Altisource Asset Management Corporation Reports Third Quarter 2018 Results
November 07 2018 - 7:30AM
Altisource Asset Management Corporation (“AAMC” or the “Company”)
(NYSE MKT: AAMC) today announced financial and operating results
for the third quarter of 2018.
Third Quarter 2018 Highlights and Recent
Developments
- Advised Front Yard Residential Corporation (“Front Yard”) on
the acquisition of property manager HavenBrook Partners, LLC
(“HavenBrook”) and the 3,236 affordable single-family rental
(“SFR”) homes managed by HavenBrook, growing Front Yard's SFR
portfolio to approximately 15,000 homes.
- Transition of ASPS-managed homes to Front Yard's HavenBrook
platform is ahead of schedule: 2,245 homes were transferred by
October 31, 2018 and the remaining 1,815 homes will be moved by the
end of November 2018.
- Following this transition, approximately 7,300 homes will be
internally managed by Front Yard.
- Maintained strong operating metrics for Front Yard during
integration of HavenBrook.
- Reduced Front Yard's remaining legacy REOs to 133, down 30%
from 190 at June 30, 2018 and 73% from 490 at December 31,
2017.
- Obtained $508.7 million of 10-year, fixed rate financing for
Front Yard as part of Freddie Mac's affordable SFR pilot program in
connection with the HavenBrook acquisition.
- Continued optimization of Front Yard's financing: capped an
additional $172.4 million of financing on October 16, 2018,
bringing its fixed-rate or capped financing of total debt to 88%
with a weighted average maturity of five years.
“Front Yard’s internalization of property management under our
guidance is ahead of schedule, and we continue to maintain strong
operating metrics for Front Yard despite the costs associated with
the integration of HavenBrook,” stated Chief Executive Officer
George Ellison. “We believe Front Yard’s internal property
management platform will enable it to drive operating efficiencies,
improve service to its tenants and unlock Front Yard’s shareholder
value. As Front Yard realizes the advantages of this structure,
AAMC should benefit as well.”
Third Quarter 2018 Financial Results
AAMC’s net loss attributable to common stockholders for the
third quarter of 2018 was $1.2 million, or $0.75 per diluted share,
which included a $0.7 million change in the fair value of its
shares of Front Yard common stock, compared to $2.2 million, or
$1.38 per diluted share, for the third quarter of 2017. AAMC’s net
loss attributable to common stockholders for the nine months ended
September 30, 2018 was $6.7 million, or $4.19 per diluted share,
which included a $(1.6) million change in the fair value of its
shares of Front Yard common stock, compared to $5.3 million, or
$3.42 per diluted share, for the nine months ended September 30,
2017.
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; general economic and market conditions;
governmental regulations, taxes and policies; 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-rental real
estate 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 successfully and efficiently integrate
and manage Front Yard’s newly acquired property manager or
effectively manage the performance of Front Yard’s internal
property manager at the level and/or the cost that it anticipates;
the failure of external property managers to effectively perform
their obligations under their agreements with Front Yard; 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 CorporationCondensed Consolidated
Statements of Operations(In thousands, except
share and per share
amounts)(Unaudited) |
|
|
Three months endedSeptember
30, |
|
Nine months endedSeptember
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Revenues: |
|
|
|
|
|
|
|
Management fees from Front Yard |
$ |
3,613 |
|
|
$ |
3,966 |
|
|
$ |
10,984 |
|
|
$ |
12,176 |
|
Conversion fees from Front Yard |
35 |
|
|
163 |
|
|
151 |
|
|
1,201 |
