SEATTLE, March 1, 2018 /PRNewswire/ -- WMIH Corp.
(Nasdaq: WMIH) (the "Company") today reported financial results for
the year ended December 31,
2017.
In 2017, the Company reported a net operating loss of
$2.5 million on revenues of
$7.9 million and operating expenses
of $10.4 million. Net income before
taxes and dividends was $25.9 million
primarily as a result of $28.2
million of other income resulting from a gain on change in
value of the derivative embedded conversion feature recorded by the
Company in relation to its Series B Convertible Preferred Stock.
Net income attributable to common and participating stockholders
was $7.8 million after $18.1 million of preferred stock
dividends.
Bill Gallagher, the Company's
Chief Executive Officer, said, "In February
2018, following our successful efforts to amend and extend
the mandatory redemption date of our Series B Convertible Preferred
Stock, we executed definitive documentation to merge with
Nationstar Mortgage Holdings Inc. (NYSE: NSM). We are very
excited about this accretive combination, which we believe will
significantly benefit and deliver value to our stockholders given
the synergies between the WMIH platform and financial attributes
and Nationstar's experienced management team and best-in-class
servicing and originations platform. We are working closely with
the Nationstar team to successfully complete the merger in the
second half of 2018."
As of December 31, 2017, WMIH had
approximately $578.9 million of
restricted cash held in escrow, which represents the net proceeds
of the Series B Preferred Convertible Stock issuance, net of fees
and expenses paid in pursuit of acquisitions. The funds held in
escrow are only available for Acquisitions and Qualified
Acquisitions (as defined in WMIH's Amended and Restated Certificate
of Incorporation). Additionally, WMIH had $28.9 million of unrestricted cash available for
general corporate purposes as of year-end.
IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT
This communication is being made in respect of the proposed
merger transaction involving WMIH and Nationstar. WMIH intends to
file a registration statement on Form S-4 with the SEC, which will
include a joint proxy statement of WMIH and Nationstar and a
prospectus of WMIH, and each party will file other documents
regarding the proposed transaction with the SEC. Any definitive
proxy statement(s)/prospectus(es) will also be sent to the
stockholders of WMIH and/or Nationstar, as applicable, seeking any
required stockholder approval. This communication does not
constitute an offer to sell or the solicitation of an offer to buy
any securities or a solicitation of any vote or approval. Before
making any voting or investment decision, investors and security
holders of WMIH and Nationstar are urged to carefully read the
entire registration statement(s) and proxy
statement(s)/prospectus(es), when they become available, and any
other relevant documents filed with the SEC, as well as any
amendments or supplements to these documents, because they will
contain important information about the proposed transaction. The
documents filed by WMIH and Nationstar with the SEC may be obtained
free of charge at the SEC's website at www.sec.gov. In
addition, the documents filed by WMIH may be obtained free of
charge from WMIH at www.wmih-corp.com, and the documents filed by
Nationstar may be obtained free of charge from Nationstar at
www.nationstarholdings.com. Alternatively, these documents,
when available, can be obtained free of charge from WMIH upon
written request to WMIH Corp., 800 Fifth Avenue, Suite 4100,
Seattle, Washington 98104, Attn:
Secretary, or by calling (206) 922-2957, or from Nationstar upon
written request to Nationstar Mortgage Holdings Inc., 8950 Cypress
Waters Blvd, Dallas, TX 75019,
Attention: Corporate Secretary, or by calling (469) 549-2000.
WMIH and Nationstar and certain of their respective directors
and executive officers may be deemed to be participants in the
solicitation of proxies from the shareholders of WMIH and/or
Nationstar, as applicable, in favor of the approval of the merger.
Information regarding WMIH's directors and executive officers is
contained in WMIH's Annual Report on Form 10-K for the year ended
December 31, 2016, its Quarterly
Report on Form 10-Q for the quarterly periods ended March 31, 2017, June 30,
2017 and September 30, 2017
and its Proxy Statement on Schedule 14A, dated April 18, 2017, which are filed with the SEC.
