Abacus Life Reports First Quarter 2024 Results

May 13, 2024

- First Quarter 2024 Total Revenue More Than Doubled Year-over-Year to $21.5 Million -

- Driven by 59% Year-over-Year Growth in Direct-to-Consumer Division -

ORLANDO, Fla., May 13, 2024 (GLOBE NEWSWIRE) -- Abacus Life, Inc. (“Abacus” or the “Company”) (NASDAQ: ABL), a pioneering alternative asset manager specializing in longevity and actuarial technology, today reported results for the first quarter ended March 31, 2024.

“We are pleased with our continued momentum, delivering yet another strong quarterly performance due to our relentless execution, and further validating the resiliency and profitability of our business model,” said Jay Jackson, Chief Executive Officer of Abacus. “In addition to our strong growth, we launched our technology subdivision ABL Tech, raised an additional $25 million from the issuance of our 9.875% Fixed Rate Senior Notes, and continued to repurchase shares. We also strengthened our senior management team with the hiring of Elena Plesco as our new Chief Capital Officer, and appointing Fei Xue to lead our efforts at ABL Wealth. We remain focused and committed to delivering on our key strategic priorities by leveraging our considerable technology and data advantages to further drive shareholder value.”

First Quarter 2024 Highlights

  • Total revenue for the first quarter of 2024 more than doubled to $21.5 million, compared to $10.3 million in the prior-year period. The increase 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 first quarter of 2024 was $0.2 million, compared to $0.3 million in the prior-year period.
  • Originations capital deployment for the first quarter of 2024 were $33.3 million, compared to $34.4 million in the prior-year period; number of policy originations for the first quarter of 2024 grew 6% to 119, compared to 112 in the prior-year period.
  • GAAP net loss attributable to shareholders for the first quarter of 2024 was $1.3 million, compared to GAAP net income attributable to shareholders of $8.1 million in the prior-year period, primarily driven by higher interest expenses, a non-cash expense related to employee stock compensation of $5.8 million and public company expenses incurred in the first quarter of 2024 that were not recorded in the prior-year period.
  • Adjusted net income for the first quarter of 2024 was $6.7 million, compared to $7.6 million in the prior-year period.
  • Adjusted EBITDA for the first quarter of 2024 grew 38.1% to $11.6 million, compared to $8.4 million in the prior-year period. Adjusted EBITDA margin (a non-GAAP measure) for the first quarter of 2024 was 53.9%, compared to 81.4% in the prior-year period.
  • Annualized return on invested capital (ROIC) (a non-GAAP measure defined below) for the first quarter of 2024 was 15%.
  • Annualized Return on equity (ROE) (a non-GAAP measure defined below) for the first quarter of 2024 was 16%.

Liquidity and Capital

As of March 31, 2024, the Company had cash and cash equivalents of $65.4 million, balance sheet policy assets of $126.9 million and outstanding long-term debt of $131.4 million.

From the commencement of the Company’s $15 million stock repurchase program previously announced on December 12, 2023 (the “Repurchase Program”) through May 6, 2024, Abacus has repurchased 966 thousand shares of its common stock at an average price of $11.41 on the open market at a total cost of approximately $11 million. As of May 6, 2024, the Company has $4 million of availability under the Repurchase Program, which expires on June 10, 2025, unless sooner suspended or discontinued.

Webcast and Conference Call

A webcast and conference call to discuss the Company’s results will be held today beginning at 9:00 a.m. (Eastern Time). A live webcast of the conference call will be available on Abacus’ investor relations website at ir.abacuslife.com. The dial-in number for the conference call is (877) 407-9716 (toll-free) or (201) 493-6779 (international). Please dial the number 10 minutes prior to the scheduled start time.

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, Goodwill and Current Liabilities multiplied by four. ROIC is not a measure of financial performance under GAAP. We believe ROIC 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.

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 U.S. Securities and Exchange Commission from time to time, including the Annual ‎Report on Form 10-K and Quarterly Reports on Form 10-Q and subsequent ‎periodic reports. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Abacus cautions you not to place undue reliance on the ‎forward-looking statements contained in this press release. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Abacus assumes no obligation and, except as required by law, does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. Abacus does not give any assurance that it will achieve its expectations.

