ZAIS Group Holdings, Inc. Reports Third Quarter 2015 Results

06 Nov, 2015, 08:00 ET from ZAIS Group Holdings, Inc.

RED BANK, N.J., Nov. 6, 2015 /PRNewswire/ -- ZAIS Group Holdings, Inc. (NASDAQ: ZAIS) ("ZAIS"), today reported financial results for the three and nine months ended September 30, 2015.  ZAIS conducts substantially all of its operations through ZAIS Group, LLC ("ZAIS Group"). References to the "Company" herein refer to ZAIS, together with its consolidated subsidiaries and affiliates.

Michael F. Szymanski, Chief Executive Officer, said, "We are focused on positioning the Company for the future.   The United States and European risk retention rules require investment managers to provide capital solutions and we have committed up to $51 million of capital to a majority owned subsidiary, in which we will co-invest with one of our long-standing clients, enabling the subsidiary to invest in ZAIS Group managed CLO vehicles.  We have also committed to a $5 million equity position in a $50 million corporate credit fund that ZAIS Group will sub-advise. Our equity capital provides us the ability to offer opportunities to ZAIS Group's clients and investors we could not otherwise offer."

CONSOLIDATED GAAP RESULTS

The Company recorded GAAP net loss for the three months ended September 30, 2015 of $(4.8) million compared with GAAP net income of $17.2 million for the three months ended September 30, 2014.  GAAP net income (loss) includes results of certain investment vehicles managed by ZAIS Group that are required to be consolidated under GAAP (the "Consolidated Funds of ZAIS Group").  The Company recorded pre-tax GAAP net loss for the three months ended September 30, 2015 of $(6.3) million compared with pre-tax GAAP net income for the three months ended September 30, 2014 of $17.2 million.

As of September 30, 2015, a portion of the proceeds of the business combination ZAIS completed in March 2015 (the "Business Combination") had been committed to expand existing business lines and consequently, the Company's results for this quarterly period may not be representative of future financial results once the proceeds from the Business Combination are fully deployed.

ZAIS Group Parent, LLC ("ZGP"), a majority-owned consolidated subsidiary of ZAIS, is the sole member, and owns all of the equity, of ZAIS Group. The consolidated financial statements include non-controlling interests of the members of ZGP other than ZAIS (the "ZGP Founder Members") which represent Class B Units of ZGP held by the ZGP Founder Members.

CONSOLIDATED NON-GAAP RESULTS

The Company recorded a net loss (excluding Consolidated Funds of ZAIS Group) for the three months ended September 30, 2015 of $(1.6) million, or $(0.06) per diluted weighted average Class A common share outstanding compared with a net loss (excluding Consolidated Funds of ZAIS Group) of $(3.5) million, or $(0.51) per diluted weighted average Class A common share outstanding for the three months ended September 30, 2014. The number of shares of common stock that was used to calculate ZGP's earnings per share for all periods prior to the Business Combination was 7,000,000, representing the interests of the ZGP Founder Members. The year-over-year decrease of loss was driven primarily by a decrease in management fee income and incentive income of $(1.4) million and $(2.1) million, respectively, more than offset by a decrease in expenses of $3.8 million and a tax benefit of $1.5 million in the current year, for which there was no comparable benefit in the prior year. The decrease in revenues is related to the decline in assets under management. 

For the three months ended September 30, 2015, the Company reported negative Adjusted EBITDA of $(1.1) million, compared with negative Adjusted EBITDA of $(2.2) million for the three months ended September 30, 2014. 

Additionally, the Company had $6.2 million in gross undistributed, unrecognized incentive income across investment vehicles managed by ZAIS Group as of September 30, 2015. This income has not been recognized in net income (loss) under GAAP or other Non-GAAP measures of income (loss) and remains at risk and subject to reduction or elimination based on the investment performance of the related ZAIS Group managed investment vehicle until the contractual measurement period for incentive fees is reached.   

Please see the discussion of "Non-GAAP Financial Measures", including the definitions of net income (loss) (excluding Consolidating Funds of ZAIS Group), Adjusted EBITDA, and reconciliations of such Non-GAAP financial measures to the respective GAAP net income (loss) and pre-tax GAAP net income (loss) measures for the periods discussed above at the end of this press release.

