GWG Holdings, Inc. (NASDAQ:GWGH) Q1 2019 Earnings Conference Call - Final Transcript

Aug 13, 2019 • 04:30 pm ET


GWG Holdings, Inc. (NASDAQ:GWGH) Q1 2019 Earnings Conference Call - Final Transcript


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Murray Holland

firm of Akin Gump Strauss Hauer & Feld, where I was a partner in the corporate security section of the firm. In the mid 1980s I was hired by First Boston, which is now known by everyone it's Credit Suisse First Boston as an investment banker and later canopy body both in the motors and acquisitions groups.

From 1993 through 2006, I served as the CEO of three technology enabled firms that serve diverse markets. These firms had combined revenue of over $3 billion with over 4000 employees. In 1999, I worked with Brad Heppner on a transaction where his firm bought a portfolio of our trend of assets for $550 million and that was my first experience with Brad. In 2001, I was an original investor and advisor to a new investment bank, MHT Partners, which specializes in rapidly growing middle market firms in mergers and acquisitions in corporate finance.

MHT Partners was retained by Beneficient in 2014 to advise them regarding the formation of the company and its operations. We see the GWG BEN transaction as a win-win for everybody. We are building on the strong base that Jon Sabes and his team built. By joining with Beneficient, we have a market opportunity to provide liquidity beyond the life insurance secondary market to a much larger market of owners are professionally managed alternative assets. It is clear that putting these two organizations together will offer great opportunities for both GWG and BEN.

With that, I will turn the call over to our CFO, Bill Acheson, who will discuss the financials. Bill?

Bill Acheson

Thank you, Murray, and welcome again, everyone, to our earnings call this afternoon. As I typically do, I'll walk through some of our key metrics that we look at. The only difference being on this call is I'll do a little bit on the full year of 2018 and then we'll look at spend probably most of our time on Q1 of 2019. But given the length of time expenses we've been together, we'll take a look at 2018.

As well, before I get into the financials and the metrics, there's a few themes that you'll recognize going through here, the presentation and things that we've talked about in the past. And they really are three decreasing margins in the life insurance business. We've been talking about this now for several quarters or I'll call variability in the mortality cash flows, although you'll see some quite oppressive improvements, they still vary period-to-period. And three would be higher interest expense kind of across the board. And when I think of the BEN transaction, the ones we've completed in 2018 and the expansion of our strategic relationship as of the second quarter in April, I really think of actions that we are taking to address those three issues.

So number one would be finding higher yielding alternative assets. Number two would be lessening our reliance on the life insurance portfolio. And number three would be using our bigger balance