Altisource Asset Management Corporation Reports First Quarter 2021 Results
May 18 2021 - 8:17AM
Altisource Asset Management Corporation (“AAMC” or the “Company”)
(NYSE American: AAMC) today announced financial and operating
results for the first quarter of 2021.
First Quarter 2021 Highlights and Recent
Developments
- Fueled by cash resources emanating from the sales and
termination of discontinued operations late last year, the Company
invested in equity securities concentrated in Real Estate
Investment Trusts (“REITs”). The purpose was to secure investment
income while the Company reviews new business opportunities.
- Net income of $5.9 million for the first quarter was fueled in
part by (i) the market value appreciation of those REIT equity
securities as well as the associated dividend income, and (ii) the
gain on the sale of subsidiaries to Front Yard Residential
Corporation.
- Settled ongoing litigation with Putnam Investments, LLC and its
affiliates (collectively “Putnam”), one of the plaintiffs in the
litigation related to the Company’s Series A Convertible Preferred
Stock.
“The Company’s attention and focus,” stated Thomas K. McCarthy,
Interim Chief Executive Officer, “is to identify, evaluate and
where applicable, pursue new business opportunities. In the
meantime, the Company is keeping its options open and no final
decision has been made.”
First Quarter 2021 Financial Results
AAMC’s net income for the first quarter of 2021 was $5.9 million
compared to a net loss of $3.8 million for the same period in 2020.
Due to a $71.9 million gain on the settlement of preferred shares,
which was recorded directly to equity, but is included in the
numerator for our earnings per share calculations, diluted earnings
per share was $37.41 for the quarter, compared with a diluted net
loss per share of $2.35 for the same period in 2020.
About AAMC
AAMC has historically been an asset management company that
provides portfolio management and corporate governance services to
investment vehicles but given the sale and discontinuance of
certain operations the Company is in the process of repositioning
itself. 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 new
businesses or, to the extent such businesses are developed, our
ability to make them successful or sustain the performance of any
such businesses; developments in the litigation regarding our
redemption obligations under the Certificate of Designations of our
Series A Convertible Preferred Stock; 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
Corporation Condensed Consolidated Statements of
Operations (In thousands, except share and per
share amounts)(Unaudited)
|
Three months ended March 31, |
|
2021 |
|
2020 |
Expenses: |
|
|
|
Salaries and employee benefits |
$ |
3,545 |
|
|
$ |
3,094 |
|
Legal and professional
fees |
1,885 |
|
|
1,480 |
|
General and
administrative |
753 |
|
|
586 |
|
Total expenses |
6,183 |
|
|
5,160 |
|
|
|
|
|
Other income
(loss): |
|
|
|
Change in fair value of Front
Yard common stock |
146 |
|
|
(634 |
) |
Dividend income on Front Yard
common stock |
— |
|
|
244 |
|
Change in fair value of equity
securities |
5,721 |
|
|
— |
|
Dividend income |
2,154 |
|
|
— |
|
Interest expense |
(36 |
) |
|
— |
|
Other income |
135 |
|
|
18 |
|
Total other income (loss) |
8,120 |
|
|
(372 |
) |
|
|
|
|
Net income (loss) from
continuing operations before income taxes |
1,937 |
|
|
(5,532 |
) |
Income tax expense |
2,294 |
|
|
122 |
|
Net loss from continuing operations |
(357 |
) |
|
(5,654 |
) |
|
|
|
|
Discontinued
operations: |
|
|
|
Income from operations related
to Front Yard, net of tax |
— |
|
|
1,897 |
|
Gain on disposal of operations
related to Front Yard |
7,485 |
|
|
— |
|
Income tax expense related to
disposal |
1,272 |
|
|
— |
|
Net gain on discontinued operations |
6,213 |
|
|
1,897 |
|
|
|
|
|
Net income (loss) |
5,856 |
|
|
(3,757 |
) |
Amortization of preferred
stock issuance costs |
— |
|
|
(42 |
) |
Net income (loss) attributable to common stockholders |
$ |
5,856 |
|
|
$ |
(3,799 |
) |
|
|
|
|
