- Fourth Quarter 2023 Total Revenue Grew 25% Year-over-Year to
- Increased Originations Capital Deployment by 92% Year-over-Year to
- Increased Originations Capital Deployment for Full Year 2023 by 46% to
“We delivered another solid performance in the fourth quarter and throughout 2023, as we continued to leverage our expert team, wealth of data and innovative technology to execute on our multiple strategic growth initiatives,” said
Full Year 2023 Results (on a Proforma Basis)
- Full year 2023 total revenues were
$79.6 million , an increase of 14% from the prior year, primarily driven by higher active management revenue, increased capital deployed and more policies sold directly to third parties.- Total revenue from the portfolio servicing segment for the full year 2023 was
$1.0 million , compared to$1.5 million in the prior year.
- Total revenue from the portfolio servicing segment for the full year 2023 was
- Originations capital deployment for the full year 2023 was
$218.9 million , an increase of 46% from the prior year; number of policy originations grew 30% to 633. - GAAP net income attributable to shareholders for the full year 2023 was
$8.5 million , compared to$31.3 million in the prior year. - Adjusted net income for the full year 2023 was
$29.4 million , compared to$32.4 million in the prior year. - Adjusted EBITDA for the full year 2023 increased 13% to
$39.3 million , compared to$34.8 million in the prior year. Adjusted EBITDA margin (a non-GAAP measure) for the full year 2023 was 49.4%, compared to 50.0% in the prior year. - Return on invested capital (ROIC) (a non-GAAP measure defined below) for the full year 2023 was 21%.
- Return on equity (ROE) (a non-GAAP measure defined below) for the full year 2023 was 18%.
Fourth Quarter 2023 Highlights (on a Proforma Basis)
- Total revenue for the fourth quarter of 2023 grew 25% to
$23.6 million , compared to$18.8 million in the prior-year period. The increase in the fourth quarter was primarily driven by higher active management revenue, increased capital deployed and more policies sold directly to third parties.- Total revenue from portfolio servicing segment for the fourth quarter of 2023 was
$0.2 million , compared to$0.1 million in the prior-year period.
- Total revenue from portfolio servicing segment for the fourth quarter of 2023 was
- Originations capital deployment for the fourth quarter of 2023 increased 92% to
$68.3 million , compared to$35.5 million in the prior-year period; number of policy originations for the fourth quarter of 2023 grew 79% to 208, compared to 116 in the prior-year period. - GAAP net loss attributable to shareholders for the fourth quarter of 2023 was
$6.2 million , compared to GAAP net income attributable to shareholders of$10.1 million in the prior-year period, primarily driven by a non-cash expense related to employee stock compensation of$6.2 million , loss on fair value of warrant liability of$3.3 million , a one-time charge of$3.1 million related to debt extinguishment, and public company expenses incurred in the fourth quarter of 2023 that were not recorded in the prior-year period. - Adjusted net income for the fourth quarter of 2023 was
$5.9 million , compared to$11.0 million in the prior-year period. - Adjusted EBITDA for the fourth quarter of 2023 was
$11.0 million , compared to$11.1 million in the prior-year period. Adjusted EBITDA margin (a non-GAAP measure) for the fourth quarter of 2023 was 46.7%, compared to 52.4% in the prior-year period. - Annualized return on invested capital (ROIC) (a non-GAAP measure defined below) for the fourth quarter of 2023 was 17%.
- Annualized Return on equity (ROE) (a non-GAAP measure defined below) for the fourth quarter of 2023 was 18%.
- Total operating expenses for the fourth quarter of 2023 were
$20.0 million , compared to$4.4 million in the prior-year period. Operating expenses for the fourth quarter of 2023 included$6.2 million in non-cash employee stock compensation, which was not recorded in the prior-year period.
Liquidity and Capital
As of
From the commencement of the Company’s
Webcast and Conference Call
A webcast and conference call to discuss the Company’s results will be held today beginning at
A webcast replay of the call will be available at ir.abacuslife.com for one year following the call.
Non-GAAP Financial Information
Adjusted Net Income, a non-GAAP measure, is defined as net income (loss) attributable to Abacus adjusted for non-controlling interest income, amortization, change in fair value of warrants and non-cash stock-based compensation and the related tax effect of those adjustments. Management believes that Adjusted Net Income is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance. A reconciliation of Adjusted Net Income to Net income attributable to Abacus, the most directly comparable GAAP measure, appears below.
Adjusted EBITDA, a non-GAAP measure, is defined as net income (loss) attributable to Abacus adjusted for depreciation expense, amortization, interest expense, income tax and other non-cash and certain non-recurring items that in our judgement significantly impact the period-over-period assessment of performance and operating results that do not directly relate to business performance within Abacus’ control. A reconciliation of Adjusted EBITDA to Net income attributable to Abacus Life, the most directly comparable GAAP measure, appears below.
