Today, GWG Holdings, Inc. (Nasdaq: GWGH), an innovative financial
services firm based in Dallas, announced its financial and
operating results for the second quarter ended June 30, 2020. The
results reflect consolidated accounting and financial reporting of
GWGH and The Beneficient Company Group, L.P. and its consolidated
subsidiaries (collectively, Beneficient). GWGH and Beneficient are
referred to collectively as the Company.
Recent Corporate
Developments
- Despite the uncertainty surrounding
the novel coronavirus pandemic (COVID-19), and although a
substantial majority of our employees continue to work remotely, we
have maintained our operations at or near normal levels. The
Company continues to raise capital, receive interest income and
insurance policy benefits, pay interest income and dividends and
otherwise meet its ongoing obligations.• A survey of advisors
conducted by GWGH in June found high satisfaction in its
communication about the Company’s products and services during
these uncertain times.
- GWGH closed its publicly registered
$1 billion L Bond offering in July 2020 and began raising capital
under a new $2 billion L Bond offering.
- Effective June 29, 2020, the
Company was again included in the Russell 2000® Index of
small-cap U.S. stocks, an important bellwether for the U.S.
economy.
- The Company hired key sales
executives Michele Drummond as Vice President of National Accounts
in the western half of the U.S. and Ben Hilgers as Regional Vice
President for Florida and Puerto Rico.
- Beneficient launched a liquidity
platform for an untapped market of mid-to-high-net-worth
individuals, small-to-midsized institutional investors and family
offices that own alternative assets. Beneficient’s product will
enable these investors to access simple, rapid and cost-effective
liquidity solutions.• Beneficient’s trust charter applications are
pending approval by the Texas Department of Banking.
Beneficient has closed a limited number of transactions to date but
intends to significantly expand its operations if and when the
trust charters are issued.
- On July 6, 2020, GWGH filed
documents with the SEC seeking authority to have the option to
effect an exchange of its equity securities for securities issued
by GWGH or one or more of its subsidiaries. The Company believes
this proposed change is a potential avenue to create additional
organizational efficiencies for the Company while at the same time
enabling it to grow the consolidated balance sheet in a prudent and
sustainable manner, and in turn create additional potential value
for its shareholders.
- Effective July 15, 2020, GWGH
entered into a Preferred Series C Unit Purchase Agreement with
Beneficient that will allow GWGH to make additional capital
contributions to Beneficient as Beneficient continues to expand its
operations.
- On July 29, 2020, GWGH, represented
by its Special Committee, approved a transaction by which GWGH
agreed to convert its promissory note with certain LiquidTrust
borrowers and any related accrued interest, into a $75.0 million
capital account of Preferred C interests in BCH. The outstanding
balance of the promissory note on June 30, 2020, with accrued and
unpaid interest thereon, was $69.4 million.
- On August 13, 2020, GWG DLP Funding
V, LLC (DLP V), a wholly owned subsidiary of GWG Life, LLC, and
Beneficient Capital Company, LLC (BCC), a wholly owned subsidiary
of Beneficient, together with BCC’s senior lender entered into a
credit agreement amending and restating the terms and conditions
regarding Beneficient’s current credit agreement, which had
approximately $124.5 million in senior debt outstanding. The
Second Amended and Restated Credit Agreement provides for, among
other things, DLP V’s assumption of the senior debt following the
occurrences of certain conditions, including Beneficient’s receipt
of the trust charters currently pending before the Texas Department
of Banking.
Second Quarter 2020 Financial and
Operating Highlights
- Reported second quarter 2020 net
loss of $18.1 million, compared to a net loss of $25.6 million in
the second quarter of 2019:• GWGH’s investment in Beneficient was
accounted for as an equity method investment prior to the
change-of-control on December 31, 2019, and the second quarter of
2020 includes the consolidated results of Beneficient.
- Reported total assets of $3.7
billion as of both June 30, 2020, and March 31,
2020.
- Reported continued strong life
insurance portfolio performance:• Realized $39.9 million of face
amount of policy benefits from 29 life insurance policies during
the second quarter of 2020, compared to $23.0 million from 19 life
insurance policies during the second quarter of 2019.• Ended the
quarter with a life insurance portfolio of $2.0 billion in face
amount of policy benefits consisting of 1,102 policies.
