Altisource Asset Management Corporation Reports First Quarter 2020 Results
May 11 2020 - 7:30AM
Altisource Asset Management Corporation (“AAMC” or the “Company”)
(NYSE American: AAMC) today announced financial and operating
results for the first quarter of 2020.
First Quarter 2020 Highlights and Recent
Developments
- Increased Front Yard Residential
Corporation's (“Front Yard”) rental revenues to $54.3 million for
the first quarter of 2020, up 4.3% over the fourth quarter of
2019.
- Managed continued improvement in Front
Yard's operating metrics, yielding its best ever quarterly
operational results.
- Advised Front Yard in the sale of 82
non-core homes for a $1.5 million gain over carrying value.
- Negotiated the settlement by Front
Yard, at the direction of the Front Yard Board, to terminate the
previously announced merger agreement with Amherst Residential, LLC
(“Amherst”), providing Front Yard with up to $100 million of
additional liquidity.
- Further developed new business
opportunities for AAMC, forming cash management and fund entities
to explore market dislocation opportunities for AAMC’s
stockholders.
“While we of course are extremely disappointed that
the merger of Front Yard and Amherst was not consummated, we
believe that the settlement puts Front Yard in a strong liquidity
position that should help it deliver long-term value for its
stockholders,” stated George Ellison, Co-Chief Executive Officer.
“We are also very pleased about the substantially improved
operational performance that we achieved for Front Yard in the
first quarter of 2020, which has continued into April, proving that
the business model of Front Yard works and can produce attractive
results.”
“AAMC has the expertise and the capital to invest
in real estate related assets and originators to collect asset
management fees and, potentially, interest income to take advantage
of the current market dislocation to drive value for our
stockholders,” stated Indroneel Chatterjee, Co-Chief Executive
Officer.
First Quarter 2020 Financial
Results
AAMC’s net loss for the first quarter of 2020 was
$3.8 million, or $2.35 per diluted common share, which included a
$(0.6) million change in the fair value of its shares of Front Yard
common stock, compared to a net loss of $0.8 million, or $0.56 per
diluted common share, which included a $0.9 million change in the
fair value of its shares of Front Yard common stock, for the first
quarter of 2019.
About AAMC
AAMC is an asset management company that provides
portfolio management and corporate governance services to
investment vehicles. Additional information is available at
www.altisourceamc.com.
Forward-looking Statements
This press release contains forward-looking
statements that involve a number of risks and uncertainties. Those
forward-looking statements include all statements that are not
historical fact, including statements about management’s beliefs
and expectations. Forward-looking statements are based on
management’s beliefs as well as assumptions made by and information
currently available to management. Because such statements are
based on expectations as to future economic performance and are not
statements of historical fact, actual results may differ materially
from those projected. The risks and uncertainties to which
forward-looking statements are subject include, but are not limited
to: AAMC’s ability to implement its business plan; AAMC's ability
to leverage strategic relationships on an efficient and
cost-effective basis; AAMC's and Front Yard's ability to compete;
Front Yard’s ability to implement its business plan; the likelihood
of Front Yard terminating our asset management agreement with Front
Yard; our ability to obtain and/or build additional asset
management clients and revenue streams; the potential for the
COVID-19 pandemic to adversely affect our business; AAMC's ability
to generate adequate and timely sources of liquidity and financing
for itself or Front Yard; Front Yard’s ability to sell non-core
assets on favorable terms or at all; AAMC's ability to identify and
acquire assets for Front Yard’s portfolio; Front Yard’s ability to
complete potential transactions in accordance with anticipated
terms and on a timely basis or at all; AAMC’s ability to integrate
newly acquired rental assets into Front Yard’s portfolio; the
ability to effectively manage the performance of Front Yard’s
internal property manager at the level and/or the cost that it
anticipates; the failure of third party vendors to effectively
perform their obligations under their respective agreements with
AAMC or Front Yard; our failure to maintain Front Yard’s
qualification as a REIT; developments in the litigations regarding
our redemption obligations under the Certificate of Designations of
our Series A Convertible Preferred Stock (the “Series A Shares”),
including our ability to obtain declaratory relief confirming that
we were not obligated to redeem any of the Series A Shares on the
March 15, 2020 redemption date since we did not have funds legally
available to redeem all, but not less than all, of the Series A
Shares requested to be redeemed on that redemption date; general
economic and market conditions; governmental regulations, taxes and
policies and other risks and uncertainties detailed in the “Risk
Factors” and other sections described from time to time in the
Company’s current and future filings with the Securities and
Exchange Commission. The foregoing list of factors should not be
construed as exhaustive. The statements made in this press
release are current as of the date of this press release only. The
Company undertakes no obligation to publicly update or revise any
forward-looking statements or any other information contained
herein, whether as a result of new information, future events or
otherwise.
