Fortegra Financial Corporation Reports Results for the Third
Quarter of 2013
JACKSONVILLE, FL--(Marketwired - Nov 11, 2013) - Fortegra
Financial Corporation (NYSE: FRF), a diversified insurance services
company offering a wide array of revenue enhancement products,
including service contracts, device and warranty services, and
distribution and administration services, reported its results for
the third quarter and nine months ended September 30, 2013.
- Total revenues increased 33.0% to $102.6 million for the third
quarter of 2013 from $77.1 million for the third quarter of
2012.
- Net revenues for the third quarter of 2013 increased 14.3% to
$35.6 million from $31.1 million for the third quarter of
2012.
- Direct and assumed written premiums for the third quarter of
2013 increased 16.0% to $116.5 million from $100.4 million for the
third quarter of 2012.
- Net income was $3.2 million for the third quarter of 2013
compared to $4.0 million for the third quarter of 2012.
- Net Income on a Non-GAAP basis was $3.9 million for the third
quarter of 2013 compared to $3.8 million for the third quarter of
2012.
- Diluted earnings per share were $0.16 for the third quarter of
2013 compared to $0.20 for the third quarter of 2012.
- Non-GAAP earnings per share on a diluted basis were $0.19 for
both the third quarter of 2013 and 2012.
"Overall, our third quarter was very productive despite the
challenges we faced given the regulatory and economic environments
in which we operated," said Richard S. Kahlbaugh, Chairman,
President and Chief Executive Officer of Fortegra. "Our quarterly
results reflected continued pressures facing our motor clubs
coupled with a seasonally weak period for ProtectCELL. Still,
revenue gains from ProtectCELL and 4Warranty contributed a combined
$6.0 million to our net revenues for the quarter and our written
premium across the enterprise grew 16.0% to $116.5 million for the
quarter. Our brokerage segment posted stable results and we made
substantive progress on our strategic goals which we believe will
drive organic growth and create value. Our operating expenses
decreased almost 7% on a comparable basis. The Company also
delivered on its commitment to further develop new products and
cultivate new channels and initiatives. I am pleased to report we
are making meaningful progress on multiple fronts and I am very
encouraged by the direction in which we are heading."
Third Quarter
Results Total revenues increased 33.0% to $102.6 million for
the third quarter of 2013, compared to $77.1 million for the third
quarter of 2012, and include $0.8 million of net realized
investment gains. Net revenues, which are comprised of total
revenues less net losses and loss adjustment, member benefit claims
and commissions expenses, increased 14.3% to $35.6 million for the
third quarter of 2013, compared to $31.1 million for the prior-year
period. Both total revenues and net revenues were favorably
impacted by the acquisitions of ProtectCELL and
4Warranty. During the third quarter of 2012, a change in
accounting estimate increased total revenues and net revenues by
$4.0 million and $1.2 million, respectively. Operating expenses for
the third quarter of 2013 increased 23.4% to $25.5 million compared
to $20.7 million in the prior-year period. Excluding operating
expenses associated with ProtectCELL and 4Warranty and costs to
support the direct-to-consumer initiative, operating expenses
decreased 6.8% or $1.4 million for the third quarter of 2013,
compared to the prior-year period. Income tax expense for the third
quarter of 2013 includes the effect of income tax
provision-to-return true-ups of $0.3 million, compared to $0.1
million of similar true-ups recorded in the third quarter of
2012.
Net income for the third quarter of 2013 was $3.2 million, or
$0.16 per diluted share, compared to $4.0 million, or $0.20 per
diluted share, for the prior-year period. The prior year period net
income included a $1.0 million favorable impact, or $0.05 per
diluted share, from a change in accounting estimate. Adjusted
EBITDA for the third quarter of 2013 was $10.6 million, compared to
$9.3 million for the third quarter of 2012. Adjusted EBITDA
margin for the third quarter of 2013 was 29.9%, compared to 31.0%
for the prior-year period.