- Reported continued success raising
capital through the L Bond investment product with $93.5 million of
L Bond sales in the second quarter of 2020.
- Total liquidity (cash, restricted
cash, policy benefits receivable and fees receivable) increased to
$219.7 million on June 30, 2020, compared to $188.7 million on
March 31, 2020.
“This past quarter marked a significant milestone as Beneficient
launched a first-of-its-kind liquidity platform to serve the large,
growing and untapped market of mid-to-high-net-worth individuals,
small-to-midsized institutional investors and family offices
seeking simple, rapid and cost-effective liquidity solutions for
their alternatives assets,” said Murray Holland, GWGH’s Chief
Executive Officer. “The fact that our investment sales have been
consistently strong during this period, while so many have operated
under stay-at-home orders and other restrictions, demonstrates the
confidence we have earned from a very active network of advisors
and places us in a robust position for the future.”
1. Financial
& Operating Highlights
($ Thousands except
per share information) |
|
Q2 2020 |
|
Q2 2019 |
|
YTD 2020 |
|
YTD 2019 |
Revenue |
|
$ |
68,789 |
|
|
|
$ |
24,010 |
|
|
|
$ |
102,346 |
|
|
|
$ |
49,227 |
|
|
Expenses |
|
68,720 |
|
|
|
45,941 |
|
|
|
192,770 |
|
|
|
83,845 |
|
|
Income Tax Benefit |
|
(8,550 |
) |
|
|
— |
|
|
|
(23,057 |
) |
|
|
— |
|
|
Income (Loss) from Equity
Method Investments |
|
(1,318 |
) |
|
|
600 |
|
|
|
(2,848 |
) |
|
|
(1,327 |
) |
|
Net Income (Loss), including
Income (Loss) from Equity Method Investment |
|
7,301 |
|
|
|
(21,331 |
) |
|
|
(70,215 |
) |
|
|
(35,945 |
) |
|
Loss (Income) Attributable to
Noncontrolling Interests |
|
(21,723 |
) |
|
|
— |
|
|
|
10,361 |
|
|
|
— |
|
|
Preferred Stock Dividends |
|
3,714 |
|
|
|
4,278 |
|
|
|
7,666 |
|
|
|
8,574 |
|
|
Net Loss Attributable to
Common Shareholders |
|
(18,136 |
) |
|
|
(25,609 |
) |
|
|
(67,520 |
) |
|
|
(44,519 |
) |
|
Per Share Data: |
|
|
|
|
|
|
|
|
Net Loss1 |
|
(0.59 |
) |
|
|
(0.78 |
) |
|
|
(2.21 |
) |
|
|
(1.35 |
) |
|
Capital Raised from L
Bonds |
|
93,519 |
|
|
|
45,241 |
|
|
|
202,572 |
|
|
|
171,227 |
|
|
Liquidity2 |
|
219,692 |
|
|
|
82,461 |
|
|
|
219,692 |
|
|
|
82,461 |
|
|
Life Insurance Portfolio3 |
|
1,960,826 |
|
|
|
2,088,445 |
|
|
|
1,960,826 |
|
|
|
2,088,445 |
|
|
Life Insurance Acquired3 |
|
— |
|
|
|
12,955 |
|
|
|
— |
|
|
|
93,166 |
|
|
Face Value of Matured
Policies |
|
39,889 |
|
|
|
22,998 |
|
|
|
65,391 |
|
|
|
53,457 |
|
|
TTM Benefits / Premiums4 |
|
205.1 |
% |
|
|
138.6 |
% |
|
|
205.1 |
% |
|
|
138.6 |
% |
|
1. Per
diluted common share
outstanding2. Includes
cash, restricted cash, policy benefits receivable and fees
receivable as of the end of the period
presented3. Face amount
of policy benefits as of the end of the period
presented.4. The ratio of
policy benefits realized to premiums paid on a trailing twelve
month (TTM) basis.