Adjusted EBITDA margin, a non-GAAP measure, is defined as Adjusted EBITDA divided by Total revenues. A reconciliation of Adjusted EBITDA margin to Net income margin, the most directly comparable GAAP measure, appears below.
Annualized return on invested capital (ROIC), a non-GAAP measure, is defined as Adjusted net income for the quarter divided by the result of Total Assets less Intangible assets, net,
Annualized return on equity (ROE), a non-GAAP measure, is defined as [Adjusted net income divided by total shareholder equity multiplied by four. ROE is not a measure of financial performance under GAAP. We believe ROE should be considered in addition to, not as a substitute for, operating income or loss, net income or loss, cash flows provided by or used in operating, investing and financing activities or other income statement or cash flow statement line items reported in accordance with GAAP. The below table presents our calculation of ROE.
Forward-Looking Statements
All statements in this press release (and oral statements made regarding the subjects of this press release) other than historical facts are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties and factors that could cause actual results to differ materially from such statements, many of which are outside the control of Abacus. Forward-looking information includes but is not limited to statements regarding: Abacus’s financial and operational outlook; Abacus’s operational and financial strategies, including planned growth initiatives and the benefits thereof, Abacus’s ability to successfully effect those strategies, and the expected results therefrom. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “expect,” ”intend,” “anticipate,” “goals,” “prospects,” “will,” “would,” “will continue,” “will likely result,” and similar expressions (including the negative versions of such words or expressions).
While Abacus believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in predicting certain important factors that could impact the future performance or results of its business. The factors that could cause results to differ materially from those indicated by such forward-looking statements include, but are not limited to: the fact that Abacus’s loss reserves are bases on estimates and may be inadequate to cover its actual losses; the failure to properly price Abacus’s insurance policies; the geographic concentration of Abacus’s business; the cyclical nature of Abacus’s industry; the impact of regulation on Abacus’s business; the effects of competition on Abacus’s business; the failure of Abacus’s relationships with independent agencies; the failure to meet Abacus’s investment objectives; the inability to raise capital on favorable terms or at all; the effects of acts of terrorism; and the effectiveness of Abacus’s control environment, including the identification of control deficiencies.
These forward-looking statements are also affected by the risk factors, forward-looking statements and challenges and uncertainties set forth in documents filed by Abacus with the
About Abacus
Abacus is a leading vertically integrated alternative asset manager and market maker, specializing in longevity and actuarial technology. The company is democratizing the life insurance space through three groundbreaking new channels: ABL Tech, ABL Wealth, and ABL Longevity Funds. Since 2004, Abacus has purchased life insurance policies from consumers seeking liquidity and has actively managed those policies over time (via trading, holding, and/or servicing). With over
Over the past 20 years, the company has built an institutionalized origination and portfolio management process that is supported by a 100+ person team, long-term relationships with 78 institutional partners and 30,000 financial advisors, and the ability to operate in 49 states. The Company complies with HIPAA and privacy laws to maintain and protect confidentiality of financial, health, and medical information. Abacus is also proud to be a BBB Accredited Business with an A+ rating.
