- Revenues of $189.2 million for the quarter, up 9.6% from the
prior year period.
- Net loss before non-controlling interests of $0.9 million
for the quarter compared to $0.5 million in the prior year period,
driven primarily by higher unrealized losses on
investments.
- Operating EBITDA(1) of $17.3 million for the quarter, an
increase of 20.1% from the prior year period, driven by growth in
insurance operations and contributions from our shipping and
mortgage operations within Tiptree Capital.
- Book value per share as of September 30, 2019 was $11.43,
which including dividends paid represents a 7.5%(2) year over year
return.
- Declared a dividend of $0.04 per share to stockholders of
record on November 18, 2019 with a payment date of November 25,
2019.
Tiptree Inc. (NASDAQ:TIPT) (“Tiptree” or the “Company”), a
holding company that combines specialty insurance operations with
investment management, today announced its financial results for
the nine months ended September 30, 2019.
Summary Consolidated
Statements of Operations
($ in millions, except per share
information)
Three Months Ended September
30,
Nine Months Ended September
30,
GAAP:
2019
2018
2019
2018
Total revenues
$
189.2
$
172.6
$
564.2
$
473.4
Net income (loss) before non-controlling
interests
(0.9
)
(0.5
)
15.6
29.4
Net income (loss) attributable to Common
Stockholders
(1.5
)
(0.6
)
14.2
23.8
Diluted earnings per share
(0.04
)
(0.02
)
0.39
0.69
Cash dividends paid per common share
0.040
0.035
0.115
0.100
Non-GAAP: (1)
Operating EBITDA
17.3
14.4
42.6
38.3
Adjusted EBITDA
6.2
7.7
43.7
23.2
Book value per share
11.43
10.77
11.43
10.77
(1)
For further information relating to the
Company’s Operating EBITDA, Adjusted EBITDA and Book value per
share, including a reconciliation to GAAP financials, see
“—Non-GAAP Reconciliations” below.
(2)
Total return per share as of September 30,
2019 defined as cumulative dividends paid of $0.15 per share plus
growth in book value per share from September 30, 2018.
Earnings Conference Call
Tiptree will host a conference call on Thursday, November 7,
2019 at 9:00 a.m. Eastern Time to discuss its third quarter 2019
financial results. A copy of our investor presentation, to be used
during the conference call, as well as this press release, will be
available in the Investor Relations section of the Company’s
website, located at www.tiptreeinc.com.
The conference call will be available via live or archived
webcast at http://www.investors.tiptreeinc.com. To listen to
a live broadcast, go to the site at least 15 minutes prior to the
scheduled start time in order to register, download and install any
necessary audio software. To participate in the telephone
conference call, please dial 1-877-407-4018 (domestic) or
1-201-689-8471 (international). Please dial in at least five
minutes prior to the start time.
A replay of the call will be available from Thursday, November
7, 2019 at 1:00 p.m. Eastern Time, until midnight Eastern on
Thursday, November 14, 2019. To listen to the replay, please dial
1-844-512-2921 (domestic) or 1-412-317-6671 (international),
Passcode: 13694922.
Q3’19 Financial Overview
Overall:
- Delivered a year-to-date return of 7.0%, as measured by growth
in book value per share plus dividends paid.
- Year-to-date 2019, we purchased and retired 1,472,730 shares of
our Common Stock for $9.1 million through open market purchases and
block purchases.
- Increased our quarterly dividend for the third consecutive year
to $0.04 per share, a 14.3% increase.
Insurance:
- Gross written premiums for the quarter were $275.1 million, up
22.0%, with net written premiums of $160.1 million, up 21.7%, both
driven primarily by growth in credit protection and warranty
products. Year-to-date 2019 gross written premiums were $736.1
million, up 18.8%, with net written premiums of $434.8 million, up
29.2%, driven by growth in all product lines.
- Combined ratio of 92.1% for the quarter, and 92.8% for the
year-to-date, both improvements from prior year as a result of
increased underwriting margins.
- Within our insurance investment portfolio, we earned an average
annualized yield of 4.1%, up from 2.2% from the prior year period,
driven primarily by lower unrealized losses and lower investment
portfolio interest expense.
-
As part of our strategy to grow our specialty insurance
operations in Europe, we acquired a majority interest in Defend, an
automotive finance and insurance provider and insurance
administrator operating in the Czech Republic, Poland, Hungary,
Slovakia, and the UK.
