- Revenues of $148.1 million for the quarter, up 1.3% from $146.2
million in the prior year period.
- Net income before non-controlling interests of $29.0 million for
the quarter, an increase of $27.7 million from the prior year period,
primarily driven by the gain on sale of Care.
- Adjusted EBITDA1 of $5.3 million for the
quarter, down 55.1% from $11.8 million in the prior year period.
Normalized EBITDA1, which removes the impact
of realized and unrealized gains and losses and stock-based
compensation, of $8.9 million for the quarter, compared to $12.4
million in 2017.
- Book value per share, as exchanged1 of
$10.59, up 4.3% compared to $10.15as of March 31, 2017.
- Declared a dividend of $0.035 per share, up 16.7% to stockholders
of record on May 21, 2018 with a payment date of May 29, 2018.
NEW YORK--(BUSINESS WIRE)--
Tiptree Inc. (NASDAQ:TIPT) (“Tiptree” or the “Company”), a holding
company that combines specialty insurance operations with investment
management today announced its financial results for the three months
ended March 31, 2018.
|
|
| |
Summary Consolidated Statements of Operations |
| ($ in millions, except for per share information) | | | Three Months Ended March 31, |
GAAP: | | | 2018 |
| 2017 |
|
Total revenues
| | |
$
|
148.1
| | |
$
|
146.2
|
|
Net income before non-controlling interests
| | |
$
|
29.0
| | |
$
|
1.3
|
|
Net income attributable to Tiptree Inc. Class A common stockholders
| | |
$
|
23.6
| | |
$
|
1.1
|
|
Diluted earnings per share
| | |
$
|
0.79
| | |
$
|
0.03
|
| | | | |
|
Non-GAAP:(1) | | | | | |
|
Adjusted EBITDA
| | |
$
|
5.3
| | |
$
|
11.8
|
|
Normalized EBITDA
| | |
$
|
8.9
| | |
$
|
12.4
|
|
Book value per share, as exchanged
|
|
|
$
|
10.59
|
|
|
$
|
10.15
|
1 |
For a reconciliation to U.S. GAAP, see “Non-GAAP Reconciliations”
below.
|
Earnings Conference Call
Tiptree will host a conference call on Tuesday, May 8, 2018 at 9:00 a.m.
Eastern Time to discuss its first quarter 2018 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 Tuesday, May 8, 2018 at 1:00
p.m. Eastern Time, until midnight Eastern on Tuesday, May 15, 2018. To
listen to the replay, please dial 1-844-512-2921 (domestic) or
1-412-317-6671 (international), Passcode: 13678648.
1Q’18 Financial Overview
Consolidated Highlights
Year-to-date 2018, we have executed on several strategic objectives:
Insurance:
- Specialty Insurance operations continued to grow as gross written
premiums were $201 million, up 21.3%, driven by growth across all our
product lines. Net written premiums were $109 million, up 26.5%,
driven by a combination of premium growth and increased retention
rates.
-
On March 28, 2018, we expanded our insurance operations into Europe
with the creation of Fortegra Europe Insurance Company Limited
(“FEIC”).
Tiptree Capital:
-
On February 1, 2018, we sold our senior living operations to Invesque
in exchange for a net 16.4 million shares, which was $0.91 accretive
to our book value per share, as exchanged, or a 9.1% increase over our
December 31, 2017 book value per share, as exchanged.
Corporate:
-
On March 23, 2018, we initiated an up to $20 million share buy-back
plan split evenly between open market and opportunistic large block
purchases.
-
On April 10, 2018, we completed a corporate reorganization that
eliminated our dual class stock structure.
-
On May 4, 2018, we extended our existing credit facility to September
2020 and up-sized to $75 million while reducing the interest rate by
100 basis points. Combined with corporate cash, this gives us
approximately $100 million of capital available to invest in support
of our growth objectives.
Consolidated Results of Operations
Revenues
For the three months ended March 31, 2018, revenues were $148.1 million,
which increased $1.9 million, or 1.3%, over prior year period driven by
growth in earned premiums and service and administrative fees, partially
offset by reduced other income, and unrealized losses on equity
securities. Earned premiums were $101.6 million for the three months
ended March 31, 2018, up from $89.2 million in the comparable 2017
period. This was consistent with our strategy to grow written premiums
of our insurance business which contributes to increased investable
assets and investment income. In addition to the growth in revenues, the
combination of unearned premiums and deferred revenues on the balance
sheet grew by $110.0 million or 23.4%, from March 31, 2017 to March 31,
2018 as we continue to grow credit protection and warranty written
premiums, which are earned over multiple years.
