RED BANK, N.J., May 11, 2017 /PRNewswire/ -- ZAIS Group
Holdings, Inc. (NASDAQ: ZAIS) ("ZAIS"), today reported financial
results for the three months ended March 31,
2017. 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, until October 31, 2016, ZAIS
Financial Corp. ("ZFC REIT"), a publicly traded real estate
investment trust (collectively, the "ZAIS Managed Entities").
References to the "Company" herein refer to ZAIS, together with
(where the context requires) its consolidated subsidiaries and
affiliates.
FIRST QUARTER 2017 HIGHLIGHTS
A summary of the Company's results for the three months ended
March 31, 2017 and March 31, 2016 are below. All dollar
amounts are presented in millions, with the exception of figures
presented on a per share basis.
|
Three Months
Ended
|
March 31,
2017
|
March 31,
2016
|
U.S.
GAAP
|
|
|
Net
income/(loss)
|
$(5.4)
|
$(6.4)
|
Net Income/(loss) per
diluted weighted average share outstanding
applicable to ZAIS Group Holdings, Inc.
|
$(0.30)
|
$(0.35)
|
Net
Income/(loss)before income taxes
|
$(5.4)
|
$(6.4)
|
Non-GAAP
|
|
|
Net income/(loss)
(excluding Consolidated Funds of ZAIS Group)
|
$(6.2)
|
$(7.1)
|
Net income/(loss)
(excluding Consolidated Funds of ZAIS Group) per
diluted weighted average share outstanding
|
$(0.30)
|
$(0.35)
|
Adjusted
EBITDA
|
$(5.0)
|
$(6.1)
|
The consolidated financial statements include non-controlling
interests of the members of ZAIS Group Parent, LLC ("ZGP") (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 GAAP RESULTS
The Company recorded GAAP net loss for the three months ended
March 31, 2017 of $(5.4) million compared with a GAAP net loss of
$(6.4) million for the three months
ended March 31, 2016. The
decrease of $1.0 million in GAAP net
loss was primarily driven by a decrease in expenses of $1.1 million offset by a decrease in other income
of $0.3 million. The GAAP
results include the results of funds and structured financing
entities which are consolidated by the Company (the "Consolidated
Funds").
Total expenses decreased by $1.1
million primarily due to a $2.4
million decrease in salaries, bonuses, severance and
associated payroll taxes and other employee benefits due to a
reduction in force that occurred in 2016, offset by a $0.8 million increase in equity compensation
expense relating to a reduction in the forfeiture rate on ZGP's
Class B-0 units due to lower employee turnover. General,
administrative and other expenses increased by $0.5 million primarily due to an increase of
$0.7 million in the cost of research
and data services borne by ZAIS Group and paid directly by ZAIS
Group to vendors relating to the management of the ZAIS Managed
Entities, offset by $0.2 million of
expense reductions with regard to professional fees, occupancy and
utilities, information systems, and travel and entertainment.
Other income decreased by $0.3
million primarily due to a decrease of $0.5 million relating to an insurance
reimbursement for legal costs incurred during the year ended
December 31, 2015 which was received
in 2016 and a $0.4 million
decrease in net gains (losses) on Consolidated Funds' investments
related to ZAIS Zephyr A-6, LP, a Consolidated Fund ("Zephyr
A-6"). This was offset by a $0.6
million increase in net gain (loss) on Zephyr A-6's
investment in ZAIS CLO 5, Limited, which is also a Consolidated
Fund.
CONSOLIDATED NON-GAAP RESULTS
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 March 31, 2017, the Company
had cash and cash equivalents, on an unconsolidated basis, of
$25.5 million and no debt
obligations.
FIRST QUARTER 2017 SUPPLEMENTAL INFORMATION
The Company's First Quarter 2017 Supplemental Information –
March 31, 2017, 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.