2. Revenue
and Expense DiscussionSecond Quarter 2020 vs. Second
Quarter 2019:
- Total revenue was $68.8 million in
the current period, compared to $24.0 million in the prior period
primarily due to:• $36.3 million of other income recognized by
Beneficient in the second quarter of 2020 as a result of the
forfeiture of vested equity-based compensation related to one
former director of Beneficient.• $11.3 million of interest income
added as a result of the consolidation of Beneficient.• $4.8
million of trust services revenues added as a result of the
consolidation of Beneficient.• The aforementioned increases were
partially offset by $5.1 million lower net gain on life insurance
policies due to no gain on policy acquisitions, higher premiums
paid and maturities of policies with a higher cumulative cost
basis
- Total expenses were $68.7 million
in the current period, compared to $45.9 million in the prior
period primarily due to:• $8.7 million higher interest expense due
to higher average outstanding balances of L Bonds, senior credit
facility and Beneficient debt.• Higher employee compensation and
benefits ($5.0 million), legal and professional fees ($2.9 million)
and other expenses ($6.2 million) primarily due to the
consolidation of Beneficient. Other expenses include Beneficient’s
provision for loan losses of $7.2 million for the second quarter
2020.
Six Months Ended June 30, 2020 vs. Six Months
Ended June 30, 2019:
- Total revenue was $102.3 million in
the current period, compared to $49.2 million in the prior period
primarily due to:• $36.3 million of other income recognized by
Beneficient in the second quarter of 2020 as a result of the
forfeiture of vested equity-based compensation related to one
former director of Beneficient.• $23.5 million of interest income
added as a result of the consolidation of Beneficient.• $9.9
million of trust services revenues added as a result of the
consolidation of Beneficient.• The aforementioned increases were
partially offset by $12.2 million lower net gain on life insurance
policies due to no gain on policy acquisitions, higher premiums
paid and maturities of policies with a higher cumulative cost
basis.
- Total expenses were $192.8 million
in the current period, compared to $83.8 million in the prior
period primarily due to:• Employee compensation and benefits
increased by $77.6 million primarily due to the inclusion of
Beneficient's operations, including the recognition of $73.3
million of non-cash, equity-based compensation expense under
Beneficient's equity incentive plans.• $17.6 million higher
interest expense due to higher average outstanding balances of L
Bonds, senior credit facility and Beneficient debt.• Higher legal
and professional fees ($6.1 million) and other expenses ($7.6
million) primarily due to the consolidation of Beneficient. Other
expenses include Beneficient’s provision for loan losses of $7.9
million for the six months ended June 30, 2020.
3. Beneficient’s Collateral Portfolio
InformationAs of June 30, 2020, Beneficient’s loan
portfolio had exposure to 120 professionally managed alternative
investment funds, comprised of 368 underlying investments, and
approximately 87 percent of Beneficient’s loan portfolio was
collateralized by investments in private companies. Beneficient’s
loan portfolio diversification spans across these industry sectors,
geographic regions and exposure types:
A graphic accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/996c9c8d-7574-4345-b370-ec3e48b3e2a4
Assets in the collateral portfolio consist
primarily of interests in alternative investment vehicles (also
referred to as funds) that are managed by a group of U.S. and
non-U.S. based alternative asset management firms that invest in a
variety of financial markets and utilize a variety of investment
strategies. The vintages of the funds in the collateral portfolio
as of June 30, 2020 ranged from 1998 to 2016.