Tiptree Capital:
- Operating EBITDA grew year over year, driven primarily by the
inclusion of our shipping operations and improvements in specialty
finance.
- Increased invested capital, primarily due to additional
investments in shipping operations.
Consolidated Results of Operations
Revenues
For the three months ended September 30, 2019, revenues were
$189.2 million, which increased $16.6 million, or 9.6%, over the
prior year period. For the nine months ended September 30, 2019,
revenues were $564.2 million, which increased $90.8 million, or
19.2%, over the prior year period. The increase for both periods
was primarily driven by growth in earned premiums, lower unrealized
losses on Invesque, improvements in specialty finance results, the
inclusion of revenue from shipping operations and the gain on sale
of our CLO management business. Earned premiums were $364.7 million
for the nine months ended September 30, 2019, up from $317.8
million in the comparable 2018 period driven by growth in net
written premiums. The combination of unearned premiums and deferred
revenues on the balance sheet grew by $162.4 million, or 25.9%,
from September 30, 2018 to September 30, 2019 as a result of
increased written premiums primarily in credit protection and
warranty programs.
Net Income before non-controlling interests
For the three months ended September 30, 2019, net loss before
non-controlling interests was $0.9 million compared to $0.5 million
in the 2018 period. The higher loss was driven primarily by higher
unrealized losses on Invesque, partially offset by improved
specialty insurance results.
For the nine months ended September 30, 2019, net income before
non-controlling interests was $15.6 million compared to $29.4
million in the 2018 period, a decrease of $13.8 million. The
decrease was primarily driven by the non-recurring gain on sale of
Care, which occurred in 2018 partially offset by improved insurance
operating performance, the realized gain on the sale of our Telos
asset management business, and realized and unrealized gains on
investments in our insurance investment portfolio.
Net Income Available to Common Stockholders
For the three months ended September 30, 2019, net loss
available to Common Stockholders was $1.5 million, an increase of
$0.9 million from the prior year period. For the nine months ended
September 30, 2019, net income available to Common Stockholders was
$14.2 million, a decrease of $9.6 million from the prior year
period. The key drivers of net income (loss) available to Common
Stockholders were the same factors which impacted the net income
before non-controlling interests.
Income before taxes (from continuing and discontinued
operations)
The table below highlights key drivers impacting our
consolidated results on a pre-tax basis. Many of our investments
are carried at fair value and marked to market through unrealized
gains and losses. As a result, we expect our earnings relating to
these investments to be relatively volatile between periods in
contrast to our fixed income securities, which are marked to market
through AOCI in stockholders’ equity. On February 1, 2018, we sold
our senior living operations to Invesque in exchange for a net of
16.6 million shares of Invesque common stock which resulted in a
pre-tax gain on sale of $56.9 million in 2018, of which $46.2
million was recorded in the nine months ended September 30,
2018.
($ in millions)
Three Months Ended September
30,
Nine Months Ended September
30,
2019
2018
2019
2018
Net realized and unrealized gains
(losses)(1)
$
(8.9
)
$
(5.1
)
$
7.5
$
(11.1
)
Discontinued operations (Care)(2)
$
—
$
—
$
—
$
46.8
(1)
Excludes Mortgage realized and unrealized
gains and losses - Performing and NPLs. Nine months ended September
30, 2019 includes $7.6 million gain on sale of our CLO
business.
(2)
Represents Care for the nine months ended
September 30, 2018 including a $46.2 million pre-tax gain on
sale.
Non-GAAP
Management uses Operating EBITDA, Adjusted EBITDA and book value
per share as measurements of operating performance which are
non-GAAP measures. Management believes the use of Operating EBITDA
and Adjusted EBITDA provides supplemental information useful to
investors as they are frequently used by the financial community to
analyze financial performance, and to analyze a company’s ability
to service its debt and to facilitate comparison among companies.
Management uses Operating EBITDA as part of its capital allocation
process and to assess comparative returns on invested capital
amongst our businesses and investments. Adjusted EBITDA is also
used in determining incentive compensation for the Company’s
executive officers. Operating EBITDA and Adjusted EBITDA are not
measurements of financial performance or liquidity under GAAP and
should not be considered as an alternative or substitute for GAAP
net income. Management believes the use of book value per share
provides supplemental information useful to investors as it is
frequently used by the financial community to analyze company
growth on a relative per share basis.