ZAIS GROUP
HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Financial Condition
(Dollars in thousands, except share amounts)
|
|
|
|
|
|
March 31,
2017
|
|
December 31,
2016
|
|
|
|
|
Assets
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
25,456
|
|
$
|
38,712
|
Income and fees receivable
|
|
1,500
|
|
|
8,805
|
Investments in affiliates, at fair value
|
|
5,286
|
|
|
5,273
|
Due from related parties
|
|
1,362
|
|
|
734
|
Property and equipment, net
|
|
235
|
|
|
274
|
Prepaid expenses
|
|
1,450
|
|
|
906
|
Other assets
|
|
318
|
|
|
348
|
Assets of
Consolidated Funds
|
|
|
|
|
|
Cash and cash equivalents
|
|
19,288
|
|
|
37,080
|
Investments, at fair value
|
|
449,951
|
|
|
404,365
|
Due from broker
|
|
9,341
|
|
|
16,438
|
Other assets
|
|
1,116
|
|
|
1,210
|
Total
Assets
|
$
|
515,303
|
|
$
|
514,145
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Notes payable
|
$
|
—
|
|
$
|
1,263
|
Compensation payable
|
|
2,208
|
|
|
7,836
|
Due to related parties
|
|
31
|
|
|
31
|
Fees payable
|
|
2,502
|
|
|
2,439
|
Other liabilities
|
|
1,403
|
|
|
1,127
|
Liabilities of
Consolidated Funds
|
|
|
|
|
|
Notes payable of consolidated CLO, at fair value
|
|
391,628
|
|
|
384,901
|
Due to broker
|
|
21,696
|
|
|
24,462
|
Other liabilities
|
|
5,110
|
|
|
2,121
|
Total
Liabilities
|
|
424,578
|
|
|
424,180
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
—
|
|
|
—
|
|
|
|
|
|
|
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;
14,449,840 and 13,900,917 shares
issued and outstanding at March 31,
2017 and December 31, 2016,
respectively.
|
|
1
|
|
|
1
|
Class B Common Stock, $0.000001 par value; 20,000,000 shares
authorized;
20,000,000 shares issued and
outstanding.
|
|
—
|
|
|
—
|
Additional paid-in capital
|
|
64,130
|
|
|
63,413
|
Retained earnings (Accumulated deficit)
|
|
(23,127)
|
|
|
(18,965)
|
Accumulated other comprehensive income (loss)
|
|
(50)
|
|
|
(70)
|
Total stockholders' equity, ZAIS Group Holdings, Inc.
|
|
40,954
|
|
|
44,379
|
Non-controlling interests in ZAIS Group Parent, LLC
|
|
19,753
|
|
|
22,258
|
Non-controlling interests in Consolidated Funds
|
|
30,018
|
|
|
23,328
|
Total
Equity
|
|
90,725
|
|
|
89,965
|
Total Liabilities
and Equity
|
$
|
515,303
|
|
$
|
514,145
|
ZAIS GROUP
HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income (Loss)
(Dollars in thousands, except share and per share
amounts)
|
|
|
|
Three Months
Ended
March
31,
|
|
2017
|
|
|
2016
|
Revenues
|
|
|
|
|
|
|
Management fee
income
|
$
|
3,107
|
|
|
$
|
3,569
|
Incentive
income
|
|
297
|
|
|
|
152
|
Reimbursement
revenue
|
|
494
|
|
|
|
—
|
Other
revenue
|
|
93
|
|
|
|
80
|
Total
Revenues
|
|
3,991
|
|
|
|
3,801
|
Expenses
|
|
|
|
|
|
|
Compensation and
benefits
|
|
7,424
|
|
|
|
9,007
|
General,
administrative and other
|
|
3,669
|
|
|
|
3,210
|
Depreciation and
amortization
|
|
40
|
|
|
|
63
|
Expenses of
Consolidated Funds
|
|
43
|
|
|
|
19
|
Total
Expenses
|
|
11,176
|
|
|
|
12,299
|
Other income
(loss)
|
|
|
|
|
|
|
Net gain (loss) on
investments
|
|
75
|
|
|
|
(18)
|
Other income
(expense)
|
|
(16)
|
|
|
|
605
|
Net gain (loss) of
Consolidated Funds' investments
|
|
1,107
|
|
|
|
1,517
|
Net gain (loss) on
beneficial interest of collateralized financing
entity
|
|
589
|
|
|
|
—
|
Total Other Income
(Loss)
|
|
1,755
|
|
|
|
2,104
|
Income (loss)
before income taxes
|
|
(5,430)
|
|
|
|
(6,394)
|
Income tax (benefit)
expense
|
|
5
|
|
|
|
5
|
Consolidated net
income (loss), net of tax
|
|
(5,435)
|
|
|
|
(6,399)
|
Other comprehensive
income (loss), net of tax:
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
30
|
|
|
|
(54)
|
Total
Comprehensive Income (Loss)
|
$
|
(5,405)
|
|
|
$
|
(6,453)
|
Allocation of
Consolidated Net Income (Loss), net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests in Consolidated Funds
|
$
|
810
|
|
|
$
|
734
|
Stockholders' equity,
ZAIS Group Holdings, Inc.
