Altisource Asset Management Corporation Reports Fourth Quarter and Full Year 2018 Results
27 Februar 2019 - 1:30PM
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 2018.
Fourth Quarter 2018 Highlights and
Recent Developments
- Conducted the transition of all ASPS-managed properties to
Front Yard Residential Corporation's (“Front Yard”) internal
property management platform ahead of schedule.
- Negotiated the transfer of the remaining 7,646 properties
managed by Main Street Renewal, LLC to Front Yard's internal
platform; 6,025 of such homes have already been transferred,
bringing total internally managed homes to 12,868 as of February
21, 2019.
- Advised Front Yard in refinancing its $489.3 million MSR Loan
Agreement with Morgan Stanley, with a credit spread reduction from
3.285% to 1.80%, LIBOR cap at 2.50% and increased funding to $505.0
million at an approximately 5% lower advance rate.
- Managed Front Yard's sale of 444 non-core homes on February 8,
2019 for an aggregate sales price of $102.9 million, resulting in a
net gain of $4.8 million that will be recognized by Front Yard in
Q1 2019.
- Maintained strong operating metrics for Front Yard during its
internalization of property management.
Full Year 2018 Highlights
- Advised Front Yard in 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 portfolio to approximately 15,000 homes.
- Managed Front Yard's liquidation of 386 legacy REO properties,
reducing the portfolio of legacy REO properties by 79% to 104 at
December 31, 2018 from 490 at December 31, 2017.
- Obtained $508.7 million of 10-year, 4.65% fixed rate,
non-amortizing financing for Front Yard as part of Freddie Mac's
affordable SFR pilot program.
- Continued to optimize Front Yard's financing: 87% of debt had
fixed or capped rates at December 31, 2018 compared to 64% at
December 31, 2017, and the weighted average debt maturity was 5.5
years at December 31, 2018 compared to 3.5 years at December 31,
2017.
“Our development and execution of Front Yard's strategic plan in
2018 resulted in a transformational year for our client,” stated
Chief Executive Officer George Ellison. “Under our management,
Front Yard made significant strides in the internalization of
property management while growing its rental portfolio and
strengthening its balance sheet with an improved financing
structure. These developments have laid the foundation for Front
Yard to achieve its operating targets, which will ultimately
benefit the stockholders of both Front Yard and AAMC.”
Fourth Quarter and Full Year 2018 GAAP Financial
Results
Net loss attributable to stockholders for the fourth quarter of
2018 totaled $4.3 million, or $2.69 per diluted common share, which
included a $(3.4) million change in the fair value of its
shares of Front Yard common stock, compared to a net loss
attributable to stockholders of $1.8 million, or $1.15 per diluted
common share, for the fourth quarter of 2017. Net loss attributable
to stockholders for the year ended December 31, 2018 totaled $10.9
million, or $6.88 per diluted common share, which included
a $(5.1) million change in the fair value of its shares
of Front Yard common stock, compared to net loss attributable
to stockholders of $7.0 million, or $4.57 per diluted common share,
for the year ended December 31, 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 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, AAMC's ability to implement its
business strategy and the business strategy of Front Yard; AAMC's
ability to retain Front Yard as a client; AAMC's ability to retain
and maintain our strategic relationships; the ability of Front Yard
to generate a return on invested capital in excess of applicable
hurdle rates under AAMC's management; AAMC's ability to obtain