Net Income (Loss) before non-controlling interests
For the three months ended March 31, 2018, net income before
non-controlling interests was $29.0 million compared to net income of
$1.3 million in the 2017 period, an increase of $27.7 million. The
increase was driven by $34.5 million of income from discontinued
operations including the net gain on sale of Care, which was partially
offset by unrealized losses on equity securities (including the Invesque
common stock), and lower asset management income as we reduced our
exposure to CLO subordinated notes which resulted in less distributions
and gains compared to 2017.
The table below highlights certain key drivers impacting our
consolidated results presented on a pre-tax basis. Our investments are
focused on a longer term investment horizon. In addition, our equity
securities holdings are relatively concentrated, and are carried at fair
value and marked to market through unrealized gains and losses. As a
result, we expect our earnings relating to these securities to be
relatively volatile between periods. For a further discussion on these
key drivers, see “Management’s Discussion and Analysis of Financial
Conditions and Results of Operations — Results of Operations — Selected
Key Metrics — Income (loss) before taxes (from continuing and
discontinued operations)” in our Form 10-Q for the quarter ended March
31, 2018.
|
|
| |
| ($ in thousands) | | | Three Months Ended March 31, |
| | | 2018 |
| 2017 |
|
Unrealized & realized gains (losses) on equity securities(1) | | |
$
|
(8,697
|
)
| |
$
|
(1,740
|
)
|
|
Discontinued operations (Care)(2) | | |
$
|
46,808
| | |
$
|
(1,530
|
)
|
|
Asset management - credit investments
| | |
$
|
277
| | |
$
|
5,168
| |
_____________________________
(1)
|
|
Includes $3.9 million attributable to Invesque shares from the date
of the sale (February 1, 2018).
|
(2)
| |
Includes pre-tax Gain on sale of Discontinued Operations of $46.2
million.
|
|
Net Income (Loss) Available to Class A Common Stockholders
For the three months ended March 31, 2018, net income available to Class
A common stockholders was $23.6 million, an increase of $22.5 million
from the prior year period. The key drivers of net income available to
Class A common stockholders were the same factors which impacted the net
income before non-controlling interests.
Non-GAAP
Management uses Adjusted EBITDA and book value per share, as exchanged
as measurements of operating performance which are non-GAAP measures.
Management believes that use of Adjusted EBITDA provides supplemental
information useful to investors as it is 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. Adjusted EBITDA is also used in determining incentive
compensation for the Company’s executive officers. Adjusted EBITDA is
not a measurement of financial performance or liquidity under GAAP and
should not be considered as an alternative or substitute for GAAP net
income. Book value per share, as exchanged assumes full exchange of the
limited partners units of Tiptree Financial Partners, L.P. (“TFP”) for
Tiptree Class A common stock. Management believes that use of this
financial measure 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.
Total Adjusted EBITDA for the three months ended March 31, 2018 was $5.3
million compared to $11.8 million for the 2017 period, a decrease of
$6.5 million, or 55.1%. The key drivers of the change in Adjusted EBITDA
were the same as those which impacted our net income before
non-controlling interests, excluding add-backs associated with the Care
gain and non-recurring expenses. For Care, 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. See “— Non-GAAP Reconciliations” for a reconciliation to
GAAP net income.
Total stockholders’ equity was $407.7 million as of March 31, 2018
compared to $393.8 million as of March 31, 2017, primarily driven by net
income over the last four quarters and the net increase in equity
outstanding as a result of an option exercise, net of share re-purchases.
As exchanged book value per share for the period ended March 31, 2018
was $10.59, an increase from $10.15 as of March 31, 2017. The key
drivers of the period-over-period impact were earnings per share of
$0.87 over the last four quarters and the purchase of 1.0 million shares
at an average 28% discount to book value. Those increases were partially
offset by dividends paid of $0.12 per share, officer and director
compensation share issuances, and the exercise of a 2007 founders’
option in June 2017, the latter of which resulted in 1.5 million shares
being issued for $5.36 per share in cash paid to the Company which
resulted in a $0.19 decrease in book value per share. Over the past
twelve months, Tiptree returned $12.0 million to shareholders through
share repurchases and dividends paid.
