- Total revenue from continuing operations increased 89% for
the year to $236 million
- Total Specialty P&C Insurance premium increased 74% for
the year to $876 million
Ambac Financial Group, Inc. (NYSE: AMBC) ("Ambac" or "AFG"), an
insurance holding company, today reported its results for the
Fourth Quarter 2024.
Fourth Quarter 2024 and Full Year Highlights
- Strategic Business Transition:
- Ambac advanced its strategic transformation by entering the
final stages of the sale of its Legacy Financial Guarantee
business, a pivotal move positioning the company for long-term
growth.
- This resulted in a loss on disposal of $(570) million in the
quarter, resulting from our adoption of the discontinued operations
accounting standard for the legacy business, leading to a
consolidated net loss to Ambac common stockholders of $(548)
million or $(10.23) per diluted share. The loss resulting from the
accounting change is not the result of any change in the economics
of financial terms of the sale of our business to funds managed by
Oaktree Capital Partners for $420 million, as previously
reported.
- Consolidated net loss included a net loss from continuing
operations attributable to common shareholders of $(22) million or
$0.70 per share for the quarter; per share results includes an add
back for adjustments to non-controlling interests.
- Significant Specialty P&C Insurance Premium Growth:
- Total P&C premium production grew to $265 million in the
quarter, an 88% increase over the fourth quarter of 2023.
- Insurance Distribution ("Cirrata") Growth Acceleration:
- Total revenue grew to $44 million for the quarter, an increase
of 257% over last year, and to $99 million for the year, an
increase of 93% over 2023.
- Launch of 4 new MGAs since the acquisition of Beat Capital, in
addition to 2 new launches Beat started pre-acquisition
- Net loss from continuing operations to Ambac common
stockholders of $(6) million and $(7) million for the quarter and
year, respectively.
- Adjusted EBITDA to Ambac common stockholders of $5 million for
the quarter, up 270%, and $13 million for the year, up 43%. The
full year figure includes only 5 months of consolidated Beat
results.
- Specialty P&C Insurance ("Everspan") Enhanced
Profitability:
- Combined ratio improved by 380 bps over the fourth quarter of
2023 to 96.5%
- Net income from continuing operations of $2 million and $10
million for the quarter and year, compared to $1 million and $0.3
million in the prior year, respectively.
Claude LeBlanc, President and Chief Executive Officer, stated,
"Our P&C operating businesses had record performances in 2024,
generating nearly $900 million in premiums across the platform.
Cirrata earned nearly $20 million of Adjusted EBITDA, up from $11
million the prior year, and Everspan contributed another $5
million, an increase of 400% over last year. We continue to focus
on our growth strategy, which is anchored in both strategic
acquisitions and organic growth, driven primarily by the launch of
new MGAs. On the new MGA launch front, we more than doubled our
expectations last year with the launch of six new MGAs, four since
acquiring Beat. Looking at 2025 our pipeline for organic and
strategic growth remains very strong. Our commitment to technology,
efficiency, and talent keeps Ambac at the forefront in terms of
delivering innovation and market expansion and positions us well to
enhance value for our shareholders."
LeBlanc continued, “In addition to expanding our P&C
business, in early 2025 we substantially completed the separation
of our legacy and P&C businesses' financial and technology
platforms to ensure a smooth transition ahead of the close of the
Legacy sale. The close of the sale remains subject only to
Wisconsin regulatory approval, which we anticipate later this
quarter or early next quarter. I look forward to a very exciting
year for Ambac in 2025."
Ambac's Fourth Quarter 2024
and Year-to-Date Summary Results
Year ended December
31,
($ in thousands, except per share
data)1
4Q2024
4Q2023
2024
2023
Gross written premium
$
59,987
$
90,736
$
382,771
$
273,287
Net premiums earned
18,931
24,945
99,005
51,911
Commission income
38,009
12,192
92,023
51,281
Program fees
3,989
2,460
13,506
8,437
Net investment income
3,557
3,588
14,448
13,159
Net investment gains (losses), including
impairments
(4,455
)
1
(497
)
19
Net gains (losses) on derivative
contracts
(2,043
)
69
4,016
(279
)
Other revenue
7,234
67
13,314
200
Losses and loss adjustment expenses
9,826
16,805
72,626
36,712
Policy acquisition costs
7,850
5,851
23,666
10,557
Commission expense
13,667
7,392
40,876
29,465
General and administrative expenses
40,444
20,960
129,166
66,985
Intangible amortization
8,901
1,137
17,602
4,152
Interest expense
5,634
—
9,379
—
Pretax income (loss) from continuing
operations
(21,100
)
(8,825
)
(59,845
)
(24,221
)
Provision (benefit) for income taxes from
continuing operations
(157
)
274
(924
)
(989
)
Net income (loss) from continuing
operations
(20,943
)
(9,099
)
(58,921
)
(23,232
)
Net income (loss) from continuing
operations attributable to Ambac shareholders
(22,163
)
(9,208
)
(59,282
)
(24,551
)
Net income (loss) from discontinued
operations
(526,102
)
(6,480
)
(497,167
)
28,183
Net income (loss) attributable to Ambac
shareholders
(548,265
)
(15,688
)
(556,449
)
3,632
Net income (loss) attributable to common
stockholders per diluted share 3
$
(10.23
)
$
(0.24
)
$
(10.71
)
$
0.18
EBITDA 2
(5,850
)
(7,296
)
(30,518
)
(18,991
)
Adjusted EBITDA2
5,057
(3,507
)
8,643
(5,879
)
Adjusted EBITDA to Ambac common
stockholders2
516
(3,833
)
2,195
(7,981
)
Adjusted net income (loss) 2
(1,135
)
(4,171
)
(2,158
)
(5,968
)
Adjusted net income (loss) attributable to
Ambac stockholders
(5,676
)
(4,497
)
(8,606
)
(8,070
)
Adjusted net income (loss) per diluted
share 2
$
(0.12
)
$
(0.10
)
$
(0.18
)
$
(0.18
)
Weighted-average diluted shares
outstanding (in millions)
48,129
45,589
46,970
45,637
(1)
Some financial data in this press release
may not add up due to rounding
(2)
See Non-GAAP Financial Data section of
this press release for further information
(3)
Per diluted share includes the impact of
adjusting redeemable noncontrolling interests to current redemption
value
Earnings Call and Webcast
On February 27, 2025, at 8:30am ET, Claude LeBlanc, President
and Chief Executive Officer, and David Trick, Executive Vice
President and Chief Financial Officer, will discuss Ambac's fourth
quarter 2024 results during a conference call. A live audio webcast
of the call will be available through the Investor Relations
section of Ambac’s website,
https://ambac.com/investor-relations/events-and-presentations/.
