- Revenues of $152.7 million for the quarter, up 9.7% from $139.2
million in the prior year period.
- Net income before non-controlling interests of $0.9 million for the
quarter, an increase of $6.2 million from the prior year period,
primarily driven by increased income from specialty insurance
operations and reduced corporate expenses.
- Operating EBITDA(1) of $15.1 million for
the quarter, up 5.6% compared to $14.3 million in the prior year
period.
- Book value per share(2) of $10.74, up 8.8%
compared to $9.87as of June 30, 2017.
- Declared a dividend of $0.035 per share to stockholders of record
on August 20, 2018 with a payment date of August 27, 2018.
NEW YORK--(BUSINESS WIRE)--
Tiptree Inc. (NASDAQ:TIPT) (“Tiptree” or the “Company”), a holding
company that combines specialty insurance operations with investment
management today announced its financial results for the three and six
months ended June 30, 2018.
|
|
Summary Consolidated Statements of Operations |
|
|
|
|
|
|
|
|
| ($ in millions, except for per share information) |
|
|
| Three Months Ended June 30, |
| Six Months Ended June 30, |
| GAAP: | | | | 2018 |
| 2017 | | 2018 |
| 2017 |
|
Total revenues
| | | |
$
|
152.7
| | |
$
|
139.2
| | |
$
|
300.8
| | |
$
|
285.4
| |
|
Net income before non-controlling interests
| | | |
$
|
0.9
| | |
$
|
(5.3
|
)
| |
$
|
29.9
| | |
$
|
(4.0
|
)
|
|
Net income (loss) attributable to Common Stockholders
| | | |
$
|
0.8
| | |
$
|
(4.4
|
)
| |
$
|
24.4
| | |
$
|
(3.3
|
)
|
|
Diluted earnings per share
| | | |
$
|
0.02
| | |
$
|
(0.15
|
)
| |
$
|
0.73
| | |
$
|
(0.12
|
)
|
|
Cash dividends paid per common share
| | | |
$
|
0.065
| | |
$
|
0.06
| | |
$
|
0.065
| | |
$
|
0.06
| |
| | | | | | | | | |
|
Non-GAAP:(1) | | | | | | | | | | |
|
Operating EBITDA
| | | |
$
|
15.1
| | |
$
|
14.3
| | |
$
|
24.0
| | |
$
|
26.7
| |
|
Adjusted EBITDA
| | | |
$
|
10.2
| | |
$
|
6.8
| | |
$
|
15.5
| | |
$
|
18.6
| |
|
Book value per share (2) |
|
|
|
$
|
10.74
|
|
|
$
|
9.87
|
|
|
$
|
10.74
|
|
|
$
|
9.87
|
|
__________________________________
|
|
(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)
| | |
For periods prior to April 10, 2018, book value per share assumed
full exchange of the limited partners units of TFP for Common Stock.
|
| | |
|
Earnings Conference Call
Tiptree will host a conference call on Tuesday, August 7, 2018 at 9:00
a.m. Eastern Time to discuss its second 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, August 7, 2018 at
1:00 p.m. Eastern Time, until midnight Eastern on Tuesday, August 14,
2018. To listen to the replay, please dial 1-844-512-2921 (domestic) or
1-412-317-6671 (international), Passcode: 13681062.
Q2’18 Year-To-Date Financial Overview
Insurance:
-
Gross written premiums were $393.7 million, up 12.0%, driven by growth
in credit and other specialty programs.
-
Net written premiums were $205.0 million, up 11.8%, driven by growth
in credit and warranty products.
-
On March 28, 2018, we expanded our insurance operations into Europe
with the creation of Fortegra Europe Insurance Company Limited.
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. As of June 30, 2018, we repurchased 1,372,739 shares at an
average price of $6.45.
-
On April 10, 2018, we completed a corporate reorganization that
eliminated Tiptree’s dual class stock structure.
-
On May 4, 2018, we extended our Fortress credit agreement to September
2020 and up-sized our borrowings under that facility to $75 million
while reducing the interest rate by 100 basis points.
Consolidated Results of Operations
Revenues
For the three months ended June 30, 2018, revenues were $152.7 million,
which increased $13.5 million, or 9.7%, over prior year period. For the
six months ended June 30, 2018, revenues were $300.8 million, which
increased $15.3 million, or 5.4%, over prior year period. The increase
for both periods was driven by growth in earned premiums and service and
administrative fees, partially offset by reduced other income and
unrealized losses on investments. Earned premiums were $201.7 million
for the six months ended June 30, 2018, up from $176.7 million in the
comparable 2017 period. This was consistent with our strategy of growing
written premiums to increase investable assets and investment income.
The combination of unearned premiums and deferred revenues on the
balance sheet grew by $94.7 million or 19.1%, from June 30, 2017 to
June 30, 2018 as we continue to grow credit protection and warranty
written premiums.