Operating EBITDA for the three months ended September 30, 2019
was $17.3 million compared to $14.4 million for the 2018 period, an
increase of $2.9 million, or 20.1%. For the three month period, the
increase was driven by growth in insurance operations and
contributions from our shipping and mortgage operations within
Tiptree Capital. Operating EBITDA for the nine months ended
September 30, 2019 was $42.6 million compared to $38.3 million for
the 2018 period, an increase of $4.3 million, or 11.2%. For the
nine month period, the key drivers of the increase were driven by
improved performance in Tiptree Capital.
Total stockholders’ equity was $407.4 million as of September
30, 2019 compared to $396 million as of September 30, 2018,
primarily driven by net income, partially offset by share
repurchases and dividends paid. Over the past twelve months,
Tiptree returned $14.7 million to shareholders through share
repurchases and dividends paid. Book value per share for the period
ended September 30, 2019 was $11.43, an increase from book value
per share of $10.77 as of September 30, 2018. The key drivers of
the period-over-period impact were earnings per share and the
purchase of 1.5 million shares at an average 40% discount to book
value. Those increases were partially offset by dividends paid of
$0.15 per share and officer compensation share issuances.
Results by Segment
Tiptree is a holding company that combines insurance operations
with investment management capabilities. Our principal operating
subsidiary is a leading provider of specialty insurance products
and related services. We also allocate capital across a broad
spectrum of businesses, assets and other investments, which we
refer to as Tiptree Capital. As such, we classify our business into
one reportable segment, specialty insurance, with the remainder of
our non-insurance operations aggregated into Tiptree Capital.
Corporate activities include holding company interest expense,
employee compensation and benefits, and other expenses. The
following table presents the components of total pre-tax income
including continuing and discontinued operations.
Pre-tax Income
($ in millions)
Three Months Ended September
30,
Nine Months Ended September
30,
2019
2018
2019
2018
Specialty Insurance
$
8.3
$
5.7
$
28.4
$
15.8
Tiptree Capital
(1.4
)
1.0
16.2
(1.2
)
Corporate
(8.6
)
(7.8
)
(25.4
)
(21.2
)
Pre-tax income (loss) from continuing
operations
$
(1.7
)
$
(1.1
)
$
19.2
$
(6.6
)
Pre-tax income (loss) from discontinued
operations (1)
$
—
$
—
$
—
$
46.8
(1)
Represents Care for the nine months ended
September 30, 2018 which includes $46.2 million pre-tax gain on
sale.
Operating EBITDA - Non-GAAP (1)
The following tables present the components of Operating
EBITDA.
($ in millions)
Three Months Ended September
30,
Nine Months Ended September
30,
2019
2018
2019
2018
Specialty Insurance
$
16.0
$
15.6
$
44.5
$
45.1
Tiptree Capital (2)
7.0
4.5
15.3
11.4
Corporate
(5.7
)
(5.7
)
(17.2
)
(18.2
)
Operating EBITDA
$
17.3
$
14.4
$
42.6
$
38.3
(1)
For further information relating to the
Company’s Operating EBITDA, including a reconciliation to GAAP
pre-tax income, see “—Non-GAAP Reconciliations.”
(2)
Includes discontinued operations related
to Care. As of February 1, 2018, invested capital from Care
discontinued operations is represented by our investment in
Invesque common shares. For more information, see “Note—(3)
Dispositions, Assets Held for Sale and Discontinued Operations” in
our Form 10-Q for the quarter ended September 30, 2019.
About Tiptree
Tiptree Inc. (NASDAQ: TIPT) is a holding company that combines
insurance operations with investment management capabilities. The
Company’s principal operating subsidiary is a leading provider of
specialty insurance products and related services, including credit
protection, warranty, and programs which underwrite niche personal
and commercial lines of insurance. The Company also allocates
capital across a broad spectrum of investments, which is referred
to as Tiptree Capital. Today, Tiptree Capital consists of asset
management operations, mortgage operations and other investments.
For more information, please visit www.tiptreeinc.com.
