WMIH CORPORATION (OTCMKTS:WMIH) submitted form 10-Q highlighting its quarterly numbers. As per the report, the company’s net income came at $5.5 million in 1Q2015 against a net loss of $3.4 million in the same period, a year earlier. The improvement in net income is primarily due to the line item stating that “change in fair value of derivative liability: embedded conversion feature.” It is a non-cash item that resulted in a $7.2 million benefit in 1Q2015. The figure will be analyzed each quarter and should not be dependent upon to result a gain of this magnitude on continuous basis failing which it can result in non-cash expenses in coming quarters.
The other factors
Apart from the abovementioned non-cash benefit, various other factors affected earnings, including decreased interest expenses and higher general and administrative expenses. The interest expense declined as a result of the considerable reductions in WMIH’s Runoff Note balances. The general and administrative expenses increased due to an increase in operations and the timing of expenses pertaining to preparation for annual meeting, held two months earlier compared to prior years.
The decline in revenue
WMIH revenue declined, as anticipated, due to the status of its primary operating subsidiary unit, WMMRC, functioning in runoff mode and the declining assets under trust due to prior commutations. The underwriting expenses were lower accounting for a net positive impact. The total revenue in 1Q2015 was $1.8 million against revenue of $2.8 million for the same quarter in 2014. The decline in revenue is largely due to the UGRIC commutation recorded in April, 2014. The investment income was $0.3 million lower compared to the same period in 2014 due to lower investments.
In last trading session, the stock price of WMIH declined 0.34% to close the trading session at $2.93. The decline came at a share volume of 199,049 compared to average share volume of 416,162.