Altisource Asset Management Corporation Reports Fourth Quarter and Full Year 2019 Results
February 28 2020 - 7:30AM
Altisource Asset Management Corporation (“AAMC” or the “Company”)
(NYSE American: AAMC) today announced financial and operating
results for the fourth quarter and full year of 2019.
Fourth Quarter 2019 Highlights and
Recent Developments
- Negotiated the entry by Front Yard Residential Corporation
(“Front Yard”) into a definitive merger agreement on February 17,
2020 with affiliates of Amherst Residential, LLC (“Amherst”)
whereby Amherst will acquire Front Yard for $12.50 per share in a
transaction valued at approximately $2.3 billion, including debt to
be assumed or refinanced.
- Increased Front Yard's rental revenue by 2.6% over third
quarter 2019 to $52.1 million.
- Managed the improvement in Front Yard's key operating
metrics.
- Advised Front Yard in the sale of 92 non-core homes for a $1.5
million gain over carrying value and negotiated the divestiture of
Front Yard's remaining mortgage loans.
- Appointed Indroneel Chatterjee as Co-Chief Executive Officer to
develop new business, including asset management services,
investments in real estate related assets or other businesses that
leverage his experience and our acquisition and portfolio
management teams.
“We saw strong improvement in Front Yard’s operating metrics in
the fourth quarter of 2019 as we started to see the results of our
initiatives to overcome the operating challenges faced by Front
Yard in 2019 following the transition of approximately 12,000
properties onto Front Yard’s internal property management
platform,” stated Co-Chief Executive Officer George Ellison. “We
believe that the transaction with Amherst allows us to realize
immediate value for Front Yard’s shareholders and provides capital
for AAMC to pursue new business opportunities.”
“I am pleased to join the AAMC team as we look to engage in new
lines of business and optimize our cost structure to create
shareholder value,” stated Co-Chief Executive Officer Indroneel
Chatterjee. “We are actively pursuing opportunities to diversify
our revenues by harnessing our resources in acquisitions and
portfolio management.”
Fourth Quarter and Full Year 2019 GAAP Financial
Results
Net loss for the fourth quarter of 2019 totaled $1.5 million, or
$1.00 per diluted common share, which included a $1.3
million change in the fair value of its shares of Front Yard
common stock, compared to a net loss of $4.3 million, or $2.69
per diluted common share, for the fourth quarter of 2018, which
included a $(3.4) million change in the fair value of its shares of
Front Yard common stock.
Net loss for the year ended December 31, 2019 totaled $2.6
million, or $1.77 per diluted common share, which included
a $5.9 million change in the fair value of its shares of
Front Yard common stock, compared to net loss of $10.9
million, or $6.88 per diluted common share, for the year ended
December 31, 2018, which included a $(5.1) million change
in the fair value of its shares of Front Yard common stock.
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 within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, regarding management’s beliefs, estimates, projections,
anticipations and assumptions with respect to, among other things,
the Company’s financial results, future operations, business plans
and investment strategies as well as industry and market
conditions. These statements may be identified by words such as
“anticipate,” “intend,” “expect,” “may,” “could,” “should,”
“would,” “plan,” “estimate,” “target,” “seek,” “believe” and other
expressions or words of similar meaning. We caution that
forward-looking statements are qualified by the existence of
certain risks and uncertainties that could cause actual results and
events to differ materially from what is contemplated by the
forward-looking statements. Factors that could cause our actual
results to differ materially from these forward-looking statements
may include, without limitation, our ability to implement our
business strategy and the business strategy of Front Yard; our
ability to retain Front Yard as a client; the likelihood that Front
Yard (or its successor) will terminate our asset management
agreement with Front Yard upon consummation of a merger to which
Front Yard agreed on February 17, 2020; our ability to develop and
implement new businesses or, to the extent such businesses are
developed, our ability to make them successful or sustain the
performance of any such businesses; our ability to retain and
maintain our strategic relationships; the ability of Front Yard to
generate returns in amounts that would enable our management fees
to increase; our ability to obtain additional asset management
clients or businesses; our ability to effectively compete with our
competitors; Front Yard's ability to complete future or pending
transactions; the failure of service providers to effectively
perform their obligations under their agreements with us; our
ability to integrate newly acquired rental assets into Front Yard's
portfolio; our ability to effectively manage the performance of
Front Yard’s internal property manager at the level and/or the cost
that it anticipates; developments in the litigation 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 are not obligated to redeem any of the Series A Shares on the
upcoming March 15, 2020 redemption date if we do 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;
our failure to maintain Front Yard's qualification as a REIT; 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.