The Company's GAAP net income (loss) and other Non-GAAP measures of income (loss) may fluctuate materially depending upon the performance of investment vehicles managed by ZAIS Group as well as other factors. Accordingly, the GAAP net income (loss) and other Non-GAAP measures of income (loss) in any particular period should not be expected to be indicative of future results.

LIQUIDITY & CAPITAL RESOURCES

As of September 30, 2015, the Company had cash and cash equivalents of $75.7 million and debt obligations of $1.3 million.

INVESTOR CONFERENCE CALL

Management will host a conference call today, November 6, 2015, at 10:00 a.m. Eastern time to review the Company's financial results.  The number to call for this interactive teleconference is (785) 424-1676. 

A replay of the conference call will be available through Friday November 13, 2015, by dialing (719) 457-0820 and entering the confirmation number, 557534. 

The live broadcast of the ZAIS quarterly conference call will also be available online at ZAIS's website, www.zaisgroupholdings.com on Friday November 6, 2015, beginning at 10:00 a.m. Eastern time.  The online replay will follow shortly after the call and will be available for approximately one year.

THIRD QUARTER 2015 SUPPLEMENTAL INFORMATION 

The Company's Third Quarter 2015 Supplemental Information – September 30, 2015, is available on ZAIS's website at www.zaisgroupholdings.com. To access the presentation, go to the "ZAIS Shareholders" section of the website.

USE OF NON-GAAP FINANCIAL INFORMATION

In addition to the results presented in accordance with generally accepted accounting principles ("GAAP"), this press release includes certain non-GAAP financial information, including net income (excluding Consolidated Funds of ZAIS Group) and Adjusted EBITDA (and per share measures).  Net income (loss) (excluding Consolidated Funds of ZAIS Group) is a non-GAAP financial measure that the Company defines as GAAP net income (loss) excluding the consolidating effects of the Consolidated Funds of ZAIS Group.  Adjusted EBITDA is a non-GAAP financial measure that the Company defines as GAAP net income (loss), excluding consolidating effects of Consolidated Funds of ZAIS Group, net unrealized gain (loss) on investments, compensation expense related to a portion of net operating income of ZAIS Group payable to certain employees of ZAIS Group, compensation expense related to incentive income in the form of percentage interests being recorded before related incentive income is recognized, equity-based compensation, severance, taxes, interest expense, depreciation and amortization expenses, foreign currency and certain other non-cash and non-operating items.

The Company believes that providing investors with this non-GAAP financial information, in addition to the related GAAP measures, gives investors greater transparency to the information used by management in its financial and operational decision-making. However, because net income (loss) (excluding Consolidated Funds of ZAIS Group) and Adjusted EBITDA are incomplete measures of the Company's financial performance and involve differences from net income (loss) computed in accordance with GAAP, they should be considered along with, but not as alternatives to, the Company's net income (loss) computed in accordance with GAAP as a measure of the Company's financial performance. In addition, because not all companies use identical calculations, the Company's presentation of net income (loss) (excluding Consolidated Funds of ZAIS Group) and Adjusted EBITDA may not be comparable to other similarly-titled measures of other companies.

The following table presents the reconciliation of the Company's GAAP net income (loss) to its non-GAAP financial measure of net income (loss) (excluding Consolidated Funds of ZAIS Group) for the periods presented in this Earnings Release.

 

Three Months Ended September 30,

Nine Months Ended September 30,

2015

2014

2015

2014

(Dollars in thousands)

Consolidated net income (loss), net of tax (GAAP Net Income (Loss))

$

(4,770)

$

17,229

$

(11,769)

$

66,419

Addback: Elimination of Management fee income

64

1,164

183

8,682

Addback: Elimination of Incentive income

1,055

10,800

Addback: Elimination of Other revenues

10

48

Addback: Elimination of net gain (loss) on investments

(11)

(174)

34

1,465

Less: Income of Consolidated Funds

(1,105)

(30,377)

(4,314)

(88,110)

Addback: Expenses of Consolidated Funds

(742)

11,938

772

99,864

Net (gain) loss on Consolidated Funds' investments

4,987

(4,384)

3,003

(72,177)

Net income (excluding Consolidated Funds of    ZAIS Group) – Non-GAAP

$

(1,577)

$

(3,539)

$

(12,091)

$

26,991

    

The following tables present the reconciliations of the Company's GAAP pre-tax consolidated net income (loss) to its non-GAAP financial measures of Distributable Earnings and Adjusted EBITDA for the periods presented in this Earnings Release.