|
|
(4,162)
|
|
|
|
(4,834)
|
Non-controlling
interests in ZAIS Group Parent, LLC
|
|
(2,083)
|
|
|
|
(2,299)
|
|
$
|
(5,435)
|
|
|
$
|
(6,399)
|
Allocation of
Total Comprehensive Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests in Consolidated Funds
|
$
|
810
|
|
|
$
|
734
|
Stockholders' equity,
ZAIS Group Holdings, Inc.
|
|
(4,142)
|
|
|
|
(4,870)
|
Non-controlling
interests in ZAIS Group Parent, LLC
|
|
(2,073)
|
|
|
|
(2,317)
|
|
$
|
(5,405)
|
|
|
$
|
(6,453)
|
|
|
|
|
|
|
|
Consolidated Net
Income (Loss), net of tax per Class A
common share applicable to ZAIS Group Holdings, Inc. –
Basic
|
$
|
(0.30)
|
|
|
$
|
(0.35)
|
Consolidated Net
Income (Loss), net of tax per Class A
common share applicable to ZAIS Group Holdings, Inc. –
Diluted
|
$
|
(0.30)
|
|
|
$
|
(0.35)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares of Class A common stock outstanding:
|
|
|
|
|
|
|
Basic
|
|
13,986,305
|
|
|
|
13,870,917
|
Diluted
|
|
20,986,305
|
|
|
|
20,870,917
|
|
|
|
|
|
|
|
The following supplemental financial information illustrates the
consolidating effects of the Consolidated Funds on the Company's
financial position and results of operations:
|
March 31,
2017
|
|
ZAIS
|
|
Consolidated
Funds
|
|
Eliminations
|
|
Consolidated
|
|
( Dollars in
thousands )
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
25,456
|
|
$
|
—
|
|
$
|
—
|
|
$
|
25,456
|
Income and fees
receivable
|
|
1,500
|
|
|
—
|
|
|
—
|
|
|
1,500
|
Investments in
affiliates, at fair value
|
|
36,530
|
|
|
—
|
|
|
(31,244)
|
|
|
5,286
|
Due from related
parties
|
|
1,362
|
|
|
—
|
|
|
—
|
|
|
1,362
|
Property and
equipment, net
|
|
235
|
|
|
—
|
|
|
—
|
|
|
235
|
Prepaid
expenses
|
|
1,450
|
|
|
—
|
|
|
—
|
|
|
1,450
|
Other
assets
|
|
318
|
|
|
—
|
|
|
—
|
|
|
318
|
Assets of
Consolidated Funds
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
—
|
|
|
19,288
|
|
|
—
|
|
|
19,288
|
Investments, at fair
value
|
|
—
|
|
|
464,612
|
|
|
(14,661)
|
|
|
449,951
|
Due from
broker
|
|
—
|
|
|
9,341
|
|
|
—
|
|
|
9,341
|
Other
assets
|
|
—
|
|
|
1,162
|
|
|
(46)
|
|
|
1,116
|
Total
Assets
|
$
|
66,851
|
|
$
|
494,403
|
|
$
|
(45,951)
|
|
$
|
515,303
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Compensation
payable
|
$
|
2,208
|
|
$
|
—
|
|
$
|
—
|
|
$
|
2,208
|
Due to related
parties
|
|
31
|
|
|
—
|
|
|
—
|
|
|
31
|
Fees
payable
|
|
2,502
|
|
|
—
|
|
|
—
|
|
|
2,502
|
Other
liabilities
|
|
1,403
|
|
|
—
|
|
|
—
|
|
|
1,403
|
Liabilities of
Consolidated Funds
|
|
|
|
|
|
|
|
|
|
|
|
Notes payable of
Consolidated CLO
|
|
—
|
|
|
406,289
|
|
|
(14,661)
|
|
|
391,628
|
Due to
broker
|
|
—
|
|
|
21,696
|
|
|
—
|
|
|
21,696
|
Other
liabilities
|
|
—
|
|
|
5,156
|
|
|
(46)
|
|
|
5,110
|
Total
Liabilities
|
|
6,144
|
|
|
433,141
|
|
|
(14,707)
|
|
|
424,578
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
Stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Class A Common
Stock
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
Class B Common
Stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Additional
paid-in-capital
|
|
64,130
|
|
|
—
|
|
|
—
|
|
|
64,130
|
Retained earnings
(Accumulated deficit)
|
|
(23,127)
|
|
|
—
|
|
|
—
|
|
|
(23,127)
|
Accumulated other comprehensive income
(loss)
|
|
(50)
|
|
|
—
|
|
|
—
|
|
|
(50)
|
Total stockholders'
equity, ZAIS Group Holdings, Inc.