Segment Results
Payment Protection Net revenues for the Payment Protection
segment increased 31.5% to $22.8 million for the third quarter of
2013, compared to $17.4 million for the prior-year period. The
increase resulted primarily from a $5.3 million increase in net
revenue attributable to the 2012 acquisition of ProtectCELL and
$0.6 million for 4Warranty. In addition, realized gains
increased by $0.8 million due to gains on invested assets sold in
the third quarter of 2013 and growth in the direct-to-consumer
initiative contributed $0.5 million to the increase,
while Motor Club net revenues increased $0.1 million. These
increases were partially offset by the 2012 change in accounting
estimate that increased 2012 net revenues by $1.2 million.
EBITDA for the Payment Protection segment was $7.0 million for
the third quarter of 2013, compared to $7.8 million for the
prior-year period. EBITDA margin percentage for the Payment
Protection segment was 30.6% for the third quarter of 2013,
compared to 44.9% for the prior-year period. The lower EBITDA
margin percentage for 2013, resulted primarily from a change in the
mix of business with the addition of ProtectCELL, 4Warranty and our
direct to consumer initiative.
Business Process Outsourcing (BPO) Net revenues for the
BPO segment decreased 24.9% to $3.7 million for the third quarter
of 2013 compared to $5.0 million for the prior-year period. EBITDA
for the BPO segment was $1.3 million for the third quarter of 2013,
compared to $1.1 million for the prior-year period. EBITDA
margin percentage for the BPO segment was 36.2% for the third
quarter of 2013, compared to 22.5% for the prior-year period. The
higher margin percentage resulted from decreases in operating
expenses.
Brokerage Net revenues for the Brokerage segment
increased 2.5% to $9.1 million for the third quarter of 2013
compared to $8.8 million for the prior-year period. Net revenues at
Bliss & Glennon increased $0.5 million, compared to the same
period in 2012, partially offset by a decline in collateral
recovery revenues of $0.2 million. EBITDA for the Brokerage segment
was $1.8 million for the third quarter of 2013, compared to $1.6
million for the prior-year period. EBITDA margin percentage
for the Brokerage segment increased to 19.5% for the third quarter
of 2013, compared to 17.8% for the prior-year period.
Balance Sheet
Total investments and cash and cash equivalents increased to $147.3
million at September 30, 2013 compared to $133.3 million at
December 31, 2012. Unearned premiums were $249.7 million at
September 30, 2013 compared to $235.9 million at December 31, 2012.
Total debt outstanding at September 30, 2013 decreased to $117.8
million compared to $124.4 million at December 31, 2012.
Stockholder's equity increased to $153.0 million at September 30,
2013 from $145.7 million at December 31, 2012.
Conference Call
Information Fortegra Financial's executive management will
host a conference call to discuss its third quarter 2013 results on
Tuesday, November 12, 2013 at 8:30 a.m. Eastern Time. To
participate in the live call, dial (877) 407-3982 within the U.S.,
or (201) 493-6780 for international callers. A live audio
webcast will also be available on the Investors page of the
company's website: http://www.fortegrafinancial.com. A replay
of the call will be available beginning November 12, 2013 at 11:30
a.m. ET and ending on November 19, 2013 at 11:59 p.m. Eastern Time
on the Company's website, and by dialing (877) 870-5176 in the U.S.
or (858) 384-5517 for international callers. The pass code for
the replay is 13572646.
Statistical
Supplement In addition, the Company has provided a
statistical supplement, which can be accessed through the "Investor
Relations" section of Fortegra Financial's website at:
http://www.fortegrafinancial.com.
About Fortegra
Financial Corporation Fortegra Financial Corporation is a
diversified insurance services company offering a wide array of
revenue enhancement products, including service contracts, device
and warranty services, and distribution and administration
services, to insurance companies, insurance brokers and agents and
other financial services companies, primarily in the United States.
Fortegra Financial's brands include Fortegra™, Life of the South®,
4Warranty, ProtectCELL™, Continental Car Club™, Auto Knight Motor
Club™, United Motor Club™, Consecta™, Pacific Benefits Group™,
Bliss & Glennon™, eReinsure™, South Bay Acceptance Corporation
and Universal Equipment Recovery Group.
Use of Non-GAAP
Financial Information We present certain additional
financial measures related to our Business Segments that are
"Non-GAAP measures" within the meaning of Regulation G under the
Securities Act of 1934. We present these Non-GAAP measures to
provide investors with additional information to analyze our
performance from period to period. Management also uses these
measures to assess performance for our segments and to allocate
resources in managing our businesses. However, investors
should not consider these Non-GAAP measures as a substitute for the
financial information that we report in accordance with
GAAP. These Non-GAAP measures reflect subjective
determinations by management, and may differ from similarly titled
Non-GAAP measures presented by other companies.