Results by Segment
Tiptree is a holding company that combines insurance operations with
investment management expertise. In addition to our specialty insurance
operations, we allocate our capital across our investments in other
companies and assets which we refer to as Tiptree Capital. As of March
31, 2018, Tiptree Capital consists of asset management operations,
mortgage operations and other investments (including Invesque common
shares). As such, we classify our business into three reportable
segments– specialty insurance, asset management and mortgage. Corporate
activities include holding company interest expense, employee
compensation and benefits, and other expenses. The following table
presents the components of total pre-tax income including continuing and
discontinued operations.
|
|
| |
Pre-tax Income |
|
|
| ($ in thousands) | | | Three Months Ended March 31, |
| | | 2018 |
| 2017 |
Specialty Insurance | | |
$
|
1,343
| | |
$
|
4,801
| |
| Tiptree Capital:
| | | | | |
|
Asset management
| | |
892
| | |
5,581
| |
|
Mortgage
| | |
153
| | |
301
| |
|
Other
| | |
(2,717
|
)
| |
84
| |
|
Corporate
| | |
(6,714
|
)
| |
(6,729
|
)
|
|
Pre-tax income (loss) from continuing operations
| | |
$
|
(7,043
|
)
| |
$
|
4,038
| |
|
Pre-tax income (loss) from discontinued operations (1) | | |
$
|
46,808
| | |
$
|
(1,530
|
)
|
_______________________________
(1)
|
|
Includes Care for 2017 and 2018. Includes $46.2 million pre-tax gain
on sale of Care in 2018.
|
| |
|
Management evaluates the return on Invested Capital and Total Capital,
which are non-GAAP financial measures, when making capital investment
decisions. Invested Capital represents its total cash investment,
including any re-investment of earnings, and acquisition costs, net of
tax. Total Capital represents Invested Capital plus Corporate Debt.
Management believes the use of these financial measures provide
supplemental information useful to investors as they are frequently used
by the financial community to analyze how the Company has allocated
capital over-time and provide a basis for determining the return on
capital to shareholders. Management uses both of these measures when
making capital investment decisions, including reinvesting cash, and
evaluating the relative performance of its businesses and investments.
The following table presents the components of Total Capital and
Adjusted EBITDA.
Invested Capital and Adjusted EBITDA - Non-GAAP (1) |
|
|
| ($ in thousands) | Three Months Ended March 31, |
| Total Capital |
| Adjusted EBITDA |
| 2018 |
| 2017 | | 2018 |
| 2017 |
| Specialty Insurance |
$
|
|
|
|
441,518
| | |
$
|
|
|
|
402,252
| | |
$
|
|
|
|
8,193
| | |
$
|
|
|
|
9,379
| |
| Tiptree Capital |
147,244
| | |
190,752
| | |
5,505
| | |
9,530
| |
|
Asset management
|
4,164
| | |
38,474
| | |
892
| | |
5,581
| |
|
Mortgage
|
30,890
| | |
25,291
| | |
289
| | |
839
| |
|
Other (2) |
112,190
| | |
126,987
| | |
4,324
| | |
3,110
| |
|
Corporate
|
43,228
|
| |
45,507
|
| |
(8,354
|
)
| |
(7,123
|
)
|
|
Total Tiptree |
$
|
|
|
|
631,990
| | |
$
|
|
|
|
638,511
| | |
$
|
|
|
|
5,344
| | |
$
|
|
|
|
11,786
| |
(1)
|
|
For further information relating to the Company’s Total Capital and
Adjusted EBITDA, including a reconciliation to GAAP total
stockholders equity and 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 &
Discontinued Operations, in the Form 10-Q for the quarter ended
March 31, 2018.
