Tiptree Reports Q3 2020 Results
Tiptree Inc. (NASDAQ:TIPT) reported its Q3 2020 financial results, highlighting a net income of $12.8 million, marking a $14.3 million increase from Q3 2019. Total revenues rose to $224.0 million, an 18.4% increase year-over-year, driven by growth in warranty contracts and mortgage services. However, year-to-date figures show a net loss of $43.4 million. Operating EBITDA surged to $31.9 million, up 84.4% from the previous year, attributed to the insurance and mortgage sectors. The company’s book value per share decreased 8.0% from last year, standing at $10.36, reflecting unrealized losses on investments.
- Net income increased to $12.8 million for Q3 2020, up $14.3 million from Q3 2019.
- Total revenues rose 18.4% to $224.0 million, driven by warranty service contracts.
- Operating EBITDA increased 84.4% to $31.9 million compared to Q3 2019.
- Gross written premiums grew 25.0% year-over-year, reaching $464.6 million.
- Year-to-date net loss is $43.4 million, a significant decline from prior year profits.
- Book value per share decreased 8.0% from $11.43 to $10.36, impacted by unrealized losses.
NEW YORK--(BUSINESS WIRE)--Tiptree Inc. (NASDAQ:TIPT) (“Tiptree” or the “Company”), a holding company that combines specialty insurance operations with investment management, today announced its financial results for the three and nine months ended September 30, 2020.
($ in millions, except per share information) |
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
GAAP: |
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
Total revenues |
$ |
224.0 |
|
|
$ |
189.2 |
|
|
$ |
552.9 |
|
|
$ |
564.2 |
|
Net income (loss) attributable to common stockholders |
$ |
12.8 |
|
|
$ |
(1.5) |
|
|
$ |
(43.4) |
|
|
$ |
14.2 |
|
Diluted earnings per share |
$ |
0.35 |
|
|
$ |
(0.04) |
|
|
$ |
(1.27) |
|
|
$ |
0.39 |
|
Cash dividends paid per common share |
$ |
0.04 |
|
|
$ |
0.04 |
|
|
$ |
0.12 |
|
|
$ |
0.115 |
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP: (1) |
|
|
|
|
|
|
|
||||||||
Operating EBITDA |
$ |
31.9 |
|
|
$ |
17.3 |
|
|
$ |
69.9 |
|
|
$ |
42.6 |
|
Book value per share |
$ |
10.36 |
|
|
$ |
11.43 |
|
|
$ |
10.36 |
|
|
$ |
11.43 |
|
____________________________
(1) For further information relating to the Company’s Operating EBITDA and Book value per share, including a reconciliation to GAAP financials, see “—Non-GAAP Reconciliations” below.
Earnings Conference Call
Tiptree will host a conference call on Thursday, November 5, 2020 at 9:00 a.m. Eastern Time to discuss its Q3 2020 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 Thursday, November 5, 2020 at 1:00 p.m. Eastern Time, until midnight Eastern on Thursday, November 12, 2020. To listen to the replay, please dial 1-844-512-2921 (domestic) or 1-412-317-6671 (international), Passcode: 13708726.
Financial Overview
Overall:
-
Net income was
$12.8 million for the quarter, an increase of$14.3 million over prior year driven by increases in operational performance. -
Operating EBITDA of
$31.9 million for the quarter, up$14.6 million , from growth in insurance and mortgage operations. -
Book value per share of
$10.36 as of September 30, 2020, when combined with dividends paid, increased4.3% from the prior quarter, driven by a combination of earnings and share repurchases in the quarter. Book value per share as of September 30, 2020, when combined with dividends paid, represents a decrease of8.0% from September 30, 2019, primarily driven by unrealized mark-to-market losses on our investment in Invesque. -
Year-to-date, we purchased and retired 1,477,302 shares of our common stock for
$9.2 million , at an average37% discount to book. -
Cash and cash equivalents of
$103.5 million as of September 30, 2020, of which$72.4 million resides outside our statutory insurance subsidiaries.
