BETHESDA, Md., Nov. 16, 2017 /PRNewswire/ -- Walker &
Dunlop, Inc. (NYSE: WD) (the "Company") announced today that it has
completed a repricing of its senior secured term loan, reducing the
spread to 300 basis points over 30-day LIBOR from 425 basis points
over 30-day LIBOR. The reduction in the interest rate will
result in annual savings of approximately $2
million.
Chief Financial Officer Steve Theobald stated, "Walker &
Dunlop's sustained top and bottom line growth and consistent
financial performance since we raised this term debt in
December 2013 has created strong
market demand for our debt, allowing us to realize significant
interest savings over the next few years with this repricing.
Our trailing 12-month adjusted EBITDA has grown from
$57 million for December 31, 2013 to $181
million for September 30,
2017, reflective of the Company's core operating performance
and profitable business model."
The outstanding principal balance of Walker & Dunlop's term
loan was $166.5 million as of
September 30, 2017. There are
no other significant changes to the debt or its related covenants
as a result of the amendment.
About Walker & Dunlop
Walker & Dunlop (NYSE:
WD), headquartered in Bethesda,
Maryland, is one of the largest commercial real estate
services and finance companies in the
United States providing financing and investment
sales to owners of multifamily and commercial properties.
Walker & Dunlop, which is included in the S&P SmallCap 600
Index, has over 600 professionals in 28 offices across the nation
with an unyielding commitment to client satisfaction.
Non-GAAP Financial Measures
To supplement our
financial statements presented in accordance with United States generally accepted accounting
principles ("GAAP"), the Company uses adjusted EBITDA, a non-GAAP
financial measure. The presentation of adjusted EBITDA is not
intended to be considered in isolation or as a substitute for, or
superior to, the financial information prepared and presented in
accordance with GAAP. When analyzing our operating performance,
readers should use adjusted EBITDA in addition to, and not as an
alternative for, net income. Adjusted EBITDA represents net income
before income taxes, interest expense on our term loan facility,
and amortization and depreciation, adjusted for provision for
credit losses net of write-offs, stock-based incentive compensation
charges, and non-cash revenues such as gains attributable to MSRs.
In addition, in 2013, adjusted EBITDA further excludes the impact
of severance and lease restructuring charges related to our fourth
quarter 2013 expense reduction efforts, early extinguishment of our
prior term loan facility, and revenues from the termination fee
related to the transfer of servicing for a portion of the Fannie
Mae small loan portfolio that are not considered part of our
ongoing operations. Because not all companies use identical
calculations, our presentation of adjusted EBITDA may not be
comparable to similarly titled measures of other companies.
Furthermore, adjusted EBITDA is not intended to be a measure of
free cash flow for our management's discretionary use, as it does
not reflect certain cash requirements such as tax and debt service
payments. The amounts shown for adjusted EBITDA may also differ
from the amounts calculated under similarly titled definitions in
our debt instruments, which are further adjusted to reflect certain
other cash and non-cash charges that are used to determine
compliance with financial covenants.
We use adjusted EBITDA to evaluate the operating performance of
our business, for comparison with forecasts and strategic plans,
and for benchmarking performance externally against competitors. We
believe that this non-GAAP measure, when read in conjunction with
the Company's GAAP financials, provides useful information to
investors by offering:
- the ability to make more meaningful period-to-period
comparisons of the Company's on-going operating results;
- the ability to better identify trends in the Company's
underlying business and perform related trend analyses; and
- a better understanding of how management plans and measures the
Company's underlying business.
We believe that adjusted EBITDA has limitations in that it does
not reflect all of the amounts associated with the Company's
results of operations as determined in accordance with GAAP and
that adjusted EBITDA should only be used to evaluate the Company's
results of operations in conjunction with net income. For more
information on adjusted EBITDA, refer to the section of this press
release below titled "Adjusted Financial Metric Reconciliation to
GAAP."
Forward Looking Statements
The statements regarding
the anticipated interest savings contained in this press release
may constitute forward-looking statements within the meaning of the
federal securities laws. The statements concerning the anticipated
savings reflect our current views and are subject to numerous known
and unknown risks, uncertainties, assumptions and changes in
circumstances that may cause actual results to differ significantly
from those expressed or contemplated in this press release.