|
| |
|
About Tiptree
Tiptree Inc. (NASDAQ:TIPT) is a holding company that combines insurance
operations with investment management expertise. 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 |
| | | March 31,
2018 |
|
|
| December 31,
2017 |
| Assets: | | | | | | | |
|
Investments:
| | | | | | | |
|
Available for sale securities, at fair value
| | |
$
|
212,809
| | | | |
$
|
182,448
| |
|
Loans, at fair value
| | |
239,331
| | | | |
258,173
| |
|
Equity securities, at fair value
| | |
140,238
| | | | |
25,536
| |
|
Other investments
| | |
41,243
|
| | | |
59,142
|
|
|
Total investments
| | |
633,621
| | | | |
525,299
| |
|
Cash and cash equivalents
| | |
81,219
| | | | |
110,667
| |
|
Restricted cash
| | |
19,336
| | | | |
31,570
| |
|
Notes and accounts receivable, net
| | |
201,157
| | | | |
186,422
| |
|
Reinsurance receivables
| | |
362,411
| | | | |
352,967
| |
|
Deferred acquisition costs
| | |
143,146
| | | | |
147,162
| |
| Goodwill | | |
91,562
| | | | |
91,562
| |
|
Intangible assets, net
| | |
59,375
| | | | |
64,017
| |
|
Other assets
| | |
42,122
| | | | |
31,584
| |
|
Assets held for sale
| | |
54,857
|
| | | |
448,492
|
|
|
Total assets
| | |
$
|
1,688,806
|
| | | |
$
|
1,989,742
|
|
| | | | | | |
|
| Liabilities and Stockholders’ Equity | | | | | | | |
| Liabilities: | | | | | | | |
|
Debt, net
| | |
$
|
320,508
| | | | |
$
|
346,081
| |
|
Unearned premiums
| | |
521,085
| | | | |
503,446
| |
|
Policy liabilities and unpaid claims
| | |
117,740
| | | | |
112,003
| |
|
Deferred revenue
| | |
58,349
| | | | |
56,745
| |
|
Reinsurance payable
| | |
96,178
| | | | |
90,554
| |
|
Other liabilities and accrued expenses
| | |
117,818
| | | | |
121,321
| |
|
Liabilities held for sale
| | |
49,468
|
| | | |
362,818
|
|
|
Total liabilities
| | |
$
|
1,281,146
|
| | | |
$
|
1,592,968
|
|
| | | | | | |
|
| Stockholders’ Equity: | | | | | | | |
Preferred stock: $0.001 par value, 100,000,000 shares authorized,
none
issued or outstanding
| | |
$
|
—
| | | | |
$
|
—
| |
Common stock - Class A: $0.001 par value, 200,000,000 shares
authorized,
35,003,004 and 35,003,004 shares issued and
outstanding, respectively
| | |
35
| | | | |
35
| |
Common stock - Class B: $0.001 par value, 50,000,000 shares
authorized,
8,049,029 and 8,049,029 shares issued and
outstanding, respectively
| | |
8
| | | | |
8
| |
|
Additional paid-in capital
| | |
294,678
| | | | |
295,582
| |
|
Accumulated other comprehensive income (loss), net of tax
| | |
(1,483
|
)
| | | |
966
| |
|
Retained earnings
| | |
60,741
| | | | |
38,079
| |
Class A common stock held by subsidiaries, 5,080,943 and
5,197,551
shares, respectively
| | |
(33,823
|
)
| | | |
(34,585
|
)
|
Class B common stock held by subsidiaries, 8,049,029 and
8,049,029
shares, respectively
| | |
(8
|
)
| | | |
(8
|
)
|
| Total Tiptree Inc. stockholders’ equity
| | |
320,148
| | | | |
300,077
| |
|
Non-controlling interests - TFP
| | |
82,082
| | | | |
77,494
| |
|
Non-controlling interests - Other
| | |
5,430
|
| | | |
19,203
|
|
|
Total stockholders’ equity
| | |
407,660
|
| | | |
396,774
|
|
|
Total liabilities and stockholders’ equity
| | |
$
|
1,688,806
|
| | | |
$
|
1,989,742
|
|
|
|
| |
Tiptree Inc. | | | |
Condensed Consolidated Statements of Operations | | | |
($ in thousands, except share data) | | | |
| | | Three Months Ended March 31, |
| | | 2018 |
|
|
| 2017 |
| Revenues: | | | | | | | |
|
Earned premiums, net
| | |
$
|
101,645
| | | | |
$
|
89,231
| |
|
Service and administrative fees
| | |
24,576
| | | | |
23,776
| |
|
Ceding commissions
| | |
2,283
| | | | |
2,271
| |
|