4. Life
Insurance Portfolio Statistics as of and for the quarter ended
June 30, 2020Portfolio Summary:
Total life insurance portfolio face value of policy benefits (in
thousands) |
$ |
1,960,826 |
|
Average face value per policy
(in thousands) |
$ |
1,779 |
|
Average face value per insured
life (in thousands) |
$ |
1,915 |
|
Weighted average age of
insured (years) |
|
82.7 |
|
Weighted average life
expectancy estimate (years) |
|
6.9 |
|
Total number of policies |
|
1,102 |
|
Number of unique lives |
|
1,024 |
|
Demographics |
|
74% male; 26% female |
|
Number of smokers |
|
45 |
|
Largest policy as % of total
portfolio face value |
|
0.7 |
% |
Average policy as % of total
portfolio |
|
0.1 |
% |
Average annual premium as % of
face value |
|
3.6 |
% |
Distribution of Policies and Benefits by Current
Age of Insured
|
|
|
|
|
|
|
|
|
Percentage of Total |
|
Weighted |
|
MinAge |
|
MaxAge |
|
Numberof Policies |
|
Policy Benefits |
|
|
Number of Policies |
|
Policy Benefits |
|
AverageLE(Years) |
|
95 |
|
101 |
|
24 |
|
$ |
45,602 |
|
|
|
|
2.2 |
% |
|
|
2.3 |
% |
|
2.1 |
|
90 |
|
94 |
|
144 |
|
|
286,510 |
|
|
|
|
13.0 |
% |
|
|
14.6 |
% |
|
3.1 |
|
85 |
|
89 |
|
237 |
|
|
550,928 |
|
|
|
|
21.5 |
% |
|
|
28.1 |
% |
|
4.9 |
|
80 |
|
84 |
|
229 |
|
|
408,437 |
|
|
|
|
20.8 |
% |
|
|
20.8 |
% |
|
7.3 |
|
75 |
|
79 |
|
218 |
|
|
380,759 |
|
|
|
|
19.8 |
% |
|
|
19.4 |
% |
|
9.8 |
|
70 |
|
74 |
|
197 |
|
|
229,052 |
|
|
|
|
17.9 |
% |
|
|
11.7 |
% |
|
10.8 |
|
60 |
|
69 |
|
53 |
|
|
59,538 |
|
|
|
|
4.8 |
% |
|
|
3.1 |
% |
|
11.2 |
|
Total |
|
|
|
1,102 |
|
$ |
1,960,826 |
|
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
6.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.
Additional InformationGain (Loss) on Life
Insurance Policies (in thousands):
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Change in estimated probabilistic cash flows(1) |
|
$ |
15,349 |
|
|
|
$ |
17,122 |
|
|
|
$ |
33,200 |
|
|
|
$ |
34,253 |
|
|
Unrealized gain on acquisitions(2) |
|
— |
|
|
|
1,844 |
|
|
|
— |
|
|
|
6,303 |
|
|
Premiums and other annual
fees |
|
(17,626 |
) |
|
|
(16,004 |
) |
|
|
(34,825 |
) |
|
|
(31,836 |
) |
|
Face value of matured
policies |
|
39,889 |
|
|
|
22,998 |
|
|
|
65,391 |
|
|
|
53,457 |
|
|
Fair value of matured
policies |
|
(22,824 |
) |
|
|
(6,030 |
) |
|
|
(34,533 |
) |
|
|
(20,751 |
) |
|
Gain on life insurance
policies, net |
|
$ |
14,788 |
|
|
|
$ |
19,930 |
|
|
|
$ |
29,233 |
|
|
|
$ |
41,426 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
___________________________________(1) Change in fair value of
expected future cash flows relating to the investment in life
insurance policies that are not specifically attributable to
changes in life expectancy, discount rate changes or policy
maturity events.(2) Gain resulting from fair value in excess
of the purchase price for life insurance policies acquired during
the reporting period. There were no policy acquisitions during the
three or six months ended June 30, 2020.