|
|
40,954
|
|
|
—
|
|
|
—
|
|
|
40,954
|
Non-controlling
interests in ZAIS Group Parent, LLC
|
|
19,753
|
|
|
—
|
|
|
—
|
|
|
19,753
|
Non-controlling
interests in Consolidated Funds
|
|
—
|
|
|
61,262
|
|
|
(31,244)
|
|
|
30,018
|
Total
Equity
|
|
60,707
|
|
|
61,262
|
|
|
(31,244)
|
|
|
90,725
|
Total Liabilities
and Equity
|
$
|
66,851
|
|
$
|
494,403
|
|
$
|
(45,951)
|
|
$
|
515,303
|
|
December 31,
2016
|
|
ZAIS
|
|
Consolidated
Funds
|
|
Eliminations
|
|
Consolidated
|
|
( Dollars in
thousands )
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
38,712
|
|
$
|
—
|
|
$
|
—
|
|
$
|
38,712
|
Income and fees
receivable
|
|
8,805
|
|
|
—
|
|
|
—
|
|
|
8,805
|
Investments in
affiliates, at fair value
|
|
29,554
|
|
|
—
|
|
|
(24,281)
|
|
|
5,273
|
Due from related
parties
|
|
734
|
|
|
—
|
|
|
—
|
|
|
734
|
Property and
equipment, net
|
|
274
|
|
|
—
|
|
|
—
|
|
|
274
|
Prepaid
expenses
|
|
906
|
|
|
—
|
|
|
—
|
|
|
906
|
Other
assets
|
|
348
|
|
|
—
|
|
|
—
|
|
|
348
|
Assets of
Consolidated Funds
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
—
|
|
|
37,080
|
|
|
—
|
|
|
37,080
|
Investments, at fair
value
|
|
—
|
|
|
423,871
|
|
|
(19,506)
|
|
|
404,365
|
Due from
broker
|
|
—
|
|
|
16,438
|
|
|
—
|
|
|
16,438
|
Other
assets
|
|
—
|
|
|
1,254
|
|
|
(44)
|
|
|
1,210
|
Total
Assets
|
$
|
79,333
|
|
$
|
478,643
|
|
$
|
(43,831)
|
|
$
|
514,145
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Notes
payable
|
$
|
1,263
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,263
|
Compensation
payable
|
|
7,836
|
|
|
—
|
|
|
—
|
|
|
7,836
|
Due to related
parties
|
|
31
|
|
|
—
|
|
|
—
|
|
|
31
|
Fees
payable
|
|
2,439
|
|
|
—
|
|
|
—
|
|
|
2,439
|
Other
liabilities
|
|
1,127
|
|
|
—
|
|
|
—
|
|
|
1,127
|
Liabilities of
Consolidated Funds
|
|
|
|
|
|
|
|
|
|
|
|
Notes payable of
Consolidated CLO
|
|
—
|
|
|
404,407
|
|
|
(19,506)
|
|
|
384,901
|
Due to
broker
|
|
—
|
|
|
24,462
|
|
|
—
|
|
|
24,462
|
Other
liabilities
|
|
—
|
|
|
2,165
|
|
|
(44)
|
|
|
2,121
|
Total
Liabilities
|
|
12,696
|
|
|
431,034
|
|
|
(19,550)
|
|
|
424,180
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
Stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Class A Common
Stock
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
Class B Common
Stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Additional
paid-in-capital
|
|
63,413
|
|
|
—
|
|
|
—
|
|
|
63,413
|
Retained earnings
(Accumulated deficit)
|
|
(18,965)
|
|
|
—
|
|
|
—
|
|
|
(18,965)
|
Accumulated other comprehensive income
(loss)
|
|
(70)
|
|
|
—
|
|
|
—
|
|
|
(70)
|
Total stockholders'
equity, ZAIS Group Holdings, Inc.
