—
|
|
|
|
101
|
|
Total
Liabilities
|
|
|
6,504
|
|
|
|
101
|
|
|
|
—
|
|
|
|
6,605
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies (Note 12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
Stock
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Class A Common
Stock
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
Class B Common
Stock
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Additional
paid-in-capital
|
|
|
61,965
|
|
|
|
—
|
|
|
|
—
|
|
|
|
61,965
|
|
Retained earnings
(Accumulated deficit)
|
|
|
(22,715)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(22,715)
|
|
Accumulated other comprehensive income
(loss)
|
|
|
24
|
|
|
|
—
|
|
|
|
—
|
|
|
|
24
|
|
Total stockholders'
equity, ZAIS Group Holdings, Inc.
|
|
|
39,275
|
|
|
|
—
|
|
|
|
—
|
|
|
|
39,275
|
|
Non-controlling
interests in ZAIS Group Parent, LLC
|
|
|
19,689
|
|
|
|
—
|
|
|
|
—
|
|
|
|
19,689
|
|
Non-controlling
interests in Consolidated Funds
|
|
|
—
|
|
|
|
44,100
|
|
|
|
(22,491)
|
|
|
|
21,609
|
|
Total
Equity
|
|
|
58,964
|
|
|
|
44,100
|
|
|
|
(22,491)
|
|
|
|
80,573
|
|
Total Liabilities
and Equity
|
|
$
|
65,468
|
|
|
$
|
44,201
|
|
|
$
|
(22,491)
|
|
|
$
|
87,178
|
|
|
|
December 31,
2015
|
|
|
|
ZAIS
|
|
|
Consolidated
Funds
|
|
|
Eliminations
|
|
|
Consolidated
|
|
|
|
( Dollars in thousands
)
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
44,351
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
44,351
|
|
Income and fees
receivable
|
|
|
2,529
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,529
|
|
Investments, at fair
value
|
|
|
8,169
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8,169
|
|
Investments in
affiliates, at fair value
|
|
|
20,767
|
|
|
|
—
|
|
|
|
(15,525)
|
|
|
|
5,242
|
|
Due from related
parties
|
|
|
748
|
|
|
|
—
|
|
|
|
—
|
|
|
|
748
|
|
Prepaid
expenses
|
|
|
776
|
|
|
|
—
|
|
|
|
—
|
|
|
|
776
|
|
Other
assets
|
|
|
310
|
|
|
|
—
|
|
|
|
—
|
|
|
|
310
|
|
Fixed assets,
net
|
|
|
544
|
|
|
|
—
|
|
|
|
—
|
|
|
|
544
|
|
Assets of Consolidated
Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
—
|
|
|
|
33
|
|
|
|
—
|
|
|
|
33
|
|
Investments, at fair
value
|
|
|
—
|
|
|
|
30,509
|
|
|
|
—
|
|
|
|
30,509
|
|
Total Assets
|
|
$
|
78,194
|
|
|
$
|
30,542
|
|
|
$
|
(15,525)
|
|
|
$
|
93,211
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
payable
|
|
$
|
1,255
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,255
|
|
Compensation
payable
|
|
|
3,575
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,575
|
|
Due to related
parties
|
|
|
175
|
|
|
|
—
|
|
|
|
—
|
|
|
|
175
|
|
Fees
payable
|
|
|
756
|
|
|
|
—
|
|
|
|
—
|
|
|
|
756
|
|
Other
liabilities
|
|
|
1,546
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,546
|
|
Liabilities of
Consolidated Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
liabilities
|
|
|
—
|
|
|
|
101
|
|
|
|
—
|
|
|
|
101
|
|
Total
Liabilities
|
|
|
7,307
|
|
|
|
101
|
|
|
|
—
|
|
|
|
7,408
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies (Note 12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
Stock
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Class A Common
Stock
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
Class B Common
Stock
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Additional
paid-in-capital
|
|
|
60,817
|
|
|
|
—
|
|
|
|
—
|
|
|
|
60,817
|
|
Retained earnings
(Accumulated deficit)
|
|
|
(13,805)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(13,805)
|
|
Accumulated other comprehensive income
(loss)
|
|
|
158
|
|
|
|
—
|
|
|
|
—
|
|
|
|
158
|
|
Total stockholders'
equity, ZAIS Group Holdings, Inc.