   

Three Months Ended September 30,

Nine Months Ended September 30,

2015

2014

2015

2014

(Dollars in thousands)

Adjusted EBITDA  - Non GAAP  

Pre-tax Consolidated Net Income (loss) (GAAP pre-tax net income (loss))

$

(6,298)

$

17,234

$

(15,880)

$

66,438

Addback: Elimination of Management fee income

64

1,164

183

8,682

Addback: Elimination of Incentive income

1,055

10,800

Addback: Elimination of Other revenues

10

48

Addback: Elimination of Net gain (loss) on investments

(11)

(174)

34

1,465

Less: Income of Consolidated Funds

(1,105)

(30,377)

(4,314)

(88,110)

Addback: Expenses of Consolidated Funds

(742)

11,938

772

99,864

Net (gain) loss on Consolidated Funds' investments

4,987

(4,384)

3,003

(72,177)

Addback: Compensation attributable to Income Unit Plan

2,085

198

6,225

Addback: Compensation attributable to equity compensation

1,410

3,288

Addback: Severance costs

113

1,087

430

Reclassification of incentive compensation

(905)

(7,664)

Addback: Depreciation and amortization

445

122

654

358

Adjusted EBITDA – Non-GAAP

$

(1,137)

$

(2,232)

$

(10,975)

$

26,359

          

ZAIS GROUP HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Financial Condition

(Dollars in thousands)

September 30, 2015

December 31, 2014

(Unaudited)

Assets

Cash and cash equivalents

$

75,707

$

7,664

Income and fees receivable

2,077

4,283

Investments in affiliates, at fair value

104

Due from related parties

809

648

Fixed assets, net

612

1,091

Prepaid expenses

1,602

1,543

Deferred tax asset

4,320

Other assets

2,974

3,310

Assets of Consolidated Funds

Cash and cash equivalents

20,098

94,212

Restricted cash

2,265

30,265

Investments, at fair value

46,230

1,126,737

Investments in affiliated securities, at fair value

26,466

31,457

Derivative assets, at fair value

1,805

6,648

Other assets

3,264

11,577

Total Assets

$

188,229

$

1,319,539

Liabilities, Redeemable Non-controlling Interests and Equity

Liabilities

Notes payable

$

1,253

$

Compensation payable

2,461

6,094

Due to related parties

174

32

Other liabilities

3,044

3,050

Liabilities of Consolidated Funds

Notes payable of consolidated CDOs, at fair value

749,719

Securities sold, not yet purchased

12,621

19,308

Derivative liabilities, at fair value

1,994

5,785

Due to broker

15,588

21,047

Other liabilities

205

32,863

Total Liabilities

37,340

837,898

Commitments and Contingencies

Redeemable Non-controlling Interests

59,551

452,925

Equity

Class A Common Stock, $0.0001 par value; 180,000,000 shares authorized;   13,870,917 and 0 shares issued and outstanding at September 30, 2015 and   December 31, 2014, respectively.

1

1

Class B Common Stock, $0.000001 par value; 20,000,000 shares authorized;   20,000,000 and 0 shares issued and outstanding at September 30, 2015 and   December 31, 2014, respectively.

Additional paid-in capital

59,771

Retained earnings (Accumulated deficit)

(4,337)

18,189

Accumulated other comprehensive income (loss)

215

186

          Total stockholders' equity, ZAIS Group Holdings, Inc.