Participants may also listen via telephone by dialing (877)
407-9716 (Domestic) or (201) 493-6779 (International).
The webcast will be archived on Ambac's website. A replay of the
call will be available through March 13, 2025, and can be accessed
by dialing (Domestic) (844) 512-2921 or (International) (412)
317-6671; and using ID#13751202
Additional information is included in an operating supplement
and presentations at Ambac's website at www.ambac.com.
Total Specialty P&C Insurance Production
Specialty P&C Insurance production, which includes gross
premiums written by Ambac's Specialty P&C Insurance segment and
premiums placed by the Insurance Distribution segment, totaled $265
million in the fourth quarter of 2024, an increase of 88% from the
fourth quarter of 2023.
Specialty P&C Insurance revenues are dependent on gross
premiums written, as specialty program insurance companies earn
premiums based on the portion of gross premiums written retained
(i.e. net premiums written) and fees on gross premiums written that
are ceded to reinsurers. Insurance Distribution revenues are
dependent on premium volume, as Managing General
Agents/Underwriters and brokers receive commissions based on the
amount of premiums placed (i.e. gross premiums written on behalf of
insurance carriers) with insurance carriers.
Three Months Ended December
31,
Year Ended December
31,
($ in thousands)
2024
2023
% Change
2024
2023
% Change
Specialty Property & Casualty
Insurance Gross Premiums Written
$
59,987
$
90,736
(34
)%
$
382,771
$
273,287
40
%
Insurance Distribution Premiums Placed
204,909
50,155
309
%
493,372
230,606
114
%
Specialty P&C Insurance Production
$
264,896
$
140,891
88
%
$
876,141
$
503,893
74
%
Results of Operations by Segment
Insurance Distribution Segment
Three Months Ended December
31,
Year Ended December
31,
($ in thousands)
2024
2023
% Change
2024
2023
% Change
Total revenues
$
44,070
$
12,331
257
%
$
99,236
$
51,546
93
%
Pretax income (loss)
$
(4,958
)
$
606
(77
)%
$
(7,809
)
$
7,289
(207
)%
Pretax income (loss) to Ambac common
stockholders
$
(6,178
)
$
496
(1346
)%
$
(8,172
)
$
5,971
(237
)%
EBITDA1
$
9,833
$
1,757
460
%
$
19,653
$
11,483
71
%
Pretax income margin2
(11.3
)%
5.0
%
-1630 bps
(7.9
)%
14.1
%
-2210 bps
EBITDA margin 3
22.3
%
14.2
%
810 bps
19.8
%
22.3
%
-250 bps
Adjusted EBITDA
$
9,829
$
1,757
459
%
$
19,901
$
11,483
73
%
Adjusted EBITDA to Ambac common
stockholders
$
5,288
$
1,431
270
%
$
13,453
$
9,381
43
%
Organic Growth
(3.2
)%
5.4
%
(1)
EBITDA is prior to the impact of income
attributable to noncontrolling interests, relating to subsidiaries
where Ambac does not own 100%, of $4,541 and $326 for the three
months ended December 31, 2024 and 2023, and $6,448 and $2,102 for
the years ended December 31, 2024 and 2023, respectively.
(2)
Represents Pretax income divided by total
revenues
(3)
See Non-GAAP Financial Data section of
this press release for further information
- Premiums placed and revenue grew during the fourth quarter of
2024 compared to the fourth quarter of 2023 driven primarily by the
inclusion of Beat Capital's results. Organic growth for the quarter
was negatively impacted primarily by A&H production, mostly due
to weak market conditions in Employer Stop Loss and short-term
medical lines.
- Adjusted EBITDA to Ambac common stockholders of $5.3 million
for the quarter was up from $1.4 million in the fourth quarter of
2023. Adjusted EBITDA margin of 22.3% for the quarter compared to
14.2% last year was driven primarily by the addition of Beat. The
impact of de-novo/start-up losses on Adjusted EBITDA to Ambac
common stockholders was approximately $2.4 million in the fourth
quarter.
Specialty Property & Casualty Insurance Segment
Three Months Ended December
31,
Year Ended December
31,
($ in thousands)
2024
2023
% Change
2024
2023
% Change
Gross premium written
$
59,987
$
90,736
(34
)%
$
382,771
$
273,287
40
%
Net premiums written
$
(2,608
)
$
36,749
(107
)%
$
88,682
$
79,824
11
%
Total revenue
$
24,818
$
28,607
(42
)%
$
126,320
$
64,101
97
%
Losses and loss expense
$
9,826
$
16,805
42
%
$
72,626
$
36,712
98
%
Net income (loss) from continuing
operations
$
1,836
$
1,092
68
%
$
10,469
$
335
3025
%
Adj. EBITDA to Ambac common
stockholders
$
2,698
$
1,384
95
%
$
5,136
$
1,017
405
%
Combined Ratio
96.5
%
100.3
%
-380 bps
101.6
%
106.5
%
490 bps
- Gross premium written ("GPW") and net premium written ("NPW")
both contracted during the fourth quarter of 2024 relative to the
fourth quarter of 2023 due to Everspan's cancellation of a personal
lines non-standard auto reinsurance program in the fourth quarter
of 2024.
