GLASSBRIDGE ENTERPRISES, INC. Forward-Looking Statements and Risk Factors
We may from time to time make written or oral forward-looking statements with
respect to our future goals, including statements contained in this Form 10-Q,
in our other filings with the
Certain information which does not relate to historical financial information
may be deemed to constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements include information concerning the launch of our asset management
business and related investment vehicles, strategic initiatives and potential
acquisitions, the results of operations of our existing business lines, the
impact of legal or regulatory matters on our business, as well as other actions,
strategies and expectations, and are identifiable by use of the words
"believes," "expects," "intends," "anticipates," "plans," "seeks," "estimates,"
"projects," "may," "will," "could," "might," or "continues" or similar
expressions. Such statements are subject to a wide range of risks and
uncertainties that could cause our actual results in the future to differ
materially from our historical results and those presently anticipated or
projected. We wish to caution investors not to place undue reliance on any such
forward-looking statements. Any forward-looking statements speak only as of the
date on which such statements are made, and we undertake no obligation to update
such statements to reflect events or circumstances arising after such date. Risk
factors include various factors set forth from time to time in our filings with
the
Overview
In
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AEC's prepackaged Chapter 11 plan of reorganization was confirmed at a hearing
on
The Company received distributions from the bankruptcy estate totaling
On
Important Notices and Disclaimers
This Management's Discussion and Analysis of Financial Condition and Results of
Operations ("MD&A") is intended to be read in conjunction with our Condensed
Consolidated Financial Statements and related Notes that appear elsewhere in
this Quarterly Report on Form 10-Q. This MD&A contains forward-looking
statements that involve risks and uncertainties. The Company's actual results
could differ materially from those anticipated due to various factors discussed
in this MD&A under the caption "Forward-Looking Statements and Risk Factors" and
the information contained in the Company's Annual Report on Form 10-K filed with
the
This Quarterly Report on Form 10-Q includes tradenames and trademarks owned by us or that we have the right to use. Solely for convenience, the trademarks or tradenames referred to in this Quarterly Report on Form 10-Q may appear without the ® or ™ symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights to these trademarks and tradenames.
15 Table of Contents Executive Summary
Consolidated Results of Operations for the Three Months Ended
? Net revenue from continuing operations was
ended
? Operating loss from continuing operations was
the three months ended
? Basic and diluted loss per share from continuing operations was
three months ended
share of
Cash Flow/Financial Condition for the Three Months Ended
? Cash and cash equivalents totaled
Results of Operations
The following discussion relates to continuing operations unless indicated otherwise. "NM" means that the percentage amount is not meaningful.
Net Revenue
Three Months Ended
March 31,
(Dollars in millions) 2022 2021 Percent Change
Net revenue $ - $ - NM
Net revenue for the three months ended
Selling, General and Administrative ("SG&A")
Three Months Ended
March 31,
(Dollars in millions) 2022 2021 Percent Change
Selling, general and administrative $ 0.8 $ 1.3 (38.5 )%
As a percent of revenue NM NM
SG&A expense decreased for the three months ended
Operating Loss from Continuing Operations
Three Months Ended
March 31,
(Dollars in millions) 2022 2021 Percent Change
Operating loss from continuing operations $ (0.8 ) $ (1.3 ) (38.5 )%
As a percent of revenue NM NM
Operating loss from continuing operations was
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Other Expense
Three Months Ended
March 31,
(Dollars in millions) 2022 2021 Percent Change
Interest expense $ (0.1 ) $ (0.9 ) (88.9 )%
Other income (expense), net 0.1 - NM
Total other income (expense) $ - $ (0.9 ) NM
As a percent of revenue NM NM
Total other expense was
Income Tax Provision
Three Months Ended
March 31,
(Dollars in millions) 2022 2021 Percent Change
Income tax benefit (provision) $ - $ - NM
Effective tax rate 0.0 % 0.0 %
Income tax for the three months ended
Segment Results
The asset management business is our only reportable segment as of
We evaluate segment performance based on revenue and operating loss. The operating loss reported in our segments excludes corporate and other unallocated amounts. Although such amounts are excluded from the business segment results, they are included in reported consolidated results. Corporate and unallocated amounts include costs that are not allocated to the business segments in management's evaluation of segment performance, such as litigation settlement expense, corporate expense and other expenses.
Information related to our segment is as follows:
Asset Management Business
Three Months Ended
March 31,
(Dollars in millions) 2022 2021 Percent Change
Operating loss $ (0.4 ) $ (1.2 ) (66.7 )%
The Company operates its diversified private asset management business through a number of subsidiaries that sponsor our fund offerings. We expect our asset management business to begin earning revenues primarily by providing investment advisory services to third party investors through managed funds, as well as separate managed accounts.
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Corporate and Unallocated
Three Months Ended
March 31,
(Dollars in millions) 2022 2021 Percent Change
Corporate and unallocated operating loss $ (0.4 ) $ (0.1 ) 300.0 %
For the three months ended
Impact of Changes in Foreign Currency Rates
The impact of changes in foreign currency exchange rates to worldwide revenue
was immaterial for the three months ended
Financial Position
Our cash and cash equivalents balance as of
Our accounts payable balance as of
Our other current liabilities balance as of
Liquidity and Capital Resources
Cash Flows Provided by (Used in) Operating Activities:
Three Months Ended
March 31,
(Dollars in millions) 2022 2021
Net loss $ (0.8 ) $ (2.2 ) Adjustments to reconcile net loss to net cash used in operating activities: Payment-in-Kind interest
0.1 -
Depreciation and amortization - 0.2
Change in non-controlling interest - (0.1 )
Changes in operating assets and liabilities - 1.0
Net cash used in operating activities $ (0.7 ) $ (1.1 ) Cash used in operating activities was
Cash Flows Used In Investing Activities:
Three Months Ended
March 31,
(Dollars in millions) 2022 2021
Purchase of investments (0.2 ) -
Net cash used in investing activities
The Company contributed
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Cash Flows Provided by Financing Activities:
Three Months Ended
March 31,
(Dollars in millions) 2022 2021Net cash provided by financing activities $ - $ -
The Company had no cash provided by financing activities for the three months
ended
We have various resources available to us for purposes of managing liquidity and capital needs. Our primary sources of liquidity include our cash and cash equivalents. Our primary liquidity needs relate to funding our operations.
We had
We expect that our cash, in addition to asset monetization, will provide liquidity sufficient to meet our needs for our operations and our obligations. We also plan to raise additional capital if necessary, although no assurance can be made that we will be able to secure such financing, if needed, on favorable terms or at all.
Off Balance Sheet Arrangements
As of
Critical Accounting Policies and Estimates
A discussion of the Company's critical accounting policies was provided in Part
II - Item 7 in our Annual Report on Form 10-K for the fiscal year ended
Recent Accounting Pronouncements
See Note 2 - New Accounting Pronouncements in our Notes to Condensed Consolidated Financial Statements in Part I, Item 1, herein, for further information.
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