Forward-Looking
Statements
This release contains “forward-looking statements” which involve
risks, uncertainties and contingencies, many of which are beyond
the Company’s control, which may cause actual results, performance,
or achievements to differ materially from anticipated results,
performance, or achievements. All statements contained in this
release that are not clearly historical in nature are
forward-looking, and the words “anticipate,” “believe,” “estimate,”
“expect,” “intend,” “may,” “might,” “plan,” “project,” “should,”
“target,” “will,” or similar expressions are intended to identify
forward-looking statements. Such forward-looking statements
include, but are not limited to, statements about the Company’s
plans, objectives, expectations and intentions. The forward-looking
statements are not guarantees of future performance and are subject
to risks, uncertainties and other factors, many of which are beyond
our control, are difficult to predict and could cause actual
results to differ materially from those expressed or forecast in
the forward-looking statements. Our actual results could differ
materially from those anticipated in these forward-looking
statements as a result of various factors, including, but not
limited to those described in the section entitled “Risk Factors”
in the Company’s Annual Report on Form 10-K, and as described in
the Company’s other filings with the Securities and Exchange
Commission. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as to the date
of this release. The factors described therein are not necessarily
all of the important factors that could cause actual results or
developments to differ materially from those expressed in any of
our forward-looking statements. Other unknown or unpredictable
factors also could affect our forward-looking statements.
Consequently, our actual performance could be materially different
from the results described or anticipated by our forward-looking
statements. Given these uncertainties, you should not place undue
reliance on these forward-looking statements. Except as required by
the federal securities laws, we undertake no obligation to update
any forward-looking statements.
Tiptree Inc.
Condensed Consolidated Balance
Sheet
($ in thousands, except share data)
As of
September 30,
December 31,
2019
2018
Assets:
Investments:
Available for sale securities, at fair
value
$
315,204
$
283,563
Loans, at fair value
111,758
215,383
Equity securities
147,446
122,979
Other investments
104,553
75,002
Total investments
678,961
696,927
Cash and cash equivalents
136,134
86,003
Restricted cash
17,823
10,521
Notes and accounts receivable, net
260,031
223,105
Reinsurance receivables
452,882
420,351
Deferred acquisition costs
201,803
170,063
Goodwill
99,147
91,562
Intangible assets, net
49,830
52,121
Other assets
74,550
46,034
Assets held for sale
85,332
68,231
Total assets
$
2,056,493
$
1,864,918
Liabilities and Stockholders’
Equity
Liabilities:
Debt, net
$
329,496
$
354,083
Unearned premiums
703,121
599,444
Policy liabilities and unpaid claims
134,501
131,611
Deferred revenue
86,692
75,754
Reinsurance payable
131,434
117,597
Other liabilities and accrued expenses
184,172
124,190
Liabilities held for sale
79,665
62,980
Total liabilities
$
1,649,081
$
1,465,659
Stockholders’ Equity:
Preferred stock: $0.001 par value,
100,000,000 shares authorized, none issued or outstanding
$
—
$
—
Common Stock: $0.001 par value,
200,000,000 shares authorized, 34,552,301 and 35,870,348 shares
issued and outstanding, respectively
35
36
Additional paid-in capital
325,359
331,892
Accumulated other comprehensive income
(loss), net of tax
1,916
(2,058
)
Retained earnings
67,465
57,231
Total Tiptree Inc. stockholders’
equity
394,775
387,101
Non-controlling interests - Other
12,637
12,158
Total stockholders’ equity
407,412
399,259
Total liabilities and stockholders’
equity
$
2,056,493
$
1,864,918
Tiptree Inc.