In this Earnings Release, we present Net Income - Non-GAAP
Basis, Non-GAAP Earnings per share - basic and diluted, EBITDA and
Adjusted EBITDA. These financial measures as presented in this
Earnings Release are considered Non-GAAP financial measures and are
not recognized terms under U.S. GAAP and should not be used as an
indicator of, and are not an alternative to, net income or earnings
per share as a measure of operating performance. Net Income -
Non-GAAP Basis as used in this Earnings Release, generally means
net income adjusted (on a tax-effected basis) by transaction costs
associated with acquisitions, stock-based compensation,
restructuring expenses, and unusual or non-recurring charges and
items that affect comparability of results. Non-GAAP earnings
per share - basic and diluted as presented in this Earnings
Release adjust for the impact of the Non-GAAP adjustments to net
income, net of tax, on a per share basis, EBITDA as used in
this Earnings Release is net income before interest expense, income
taxes, net income attributable to non-controlling interests,
depreciation and amortization. Adjusted EBITDA as used in this
Earnings Release means "Consolidated Adjusted EBITDA" which is
defined under our credit facility with Wells Fargo Bank, N.A., and
which generally means consolidated net income before net income
attributable to non-controlling interests, consolidated interest
expense, consolidated amortization expense, consolidated
depreciation expense and consolidated income tax expense. The other
items excluded in this calculation may include if applicable, but
are not limited to, specified acquisition costs, impairment of
goodwill and other non-cash charges, stock-based compensation
expense, and unusual or non-recurring charges and items that affect
comparability of results. The calculation below does not give
effect to certain additional adjustments permitted under our credit
facility, which if included, would increase the amount of Adjusted
EBITDA reflected in this table. We believe presenting Net Income -
Non-GAAP Basis, Non-GAAP Earnings per share - basic and diluted,
EBITDA and Adjusted EBITDA provides investors with a supplemental
financial measure of our operating performance.
In addition to the financial covenant requirements under our
credit facility, management uses Net Income - Non-GAAP Basis,
Non-GAAP Earnings per share - basic and diluted, EBITDA and
Adjusted EBITDA as financial measures of operating performance for
planning purposes, which may include, but are not limited to, the
preparation of budgets and projections, the determination of bonus
compensation for executive officers, the analysis of the allocation
of resources and the evaluation of the effectiveness of business
strategies. Although we use EBITDA and Adjusted EBITDA as financial
measures to assess the operating performance of our business, both
measures have significant limitations as analytical tools because
they exclude certain material expenses. For example, they do not
include interest expense and the payment of income taxes, which are
both a necessary element of our costs and operations. Since we use
property and equipment to generate service revenues, depreciation
expense is a necessary element of our costs. In addition, the
omission of amortization expense associated with our intangible
assets further limits the usefulness of this financial measure.
Management believes the inclusion of the adjustments to EBITDA and
Adjusted EBITDA are appropriate to provide additional information
to investors about certain material non-cash items and about
unusual items that we do not expect to continue at the same level
in the future. Because EBITDA and Adjusted EBITDA do not account
for these expenses, its utility as a financial measure of our
operating performance has material limitations. Due to these
limitations, management does not view EBITDA and Adjusted EBITDA in
isolation or as a primary financial performance measure.
We believe Net Income- Non-GAAP Basis, Non-GAAP Earnings per
share - basic and diluted, EBITDA and Adjusted EBITDA are
frequently used by securities analysts, investors and other
interested parties in the evaluation of similar companies in
similar industries and to measure the company's ability to service
its debt and other cash needs. Because the definitions of Net
Income- Non-GAAP Basis, Non-GAAP Earnings per share - basic and
diluted, EBITDA and Adjusted EBITDA (or similar financial measures)
may vary among companies and industries, they may not be comparable
to other similarly titled financial measures used by other
companies.