Insurance:
-
Gross written premiums and premium equivalents for the quarter were
$464.6 million , up25.0% versus the prior year period, driven by growth in warranty service contracts and specialty programs. Year-to-date premiums and equivalents of$1,175.6 million , up25.5% from prior year driven by growth in warranty and specialty programs, and premium finance volumes. Excluding the incremental premium equivalents from our acquisition of Smart AutoCare, premiums and equivalents increased7.4% for the quarter and9.7% for the year-to-date period. -
Operating EBITDA was
$19.1 million for the quarter, up$3.1 million , or19.4% , from growth in warranty and specialty programs and improved margins. Year-to-date Operating EBITDA of$48.1 million , up8.0% from increases in premium and equivalents. -
Quarterly combined ratio of
90.4% declined from92.1% in the prior year period driven by improved underwriting performance and the overall shift in product mix. - In September 2020, we announced the formation of a new excess and surplus lines subsidiary, Fortegra Specialty Insurance Company, which we expect will broaden our product reach and scope within the U.S.
- In October 2020, we refinanced and increased our premium finance asset-based facility as we continue to expand our vertically integrated product offerings.
Tiptree Capital:
-
For the quarter, Operating EBITDA improved year over year by
$11.2 million . Year-to-date Operating EBITDA was$36.1 million , up from$15.3 million in the prior year period driven by higher loan origination volume and margins in our mortgage business. - Low mortgage rates due to the Federal Reserve intervention in mortgage markets, combined with limitations on operating capacity driven by COVID-19, and rising home prices in certain markets has resulted in higher refinance mortgage volumes and margins.
Consolidated Results of Operations
Revenues
For the three months ended September 30, 2020, revenues were
The combination of unearned premiums and deferred revenues on the balance sheet grew by
The table below provides a break down between net realized and unrealized gains and losses from Invesque and from other securities which impacted our consolidated results on a pre-tax basis. Many of our investments are carried at fair value and marked to market through unrealized gains and losses. As a result, we expect our earnings relating to these investments to be relatively volatile between periods, which was highlighted by the market volatility in the first half of the year caused by uncertainly regarding the impact of COVID-19. Our fixed income securities are primarily marked to market through accumulated other comprehensive income (AOCI) in stockholders’ equity and do not impact net realized and unrealized gains and losses until they are sold.
($ in millions) |
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
Net realized and unrealized gains (losses)(1) |
$ |
1.5 |
|
|
$ |
(8.9) |
|
|
$ |
(18.1) |
|
|
$ |
1.3 |
|
Net realized and unrealized gains (losses) - Invesque |
$ |
(9.2) |
|
|
$ |
— |
|
|
$ |
(79.8) |
|
|
$ |
6.2 |
|
____________________________
(1) Excludes Invesque, Mortgage realized and unrealized gains and losses and NPLs.
Net Income (Loss) Attributable to Common Stockholders
For the three months ended September 30, 2020, net income available to common stockholders was
Non-GAAP
Management uses Operating EBITDA and book value per share as measurements of operating performance which are non-GAAP measures. Management believes the use of Operating 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. Management uses Operating EBITDA as part of its capital allocation process and to assess comparative returns on invested capital amongst our businesses and investments. Operating 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. 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.
Operating EBITDA for the three months ended September 30, 2020 was
Total stockholders’ equity was
Results by Segment
We classify our business into one reportable segment, Tiptree Insurance, with the remainder of our non-insurance operations aggregated into Tiptree Capital. Corporate activities include holding company interest expense, corporate employee compensation and benefits, and other expenses, including, but not limited to, public company expenses. The following table presents the components of total pre-tax income.
Pre-tax Income
($ in millions) |
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
Tiptree Insurance |
$ |
13.4 |
|
|
$ |
8.3 |
|
|
$ |
0.4 |
|
|
$ |
28.4 |
|
Tiptree Capital |
9.5 |
|
|
(1.4) |
|
|
(38.6) |
|
|
16.2 |
|
||||
Corporate |
(9.0) |
|
|
(8.6) |
|
|
(25.2) |
|
|
(25.4) |
|
||||
Pre-tax income (loss) |
$ |
13.9 |
|
|
$ |
(1.7) |
|
|
$ |
(63.4) |
|
|
$ |
19.2 |
|
Operating EBITDA - Non-GAAP (1)
The following tables present the components of Operating EBITDA.
($ in millions) |
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
Tiptree Insurance |
$ |
19.1 |
|
|
$ |
16.0 |
|
|
$ |
48.1 |
|
|
$ |
44.5 |
|
Tiptree Capital |
18.2 |
|
|
7.0 |
|
|
36.1 |
|
|
15.3 |
|
||||
Corporate |
(5.4) |
|
|
(5.7) |
|
|
(14.3) |
|
|
(17.2) |
|
||||
Operating EBITDA (1) |
$ |
31.9 |
|
|
$ |
17.3 |
|
|
$ |
69.9 |
|
|
$ |
42.6 |
|
____________________________
(1) For further information relating to the Company’s Operating EBITDA, including a reconciliation to pre-tax income, see “—Non-GAAP Reconciliations.”