www.Abacuslife.com
Contact:
Abacus Life Investor Relations
investors@abacuslife.com
Abacus Life Public Relations
press@abacuslife.com
ABACUS | |||||||
2023 | 2022 | ||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 25,588,668 | $ | 30,052,823 | |||
Equity securities, at fair value | 2,252,891 | 0 | |||||
Accounts receivable | 2,149,111 | 10,448 | |||||
Accounts receivable, related party | 79,509 | 198,364 | |||||
Due from affiliates | 1,007,528 | 2,904,646 | |||||
Prepaid expenses and other current assets | 699,127 | 116,646 | |||||
Total current assets | 31,776,834 | 33,282,927 | |||||
Property and equipment, net | 400,720 | 18,617 | |||||
Intangible assets, net | 29,623,130 | — | |||||
140,287,000 | — | ||||||
Operating right-of-use assets | 1,893,659 | 77011 | |||||
Life settlement policies, at cost | 1,697,178 | 8,716,111 | |||||
Life settlement policies, at fair value | 122,296,559 | 13809352 | |||||
Available-for-sale securities, at fair value | 1,105,935 | 1,000,000 | |||||
Other investments, at cost | 1,650,000 | 1,300,000 | |||||
Other assets | 998,945 | — | |||||
Equity securities, at fair value | 96,107 | 890,829 | |||||
TOTAL ASSETS | $ | 331,826,067 | $ | 59,094,847 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) | |||||||
CURRENT LIABILITIES: | |||||||
Current portion of long-term debt | $ | 13,029,632 | — | ||||
Accrued expenses | 4,354,225 | $ | — | ||||
Accounts payable | - | 40,014 | |||||
Operating lease liability, current | 118,058 | 48,127 | |||||
Due to affiliates | 5,236 | 263,785 | |||||
Due to owners | 1,159,712 | — | |||||
Contract liabilities - deposits on pending settlements | 507,000 | — | |||||
Accrued transaction costs | — | 908,256 | |||||
Other current liabilities | 3,400,734 | 42,227 | |||||
Income taxes payable | 751,734 | — | |||||
Total current liabilities | 23,326,331 | 1,302,409 | |||||
Long-term debt- Related party | 37,653,869 | — | |||||
Long-term debt | 89,137,013 | 28,249,653 | |||||
Operating lease liability, noncurrent | 1,796,727 | 29,268 | |||||
Deferred tax liability | 9,199,091 | 1,363,820 | |||||
Warrant liability | 6,642,960 | — | |||||
TOTAL LIABILITIES | 167,755,991 | 30,945,150 | |||||
COMMITMENTS AND CONTINGENCIES | |||||||
SHAREHOLDERS' EQUITY (DEFICIT) | |||||||
Class A common stock, | 6,339 | 5,037 | |||||
Treasury Stock | (1,283,062 | ) | — | ||||
Additional paid-in capital | 199,826,278 | 704,963 | |||||
Retained earnings | (34,726,135 | ) | 25,487,323 | ||||
Accumulated other comprehensive income | 108,373 | 1,052,836 | |||||
Non-controlling interest | 138,283 | 899,538 | |||||
Total shareholders' equity (deficit) | 164,070,076 | 28,149,697 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) | $ | 331,826,067 | $ | 59,094,847 | |||
ABACUS | |||||||||||||||||
Full Year | |||||||||||||||||
YTD | Q4 2023 | 2023 | 2022 | ||||||||||||||
REVENUES: | |||||||||||||||||
Portfolio servicing revenue | |||||||||||||||||
Related party service revenue | $ | 711,975 | $ | 66,703 | $ | 778,678 | $ | 818,299 | |||||||||
Portfolio servicing | 102,651 | 120,845 | 223,496 | 652,673 | |||||||||||||
Total Portfolio servicing revenue | 814,626 | 187,548 | 1,002,174 | 1,470,972 | |||||||||||||
Active management revenue | |||||||||||||||||
Investment Income from life insurance policies held using investment method | 18,473,597 | (492,610 | ) | 17,980,987 | 37,828,829 | ||||||||||||
Change in fair value of life insurance policies (policies held using fair value method) | 28,242,105 | 21,766,926 | 50,009,031 | 5,263,751 | |||||||||||||
Total Active management revenue | 46,715,702 | 21,274,316 | 67,990,018 | 43,092,580 | |||||||||||||
Originations revenue | |||||||||||||||||
3,391,814 | 240,455 | 3,632,269 | 18,146,493 | ||||||||||||||
Originations | 5,018,438 | 1,943,228 | 6,961,666 | 7,056,970 | |||||||||||||
Total Origination revenue | 8,410,252 | 2,183,683 | 10,593,935 | 25,203,463 | |||||||||||||
Total Revenues | 55,940,580 | 23,645,547 | 79,586,127 | 69,767,015 | |||||||||||||
COST OF REVENUES (excluding depreciation and amortization stated below) | |||||||||||||||||
Related party cost of revenue | 6,566,335 | 91,475 | 6,657,810 | 11,631,129 | |||||||||||||