Forward-Looking
Statements This press release may contain forward-looking
statements within the meaning of the Private Securities Litigation
Act of 1995. Such statements are subject to risks and
uncertainties. All statements other than statements of
historical fact included in this press release are forward-looking
statements. Forward-looking statements give our current
expectations and projections relating to our financial condition,
results of operations, plans, objectives, future performance and
business. You can identify forward-looking statements by the
fact that they do not relate strictly to historical or current
facts. These statements may include words such as
"anticipate," "estimate," "expect," "project,'' "plan," "intend,"
"believe," "may," "should," "can have," "likely" and other words
and terms of similar meaning in connection with any discussion of
the timing or nature of future operating or financial performance
or other events.
The forward-looking statements contained in this press release
are based on assumptions that we have made in light of our industry
experience and our perceptions of historical trends, current
conditions, expected future developments and other factors we
believe are appropriate under the circumstances. As you read
this press release, you should understand that these statements are
not guarantees of performance or results. They involve risks,
uncertainties (some of which are beyond our control) and
assumptions. Although we believe that these forward-looking
statements are based on reasonable assumptions, you should be aware
that many factors could affect our actual financial results and
cause them to differ materially from those anticipated in the
forward-looking statements. We believe these factors include,
but are not limited to, those described under Item 1A. - "Risk
Factors" in Fortegra's most current Annual Report on Form 10-K and
most current Quarterly Report on Form 10-Q. Should one or more of
these risks or uncertainties materialize, or should any of these
assumptions prove incorrect, our actual results may vary in
material respects from those projected in these forward-looking
statements.
Any forward-looking statement made by us in this press release
speaks only as of the date on which we make it. Factors or
events that could cause our actual results to differ may emerge
from time to time, and it is not possible for us to predict all of
them. We undertake no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as may be required by
law.
Further information concerning Fortegra Financial and its
business, including factors that potentially could materially
affect Fortegra's financial results, is contained in Fortegra's
filings with the SEC, which are available free of charge at the
SEC's website at http://www.sec.gov and from Fortegra Financial's
website in the "Investor Relations" section under "SEC Filings" at
http://www.fortegrafinancial.com.
|
|
FORTEGRA FINANCIAL CORPORATION |
|
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) |
|
(All Amounts in Thousands Except Share and Per
Share Amounts) |
|
|
|
|
|
For the Three Months Ended |
|
|
For the Nine Months Ended |
|
|
|
September 30, 2013 |
|
|
September 30, 2012 |
|
|
September 30, 2013 |
|
