ABL Abacus Life Inc

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 second quarter ended June 30, 2024.

“We delivered another excellent quarter, showcasing continued robust growth and profitability, as well as successfully executing on our long-term strategy,” said Jay Jackson, Chief Executive Officer of Abacus. “During the quarter, we completed a public equity offering that generated over $90 million of gross proceeds, which we quickly deployed towards new policy originations and other growth initiatives. Additionally, we established a new national distribution relationship with AIMCOR in which Abacus will offer its expertise and become a preferred partner for life settlement solutions.”

“Subsequent to quarter-end, in mid-July, we entered into an agreement to acquire Carlisle Management, a premier Luxembourg-based investment manager in the life settlement space. The deal will add around $2 billion in assets under management and accelerate ABL Wealth’s international expansion. In addition, we agreed last week to acquire FCF Advisors, an asset manager and index provider specializing in free cash flow-focused investment strategies, which we expect will add another $600 million in assets under management and further expand our lifespan-based financial product offering. These agreements underscore our relentless commitment to innovative solutions and long-term growth, and solidify Abacus as a leading global market maker and alternative asset manager.”

Second Quarter 2024 Highlights

• Total revenue for the second quarter of 2024 more than doubled to $29.1 million, compared to $11.4 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.
• Origination capital deployment for the second quarter of 2024 was $104.7 million, compared to $59.8 million in the prior-year period; number of policy originations for the second quarter of 2024 grew 95% to 275, compared to 141 in the prior-year period.
• U.S. GAAP net income attributable to shareholders for the second quarter of 2024 was $0.8 million, compared to $6.8 million in the prior-year period, primarily driven by higher interest expense of $4.5 million, a non-cash expense related to employee stock compensation of $6.2 million and public company expenses incurred in the second quarter of 2024 that were not incurred in the prior-year period.
• Adjusted net income (a non-GAAP financial measure) for the second quarter of 2024 grew 75% to $11.8 million, compared to $6.8 million in the prior-year period. Adjusted diluted earnings per share for the second quarter of 2024 was $0.18.
• Adjusted EBITDA (a non-GAAP financial measure) for the second quarter of 2024 grew 83% to $16.7 million, compared to $9.1 million in the prior-year period. Adjusted EBITDA margin (a non-GAAP financial measure) for the second quarter of 2024 was 57.5%, compared to 80.4% in the prior-year period.
• Annualized return on invested capital (ROIC) (a non-GAAP financial measure) for the second quarter of 2024 was 18%.
• Annualized Return on equity (ROE) (a non-GAAP financial measure) for the second quarter of 2024 was 18%.

Liquidity and Capital

As of June 30, 2024, the Company had cash and cash equivalents of $91.3 million, balance sheet policy assets of $208.7 million and outstanding long-term debt of $81.6 million.

From the commencement of the Company’s $15 million stock repurchase program previously announced on December 12, 2023 (the “Repurchase Program”) through August 8, 2024, Abacus has repurchased approximately 1,048,000 shares of its common stock at an average price of $11.43 on the open market at a total cost of approximately $12 million. As of August 8, 2024, the Company has $3 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 financial 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 financial 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 financial 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 financial 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 financial 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 global alternative asset manager and market maker that specializes in the use of advanced longevity and actuarial technology to purchase life insurance policies from consumers seeking liquidity, while creating a high-returning asset class of insurance products, uncorrelated to market fluctuations, for institutional investors. With more than $2 billion in assets under management, Abacus is the only publicly traded licensed life policy origination company and asset manager.

The company’s pioneering experience in the life planning space has created growth into new verticals. The longevity-based wealth management service and investment offerings, called ABL Wealth, uses Abacus’ decades of data and proprietary algorithms to help financial advisors create more customized plans for clients and access to uncorrelated investment funds. The ground-breaking technology service, called ABL Tech, provides advanced real-time data tracking and analysis for pensions funds, governments, insurance companies, retirement associations and more. With each new channel, Abacus is revolutionizing the future of life insurance.