Condensed Consolidated Statements of
Operations
($ in thousands, except share data)
Three Months Ended September
30,
Nine Months Ended September
30,
2019
2018
2019
2018
Revenues:
Earned premiums, net
$
129,163
$
116,153
$
364,712
$
317,842
Service and administrative fees
26,058
26,168
78,681
75,635
Ceding commissions
1,598
2,257
7,150
6,782
Net investment income
2,984
4,810
10,713
13,942
Net realized and unrealized gains
(losses)
16,594
12,211
61,620
31,912
Other revenue
12,788
11,069
41,284
27,336
Total revenues
189,185
172,668
564,160
473,449
Expenses:
Policy and contract benefits
43,993
44,491
124,256
115,291
Commission expense
77,430
69,222
225,070
194,417
Employee compensation and benefits
34,176
28,970
94,298
83,946
Interest expense
6,731
7,334
20,183
19,935
Depreciation and amortization
3,523
3,200
9,908
9,110
Other expenses
24,930
20,589
71,183
57,354
Total expenses
190,783
173,806
544,898
480,053
Income (loss) before taxes from continuing
operations
(1,598
)
(1,138
)
19,262
(6,604
)
Less: provision (benefit) for income
taxes
(649
)
(611
)
3,706
(1,478
)
Net income (loss) from continuing
operations
(949
)
(527
)
15,556
(5,126
)
Discontinued operations:
Income (loss) before taxes from
discontinued operations
—
—
—
624
Gain on sale of discontinued
operations
—
—
—
46,184
Less: Provision (benefit) for income
taxes
—
—
—
12,327
Net income (loss) from discontinued
operations
—
—
—
34,481
Net income (loss) before
non-controlling interests
(949
)
(527
)
15,556
29,355
Less: net income (loss) attributable to
non-controlling interests - TFP
—
—
—
5,500
Less: net income (loss) attributable to
non-controlling interests - Other
508
91
1,342
87
Net income (loss) attributable to
Common Stockholders
$
(1,457
)
$
(618
)
$
14,214
$
23,768
Net income (loss) per Common
Share:
Basic, continuing operations, net
$
(0.04
)
$
(0.02
)
$
0.40
$
(0.12
)
Basic, discontinued operations, net
—
—
—
0.81
Basic earnings per share
$
(0.04
)
$
(0.02
)
$
0.40
$
0.69
Diluted, continuing operations, net
(0.04
)
(0.02
)
0.39
(0.12
)
Diluted, discontinued operations, net
—
—
—
0.81
Diluted earnings per share
$
(0.04
)
$
(0.02
)
$
0.39
$
0.69
Weighted average number of Common
Shares:
Basic
34,552,171
36,402,129
34,583,709
34,309,551
Diluted
34,552,171
36,402,129
34,583,709
34,309,551
Dividends declared per Common Share
$
0.040
$
0.035
$
0.120
$
0.105
Tiptree Inc.
Non-GAAP Reconciliations (Unaudited)
Non-GAAP Financial Measures — Adjusted
EBITDA and Operating EBITDA
The Company defines Adjusted EBITDA as GAAP net income of the
Company adjusted to add (i) corporate interest expense,
consolidated income taxes and consolidated depreciation and
amortization expense, (ii) adjust for the effect of purchase
accounting, (iii) adjust for non-cash fair value adjustments, and
(iv) any significant non-recurring expenses. Operating EBITDA
represents Adjusted EBITDA plus stock based compensation expense,
less realized and unrealized gains and losses and less third party
non-controlling interests. Operating EBITDA and Adjusted EBITDA are
not measurements of financial performance or liquidity under GAAP
and should not be considered as an alternative or substitute for
GAAP net income.
($ in millions)
Three Months Ended September
30,
Nine Months Ended September
30,
2019
2018
2019
2018
Net income (loss) attributable to Common
Stockholders
$
(1.5
)
$
(0.6
)
$
14.2
$
23.8
Add: net (loss) income attributable to
noncontrolling interests
0.5
0.1
1.3
5.6
Less: net income from discontinued
operations
—
—
—
34.5
Income (loss) from continuing
operations
$
(1.0
)
$
(0.5
)
$
15.5
$
(5.1
)
Corporate debt related interest
expense(1)
5.0
4.9
14.9
13.3
Consolidated income tax expense
(benefit)
(0.7
)
(0.6
)
3.7
(1.5
)
Depreciation and amortization
expense(2)
3.4
2.7
9.5
8.2
Non-cash fair value adjustments(3)
(1.0
)
—
(2.4
)
0.1
Non-recurring expenses(4)
0.5
1.2
2.5
2.1
Adjusted EBITDA from continuing
operations
$
6.2
$
7.7
$
43.7
$
17.1
Add: Stock-based compensation expense
1.5
1.5
4.5
3.8
Add: Vessel depreciation, net of capital
expenditures
0.7
—
1.9
—
Less: Realized and unrealized gain
(loss)(5)
(8.9
)
(5.1
)
7.5
(16.6
)
Less: Third party non-controlling
interests(6)
—
(0.1
)
—
(0.2
)
Operating EBITDA from continuing
operations
$
17.3
$
14.4
$
42.6
$
37.7
Income (loss) from discontinued
operations
$
—
$
—
$
—
$
34.5
Consolidated income tax expense
(benefit)
—
—
—
12.3
Non-cash fair value adjustments (3)
—
—
—
(40.7
)
Adjusted EBITDA from discontinued
operations
$
—
$
—
$
—
$
6.1
Less: Realized and unrealized gain (loss)
(5)
—
—
—
5.5
Operating EBITDA from discontinued
operations
$
—
$
—
$
—
$
0.6
Total Adjusted EBITDA
$
6.2
$
7.7
$
43.7
$
23.2
Total Operating EBITDA
$
17.3
$
14.4
$
42.6
$
38.3
_______________________________
(1)
Corporate Debt interest expense includes
Secured corporate credit agreements, junior subordinated notes and
preferred trust securities. Interest expense associated with
asset-specific debt in specialty insurance and asset management,
mortgage and other operations is not added-back for Adjusted EBITDA
and Operating EBITDA.