Net Income (Loss) before non-controlling interests
For the three months ended June 30, 2018, net income before
non-controlling interests was $0.9 million, compared to a loss of $5.3
million in the prior year period. The increase was driven by increased
income from specialty insurance operations and reduced corporate
expenses, which was partially offset by unrealized losses on Invesque
common shares and lower distributions as we reduced our exposure to
asset management related investments.
For the six months ended June 30, 2018, net income before
non-controlling interests was $29.9 million compared to a loss of $4.0
million in the 2017 period, an increase of $33.9 million. In addition to
the factors that impacted the three month period, the year-to-date
increase was driven by $34.5 million of income from discontinued
operations including the net gain on sale of Care.
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 accumulated other
comprehensive income (“AOCI”) in stockholders equity. For the six months
ended June 30, 2018, we incurred $7.2 million of unrealized losses on
our Invesque common shares, all of which was the result of mark to
market movement from the date of the Care sale (February 1, 2018).
During 2017, we made a strategic decision to decrease our overall
exposure to CLO subordinated notes, which resulted in deconsolidation
and decreased our earnings from CLO distributions and gains on sales of
investments when comparing 2018 versus 2017 periods.
|
|
|
| |
| |
| ($ in thousands) | | | | Three Months Ended June 30, | | Six Months Ended June 30, |
| | | | 2018 |
| 2017 | | 2018 |
| 2017 |
|
Unrealized and realized gains (losses)(1) | | | |
$
|
(3,829
|
)
| |
$
|
(6,866
|
)
| |
$
|
(11,534
|
)
| |
$
|
(6,166
|
)
|
|
Discontinued operations (Care)(2) | | | |
$
|
—
| | |
$
|
(2,294
|
)
| |
$
|
46,808
| | |
$
|
(3,824
|
)
|
|
Asset management - credit investments
| | | |
$
|
(1,135
|
)
| |
$
|
2,670
| | |
$
|
(858
|
)
| |
$
|
7,838
| |
__________________________________
|
|
(1)
|
|
|
Excludes Mortgage realized and unrealized gains and losses -
Performing and NPLs. Includes $7.2 million of unrealized losses
attributable to Invesque shares from the date of the Care sale
(February 1, 2018).
|
|
(2)
| | |
Includes pre-tax Gain on sale of Discontinued Operations of $46.2
million.
|
| | |
|
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.
For the three months ended June 30, 2018, Operating EBITDA was $15.1
million compared to $14.3 million in the prior year period, an increase
of $0.8 million, or 5.6%. Operating EBITDA for the six months ended June
30, 2018 was $24.0 million compared to $26.7 million for the 2017
period, a decrease of $2.7 million, or 10.1%. The key drivers of the
change in Operating EBITDA were increased income from specialty
insurance operations and reduced corporate expenses, which were more
than offset by lower distributions on asset management related
investments.
Total stockholders’ equity was $400.8 million as of June 30, 2018
compared to $390.7 million as of June 30, 2017. Book value per share for
the period ended June 30, 2018 was $10.74, an increase from book value
per share, as exchanged, of $9.87 as of June 30, 2017. The key drivers
of the period-over-period impact were basic earnings per share of $1.04
over the last four quarters and the purchase of 1.4 million shares at an
average 39% discount to book value. Those increases were partially
offset by dividends paid of $0.125 per share and officer and director
compensation share issuances. Over the past twelve months, Tiptree
returned $13.7 million to shareholders through share repurchases and
dividends paid.
Results by Segment
Tiptree is a holding company that combines insurance operations with
investment management expertise. In addition to our specialty insurance
operations, we allocate our capital across our investments in other
companies and assets which we refer to as Tiptree Capital. As of June
30, 2018, Tiptree Capital consists of asset management operations,
mortgage operations and other investments (including Invesque common
shares). As such, we classify our business into three reportable
segments– specialty insurance, asset management and mortgage. Corporate
activities include holding company interest expense, employee
compensation and benefits, and other expenses. The following table
presents the components of total pre-tax income including continuing and
discontinued operations.
Pre-tax Income
|
|
|
| |
| |
| ($ in thousands) | | | | Three Months Ended June 30, | | Six Months Ended June 30, |
| | | | 2018 |
| 2017 | | 2018 |
| 2017 |
| Specialty Insurance | | | |
$
|
8,731
| | |
$
|
(732
|
)
| |
$
|
10,074
| | |
$
|
4,069
| |
| Tiptree Capital:
| | | | | | | | | | |
|
Asset management
| | | |
(614
|
)
| |
4,529
| | |
278
| | |
10,110
| |
|
Mortgage
| | | |
354
| | |
(1,300
|
)
| |
507
| | |
(999
|
)
|
|
Other
| | | |
(245
|
)
| |
1,226
| | |
(2,962
|
)
| |
1,310
| |
|
Corporate
| | | |
(6,649
|
)
| |
(8,628
|
)
| |
(13,363
|
)
| |
(15,357
|
)
|
|
Pre-tax income (loss) from continuing operations
| | | |
$
|
1,577
| | |
$
|
(4,905
|
)
| |
$
|
(5,466
|
)
| |
$
|
(867
|
)
|
|
Pre-tax income (loss) from discontinued operations (1) | | | |
$
|
—
| | |
$
|
(2,294
|
)
| |
$
|
46,808
| | |
$
|
(3,824
|
)
|
_______________________________
|
|
(1)
|
|
|
Includes Care for 2017 and 2018. Includes $46.2 million pre-tax gain
on sale of Care in 2018.
