MINNEAPOLIS, May 10, 2017 (GLOBE NEWSWIRE) — GWG Holdings, Inc. (Nasdaq:GWGH), the parent company of GWG Life, a financial services company committed to transforming the life insurance industry through disruptive and innovative products and services, today announced its financial results for the quarter ended March 31, 2017.
Highlights for the Three Months Ended March 31, 2017
- GAAP Financial Information
° Total revenue of $20.1 million, up 12% from the prior year
° Net loss attributable to common shareholders of $1.9 million, or ($0.32) per basic and fully diluted share
- Adjusted Non-GAAP Financial Information
° Non-GAAP income attributable to common shareholders of $10.8 million, or $1.83 per basic and fully diluted share
- Increased the number of financial advisors able to sell our investment products to 5,309 – the largest network of advisors in the Company’s history
- Raised $56 million of capital from investment product offerings – our second highest quarterly amount on record
- Sold out the $100 million 7% Redeemable Preferred Stock (RPS) offering
- Commenced $150 million 7% Series 2 Redeemable Preferred Stock (RPS2) offering April 3, 2017
- Increased the number of financial advisors and life insurance agents able to source life insurance policies through GWG Life’s Appointed Agent Program to 3,787 – the largest network of insurance agents in the Company’s history
- Purchased $105 million in face value of policy benefits, the fifth consecutive quarter of purchases exceeding $100 million
- 27% of policy purchases were directly through independent financial advisors and life insurance agents, as compared to 13% in the first quarter of 2016
- Recognized $19 million in policy benefits from ten life insurance policies during the quarter, and an additional $9 million in policy benefits from three policies since quarter end
- Reported a portfolio of $1.45 billion in face value of life insurance policy benefits, covering 675 unique lives; representing a net year-over-year growth of $420 million or 41%
- Announced the appointment of Chris Orestis, former Chief Executive Officer of Life Care Funding, as EVP of Life Insurance Secondary Markets.
- Reported a total liquidity position of $107 million at March 31, 2017
“This was another strong quarter for us, one in which we made significant progress on several important corporate initiatives that we expect will lead to significant growth opportunities almost immediately and in the quarters to come,” said Jon Sabes, Chairman and Chief Executive Officer. “We closed out our $100 million Redeemable Preferred Stock (RPS) offering and introduced a new $150 million Series 2 Redeemable Preferred Stock (RPS2) offering that continues to see growing acceptance as broker-dealers, financial advisors, and investors better understand our business and its potential.”
“On the life insurance secondary market front, we hired as Executive Vice President Chris Orestis who brings decades of experience creating innovative long-term care and life insurance products for seniors. With Chris’s leadership, we are participating in a national rollout campaign to develop insurance professionals into Care Funding Specialists who focus on long-term care solutions. And we are supporting this campaign with a new product suite called the LifeCare Exchange that seeks to give seniors more options to exchange their life insurance to meet their long-term care and other post-retirement needs.”
“On the M-Panel technology front, we completed our exclusive license with UCLA for use of Dr. Horvath’s epigenetic methylation biomarker technology that are a predictive of individual all-cause mortality. In layman’s terms, this technology measures epigenetic methylation changes that occur from a wide range of environmental factors such as smoking and air pollution to diet and exercise, and impact our gene expression. In order to assess and better understand our commercial opportunities with M-Panel technology, we retained a global consultancy firm to assist us in the development of a report to quantify the value of epigenetic methylation technology to the life insurance and annuity industries. We are excited that this report shows us to be at the forefront of an emerging technology whose applications were not even imagined a year ago.”
“In the first quarter of 2017, we continued attracting record numbers of independent financial advisors to sell our non-correlated income and growth investment products, which are the primary engine of our growth,” said William Acheson, Chief Financial Officer. “Likewise, we have attracted a record number of independent insurance agents to fuel the growth of our direct policy acquisitions which, we believe will be a key differentiator for us and a source of shareholder value once operating at scale,” Acheson continued. “This progress, combined with the steadily rising cash flows realized from our portfolio of life insurance policies, signals success in the execution of our growth strategy.”
First Quarter 2017 Financial Summary
Total revenue for the quarter ended March 31, 2017 was $20.1 million, as compared to $17.9 million for the same period in 2016. Realized gain from policy benefits for the first quarter was $16.6 million, as compared to $14.6 million for the same period in 2016. The Company recognized $19.0 million of life insurance policy benefits during the quarter, as compared to $19.2 million for the same period in 2016. Total unrealized gain from policy acquisitions during the first quarter was $10.6 million, as compared to $8.0 million for the same period in 2016.
Total expenses for the first quarter of 2017 were $20.1 million, as compared to $15.2 million for the same period in 2016. As in prior quarters, increased expenses versus the prior year period were directly related to our growth in headcount, infrastructure, financing and operating costs as we continue to execute our growth strategy. The rate of increase in our total expenses is declining, however, as evidenced by sequential growth in total expenses of approximately 2% for the first quarter of 2017. We are, however, prepared to continue investing in the resources necessary to support our growth plans and the opportunity we see in the life insurance markets.