|
|
44,379
|
|
|
—
|
|
|
—
|
|
|
44,379
|
Non-controlling
interests in ZAIS Group Parent, LLC
|
|
22,258
|
|
|
—
|
|
|
—
|
|
|
22,258
|
Non-controlling
interests in Consolidated Funds
|
|
—
|
|
|
47,609
|
|
|
(24,281)
|
|
|
23,328
|
Total
Equity
|
|
66,637
|
|
|
47,609
|
|
|
(24,281)
|
|
|
89,965
|
Total Liabilities
and Equity
|
$
|
79,333
|
|
$
|
478,643
|
|
$
|
(43,831)
|
|
$
|
514,145
|
|
Three Months
Ended
March 31,
2017
|
|
ZAIS
|
|
Consolidated
Funds
|
|
Eliminations
|
|
Consolidated
|
|
( Dollars in
thousands )
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
Management fee
income
|
$
|
3,107
|
|
$
|
—
|
|
$
|
—
|
|
$
|
3,107
|
Incentive
income
|
|
297
|
|
|
—
|
|
|
—
|
|
|
297
|
Reimbursement
revenue
|
|
494
|
|
|
—
|
|
|
—
|
|
|
494
|
Other
revenues
|
|
93
|
|
|
—
|
|
|
—
|
|
|
93
|
Income of
Consolidated Funds
|
|
—
|
|
|
205
|
|
|
(205)
|
|
|
—
|
Total
Revenues
|
|
3,991
|
|
|
205
|
|
|
(205)
|
|
|
3,991
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
7,424
|
|
|
—
|
|
|
—
|
|
|
7,424
|
General,
administrative and other
|
|
3,669
|
|
|
—
|
|
|
—
|
|
|
3,669
|
Depreciation and
amortization
|
|
40
|
|
|
—
|
|
|
—
|
|
|
40
|
Expenses of
Consolidated Funds
|
|
—
|
|
|
43
|
|
|
—
|
|
|
43
|
Total
Expenses
|
|
11,133
|
|
|
43
|
|
|
—
|
|
|
11,176
|
Other Income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
Net gain (loss) on
investments
|
|
918
|
|
|
—
|
|
|
(843)
|
|
|
75
|
Other income
(expense)
|
|
(16)
|
|
|
—
|
|
|
—
|
|
|
(16)
|
Net gains (losses) of
Consolidated Funds' investments
|
|
—
|
|
|
1,492
|
|
|
(385)
|
|
|
1,107
|
Net gain (loss) on
beneficial interest of collateralized financing entity
|
|
—
|
|
|
—
|
|
|
589
|
|
|
589
|
Total Other Income
(Loss)
|
|
902
|
|
|
1,492
|
|
|
(639)
|
|
|
1,755
|
Income (loss)
before income taxes
|
|
(6,240)
|
|
|
1,654
|
|
|
(844)
|
|
|
(5,430)
|
Income tax (benefit)
expense
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
Consolidated net
income (loss), net of tax
|
|
(6,245)
|
|
|
1,654
|
|
|
(844)
|
|
|
(5,435)
|
Other Comprehensive
Income (Loss), net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Foreign currency
translation adjustment
|
|
30
|
|
|
—
|
|
|
—
|
|
|
30
|
Total
Comprehensive Income (Loss)
|
$
|
(6,215)
|
|
$
|
1,654
|
|
$
|
(844)
|
|
$
|
(5,405)
|
|
Three Months
Ended
March 31,
2016
|
|
ZAIS
|
|
Consolidated
Funds
|
|
Eliminations
|
|
Consolidated
|
|
( Dollars in
thousands )
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
Management fee
income
|
$
|
3,569
|
|
$
|
—
|
|
$
|
—
|
|
$
|
3,569
|
Incentive
income
|
|
152
|
|
|
—
|
|
|
—
|
|
|
152
|
Other
revenues
|
|
80
|
|
|
—
|
|
|
—
|
|
|
80
|
Total
Revenues
|
|
3,801
|
|
|
—
|
|
|
—
|
|
|
3,801
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
9,007
|
|
|
—
|
|
|
—
|
|
|
9,007
|
General,
administrative and other
|
|
3,210
|
|
|
—
|
|
|
—
|
|
|
3,210
|
Depreciation and
amortization
|
|
63
|
|
|
—
|
|
|
—
|
|
|
63
|
Expenses of
Consolidated Funds
|