55,650

18,376

Non-controlling interests in ZAIS Group Parent, LLC

25,811

Non-controlling interests in Consolidated Funds

9,877

10,340

Total Equity

91,338

28,716

Total Liabilities, Redeemable Non-controlling Interests and Equity

$

188,229

$

1,319,539

     

 ZAIS GROUP HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

(Dollars in thousands)

Three Months Ended September 30, 2015

Three Months Ended September  30, 2014

Nine Months Ended September  30, 2015

Nine Months Ended September  30, 2014

Revenues

Management fee income

$

4,111

$

4,373

$

11,826

$

14,739

Incentive income

3,870

4,953

5,991

41,743

Other revenues

81

85

218

454

Income of Consolidated Funds

1,105

30,377

4,314

88,110

Total Revenues

9,167

39,788

22,349

145,046

Expenses

Compensation and benefits

6,488

9,490

20,418

37,600

General, administrative and other

4,370

5,472

13,470

13,086

Depreciation and amortization

445

122

654

358

Expenses of Consolidated Funds

(742)

11,938

772

99,864

Total Expenses

10,561

27,022

35,314

150,908

Other income (loss)

Net gain (loss) on investments

(20)

(41)

Other income (expense)

83

104

88

164

Net gains (losses) of Consolidated   Funds' investments

(4,987)

4,384

(3,003)

72,177

Total Other Income (Loss)

(4,904)

4,468

(2,915)

72,300

Income (loss) before income taxes

(6,298)

17,234

(15,880)

66,438

Income tax (benefit) expense

(1,528)

5

(4,111)

19

Consolidated net income (loss), net of tax

(4,770)

17,229

(11,769)

66,419

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustment

(160)

831

323

630

Total Comprehensive Income (Loss)

$

(4,930)

$

18,060

$

(11,446)

$

67,049

Allocation of Consolidated Net Income   (Loss), net of tax

Redeemable non-controlling interests

$

(2,282)

$

21,183

$

(43)

$

41,434

Non-controlling interests in Consolidated   Funds

(911)

(415)

365

1,726

Stockholders' equity, ZAIS Group   Holdings, Inc.

(568)

(4,337)

Non-controlling interests in ZAIS Group   Parent, LLC

(1,009)

(3,539)

(7,754)

23,259

$

(4,770)

$

17,229

$

(11,769)

$

66,419

Allocation of Total Comprehensive Income (Loss)

Redeemable non-controlling interests

$

(2,282)

$

21,182

$

(43)

$

41,408

Non-controlling interests in Consolidated Funds

(911)

(415)

365

1,726

Stockholders' equity, ZAIS Group Holdings, Inc.

(674)

(4,122)

Non-controlling interests in ZAIS Group Parent, LLC

(1,063)

(2,707)

(7,646)

23,915

$

(4,930)

$

18,060

$

(11,446)

$

67,049

Consolidated Net Income (Loss), net of   tax per Class A common share   applicable to ZAIS Group Holdings,   Inc. – Basic

$

(0.04)

$

(0.51)

$

(0.43)

$

3.32

Consolidated Net Income (Loss), net of   tax per Class A common share   applicable to ZAIS Group Holdings,   Inc. – Diluted

$

(0.06)

$

(0.51)

$

(0.54)

$

3.32

Weighted average shares of Class A   common stock outstanding:

Basic

13,870,917

7,000,000

(2)

10,009,416

(3)

7,000,000

(2)

Diluted

20,870,917

(1)

7,000,000

17,009,416

(1) (3)

7,000,000

   

(1)

Number of diluted shares outstanding for periods after Business Combination takes into account non-controlling interests in ZAIS Group Parent, LLC that may be exchanged for Class A common stock under certain circumstances.  

(2)

Represents 100% ownership of ZAIS Group prior to the Business Combination.

(3)

Pro-rated based on the portion of the nine-month period preceding and following the Business Combination.