FOR FURTHER INFORMATION
CONTACT:Investor RelationsT: +1-704-885-2461E:
IR@AltisourceAMC.com
Altisource Asset Management
CorporationCondensed Consolidated Statements of
Operations(In thousands, except share and per
share amounts)(Unaudited)
|
Three months ended March 31, |
|
2020 |
|
2019 |
Revenues: |
|
|
|
Management fees from Front Yard |
$ |
3,584 |
|
|
$ |
3,546 |
|
Conversion fees from Front
Yard |
— |
|
|
29 |
|
Expense reimbursements from
Front Yard |
368 |
|
|
328 |
|
Total revenues |
3,952 |
|
|
3,903 |
|
Expenses: |
|
|
|
Salaries and employee
benefits |
4,544 |
|
|
4,418 |
|
Legal and professional
fees |
1,534 |
|
|
342 |
|
General and
administrative |
1,095 |
|
|
1,039 |
|
Total expenses |
7,173 |
|
|
5,799 |
|
Other income
(loss): |
|
|
|
Change in fair value of Front
Yard common stock |
(634 |
) |
|
877 |
|
Dividend income on Front Yard
common stock |
244 |
|
|
244 |
|
Other income |
37 |
|
|
4 |
|
Total other (loss) income |
(353 |
) |
|
1,125 |
|
Loss before income taxes |
(3,574 |
) |
|
(771 |
) |
Income tax expense |
183 |
|
|
69 |
|
Net loss |
(3,757 |
) |
|
(840 |
) |
Amortization of preferred
stock issuance costs |
(42 |
) |
|
(51 |
) |
Net loss attributable to common stockholders |
$ |
(3,799 |
) |
|
$ |
(891 |
) |
|
|
|
|
Loss per share of
common stock – basic: |
|
|
|
Loss per basic common
share |
$ |
(2.35 |
) |
|
$ |
(0.56 |
) |
Weighted average common stock
outstanding – basic |
1,615,710 |
|
|
1,582,016 |
|
|
|
|
|
Loss per share of
common stock – diluted: |
|
|
|
Loss per diluted common
share |
$ |
(2.35 |
) |
|
$ |
(0.56 |
) |
Weighted average common stock
outstanding – diluted |
1,615,710 |
|
|
1,582,016 |
|
|
|
|
|
|
|
Altisource Asset Management
CorporationCondensed Consolidated Balance
Sheets(In thousands, except share and per share
amounts)
|
March 31, 2020 |
|
December 31, 2019 |
|
(unaudited) |
|
|
Current
assets: |
|
|
|
Cash and cash equivalents |
$ |
16,731 |
|
|
$ |
19,965 |
|
Short-term investments |
— |
|
|
517 |
|
Front Yard common stock, at
fair value |
19,412 |
|
|
20,046 |
|
Receivable from Front
Yard |
4,140 |
|
|
5,014 |
|
Prepaid expenses and other
assets |
2,588 |
|
|
1,609 |
|
Total current assets |
42,871 |
|
|
47,151 |
|
|
|
|
|
Non-current
assets: |
|
|
|
Right-of-use lease assets |
4,157 |
|
|
4,339 |
|
Other non-current assets |
2,027 |
|
|
1,758 |
|
Total non-current assets |
6,184 |
|
|
6,097 |
|
Total assets |
$ |
49,055 |
|
|
$ |
53,248 |
|
|
|
|
|
Current
liabilities: |
|
|
|
Accrued salaries and employee
benefits |
$ |
4,650 |
|
|
$ |
5,407 |
|
Accounts payable and accrued
liabilities |
1,617 |
|
|
1,328 |
|
Short-term lease
liabilities |
270 |
|
|
265 |
|
Total current liabilities |
6,537 |
|
|
7,000 |
|
Long-term lease
liabilities |
4,049 |
|
|
4,218 |
|
Total liabilities |
10,586 |
|
|
11,218 |
|
|
|
|
|
Commitments and
contingencies |
— |
|
|
— |
|
|
|
|
|
Redeemable preferred
stock: |
|
|
|
Preferred stock, $0.01 par
value, 250,000 shares issued and outstanding as of March 31, 2020
and December 31, 2019; redemption value $250,000 |
250,000 |
|
|
249,958 |
|
|
|
|
|
Stockholders'
deficit: |
|
|
|
Common stock, $0.01 par value,
5,000,000 authorized shares; 2,936,739 and 1,626,259 shares issued
and outstanding, respectively, as of March 31, 2020 and 2,897,177
and 1,598,512 shares issued and outstanding, respectively, as of
December 31, 2019 |
29 |
|
|
29 |
|
Additional paid-in
capital |
45,127 |
|
|
44,646 |
|
Retained earnings |
19,863 |
|
|
23,662 |
|
Accumulated other
comprehensive loss |
(122 |
) |
|
(33 |
) |
Treasury stock, at cost,
1,310,480 shares as of March 31, 2020 and 1,298,665 shares as of
December 31, 2019 |
(276,428 |
) |
|
(276,232 |
) |
Total stockholders' deficit |
(211,531 |
) |
|
(207,928 |
) |
Total liabilities and equity |
$ |
49,055 |
|
|
$ |
53,248 |
|
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