Policy Benefits Realized and Premiums Paid
(TTM):
Quarter End
Date |
Portfolio FaceAmount(in thousands) |
12-MonthTrailingBenefitsRealized(in thousands) |
12-MonthTrailingPremiumsPaid(in thousands) |
12-Month Trailing
Benefits/Premium Coverage
Ratio |
June 30, 2016 |
|
1,154,798 |
|
|
30,924 |
|
|
31,891 |
|
|
97.0 |
% |
September 30, 2016 |
|
1,272,078 |
|
|
35,867 |
|
|
37,055 |
|
|
96.8 |
% |
December 31, 2016 |
|
1,361,675 |
|
|
48,452 |
|
|
40,239 |
|
|
120.4 |
% |
March 31, 2017 |
|
1,447,558 |
|
|
48,189 |
|
|
42,753 |
|
|
112.7 |
% |
June 30, 2017 |
|
1,525,363 |
|
|
49,295 |
|
|
45,414 |
|
|
108.5 |
% |
September 30, 2017 |
|
1,622,627 |
|
|
53,742 |
|
|
46,559 |
|
|
115.4 |
% |
December 31, 2017 |
|
1,676,148 |
|
|
64,719 |
|
|
52,263 |
|
|
123.8 |
% |
March 31, 2018 |
|
1,758,066 |
|
|
60,248 |
|
|
53,169 |
|
|
113.3 |
% |
June 30, 2018 |
|
1,849,079 |
|
|
76,936 |
|
|
53,886 |
|
|
142.8 |
% |
September 30, 2018 |
|
1,961,598 |
|
|
75,161 |
|
|
55,365 |
|
|
135.8 |
% |
December 31, 2018 |
|
2,047,992 |
|
|
71,090 |
|
|
52,675 |
|
|
135.0 |
% |
March 31, 2019 |
|
2,098,428 |
|
|
87,045 |
|
|
56,227 |
|
|
154.8 |
% |
June 30, 2019 |
|
2,088,445 |
|
|
82,421 |
|
|
59,454 |
|
|
138.6 |
% |
September 30, 2019 |
|
2,064,156 |
|
|
101,918 |
|
|
61,805 |
|
|
164.9 |
% |
December 31, 2019 |
|
2,020,973 |
|
|
125,148 |
|
|
63,851 |
|
|
196.0 |
% |
March 31, 2020 |
|
2,000,680 |
|
|
120,191 |
|
|
65,224 |
|
|
184.3 |
% |
June 30, 2020 |
|
1,960,826 |
|
|
137,082 |
|
|
66,846 |
|
|
205.1 |
% |
Webcast Details
Management will host a webcast Monday, August 17, 2020 at 4:30
p.m. EDT to discuss financial and operating results. The webcast
will give viewers audio and access to PowerPoint slides that
illustrate points made during the presentation. To register for the
webcast, go to http://get.gwgh.com/q22020webcastinvite.
After the webcast is completed, a replay can be accessed at
http://get.gwgh.com/q22020webcast.
About GWG Holdings,
Inc.
GWG Holdings, Inc. (Nasdaq: GWGH) is an
innovative financial services firm based in Dallas, Texas that is a
leader in providing investments that are non-correlated to the
traded markets, and unique liquidity solutions and services for the
owners of illiquid investments. Through its subsidiaries, The
Beneficient Company Group, L.P. and GWG Life,
LLC, GWGH owns and manages a diverse portfolio of alternative
assets that, as of June 30, 2020, included $2.0 billion in life
insurance policy benefits, and exposure to a diversified and
growing loan portfolio secured by 120 professionally managed
alternative investment funds.
For more information about GWG Holdings,
email info@gwgh.com or visit www.gwgh.com. For more
information about Beneficient,
email askben@beneficient.com or
visit www.trustben.com.
Cautionary Statement Regarding
Forward-Looking Statements
This press release contains forward-looking statements that
involve substantial risks and uncertainties. All statements, other
than statements of historical facts, included in this press release
regarding our strategy, future operations, future financial
position, future revenue, projected costs, prospects, plans and
objectives of management are forward-looking statements. The words
“anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,”
“plan,” “would,” “target” and similar expressions are intended to
identify forward-looking statements, although not all
forward-looking statements contain these identifying words. These
forward-looking statements include, among other things, statements
about our estimates regarding future revenue and financial
performance. We may not actually achieve the expectations disclosed
in our forward-looking statements, and you should not place undue
reliance on our forward-looking statements. Actual results or
events could differ materially from the expectations disclosed in
the forward-looking statements that we make. More information about
potential factors that could affect our business and financial
results is contained in our filings with the Securities and
Exchange Commission, including our Quarterly Report on Form 10-Q
filed with the Securities and Exchange Commission (“SEC”) on
August 14, 2020, and our Annual Report on Form 10-K filed with
the SEC on March 27, 2020. Additional information will also be set
forth in our future quarterly reports on Form 10-Q, annual reports
on Form 10-K and other filings that we make with the SEC. We do not
intend, and undertake no duty, to release publicly any updates or
revisions to any forward-looking statements contained herein.