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 Growth & Income 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 $5BN in face value of policies purchased, we have helped thousands of clients maximize the value of life insurance. Abacus Life is the only public life settlement company, trading on the Nasdaq Exchange under the ticker symbol ABL.

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 LIFE, INC. Condensed Consolidated Balance Sheets

 March 31, December 31,
 2024  2023 
(unaudited) 
ASSETS   
CURRENT ASSETS:   
Cash and cash equivalents$65,386,512  $25,588,668 
Equity securities, at fair value 3,403,897   2,252,891 
Accounts receivable 2,520,869   2,149,111 
Accounts receivable, related party 215,033   79,509 
Due from affiliates 760,364   1,007,528 
Prepaid expenses and other current assets 2,037,753   699,127 
Total current assets 74,324,428   31,776,834 
Property and equipment, net 547,561   400,720 
Intangible assets, net 28,048,028   29,623,130 
Goodwill 140,287,000   140,287,000 
Operating right-of-use assets 2,182,681   1,893,659 
Life settlement policies, at cost 1,434,444   1,697,178 
Life settlement policies, at fair value 125,488,525   122,296,559 
Available-for-sale securities, at fair value 1,145,630   1,105,935 
Other investments, at cost 1,650,000   1,650,000 
Other assets 1,501,036   998,945 
Equity securities, at fair value 110,067   96,107 
TOTAL ASSETS$376,719,400  $331,826,067 
LIABILITIES AND STOCKHOLDERS' EQUITY   
CURRENT LIABILITIES:   
Current portion of long-term debt$15,648,628  $13,029,632 
Accrued expenses 707,159   4,354,225 
Operating lease liabilities 232,138   118,058 
Due to affiliates 5,236   5,236 
Due to former members 1,159,712   1,159,712 
Contract liabilities, deposits on pending settlements 667,500   507,000 
Other current liabilities 3,797,808   3,400,734 
Income taxes payable 1,617,171   751,734 
Total current liabilities 23,835,352   23,326,331 
Long-term debt, related party 38,794,519   37,653,869 
Long-term debt 131,365,988   89,137,013 
Operating lease liabilities 2,028,959   1,796,727 
Deferred tax liability 9,657,810   9,199,091 
Warrant liability 5,696,000   6,642,960 
TOTAL LIABILITIES 211,378,628   167,755,991 
COMMITMENTS AND CONTINGENCIES   
STOCKHOLDERS' EQUITY   
    
Class A common stock, $0.0001 par value; 200,000,000 authorized shares; 63,776,058 and 63,388,823 shares issued at March 31, 2024 and December 31, 2023, respectively 6,378   6,339 
Treasury stock - at cost; 778,766 and 146,650 shares repurchased at March 31, 2024 and December 31, 2023, respectively (8,807,454)  (1,283,062)
Additional paid-in capital 209,889,362   199,826,278 
Accumulated deficit (36,074,880)  (34,726,135)
Accumulated other comprehensive income 120,323   108,373 
Non-controlling interest 207,043   138,283 
Total stockholders' equity 165,340,772   164,070,076 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$376,719,400  $331,826,067 