- Combined ratio improved to 96.5% for the fourth quarter of 2024
compared to 100.3% in the fourth quarter of 2023 and 100.5% in the
third quarter of 2024.
- The loss and loss expense ratio for the fourth quarter of 2024
was 51.9% compared to 67.4% for the fourth quarter of 2023.
Favorable performance across a number of programs accounted for the
improvement, which more than offset additional development in
commercial auto. The loss ratio in the fourth quarter was impacted
by 8.6% of prior period development, with 3.3% stemming from a
management decision to reserve to the high end of the actuarial
range for run-off programs.
- The expense ratio(1) of 44.6% for the fourth quarter of 2024
was up from 32.9% in the prior year period as a sliding scale
commissions adjustment, linked to loss ratios on certain programs,
increased the expense ratio by 14.9% in the fourth quarter of 2024
compared to a (1.2)% reduction in the prior year period, due to
improved underwriting performance.
(1)
Expense Ratio is defined as acquisition
costs and general and administrative expenses, reduced by program
fees, divided by net premiums earned
Discontinued Operations
- This quarter, following the shareholder vote approving the sale
of the Legacy Financial Guarantee segment, the business was moved
to held for sale accounting and placed into discontinued
operations. The sale is anticipated to close by early second
quarter pending the final outstanding approval from the Wisconsin
OCI.
- Ambac recognized a $570 million expected loss on the sale of
the Legacy Financial Guarantee business, which was partially offset
by $44 million of net income from the Legacy Financial Guarantee
business primarily related to the impact of higher discount rates
on losses incurred.
- In preparation for the close, the company has undertaken a full
technology and operational separation, allowing the continuing
business to operate independently of the discontinued
business.
AFG Corporate (holding company only)
Corporate consists of our holding company and shared services
operations ("Corporate"). Corporate provides financial,
technological and human resources to Ambac's two segments and is
responsible for the functioning of AFG as a publicly traded
company.
Corporate loss of $(18) million and $(63) million for the fourth
quarter and full year 2024. Corporate expenses were $15 million and
$75 million for the fourth quarter and full year of 2024,
respectively, up from $13 million and $41 million for the
comparable periods in 2023. Corporate expenses include certain
expenses charged to AAC that must be reported within results from
continuing operations in accordance with US GAAP. The increase in
Corporate expenses from 2023 to 2024 mainly related to costs
associated with the Beat acquisition as well as costs (prior to the
October proxy vote) related to the sale of the Legacy Financial
Guarantee business.
AFG on a standalone basis, excluding its ownership interests in
its Specialty P&C Insurance, Insurance Distribution, and Legacy
Financial Guarantee subsidiaries, had net assets of $119 million as
of December 31, 2024. Assets included cash and liquid securities of
$74 million and other investments of $28 million.
Capital Activity
During the fourth quarter of 2024 962,141 shares were
repurchased at an average price of $12.48 per share. An additional
239,791 shares were repurchased during the first quarter of 2025 at
an average price of $11.71 per share. Combined these repurchases
totaled approximately $14.8 million, with approximately $35 million
remaining on the current repurchase authorization.
Consolidated Ambac Financial Group, Inc. Stockholders' Equity
and NCI Impact
Stockholders’ equity at December 31, 2024, was $857 million, or
$18.43 per share compared to $1.47 billion or $30.89 per share as
of September 30, 2024. The net loss attributable to common
shareholders of $548 million was somewhat offset by net unrealized
investment gains of $35 million and foreign exchange translation
gains of $73 million.
Calculation of Earnings Per Share
Diluted net income per share is computed by dividing net income
attributable to common stockholders, including the adjustment to
redemption value of the redeemable controlling interest, by the
basic weighted-average shares outstanding plus all potentially
dilutive common shares outstanding during the period. The following
table provides a reconciliation of net income attributable to
common stockholders to the numerator in the diluted earnings per
share calculation, together with the resulting earnings per share
amounts:
Three Months Ended December
31,
Year Ended December
31,
2024
2023
2024
2023
Net income (loss) from continuing
operations attributable to Ambac shareholders
$
(22,163
)
$
(9,208
)
$
(59,282
)
$
(24,551
)
Adjustment for Redeemable NCI
55,762
4,855
53,210
4,792
Numerator of diluted EPS
$
33,599
$
(4,353
)
$
(6,072
)
$
(19,759
)
Per Share — Diluted
$
0.70
$
(0.10
)
$
(0.13
)
$
(0.43
)
Net income (loss) attributable to Ambac
shareholders
$
(548,265
)
$
(15,688
)
$
(556,449
)
$
3,632
Adjustment for Redeemable NCI
55,762
4,855
53,210
4,792
Numerator of diluted EPS
$
(492,503
)
$
(10,833
)
$
(503,239
)
$
8,424
Per Share — Diluted
$
(10.23
)
$
(0.24
)
$
(10.71
)
$
0.18
WASO-Diluted
48,129
45,589
46,970
45,637
Non-GAAP Financial Data
In addition to reporting the Company’s quarterly financial
results in accordance with GAAP, the Company is reporting non-GAAP
financial measures: EBITDA, Organic Revenue Growth Rate (Insurance
Distribution segment only), Adjusted Net Income and Adjusted Net
Income Margin, Adjusted EBITDA and Adjusted EBITDA Margin. These
amounts are derived from our consolidated financial information,
but are not presented in our consolidated financial results.