|
| | |
|
Operating EBITDA and Invested Capital - Non-GAAP (1)
|
|
|
| |
| |
| ($ in thousands) | | | | Three Months Ended June 30, | | Six Months Ended June 30, |
| | | | 2018 |
| 2017 | | 2018 |
| 2017 |
| Specialty Insurance | | | |
$
|
16,180
| | |
$
|
12,762
| | |
$
|
29,500
| | |
$
|
25,020
| |
| Tiptree Capital | | | |
3,659
| | |
8,256
| | |
7,007
| | |
15,091
| |
|
Asset management
| | | |
652
| | |
3,330
| | |
1,572
| | |
6,678
| |
|
Mortgage
| | | |
294
| | |
2,076
| | |
604
| | |
2,963
| |
|
Other (2) | | | |
2,713
| | |
2,850
| | |
4,831
| | |
5,450
| |
|
Corporate
| | | |
(4,786
|
)
| |
(6,717
|
)
| |
(12,556
|
)
| |
(13,441
|
)
|
|
Total Operating EBITDA
| | | |
$
|
15,053
|
| |
$
|
14,301
|
| |
$
|
23,951
|
| |
$
|
26,670
|
|
| | | | | | | | | | | | | | | | | |
|
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.
|
|
|
| |
| | | | As of June 30, |
| ($ in thousands) | | | | Invested Capital |
| Total Capital |
| | | | 2018 |
| 2017 | | 2018 |
| 2017 |
| Specialty Insurance | | | |
$
|
288,433
| | |
$
|
265,156
| | |
$
|
448,433
| | |
$
|
410,416
|
| Tiptree Capital | | | |
163,724
| | |
201,121
| | |
163,724
| | |
201,121
|
|
Asset management
| | | |
2,498
| | |
60,503
| | |
2,498
| | |
60,503
|
|
Mortgage
| | | |
31,217
| | |
22,071
| | |
31,217
| | |
22,071
|
|
Other (2) | | | |
130,009
| | |
118,547
| | |
130,009
| | |
118,547
|
|
Corporate
| | | |
(14,852
|
)
| |
(33,121
|
)
| |
59,178
|
| |
24,379
|
|
Total Tiptree
| | | |
$
|
437,305
|
| |
$
|
433,156
|
| |
$
|
671,335
|
| |
$
|
635,916
|
_______________________________
|
|
(1)
|
|
|
For further information relating to the Company’s Invested Capital,
Total Capital and Operating 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 June
30, 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 |
| | | | June 30, 2018 |
| December 31, 2017 |
| Assets: | | | | | | |
|
Investments:
| | | | | | |
|
Available for sale securities, at fair value
| | | |
$
|
234,361
| | |
$
|
182,448
| |
|
Loans, at fair value
| | | |
233,535
| | |
258,173
| |
|
Equity securities, at fair value
| | | |
140,132
| | |
25,536
| |
|
Other investments
| | | |
56,442
|
| |
59,142
|
|
|
Total investments
| | | |
664,470
| | |
525,299
| |
|
Cash and cash equivalents
| | | |
91,490
| | |
110,667
| |
|
Restricted cash
| | | |
18,148
| | |
31,570
| |
|
Notes and accounts receivable, net
| | | |
194,971
| | |
186,422
| |
|
Reinsurance receivables
| | | |
373,145
| | |
352,967
| |
|
Deferred acquisition costs
| | | |
146,882
| | |
147,162
| |
| Goodwill | | | |
91,562
| | |
91,562
| |
|
Intangible assets, net
| | | |
56,936
| | |
64,017
| |
|
Other assets
| | | |
40,329
| | |
31,584
| |
|
Assets held for sale
| | | |
51,598
|
| |
448,492
|
|
|
Total assets
| | | |
$
|
1,729,531
|
| |
$
|
1,989,742
|
|
| | | | | |
|
| Liabilities and Stockholders’ Equity | | | | | | |
| Liabilities: | | | | | | |
|
Debt, net
| | | |
$
|
366,215
| | |
$
|
346,081
| |
|
Unearned premiums
| | | |
526,282
| | |
503,446
| |
|
Policy liabilities and unpaid claims
| | | |
122,290
| | |
112,003
| |
|
Deferred revenue
| | | |
63,797
| | |
56,745
| |
|
Reinsurance payable
| | | |
93,488
| | |
90,554
| |
|
Other liabilities and accrued expenses
| | | |
110,379
| | |
121,321
| |
|
Liabilities held for sale
| | | |
46,264
|
| |
362,818
|
|
|
Total liabilities
| | | |
$
|
1,328,715
|
| |
$
|
1,592,968
|
|
| | | | | |
|
| Stockholders’ Equity: (1) | | | | | | |
|
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,