Cost of revenue | 7,604,875 | 1,520,994 | 9,125,869 | 11,325,000 | |||||||||||||
Total Cost of revenue | 14,171,210 | 1,612,469 | 15,783,679 | 22,956,129 | |||||||||||||
Gross Profit | 41,769,370 | 22,033,078 | 63,802,448 | 46,810,886 | |||||||||||||
OPERATING EXPENSES: | |||||||||||||||||
Sales and marketing | 3,116,999 | 1,788,748 | 4,905,747 | 2,596,140 | |||||||||||||
General, administrative and other | 15,961,962 | 15,369,189 | 31,331,151 | 9,971,247 | |||||||||||||
(Gain) loss on change in fair value of debt | 309,865 | 2,046,193 | 2,356,058 | 90,719 | |||||||||||||
Unrealized loss (gain) on investments | (491,356 | ) | (877,755 | ) | (1,369,111 | ) | 1,045,623 | ||||||||||
Depreciation and amortization expense | 1,702,591 | 1,712,934 | 3,415,525 | 18,588 | |||||||||||||
Total Operating expenses | 20,600,061 | 20,039,309 | 40,639,370 | 13,722,317 | |||||||||||||
Operating Income | $ | 21,169,309 | $ | 1,993,769 | $ | 23,163,078 | $ | 33,088,569 | |||||||||
OTHER INCOME (EXPENSE) | |||||||||||||||||
Change in fair value of warrant liability | (943,400 | ) | (3,260,960 | ) | (4,204,360 | ) | - | ||||||||||
Interest (expense) | (3,632,420 | ) | (6,246,126 | ) | (9,878,546 | ) | (51,615 | ) | |||||||||
Interest income | 73,200 | 523,481 | 596,681 | 3,672 | |||||||||||||
Other income (expense) | (1,565 | ) | (144,879 | ) | (146,444 | ) | (346,740 | ) | |||||||||
Total other income (expense) | (4,504,185 | ) | (9,128,484 | ) | (13,632,669 | ) | (394,683 | ) | |||||||||
Net income before provision for income taxes | 16,665,124 | (7,134,715 | ) | 9,530,409 | 32,693,886 | ||||||||||||
Income tax expense | 2,240,708 | (769,885 | ) | 1,470,823 | 656,904 | ||||||||||||
NET INCOME | 14,424,416 | (6,364,830 | ) | 8,059,586 | 32,036,982 | ||||||||||||
LESS: NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTEREST | (339,692 | ) | (142,447 | ) | (482,139 | ) | 704,699 | ||||||||||
NET INCOME ATTRIBUTABLE TO SHAREHOLDERS | $ | 14,764,108 | $ | (6,222,383 | ) | $ | 8,541,725 | $ | 31,332,283 | ||||||||
ABACUS | |||||||||
Full Year | |||||||||
2023 | 2022 | ||||||||
Net income attributable to | $ | 9,516,626 | $ | 31,682,275 | |||||
Net income attributable to non-controlling interests | (482,139 | ) | 704,699 | ||||||
Amortization expense | 3,364,167 | — | |||||||
Stock compensation expense | 10,768,024 | — | |||||||
Change in fair value of warrant liability | 4,204,360 | — | |||||||
Tax impact of items listed above | 2,069,993 | ||||||||
Adjusted Net Income | $ | 29,441,031 | $ | 32,386,974 | |||||
Weighted-average shares of Class A common stock outstanding | 56,951,414 | 50,369,350 | |||||||
Earnings Per Share | $ | 0.17 | $ | 0.63 | |||||
Adjusted Earnings Per Share | $ | 0.52 | $ | 0.64 | |||||
ABACUS | |||||||||
Full Year | |||||||||
2023 | 2022 | ||||||||
Net Income excluding non-controlling interests | $ | 9,034,487 | $ | 32,386,974 | |||||
Depreciation and Amortization | 3,409,928 | 4,282 | |||||||
Interest expense | 9,866,821 | 42,798 | |||||||
Interest income | (594,764 | ) | (1,474 | ) | |||||
Income tax expense | 1,468,535 | 889,943 | |||||||
Stock compensation | 10,768,024 | — | |||||||
Other (Income) / Expenses | 146,443 | 347,013 | |||||||
Change in fair value of warrant liability | 4,204,360 | — | |||||||
Change in fair value of debt | 2,356,058 | 90,719 | |||||||
Unrealized loss / (gain) on investments | (1,369,112 | ) | 1,045,623 | ||||||
Adjusted EBITDA | $ | 39,290,780 | $ | 34,805,878 | |||||
Proforma Revenue | $ | 79,586,127 | $ | 69,767,015 | |||||
Proforma Adjusted EBITDA Margin | 49.37 | % | 49.89 | % | |||||
Proforma Net Income Margin | 36.99 | % | 46.42 | % | |||||
ABACUS | |||||
For the Period Ended | |||||
Total Assets | $ | 331,826,067 | |||
Less: | |||||
Intangible assets, net | (29,623,130 | ) | |||
(140,287,000 | ) | ||||
Current Liabilities | (23,326,331 | ) | |||
$ | 138,589,606 | ||||
Adjusted Net income | $ | 29,441,031 | |||
Adjusted Annualized ROIC | 21 | % | |||
ABACUS | |||||
Return on Equity | |||||
For the Period Ended | |||||
Total Shareholder Equity | $ | 164,070,076 | |||
Proforma Adjusted Net income | $ | 29,441,031 | |||
Adjusted Annualized ROE | 18 | % |
Source: Abacus Life Settlements
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