We present non-GAAP supplemental financial information because
we believe such information is of interest to the investment
community, and that it provides greater transparency and enhanced
visibility into the underlying drivers and performance of our
businesses on a basis that may not be otherwise apparent on a GAAP
basis. We view these non-GAAP financial measures as important
indicators when assessing and evaluating our performance on a
segmented and consolidated basis and they are presented to improve
the comparability of our results between periods by eliminating the
impact of the items that may not be representative of our core
operating performance. These non-GAAP financial measures are not
substitutes for the Company’s GAAP reporting, should not be viewed
in isolation and may differ from similar reporting provided by
other companies, which may define non-GAAP measures differently
The following paragraphs define each non-GAAP financial measure.
A tabular reconciliation of the non-GAAP financial measure and the
most comparable GAAP financial measure is also presented below.
EBITDA — EBITDA is net
income (loss) before interest expense, income taxes, depreciation
and amortization of intangible assets.
The following table reconciles net income (loss) to the non-GAAP
measure, EBITDA on a consolidation and segment basis.
($ in thousands)
Specialty Property &
Casualty Insurance
Insurance Distribution
Corporate & Other
Consolidated
Three Months
Ended December 31, 2024
Net income (loss) (1) from continuing
operations
$
1,836
$
(4,786
)
$
(17,995
)
$
(20,944
)
Adjustments:
Interest expense
—
5,639
—
5,639
Income taxes
730
(172
)
(714
)
(156
)
Depreciation
—
251
464
715
Amortization of intangible assets
—
8,901
—
8,901
EBITDA (2)
$
2,566
$
9,833
$
(18,245
)
$
(5,845
)
Three Months
Ended December 31, 2023
Net income (loss) (1) from continuing
operations
$
1,092
$
568
$
(10,758
)
$
(9,099
)
Adjustments:
Interest expense
—
—
—
—
Income taxes
48
38
189
275
Depreciation
—
12
376
388
Amortization of intangible assets
—
1,139
—
1,139
EBITDA (2)
$
1,140
$
1,757
$
(10,193
)
$
(7,297
)
(1)
Net income (loss) is prior to the impact
of noncontrolling interests.
(2)
EBITDA is prior to the impact of
noncontrolling interests, relating to subsidiaries where Ambac does
not own 100%, of $4,541 and $326 for the three months ended
December 31, 2024 and 2023, respectively. These noncontrolling
interests are in the Insurance Distribution segment.
($ in thousands)
Specialty Property &
Casualty Insurance
Insurance Distribution
Corporate & Other
Consolidated
Year Ended
December 31, 2024
Net income (loss) (1) from continuing
operations
$
10,469
$
(6,881
)
$
(62,509
)
$
(58,921
)
Adjustments:
Interest expense
—
9,379
—
9,379
Income taxes
1,753
(928
)
(1,748
)
(923
)
Depreciation
—
481
1,864
2,345
Amortization of intangible assets
—
17,602
—
17,602
EBITDA (2)
$
12,222
$
19,653
$
(62,393
)
$
(30,518
)
Year Ended
December 31, 2023
Net income (loss) (1) from continuing
operations
$
335
$
7,133
$
(30,701
)
$
(23,232
)
Adjustments:
Interest expense
—
—
—
—
Income taxes
48
156
(1,193
)
(989
)
Depreciation
—
42
1,036
1,078
Amortization of intangible assets
—
4,152
—
4,152
EBITDA (2)
$
383
$
11,483
$
(30,858
)
$
(18,991
)
(1)
Net income (loss) is prior to the impact
of noncontrolling interests.
(2)
EBITDA is prior to the impact of
noncontrolling interests, relating to subsidiaries where Ambac does
not own 100%, of $6,448 and $2,102 for the years ended December 31,
2024 and 2023, respectively. These noncontrolling interests are in
the Insurance Distribution segment.
Adjusted EBITDA and Adjusted EBITDA Margin — We define
Adjusted EBITDA as net income (loss) before interest, taxes,
depreciation, amortization, change in fair value of contingent
consideration and certain items of income and expense, including
share-based compensation expense, acquisition and integration
related expenses, severance, and other exceptional or non-recurring
items, including those related to raising capital. We believe that
adjusted EBITDA is an appropriate measure of operating performance
because it eliminates the impact of income and expenses that may
obfuscate business performance, and that the presentation of this
measure enhances an investor's understanding of our financial
performance.
EBITDA margin — EBITDA margin is
EBITDA divided by total revenues. We report EBITDA margin for the
Insurance Distribution segment only.
Three Months Ended December
31,
Year Ended December
31,
($ in thousands)
2024
2023
2024
2023
Net income (loss) (Continuing
Operations)
$
(20,943
)
$
(9,099
)
$
(58,921
)
$
(23,232
)
Adjustments:
Add: Interest expense
5,634
—
9,379
—
Add: Income tax expense
(157
)
274
(923
)
(989
)
Add: Depreciation
714
390
2,345
1,078
Add: Intangible amortization
8,902
1,139
17,602
4,152
EBITDA
(5,850
)
(7,296
)
(30,518
)
(18,991
)
Impact of noncontrolling interests
(4,541
)
(326
)
(6,448
)
(2,102
)
EBITDA to common shareholders
(10,391
)
(7,622
)
(36,966
)
(21,093
)
Net income margin
(32.1
)%
(21.0
)%
(25.0
)%
(18.6
)%
Net income margin to Ambac common
stockholders
(34.0
)%
(21.3
)%
(25.1
)%
(19.7
)%
EBITDA margin
(9.0
)%
(16.8
)%
(12.9
)%
(15.2
)%
EBITDA margin to Ambac common
stockholders
(15.9
)%
(17.6
)%
(15.7
)%
(16.9
)%
Add: Acquisition and integration related
expenses
1,561
110
27,388
567
Add: Equity-based compensation expense
2,821
3,748
9,355
12,266
Add: Severance and restructuring
expense
362
—
7,600
—
Add: Other non-operating (income)
losses
6,163
(69
)
(5,182
)
279
Adjusted EBITDA
$
5,057
$
(3,507
)
$
8,643
$
(5,879
)
Adjusted EBITDA attributable to Ambac
common stockholders
$
516
$
(3,833
)
$
2,195
$
(7,981
)
Adjusted EBITDA Margin
7.8
%
(8.1
)%
3.7
%
(4.7
)%
Adjusted EBITDA Margin to Ambac common
stockholders
0.8
%
(8.8
)%
0.9
%
(6.4
)%
Organic Revenue Growth & Rate (Insurance Distribution
Only.) — Organic revenue is based on commissions and fees for
the relevant period by excluding (i) the first twelve months of
commissions and fees generated from acquisitions and (ii)
commissions and fees from divestitures (iii) and other items such
as contingent commissions and the impact of changes in foreign
exchange rates.