About Tiptree
Tiptree Inc. (NASDAQ: TIPT) is a holding company that allocates capital across a broad spectrum of businesses, assets and other investments. Our principal operating business, Fortegra Financial, along with its subsidiaries, is a leading provider of specialty insurance, warranty products and related administration services. We also allocate capital to a diverse group of select investments that we refer to as Tiptree Capital. 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.
|
|||||||
|
As of |
||||||
|
September 30,
|
|
December 31,
|
||||
Assets: |
|
|
|
||||
Investments: |
|
|
|
||||
Available for sale securities, at fair value, net of allowance for credit losses |
$ |
369,914 |
|
|
$ |
335,192 |
|
Loans, at fair value |
115,472 |
|
|
108,894 |
|
||
Equity securities |
111,659 |
|
|
155,378 |
|
||
Other investments |
214,192 |
|
|
137,472 |
|
||
Total investments |
811,237 |
|
|
736,936 |
|
||
Cash and cash equivalents |
103,502 |
|
|
133,117 |
|
||
Restricted cash |
78,095 |
|
|
11,473 |
|
||
Notes and accounts receivable, net |
361,747 |
|
|
286,968 |
|
||
Reinsurance receivables |
646,571 |
|
|
539,833 |
|
||
Deferred acquisition costs |
204,396 |
|
|
166,493 |
|
||
Goodwill |
163,366 |
|
|
99,147 |
|
||
Intangible assets, net |
134,199 |
|
|
47,974 |
|
||
Other assets |
151,175 |
|
|
68,510 |
|
||
Assets held for sale |
140,578 |
|
|
107,835 |
|
||
Total assets |
$ |
2,794,866 |
|
|
$ |
2,198,286 |
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity |
|
|
|
||||
Liabilities: |
|
|
|
||||
Debt, net |
$ |
397,764 |
|
|
$ |
374,454 |
|
Unearned premiums |
792,533 |
|
|
754,993 |
|
||
Policy liabilities and unpaid claims |
211,198 |
|
|
144,384 |
|
||
Deferred revenue |
358,734 |
|
|
94,601 |
|
||
Reinsurance payable |
189,500 |
|
|
143,869 |
|
||
Other liabilities and accrued expenses |
351,234 |
|
|
172,140 |
|
||
Liabilities held for sale |
132,212 |
|
|
102,430 |
|
||
Total liabilities |
$ |
2,433,175 |
|
|
$ |
1,786,871 |
|
|
|
|
|
||||
Stockholders’ Equity: |
|
|
|
||||
Preferred stock: |
$ |
— |
|
|
$ |
— |
|
Common stock: |
34 |
|
|
35 |
|
||
Additional paid-in capital |
319,522 |
|
|
326,140 |
|
||
Accumulated other comprehensive income (loss), net of tax |
5,662 |
|
|
1,698 |
|
||
Retained earnings |
22,520 |
|
|
70,189 |
|
||
Total Tiptree Inc. stockholders’ equity |
347,738 |
|
|
398,062 |
|
||
Non-controlling interests |
13,953 |
|
|
13,353 |
|
||
Total stockholders’ equity |
361,691 |
|
|
411,415 |
|
||
Total liabilities and stockholders’ equity |
$ |
2,794,866 |
|
|
$ |
2,198,286 |
|
Tiptree Inc.