Net investment income
| | |
4,205
| | | | |
4,505
| |
|
Net realized and unrealized gains (losses)
| | |
6,606
| | | | |
16,212
| |
|
Other revenue
| | |
8,757
|
| | | |
10,194
|
|
| Total revenues | | |
148,072
|
| | | |
146,189
|
|
| Expenses: | | | | | | | |
|
Policy and contract benefits
| | |
36,626
| | | | |
32,992
| |
|
Commission expense
| | |
62,633
| | | | |
56,793
| |
|
Employee compensation and benefits
| | |
27,788
| | | | |
29,030
| |
|
Interest expense
| | |
5,946
| | | | |
6,078
| |
|
Depreciation and amortization
| | |
2,957
| | | | |
3,554
| |
|
Other expenses
| | |
19,165
|
| | | |
17,619
|
|
| Total expenses | | |
155,115
|
| | | |
146,066
|
|
| Other income: | | | | | | | |
|
Income attributable to consolidated CLOs
| | |
—
| | | | |
8,867
| |
|
Expenses attributable to consolidated CLOs
| | |
—
|
| | | |
4,952
|
|
|
Net income (loss) attributable to consolidated CLOs
| | |
—
|
| | | |
3,915
|
|
| Total other income | | |
| | | |
|
|
Income (loss) before taxes from continuing operations
| | |
(7,043
|
)
| | | |
4,038
| |
|
Less: provision (benefit) for income taxes
| | |
(1,568
|
)
| | | |
1,568
|
|
| Net income (loss) from continuing operations | | |
(5,475
|
)
| | | |
2,470
| |
| Discontinued operations: | | | | | | | |
|
Income (loss) before taxes from discontinued operations
| | |
624
| | | | |
(1,530
|
)
|
|
Gain on sale of discontinued operations, net
| | |
46,184
| | | | |
—
| |
|
Less: Provision (benefit) for income taxes
| | |
12,327
|
| | | |
(402
|
)
|
| Net income (loss) from discontinued operations | | |
34,481
|
| | | |
(1,128
|
)
|
| Net income (loss) before non-controlling interests | | |
29,006
| | | | |
1,342
| |
|
Less: net income (loss) attributable to non-controlling interests -
TFP
| | |
5,392
| | | | |
208
| |
|
Less: net income (loss) attributable to non-controlling interests -
Other
| | |
54
|
| | | |
34
|
|
| Net income (loss) attributable to Tiptree Inc. Class A common
stockholders | | | $ | 23,560 |
| | | | $ | 1,100 |
|
| | | | | | |
|
| Net income (loss) per Class A common share: | | | | | | | |
|
Basic, continuing operations, net
| | |
$
|
(0.15
|
)
| | | |
$
|
0.07
| |
|
Basic, discontinued operations, net
| | |
0.94
|
| | | |
(0.03
|
)
|
|
Basic earnings per share
| | |
$
|
0.79
| | | | |
$
|
0.04
| |
| | | | | | |
|
|
Diluted, continuing operations, net
| | |
(0.15
|
)
| | | |
0.06
| |
|
Diluted, discontinued operations, net
| | |
0.94
|
| | | |
(0.03
|
)
|
|
Diluted earnings per share
| | |
$
|
0.79
| | | | |
$
|
0.03
| |
| | | | | | |
|
| Weighted average number of Class A common shares: | | | | | | | |
|
Basic
| | |
29,861,496
| | | | |
28,424,824
| |
|
Diluted
| | |
29,861,496
| | | | |
36,749,956
| |
| | | | | | |
|
|
Dividends declared per common share
| | |
$
|
0.035
| | | | |
$
|
0.030
| |
|
|
Tiptree Inc. |
Non-GAAP Reconciliations (Unaudited) |
Non-GAAP Financial Measures — EBITDA and
Adjusted EBITDA |
|
|
The Company defines EBITDA as GAAP net income of the Company
adjusted to add consolidated interest expense, consolidated income
taxes and consolidated depreciation and amortization expense as
presented in its financial statements and Adjusted EBITDA as
EBITDA adjusted to (i) subtract interest expense on asset-specific
debt incurred in the ordinary course of its subsidiaries’ business
operations, (ii) adjust for the effect of purchase accounting,
(iii) adjust for non-cash fair value adjustments, and (iv) any
significant non-recurring expenses.
|
|
|
| |
| ($ in thousands) | | | Three Months Ended March 31, |
| | | 2018 |
|
|
| 2017 |
|
Net income (loss) available to Class A common stockholders