Organic revenue growth is the change in organic revenue
period-to-period, with prior period results adjusted to (i) include
commissions and fees that were excluded from organic revenue in the
prior period and reached the twelve-month owned mark in the current
period, and (ii) exclude commissions and fees related to
divestitures from organic revenue.
Organic revenue growth rate to Total revenue growth rate, the
most directly comparable GAAP measure, for each of the periods
indicated is as follows (in percentages):
Three Months Ended December
31,
Year Ended December
31,
($ in thousands)
2024
2023
% Growth
2024
2023
% Growth
Total Insurance Distribution revenue
(1)
$
44,070
$
12,331
257
%
$
99,236
$
51,546
48
%
Less: Acquired revenues
(32,269
)
—
(45,202
)
—
Less: Profit commission and contingent
commission income
(963
)
(1,140
)
(4,273
)
(4,489
)
Total Organic Revenue & Growth
Percentage
10,838
11,191
(3.2
)%
49,761
47,057
5.4
%
(1)
Total Insurance Distribution revenue
includes investment income
Adjusted Net Income and Adjusted Net Income Margin — We
define Adjusted net income as net income (loss) attributable to
Ambac adjusted for depreciation, amortization, change in fair value
of contingent consideration and certain items of income and
expense, including share-based compensation expense, acquisition
and integration related expenses, severance and non-recurring
income and loss items that, in the opinion of management,
significantly affect the period-over-period assessment of operating
results, and the related tax effect of those adjustments. Per share
amounts exclude any impact of revaluing non-controlling interests
as otherwise reported under GAAP earnings per share. We believe
that adjusted net income is an appropriate measure of operating
performance because it eliminates the impact of income and expenses
that may obfuscate business performance.
Three Months Ended December
31,
Year Ended December
31,
($ in thousands)
2024
2023
2024
2023
Net income (loss) (Continuing
Operations)
$
(20,943
)
$
(9,099
)
$
(58,921
)
$
(23,232
)
Adjustments:
Add: Acquisition and integration related
expenses
1,561
110
27,388
567
Add: Intangible amortization
8,901
1,139
17,602
4,152
Add: Equity-based compensation expense
2,821
3,748
9,355
12,266
Add: Severance and restructuring
expense
362
—
7,600
—
Add: Other non-operating (income)
losses
6,163
(69
)
(5,182
)
279
Adjusted net income (loss) before tax and
NCI
(1,135
)
(4,171
)
(2,158
)
(5,968
)
Income tax effects
—
—
—
—
Adjusted net income (loss) before NCI
(1,135
)
(4,171
)
(2,158
)
(5,968
)
Net (income) loss attributable to
noncontrolling interest
(4,541
)
(326
)
(6,448
)
(2,102
)
Adjusted net income (loss) attributable
to Ambac stockholders
$
(5,676
)
$
(4,497
)
$
(8,606
)
$
(8,070
)
Earnings Per Share:
Diluted earnings per share from continuing
operations
$
0.70
$
(0.10
)
$
(0.13
)
$
(0.43
)
Less: adjustment to redemption value
(1.16
)
(0.11
)
(1.13
)
(0.11
)
Add: adjustments to net income (loss)
0.41
0.11
1.21
0.38
Less: adjustments attributable to
noncontrolling interest
(0.07
)
—
(0.13
)
(0.03
)
Adjusted net income (loss) per diluted
share
$
(0.12
)
$
(0.10
)
$
(0.18
)
$
(0.18
)
Three Months Ended December
31,
Year Ended December
31,
2024
2023
2024
2023
Net income (loss) margin
(32.1
)%
(21.0
)%
(25.0
)%
(18.6
)%
Adjusted Net income (loss) after NCI
margin
(8.7
)%
(10.4
)%
(3.6
)%
(6.5
)%
About Ambac
Ambac Financial Group, Inc. (“Ambac” or “AFG”) is an insurance
holding company headquartered in New York City. Ambac’s core
business is a growing specialty P&C distribution and
underwriting platform. Ambac also has a legacy financial guarantee
business in run-off which we have agreed to sell to funds managed
by Oaktree Capital Management pending regulatory approval. Ambac’s
common stock trades on the New York Stock Exchange under the symbol
“AMBC”. Ambac is committed to providing timely and accurate
information to the investing public, consistent with our legal and
regulatory obligations. To that end, we use our website to convey
information about our businesses, including the anticipated release
of quarterly financial results, quarterly financial, statistical
and business-related information. For more information, please go
to www.ambac.com.
The Amended and Restated Certificate of Incorporation of Ambac
contains substantial restrictions on the ability to transfer
Ambac’s common stock. Subject to limited exceptions, any attempted
transfer of common stock shall be prohibited and void to the extent
that, as a result of such transfer (or any series of transfers of
which such transfer is a part), any person or group of persons
shall become a holder of 5% or more of Ambac’s common stock or a
holder of 5% or more of Ambac’s common stock increases its
ownership interest.