|
|
|
47,171
|
|
|
|
—
|
|
|
|
—
|
|
|
|
47,171
|
|
Non-controlling
interests in ZAIS Group Parent, LLC
|
|
|
23,716
|
|
|
|
—
|
|
|
|
—
|
|
|
|
23,716
|
|
Non-controlling
interests in Consolidated Funds
|
|
|
—
|
|
|
|
30,441
|
|
|
|
(15,525)
|
|
|
|
14,916
|
|
Total Equity
|
|
|
70,887
|
|
|
|
30,441
|
|
|
|
(15,525)
|
|
|
|
85,803
|
|
Total Liabilities and
Equity
|
|
$
|
78,194
|
|
|
$
|
30,542
|
|
|
$
|
(15,525)
|
|
|
$
|
93,211
|
|
|
|
Three months Ended
June 30, 2016
|
|
|
|
ZAIS
|
|
|
Consolidated
Funds
|
|
|
Eliminations
|
|
|
Consolidated
|
|
|
|
( Dollars in
Thousands )
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fee
income
|
|
$
|
3,571
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,571
|
|
Incentive
income
|
|
|
143
|
|
|
|
—
|
|
|
|
—
|
|
|
|
143
|
|
Other
revenues
|
|
|
79
|
|
|
|
—
|
|
|
|
—
|
|
|
|
79
|
|
Total
Revenues
|
|
|
3,793
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,793
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
|
7,999
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7,999
|
|
General,
administrative and other
|
|
|
2,950
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,950
|
|
Depreciation and
amortization
|
|
|
64
|
|
|
|
—
|
|
|
|
—
|
|
|
|
64
|
|
Expenses of
Consolidated Funds
|
|
|
—
|
|
|
|
29
|
|
|
|
—
|
|
|
|
29
|
|
Total
Expenses
|
|
|
11,013
|
|
|
|
29
|
|
|
|
—
|
|
|
|
11,042
|
|
Other Income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gain (loss) on
investments
|
|
|
1,150
|
|
|
|
—
|
|
|
|
(1,095)
|
|
|
|
55
|
|
Other income
(expense)
|
|
|
87
|
|
|
|
—
|
|
|
|
—
|
|
|
|
87
|
|
Net gains (losses) of
Consolidated Funds' investments
|
|
|
—
|
|
|
|
2,176
|
|
|
|
—
|
|
|
|
2,176
|
|
Total Other Income
(Loss)
|
|
|
1,237
|
|
|
|
2,176
|
|
|
|
(1,095)
|
|
|
|
2,318
|
|
Income (loss)
before income taxes
|
|
|
(5,983)
|
|
|
|
2,147
|
|
|
|
|
|
|
|
(4,931)
|
|
Income tax (benefit)
expense
|
|
|
4
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4
|
|
Consolidated net
income (loss), net of tax
|
|
|
(5,987)
|
|
|
|
2,147
|
|
|
|
(1,095)
|
|
|
|
(4,935)
|
|
Other Comprehensive
Income (Loss), net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
(147)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(147)
|
|
Total
Comprehensive Income (Loss)
|
|
$
|
(6,134)
|
|
|
$
|
2,147
|
|
|
$
|
(1,095)
|
|
|
$
|
(5,082)
|
|
|
|
Three months Ended
June 30, 2015
|
|
|
|
ZAIS
|
|
|
Consolidated
Funds
|
|
|
Eliminations
|
|
|
Consolidated
|
|
|
|
( Dollars in
Thousands )
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fee
income
|
|
$
|
4,081
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,081
|
|
Incentive
income
|
|
|
1,213
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,213
|
|
Other
revenues
|
|
|
106
|
|
|
|
—
|
|
|
|
—
|
|
|
|
106
|
|
Total
Revenues
|
|
|
5,400
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5,400
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
|
7,361
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7,361
|
|
General,
administrative and other
|
|
|
4,764
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,764
|
|
Depreciation and
amortization
|
|
|
146
|
|
|
|
—
|
|
|
|
—
|
|
|
|
146
|
|
Expenses of
Consolidated Funds
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Total
Expenses
|
|
|
12,271
|
|
|
|
—
|
|
|
|
—
|
|
|
|
12,271
|
|
Other Income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gain (loss) on
investments
|
|
|
2
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2
|
|
Other income
(expense)
|
|
|
9
|
|
|
|
—
|
|
|
|
—
|
|
|
|
9
|
|
Net gains (losses) of
Consolidated Funds' investments
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Total Other Income
(Loss)
|
|
|
11
|
|
|
|
—
|
|
|
|
—
|
|
|
|
11
|
|
Income (loss)
before income taxes
|
|
|
(6,860)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(6,860)
|
|
Income tax (benefit)
expense
|
|
|
(1,682)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,682)
|
|
Consolidated net
income (loss), net of tax
|
|
|
(5,178)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(5,178)
|
|