Altisource Asset Management
CorporationConsolidated Statements of
Operations(In thousands, except share and per
share amounts)
|
Three Months EndedDecember
31, |
|
Year EndedDecember 31, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
(unaudited) |
|
(unaudited) |
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
Management fees from Front Yard |
$ |
3,584 |
|
|
$ |
3,583 |
|
|
$ |
14,270 |
|
|
$ |
14,567 |
|
Conversion fees from Front
Yard |
— |
|
|
25 |
|
|
29 |
|
|
176 |
|
Expense reimbursements from
Front Yard |
543 |
|
|
416 |
|
|
1,463 |
|
|
1,183 |
|
Total revenues |
4,127 |
|
|
4,024 |
|
|
15,762 |
|
|
15,926 |
|
Expenses: |
|
|
|
|
|
|
|
Salaries and employee
benefits |
4,154 |
|
|
3,977 |
|
|
17,029 |
|
|
17,320 |
|
Legal and professional
fees |
1,524 |
|
|
312 |
|
|
3,611 |
|
|
1,605 |
|
General and
administrative |
1,129 |
|
|
826 |
|
|
4,147 |
|
|
3,609 |
|
Total expenses |
6,807 |
|
|
5,115 |
|
|
24,787 |
|
|
22,534 |
|
Other
income: |
|
|
|
|
|
|
|
Change in fair value of Front
Yard common stock |
1,267 |
|
|
(3,443 |
) |
|
5,864 |
|
|
(5,084 |
) |
Dividend income on Front Yard
common stock |
— |
|
|
244 |
|
|
731 |
|
|
975 |
|
Other income |
39 |
|
|
66 |
|
|
155 |
|
|
216 |
|
Total other income (loss) |
1,306 |
|
|
(3,133 |
) |
|
6,750 |
|
|
(3,893 |
) |
Loss before income taxes |
(1,374 |
) |
|
(4,224 |
) |
|
(2,275 |
) |
|
(10,501 |
) |
Income tax expense |
165 |
|
|
66 |
|
|
338 |
|
|
375 |
|
Net loss |
(1,539 |
) |
|
(4,290 |
) |
|
(2,613 |
) |
|
(10,876 |
) |
Amortization of preferred
stock issuance costs |
(51 |
) |
|
(51 |
) |
|
(206 |
) |
|
(206 |
) |
Net loss attributable to common stockholders |
$ |
(1,590 |
) |
|
$ |
(4,341 |
) |
|
$ |
(2,819 |
) |
|
$ |
(11,082 |
) |
|
|
|
|
|
|
|
|
Loss per share of
common stock – basic: |
|
|
|
|
|
|
|
Loss per basic common
share |
$ |
(1.00 |
) |
|
$ |
(2.69 |
) |
|
$ |
(1.77 |
) |
|
$ |
(6.88 |
) |
Weighted average common stock
outstanding – basic |
1,597,384 |
|
|
1,615,848 |
|
|
1,589,952 |
|
|
1,611,424 |
|
Loss per share of
common stock – diluted: |
|
|
|
|
|
|
|
Loss per diluted common
share |
$ |
(1.00 |
) |
|
$ |
(2.69 |
) |
|
$ |
(1.77 |
) |
|
$ |
(6.88 |
) |
Weighted average common stock
outstanding – diluted |
1,597,384 |
|
|
1,615,848 |
|
|
1,589,952 |
|
|
1,611,424 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Altisource Asset Management
CorporationConsolidated Balance
Sheets(In thousands, except share and per share
amounts)
|
December 31, 2019 |
|
December 31, 2018 |
Current
assets: |
|
|
|
Cash and cash equivalents |
$ |
19,965 |
|
|
$ |
27,171 |
|
Short-term investments |
517 |
|
|
584 |
|
Front Yard common stock |
20,046 |
|
|
14,182 |
|
Receivable from Front
Yard |
5,014 |
|
|
3,968 |
|
Prepaid expenses and other
assets |
1,609 |
|
|
1,552 |
|
Total current assets |
47,151 |
|
|
47,457 |
|
Non-current
assets: |
|
|
|
Right-of-use lease assets |
4,339 |
|
|
— |
|
Other non-current assets |
1,758 |
|
|
1,910 |
|
Total non-current assets |
6,097 |
|
|
1,910 |
|
Total assets |
$ |
53,248 |
|
|
$ |
49,367 |
|
|
|
|
|
Current
liabilities: |
|
|
|
Accrued salaries and employee
benefits |
$ |
5,407 |
|
|
$ |
5,583 |
|
Accounts payable and accrued
liabilities |
1,328 |
|
|
1,188 |
|
Short-term lease
liabilities |
265 |
|
|
— |
|
Total current liabilities |
7,000 |
|
|
6,771 |
|
Long-term lease
liabilities |
4,218 |
|
|
— |
|
Total liabilities |
11,218 |
|
|
6,771 |
|
|
|
|
|
Commitments and
contingencies |
— |
|
|
— |
|
|
|
|
|
Redeemable preferred
stock: |
|
|
|
Series A preferred stock,
$0.01 par value, 250,000 shares issued and outstanding as of
December 31, 2019 and 2018; redemption value $250,000 |
249,958 |
|
|
249,752 |
|
|
|
|
|
Stockholders'
deficit: |
|
|
|
Common stock, $.01 par value,
5,000,000 authorized shares; 2,897,177 and 1,598,512 shares issued
and outstanding, respectively, as of December 31, 2019 and
2,862,760 and 1,573,691 shares issued and outstanding,
respectively, as of December 31, 2018 |
29 |
|
|
29 |
|
Additional paid-in
capital |
44,646 |
|
|
42,245 |
|
Retained earnings |
23,662 |
|
|
26,558 |
|
Accumulated other
comprehensive loss |
(33 |
) |
|
— |
|
Treasury stock, at cost,
1,298,665 and 1,289,069 shares as of December 31, 2019 and 2018,
respectively |
(276,232 |
) |
|
(275,988 |
) |
Total stockholders'
deficit |
(207,928 |
) |
|
(207,156 |
) |
Total liabilities and equity |
$ |
53,248 |
|
|
$ |
49,367 |
|
|
FOR FURTHER
INFORMATION CONTACT: |
Investor Relations |
T: 1-704-558-3068 |
E:
InvestorRelations@AltisourceAMC.com |
Altisource Asset Managem... (AMEX:AAMC)
Historical Stock Chart
From Aug 2024 to Sep 2024
Altisource Asset Managem... (AMEX:AAMC)
Historical Stock Chart
From Sep 2023 to Sep 2024