36,643,317 and 35,003,004 shares issued and outstanding, respectively
| | | |
37
| | |
35
| |
|
Common stock - Class B: $0.001 par value, none and 50,000,000 shares
authorized, none and 8,049,029 shares issued and outstanding,
respectively
| | | |
—
| | |
8
| |
|
Additional paid-in capital
| | | |
335,749
| | |
295,582
| |
|
Accumulated other comprehensive income (loss), net of tax
| | | |
(2,399
|
)
| |
966
| |
|
Retained earnings
| | | |
60,265
| | |
38,079
| |
|
Common Stock held by subsidiaries, 0 and 5,197,551 shares,
respectively
| | | |
—
| | |
(34,585
|
)
|
|
Class B common stock held by subsidiaries, none and 8,049,029
shares, respectively
| | | |
—
|
| |
(8
|
)
|
| Total Tiptree Inc. stockholders’ equity
| | | |
393,652
| | |
300,077
| |
|
Non-controlling interests - TFP
| | | |
—
| | |
77,494
| |
|
Non-controlling interests - Other
| | | |
7,164
|
| |
19,203
|
|
|
Total stockholders’ equity
| | | |
400,816
|
| |
396,774
|
|
|
Total liabilities and stockholders’ equity
| | | |
$
|
1,729,531
|
| |
$
|
1,989,742
|
|
| | | | | | | | | |
|
__________________________________
|
|
(1)
|
|
|
For information related to changes in the Company’s equity
capitalization, see “Note—(16) Stockholders’ Equity” in the Form
10-Q for the quarter ended June 30, 2018.
|
| | |
|
|
|
Tiptree Inc. Condensed Consolidated Statements of Operations ($ in thousands, except share data) |
|
|
|
| |
| |
| | | | Three Months Ended June 30, | | Six Months Ended June 30, |
| | | | 2018 |
| 2017 | | 2018 |
| 2017 |
| Revenues: | | | | | | | | | | |
|
Earned premiums, net
| | | |
$
|
100,044
| | |
$
|
87,477
| | |
$
|
201,689
| | |
$
|
176,708
| |
|
Service and administrative fees
| | | |
24,891
| | |
23,067
| | |
49,467
| | |
46,843
| |
|
Ceding commissions
| | | |
2,242
| | |
2,017
| | |
4,525
| | |
4,288
| |
|
Net investment income
| | | |
4,927
| | |
3,687
| | |
9,132
| | |
8,192
| |
|
Net realized and unrealized gains (losses)
| | | |
11,472
| | |
11,445
| | |
18,078
| | |
27,657
| |
|
Other revenue
| | | |
9,133
|
| |
11,552
|
| |
17,890
|
| |
21,746
|
|
| Total revenues | | | |
152,709
|
| |
139,245
|
| |
300,781
|
| |
285,434
|
|
| Expenses: | | | | | | | | | | |
|
Policy and contract benefits
| | | |
34,174
| | |
29,802
| | |
70,800
| | |
62,794
| |
|
Commission expense
| | | |
62,562
| | |
56,546
| | |
125,195
| | |
113,339
| |
|
Employee compensation and benefits
| | | |
27,188
| | |
29,035
| | |
54,976
| | |
58,065
| |
|
Interest expense
| | | |
6,655
| | |
6,305
| | |
12,601
| | |
12,383
| |
|
Depreciation and amortization
| | | |
2,953
| | |
3,471
| | |
5,910
| | |
7,025
| |
|
Other expenses
| | | |
17,600
|
| |
21,886
|
| |
36,765
|
| |
39,505
|
|
| Total expenses | | | |
151,132
|
| |
147,045
|
| |
306,247
|
| |
293,111
|
|
| Other income: | | | | | | | | | | |
|
Income attributable to consolidated CLOs
| | | |
—
| | |
7,941
| | |
—
| | |
16,808
| |
|
Expenses attributable to consolidated CLOs
| | | |
—
|
| |
5,046
|
| |
—
|
| |
9,998
|
|
|
Net income (loss) attributable to consolidated CLOs
| | | |
—
|
| |
2,895
|
| |
—
|
| |
6,810
|
|
| Total other income | | | |
—
|
| |
2,895
|
| |
—
|
| |
6,810
|
|
|
Income (loss) before taxes from continuing operations
| | | |
1,577
| | |
(4,905
|
)
| |
(5,466
|
)
| |
(867
|
)
|
|
Less: provision (benefit) for income taxes
| | | |
701
|
| |
(1,305
|
)
| |
(867
|
)
| |
263
|
|
| Net income (loss) from continuing operations | | | |
876
| | |
(3,600
|
)
| |
(4,599
|
)
| |
(1,130