Media Contact:Dan
CallahanDirector of CommunicationGWG Holdings, Inc.(612)
787-5744dcallahan@gwgh.com
GWG HOLDINGS, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(dollars in thousands)
|
June 30, 2020 (unaudited) |
|
December 31, 2019 |
ASSETS |
|
|
|
Cash and cash equivalents |
$ |
149,233 |
|
|
|
$ |
79,073 |
|
|
Restricted cash |
19,059 |
|
|
|
20,258 |
|
|
Investment in life insurance
policies, at fair value |
794,706 |
|
|
|
796,039 |
|
|
Life insurance policy benefits
receivable, net |
19,789 |
|
|
|
23,031 |
|
|
Loans receivable, net of
unearned income |
218,448 |
|
|
|
232,344 |
|
|
Allowance for loan losses |
(7,900 |
) |
|
|
— |
|
|
Loans receivable, net |
210,548 |
|
|
|
232,344 |
|
|
Fees receivable |
31,611 |
|
|
|
29,168 |
|
|
Financing receivables from
affiliates |
69,428 |
|
|
|
67,153 |
|
|
Other assets |
40,142 |
|
|
|
30,135 |
|
|
Goodwill |
2,384,121 |
|
|
|
2,358,005 |
|
|
TOTAL ASSETS |
$ |
3,718,637 |
|
|
|
$ |
3,635,206 |
|
|
LIABILITIES & STOCKHOLDERS’ EQUITY |
|
|
|
LIABILITIES |
|
|
|
Senior credit facility with
LNV Corporation |
$ |
203,578 |
|
|
|
$ |
174,390 |
|
|
L Bonds |
1,072,973 |
|
|
|
926,638 |
|
|
Seller Trust L Bonds |
366,892 |
|
|
|
366,892 |
|
|
Other borrowings |
152,118 |
|
|
|
153,086 |
|
|
Interest and dividends
payable |
23,284 |
|
|
|
16,516 |
|
|
Deferred revenue |
37,858 |
|
|
|
41,444 |
|
|
Accounts payable and accrued
expenses |
23,457 |
|
|
|
27,836 |
|
|
Deferred tax liability,
net |
33,674 |
|
|
|
57,923 |
|
|
TOTAL LIABILITIES |
1,913,834 |
|
|
|
1,764,725 |
|
|
|
|
|
|
Redeemable noncontrolling
interests |
1,264,031 |
|
|
|
1,269,654 |
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
REDEEMABLE PREFERRED
STOCK |
|
|
|
(par value $0.001; shares authorized 100,000; shares outstanding
62,986 and 84,636; liquidation preference of $63,354 and $85,130 as
of June 30, 2020 and December 31, 2019,
respectively) |
52,373 |
|
|
|
74,023 |
|
|
SERIES 2 REDEEMABLE PREFERRED
STOCK |
|
|
|
(par value $0.001; shares authorized 150,000; shares outstanding
144,325 and 147,164; liquidation preference of $145,167 and
$148,023 as of June 30, 2020 and December 31, 2019,
respectively) |
125,029 |
|
|
|
127,868 |
|
|
COMMON STOCK |
|
|
|
(par value $0.001; shares authorized 210,000,000; shares issued and
outstanding 30,537,481 and 30,533,793 as of June 30, 2020 and
December 31, 2019, respectively) |
33 |
|
|
|
33 |
|
|
Common stock in treasury, at
cost (2,500,000 shares as of both June 30, 2020 and
December 31, 2019) |
(24,550 |
) |
|
|
(24,550 |
) |
|
Additional paid-in
capital |
225,537 |
|
|
|
233,106 |
|
|
Accumulated deficit |
(136,355 |
) |
|
|
(76,501 |
) |
|
TOTAL GWG HOLDINGS