The following supplemental financial information illustrates the consolidating effects of the Consolidated Funds of ZAIS Group on the Company's financial position at September 30, 2015 and December 31, 2014, and results of operations for the three and nine months ended September 30, 2015 and September 30, 2014:

September 30, 2015

ZAIS

Consolidated Funds

Eliminations

Consolidated

( Dollars in thousands )

Assets

Cash and cash equivalents

$

75,707

$

$

$

75,707

Income and fees receivable

2,077

2,077

Investments in affiliates, at fair value

253

(253)

Due from related parties

848

(39)

809

Fixed assets, net

612

612

Prepaid expenses

1,602

1,602

Deferred tax assets

4,320

4,320

Other assets

2,974

2,974

Assets of Consolidated Funds

Cash and cash equivalents

20,098

20,098

Restricted cash

2,265

2,265

Investments, at fair value

46,230

46,230

Investments in affiliated securities, at fair value

26,466

26,466

Derivative assets, at fair value

1,805

1,805

Other assets

3,264

3,264

Total Assets

$

88,393

$

100,128

$

(292)

$

188,229

Liabilities, Redeemable Non-controlling Interests and Equity

Liabilities

Notes payable

$

1,253

$

$

$

1,253

Compensation payable

2,461

2,461

Due to related parties

174

174

Other liabilities

3,044

3,044

Liabilities of Consolidated Funds

Notes payable of consolidated CDOs, at fair value

Securities sold, not yet purchased

12,621

12,621

Derivative liabilities, at fair value

1,994

1,994

Due to broker

15,588

15,588

Other liabilities

244

(39)

205

Total Liabilities

6,932

30,447

(39)

37,340

Commitments and Contingencies

Redeemable Non-controlling Interests

59,792

(241)

59,551

Equity

Class A Common Stock

1

1

Class B Common Stock

Additional paid-in-capital

59,771

59,771

Retained earnings (Accumulated deficit)

(4,337)

(4,337)

Accumulated  other comprehensive income (loss)

215

215

Total stockholders' equity, ZAIS Group Holdings, Inc.

55,650

55,650

Non-controlling interests in ZAIS Group Parent, LLC

25,811

25,811

Non-controlling interests in Consolidated Funds

9,889

(12)

9,877

Total Equity

81,461

9,889

(12)

91,338

Total Liabilities, Redeemable Non-controlling Interests and Equity

$

88,393

$

100,128

$

(292)

$

188,229

       

December 31, 2014

ZAIS

Consolidated Funds

Eliminations

Consolidated

( Dollars in thousands )

Assets

Cash and cash equivalents

$

7,664

$

$

$

7,664

Income and fees receivable

11,223

(6,940)

4,283

Investments in affiliates, at fair value

1,752

(1,648)

104

Due from related parties

968

(320)

648

Fixed assets, net

1,091

1,091

Prepaid expenses

1,543

1,543

Other assets

3,310

3,310

Assets of Consolidated Funds

Cash and cash equivalents

94,212

94,212

Restricted cash

30,265

30,265

Investments, at fair value

1,126,737

1,126,737

Investments in affiliated securities, at fair value

66,219

(34,762)

31,457

Derivative assets, at fair value

6,648

6,648

Other assets

11,599

(22)

11,577

Total Assets

$

27,551

$

1,335,680

$

(43,692)

$

1,319,539

Liabilities, Redeemable Non-controlling Interests and Equity

Liabilities

Compensation payable

$

6,094

$

$

$

6,094

Due to related parties

32

32

Other liabilities

3,050

3,050

Liabilities of Consolidated Funds

Notes payable of consolidated CDOs, at fair value

784,481

(34,762)

749,719

Securities sold, not yet purchased

19,308

19,308

Derivative liabilities, at fair value

5,785

5,785

Due to broker

21,047

21,047

Other liabilities

40,144

(7,281)

32,863

Total Liabilities

9,176

870,765

(42,043)

837,898

Commitments and Contingencies

Redeemable Non-controlling Interests

452,925

452,925

Equity

Class A Common Stock

1

1

Class B Common Stock

Additional paid-in-capital

Retained earnings (Accumulated deficit)

18,188

1,650

(1,649)

18,189

Accumulated  other comprehensive income (loss)

186

186

Total stockholders' equity, ZAIS Group Holdings, Inc.