|
)
|
| Discontinued operations: | | | | | | | | | | |
|
Income (loss) before taxes from discontinued operations
| | | |
—
| | |
(2,294
|
)
| |
624
| | |
(3,824
|
)
|
|
Gain on sale of discontinued operations, net
| | | |
—
| | |
—
| | |
46,184
| | |
—
| |
|
Less: Provision (benefit) for income taxes
| | | |
—
|
| |
(570
|
)
| |
12,327
|
| |
(972
|
)
|
| Net income (loss) from discontinued operations | | | |
—
|
| |
(1,724
|
)
| |
34,481
|
| |
(2,852
|
)
|
| Net income (loss) before non-controlling interests | | | |
876
| | |
(5,324
|
)
| |
29,882
| | |
(3,982
|
)
|
|
Less: net income (loss) attributable to non-controlling interests -
TFP
| | | |
108
| | |
(1,045
|
)
| |
5,500
| | |
(837
|
)
|
|
Less: net income (loss) attributable to non-controlling interests -
Other
| | | |
(58
|
)
| |
164
|
| |
(4
|
)
| |
198
|
|
| Net income (loss) attributable to Common Stockholders | | | | $ | 826 |
| | $ | (4,443 | ) | | $ | 24,386 |
| | $ | (3,343 | ) |
| | | | | | | | | |
|
Net income (loss) per Common Share: | | | | | | | | | | |
|
Basic, continuing operations, net
| | | |
$
|
0.02
| | |
$
|
(0.11
|
)
| |
$
|
(0.11
|
)
| |
$
|
(0.05
|
)
|
|
Basic, discontinued operations, net
| | | |
—
|
| |
(0.04
|
)
| |
0.84
|
| |
(0.07
|
)
|
|
Basic earnings per share
| | | |
$
|
0.02
|
| |
$
|
(0.15
|
)
| |
$
|
0.73
|
| |
$
|
(0.12
|
)
|
| | | | | | | | | |
|
|
Diluted, continuing operations, net
| | | |
0.02
| | |
(0.11
|
)
| |
(0.11
|
)
| |
(0.05
|
)
|
|
Diluted, discontinued operations, net
| | | |
—
|
| |
(0.04
|
)
| |
0.84
|
| |
(0.07
|
)
|
|
Diluted earnings per share
| | | |
$
|
0.02
|
| |
$
|
(0.15
|
)
| |
$
|
0.73
|
| |
$
|
(0.12
|
)
|
| | | | | | | | | |
|
Weighted average number of Common Shares: | | | | | | | | | | |
|
Basic
| | | |
36,593,154
| | |
28,832,975
| | |
33,245,921
| | |
28,630,027
| |
|
Diluted
| | | |
37,386,319
| | |
28,832,975
| | |
33,245,921
| | |
28,630,027
| |
| | | | | | | | | |
|
|
Dividends declared per Common Share
| | | |
$
|
0.035
| | |
$
|
0.030
| | |
$
|
0.070
| | |
$
|
0.060
| |
| | | | | | | | | | | | | | | | | |
|
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 thousands) | | | | Three Months Ended June 30, | | Six Months Ended June 30, |
| | | | 2018 |
| 2017 | | 2018 |
| 2017 |
|
Net income (loss) attributable to Common Stockholders
| | | |
$
|
826
| | |
$
|
(4,443
|
)
| |
$
|
24,386
| | |
$
|
(3,343
|
)
|
|
Add: net (loss) income attributable to noncontrolling interests
| | | |
50
| | |
(881
|
)
| |
5,496
| | |
(639
|
)
|
|
Less: net income from discontinued operations
| | | |
—
|
| |
(1,724
|
)
| |
34,481
|
| |
(2,852
|
)
|
|
Income (loss) from continuing operations
| | | |
$
|
876
| | |
$
|
(3,600
|
)
| |
$
|
(4,599
|
)
| |
$
|
(1,130
|
)
|
|
Corporate Debt related interest expense (1) | | | |
4,538
| | |
2,998
| | |
8,390
| | |
5,913
| |
|
Consolidated income tax expense (benefit)
| | | |
701
| | |
(1,305
|
)
| |
(867
|
)
| |
263
| |
|
Depreciation and amortization expense (2) | | | |
2,751
| | |
3,036
| | |
5,460
| | |
6,125
| |
|
Non-cash fair value adjustments (3) | | | |
—
| | |
3,174
| | |
66
| | |
3,687
| |
|
Non-recurring expenses (4) | | | |
1,301
|
| |
—
|
| |
925
|
| |
(1,736
|
)
|
|
Adjusted EBITDA from continuing operations
| | | |
$
|
10,167
|
| |
$
|
4,303
|
| |
$
|
9,375
|
| |
$
|
13,122
|
|
|
Add: Stock-based compensation expense
| | | |
1,051
| | |
1,342
| | |
2,284
| | |
3,140
| |
|
Less: Realized and unrealized gain (loss)
| | | |
(3,829
|
)
| |
(6,866
|
)
| |