While the statements regarding the anticipated savings reflect
our good faith projections, assumptions and expectations, they are
not guarantees of future results. Furthermore, we disclaim any
obligation to publicly update or revise these statements to reflect
changes in underlying assumptions or factors, new information or
data, future events or other changes, except as required by
applicable law. A pre-payment of the senior secured term loan
could impact our ability to achieve the anticipated annual interest
savings described above.
For a further discussion of other factors that could cause
future results to differ materially from those expressed or
contemplated in any forward-looking statements, see the section
titled ''Risk Factors" in our most recent Annual Report on Form
10-K, as updated or supplemented by our Quarterly Reports on Form
10-Q and our other filings with the SEC. Such filings are
available publicly on our Investor Relations web page
at www.walkerdunlop.com.
ADJUSTED FINANCIAL
METRIC RECONCILIATION TO GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31,
|
(in
thousands)
|
Q3
2017
|
|
Q2
2017
|
|
Q1
2017
|
|
Q4
2016
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
Reconciliation of
Walker & Dunlop Net Income to Adjusted EBITDA
|
Walker &
Dunlop Net Income
|
$
|
34,378
|
|
$
|
34,567
|
|
$
|
43,221
|
|
$
|
36,790
|
|
$
|
113,897
|
|
$
|
82,128
|
|
$
|
51,422
|
|
$
|
41,530
|
Income tax
expense
|
|
19,988
|
|
|
21,570
|
|
|
13,063
|
|
|
24,175
|
|
|
71,470
|
|
|
52,771
|
|
|
32,490
|
|
|
25,257
|
Interest expense on
corporate debt
|
|
2,555
|
|
|
2,443
|
|
|
2,403
|
|
|
2,432
|
|
|
9,851
|
|
|
9,918
|
|
|
10,311
|
|
|
3,743
|
Amortization and
depreciation
|
|
32,343
|
|
|
32,860
|
|
|
32,338
|
|
|
30,603
|
|
|
111,427
|
|
|
98,173
|
|
|
80,138
|
|
|
75,955
|
Provision (benefit) for
credit losses
|
|
9
|
|
|
(93)
|
|
|
(132)
|
|
|
(778)
|
|
|
(612)
|
|
|
1,644
|
|
|
2,206
|
|
|
1,322
|
Net recoveries
(write-offs)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
810
|
|
|
(1,757)
|
|
|
(808)
|
|
|
(5,242)
|
|
|
(9,188)
|
Stock compensation
expense
|
|
6,508
|
|
|
4,310
|
|
|
4,947
|
|
|
5,693
|
|
|
18,477
|
|
|
14,084
|
|
|
9,994
|
|
|
9,194
|
Gains attributable to
mortgage servicing rights (1)
|
|
(50,781)
|
|
|
(44,669)
|
|
|
(45,535)
|
|
|
(65,100)
|
|
|
(192,825)
|
|
|
(133,631)
|
|
|
(96,515)
|
|
|
(91,972)
|
Severance costs
(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
429
|
Lease modification and
exit charges
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,137
|
Loss on extinguishment
of debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,214
|
Gain on termination of
servicing (3)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,838)
|
Adjusted
EBITDA
|
$
|
45,000
|
|
$
|
50,988
|
|
$
|
50,305
|
|
$
|
34,625
|
|
$
|
129,928
|
|
$
|
124,279
|
|
$
|
84,804
|
|
$
|
56,783
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents the fair
value of the expected net cash flows from servicing recognized at
commitment, net of the expected guaranty obligation.
|
(2)
|
Severance costs
incurred in connection with a cost reduction plan.
|
(3)
|
Gain attributable to
the termination of the servicing rights associated with a portion
of our Fannie Mae small loan portfolio.
|
View original content with
multimedia:http://www.prnewswire.com/news-releases/walker--dunlop-lowers-its-debt-costs-300558107.html
SOURCE Walker & Dunlop, Inc.