|
|||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
Revenues: |
|
|
|
|
|
|
|
||||||||
Earned premiums, net |
$ |
116,418 |
|
|
$ |
129,163 |
|
|
$ |
344,994 |
|
|
$ |
364,712 |
|
Service and administrative fees |
47,701 |
|
|
26,058 |
|
|
134,290 |
|
|
78,681 |
|
||||
Ceding commissions |
5,157 |
|
|
1,598 |
|
|
16,217 |
|
|
7,150 |
|
||||
Net investment income |
3,023 |
|
|
2,984 |
|
|
8,803 |
|
|
10,713 |
|
||||
Net realized and unrealized gains (losses) |
38,959 |
|
|
15,302 |
|
|
6,628 |
|
|
58,746 |
|
||||
Other revenue |
12,783 |
|
|
14,080 |
|
|
41,974 |
|
|
44,158 |
|
||||
Total revenues |
224,041 |
|
|
189,185 |
|
|
552,906 |
|
|
564,160 |
|
||||
Expenses: |
|
|
|
|
|
|
|
||||||||
Policy and contract benefits |
57,738 |
|
|
43,993 |
|
|
167,761 |
|
|
124,256 |
|
||||
Commission expense |
68,868 |
|
|
77,430 |
|
|
207,172 |
|
|
225,070 |
|
||||
Employee compensation and benefits |
45,715 |
|
|
34,176 |
|
|
124,894 |
|
|
94,298 |
|
||||
Interest expense |
8,321 |
|
|
6,731 |
|
|
23,518 |
|
|
20,183 |
|
||||
Depreciation and amortization |
4,010 |
|
|
3,523 |
|
|
12,244 |
|
|
9,908 |
|
||||
Other expenses |
25,492 |
|
|
24,930 |
|
|
80,737 |
|
|
71,183 |
|
||||
Total expenses |
210,144 |
|
|
190,783 |
|
|
616,326 |
|
|
544,898 |
|
||||
Income (loss) before taxes |
13,897 |
|
|
(1,598) |
|
|
(63,420) |
|
|
19,262 |
|
||||
Less: provision (benefit) for income taxes |
(844) |
|
|
(649) |
|
|
(22,030) |
|
|
3,706 |
|
||||
Net income (loss) before non-controlling interests |
14,741 |
|
|
(949) |
|
|
(41,390) |
|
|
15,556 |
|
||||
Less: net income (loss) attributable to non-controlling interests |
1,978 |
|
|
508 |
|
|
2,038 |
|
|
1,342 |
|
||||
Net income (loss) attributable to common stockholders |
$ |
12,763 |
|
|
$ |
(1,457) |
|
|
$ |
(43,428) |
|
|
$ |
14,214 |
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per common share: |
|
|
|
|
|
|
|
||||||||
Basic earnings per share |
$ |
0.37 |
|
|
$ |
(0.04) |
|
|
$ |
(1.27) |
|
|
$ |
0.40 |
|
Diluted earnings per share |
$ |
0.35 |
|
|
$ |
(0.04) |
|
|
$ |
(1.27) |
|
|
$ |
0.39 |
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares: |
|
|
|
|
|
|
|
||||||||
Basic |
33,684,301 |
|
|
34,552,171 |
|
|
34,076,837 |
|
|
34,583,709 |
|
||||
Diluted |
33,684,301 |
|
|
34,552,171 |
|
|
34,076,837 |
|
|
34,583,709 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Dividends declared per common share |
$ |
0.04 |
|
|
$ |
0.04 |
|
|
$ |
0.12 |
|
|
$ |
0.12 |
|
Tiptree Inc.
Non-GAAP Reconciliations (Unaudited)
Non-GAAP Financial Measures — Operating EBITDA
The Company defines Operating 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, (iv) any significant non-recurring expenses, (v) stock based compensation expense, (vi) less realized and unrealized gains and losses, and (vii) less third party non-controlling interests. Operating 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.
($ in millions) |
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
Net income (loss) attributable to common stockholders |
$ |
12.8 |
|
|
$ |
(1.5) |
|
|
$ |
(43.4) |
|
|
$ |
14.2 |
|
Add: net (loss) income attributable to non-controlling interests |
1.9 |
|
|
0.5 |
|
|
2.0 |
|
|
1.3 |
|
||||
Income (loss) |
$ |
14.7 |
|
|
$ |
(1.0) |
|
|
$ |
(41.4) |
|
|
$ |
15.5 |
|
Corporate debt related interest expense(1) |
6.1 |
|
|
5.0 |
|
|
17.3 |
|
|
14.9 |
|
||||
Consolidated income tax expense (benefit) |
(0.8) |
|
|
(0.7) |
|
|
(22.0) |
|
|
3.7 |
|
||||
Depreciation and amortization expense(2) |
3.9 |
|
|
3.4 |
|
|
12.0 |
|
|
9.5 |
|
||||
Non-cash fair value adjustments |