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
Total
Expenses
|
|
12,280
|
|
|
19
|
|
|
—
|
|
|
12,299
|
Other Income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
Net gain (loss) on
investments
|
|
746
|
|
|
—
|
|
|
(764)
|
|
|
(18)
|
Other income
(expense)
|
|
605
|
|
|
—
|
|
|
—
|
|
|
605
|
Net gains (losses) of
Consolidated Funds' investments
|
|
—
|
|
|
1,517
|
|
|
—
|
|
|
1,517
|
Total Other Income
(Loss)
|
|
1,351
|
|
|
1,517
|
|
|
(764)
|
|
|
2,104
|
Income (loss)
before income taxes
|
|
(7,128)
|
|
|
1,498
|
|
|
(764)
|
|
|
(6,394)
|
Income tax (benefit)
expense
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
Consolidated net
income (loss), net of tax
|
|
(7,133)
|
|
|
1,498
|
|
|
(764)
|
|
|
(6,399)
|
Other Comprehensive
Income (Loss), net of tax
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
(54)
|
|
|
—
|
|
|
—
|
|
|
(54)
|
Total
Comprehensive Income (Loss)
|
$
|
(7,187)
|
|
$
|
1,498
|
|
$
|
(764)
|
|
$
|
(6,453)
|
The following table presents the reconciliations of our
consolidated GAAP net income, net of tax to (i) our non-GAAP
financial measure of net income (loss) (excluding Consolidated
Funds of ZAIS Group) and (ii) our non-GAAP financial measure
of Adjusted EBITDA:
|
|
|
Three Months
Ended
March 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
(Dollars in
thousands)
|
Consolidated net
income (loss), net of tax (GAAP Net Income (Loss))
|
$
|
(5,435)
|
|
|
$
|
(6,399)
|
Add back: Elimination
of Net gain (loss) on investments
|
|
|
|
843
|
|
|
|
764
|
Add back: Expenses of
Consolidated Funds
|
|
|
|
43
|
|
|
|
19
|
Net (gain) loss on
Consolidated Funds' investments
|
|
|
|
(1,107)
|
|
|
|
(1,517)
|
Net (gain) loss on
beneficial interest of collateralized financing entity
|
|
(589)
|
|
|
|
—
|
Net income (loss)
(excluding Consolidated Funds of ZAIS Group) –
Non-GAAP
|
|
(6,245)
|
|
|
|
(7,133)
|
|
|
|
|
|
|
|
|
|
Add back: Tax
expense
|
|
|
|
5
|
|
|
|
5
|
Add back:
Compensation attributable to equity compensation
|
|
1,112
|
|
|
|
343
|
Add back: Severance
costs
|
|
|
|
72
|
|
|
|
642
|
Add back:
Depreciation and amortization
|
|
|
|
40
|
|
|
|
63
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA –
Non-GAAP
|
|
|
$
|
(5,016)
|
|
|
$
|
(6,080)
|
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 $3.360 billion of
assets under management as of March 31,
2017. 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 the
strategic review of the Company's business and availability of
suitable strategic options; the ability of the Company to negotiate
and enter into an agreement for a potential sale, business
combination, going private or other strategic transaction; the
ability of the Company to consummate any potential strategic
transaction and to realize any anticipated benefits of such
transaction; 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 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-first-quarter-2017-results-300456502.html
SOURCE ZAIS Group Holdings, Inc.