| | |
$
|
23,560
| | | | |
$
|
1,100
| |
|
Add: net (loss) income attributable to noncontrolling interests
| | |
5,446
| | | | |
242
| |
|
Less: net income from discontinued operations
| | |
34,481
|
| | | |
(1,128
|
)
|
|
Income (loss) from continuing operations
| | |
$
|
(5,475
|
)
| | | |
$
|
2,470
| |
|
Consolidated interest expense
| | |
5,946
| | | | |
6,078
| |
|
Consolidated income tax expense (benefit)
| | |
(1,568
|
)
| | | |
1,568
| |
|
Consolidated depreciation and amortization expense
| | |
2,957
|
| | | |
3,554
|
|
|
EBITDA from Continuing Operations
| | |
$
|
1,860
| | | | |
$
|
13,670
| |
|
Asset-based interest expense(1) | | |
(2,094
|
)
| | | |
(3,163
|
)
|
|
Effects of purchase accounting (2) | | |
(248
|
)
| | | |
(464
|
)
|
|
Non-cash fair value adjustments (3) | | |
66
| | | | |
513
| |
|
Non-recurring expenses (4) | | |
(376
|
)
| | | |
(1,736
|
)
|
|
Adjusted EBITDA from Continuing Operations
| | |
$
|
(792
|
)
| | | |
$
|
8,820
|
|
| | | | | | |
|
|
Income (loss) from discontinued operations
| | |
$
|
34,481
| | | | |
$
|
(1,128
|
)
|
|
Consolidated interest expense
| | |
1,252
| | | | |
2,701
| |
|
Consolidated income tax expense (benefit)
| | |
12,327
| | | | |
(402
|
)
|
|
Consolidated depreciation and amortization expense
| | |
—
|
| | | |
4,255
|
|
|
EBITDA from discontinued operations
| | |
$
|
48,060
| | | | |
$
|
5,426
| |
|
Asset based interest expense(1) | | |
(1,252
|
)
| | | |
(2,701
|
)
|
|
Non-cash fair value adjustments (3) | | |
(40,672
|
)
| | | |
—
| |
|
Non-recurring expenses (4) | | |
—
|
| | | |
241
|
|
|
Adjusted EBITDA from discontinued operations
| | |
$
|
6,136
|
| | | |
$
|
2,966
|
|
|
Total Adjusted EBITDA
| | |
$
|
5,344
|
| | | |
$
|
11,786
|
|
______________________
|
(1)
|
|
The consolidated asset-based interest expense is subtracted from
EBITDA to arrive at Adjusted EBITDA. This includes interest expense
associated with asset-specific debt at subsidiaries in the specialty
insurance, asset management, mortgage and other operations.
|
| |
|
|
(2)
| |
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 Fortegra increased EBITDA above what the historical basis of
accounting would have generated. The impact of this purchase
accounting adjustments have been reversed to reflect an adjusted
EBITDA without such purchase accounting effect.
|
| |
|
|
(3)
| |
For Reliance, within our mortgage operations, Adjusted EBITDA
excludes the impact of changes in contingent earn-outs. 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 legal, taxes,
banker fees and other costs. Also includes payments pursuant to a
separation agreement, dated as of November 10, 2015.
|
| |
|
Non-GAAP Financial Measures — EBITDA and
Adjusted EBITDA
The tables below present EBITDA and Adjusted EBITDA by business
component.
|
|
| Three Months Ended March 31, 2018 |
| | | |
|
| Tiptree Capital |
|
| |
|
| |
| ($ in thousands) | | | Specialty
insurance | | | Asset
Management |
|
| Mortgage |
|
| Other |
|
| Discontinued
Operations(1) |
|
| Tiptree
Capital | | | Corporate
Expenses | | | Total |
|
Pre-tax income/(loss) from continuing ops
| | |
$
|
1,343
| | | |
$
|
892
| | | |
$
|
153
| | | |
$
|
|
|
(2,717
|
)
| | |
$
|
—
| | | |
$
|
|
|
(1,672
|
)
| | |
$
|
|
|
(6,714
|
)
| | |
$
|
|
|
(7,043
|
)
|
|
Pre-tax income/(loss) from discontinued ops
| | |
—
| | | |
—
| | | |
—
| | | |
—
| | | |
46,808
| | | |
46,808
| | | |
—
| | | |
46,808
| |
Add back: | | | | | | | | | | | | | | | | | | | | | | | | |
|
Interest expense
| | |
4,533
| | | |
—
| | | |
300
| | | |
485
| | | |
1,252
| | | |