(2.5) |
|
|
(0.3) |
|
|
(3.1) |
|
|
(0.5) |
|
||||
Non-recurring expenses(3) |
0.2 |
|
|
0.5 |
|
|
2.9 |
|
|
2.5 |
|
||||
Stock based compensation expense |
2.6 |
|
|
1.5 |
|
|
6.2 |
|
|
4.5 |
|
||||
Realized and unrealized (gain) loss(4) |
7.7 |
|
|
8.9 |
|
|
97.9 |
|
|
(7.5) |
|
||||
Third party non-controlling interests(5) |
— |
|
|
— |
|
|
0.1 |
|
|
— |
|
||||
Operating EBITDA |
$ |
31.9 |
|
|
$ |
17.3 |
|
|
$ |
69.9 |
|
|
$ |
42.6 |
|
_______________________________
(1) |
Corporate debt interest expense includes interest expense from secured corporate credit agreements, junior subordinated notes and preferred trust securities. Interest expense associated with asset-specific debt in Tiptree Insurance and Tiptree Capital is not added-back for Operating EBITDA. |
|
(2) |
Represents total depreciation and amortization expense less purchase accounting amortization related adjustments at our insurance companies. 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 companies increased EBITDA above what the historical basis of accounting would have generated. |
|
(3) |
Acquisition, start-up and disposition costs, including debt extinguishment, legal, taxes, banker fees and other costs. |
|
(4) |
Adjustment excludes Mortgage realized and unrealized gains and losses - Performing and NPLs, as those are recurring in nature and align with those business models. |
|
(5) |
Removes the Operating EBITDA associated with third party non-controlling interests. Does not remove the non-controlling interests related to employee-based shares. |
Non-GAAP Financial Measures — Operating EBITDA
The tables below present Operating EBITDA by business component.
|
Three Months Ended September 30, 2020 |
||||||||||||||
($ in millions) |
Specialty
|
|
Tiptree
|
|
Corporate
|
|
Total |
||||||||
Pre-tax income/(loss) from continuing operations |
$ |
13.4 |
|
|
$ |
9.5 |
|
|
$ |
(9.0) |
|
|
$ |
13.9 |
|
Adjustments: |
|
|
|
|
|
|
|
||||||||
Corporate debt related interest expense(1) |
3.4 |
|
|
— |
|
|
2.7 |
|
|
6.1 |
|
||||
Depreciation and amortization expenses(2) |
2.2 |
|
|
1.5 |
|
|
0.2 |
|
|
3.9 |
|
||||
Non-cash fair value adjustments |
— |
|
|
(2.5) |
|
|
— |
|
|
(2.5) |
|
||||
Non-recurring expenses(3) |
(0.1) |
|
|
0.3 |
|
|
— |
|
|
0.2 |
|
||||
Stock-based compensation expense |
0.6 |
|
|
1.3 |
|
|
0.7 |
|
|
2.6 |
|
||||
Realized and unrealized (gain) loss(4) |
(0.4) |
|
|
8.1 |
|
|
— |
|
|
7.7 |
|
||||
Third party non-controlling interests(5) |
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
Operating EBITDA |
$ |
19.1 |
|
|
$ |
18.2 |
|
|
$ |
(5.4) |
|
|
$ |
31.9 |
|
|
Nine Months Ended September 30, 2020 |
||||||||||||||
($ in millions) |
Tiptree
|
|
Tiptree
|
|
Corporate
|
|
Total |
||||||||
Pre-tax income/(loss) from continuing operations |
$ |
0.4 |
|
|
$ |
(38.6) |
|
|
$ |
(25.2) |
|
|
$ |
(63.4) |
|
Adjustments: |
|
|
|
|
|
|
|
||||||||
Corporate debt related interest expense(1) |
9.9 |
|
|
— |
|
|
7.4 |
|
|
17.3 |
|
||||
Depreciation and amortization expenses(2) |
7.0 |
|
|
4.4 |
|
|
0.6 |
|
|
12.0 |
|
||||
Non-cash fair value adjustments |
— |
|
|
(3.1) |
|
|
— |
|
|
(3.1) |
|
||||
Non-recurring expenses(3) |
2.2 |
|
|
0.3 |
|
|
0.4 |
|
|
2.9 |
|
||||
Stock-based compensation expense |
1.4 |
|
|
2.3 |
|
|
2.5 |
|
|
6.2 |
|
||||
Realized and unrealized (gain) loss(4) |
27.2 |
|
|
70.7 |
|
|
— |
|
|
97.9 |
|
||||
Third party non-controlling interests(5) |
— |
|
|
0.1 |
|
|
— |
|
|
0.1 |
|
||||
Operating EBITDA |
$ |
48.1 |
|
|
$ |
36.1 |
|
|
$ |
(14.3) |
|
|
$ |
69.9 |
|
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended September 30, 2019 |