www.Abacuslife.com

Contact:Abacus Life Investor Relationsinvestors@abacuslife.com

Abacus Life Public Relationspress@abacuslife.com

ABACUS LIFE, INC. Condensed Consolidated Balance Sheets

	June 30,				December 31,
		2024				2023
	(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	91,323,829			$	25,588,668
Equity securities, at fair value		4,008,225				2,252,891
Accounts receivable		1,616,676				2,149,111
Accounts receivable, related party		150,213				79,509
Due from affiliates		1,170,589				1,007,528
Income tax receivables		2,435,239				-
Prepaid expenses and other current assets		932,598				699,127
Total current assets		101,637,369				31,776,834
Property and equipment, net		692,273				400,720
Intangible assets, net		26,352,123				29,623,130
Goodwill		139,930,190				140,287,000
Operating right-of-use assets		2,108,034				1,893,659
Life settlement policies, at cost		1,140,497				1,697,178
Life settlement policies, at fair value		207,571,413				122,296,559
Available-for-sale securities, at fair value		1,165,575				1,105,935
Other investments, at cost		1,750,000				1,650,000
Other assets		1,507,431				998,945
Equity securities, at fair value		-				96,107
TOTAL ASSETS	$	483,854,905			$	331,826,067
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt	$	17,589,514			$	13,029,632
Current portion of long-term debt, related party		28,170,326				-
Accrued expenses		2,176,515				4,354,225
Operating lease liabilities		297,397				118,058
Due to affiliates		5,236				5,236
Due to former members		-				1,159,712
Contract liabilities, deposits on pending settlements		1,443,483				507,000
Accrued transaction costs		2,533,627				-
Other current liabilities		3,166,959				3,400,734
Income taxes payable		-				751,734
Total current liabilities		55,383,057				23,326,331
Long-term debt, related party		11,799,715				37,653,869
Long-term debt, net		57,871,104				33,818,090
Long-term debt, at fair value, net		81,640,478				55,318,923
Operating lease liabilities		1,946,140				1,796,727
Deferred tax liability		12,001,423				9,199,091
Warrant liability		6,363,500				6,642,960
TOTAL LIABILITIES		227,005,417				167,755,991
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Class A common stock, $0.0001 par value; 200,000,000 authorized shares; 75,484,567 and 63,388,823 shares issued at June 30, 2024 and December 31, 2023, respectively		7,548				6,339
Treasury stock - at cost; 1,048,226 and 146,650 shares repurchased at June 30, 2024 and December 31, 2023, respectively		(12,025,137	)			(1,283,062	)
Additional paid-in capital		303,237,878				199,826,278
Accumulated deficit		(34,514,318	)			(34,726,135	)
Accumulated other comprehensive income		64,324				108,373
Non-controlling interest		79,193				138,283
Total stockholders' equity		256,849,488				164,070,076
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	483,854,905			$	331,826,067

ABACUS LIFE, INC. Condensed Consolidated Statement of Operations

	Three Months Ended								Six Months Ended
	June 30,								June 30,
		2024				2023				2024				2023
REVENUES:
Portfolio servicing revenue	$	204,888			$	354,366			$	422,823			$	590,057
Active management revenue		27,013,757				11,024,399				46,810,756				20,994,917
Origination revenue		1,857,457				—				3,329,707				—
Total revenues		29,076,102				11,378,765				50,563,286				21,584,974
COST OF REVENUES (excluding depreciation and amortization stated below)
Cost of revenue (including stock-based compensation)		2,742,081				973,400				5,462,293				1,462,950
Related party cost of revenue		1,453				—				2,138				—
Total cost of revenue		2,743,534				973,400				5,464,431				1,462,950
Gross Profit		26,332,568				10,405,365				45,098,855				20,122,024
OPERATING EXPENSES:
Sales and marketing		2,552,801				683,841				4,482,745				1,412,845
General and administrative (including stock-based compensation)		14,553,344				577,539				25,906,843				1,274,431
Loss on change in fair value of debt		1,199,463				1,445,229				3,912,090				2,398,662
Realized & Unrealized (gain) on investments		(494,262	)			(672,936	)			(1,659,228	)			(798,156	)
Depreciation and amortization expense		1,750,452				1,098				3,432,506				2,141
Total operating expenses		19,561,798				2,034,771				36,074,956				4,289,923
Operating Income	$	6,770,770			$	8,370,594			$	9,023,899			$	15,832,101
OTHER INCOME (EXPENSE):
Gain on change in fair value of warrant liability		(667,500	)			—				279,460				—
Interest expense		(4,529,187	)			(584,075	)			(8,199,632	)			(941,458	)
Interest income		639,906				—				1,061,332				7,457
Other income (expense)		195,470				121,601				142,442				(21,651	)
Total other (expense)		(4,361,311	)			(462,474	)			(6,716,398	)			(955,652	)
Net income (loss) income before provision for income taxes		2,409,459				7,908,120				2,307,501				14,876,449
Income tax expense (benefit)		1,757,710				1,184,571				2,931,223				528,104
NET (LOSS) INCOME		651,749				6,723,549				(623,722	)			14,348,345
LESS: NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTEREST		(118,234	)			(26,596	)			(44,960	)			(487,303	)
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	769,983			$	6,750,145			($	578,762	)		$	14,835,648
(LOSS) EARNINGS PER SHARE:
Earning (Loss) per share - basic	$	0.01			$	0.13			$	(0.01	)		$	0.29
Earning (Loss) per share - diluted	$	0.01			$	0.13			$	(0.01	)		$	0.29
Weighted-average stock outstanding—basic		63,846,170				50,507,728				63,087,878				50,438,921
Weighted-average stock outstanding— diluted		67,162,820				50,507,728				63,102,210				50,438,921
NET (LOSS) INCOME	$	651,749			$	6,723,549			($	623,722	)		$	14,348,345
Other comprehensive income (loss), net of tax or tax benefit:
Change in fair value of debt (risk adjusted)		(65,614	)			(119,663	)			(58,178	)			(231,976	)
Comprehensive (loss) income before non-controlling interests		586,135				6,603,886				(681,900	)			14,116,369
Net and comprehensive income (loss) attributable to non-controlling interests		(127,850	)			(56,111	)			(59,090	)			(543,749	)
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	713,985			$	6,659,997			($	622,810	)		$	14,660,118