Other Comprehensive
Income (Loss), net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
291
|
|
|
|
—
|
|
|
|
—
|
|
|
|
291
|
|
Total
Comprehensive Income (Loss)
|
|
$
|
(4,887)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(4,887)
|
|
|
|
Six months Ended June
30, 2016
|
|
|
|
ZAIS
|
|
|
Consolidated
Funds
|
|
|
Eliminations
|
|
|
Consolidated
|
|
|
|
( Dollars in
Thousands )
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fee
income
|
|
$
|
7,140
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,140
|
|
Incentive
income
|
|
|
295
|
|
|
|
—
|
|
|
|
—
|
|
|
|
295
|
|
Other
revenues
|
|
|
159
|
|
|
|
—
|
|
|
|
—
|
|
|
|
159
|
|
Total
Revenues
|
|
|
7,594
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7,594
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
|
17,006
|
|
|
|
—
|
|
|
|
—
|
|
|
|
17,006
|
|
General,
administrative and other
|
|
|
6,160
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6,160
|
|
Depreciation and
amortization
|
|
|
27
|
|
|
|
—
|
|
|
|
—
|
|
|
|
127
|
|
Expenses of
Consolidated Funds
|
|
|
—
|
|
|
|
48
|
|
|
|
—
|
|
|
|
48
|
|
Total
Expenses
|
|
|
23,293
|
|
|
|
48
|
|
|
|
—
|
|
|
|
23,341
|
|
Other Income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gain (loss) on
investments
|
|
|
1,896
|
|
|
|
—
|
|
|
|
(1,859)
|
|
|
|
37
|
|
Other income
(expense)
|
|
|
692
|
|
|
|
—
|
|
|
|
—
|
|
|
|
692
|
|
Net gains (losses) of
Consolidated Funds' investments
|
|
|
—
|
|
|
|
3,693
|
|
|
|
—
|
|
|
|
3,693
|
|
Total Other Income
(Loss)
|
|
|
2,588
|
|
|
|
3,693
|
|
|
|
(1,859)
|
|
|
|
4,422
|
|
Income (loss)
before income taxes
|
|
|
(13,111)
|
|
|
|
3,645
|
|
|
|
(1,859)
|
|
|
|
(11,325)
|
|
Income tax (benefit)
expense
|
|
|
9
|
|
|
|
—
|
|
|
|
—
|
|
|
|
9
|
|
Consolidated net
income (loss), net of tax
|
|
|
(13,120)
|
|
|
|
3,645
|
|
|
|
(1,859)
|
|
|
|
(11,334)
|
|
Other Comprehensive
Income (Loss), net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
(201)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(201)
|
|
Total
Comprehensive Income (Loss)
|
|
$
|
(13,321)
|
|
|
$
|
3,645
|
|
|
$
|
(1,859)
|
|
|
$
|
(11,535)
|
|
|
|
Six months Ended June
30, 2015
|
|
|
|
ZAIS
|
|
|
Consolidated
Funds
|
|
|
Eliminations
|
|
|
Consolidated
|
|
|
|
( Dollars in
Thousands )
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fee
income
|
|
$
|
7,834
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,834
|
|
Incentive
income
|
|
|
2,121
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,121
|
|
Other
revenues
|
|
|
137
|
|
|
|
—
|
|
|
|
—
|
|
|
|
137
|
|
Total
Revenues
|
|
|
10,092
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10,092
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
|
13,931
|
|
|
|
—
|
|
|
|
—
|
|
|
|
13,931
|
|
General,
administrative and other
|
|
|
9,101
|
|
|
|
—
|
|
|
|
—
|
|
|
|
9,101
|
|
Depreciation and
amortization
|
|
|
208
|
|
|
|
—
|
|
|
|
—
|
|
|
|
208
|
|
Expenses of
Consolidated Funds
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Total
Expenses
|
|
|
23,240
|
|
|
|
—
|
|
|
|
—
|
|
|
|
23,240
|
|
Other Income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gain (loss) on
investments
|
|
|
45
|
|
|
|
—
|
|
|
|
—
|
|
|
|
45
|
|
Other income
(expense)
|
|
|
5
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5
|
|
Net gains (losses) of
Consolidated Funds' investments
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Total Other Income
(Loss)
|
|
|
50
|
|
|
|
—
|
|
|
|
—
|
|
|
|
50
|
|
Income (loss)
before income taxes
|
|
|
(13,098)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(13,098)
|
|
Income tax (benefit)
expense
|
|
|
(2,584)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,584)
|
|
Consolidated net
income (loss), net of tax
|
|
|
(10,514)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(10,514)
|
|
Other Comprehensive
Income (Loss), net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
483
|
|
|
|
—
|
|
|
|
—
|
|
|
|
483
|
|
Total
Comprehensive Income (Loss)
|
|
$
|
(10,031)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(10,031)
|
|
ABOUT ZAIS GROUP HOLDINGS, INC.