September 30, 2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service and administrative fees |
|
$ |
49,238 |
|
|
$ |
22,898 |
|
|
$ |
135,022 |
|
$ |
67,195 |
|
|
Brokerage commissions and fees |
|
|
8,787 |
|
|
|
8,411 |
|
|
|
28,409 |
|
|
27,295 |
|
|
Ceding commission |
|
|
8,731 |
|
|
|
11,122 |
|
|
|
22,851 |
|
|
25,396 |
|
|
Net investment income |
|
|
772 |
|
|
|
744 |
|
|
|
2,433 |
|
|
2,219 |
|
|
Net realized investment gains (losses) |
|
|
756 |
|
|
|
(16 |
) |
|
|
2,043 |
|
|
(6 |
) |
|
Net earned premium |
|
|
34,106 |
|
|
|
33,893 |
|
|
|
100,929 |
|
|
97,770 |
|
|
Other income |
|
|
179 |
|
|
|
52 |
|
|
|
529 |
|
|
172 |
|
|
Gain on sale of subsidiary |
|
|
-- |
|
|
|
-- |
|
|
|
402 |
|
|
-- |
|
Total revenues |
|
|
102,569 |
|
|
|
77,104 |
|
|
|
292,618 |
|
|
220,041 |
|
|
Net losses and loss adjustment expenses |
|
|
9,957 |
|
|
|
11,430 |
|
|
|
31,096 |
|
|
32,272 |
|
|
Member benefit claims |
|
|
13,834 |
|
|
|
1,157 |
|
|
|
34,624 |
|
|
3,558 |
|
|
Commissions |
|
|
43,175 |
|
|
|
33,377 |
|
|
|
120,148 |
|
|
96,647 |
|
Net Revenues |
|
|
35,603 |
|
|
|
31,140 |
|
|
|
106,750 |
|
|
87,564 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personnel costs |
|
|
14,649 |
|
|
|
12,708 |
|
|
|
45,089 |
|
|
36,467 |
|
|
Other operating expenses |
|
|
10,850 |
|
|
|
7,959 |
|
|
|
30,438 |
|
|
21,635 |
|
|
Depreciation and amortization |
|
|
1,378 |
|
|
|
871 |
|
|
|
4,063 |
|
|
2,584 |
|
|
Amortization of intangibles |
|
|
1,870 |
|
|
|
1,127 |
|
|
|
5,598 |
|
|
3,775 |
|
|
Interest expense |
|
|
1,501 |
|
|
|
2,025 |
|
|
|
4,489 |
|
|
5,267 |
|
Total expenses |
|
|
30,248 |
|
|
|
24,690 |
|
|
|
89,677 |
|
|
69,728 |
|
Income before income taxes and non-controlling
interests |
|
|
5,355 |
|
|
|
6,450 |
|
|
|
17,073 |
|
|
17,836 |
|
|
Income taxes |
|
|
2,268 |
|
|
|
2,397 |
|
|
|
6,048 |
|
|
6,392 |
|
Income before non-controlling interests |
|
|
3,087 |
|
|
|
4,053 |
|
|
|
11,025 |
|
|
11,444 |
|
|
Less: net (loss) income attributable to non-controlling
interests |
|
|
(135 |
) |
|
|
29 |
|
|
|
868 |
|
|
62 |
|
Net income |
|
$ |
3,222 |
|
|
$ |
4,024 |
|
|
$ |
10,157 |
|
$ |
11,382 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.17 |
|
|
$ |
0.21 |
|
|
$ |
0.52 |
|
$ |
0.59 |
|
|
|
Diluted |
|
$ |
0.16 |
|
|
$ |
0.20 |
|
|
$ |
0.49 |
|
$ |
0.56 |
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
19,405,597 |
|
|
|
19,531,694 |
|
|
|
19,500,430 |
|
|
19,705,105 |
|
|
|
Diluted |
|
|
20,404,508 |
|
|
|
20,463,238 |
|
|
|
20,531,122 |
|
|
20,620,084 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FORTEGRA FINANCIAL CORPORATION |
|
CONSOLIDATED BALANCE SHEETS (Unaudited) |
|
(All Amounts in Thousands) |
|
|
|
|
|
At |
|
|
|
September 30, 2013 |
|
|
December 31, 2012 |
|
Assets: |
|
|
|
|
|
|
|
|
Investments: |
|
|
|
|
|
|
|
|
|
Fixed maturity securities available-for-sale, at fair
value |
|
$ |
122,760 |
|
|
$ |
110,641 |
|
|
Equity securities available-for-sale, at fair
value |
|
|
6,372 |
|
|
|
6,220 |
|
|
Short-term investments |
|
|
971 |
|
|
|
1,222 |
|
|
|
Total investments |
|
|
130,103 |
|
|
|
118,083 |
|
Cash and cash equivalents |
|
|
17,213 |
|
|
|
15,209 |
|
Restricted cash |
|
|
28,792 |
|
|
|
31,142 |
|
Accrued investment income |
|
|
1,006 |
|
|
|
1,235 |