(2)
Represents total depreciation and
amortization expense less purchase accounting amortization related
adjustments at the Insurance Company. Following the purchase
accounting adjustments, current period expenses associated with
deferred costs were more favorably stated and current period income
associated with deferred revenues were less favorably stated. Thus,
the purchase accounting effect related to our Insurance company
increased EBITDA above what the historical basis of accounting
would have generated.
(3)
For our specialty insurance operations,
depreciation and amortization on senior living real estate that is
within net investment income is added back to Adjusted EBITDA. For
Care (Discontinued Operations), the reduction in EBITDA is related
to accumulated depreciation and amortization, and certain operating
expenses, which were previously included in Adjusted EBITDA in
prior periods.
(4)
Acquisition, start-up and disposition
costs including debt extinguishment, legal, taxes, banker fees and
other costs. In 2018, includes payments pursuant to a separation
agreement, dated November 10, 2015.
(5)
Adjustment excludes Mortgage realized and
unrealized gains and losses - Performing and NPLs as those are
recurring in nature and align with those business models.
(6)
Removes the Operating EBITDA associated
with third party non-controlling interests. Does not remove the
non-controlling interests related to employee based shares.
Non-GAAP Financial Measures — Adjusted
EBITDA and Operating EBITDA
The tables below present Adjusted EBITDA and Operating EBITDA by
business component.
Three Months Ended September
30, 2019
($ in millions)
Specialty Insurance
Tiptree Capital
Corporate Expenses
Total
Pre-tax income/(loss) from continuing
operations
$
8.3
$
(1.4
)
$
(8.6
)
$
(1.7
)
Adjustments:
Corporate debt related interest
expense(2)
3.4
—
1.6
5.0
Depreciation and amortization
expenses(3)
2.2
0.9
0.3
3.4
Non-cash fair value adjustments(4)
—
(1.0
)
—
(1.0
)
Non-recurring expenses(5)
0.3
—
0.2
0.5
Adjusted EBITDA
$
14.2
$
(1.5
)
$
(6.5
)
$
6.2
Add: Stock-based compensation expense
0.7
—
0.8
1.5
Add: Vessel depreciation, net of capital
expenditures
—
0.7
—
0.7
Less: Realized and unrealized gain
(loss)(6)
(1.1
)
(7.8
)
—
(8.9
)
Operating EBITDA
$
16.0
$
7.0
$
(5.7
)
$
17.3
Nine Months Ended September
30, 2019
($ in millions)
Specialty Insurance
Tiptree Capital
Corporate Expenses
Total
Pre-tax income/(loss) from continuing
operations
$
28.4
$
16.2
$
(25.4
)
$
19.2
Adjustments:
Corporate debt related interest
expense(2)
10.1
—
4.8
14.9
Depreciation and amortization
expenses(3)
6.5
2.5
0.5
9.5
Non-cash fair value adjustments(4)
—
(2.4
)
—
(2.4
)
Non-recurring expenses(5)
1.7
0.2
0.6
2.5
Adjusted EBITDA
$
46.7
$
16.5
$
(19.5
)
$
43.7
Add: Stock-based compensation expense
2.0
0.2
2.3
4.5
Add: Vessel depreciation, net of capital
expenditures
—
1.9
—
1.9
Less: Realized and unrealized gain
(loss)(6)
4.2
3.3
—
7.5
Operating EBITDA
$
44.5
$
15.3
$
(17.2
)
$
42.6
Three Months Ended September
30, 2018
($ in millions)
Specialty Insurance
Tiptree Capital
Corporate Expenses
Total
Pre-tax income/(loss) from continuing
operations
$
5.7
$
1.0
$
(7.8
)
$
(1.1
)
Adjustments:
Corporate debt related interest
expense(2)
3.4
—
1.5
4.9
Depreciation and amortization
expenses(3)
2.6
0.1
—
2.7
Non-cash fair value adjustments(4)
—
—
—
—
Non-recurring expenses(5)
0.6
0.5
0.1
1.2
Adjusted EBITDA
$
12.3
$
1.6
$
(6.2
)
$
7.7
Add: Stock-based compensation expense
0.7
0.3
0.5
1.5
Less: Realized and unrealized gain
(loss)(6)
(2.6
)
(2.5
)
—
(5.1
)
Operating EBITDA
$
15.6
$
4.4
$
(5.7
)
$
14.3
Nine Months Ended September
30, 2018
($ in millions)
Specialty Insurance
Tiptree Capital
Corporate Expenses
Total
