(loss) $ 2,391 $ 5,616 $(61,178) $ 27,665 $ 56,129 $ 30,623 Mark to market adjustment on interests in the GWG Wind Down Trust -- -- 531 7 -- 538 Intersegment provision for credit losses on collateral comprised of interests in the GWG Down Trust 5 -- -- -- (5) -- Goodwill impairment -- 3,427 -- 265 -- 3,692 Release of loss contingency related to arbitration award -- -- -- (54,973) -- (54,973) Share-based compensation expense -- -- -- 4,358 -- 4,358 Legal and professional fees(1) -- -- -- 4,425 -- 4,425 Adjusted operating income (loss) $ 2,396 $ 9,043 $(60,647) $ (18,253) $ 56,124 $ (11,337) ========= ======= ======= === ========= ======== === ========
(1) Includes legal and professional fees related to lawsuits.
(in thousands) Six Months Ended September 30, 2023
--------------------------------------------------------------------------------------------
Customer
Ben Ben ExAlt Consolidating
Liquidity Custody Trusts Corporate/Other Eliminations Consolidated
------------ ---------- ---------- ------------------- ----------------- --------------
Total revenues $ 25,028 $ 13,065 $ (43,182) $ (2,337) $ (38,078) $ (45,504)
Mark to market
adjustment on
interests in
the GWG Wind
Down Trust -- -- 44,367 1,159 -- 45,526
Adjusted
revenues $ 25,028 $ 13,065 $ 1,185 $ (1,178) $ (38,078) $ 22
========== ======== ======== === ========= ======== ==========
Operating income
(loss) $(1,175,119) $(270,844) $(116,687) $ (74,313) $ 99,229 $(1,537,734)
Mark to market
adjustment on
interests in
the GWG Wind
Down Trust -- -- 44,367 1,159 -- 45,526
Intersegment
provision for
loan losses on
collateral
comprised of
interests in
the GWG Wind
Down Trust 39,610 -- -- -- (39,610) --
Goodwill
impairment 1,121,212 281,777 -- -- -- 1,402,989
Loss on
arbitration -- -- -- -- -- --
Share-based
compensation
expense -- -- -- 35,504 -- 35,504
Legal and
professional
fees(1) -- -- -- 8,025 -- 8,025
Adjusted
operating
income (loss) $ (14,297) $ 10,933 $ (72,320) $ (29,625) $ 59,619 $ (45,690)
========== ======== ======== === ========= ======== === ==========
(1) Includes legal and professional fees related to GWG Holdings bankruptcy, lawsuits, public relations, and employee matters.
Operating Three Months Three Months Six Months
Expenses Non Ended Ended Ended Six Months
GAAP September 30, September 30, September 30, Ended September
Reconciliation 2024 2023 2024 30, 2023
------------- -------------- ------------- ---------------
Operating
expenses $22,276 $ 339,003 $(12,016) $ 1,492,230
Plus: Release
of loss
contingency
related to
arbitration
award -- -- 54,973 --
Less: Goodwill
impairment (298) (306,684) (3,692) (1,402,989)
------ --- -------- ------- ----------
Operating
expenses,
excluding
goodwill
impairment and
release of
loss
contingency
related to
arbitration
award $21,978 $ 32,319 $ 39,265 $ 89,241
====== ==== ======== === ======= === ==========
Adjusted Revenues, Adjusted Operating Income (Loss), Adjusted Segment Revenues attributable to Ben's Equity Holders and Adjusted Segment Operating Income (Loss) attributable to Ben's Equity Holders are non-GAAP financial measures. We present these non-GAAP financial measures because we believe it helps investors understand underlying trends in our business and facilitates an understanding of our operating performance from period to period because it facilitates a comparison of our recurring core business operating results. These non-GAAP financial measures are intended as a supplemental measure of our performance that is neither required by, nor presented in accordance with, U.S. GAAP. Our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of these non-GAAP financial measures may not be comparable to other similarly titled measures computed by other companies, because all companies may not calculate such items in the same way.
We define adjusted revenue as revenue adjusted to exclude the effect of mark-to-market adjustments on related party equity securities that were acquired both prior to and during the Collateral Swap, which on August 1, 2023, became interests in the GWG Wind Down Trust. Adjusted Segment Revenues attributable to Ben's Equity Holders is the same as "adjusted revenues" related to the aggregate of the Ben Liquidity, Ben Custody, and Corporate/Other Business Segments, which are the segments that impact the net income (loss) attributable to all equity holders of Beneficient, including equity holders of Beneficient's subsidiary, Beneficient Company Holdings, L.P.
Adjusted operating income (loss) represents GAAP operating income (loss), adjusted to exclude the effect of the adjustments to revenue as described above, credit losses on related party available-for-sale debt securities that were acquired in the Collateral Swap which on August 1, 2023, became interests in the GWG Wind Down Trust, and receivables from a related party that filed for bankruptcy and certain notes receivables originated during our formative transactions, non-cash asset impairment, share-based compensation expense, and legal, professional services, and public relations costs related to the GWG Holdings bankruptcy, lawsuits, a defunct product offering, and certain employee matters, including fees & loss contingency accruals (releases) incurred in arbitration with a former director. Adjusted Segment Operating Income (Loss) attributable to Ben's Equity Holders is the same as "adjusted operating income (loss)" related to the aggregate of the Ben Liquidity, Ben Custody, and Corporate/Other Business Segments, which are the segments that impact the net income (loss) attributable to all equity holders of Beneficient, including equity holders of Beneficient's subsidiary, Beneficient Company Holdings, L.P.
These non-GAAP financial measures are not a measure of performance or liquidity calculated in accordance with U.S. GAAP. They are unaudited and should not be considered an alternative to, or more meaningful than, GAAP revenues or GAAP operating income (loss) as an indicator of our operating performance. Uses of cash flows that are not reflected in adjusted operating income (loss) or adjusted segment operating income (loss) attributable to Ben's Equity Holders include capital expenditures, interest payments, debt principal repayments, and other expenses, which can be significant. As a result, adjusted operating income (loss) and/or adjusted segment operating income (loss) attributable to Ben's Equity Holders should not be considered as a measure of our liquidity.
Because of these limitations, Adjusted Revenues, Adjusted Operating Income (Loss), Adjusted Segment Revenues attributable to Ben's Equity Holders and Adjusted Segment Operating Income (Loss) attributable to Ben's Equity Holders should not be considered in isolation or as a substitute for performance measures calculated in accordance with U.S. GAAP. We compensate for these limitations by relying primarily on our U.S. GAAP results and using Adjusted Revenues, Adjusted Operating Income (Loss), Adjusted Segment Revenues attributable to Ben's Equity Holders and Adjusted Segment Operating Income (Loss) attributable to Ben's Equity Holders on a supplemental basis. You should review the reconciliation of these non-GAAP financial measures set forth above and not rely on any single financial measure to evaluate our business.
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/ace529a8-96c4-48d8-a799-87ab85642048
(END) Dow Jones Newswires
November 14, 2024 16:45 ET (21:45 GMT)
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