18,375

1,650

(1,649)

18,376

Non-controlling interests in ZAIS Group Parent, LLC

Non-controlling interests in Consolidated Funds

10,340

10,340

Total Equity

18,375

11,990

(1,649)

28,716

Total Liabilities, Redeemable Non-controlling Interests and Equity

$

27,551

$

1,335,680

$

(43,692)

$

1,319,539

       

Three months Ended September 30, 2015

ZAIS

Consolidated Funds

Eliminations

Consolidated

( Dollars in Thousands )

Revenues

Management fee income

$

4,175

$

$

(64)

$

4,111

Incentive income

3,870

3,870

Other revenues

81

81

Income of Consolidated Funds

1,105

1,105

        Total Revenues

8,126

1,105

(64)

9,167

Expenses

Compensation and benefits

6,488

6,488

General, administrative and other

4,370

4,370

Depreciation and amortization

445

445

Expenses of Consolidated Funds

(677)

(65)

(742)

        Total Expenses

11,303

(677)

(65)

10,561

Other Income (loss)

Net gain (loss) on investments

(11)

11

Other income (expense)

83

83

Net gains (losses) of Consolidated Funds'    investments

(4,987)

(4,987)

        Total Other Income (Loss)

72

(4,987)

11

(4,904)

Income (loss) before income taxes

(3,105)

(3,205)

12

(6,298)

Income tax (benefit) expense

(1,528)

(1,528)

Consolidated net income (loss) , net of tax

(1,577)

(3,205)

12

(4,770)

Other Comprehensive Income (Loss), net of    tax

Foreign currency translation adjustment

(160)

(160)

Total Comprehensive Income (Loss)

$

(1,737)

$

(3,205)

$

12

$

(4,930)

      

Three months Ended September 30, 2014

ZAIS

Consolidated Funds

Eliminations

Consolidated

( Dollars in Thousands )

Revenues

Management fee income

$

5,537

$

$

(1,164)

$

4,373

Incentive income

6,008

(1,055)

4,953

Other revenues

95

(10)

85

Income of Consolidated Funds

25,065

5,312

30,377

        Total Revenues

11,640

25,065

3,083

39,788

Expenses

Compensation and benefits

9,490

9,490

General, administrative and other

5,472

5,472

Depreciation and amortization

122

122

Expenses of Consolidated Funds

17,449

(5,511)

11,938

        Total Expenses

15,084

17,449

(5,511)

27,022

Other Income (loss)

Net gain (loss) on investments

(194)

174

(20)

Other income (expense)

104

104

Net gains (losses) of Consolidated Funds'    investments

151,354

(146,970)

4,384

        Total Other Income (Loss)

(90)

151,354

(146,796)

4,468

Income (loss) before income taxes

(3,534)

158,970

(138,202)

17,234

Income tax (benefit) expense

5

5

Consolidated net income (loss), net of tax

(3,539)

158,970

(138,202)

17,229

Other Comprehensive Income (Loss), net of tax

Foreign currency translation adjustment

831

831

Total Comprehensive Income (Loss)

$

(2,708)

$

158,970

$

(138,202)

$

18,060

        

Nine months Ended September 30, 2015

ZAIS

Consolidated Funds

Eliminations

Consolidated

( Dollars in Thousands )

Revenues

Management fee income

$

12,009

$

$

(183)

$

11,826

Incentive income

5,991

5,991

Other revenues

218

218

Income of Consolidated Funds

4,314

4,314

        Total Revenues

18,218

4,314

(183)

22,349

Expenses

Compensation and benefits

20,418

20,418

General, administrative and other

13,470

13,470

Depreciation and amortization

654

654

Expenses of Consolidated Funds

956

(184)

772

        Total Expenses

34,542

956

(184)

35,314

Other Income (loss)

Net gain (loss) on investments

34

(34)

Other income (expense)

88

88

Net gains (losses) of Consolidated Funds'    investments

(3,003)

(3,003)

        Total Other Income (Loss)

122

(3,003)

(34)

(2,915)

Income (loss) before income taxes

(16,202)

355

(33)

(15,880)

Income tax (benefit) expense

(4,111)

(4,111)

Consolidated net income (loss), net of tax

(12,091)

355

(33)

(11,769)

Other Comprehensive Income (Loss), net of    tax

Foreign currency translation adjustment

323

323

Total Comprehensive Income (Loss)

$

(11,768)

$

355

$

(33)

$

(11,446)