Forward-Looking Statements
In this press release, statements that may constitute
“forward-looking statements” within the meaning of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Words such as “estimate,” “project,” “plan,” “believe,”
“anticipate,” “intend,” “planned,” “potential” and similar
expressions, or future or conditional verbs such as “will,”
“should,” “would,” “could,” and “may,” or the negative of those
expressions or verbs, identify forward-looking statements. We
caution readers that these statements are not guarantees of future
performance. Forward-looking statements are not historical facts,
but instead represent only our beliefs regarding future events,
which may by their nature be inherently uncertain and some of which
may be outside our control. These statements may relate to plans
and objectives with respect to the future, among other things which
may change. We are alerting you to the possibility that our actual
results may differ, possibly materially, from the expected
objectives or anticipated results that may be suggested, expressed
or implied by these forward-looking statements. Important factors
that could cause our results to differ, possibly materially, from
those indicated in the forward-looking statements include, among
others, those discussed under “Risk Factors” in our most recent SEC
filed quarterly or annual report.
Any or all of management’s forward-looking statements here or in
other publications may turn out to be incorrect and are based on
management’s current belief or opinions. Ambac Financial Group’s
(“AFG”) and its subsidiaries’ (collectively, “Ambac” or the
“Company”) actual results may vary materially, and there are no
guarantees about the performance of Ambac’s securities. Among
events, risks, uncertainties or factors that could cause actual
results to differ materially are: (1) the high degree of volatility
in the price of AFG’s common stock; (2) failure to consummate the
proposed sale of all of the common stock of Ambac Assurance
Corporation (“AAC”) and the transactions contemplated by the
related stock purchase agreement (the “Sale Transactions”) in a
timely manner or at all; (3) disruptions from the proposed Sale
Transactions, including from litigation, that may harm Ambac’s
business, including current plans and operations; (4) potential
adverse reactions or changes to business relationships resulting
from the announcement or completion of the proposed Sale
Transactions; (5) uncertainty concerning the Company’s ability to
achieve value for holders of its securities from the specialty
property and casualty insurance business, the insurance
distribution business, or related businesses; (6) inadequacy of
reserves established for losses and loss expenses and the
possibility that changes in loss reserves may result in further
volatility of earnings or financial results; (7) risks historically
reported by the Company with respect to the legacy financial
guarantee business, which may continue to affect the Company if the
Sale Transactions are not consummated; (8) credit risk throughout
Ambac’s business, including but not limited to exposures to
reinsurers and insurance distribution partners; (9) the Company’s
inability to generate the significant amount of cash needed to
service its debt and financial obligations, and its inability to
refinance its indebtedness; (10) the Company’s substantial
indebtedness could adversely affect the Company’s financial
condition and operating flexibility; (11) the Company may not be
able to obtain financing, refinance its outstanding indebtedness,
or raise capital on acceptable terms or at all due to its
substantial indebtedness and financial condition; (12) greater than
expected underwriting losses in the Company’s specialty property
and casualty insurance business; (13) failure of specialty
insurance program partners to properly market, underwrite or
administer policies; (14) inability to obtain reinsurance coverage
or charge rates for insurance on expected terms; (15) loss of key
relationships for production of business in specialty property and
casualty and insurance distribution businesses or the inability to
secure such additional relationships to produce expected results;
(16) the impact of catastrophic public health, environmental or
natural events, or global or regional conflicts; (17) the risk that
the Company’s risk management policies and practices do not
anticipate certain risks and/or the magnitude of potential for
loss; (18) restrictive covenants in agreements and instruments that
impair Ambac’s ability to pursue or achieve its business
strategies; (19) disagreements or disputes with the Company’s
insurance regulators; (20) failure of a financial institution in
which we maintain cash and investment accounts; (21) adverse
impacts from changes in prevailing interest rates; (22) events or
circumstances that result in the impairment of our intangible
assets and/or goodwill that was recorded in connection with Ambac’s
acquisitions; (23) the risk of litigation, regulatory inquiries,
investigations, claims or proceedings, and the risk of adverse
outcomes in connection therewith; (24) the Company’s ability to
adapt to the rapid pace of regulatory change; (25) actions of
stakeholders whose interests are not aligned with broader interests
of Ambac's stockholders; (26) system security risks, data
protection breaches and cyber attacks; (27) failures in services or
products provided by third parties; (28) political developments
that disrupt the economies where the Company has insured exposures
or the markets in which our insurance programs operate; (29) our
inability to attract and retain qualified executives, senior
managers and other employees, or the loss of such personnel; (30)
fluctuations in foreign currency exchange rates; (31) failure to
realize our business expansion plans, including failure to
effectively onboard new program partners, or failure of such plans
to create value; (32) greater competition for our specialty
property and casualty insurance business and/or our insurance
distribution business; (33) loss or lowering of the AM Best rating
for our property and casualty insurance company subsidiaries; (34)
disintermediation within the insurance industry or greater
competition from technology-based insurance solutions or
non-traditional insurance markets; (35) adverse effects of market
cycles in the property and casualty insurance industry; (36)
variations in commission income resulting from timing of policy
renewals and the net effect of new and lost business production;
(37) variations in contingent commissions resulting from the
effects insurance losses; (38) reliance on a limited number of
counterparties to produce revenue in our specialty property and
casualty insurance and insurance distribution businesses; (39)
changes in law or in the functioning of the healthcare market that
impair the business model of our accident and health managing
general underwriter; (40) difficulties in identifying appropriate
acquisition or investment targets, properly evaluating the business
and prospects of acquired businesses, businesses in which we
invest, or targets, integrating acquired businesses into our
business or failures to realize expected synergies from
acquisitions or new business investments; (41) failure to realize
expected benefits from investments in technology; (42) harmful acts
and omissions of our business counterparts; and (43) other risks
and uncertainties that have not been identified at this time.