ZAIS (NASDAQ: ZAIS) owns a majority interest in, and is the
managing member of, ZGP. ZGP is the sole member of ZAIS Group, an
investment advisory and asset management firm focused on
specialized credit strategies with approximately $3.949 billion of assets under management as of
June 30, 2016. Based in Red Bank, New Jersey with operations in
London, ZAIS Group employs
professionals across investment management, client relations,
information technology, analytics, finance, law, compliance, risk
management and operations. To learn more,
visit www.zaisgroupholdings.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This press release contains statements that constitute
"forward-looking statements," as such term is defined in Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended, and such
statements are intended to be covered by the safe harbor provided
by the same. These statements are generally identified by the
use of words such as "outlook," "believe," "expect," "potential,"
"continue," "may," "will," "should," "could," "would," "seek,"
"approximately," "predict," "intend," "plan," "estimate,"
"anticipate," "opportunity," "pipeline," "comfortable," "assume,"
"remain," "maintain," "sustain," "achieve" or the negative version
of those words or other comparable words. These
statements are based on management's current expectations and
beliefs and are subject to a number of trends and uncertainties
that could cause actual results to differ materially from those
described in the forward-looking statements; the Company can give
no assurance that its expectations will be attained. Factors that
could cause actual results to differ materially from the Company's
expectations include, but are not limited to: the inability of the
Company to realize the anticipated benefits of the Business
Combination, which may be affected by, among other things,
competition, the ability of the Company to grow and manage growth
profitably, and retain its management and key employees;
the ability to rationalize our expense structure and
specifically to exit the residential whole loan related businesses
in an orderly fashion, or at all; the outcome of any legal
proceedings that may be instituted against the Company or others;
the inability to continue to be listed on the NASDAQ Stock Market;
operational expenses and costs related to being a public company;
changes in political, economic or industry conditions, the interest
rate environment or financial and capital markets, which could
result in changes in demand for products or services or in the
value of assets under management; the relative and absolute
investment performance of advised or sponsored investment products;
the availability of suitable investment opportunities; changes in
interest rates; changes in the yield curve; changes in prepayment
rates; the availability and terms of financing; conditions in the
market for mortgage-related investments; the impact of capital
improvement projects; the impact of future acquisitions or
divestitures; the impact, extent and timing of technological
changes and the adequacy of intellectual property protection; the
impact of legislative and regulatory actions and reforms and
regulatory, supervisory or enforcement actions of government
agencies relating to the Company; terrorist activities and
international hostilities, which may adversely affect the general
economy, financial and capital markets, specific industries, and
the Company; the ability to attract and retain highly talented
professionals; the impact of changes to tax legislation and,
generally, the tax position of the Company; legislative and
regulatory changes that could adversely affect the business of the
Company; and other factors, including those set forth in the Risk
Factors section of the Company's Annual Report on Form 10-K
filed on March 10, 2016, Form 10-K/A
filed with the SEC on April 29, 2016
and other reports filed by the Company with the Securities
and Exchange Commission (the "SEC"), copies of which are available
on the SEC's website, www.sec.gov. The Company undertakes no
obligation to update these statements for revisions or changes
after the date of this release, except as required by law.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/zais-group-holdings-inc-reports-second-quarter-2016-results-300311064.html
SOURCE ZAIS Group Holdings, Inc.