Information regarding Nationstar's directors and executive officers
is contained in Nationstar's Annual Report on Form 10-K for the
year ended December 31, 2016, its
Quarterly Report on Form 10-Q for the quarterly periods ended
March 31, 2017, June 30, 2017 and September 30, 2017, and its Proxy Statement on
Schedule 14A, dated April 11, 2017,
which are filed with the SEC. Additional information regarding the
interests of those participants and other persons who may be deemed
participants in the transaction may be obtained by reading the
registration statement(s) and the proxy statement(s)/prospectus(es)
and other relevant documents filed with the SEC when they become
available. Free copies of these documents may be obtained as
described in the preceding paragraph.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
including, but not limited to, WMIH's and Nationstar's expectations
or predictions of future financial or business performance or
conditions. All statements other than statements of historical or
current fact included in this press release that address
activities, events, conditions or developments that we expect,
believe or anticipate will or may occur in the future are
forward-looking statements. Forward-looking statements give our
current expectations and projections relating to our financial
condition, results of operations, plans, objectives, future
performance and business and these statements are not guarantees of
future performance. Forward-looking statements may include the
words "anticipate," "estimate," "expect," "project," "intend,"
"plan," "believe," "strategy," "future," "opportunity," "may,"
"should," "will," "would," "will be," "will continue," "will likely
result," and similar expressions. Such forward-looking statements
involve risks and uncertainties that may cause actual events,
results or performance to differ materially from those indicated by
such statements. Certain of these risks are identified and
discussed in WMIH's Form 10-K for the year ended December 31, 2016 under Risk Factors in Part I,
Item 1A and Nationstar's Form 10-K for the year ended December 31, 2016 under Risk Factors in Part I,
Item 1A. These risk factors will be important to consider in
determining future results and should be reviewed in their
entirety. These forward-looking statements are expressed in good
faith, and WMIH and Nationstar believe there is a reasonable basis
for them. However, there can be no assurance that the events,
results or trends identified in these forward-looking statements
will occur or be achieved. Forward-looking statements speak only as
of the date they are made, and neither WMIH nor Nationstar is under
any obligation, and expressly disclaim any obligation, to update,
alter or otherwise revise any forward-looking statement, except as
required by law. Readers should carefully review the statements set
forth in the reports, which WMIH and Nationstar have filed or will
file from time to time with the SEC.
In addition to factors previously disclosed in WMIH's and
Nationstar's reports filed with the SEC and those identified
elsewhere in this press release, the following factors, among
others, could cause actual results to differ materially from
forward-looking statements or historical performance: ability to
meet the closing conditions to the merger, including approval by
shareholders of WMIH and Nationstar on the expected terms and
schedule and the risk that regulatory approvals required for the
merger are not obtained or are obtained subject to conditions that
are not anticipated; delay in closing the merger; failure to
realize the benefits expected from the proposed transaction; the
effects of pending and future legislation; risks associated with
investing in mortgage loans and mortgage servicing
rights and changes in interest rates; risks related to
disruption of management time from ongoing business operations due
to the proposed transaction; business disruption following the
transaction; macroeconomic factors beyond WMIH's or Nationstar's
control; risks related to WMIH's or Nationstar's indebtedness and
other consequences associated with mergers, acquisitions and
divestitures and legislative and regulatory actions and
reforms.
CONTACT
Helen
Grayson
206-922-2957
Financial Tables
WMIH CORP. AND
SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(in thousands,
except share and per share data)
|
|
|
Year ended
December 31,
2017
|
|
|
Year ended
December 31,
2016
|
|
|
Year ended
December 31,
2015
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Premiums
earned
|
$
|
1,220
|
|
|
$
|
3,147
|
|
|
$