Pre-tax income/(loss) from continuing
operations
$
15.8
$
(1.2
)
$
(21.2
)
$
(6.6
)
Pre-tax income/(loss) from discontinued
operations(1)
—
46.8
—
46.8
Adjustments:
Corporate debt related interest
expense(2)
10.0
—
3.3
13.3
Depreciation and amortization
expenses(3)
7.6
0.5
0.1
8.2
Non-cash fair value adjustments(4)
—
(40.6
)
—
(40.6
)
Non-recurring expenses(5)
2.8
1.5
(2.2
)
2.1
Adjusted EBITDA
$
36.2
$
7.0
$
(20.0
)
$
23.2
Add: Stock-based compensation expense
1.9
0.1
1.8
3.8
Less: Realized and unrealized gain
(loss)(6)
(7.0
)
(4.1
)
—
(11.1
)
Less: Third party non-controlling
interests(7)
—
(0.2
)
—
(0.2
)
Operating EBITDA
$
45.1
$
11.4
$
(18.2
)
$
38.3
_______________________________
The footnotes below correspond to the
tables above, under “—Adjusted EBITDA and Operating EBITDA -
Non-GAAP”
(1)
Includes discontinued operations related
to Care. For more information, see “Note—(3) Dispositions, Assets
Held for Sale & Discontinued Operations” in our Form 10-Q for
the quarter ended September 30, 2019.
(2)
Corporate Debt interest expense includes
Secured corporate credit agreements, junior subordinated notes and
preferred trust securities. Interest expense associated with
asset-specific debt in specialty insurance and asset management,
mortgage and other operations is not added-back for Adjusted EBITDA
and Operating EBITDA.
(3)
Represents total depreciation and
amortization expense less purchase accounting amortization related
adjustments at the Insurance Company. Following the purchase
accounting adjustments, current period expenses associated with
deferred costs were more favorably stated and current period income
associated with deferred revenues were less favorably stated. Thus,
the purchase accounting effect related to our Insurance company
increased EBITDA above what the historical basis of accounting
would have generated.
(4)
For our specialty insurance operations,
depreciation and amortization on senior living real estate that is
within net investment income is added back to Adjusted EBITDA. For
Care (Discontinued Operations), the reduction in EBITDA is related
to accumulated depreciation and amortization, and certain operating
expenses, which were previously included in Adjusted EBITDA in
prior periods.
(5)
Acquisition, start-up and disposition
costs including debt extinguishment, legal, taxes, banker fees and
other costs. In 2018, includes payments pursuant to a separation
agreement, dated November 10, 2015.
(6)
Adjustment excludes Mortgage realized and
unrealized gains and losses - Performing and NPLs as those are
recurring in nature and align with those business models.
(7)
Removes the Operating EBITDA associated
with third party non-controlling interests. Does not remove the
non-controlling interests related to employee based shares.
Non-GAAP Financial Measures — Book
value per share
Management believes the use of this financial measure provides
supplemental information useful to investors as book value is
frequently used by the financial community to analyze company
growth on a relative per share basis. The following table provides
a reconciliation between total stockholders’ equity and total
shares outstanding, net of treasury shares.
($ in millions, except per share
information)
As of September 30,
2019
2018
Total stockholders’ equity
$
407.4
$
396.0
Less non-controlling interests - other
12.6
9.1
Total stockholders’ equity, net of
non-controlling interests - other
$
394.8
$
386.9
Total Common shares outstanding
34.6
35.9
Book value per share
$
11.43
$
10.77
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191106005811/en/
Tiptree Inc. Investor Relations, 212-446-1400
ir@tiptreeinc.com
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