STOCKHOLDERS’ EQUITY |
242,067 |
|
|
|
333,979 |
|
|
Noncontrolling interests |
298,705 |
|
|
|
266,848 |
|
|
TOTAL STOCKHOLDERS’
EQUITY |
540,772 |
|
|
|
600,827 |
|
|
TOTAL LIABILITIES &
STOCKHOLDERS’ EQUITY |
$ |
3,718,637 |
|
|
|
$ |
3,635,206 |
|
|
|
|
|
|
|
|
|
|
|
|
GWG HOLDINGS, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
OPERATIONS(dollars in
thousands)(unaudited)
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
REVENUE |
|
|
|
|
|
|
|
Gain on life insurance policies, net |
$ |
14,788 |
|
|
|
$ |
19,930 |
|
|
|
$ |
29,233 |
|
|
|
$ |
41,426 |
|
|
Interest income |
12,671 |
|
|
|
3,881 |
|
|
|
26,660 |
|
|
|
7,337 |
|
|
Trust services revenues |
4,829 |
|
|
|
— |
|
|
|
9,856 |
|
|
|
— |
|
|
Other income |
36,501 |
|
|
|
199 |
|
|
|
36,597 |
|
|
|
464 |
|
|
TOTAL REVENUE |
68,789 |
|
|
|
24,010 |
|
|
|
102,346 |
|
|
|
49,227 |
|
|
EXPENSES |
|
|
|
|
|
|
|
Interest expense |
37,142 |
|
|
|
28,487 |
|
|
|
73,013 |
|
|
|
55,462 |
|
|
Employee compensation and benefits |
11,840 |
|
|
|
6,794 |
|
|
|
89,544 |
|
|
|
11,948 |
|
|
Legal and professional fees |
7,643 |
|
|
|
4,722 |
|
|
|
13,806 |
|
|
|
7,669 |
|
|
Provision for loan losses |
7,200 |
|
|
|
— |
|
|
|
7,900 |
|
|
|
— |
|
|
Other expenses |
4,895 |
|
|
|
5,938 |
|
|
|
8,507 |
|
|
|
8,766 |
|
|
TOTAL EXPENSES |
68,720 |
|
|
|
45,941 |
|
|
|
192,770 |
|
|
|
83,845 |
|
|
INCOME (LOSS) BEFORE INCOME TAXES |
69 |
|
|
|
(21,931 |
) |
|
|
(90,424 |
) |
|
|
(34,618 |
) |
|
INCOME TAX BENEFIT |
(8,550 |
) |
|
|
— |
|
|
|
(23,057 |
) |
|
|
— |
|
|
NET INCOME (LOSS) BEFORE LOSS FROM EQUITY METHOD INVESTMENT |
8,619 |
|
|
|
(21,931 |
) |
|
|
(67,367 |
) |
|
|
(34,618 |
) |
|
Income (loss) from equity method investment |
(1,318 |
) |
|
|
600 |
|
|
|
(2,848 |
) |
|
|
(1,327 |
) |
|
NET INCOME (LOSS) |
7,301 |
|
|
|
(21,331 |
) |
|
|
(70,215 |
) |
|
|
(35,945 |
) |
|
Net loss (income) attributable to noncontrolling interests |
(21,723 |
) |
|
|
— |
|
|
|
10,361 |
|
|
|
— |
|
|
Less: Preferred stock dividends |
3,714 |
|
|
|
4,278 |
|
|
|
7,666 |
|
|
|
8,574 |
|
|
NET LOSS ATTRIBUTABLE TO
COMMON SHAREHOLDERS |
$ |
(18,136 |
) |
|
|
$ |
(25,609 |
) |
|
|
$ |
(67,520 |
) |
|
|
$ |
(44,519 |
) |
|
NET LOSS PER COMMON SHARE |
|
|
|
|
|
|
|
Basic |
$ |
(0.59 |
) |
|
|
$ |
(0.78 |
) |
|
|
$ |
(2.21 |
) |
|
|
$ |
(1.35 |
) |
|
Diluted |
$ |
(0.59 |
) |
|
|
$ |
(0.78 |
) |
|
|
$ |
(2.21 |
) |
|
|
$ |
(1.35 |
) |
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
|
|
|
|
|
|
|
Basic |
30,536,830 |
|
|
|
33,011,603 |
|
|
|
30,535,811 |
|
|
|
32,998,246 |
|
|
Diluted |
30,536,830 |
|
|
|
33,011,603 |
|
|
|
30,535,811 |
|
|
|
32,998,246 |
|
|
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