ABACUS LIFE, INC. Condensed Consolidated Statement of Operations

 Three Months Ended
March 31,
  2024   2023 
REVENUES:   
Portfolio servicing revenue$217,935  $302,871 
Active management revenue 19,796,999   9,970,518 
Origination revenue 1,472,250    
Total revenues 21,487,184   10,273,389 
Total cost of revenue 2,720,897   489,550 
Gross Profit 18,766,287   9,783,839 
OPERATING EXPENSES:   
Sales and marketing 1,929,944   729,004 
General and administrative (including stock-based compensation) 11,353,499   696,892 
Loss on change in fair value of debt 2,712,627   953,433 
Unrealized (gain) on investments (1,164,966)  (125,220)
Depreciation and amortization expense 1,682,054   1,043 
Total operating expenses 16,513,158   2,255,152 
Operating Income$2,253,129  $7,528,687 
OTHER INCOME (EXPENSE):   
Gain on change in fair value of warrant liability 946,960    
Interest expense (3,670,445)  (357,383)
Interest income 421,426   7,457 
Other income (expense) (53,028)  (210,432)
Net (loss) income before provision for income taxes (101,958)  6,968,329 
Income tax expense (benefit) 1,173,513   (656,467)
NET (LOSS) INCOME (1,275,471)  7,624,796 
LESS: NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTEREST 73,274   (460,707)
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS($1,348,745) $8,085,503 
(LOSS) EARNINGS PER SHARE:   
(Loss) earnings per share - basic and diluted($0.02) $0.16 
Weighted-average stock outstanding—basic and diluted [1] 63,027,246   50,369,350 
NET (LOSS) INCOME (1,275,471)  7,624,796 
Other comprehensive income (loss), net of tax or tax benefit:   
Change in fair value of debt (risk adjusted) 7,436   (112,313)
Comprehensive (loss) income before non-controlling interests (1,268,035)  7,512,483 
Net and comprehensive income (loss) attributable to non-controlling interests 68,760   (487,638)
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS($1,336,795) $8,000,121 
    

[1] The 2023 number of shares outstanding have been retrospectively recast for prior period presented to reflect the outstanding stock of Abacus Life, Inc. as a result of the Business Combination.


ABACUS LIFE, INC. Adjusted Net Income and Adjusted EPS

  Three Months Ended March 31,
  2024   2023 
Net income attributable to common stockholders($1,348,745) $8,085,503 
 Net income (loss) attributable to noncontrolling interests 73,274   (460,707)
 Stock based compensation 6,093,371    
 Amortization expense 1,667,109    
 Gain on change in fair value of warrant liability (946,960)   
 Tax impact [1] 1,165,902    
Adjusted Net Income$6,703,951  $7,624,796 
Weighted-average shares of Class A common stock outstanding - basic and diluted [2] 63,027,246   50,369,350 
Adjusted EPS - basic and diluted$0.11  $0.15 
Adjusted EPS - basic and diluted$0.11  $0.15 
Adjusted EPS - diluted$0.11  $0.15 
      

[1] Tax impact represents the permanent difference in tax expense related to the restricted stock awards granted to the CEO due to IRC 162(m) limitations.

[2] The 2023 number of shares outstanding have been retrospectively recast for prior period presented to reflect the outstanding stock of Abacus Life, Inc. as a result of the Business Combination.


ABACUS LIFE, INC. Adjusted EBITDA

  Three Months Ended March 31,
   2024   2023 
Net (loss) income($1,275,471) $7,624,796 
 Depreciation and amortization expense 1,682,054   1,043 
 Income Tax 1,173,513   (656,467)
 Interest (Expense) 3,670,445   357,383 
 Other Income (Expenses) 53,028   210,432 
 Interest Income (421,426)  (7,457)
 Gain on change in fair value of warrant liability (946,960)   
 Stock based compensation 6,093,371    
 Unrealized loss (gain) on investments (1,164,966)  (125,220)
 Loss on change in fair value of debt 2,712,627   953,433 
Adjusted EBITDA$11,576,215  $8,357,943 
Adjusted EBITDA Margin 53.9%   81.4% 
Net (Loss) Income Margin -5.9%   74.2% 


ABACUS LIFE, INC. Return on Invested Capital (ROIC)

Return on Invested Capital 
 For the Period Ended 
 March 31, 2024 
Total Assets$376,719,400 
Less: 
Intangible assets, net(28,048,028)
Goodwill(140,287,000)
Current Liabilities(23,835,352)
Total Invested Capital$184,549,020 
  
  
Adjusted Net income$6,703,951 
Adjusted Annualized ROIC15% 


ABACUS LIFE, INC. Return on Equity (ROE)

 For the Period Ended 
 March 31, 2024 
Total Shareholder Equity$165,340,772 
  
  
Adjusted Net income$6,703,951 
Adjusted Annualized ROE16%