|
Notes receivable, net |
|
|
5,818 |
|
|
|
11,290 |
|
Accounts and premiums receivable, net |
|
|
32,785 |
|
|
|
27,302 |
|
Other receivables |
|
|
36,109 |
|
|
|
13,393 |
|
Reinsurance receivables |
|
|
211,835 |
|
|
|
203,988 |
|
Deferred acquisition costs |
|
|
67,529 |
|
|
|
59,320 |
|
Property and equipment, net |
|
|
16,805 |
|
|
|
17,900 |
|
Goodwill |
|
|
127,679 |
|
|
|
127,679 |
|
Other intangible assets, net |
|
|
65,139 |
|
|
|
70,310 |
|
Income taxes receivable |
|
|
-- |
|
|
|
2,919 |
|
Other assets |
|
|
9,062 |
|
|
|
7,667 |
|
|
|
|
Total assets |
|
$ |
749,875 |
|
|
$ |
707,437 |
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
Unpaid claims |
|
$ |
33,471 |
|
|
$ |
33,007 |
|
Unearned premiums |
|
|
249,671 |
|
|
|
235,900 |
|
Policyholder account balances |
|
|
24,403 |
|
|
|
26,023 |
|
Accrued expenses, accounts payable and other
liabilities |
|
|
76,298 |
|
|
|
58,660 |
|
Income taxes payable |
|
|
237 |
|
|
|
-- |
|
Deferred revenue |
|
|
69,188 |
|
|
|
55,043 |
|
Note payable |
|
|
82,750 |
|
|
|
89,438 |
|
Preferred trust securities |
|
|
35,000 |
|
|
|
35,000 |
|
Deferred income taxes, net |
|
|
25,844 |
|
|
|
28,651 |
|
|
|
Total liabilities |
|
|
596,862 |
|
|
|
561,722 |
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity: |
|
|
|
|
|
|
|
|
Preferred stock |
|
|
-- |
|
|
|
-- |
|
Common stock |
|
|
209 |
|
|
|
207 |
|
Treasury stock, at cost |
|
|
(8,014 |
) |
|
|
(6,651 |
) |
Additional paid-in capital |
|
|
98,893 |
|
|
|
97,641 |
|
Accumulated other comprehensive loss, net of tax |
|
|
(3,471 |
) |
|
|
(631 |
) |
Retained earnings |
|
|
59,974 |
|
|
|
49,817 |
|
|
|
Stockholders' equity before non-controlling
interests |
|
|
147,591 |
|
|
|
140,383 |
|
Non-controlling interests |
|
|
5,422 |
|
|
|
5,332 |
|
|
|
Total stockholders' equity |
|
|
153,013 |
|
|
|
145,715 |
|
|
|
|
|
Total
liabilities and stockholders' equity |
|
$ |
749,875 |
|
|
$ |
707,437 |
|
|
|
|
|
|
|
|
|
|
|
|
FORTEGRA FINANCIAL CORPORATION |
CONSOLIDATED STATEMENTS OF INCOME- Segments
(Unaudited) |
(All Amounts in Thousands) |
|
|
|
For the Three Months Ended |
|
For the Nine Months Ended |
|
|
September 30, 2013 |
|
|
September 30, 2012 |
|
September 30, 2013 |
|
September 30, 2012 |
Segment Net Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment Protection (1) |
|
$ |
22,823 |
|
|
$ |
17,350 |
|
$ |
65,332 |
|
$ |
45,355 |
|
BPO |
|
|
3,717 |
|
|
|
4,951 |
|
|
11,900 |
|
|
13,565 |
|
Brokerage |
|
|
9,063 |
|
|
|
8,839 |
|
|
29,518 |
|
|
28,644 |
|
|
Segment net revenues |
|
|
35,603 |
|
|
|
31,140 |
|
|
106,750 |
|
|
87,564 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment Protection |
|
|
15,833 |
|
|
|
9,563 |
|
|
44,805 |
|
|
26,205 |
|
BPO |
|
|
2,370 |
|
|
|
3,836 |
|
|
8,706 |
|
|
10,320 |
|
Brokerage |
|
|
7,296 |
|
|
|
7,268 |
|
|
22,016 |
|
|
21,577 |
|
|
Total
operating expenses |
|
|
25,499 |
|
|
|
20,667 |
|
|
75,527 |
|
|
58,102 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment Protection |
|
|
6,990 |
|
|
|
7,787 |
|
|
20,527 |
|
|
19,150 |
|
BPO |
|
|
1,347 |
|
|
|
1,115 |
|
|
3,194 |
|
|
3,245 |
|
Brokerage |
|
|
1,767 |
|
|
|
1,571 |
|
|
7,502 |
|
|
7,067 |
|
|
Total
EBITDA |
|
|
10,104 |
|
|
|
10,473 |
|
|
31,223 |
|
|