(11,534
|
)
| |
(6,166
|
)
|
|
Less: Third party non-controlling interests
| | | |
(6
|
)
| |
357
|
| |
(134
|
)
| |
486
|
|
|
Operating EBITDA from continuing operations
| | | |
$
|
15,053
|
| |
$
|
12,154
|
| |
$
|
23,327
|
| |
$
|
21,942
|
|
| | | | | | | | | |
|
|
Income (loss) from discontinued operations
| | | |
$
|
—
| | |
$
|
(1,724
|
)
| |
$
|
34,481
| | |
$
|
(2,852
|
)
|
|
Consolidated income tax expense (benefit)
| | | |
—
| | |
(570
|
)
| |
12,327
| | |
(972
|
)
|
|
Consolidated depreciation and amortization expense
| | | |
—
| | |
4,726
| | |
—
| | |
8,981
| |
|
Non-cash fair value adjustments (3) | | | |
—
| | |
—
| | |
(40,672
|
)
| |
—
| |
|
Non-recurring expenses (4) | | | |
—
|
| |
36
|
| |
—
|
| |
277
|
|
|
Adjusted EBITDA from discontinued operations
| | | |
$
|
—
|
| |
$
|
2,468
|
| |
$
|
6,136
|
| |
$
|
5,434
|
|
|
Less: Realized and unrealized gain (loss) (5) | | | |
—
| | |
$
|
—
| | |
$
|
5,512
| | |
$
|
—
| |
|
Less: Third party non-controlling interests
| | | |
—
|
| |
$
|
321
|
| |
$
|
—
|
| |
$
|
706
|
|
|
Operating EBITDA from discontinued operations
| | | |
$
|
—
|
| |
$
|
2,147
|
| |
$
|
624
|
| |
$
|
4,728
|
|
|
Total Adjusted EBITDA
| | | |
$
|
10,167
|
| |
$
|
6,771
|
| |
$
|
15,511
|
| |
$
|
18,556
|
|
|
Total Operating EBITDA
| | | |
$
|
15,053
|
| |
$
|
14,301
|
| |
$
|
23,951
|
| |
$
|
26,670
|
|
_______________________________
|
|
(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, 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 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. 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.
|
| | |
|
Non-GAAP Financial Measures — Adjusted EBITDA
and Operating EBITDA
The tables below present EBITDA and Adjusted EBITDA by business
component.
|
|
|
| |
| | | | Three Months Ended June 30, 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
| | | |
$
|
8,731
| | |
$
|
(614
|
)
| |
$
|
354
| | |
$
|
(245
|
)
| |
$
|
—
| | |
$
|
(505
|
)
| |
$
|
(6,649
|
)
| |
$
|
1,577
| |
|
Pre-tax income/(loss) from discontinued ops
| | | |
—
| | |
—
| | |
—
| | |
—
| | |
—
| | |
—
| | |
—
| | |
—
| |
Adjustments: | | | | | | | | | | | | | | | | | | |
|
Corporate Debt related interest expense(1) | | | |
3,357
| | |
—
| | |
—
| | |
—
| | |
—
| | |
—
| | |
1,181
| | |
4,538
| |
|
Depreciation and amortization expenses(2) | | | |
2,495
| | |
—
| | |
136
| | |
58
| | | | |
194
| | |
62
| | |
2,751
| |
|
Non-cash fair value adjustments(3) | | | |
—
| | |
—
| | |
—
| | |
—
| | |
—
| | |
—
| | |
—
| | |
—
| |
|
Non-recurring expenses(4) | | | |
1,074
|
| |
—
|
| |
—
|
| |
227
|
| |
—
|
| |
227
|
| |
—
|
| |
1,301
|
|
|
Adjusted EBITDA
| | | |
$
|
15,657
|
| |
$
|
(614
|
)
| |
$
|
490
|
| |
$
|
40
|
| |
$
|
—
|
| |
$
|
(84
|
)
| |
$
|
(5,406
|
)
| |
$
|
10,167
|
|
|
Add: Stock-based compensation expense
| | | |
$
|
627
| | |
$
|
—
| | |
$
|
(196
|
)
| |
$
|
—
| | |
$
|
—
| | |
$
|
(196
|
)
| |
$
|
620
| | |
$
|
1,051
| |
|
Less: Realized and unrealized gain (loss)(5) | | | |
104
| | |
(1,266
|
)
| |
—
| | |
(2,667
|
)
| |
—
| | |
(3,933
|
)
| |
—
| | |
(3,829
|
)
|
|
Less: Third party non-controlling interests
| | | |
—
|
| |
—
|
| |
—
|
| |
(6
|
)
| |
—
|
| |
(6
|
)
| |
—
|
| |
(6
|
)
|
|
Operating EBITDA
| | | |
$
|
16,180
|
| |
$
|
652
|
| |
$
|
294
|
| |
$
|
2,713
|
| |
$
|
—
|
| |
$
|
3,659
|
| |
$
|
(4,786
|
)
| |
$
|
15,053
|
|
__________________________________
|
|
(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
June 30, 2018.