2,037
| | | |
629
| | | |
7,199
| |
|
Depreciation and amortization expenses
| | |
2,722
|
| | |
—
|
| | |
136
|
| | |
37
|
| | |
| | |
173
|
| | |
62
|
| | |
2,957
|
|
|
EBITDA
| | |
$
|
8,598
| | | |
$
|
892
| | | |
$
|
589
| | | |
$
| | |
(2,195
|
)
| | |
$
|
48,060
| | | |
$
| | |
47,346
| | | |
$
| | |
(6,023
|
)
| | |
$
| | |
49,921
| |
EBITDA adjustments: | | | | | | | | | | | | | | | | | | | | | | | | |
|
Asset-specific debt interest(2) | | |
(1,309
|
)
| | |
—
| | | |
(300
|
)
| | |
(485
|
)
| | |
(1,252
|
)
| | |
(2,037
|
)
| | |
—
| | | |
(3,346
|
)
|
|
Effects of purchase accounting(3) | | |
(248
|
)
| | |
—
| | | |
—
| | | |
—
| | | |
—
| | | |
—
| | | |
—
| | | |
(248
|
)
|
|
Non-cash fair value adjustments(4) | | |
66
| | | |
—
| | | |
—
| | | |
—
| | | |
(40,672
|
)
| | |
(40,672
|
)
| | |
—
| | | |
(40,606
|
)
|
|
Non-recurring expenses(5) | | |
1,086
|
| | |
—
|
| | |
—
|
| | |
868
|
| | |
—
|
| | |
868
|
| | |
(2,331
|
)
| | |
(377
|
)
|
|
Adjusted EBITDA
| | |
$
|
8,193
|
| | |
$
|
892
|
| | |
$
|
289
|
| | |
$
|
|
|
(1,812
|
)
| | |
$
|
6,136
|
| | |
$
|
|
|
5,505
|
| | |
$
|
|
|
(8,354
|
)
| | |
$
|
|
|
5,344
|
|
|
Plus: Stock based compensation expense
| | |
627
| | | |
—
| | | |
20
| | | |
—
| | | |
—
| | | |
20
| | | |
585
| | | |
1,232
| |
|
Less: Realized and unrealized gains (losses)(6) | | |
(4,499
|
)
| | |
(28
|
)
| | |
—
| | | |
(3,178
|
)
| | |
5,512
| | | |
2,306
| | | |
—
| | | |
(2,193
|
)
|
|
Less: Third party NCI Adjusted EBITDA
| | |
—
|
| | |
—
|
| | |
—
|
| | |
(128
|
)
| | |
—
|
| | |
(128
|
)
| | |
—
|
| | |
(128
|
)
|
|
Normalized EBITDA
| | |
$
|
13,319
|
| | |
$
|
920
|
| | |
$
|
309
|
| | |
$
|
|
|
1,494
|
| | |
$
|
624
|
| | |
$
|
|
|
3,347
|
| | |
$
|
|
|
(7,769
|
)
| | |
$
|
|
|
8,897
|
|
______________________
|
(1)
|
|
Includes discontinued operations related to Care. For more
information, see “Note—(3) Dispositions, Assets Held for Sale &
Discontinued Operations”, in the Form 10-Q for the quarter ended
March 31, 2018.
|
| |
|
|
|
| Three Months Ended March 31, 2017 |
| | | |
|
| Tiptree Capital |
|
| |
|
| |
| ($ in thousands) | | | Specialty
insurance | | | Asset
Management |
|
| Mortgage |
|
| Other |
|
| Discontinued
Operations(1) |
|
| Tiptree
Capital | | | Corporate
Expenses | | | Total |
|
Pre-tax income/(loss) from continuing ops
| | |
$
|
4,801
| | | |
$
|
5,581
| | | |
$
|
301
| | | |
$
|
|
|
84
| | | |
$
|
—
| | | |
$
|
|
|
5,966
| | | |
$
|
|
|
(6,729
|
)
| | |
$
|
|
|
4,038
| |
|
Pre-tax income/(loss) from discontinued ops
| | |
—
| | | |
—
| | | |
—
| | | |
—
| | | |
(1,530
|
)
| | |
(1,530
|
)
| | |
—
| | | |
(1,530
|
)
|
Add back: | | | | | | | | | | | | | | | | | | | | | | | | |
|
Interest expense
| | |
3,445
| | | |
—
| | | |
216
| | | |
1,137
| | | |
2,701
| | | |
4,054
| | | |
1,280
| | | |
8,779
| |
|
Depreciation and amortization expenses
| | |
3,294
|
| | |
—
|
| | |
138
|
| | |
60
|
| | |
4,255
|
| | |
4,453
|
| | |
62
|
| | |
7,809
|
|
|
EBITDA
| | |
$
|
11,540
| | | |
$
|
5,581
| | | |
$
|
655
| | | |
$
| | |
1,281
| | | |
$
|
5,426
| | | |
$
| | |
12,943
| | | |
$
| | |
(5,387
|
)
| | |
$
| | |
19,096
| |
EBITDA adjustments: | | | | | | | | | | | | | | | | | | | | | | | | |
|
Asset-specific debt interest(2) | | |
(1,810
|
)
| | |
—
| | | |
(216
|
)
| | |
(1,137
|
)
| | |
(2,701
|
)
| | |
(4,054
|
)
| | |
—
| | | |
(5,864
|
)
|
|
Effects of purchase accounting(3) | | |
(464
|
)
| | |
—
| | | |
—
| | | |
—
| | | |
—
| | | |
—
| | | |
—
| | | |
(464
|
)
|
|
Non-cash fair value adjustments(4) | | |
113
| | | |
—
| | | |
400
| | | |
—
| | | |
—
| | | |