|
5,121
|
|
Net investment
income
|
|
6,670
|
|
|
|
2,249
|
|
|
|
879
|
|
Total
revenues
|
|
7,890
|
|
|
|
5,396
|
|
|
|
6,000
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Losses and loss
adjustment expense (benefit)
|
|
19
|
|
|
|
(669)
|
|
|
|
(1,115)
|
|
Ceding commission
expense
|
|
137
|
|
|
|
306
|
|
|
|
456
|
|
General and
administrative expense
|
|
14,457
|
|
|
|
7,043
|
|
|
|
20,940
|
|
Loss contract reserve
reduction
|
|
(5,645)
|
|
|
|
(3,978)
|
|
|
|
(2,926)
|
|
Gain from contract
termination
|
|
(383)
|
|
|
|
—
|
|
|
|
—
|
|
Interest
expense
|
|
1,788
|
|
|
|
2,616
|
|
|
|
3,702
|
|
Total operating
expenses
|
|
10,373
|
|
|
|
5,318
|
|
|
|
21,057
|
|
Net operating (loss)
income
|
|
(2,483)
|
|
|
|
78
|
|
|
|
(15,057)
|
|
Other (income)
expense:
|
|
|
|
|
|
|
|
|
|
|
|
Other
income
|
|
(123)
|
|
|
|
(123)
|
|
|
|
(7,845)
|
|
(Gain) Loss on change
in fair value of
derivative embedded conversion feature
|
|
(28,242)
|
|
|
|
(201,499)
|
|
|
|
54,621
|
|
Total other (income)
expense
|
|
(28,365)
|
|
|
|
(201,622)
|
|
|
|
46,776
|
|
Income (Loss) before
income taxes
|
|
25,882
|
|
|
|
201,700
|
|
|
|
(61,833)
|
|
Income tax expense
(benefit)
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Net income
(loss)
|
|
25,882
|
|
|
|
201,700
|
|
|
|
(61,833)
|
|
Redeemable convertible
series B preferred stock dividends
|
|
(18,050)
|
|
|
|
(18,000)
|
|
|
|
(17,748)
|
|
Net income (loss)
attributable to common and participating stockholders
|
$
|
7,832
|
|
|
$
|
183,700
|
|
|
$
|
(79,581)
|
|
Basic net income
(loss) per share attributable to common stockholders (Note
12)
|
$
|
0.01
|
|
|
$
|
0.33
|
|
|
$
|
(0.39)
|
|
Shares used in
computing basic net income (loss) per share
|
|
202,595,288
|
|
|
|
202,270,887
|
|
|
|
201,746,613
|
|
Diluted net income
(loss) per share attributable to common stockholders (Note
12)
|
$
|
0.01
|
|
|
$
|
0.30
|
|
|
$
|
(0.39)
|
|
Shares used in
computing diluted net income (loss) per share
|
|
212,660,917
|
|
|
|
235,406,360
|
|
|
|
201,746,613
|
|
WMIH CORP. AND
SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
(in thousands,
except share data)
|
|
|
December 31,
2017
|
|
|
December 31,
2016
|
|
ASSETS:
|
|
|
|
|
|
|
|
Investments held in
trust:
|
|
|
|
|
|
|
|
Fixed-maturity
securities
|
$
|
1,518
|
|
|
$
|
29,206
|
|
Cash equivalents held
in trust
|
|
4,199
|
|
|
|
2,176
|
|
Total investments held
in trust
|
|
5,717
|
|
|
|
31,382
|
|
Cash and cash
equivalents
|
|
26,709
|
|
|
|
2,491
|
|
Fixed-maturity
securities
|
|
2,142
|
|
|
|
47,625
|
|
Restricted
cash
|
|
578,936
|
|
|
|
573,347
|
|
Derivative asset -
embedded conversion feature
|
|
—
|
|
|
|
80,651
|
|
Accrued investment
income
|
|
59
|
|
|
|
187
|
|
Other
assets
|
|
558
|
|
|
|
507
|
|
Total
assets
|
$
|
614,121
|
|
|
$
|
736,190
|
|
LIABILITIES, REDEEMABLE
CONVERTIBLE PREFERRED
STOCK AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
Notes payable -
principal
|
$
|
—
|
|
|
$
|
18,774
|
|
Notes payable -
interest
|
|
—
|
|
|
|
203
|
|
Losses and loss
adjustment reserves
|
|
474
|
|
|
|
811
|
|
Losses
payable
|
|
—
|
|
|
|
53
|
|
Unearned
premiums
|
|
39
|
|
|
|
270
|
|
Accrued ceding
commissions
|
|
—
|
|
|
|
22
|
|
Loss contract
reserve
|
|
—
|
|
|
|
5,645
|
|
Other
liabilities
|
|
16,303
|
|
|
|
14,063
|
|
Total
liabilities
|
|
16,816
|
|
|
|
39,841
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Redeemable
convertible series B preferred stock, $0.00001 par value; 600,000
shares issued and outstanding as of December 31, 2017 and
December 31, 2016; aggregate liquidation preference of
$600,000,000 as of December 31, 2017 and December 31,
2016
|
|
503,713
|
|
|
|
502,213
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
Convertible series A
preferred stock, $0.00001 par value; 1,000,000 shares issued and
outstanding as of December 31, 2017 and December 31,
2016; aggregate liquidation preference of $10 as of December 31,
2017 and December 31, 2016
|
|
—
|
|
|
|
—
|
|
Common stock, $0.00001
par value; 3,500,000,000 authorized; 206,714,132 and 206,380,800
shares issued and outstanding as of December 31, 2017 and
December 31, 2016, respectively
|
|
2
|
|
|
|
2
|
|
Additional paid-in
capital
|
|
39
|
|
|
|
108,415
|
|
Retained
earnings
|
|
93,551
|
|
|
|
85,719
|
|
Total stockholders'
equity
|
|
93,592
|
|
|
|
194,136
|
|
Total liabilities,
redeemable convertible preferred stock and
stockholders' equity
|
$
|
614,121
|
|
|
$
|
736,190
|
|
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content:http://www.prnewswire.com/news-releases/wmih-corp-reports-2017-annual-financial-results-300606582.html
SOURCE WMIH Corp.