The following table presents segment financial results and
includes the non-GAAP measure, EBITDA on a segment and consolidated
basis.
Three Months Ended December 31,
2024
Specialty Property &
Casualty Insurance
Insurance Distribution
Corporate & Other
Consolidated
($ in
thousands)
Gross premiums written
$
59,987
$
59,987
Net premiums written
(2,608
)
(2,608
)
Total revenues from Continuing
Operations
24,818
44,070
(3,666
)
65,222
Total expenses from Continuing
Operations
22,252
49,028
15,042
86,322
Pretax income (loss)
2,566
(4,958
)
(18,708
)
(21,100
)
Provision (benefit) for income taxes
730
(172
)
(715
)
(157
)
Net income (loss) from Continuing
Operations
$
1,836
$
(4,786
)
$
(17,993
)
$
(20,943
)
Adjustments to EBITDA
Add: Interest expense
$
—
$
5,634
$
—
$
5,634
Add: Income tax expense
730
(172
)
(715
)
(157
)
Add: Depreciation
—
251
463
714
Add: Intangible amortization
—
8,901
—
8,901
EBITDA from Continuing
Operations
$
2,566
$
9,829
$
(18,245
)
$
(5,850
)
EBITDA from Continuing Operations
attributable to
Ambac shareholders
$
2,566
$
5,288
$
(18,245
)
$
(10,391
)
Adjustments to Adjusted EBITDA
Add: Acquisition and integration related
expenses
$
—
$
—
$
1,561
$
1,561
Add: Equity-based compensation expense
132
—
2,689
2,821
Add: Severance and restructuring
expense
—
—
362
362
Add: Other non-operating (income)
losses
—
—
6,163
6,163
Adjusted EBITDA from Continuing
Operations
$
2,698
$
9,829
$
(7,470
)
$
5,057
Adjusted EBITDA from Continuing
Operations attributable to
Ambac shareholders
$
2,698
$
5,288
$
(7,470
)
$
516
Three Months Ended December 31,
2024
Specialty Property &
Casualty Insurance
Insurance Distribution
Corporate & Other
Consolidated
Net income (loss) (Continuing
Operations)
$
1,836
$
(4,786
)
$
(17,993
)
$
(20,943
)
Adjustments:
Add: Acquisition and integration related
expenses
—
—
1,561
1,561
Add: Intangible amortization
—
8,901
—
8,901
Add: Equity-based compensation expense
132
—
2,689
2,821
Add: Severance and restructuring
expense
—
—
362
362
Add: Other non-operating (income)
losses
—
—
6,163
6,163
Adjusted net income (loss) before tax and
NCI
1,968
4,115
(7,218
)
(1,135
)
Income tax effects
—
—
—
—
Adjusted net income (loss) before NCI
1,968
4,115
(7,218
)
(1,135
)
Net (income) loss attributable to
noncontrolling interest
—
(4,541
)
—
(4,541
)
Adjusted net income (loss) attributable
to Ambac stockholders
$
1,968
$
(426
)
$
(7,218
)
$
(5,676
)
Three Months Ended December 31,
2023
Specialty Property &
Casualty Insurance
Insurance Distribution
Corporate & Other
Consolidated
($ in
thousands)
Gross premiums written
$
90,736
$
90,736
Net premiums written
36,749
36,749
Total revenues from Continuing
Operations
28,607
12,331
2,385
43,323
Total expenses from Continuing
Operations
27,467
11,725
12,956
52,148
Pretax income (loss)
1,140
606
(10,571
)
(8,825
)
Provision (benefit) for income taxes
48
38
188
274
Net income (loss) from Continuing
Operations
$
1,092
$
568
$
(10,759
)
$
(9,099
)
Adjustments to EBITDA
Add: Interest expense
$
—
$
—
$
—
$
—
Add: Income tax expense
48
38
188
274
Add: Depreciation
—
12
378
390
Add: Intangible amortization
—
1,139
—
1,139
EBITDA from Continuing
Operations
$
1,140
$
1,757
$
(10,193
)
$
(7,296
)
EBITDA from Continuing Operations
attributable to
Ambac shareholders
$
1,140
$
1,431
$
(10,193
)
$
(7,622
)
Adjustments to Adjusted EBITDA
Add: Acquisition and integration related
expenses
$
—
$
—
$
110
$
110
Add: Equity-based compensation expense
244
—
3,504
3,748
Add: Severance and restructuring
expense
—
—
—
—
Add: Other non-operating (income)
losses
—
—
(69
)
(69
)
Adjusted EBITDA from Continuing
Operations
$
1,384
$
1,757
$
(6,648
)
$
(3,507
)
Adjusted EBITDA from Continuing
Operations attributable to
Ambac shareholders
$
1,384
$
1,431
$
(6,648
)
$
(3,833
)
Three Months Ended December 31,
2023
Specialty Property &
Casualty Insurance
Insurance Distribution
Corporate & Other
Consolidated
Net income (loss) (Continuing
Operations)
$
1,092
$
568
$
(10,759
)
$
(9,099
)
Adjustments:
Add: Acquisition and integration related
expenses
—
—
110
110
Add: Intangible amortization
—
1,139
—
1,139
Add: Equity-based compensation expense
244
—
3,504
3,748
Add: Other non-operating (income)
losses
—
—
(69
)
(69
)
Adjusted net income (loss) before tax and
NCI
1,336
1,707
(7,214
)
(4,171
)
Income tax effects
—
—
—
—
Adjusted net income (loss) before NCI
1,336
1,707
(7,214
)
(4,171
)
Net (income) loss attributable to
noncontrolling interest
—
(326
)
—
(326
)
Adjusted net income (loss) attributable
to Ambac stockholders
$
1,336
$
1,381
$
(7,214
)
$
(4,497
)
Results of Operations by Segment (Continued)
Year Ended December 31, 2024
Specialty Property &