   

Nine months Ended September 30, 2014

ZAIS

Consolidated Funds

Eliminations

Consolidated

( Dollars in Thousands )

Revenues

Management fee income

$

23,421

$

$

(8,682)

$

14,739

Incentive income

52,543

(10,800)

41,743

Other revenues

502

(48)

454

Income of Consolidated Funds

77,355

10,755

88,110

        Total Revenues

76,466

77,355

(8,775)

145,046

Expenses

Compensation and benefits

37,600

37,600

General, administrative and other

13,086

13,086

Depreciation and amortization

358

358

Expenses of Consolidated Funds

134,466

(34,602)

99,864

        Total Expenses

51,044

134,466

(34,602)

150,908

Other Income (loss)

Net gain (loss) on investments

1,424

(1,465)

(41)

Other income (expense)

164

164

Net gains (losses) of Consolidated Funds'    investments

92,504

(20,327)

72,177

        Total Other Income (Loss)

1,588

92,504

(21,792)

72,300

Income (loss) before income taxes

27,010

35,393

4,035

66,438

Income tax (benefit) expense

19

19

Consolidated net income (loss), net of tax

26,991

35,393

4,035

66,419

Other Comprehensive Income (Loss), net of tax

Foreign currency translation adjustment

630

630

Total Comprehensive Income (Loss)

$

27,621

$

35,393

$

4,035

$

67,049

      

ABOUT ZAIS GROUP HOLDINGS, INC.

ZAIS (NASDAQ: ZAIS) owns a majority interest in, and is the managing member of ZGP. ZGP is the sole member of ZAIS Group, an investment advisory and asset management firm focused on specialized credit strategies with approximately $4.2 billion of assets under management as of September 30, 2015. Based in Red Bank, New Jersey with operations in London, ZAIS Group employs professionals across investment management, client relations, information technology, analytics, finance, law, compliance, risk management and operations. To learn more, visit www.zaisgroupholdings.com.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS 

This press release contains statements that constitute "forward-looking statements," as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. These statements are generally identified by the use of words such as "outlook," "believe," "expect," "potential," "continue," "may," "will," "should," "could," "would," "seek," "approximately," "predict," "intend," "plan," "estimate," "anticipate," "opportunity," "pipeline," "comfortable," "assume," "remain," "maintain," "sustain," "achieve" or the negative version of those words or other comparable words.  These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements; the Company can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from the Company's expectations include, but are not limited to: the inability of the Company to realize the benefits of the Business Combination, which may be affected by, among other things, competition, the ability of the Company to grow and manage growth profitably, and retain its management and key employees; the outcome of any legal proceedings that may be instituted against the Company or others following completion of the Business Combination; the inability to continue to be listed on the NASDAQ Stock Market; the risk that the Business Combination disrupts current plans and operations of the Company; costs related to the Business Combination; changes in political, economic or industry conditions, the interest rate environment or financial and capital markets, which could result in changes in demand for products or services or in the value of assets under management; the relative and absolute investment performance of advised or sponsored investment products; the availability of suitable investment opportunities; changes in interest rates; changes in the yield curve; changes in prepayment rates; the availability and terms of financing; conditions in the market for mortgage-related investments; the impact of capital improvement projects; the impact of future acquisitions or divestitures; the impact, extent and timing of technological changes and the adequacy of intellectual property protection; the impact of legislative and regulatory actions and reforms and regulatory, supervisory or enforcement actions of government agencies relating to the Company; terrorist activities and international hostilities, which may adversely affect the general economy, financial and capital markets, specific industries, and the Company; the ability to attract and retain highly talented professionals; the impact of changes to tax legislation and, generally, the tax position of the Company; legislative and regulatory changes that could adversely affect the business of the Company; and other factors, including those set forth in the Risk Factors section of the Company's Annual Report on Form 10-K  filed on February 12, 2015, Form 8-K filed on March 23, 2015, Form 10-Q filed on November 6, 2015 and other reports filed by the Company with the Securities and Exchange Commission (the "SEC"), copies of which are available on the SEC's website, www.sec.gov. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.

SOURCE ZAIS Group Holdings, Inc.



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