2013 Form 10-K Financial Statement

#000120677414000850 Filed on March 13, 2014

View on sec.gov

Income Statement

Concept 2013 2012 Q4 2012 Q3
Revenue $24.30M $5.200M $8.900M
YoY Change -5.81% -966.67%
Cost Of Revenue $9.700M $500.0K $800.0K
YoY Change 321.74% -16.67%
Gross Profit $14.50M $4.700M $8.100M
YoY Change -38.56% -491.67%
Gross Profit Margin 59.67% 90.38% 91.01%
Selling, General & Admin $0.00 $200.0K $0.00
YoY Change 100.0%
% of Gross Profit 0.0% 4.26% 0.0%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $0.00
YoY Change
% of Gross Profit 0.0%
Operating Expenses $5.474M $2.000M $100.0K
YoY Change 270.93%
Operating Profit $9.026M $2.700M $8.000M
YoY Change -59.2% -325.0%
Interest Expense $7.095M $343.6K $376.7K
YoY Change 411.33%
% of Operating Profit 78.6% 12.72% 4.71%
Other Income/Expense, Net $26.42M
YoY Change
Pretax Income $7.553M $2.600M $8.100M
YoY Change -62.73% -300.0%
Income Tax $0.00 $0.00 $0.00
% Of Pretax Income 0.0% 0.0% 0.0%
Net Earnings $7.553M $2.646M $8.059M
YoY Change -62.73% -303.53%
Net Earnings / Revenue 31.08% 50.88% 90.55%
Basic Earnings Per Share $0.92 $0.90 $2.83
Diluted Earnings Per Share $0.92 $0.90 $2.83
COMMON SHARES
Basic Shares Outstanding 7.273M shares 2.018M shares 2.843M shares
Diluted Shares Outstanding 8.200M shares 2.215M shares 2.843M shares

Balance Sheet

Concept 2013 2012 Q4 2012 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $57.10M $19.10M $15.30M
YoY Change 198.95% 203.17%
Cash & Equivalents $57.10M $19.06M $15.27M
Short-Term Investments
Other Short-Term Assets
YoY Change
Inventory
Prepaid Expenses
Receivables
Other Receivables
Total Short-Term Assets $57.10M $25.90M $15.30M
YoY Change 120.46% 311.11%
LONG-TERM ASSETS
Property, Plant & Equipment
YoY Change
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments $557.9M $170.7M $163.4M
YoY Change 226.83% 16.92%
Other Assets $2.100M $3.800M $3.100M
YoY Change -44.74% 123.53%
Total Long-Term Assets $563.0M $175.7M $167.0M
YoY Change 220.43% 18.91%
TOTAL ASSETS
Total Short-Term Assets $57.10M $25.90M $15.30M
Total Long-Term Assets $563.0M $175.7M $167.0M
Total Assets $620.1M $201.6M $182.3M
YoY Change 207.59% 30.86%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $3.200M $8.000M $1.200M
YoY Change -60.0% 788.89%
Accrued Expenses $100.0K $100.0K
YoY Change 0.0%
Deferred Revenue
YoY Change
Short-Term Debt $374.7M $116.1M $110.1M
YoY Change 222.74% 18.95%
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $386.4M $124.2M $111.4M
YoY Change 211.11% 25.96%
LONG-TERM LIABILITIES
Long-Term Debt $54.50M $0.00 $0.00
YoY Change
Other Long-Term Liabilities $1.500M $12.30M $26.20M
YoY Change -87.8% 4000.0%
Total Long-Term Liabilities $56.00M $12.30M $26.20M
YoY Change 355.28% 4000.0%
TOTAL LIABILITIES
Total Short-Term Liabilities $386.4M $124.2M $111.4M
Total Long-Term Liabilities $56.00M $12.30M $26.20M
Total Liabilities $460.8M $136.5M $137.7M
YoY Change 194.25% 38.17%
SHAREHOLDERS EQUITY
Retained Earnings $5.282M
YoY Change
Common Stock $207.00
YoY Change
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $159.2M $45.04M $44.70M
YoY Change
Total Liabilities & Shareholders Equity $620.1M $201.6M $182.3M
YoY Change 207.59% 30.86%