Casualty Insurance
Insurance Distribution
Corporate & Other
Consolidated
($ in
thousands)
Gross premiums written
$
382,771
$
382,771
Net premiums written
88,682
88,682
Total revenues from Continuing
Operations
126,320
99,236
10,259
235,815
Total expenses from Continuing
Operations
114,098
107,045
74,516
295,660
Pretax income (loss)
12,222
(7,809
)
(64,257
)
(59,844
)
Provision (benefit) for income taxes
1,753
(928
)
(1,748
)
(923
)
Net income (loss) from Continuing
Operations
$
10,469
$
(6,881
)
$
(62,509
)
$
(58,921
)
Adjustments to EBITDA
Add: Interest expense
$
—
$
9,379
$
—
$
9,379
Add: Income tax expense
1,753
(928
)
(1,748
)
(923
)
Add: Depreciation
—
481
1,864
2,345
Add: Intangible amortization
—
17,602
—
17,602
EBITDA from Continuing
Operations
$
12,222
$
19,653
$
(62,393
)
$
(30,518
)
EBITDA from Continuing Operations
attributable to
Ambac shareholders
$
12,222
$
13,205
$
(62,393
)
$
(36,966
)
Adjustments to Adjusted EBITDA
Add: Acquisition and integration related
expenses
$
—
$
—
$
27,388
$
27,388
Add: Equity-based compensation expense
414
—
8,941
9,355
Add: Severance and restructuring
expense
—
248
7,352
7,600
Add: Other non-operating (income)
losses
(7,500
)
—
2,318
(5,182
)
Adjusted EBITDA from Continuing
Operations
$
5,136
$
19,901
$
(16,394
)
$
8,643
Adjusted EBITDA from Continuing
Operations attributable to
Ambac shareholders
$
5,136
$
13,453
$
(16,394
)
$
2,195
Year Ended December 31, 2024
Specialty Property &
Casualty Insurance
Insurance Distribution
Corporate & Other
Consolidated
Net income (loss) (Continuing
Operations)
$
10,469
$
(6,881
)
$
(62,509
)
$
(58,921
)
Adjustments:
Add: Acquisition and integration related
expenses
—
—
27,388
27,388
Add: Intangible amortization
—
17,602
—
17,602
Add: Equity-based compensation expense
414
—
8,941
9,355
Add: Severance and restructuring
expense
—
248
7,352
7,600
Add: Other non-operating (income)
losses
(7,500
)
—
2,318
(5,182
)
Adjusted net income (loss) before tax and
NCI
3,383
10,969
(16,510
)
(2,158
)
Income tax effects
—
—
—
—
Adjusted net income (loss) before NCI
3,383
10,969
(16,510
)
(2,158
)
Net (income) loss attributable to
noncontrolling interest
—
(6,448
)
—
(6,448
)
Adjusted net income (loss) attributable
to Ambac stockholders
$
3,383
$
4,521
$
(16,510
)
$
(8,606
)
Year Ended December 31, 2023
Specialty Property &
Casualty Insurance
Insurance Distribution
Corporate & Other
Consolidated
($ in
thousands)
Gross premiums written
$
273,287
$
273,287
Net premiums written
79,824
79,824
Total revenues from Continuing
Operations
64,101
51,546
9,080
124,728
Total expenses from Continuing
Operations
63,718
44,257
40,974
148,949
Pretax income (loss)
383
7,289
(31,894
)
(24,221
)
Provision (benefit) for income taxes
48
156
(1,193
)
(989
)
Net income (loss) from Continuing
Operations
$
335
$
7,133
$
(30,701
)
$
(23,232
)
Adjustments to EBITDA
Add: Interest expense
$
—
$
—
$
—
$
—
Add: Income tax expense
48
156
(1,193
)
(989
)
Add: Depreciation
—
42
1,036
1,078
Add: Intangible amortization
—
4,152
—
4,152
EBITDA from Continuing
Operations
$
383
$
11,483
$
(30,858
)
$
(18,991
)
EBITDA from Continuing Operations
attributable to
Ambac shareholders
$
383
$
9,381
$
(30,858
)
$
(21,094
)
Adjustments to Adjusted EBITDA
Add: Acquisition and integration related
expenses
$
—
$
—
$
567
$
567
Add: Equity-based compensation expense
634
—
11,632
12,266
Add: Severance and restructuring
expense
—
—
—
—
Add: Other non-operating (income)
losses
—
—
279
279
Adjusted EBITDA from Continuing
Operations
$
1,017
$
11,483
$
(18,380
)
$
(5,879
)
Adjusted EBITDA from Continuing
Operations attributable to
Ambac shareholders
$
1,017
$
9,381
$
(18,380
)
$
(7,981
)
Year Ended December 31, 2023
Specialty Property &
Casualty Insurance
Insurance Distribution
Corporate & Other
Consolidated
Net income (loss) (Continuing
Operations)
$
335
$
7,133
$
(30,701
)
$
(23,232
)
Adjustments:
Add: Acquisition and integration related
expenses
—
—
567
567
Add: Intangible amortization
—
4,152
—
4,152
Add: Equity-based compensation expense
634
—
11,632
12,266
Add: Other non-operating (income)
losses
—
—
279
279
Adjusted net income (loss) before tax and
NCI
969
11,285
(18,223
)
(5,968
)
Income tax effects
—
—
—
—
Adjusted net income (loss) before NCI
969
11,285
(18,223
)
(5,968
)
Net (income) loss attributable to
noncontrolling interest
—
(2,102
)
—
(2,102
)
Adjusted net income (loss) attributable
to Ambac stockholders
$
969
$
9,183
$
(18,223
)
$
(8,070
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250226610667/en/
Charles J. Sebaski Managing Director, Investor Relations (212)
208-3222 csebaski@ambac.com
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