Continuing operations earnings
per share |
|
|
|
Net loss from continuing
operations |
$ |
(357 |
) |
|
(5,654 |
) |
Reverse amortization of preferred stock issuance costs |
— |
|
|
42 |
|
Gain on preferred stock transaction |
71,883 |
|
|
— |
|
Numerator for earnings
per share from continuing operations |
$ |
71,526 |
|
|
$ |
(5,612 |
) |
|
|
|
|
Discontinued operations
earnings per share |
|
|
|
Net income from
discontinued operations |
$ |
6,213 |
|
|
$ |
1,897 |
|
|
|
|
|
Earnings (loss) per
share of common stock – basic: |
|
|
|
Continuing operations –
basic |
$ |
38.78 |
|
|
$ |
(3.52 |
) |
Discontinued operations –
basic |
3.37 |
|
|
1.17 |
|
Earnings (loss) per basic
common share |
$ |
42.15 |
|
|
$ |
(2.35 |
) |
Weighted average common stock
outstanding – basic |
1,844,212 |
|
|
1,615,710 |
|
|
|
|
|
Earnings (loss) per
share of common stock – diluted: |
|
|
|
Continuing operations –
diluted |
$ |
34.42 |
|
|
$ |
(3.52 |
) |
Discontinued operations –
diluted |
2.99 |
|
|
1.17 |
|
Earnings (loss) per diluted
common share |
$ |
37.41 |
|
|
$ |
(2.35 |
) |
Weighted average common stock
outstanding – diluted |
2,078,077 |
|
|
1,615,710 |
|
Altisource Asset Management
Corporation Condensed Consolidated Balance
Sheets (In thousands, except share and per share
amounts)
|
March 31, 2021 |
|
December 31, 2020 |
|
(unaudited) |
|
|
Current
assets: |
|
|
|
Cash and cash equivalents |
$ |
14,902 |
|
|
$ |
41,623 |
|
Equity securities, at fair
value |
102,672 |
|
|
— |
|
Front Yard common stock, at
fair value |
— |
|
|
47,355 |
|
Receivable from Front
Yard |
— |
|
|
3,414 |
|
Dividends receivable |
2,012 |
|
|
— |
|
Prepaid expenses and other
assets |
2,882 |
|
|
3,328 |
|
Current assets held for
sale |
— |
|
|
894 |
|
Total current assets |
122,468 |
|
|
96,614 |
|
|
|
|
|
Non-current
assets: |
|
|
|
Right-of-use lease assets |
932 |
|
|
656 |
|
Other non-current assets |
587 |
|
|
503 |
|
Non-current assets held for
sale |
— |
|
|
1,979 |
|
Total non-current assets |
1,519 |
|
|
3,138 |
|
Total assets |
$ |
123,987 |
|
|
$ |
99,752 |
|
|
|
|
|
Current
liabilities: |
|
|
|
Accrued salaries and employee
benefits |
$ |
404 |
|
|
$ |
2,539 |
|
Accounts payable and accrued
liabilities |
1,668 |
|
|
9,152 |
|
Interest payable |
36 |
|
|
— |
|
Borrowed funds |
28,407 |
|
|
— |
|
Short-term lease
liabilities |
126 |
|
|
75 |
|
Current liabilities held for
sale |
— |
|
|
1,338 |
|
Total current liabilities |
30,641 |
|
|
13,104 |
|
|
|
|
|
Non-current
liabilities: |
|
|
|
Long-term lease
liabilities |
830 |
|
|
600 |
|
Other non-current
liabilities |
4,523 |
|
|
1,027 |
|
Non-current liabilities held
for sale |
— |
|
|
1,599 |
|
Total non-current liabilities |
5,353 |
|
|
3,226 |
|
Total liabilities |
35,994 |
|
|
16,330 |
|
|
|
|
|
Commitments and
contingencies (Note 6) |
— |
|
|
— |
|
|
|
|
|
Redeemable preferred
stock: |
|
|
|
Preferred stock, $0.01 par
value, 250,000 and 250,000 shares issued as March 31, 2021
andDecember 31, 2020, respectively. 168,200 shares outstanding
and $168,200 redemption value as ofMarch 31, 2021 and 250,000
shares outstanding and $250,000 redemption value as of
December 31,2020 |
168,200 |
|
|
250,000 |
|
|
|
|
|
Stockholders'
deficit: |
|
|
|
Common stock, $0.01 par value,
5,000,000 authorized shares; 3,407,919 and 2,048,319 shares
issuedand outstanding, respectively, as of March 31, 2021 and
2,966,207 and 1,650,212 shares issued andoutstanding, respectively,
as of December 31, 2020 |
34 |
|
|
30 |
|
Additional paid-in
capital |
127,953 |
|
|
46,574 |
|
Retained earnings |
69,310 |
|
|
63,426 |
|
Accumulated other
comprehensive loss |
58 |
|
|
(65 |
) |
Treasury stock, at cost,
1,359,600 shares as of March 31, 2021 and 1,315,995 shares as
ofDecember 31, 2020 |
(277,562 |
) |
|
(276,543 |
) |
Total stockholders' deficit |
(80,207 |
) |
|
(166,578 |
) |
Total liabilities and equity |
$ |
123,987 |
|
|
$ |
99,752 |
|
|
FOR FURTHER
INFORMATION CONTACT: |
|
Investor Relations |
|
T: +1-704-275-9113 |
|
E: IR@AltisourceAMC.com |
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