|
Expense reimbursements from Front Yard |
286 |
|
|
300 |
|
|
767 |
|
|
706 |
|
Total revenues |
3,934 |
|
|
4,429 |
|
|
11,902 |
|
|
14,083 |
|
Expenses: |
|
|
|
|
|
|
|
Salaries and employee benefits |
4,605 |
|
|
5,035 |
|
|
13,343 |
|
|
15,003 |
|
Legal and professional fees |
474 |
|
|
899 |
|
|
1,293 |
|
|
1,919 |
|
General and administrative |
993 |
|
|
778 |
|
|
2,783 |
|
|
2,661 |
|
Total expenses |
6,072 |
|
|
6,712 |
|
|
17,419 |
|
|
19,583 |
|
Other income (loss): |
|
|
|
|
|
|
|
Change in fair value of Front Yard common stock |
698 |
|
|
— |
|
|
(1,641 |
) |
|
— |
|
Dividend income on Front Yard common stock |
244 |
|
|
244 |
|
|
731 |
|
|
731 |
|
Other income |
58 |
|
|
41 |
|
|
150 |
|
|
68 |
|
Total other income (loss) |
1,000 |
|
|
285 |
|
|
(760 |
) |
|
799 |
|
Loss before income taxes |
(1,138 |
) |
|
(1,998 |
) |
|
(6,277 |
) |
|
(4,701 |
) |
Income tax expense |
17 |
|
|
127 |
|
|
309 |
|
|
484 |
|
Net loss |
(1,155 |
) |
|
(2,125 |
) |
|
(6,586 |
) |
|
(5,185 |
) |
Amortization of preferred stock issuance costs |
(52 |
) |
|
(52 |
) |
|
(155 |
) |
|
(155 |
) |
Net loss attributable to common stockholders |
$ |
(1,207 |
) |
|
$ |
(2,177 |
) |
|
$ |
(6,741 |
) |
|
$ |
(5,340 |
) |
|
|
|
|
|
|
|
|
Loss per share of common stock – basic: |
|
|
|
|
|
|
|
Loss per basic share |
$ |
(0.75 |
) |
|
$ |
(1.38 |
) |
|
$ |
(4.19 |
) |
|
$ |
(3.42 |
) |
Weighted average common stock outstanding – basic |
1,613,413 |
|
|
1,574,822 |
|
|
1,609,932 |
|
|
1,562,056 |
|
|
|
|
|
|
|
|
|
Loss per share of common stock – diluted: |
|
|
|
|
|
|
|
Loss per diluted share |
$ |
(0.75 |
) |
|
$ |
(1.38 |
) |
|
$ |
(4.19 |
) |
|
$ |
(3.42 |
) |
Weighted average common stock outstanding – diluted |
1,613,413 |
|
|
1,574,822 |
|
|
1,609,932 |
|
|
1,562,056 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Altisource Asset
Management CorporationCondensed Consolidated
Balance Sheets(In thousands, except share and per
share amounts) |
|
|
September 30,
2018 |
|
December 31,
2017 |
|
(unaudited) |
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
30,194 |
|
|
$ |
33,349 |
|
Short-term investments |
279 |
|
|
625 |
|
Front Yard common stock, at fair value |
17,625 |
|
|
19,266 |
|
Receivable from Front Yard |
4,006 |
|
|
4,151 |
|
Prepaid expenses and other assets |
1,172 |
|
|
1,022 |
|
Total current assets |
53,276 |
|
|
58,413 |
|
Other non-current assets |
1,638 |
|
|
1,974 |
|
Total assets |
$ |
54,914 |
|
|
$ |
60,387 |
|
|
|
|
|
Current liabilities: |
|
|
|
Accrued salaries and employee benefits |
$ |
4,603 |
|
|
$ |
5,651 |
|
Accounts payable and other accrued liabilities |
888 |
|
|
2,085 |
|
Total liabilities |
5,491 |
|
|
7,736 |
|
|
|
|
|
Commitments and contingencies |
— |
|
|
— |
|
|
|
|
|
Redeemable preferred stock: |
|
|
|
Preferred stock, $0.01 par value, 250,000 shares issued and
outstanding as of September 30, 2018 and December 31, 2017;
redemption value $250,000 |
249,701 |
|
|
249,546 |
|
|
|
|
|
Stockholders' deficit: |
|
|
|
Common stock, $0.01 par value, 5,000,000 authorized shares;
2,835,046 and 1,613,852 shares issued and outstanding,
respectively, as of September 30, 2018 and 2,815,122 and 1,599,210
shares issued and outstanding, respectively, as of December 31,
2017 |
28 |
|
|
28 |
|
Additional paid-in capital |
41,475 |
|
|
37,765 |
|
Retained earnings |
30,899 |
|
|
38,970 |
|
Accumulated other comprehensive loss |
— |
|
|
(1,330 |
) |
Treasury stock, at cost, 1,221,194 shares as of September 30, 2018
and 1,215,912 shares as of December 31, 2017 |
(272,680 |
) |
|
(272,328 |
) |
Total stockholders' deficit |
(200,278 |
) |
|
(196,895 |
) |
Total liabilities and equity |
$ |
54,914 |
|
|
$ |
60,387 |
|
|
|
FOR FURTHER INFORMATION CONTACT: |
Robin N. Lowe |
Chief Financial Officer |
T:
+1-345-815-9919 |
E:
Robin.Lowe@AltisourceAMC.com |
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