29,462 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and Amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment Protection |
|
|
1,736 |
|
|
|
863 |
|
|
5,145 |
|
|
2,577 |
|
BPO |
|
|
845 |
|
|
|
494 |
|
|
2,512 |
|
|
1,495 |
|
Brokerage |
|
|
667 |
|
|
|
641 |
|
|
2,004 |
|
|
2,287 |
|
|
Total
depreciation and amortization |
|
|
3,248 |
|
|
|
1,998 |
|
|
9,661 |
|
|
6,359 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment Protection |
|
|
1,022 |
|
|
|
1,359 |
|
|
3,044 |
|
|
3,342 |
|
BPO |
|
|
176 |
|
|
|
294 |
|
|
528 |
|
|
820 |
|
Brokerage |
|
|
303 |
|
|
|
372 |
|
|
917 |
|
|
1,105 |
|
|
Total
interest expense |
|
|
1,501 |
|
|
|
2,025 |
|
|
4,489 |
|
|
5,267 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes and non-controlling
interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment Protection |
|
|
4,232 |
|
|
|
5,565 |
|
|
12,338 |
|
|
13,231 |
|
BPO |
|
|
326 |
|
|
|
327 |
|
|
154 |
|
|
930 |
|
Brokerage |
|
|
797 |
|
|
|
558 |
|
|
4,581 |
|
|
3,675 |
Total income before income taxes and non-controlling
interests |
|
|
5,355 |
|
|
|
6,450 |
|
|
17,073 |
|
|
17,836 |
|
Income taxes |
|
|
2,268 |
|
|
|
2,397 |
|
|
6,048 |
|
|
6,392 |
|
Less: net (loss) income attributable to non-controlling
interests |
|
|
(135 |
) |
|
|
29 |
|
|
868 |
|
|
62 |
Net income |
|
$ |
3,222 |
|
|
$ |
4,024 |
|
$ |
10,157 |
|
$ |
11,382 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) - Includes the $402 gain on sale of subsidiary for
the nine months ended September 30, 2013. |
|
|
|
|
|
|
FORTEGRA FINANCIAL CORPORATION |
|
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION |
|
EBITDA AND ADJUSTED EBITDA (Unaudited) |
|
(All Amounts in Thousands, except for
percentages) |
|
|
|
|
|
For the Three Months Ended |
|
|
For the Nine Months Ended |
|
|
|
September 30, 2013 |
|
|
September 30, 2012 |
|
|
September 30, 2013 |
|
|
September 30, 2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
3,222 |
|
|
$ |
4,024 |
|
|
$ |
10,157 |
|
|
$ |
11,382 |
|
|
Depreciation and amortization |
|
|
1,378 |
|
|
|
871 |
|
|
|
4,063 |
|
|
|
2,584 |
|
|
Amortization of intangibles |
|
|
1,870 |
|
|
|
1,127 |
|
|
|
5,598 |
|
|
|
3,775 |
|
|
Interest expense |
|
|
1,501 |
|
|
|
2,025 |
|
|
|
4,489 |
|
|
|
5,267 |
|
|
Income taxes |
|
|
2,268 |
|
|
|
2,397 |
|
|
|
6,048 |
|
|
|
6,392 |
|
|
Net (loss) income attributable to non-controlling
interests |
|
|
(135 |
) |
|
|
29 |
|
|
|
868 |
|
|
|
62 |
|
EBITDA |
|
|
10,104 |
|
|
|
10,473 |
|
|
|
31,223 |
|
|
|
29,462 |
|
|
|
Transaction costs (1) |
|
|
25 |
|
|
|
5 |
|
|
|
166 |
|
|
|
139 |
|
|
|
Stock-based compensation expense |
|
|
357 |
|
|
|
288 |
|
|
|
989 |
|
|
|
657 |
|
|
|
Restructuring expenses |
|
|
-- |
|
|
|
-- |
|
|
|
1,234 |
|
|
|
-- |
|
|
|
Gain
on sale of subsidiary |
|
|
-- |
|
|
|
-- |
|
|
|
(402 |
) |
|
|
-- |
|
|
|
Legal
expenses |
|
|
152 |
|
|
|
-- |
|
|
|
395 |
|
|
|
-- |
|
|
|
Change in accounting estimate |
|
|
-- |
|
|
|
(1,509 |
) |
|
|
-- |
|
|
|
(1,509 |
) |
Adjusted EBITDA |
|
$ |
10,638 |
|
|
$ |
9,257 |
|
|
$ |
33,605 |
|
|
$ |
28,749 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA Margin |
|
|
28.4 |
% |
|
|
33.6 |
% |
|
|
29.2 |
% |
|
|
33.6 |
% |
Adjusted EBITDA Margin (2) |
|
|
29.9 |
% |
|
|
31.0 |
% |
|
|
31.5 |
% |
|
|