ABACUS LIFE, INC. Adjusted Net Income and Adjusted EPS

	Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Net income attributable to common stockholders	$	769,983			$	6,750,145			($	578,762	)		$	14,835,648
Amortization expense		1,706,033				—				3,373,142				—
Stock based compensation		6,165,459				—				12,258,830				—
Business Acquisition Costs		1,325,000				—				1,325,000				—
Gain on change in fair value of warrant liability		667,500				—				(279,460	)			—
Tax impact		1,178,552				—				2,344,454
Adjusted Net Income	$	11,812,527			$	6,750,145			$	18,443,204			$	14,835,648
Weighted-average shares of Class A common stock outstanding - basic		63,846,170				50,507,728				63,087,878				50,438,921
Weighted-average shares of Class A common stock outstanding - diluted		67,162,820				50,507,728				63,102,210				50,438,921
Adjusted EPS - basic	$	0.19			$	0.13			$	0.29			$	0.29
Adjusted EPS - diluted	$	0.18			$	0.13			$	0.29			$	0.29

ABACUS LIFE, INC. Adjusted EBITDA and Adjusted EBITDA margin

	Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Net (loss) income	$	651,749			$	6,723,549			($	623,722	)		$	14,348,345
Depreciation and amortization expense		1,750,452				1,098				3,432,506				2,141
Income Tax expense		1,757,710				1,184,571				2,931,223				528,104
Interest (Expense)		4,529,187				584,075				8,199,632				941,458
Other Income (Expenses)		(195,470	)			(121,601	)			(142,442	)			21,651
Interest Income		(639,906	)			—				(1,061,332	)			(7,457	)
Gain on change in fair value of warrant liability		667,500				—				(279,460	)			—
Stock based compensation		6,165,459				—				12,258,830				—
Business acquisition costs		1,325,000				—				1,325,000				—
Unrealized loss (gain) on investments		362,482				(672,936	)			(802,484	)			(798,156	)
Realized gain on investments		(856,744	)			—				(856,744	)			—
Loss on change in fair value of debt		1,199,463				1,445,229				3,912,090				2,398,662
Adjusted EBITDA	$	16,716,882			$	9,143,985			$	28,293,097			$	17,434,748
Adjusted EBITDA Margin		57.5	%			80.4	%			56.0	%			80.8	%
Net (Loss) Income Margin		2.2	%			59.1	%			-1.2	%			66.5	%

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

	For the Period Ended				For the Period Ended
	March 31, 2024				June 30, 2024
Total Assets	$	376,719,400			$	483,854,905
Less:
Intangible assets, net		(28,048,028	)			(26,352,133	)
Goodwill		(140,287,000	)			(139,930,190	)
Current Liabilities		(23,835,352	)			(55,383,057	)
Total Invested Capital	$	184,549,020			$	262,189,525
Adjusted Net Income	$	6,703,951			$	11,812,527
Adjusted Annualized ROIC		15	%			18	%

ABACUS LIFE, INC. Return on Equity (ROE)

	For the Period Ended				For the Period Ended
	March 31, 2024				June 30, 2024
Total Shareholder Equity	$	165,340,772			$	256,849,488
Adjusted Net Income	$	6,703,951			$	11,812,527
Adjusted Annualized ROE		16	%			18	%