GWG Holdings (GWGH) Reports Q3 Loss of $2.23, Revenues Beat

GWG Holdings (NASDAQ: GWGH) reported Q3 EPS of ($2.23), versus ($0.75) reported last year. Revenue for the quarter came in at $28.51 million versus the consensus estimate of $24.01 million.

Third Quarter 2020 Financial and Operating Highlights

• Reported third quarter 2020 net loss of $68.1 million, compared to $24.6 million in the third quarter of 2019, primarily related to increased interest expense ($12.5 million), non-cash deferred income tax expense ($22.4 million), and non-cash equity incentive compensation ($22.9 million).
• Reported total assets of $3.6 billion as of September 30, 2020, and $3.7 billion as of June 30, 2020.
• Reported continued strong life insurance portfolio performance:
  • Realized $39.8 million of face amount of policy benefits from 21 life insurance policies during the third quarter of 2020, compared to $27.5 million from 22 life insurance policies during the third quarter of 2019.
  • Ended the quarter with a life insurance portfolio of $1.9 billion in face amount of policy benefits consisting of 1,081 policies.
• Reported continued success raising capital through the L Bond investment product with $114.1 million of L Bond sales in the third quarter of 2020.
• Reported $22.4M of non-cash deferred income tax expense primarily related to management’s reassessment of GWGH’s deferred tax liabilities. GWGH reported a material weakness in internal controls over the quarterly income tax provision process, as reported in GWGH’s Quarterly Report on Form 10-Q filed with the SEC on November 19, 2020. Management is reevaluating the internal and external resources involved in the quarterly assessment and believes these measures will enable it to quickly remediate the material weakness.
• Total liquidity (cash, restricted cash, policy benefits receivable and fees receivable) decreased to $177.7 million at September 30, 2020, compared to $219.7 million at June 30, 2020. This reduction is largely reflective of the paydowns of senior credit facilities at Beneficient on July 15 and September 10, 2020, totaling $50 million.

“The market is responding very well to the unique offerings we have created to deliver liquidity products and yield to investors across the U.S.,” said Murray Holland, GWGH's Chief Executive Officer. “The roll-out of the Beneficient products has gone as expected and our L Bond sales remain strong. We believe we are poised for a break-out success at a time when there has never been a greater need for the products and services we have created.”

For earnings history and earnings-related data on GWG Holdings (GWGH) click here.

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