||||||||||||||
($ in millions) |
Specialty
|
|
Tiptree
|
|
Corporate
|
|
Total |
||||||||
Pre-tax income/(loss) from continuing operations |
$ |
8.3 |
|
|
$ |
(1.4) |
|
|
$ |
(8.6) |
|
|
$ |
(1.7) |
|
Adjustments: |
|
|
|
|
|
|
|
||||||||
Corporate debt related interest expense(1) |
3.4 |
|
|
— |
|
|
1.6 |
|
|
5.0 |
|
||||
Depreciation and amortization expenses(2) |
2.2 |
|
|
0.9 |
|
|
0.3 |
|
|
3.4 |
|
||||
Non-cash fair value adjustments |
— |
|
|
(0.3) |
|
|
— |
|
|
(0.3) |
|
||||
Non-recurring expenses(3) |
0.3 |
|
|
— |
|
|
0.2 |
|
|
0.5 |
|
||||
Stock-based compensation expense |
0.7 |
|
|
— |
|
|
0.8 |
|
|
1.5 |
|
||||
Realized and unrealized (gain) loss(4) |
1.1 |
|
|
7.8 |
|
|
— |
|
|
8.9 |
|
||||
Third party non-controlling interests(5) |
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
Operating EBITDA |
$ |
16.0 |
|
|
$ |
7.0 |
|
|
$ |
(5.7) |
|
|
$ |
17.3 |
|
|
Nine Months Ended September 30, 2019 |
||||||||||||||
($ in millions) |
Tiptree
|
|
Tiptree
|
|
Corporate
|
|
Total |
||||||||
Pre-tax income/(loss) from continuing operations |
$ |
28.4 |
|
|
$ |
16.2 |
|
|
$ |
(25.4) |
|
|
$ |
19.2 |
|
Adjustments: |
|
|
|
|
|
|
|
||||||||
Corporate debt related interest expense(1) |
10.1 |
|
|
— |
|
|
4.8 |
|
|
14.9 |
|
||||
Depreciation and amortization expenses(2) |
6.5 |
|
|
2.5 |
|
|
0.5 |
|
|
9.5 |
|
||||
Non-cash fair value adjustments |
— |
|
|
(0.5) |
|
|
— |
|
|
(0.5) |
|
||||
Non-recurring expenses(3) |
1.7 |
|
|
0.2 |
|
|
0.6 |
|
|
2.5 |
|
||||
Stock-based compensation expense |
2.0 |
|
|
0.2 |
|
|
2.3 |
|
|
4.5 |
|
||||
Realized and unrealized (gain) loss(4) |
(4.2) |
|
|
(3.3) |
|
|
— |
|
|
(7.5) |
|
||||
Third party non-controlling interests(5) |
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
Operating EBITDA |
$ |
44.5 |
|
|
$ |
15.3 |
|
|
$ |
(17.2) |
|
|
$ |
42.6 |
|
_______________________________
The footnotes below correspond to the tables above, under “Non-GAAP Financial Measures — Operating EBITDA”
(1) |
Corporate debt interest expense includes interest expense from secured corporate credit agreements, junior subordinated notes and preferred trust securities. Interest expense associated with asset-specific debt in Tiptree Insurance and Tiptree Capital is not added-back for Operating EBITDA. |
|
(2) |
Represents total depreciation and amortization expense less purchase accounting amortization related adjustments at our insurance companies. 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 companies increased EBITDA above what the historical basis of accounting would have generated. |
|
(3) |
Acquisition, start-up and disposition costs, including debt extinguishment, legal, taxes, banker fees and other costs. |
|
(4) |
Adjustment excludes Mortgage realized and unrealized gains and losses - Performing and NPLs, as those are recurring in nature and align with those business models. |
|
(5) |
Removes the Operating EBITDA associated with third party non-controlling interests. Does not remove the non-controlling interests related to employee-based shares. |
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 millions, except per share information) |
As of September 30, 2020 |
||||||
|
2020 |
|
2019 |
||||
Total stockholders’ equity |
$ |
361.7 |
|
|
$ |
407.4 |
|
Less: Non-controlling interests |
14.0 |
|
|
12.6 |
|
||
Total stockholders’ equity, net of non-controlling interests |
$ |
347.7 |
|
|
$ |
394.8 |
|
|
|
|
|
||||
Total common shares outstanding |
33.6 |
|
|
34.6 |
|
||
|
|
|
|
||||
Book value per share |
$ |
10.36 |
|
|
$ |
11.43 |
|