Cashflow Statement

Concept 2013 2012 Q4 2012 Q3
OPERATING ACTIVITIES
Net Income $7.553M $2.646M $8.059M
YoY Change -62.73% -303.53%
Depreciation, Depletion And Amortization $0.00
YoY Change
Cash From Operating Activities $8.100M -$500.0K $1.500M
YoY Change 211.54% -225.0% 15.38%
INVESTING ACTIVITIES
Capital Expenditures
YoY Change
Acquisitions $0.00
YoY Change
Other Investing Activities -$386.8M -$5.400M $30.80M
YoY Change 4246.07% -146.96% -128.65%
Cash From Investing Activities -$386.8M -$5.400M $30.80M
YoY Change 4246.07% -146.96% -128.65%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net -$118.9M
YoY Change -1361.3%
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 416.7M 9.600M -20.00M
YoY Change 2093.16% -235.21% -118.57%
NET CHANGE
Cash From Operating Activities 8.100M -500.0K 1.500M
Cash From Investing Activities -386.8M -5.400M 30.80M
Cash From Financing Activities 416.7M 9.600M -20.00M
Net Change In Cash 38.00M 3.700M 12.30M
YoY Change 199.21% -22.92% 720.0%
FREE CASH FLOW
Cash From Operating Activities $8.100M -$500.0K $1.500M
Capital Expenditures
Free Cash Flow
YoY Change