400
| | | |
—
| | | |
513
| |
|
Non-recurring expenses(5) | | |
—
|
| | |
—
|
| | |
—
|
| | |
—
|
| | |
241
|
| | |
241
|
| | |
(1,736
|
)
| | |
(1,495
|
)
|
|
Adjusted EBITDA
| | |
$
|
9,379
|
| | |
$
|
5,581
|
| | |
$
|
839
|
| | |
$
|
|
|
144
|
| | |
$
|
2,966
|
| | |
$
|
|
|
9,530
|
| | |
$
|
|
|
(7,123
|
)
| | |
$
|
|
|
11,786
|
|
|
Plus: Stock based compensation expense
| | |
1,351
| | | |
—
| | | |
49
| | | |
—
| | | |
—
| | | |
49
| | | |
399
| | | |
1,799
| |
|
Less: Realized and unrealized gains (losses)(6) | | |
(1,528
|
)
| | |
2,233
| | | |
—
| | | |
(4
|
)
| | |
—
| | | |
2,229
| | | |
—
| | | |
701
| |
|
Less: Third party NCI Adjusted EBITDA
| | |
—
|
| | |
—
|
| | |
—
|
| | |
129
|
| | |
386
|
| | |
515
|
| | |
—
|
| | |
515
|
|
|
Normalized EBITDA
| | |
$
|
12,258
|
| | |
$
|
3,348
|
| | |
$
|
888
|
| | |
$
|
|
|
19
|
| | |
$
|
2,580
|
| | |
$
|
|
|
6,835
|
| | |
$
|
|
|
(6,724
|
)
| | |
$
|
|
|
12,369
|
|
______________________
|
(1)
|
|
Includes discontinued operations related to Care. For more
information, see “Note—(3) Dispositions, Assets Held for Sale &
Discontinued Operations”, in the Form 10-Q for the quarter ended
March 31, 2018.
|
| |
|
Non-GAAP Financial Measures — Book value per
share, as exchanged
Book value per share, as exchanged assumes full exchange of the limited
partners units of TFP for Tiptree Class A common stock. 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 thousands, except per share information) |
|
| Three Months Ended March 31, |
| | | 2018 |
|
|
| 2017 |
|
Total stockholders’ equity
| | |
$
|
407,660
| | | | |
$
|
393,838
|
|
Less non-controlling interest - other
| | |
5,430
|
| | | |
22,970
|
|
Total stockholders’ equity, net of non-controlling interests - other
| | |
$
|
402,230
| | | | |
$
|
370,868
|
|
Total Class A shares outstanding (1) | | |
29,922
| | | | |
28,492
|
|
Total Class B shares outstanding
| | |
8,049
|
| | | |
8,049
|
|
Total shares outstanding
| | |
37,971
|
| | | |
36,541
|
|
Book value per share, as exchanged
| | |
$
|
10.59
|
| | | |
$
|
10.15
|
______________________
|
(1)
|
|
As of March 31, 2018, excludes 5,197,551 shares of Class A common
stock held by a consolidated subsidiary of the Company. See
Note—(21) Earnings Per Share, in the Form 10-Q for the quarter ended
March 31, 2018, for further discussion of potential dilution from
warrants.
|
| |
|
Non-GAAP Financial Measures — Invested & Total
Capital
Invested Capital represents its total cash investment, including any
re-investment of earnings, and acquisition costs, net of tax. Total
Capital represents Invested Capital plus Corporate Debt.
| ($ in thousands) |
|
| Three Months Ended March 31, |
| | | 2018 |
|
|
| 2017 |
|
Total stockholders’ equity
| | |
$
|
407,660
| | | | |
$
|
393,838
|
|
Less non-controlling interest - other
| | |
5,430
|
| | | |
22,970
|
|
Total stockholders’ equity, net of non-controlling interests - other
| | |
$
|
402,230
| | | | |
$
|
370,868
|
| Plus Specialty Insurance accumulated depreciation and amortization,
net of tax
| | |
37,599
| | | | |
30,491
|
|
Plus Care accumulated depreciation and amortization - discontinued
operations, net of tax and NCI
| | |
—
| | | | |
23,965
|
|
Plus acquisition costs
| | |
4,161
|
| | | |
7,563
|
| Invested Capital | | |
$
|
443,990
| | | | |
$
|
432,887
|
|
Plus corporate debt
| | |
$
|
188,000
|
| | | |
$
|
205,626
|
|
Total Capital
| | |
$
|
631,990
| | | | |
$
|
638,513
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20180507006156/en/
Tiptree Inc.
Investor Relations, 212-446-1400
ir@tiptreeinc.com
Source: Tiptree Inc.