|
| | |
|
|
|
|
| Six Months Ended June 30, 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
| | | |
$
|
10,074
| | |
$
|
278
| | |
$
|
507
| | |
$
|
(2,962
|
)
| |
$
|
—
| | |
$
|
(2,177
|
)
| |
$
|
(13,363
|
)
| |
$
|
(5,466
|
)
|
|
Pre-tax income/(loss) from discontinued ops
| | | |
—
| | |
—
| | |
—
| | |
—
| | |
46,808
| | |
46,808
| | |
—
| | |
46,808
| |
Adjustments: | | | | | | | | | | | | | | | | | | |
|
Corporate Debt related interest expense(1) | | | |
6,580
| | |
—
| | |
—
| | |
—
| | |
—
| | |
—
| | |
1,810
| | |
8,390
| |
|
Depreciation and amortization expenses(2) | | | |
4,969
| | |
—
| | |
272
| | |
95
| | | | |
367
| | |
124
| | |
5,460
| |
|
Non-cash fair value adjustments(3) | | | |
66
| | |
—
| | |
—
| | |
—
| | |
(40,672
|
)
| |
(40,672
|
)
| |
—
| | |
(40,606
|
)
|
|
Non-recurring expenses(4) | | | |
2,161
|
| |
—
|
| |
—
|
| |
1,095
|
| |
—
|
| |
1,095
|
| |
(2,331
|
)
| |
925
|
|
|
Adjusted EBITDA
| | | |
$
|
23,850
|
| |
$
|
278
|
| |
$
|
779
|
| |
$
|
(1,772
|
)
| |
$
|
6,136
|
| |
$
|
5,421
|
| |
$
|
(13,760
|
)
| |
$
|
15,511
|
|
|
Add: Stock-based compensation expense
| | | |
1,255
| | |
—
| | |
(175
|
)
| |
—
| | |
—
| | |
(175
|
)
| |
1,204
| | |
2,284
| |
|
Less: Realized and unrealized gain (loss)(5) | | | |
(4,395
|
)
| |
(1,294
|
)
| |
—
| | |
(5,845
|
)
| |
5,512
| | |
(1,627
|
)
| |
—
| | |
(6,022
|
)
|
|
Less: Third party non-controlling interests
| | | |
—
|
| |
—
|
| |
—
|
| |
(134
|
)
| |
—
|
| |
(134
|
)
| |
—
|
| |
(134
|
)
|
|
Operating EBITDA
| | | |
$
|
29,500
|
| |
$
|
1,572
|
| |
$
|
604
|
| |
$
|
4,207
|
| |
$
|
624
|
| |
$
|
7,007
|
| |
$
|
(12,556
|
)
| |
$
|
23,951
|
|
__________________________________
|
|
(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
June 30, 2018.
|
| | |
|
|
|
|
| Three Months Ended June 30, 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
| | | |
$
|
(732
|
)
| |
$
|
4,529
| | |
$
|
(1,300
|
)
| |
$
|
1,226
| | |
$
|
—
| | |
$
|
4,455
| | |
$
|
(8,628
|
)
| |
$
|
(4,905
|
)
|
|
Pre-tax income/(loss) from discontinued ops
| | | |
—
| | |
—
| | |
—
| | |
—
| | |
(2,294
|
)
| |
(2,294
|
)
| |
—
| | |
(2,294
|
)
|
Adjustments: | | | | | | | | | | | | | | | | | |
—
| |
|
Corporate Debt related interest expense(1) | | | |
1,726
| | |
—
| | |
—
| | |
—
| | |
—
| | |
—
| | |
1,272
| | |
2,998
| |
|
Depreciation and amortization expenses(2) | | | |
2,762
| | |
—
| | |
136
| | |
76
| | |
.
| |
4,938
| | |
62
| | |
7,762
| |
|
Non-cash fair value adjustments(3) | | | |
113
| | |
—
| | |
3,061
| | |
—
| | |
—
| | |
3,061
| | |
—
| | |
3,174
| |
|
Non-recurring expenses(4) | | | |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
36
|
| |
36
|
| |
—
|
| |
36
|
|
|
Adjusted EBITDA
| | | |
$
|
3,869
|
| |
$
|
4,529
|
| |
$
|
1,897
|
| |
$
|
1,302
|
| |
$
|
2,468
|
| |
$
|
10,196
|
| |
$
|
(7,294
|
)
| |
$
|
6,771
|
|
|
Add: Stock-based compensation expense
| | | |
586
| | |
—
| | |
179
| | |
—
| | |
—
| | |
179
| | |
577
| | |
1,342
| |
|
Less: Realized and unrealized gain (loss)(5) | | | |
(8,307
|
)
| |
1,199
| | |
—
| | |
242
| | |
—
| | |
1,441
| | |
—
| | |
(6,866
|
)
|
|
Less: Third party non-controlling interests
| | | |
—
|
| |
—
|
| |
—
|
| |
357
|
| |
321
|
| |
678
|
| |
—
|
| |
678
|
|
|
Operating EBITDA
| | | |
$
|
12,762
|
| |
$
|
3,330
|
| |
$
|
2,076
|
| |
$
|
703
|
| |
$
|
2,147
|
| |
$
|
8,256
|
| |
$
|
(6,717
|
)
| |
$
|
14,301
|
|
__________________________________
|
|
(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
June 30, 2018.