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<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="text-align: justify"><strong><em style="font-family: Times New Roman; font-size: 80%">Counterparty Risk and Concentration</em></strong></p> <p style="font-family: Times New Roman; font-size: 80%; text-align: justify"> <font style="font-family: Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font> Counterparty risk is the risk that counterparties may fail to fulfill their obligations or that pledged collateral value becomes inadequate. The Company attempts to manage its exposure to counterparty risk through diversification, use of financial instruments and monitoring the creditworthiness of counterparties.</p> <p style="font-family: Times New Roman; font-size: 80%; text-align: justify"> <font style="font-family: Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font> As explained in the notes above, while the Company engages in repurchase financing activities with several financial institutions, the Company maintains custody accounts with two custodians at December 31, 2013. There is no guarantee that these custodians will not become insolvent. While there are certain regulations that seek to protect customer property in the event of a failure, insolvency or liquidation of a custodian, there is no certainty that the Company would not incur losses due to its assets being unavailable for a period of time in the event of a failure of a custodian that has custody of the Company&#39;s assets. Although management monitors the credit worthiness of its custodians, such losses could be significant and could materially impair the ability of the Company to achieve its investment objective.</p> <!--EndFragment--></div> </div>
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<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="text-align: justify"><font style="font-family: Times New Roman; font-size: 80%">1.</font> <strong style="font-family: Times New Roman; font-size: 80%">Formation and Organization</strong></p> <p style="text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp; <font style="font-family: Times New Roman; font-size: 80%">ZAIS Financial Corp. (the "Company") was incorporated in Maryland on May 24, 2011, and has elected to be taxed and to qualify as a real estate investment trust ("REIT") beginning with the taxable year ended December 31, 2011. The Company was initially capitalized and commenced operations on July 29, 2011, when it completed an exchange of a mutually agreed upon portion of the shareholders&#39; and limited partners&#39; interests in the ZAIS Matrix VI-A Ltd. and ZAIS Matrix VI-B L.P. funds (the "Matrix Funds") managed by ZAIS Group, LLC ("ZAIS"), which included cash of $3,036,222 and real estate securities having a fair value of $57,416,118, for 3,022,617 shares of the Company&#39;s common stock. On February 13, 2013, the Company completed its initial public offering ("IPO"), pursuant to which the Company sold 5,650,000 shares of its common stock at a price of $21.25 per share for gross proceeds of $120.1 million. Net proceeds after the payment of offering costs of $1.2 million were $118.9 million.</font></p> <p style="font-family: Times New Roman; font-size: 80%; text-align: justify"> <font style="font-family: Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font> The Company primarily invests in, finances and manages performing and re-performing residential mortgage loans, which may be seasoned or recently originated. The Company also invests in, finances and manages residential mortgage-backed securities ("RMBS") that are not issued or guaranteed by a federally chartered corporation, such as the Federal National Mortgage Association ("Fannie Mae"), or the Federal Home Loan Mortgage Corporation ("Freddie Mac"), or an agency of the U.S. Government, such as the Government National Mortgage Association ("Ginnie Mae") ("non-Agency RMBS") with an emphasis on securities that, when originally issued, were rated in the highest rating category by one or more of the nationally recognized statistical rating organizations. The Company also has the discretion to invest in mortgage servicing rights ("MSRs"), RMBS that are issued or guaranteed by a federally chartered corporation or a U.S. Government agency ("Agency RMBS"), including through To-Be-Announced ("TBA") contracts, and in other real estate-related and financial assets, such as interest only strips created from RMBS ("IOs"), commercial mortgage-backed securities ("CMBS") and asset-backed securities ("ABS"). The Company refers collectively to the assets it targets for acquisition as its target assets.</p> <p style="font-family: Times New Roman; font-size: 80%; text-align: justify"> <font style="font-family: Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font> The Company is externally managed by ZAIS REIT Management, LLC (the "Advisor"), a subsidiary of ZAIS, and has no employees. The Company is the sole general partner of, and conducts substantially all of its business through, ZAIS Financial Partners, L.P., the Company&#39;s consolidated operating partnership subsidiary (the "Operating Partnership").</p> <p style="font-family: Times New Roman; font-size: 80%; text-align: justify"> <font style="font-family: Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font> The Company&#39;s charter authorizes the issuance of up to 500,000,000 shares of common stock with a par value of $0.0001 per share, and 50,000,000 shares of preferred stock, with a par value of $0.0001 per share. The Company&#39;s board of directors is authorized to amend its charter, without the approval of stockholders, to increase the aggregate number of authorized shares of capital stock or the number of shares of any class or series of capital stock or to classify and reclassify any unissued shares of its capital stock into other classes or series of stock that the Company has authority to issue.</p> <!--EndFragment--></div> </div>
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CY2013Q4 us-gaap Securities Sold Under Agreements To Repurchase
SecuritiesSoldUnderAgreementsToRepurchase
138591678 USD
CY2012Q4 us-gaap Senior Notes
SeniorNotes
USD
CY2013Q4 us-gaap Senior Notes
SeniorNotes
54539051 USD
CY2012Q4 us-gaap Shares Subject To Mandatory Redemption Settlement Terms Amount
SharesSubjectToMandatoryRedemptionSettlementTermsAmount
11190687 USD
CY2013Q4 us-gaap Shares Subject To Mandatory Redemption Settlement Terms Amount
SharesSubjectToMandatoryRedemptionSettlementTermsAmount
USD
CY2012Q4 us-gaap Shares Subject To Mandatory Redemption Settlement Terms Number Of Shares Indexed
SharesSubjectToMandatoryRedemptionSettlementTermsNumberOfSharesIndexed
515035 shares
CY2013Q1 us-gaap Shares Subject To Mandatory Redemption Settlement Terms Number Of Shares Indexed
SharesSubjectToMandatoryRedemptionSettlementTermsNumberOfSharesIndexed
265245 shares