33.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) - Represents transaction costs associated with
acquisitions. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) - The change in accounting estimate affecting the
three and nine month periods ending September 30, 2012 impacted net
revenues by $1.2 million and other operating expense by ($0.3)
million. The Adjusted EBITDA Margin for these periods is computed
based on net revenues and income before tax adjusted for these
impacts. |
|
|
|
|
|
|
|
FORTEGRA FINANCIAL CORPORATION |
|
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION
- |
|
NET INCOME - NON-GAAP BASIS (Unaudited) |
|
(All Amounts in Thousands Except Share and Per
Share Amounts) |
|
|
|
|
|
For the Three Months Ended |
|
|
For the Nine Months Ended |
|
|
|
September 30, 2013 |
|
September 30, 2012 |
|
|
September 30, 2013 |
|
|
September 30, 2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
3,222 |
|
$ |
4,024 |
|
|
$ |
10,157 |
|
|
$ |
11,382 |
|
|
Non-GAAP Adjustments, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction costs associated with acquisitions (1) |
|
|
25 |
|
|
5 |
|
|
|
166 |
|
|
|
139 |
|
|
|
Stock-based compensation |
|
|
232 |
|
|
186 |
|
|
|
642 |
|
|
|
425 |
|
|
|
Restructuring expenses |
|
|
-- |
|
|
-- |
|
|
|
799 |
|
|
|
-- |
|
|
|
Gain
on sale of subsidiary |
|
|
-- |
|
|
-- |
|
|
|
(261 |
) |
|
|
-- |
|
|
|
Legal |
|
|
99 |
|
|
-- |
|
|
|
257 |
|
|
|
-- |
|
|
|
Retirement of debt (2) |
|
|
-- |
|
|
439 |
|
|
|
-- |
|
|
|
439 |
|
|
|
Change in accounting estimate |
|
|
-- |
|
|
(976 |
) |
|
|
-- |
|
|
|
(976 |
) |
|
|
Income tax provision-to-return true-ups |
|
|
312 |
|
|
116 |
|
|
|
312 |
|
|
|
103 |
|
|
Total Non-GAAP adjustments, net of tax |
|
|
668 |
|
|
(230 |
) |
|
|
1,915 |
|
|
|
130 |
|
Net income - Non-GAAP basis |
|
$ |
3,890 |
|
$ |
3,794 |
|
|
$ |
12,072 |
|
|
$ |
11,512 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP earnings per share - basic |
|
$ |
0.17 |
|
$ |
0.21 |
|
|
$ |
0.52 |
|
|
$ |
0.59 |
|
|
Non-GAAP adjustments, net of tax |
|
|
0.03 |
|
|
(0.01 |
) |
|
|
0.10 |
|
|
|
0.01 |
|
Non-GAAP earnings per share - basic |
|
$ |
0.20 |
|
$ |
0.20 |
|
|
$ |
0.62 |
|
|
$ |
0.60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP earnings per share - diluted |
|
$ |
0.16 |
|
$ |
0.20 |
|
|
$ |
0.49 |
|
|
$ |
0.56 |
|
|
Non-GAAP adjustments, net of tax |
|
|
0.03 |
|
|
(0.01 |
) |
|
|
0.09 |
|
|
|
0.01 |
|
Non-GAAP earnings per share - diluted |
|
$ |
0.19 |
|
$ |
0.19 |
|
|
$ |
0.58 |
|
|
$ |
0.57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
19,405,597 |
|
|
19,531,694 |
|
|
|
19,500,430 |
|
|
|
19,705,105 |
|
|
|
Diluted |
|
|
20,404,508 |
|
|
20,463,238 |
|
|
|
20,531,122 |
|
|
|
20,620,084 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Adjustments not tax effected. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) - 2012 amounts represent the write off of $678 in
previously capitalized transactions costs on the termination of the
SunTrust Bank, N.A., revolving credit line, net of tax. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Schedule may not add or recalculate due to
rounding. |
|
Contacts:
Stephanie Gannon 904-352-2759 Email Contact
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