|
| | |
|
|
|
|
| Six Months Ended June 30, 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
| | | |
$
|
4,069
| | |
$
|
10,110
| | |
$
|
(999
|
)
| |
$
|
1,310
| | |
$
|
—
| | |
$
|
10,421
| | |
$
|
(15,357
|
)
| |
$
|
(867
|
)
|
|
Pre-tax income/(loss) from discontinued ops
| | | |
—
| | |
—
| | |
—
| | |
—
| | |
(3,824
|
)
| |
(3,824
|
)
| |
—
| | |
(3,824
|
)
|
Adjustments: | | | | | | | | | | | | | | | | | |
—
| |
|
Corporate Debt related interest expense(1) | | | |
3,361
| | |
—
| | |
—
| | |
—
| | |
—
| | |
—
| | |
2,552
| | |
5,913
| |
|
Depreciation and amortization expenses(2) | | | |
5,591
| | |
—
| | |
274
| | |
136
| | |
8,981
| | |
9,391
| | |
124
| | |
15,106
| |
|
Non-cash fair value adjustments(3) | | | |
226
| | |
—
| | |
3,461
| | |
—
| | |
—
| | |
3,461
| | |
—
| | |
3,687
| |
|
Non-recurring expenses(4) | | | |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
277
|
| |
277
|
| |
(1,736
|
)
| |
(1,459
|
)
|
|
Adjusted EBITDA
| | | |
$
|
13,247
|
| |
$
|
10,110
|
| |
$
|
2,736
|
| |
$
|
1,446
|
| |
$
|
5,434
|
| |
$
|
19,726
|
| |
$
|
(14,417
|
)
| |
$
|
18,556
|
|
|
Add: Stock-based compensation expense
| | | |
1,937
| | |
—
| | |
227
| | |
—
| | |
—
| | |
227
| | |
976
| | |
3,140
| |
|
Less: Realized and unrealized gain (loss)(5) | | | |
(9,836
|
)
| |
3,432
| | |
—
| | |
238
| | |
—
| | |
3,670
| | |
—
| | |
(6,166
|
)
|
|
Less: Third party non-controlling interests
| | | |
—
|
| |
—
|
| |
—
|
| |
486
|
| |
706
|
| |
1,192
|
| |
—
|
| |
1,192
|
|
|
Operating EBITDA
| | | |
$
|
25,020
|
| |
$
|
6,678
|
| |
$
|
2,963
|
| |
$
|
722
|
| |
$
|
4,728
|
| |
$
|
15,091
|
| |
$
|
(13,441
|
)
| |
$
|
26,670
|
|
__________________________________
|
|
(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
June 30, 2018.
|
| | |
|
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 thousands, except per share information) | | | | As of June 30, |
| | | | 2018 |
| 2017 |
|
Total stockholders’ equity
| | | |
$
|
400,816
| | |
$
|
390,672
|
|
Less non-controlling interest - other
| | | |
7,164
|
| |
24,867
|
Total stockholders’ equity, net of non-controlling interests -
other
| | | |
$
|
393,652
| | |
$
|
365,805
|
|
Total Common shares outstanding
| | | |
36,643
| | |
29,017
|
|
Total Class B shares outstanding
| | | |
—
|
| |
8,049
|
|
Total shares outstanding
| | | |
36,643
|
| |
37,066
|
|
Book value per share(1) | | | |
$
|
10.74
|
| |
$
|
9.87
|
__________________________________
|
|
(1)
|
|
|
For periods prior to April 10, 2018, book value per share assumes
full exchange of the limited partners units of TFP for Common Stock.
|
| | |
|
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) | | | | As of June 30, |
| | | | 2018 |
| 2017 |
|
Total stockholders’ equity
| | | |
$
|
400,816
| | |
$
|
390,672
|
|
Less non-controlling interest - other
| | | |
7,164
|
| |
24,867
|
|
Total stockholders’ equity, net of non-controlling interests - other
| | | |
$
|
393,652
| | |
$
|
365,805
|
| Plus Specialty Insurance accumulated depreciation and amortization,
net of tax
| | | |
39,491
| | |
32,262
|
|
Plus Care accumulated depreciation and amortization - discontinued
operations, net of tax and NCI
| | | |
—
| | |
26,538
|
|
Plus acquisition costs
| | | |
4,161
|
| |
8,552
|
| Invested Capital | | | |
$
|
437,304
| | |
$
|
433,157
|
|
Plus corporate debt
| | | |
$
|
234,030
|
| |
$
|
202,760
|
|
Total Capital
| | | |
$
|
671,334
| | |
$
|
635,917
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20180806005601/en/
Tiptree Inc.
Investor Relations, 212-446-1400
ir@tiptreeinc.com
Source: Tiptree Inc.