CY2012 us-gaap Sponsor Fees
SponsorFees
877825 USD
CY2013 us-gaap Sponsor Fees
SponsorFees
2629815 USD
us-gaap Sponsor Fees
SponsorFees
361890 USD
CY2012Q4 us-gaap Stockholders Equity
StockholdersEquity
45041918 USD
CY2013Q4 us-gaap Stockholders Equity
StockholdersEquity
159249808 USD
CY2011Q4 us-gaap Stockholders Equity Including Portion Attributable To Noncontrolling Interest
StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest
55317874 USD
CY2012Q4 us-gaap Stockholders Equity Including Portion Attributable To Noncontrolling Interest
StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest
65140795 USD
CY2013Q4 us-gaap Stockholders Equity Including Portion Attributable To Noncontrolling Interest
StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest
177768562 USD
CY2011Q3 us-gaap Stockholders Equity Including Portion Attributable To Noncontrolling Interest
StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest
USD
CY2012 us-gaap Stockholders Equity Other
StockholdersEquityOther
10923944 USD
CY2013 us-gaap Stockholders Equity Other
StockholdersEquityOther
-5440175 USD
CY2011Q3 us-gaap Stock Issued During Period Shares Other
StockIssuedDuringPeriodSharesOther
3022617 shares
CY2012 us-gaap Stock Issued During Period Value New Issues
StockIssuedDuringPeriodValueNewIssues
4757470 USD
CY2013 us-gaap Stock Issued During Period Value New Issues
StockIssuedDuringPeriodValueNewIssues
118862500 USD
us-gaap Stock Issued During Period Value Other
StockIssuedDuringPeriodValueOther
60452340 USD
CY2012 us-gaap Stock Repurchased And Retired During Period Value
StockRepurchasedAndRetiredDuringPeriodValue
14181259 USD
CY2013 us-gaap Stock Repurchased And Retired During Period Value
StockRepurchasedAndRetiredDuringPeriodValue
133000 USD
CY2013 us-gaap Threshold Period Past Due For Writeoff Of Financing Receivable
ThresholdPeriodPastDueForWriteoffOfFinancingReceivable
P60D
CY2012 us-gaap Unrealized Gain Loss On Derivatives And Commodity Contracts
UnrealizedGainLossOnDerivativesAndCommodityContracts
-890442 USD
CY2013 us-gaap Unrealized Gain Loss On Derivatives And Commodity Contracts
UnrealizedGainLossOnDerivativesAndCommodityContracts
1281997 USD
us-gaap Unrealized Gain Loss On Derivatives And Commodity Contracts
UnrealizedGainLossOnDerivativesAndCommodityContracts
-254302 USD
CY2012 us-gaap Unrealized Gain Loss On Securities
UnrealizedGainLossOnSecurities
17793339 USD
CY2013 us-gaap Unrealized Gain Loss On Securities
UnrealizedGainLossOnSecurities
-7170706 USD
us-gaap Unrealized Gain Loss On Securities
UnrealizedGainLossOnSecurities
-5960301 USD
CY2013 us-gaap Use Of Estimates
UseOfEstimates
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CY2012 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
2773845 shares
CY2012Q4 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
2215057 shares
CY2012Q1 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
3022617 shares
CY2012Q2 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
3022617 shares
CY2012Q3 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
2843203 shares
CY2013 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
8200280 shares
CY2013Q1 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
6068967 shares
CY2013 zfc Payments Of Dividends Common Stock And Noncontrolling Interest
PaymentsOfDividendsCommonStockAndNoncontrollingInterest
10410426 USD
zfc Payments Of Dividends Common Stock And Noncontrolling Interest
PaymentsOfDividendsCommonStockAndNoncontrollingInterest
USD
CY2013Q2 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
8897800 shares
CY2013Q3 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
8897800 shares
CY2013Q4 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
9594150 shares
us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
3022617 shares
CY2012 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
2724252 shares
CY2012Q4 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
2018302 shares
CY2012Q1 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
3022617 shares
CY2012Q2 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
3022617 shares
CY2012Q3 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
2843203 shares
CY2013 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
7273366 shares
CY2013Q1 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
5142053 shares
CY2013Q2 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
7970886 shares
CY2013Q3 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
7970886 shares
CY2013Q4 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
7970886 shares
us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
3022617 shares
CY2012 zfc Distributions Percentage Of Income Distributed
DistributionsPercentageOfIncomeDistributed
0.844 pure
CY2013 zfc Distributions Percentage Of Income Distributed
DistributionsPercentageOfIncomeDistributed
1 pure
CY2012 zfc Distributions Percentage Return Of Capital To Stockholders
DistributionsPercentageReturnOfCapitalToStockholders
0.156 pure
CY2012 zfc Net Income Loss Available To Common Stockholders And Common Stock Repurchase Liability
NetIncomeLossAvailableToCommonStockholdersAndCommonStockRepurchaseLiability
19887849 USD
CY2013 zfc Net Income Loss Available To Common Stockholders And Common Stock Repurchase Liability
NetIncomeLossAvailableToCommonStockholdersAndCommonStockRepurchaseLiability
6657728 USD
zfc Net Income Loss Available To Common Stockholders And Common Stock Repurchase Liability
NetIncomeLossAvailableToCommonStockholdersAndCommonStockRepurchaseLiability
-5134466 USD
CY2012 zfc Payments Of Dividends Common Stock And Noncontrolling Interest
PaymentsOfDividendsCommonStockAndNoncontrollingInterest
10588722 USD
CY2012 zfc Preferred Stock Issued During Period Value New Issues
PreferredStockIssuedDuringPeriodValueNewIssues
115499 USD
CY2012 zfc Proceeds From Sale Of Real Estate Securities
ProceedsFromSaleOfRealEstateSecurities
74216314 USD
CY2013 zfc Proceeds From Sale Of Real Estate Securities
ProceedsFromSaleOfRealEstateSecurities
291348906 USD
zfc Proceeds From Sale Of Real Estate Securities
ProceedsFromSaleOfRealEstateSecurities
7216183 USD
CY2012 zfc Profit Loss Attributable To Common Stockholders
ProfitLossAttributableToCommonStockholders
20250173 USD
CY2013 zfc Profit Loss Attributable To Common Stockholders
ProfitLossAttributableToCommonStockholders
7538086 USD
zfc Profit Loss Attributable To Common Stockholders
ProfitLossAttributableToCommonStockholders
-5134466 USD
CY2012Q4 zfc Stock Issued During Period Value Subsidiary And Reporting Entity
StockIssuedDuringPeriodValueSubsidiaryAndReportingEntity
25151174 USD
CY2012 zfc Unrealized Gain Loss On Mortgage Loans
UnrealizedGainLossOnMortgageLoans
USD
CY2013 zfc Unrealized Gain Loss On Mortgage Loans
UnrealizedGainLossOnMortgageLoans
7136482 USD
zfc Unrealized Gain Loss On Mortgage Loans
UnrealizedGainLossOnMortgageLoans
USD

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