additional asset management clients or businesses; AAMC's 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 AAMC and Front Yard; AAMC's 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; AAMC's 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 Ended December 31, |
|
Year Ended December 31, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
(unaudited) |
|
(unaudited) |
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
Management fees from
Front Yard |
$ |
3,583 |
|
|
$ |
3,834 |
|
|
$ |
14,567 |
|
|
$ |
16,010 |
|
Conversion fees from
Front Yard |
25 |
|
|
90 |
|
|
176 |
|
|
1,291 |
|
Expense reimbursements
from Front Yard |
416 |
|
|
153 |
|
|
1,183 |
|
|
859 |
|
Total
revenues |
4,024 |
|
|
4,077 |
|
|
15,926 |
|
|
18,160 |
|
Expenses: |
|
|
|
|
|
|
|
Salaries and employee
benefits |
3,977 |
|
|
4,390 |
|
|
17,320 |
|
|
19,393 |
|
Legal and professional
fees |
312 |
|
|
875 |
|
|
1,605 |
|
|
2,794 |
|
General and
administrative |
826 |
|
|
659 |
|
|
3,609 |
|
|
3,320 |
|
Total
expenses |
5,115 |
|
|
5,924 |
|
|
22,534 |
|
|
25,507 |
|
Other
income: |
|
|
|
|
|
|
|
Change in fair value of
Front Yard common stock |
(3,443 |
) |
|
— |
|
|
(5,084 |
) |
|
— |
|
Dividend income on
Front Yard common stock |
244 |
|
|
244 |
|
|
975 |
|
|
975 |
|
Other income |
66 |
|
|
43 |
|
|
216 |
|
|
111 |
|
Total
other (loss) income |
(3,133 |
) |
|
287 |
|
|
(3,893 |
) |
|
1,086 |
|
Loss before income
taxes |
(4,224 |
) |
|
(1,560 |
) |
|
(10,501 |
) |
|
(6,261 |
) |
Income tax expense |
66 |
|
|
224 |
|
|
375 |
|
|
708 |
|
Net loss
attributable to stockholders |
(4,290 |
) |
|
(1,784 |
) |
|
(10,876 |
) |
|
(6,969 |
) |
Amortization of
preferred stock issuance costs |
(51 |
) |
|
(51 |
) |
|
(206 |
) |
|
(206 |
) |
Net loss
attributable to common stockholders |
$ |
(4,341 |
) |
|
$ |
(1,835 |
) |
|
$ |
(11,082 |
) |
|
$ |
(7,175 |
) |
|
|
|
|
|
|
|
|
Loss per share
of common stock – basic: |
|
|
|
|
|
|
|
Loss per basic common
share |
$ |
(2.69 |
) |
|
$ |
(1.15 |
) |
|
$ |
(6.88 |
) |
|
$ |
(4.57 |
) |
Weighted average common
stock outstanding – basic |
1,615,848 |
|
|
1,595,272 |
|
|
1,611,424 |
|
|
1,570,428 |
|
Loss per share
of common stock – diluted: |
|
|
|
|
|
|
|
Loss per diluted common
share |
$ |
(2.69 |
) |
|
$ |
(1.15 |
) |
|
$ |
(6.88 |
) |
|
$ |
(4.57 |
) |
Weighted average common
stock outstanding – diluted |
1,615,848 |
|
|
1,595,272 |
|
|
1,611,424 |
|
|
1,570,428 |
|
|
Altisource
Asset Management CorporationConsolidated Balance
Sheets(In thousands, except share and per share
amounts) |
|
|
December 31, 2018 |
|
December 31, 2017 |
Current
assets: |
|
|
|
Cash and cash
equivalents |
$ |
27,171 |
|
|
$ |
33,349 |
|
Short-term
investments |
584 |
|
|
625 |
|
Front Yard common
stock |
14,182 |
|
|
19,266 |
|
Receivable from Front
Yard |
3,968 |
|
|
4,151 |
|
Prepaid expenses and
other assets |
1,552 |
|
|
1,022 |
|
Total
current assets |
47,457 |
|
|
58,413 |
|
Other non-current
assets |
1,910 |
|
|
1,974 |
|
Total
assets |
$ |
49,367 |
|
|
$ |
60,387 |
|
|
|
|
|
Current
liabilities: |
|
|
|
Accrued salaries and
employee benefits |
$ |
5,583 |
|
|
$ |
5,651 |
|
Accounts payable and
accrued liabilities |
1,188 |
|
|
2,085 |
|
Total
liabilities |
6,771 |
|
|
7,736 |
|
|
|
|
|
Commitments and
contingencies |
— |
|
|
— |
|
|
|
|
|
Redeemable
preferred stock: |
|
|
|
Series A preferred
stock, $0.01 par value, 250,000 shares issued and outstanding as of
December 31, 2018 and 2017; redemption value $250,000 |
249,752 |
|
|
249,546 |
|
|
|
|
|
Stockholders'
deficit: |
|
|
|
Common stock, $.01 par
value, 5,000,000 authorized shares; 2,862,760 and 1,573,691 shares
issued and outstanding, respectively, as of December 31, 2018 and
2,815,122 and 1,599,210 shares issued and outstanding,
respectively, as of December 31, 2017 |
29 |
|
|
28 |
|
Additional paid-in
capital |
42,245 |
|
|
37,765 |
|
Retained earnings |
26,558 |
|
|
38,970 |
|
Accumulated other
comprehensive loss |
— |
|
|
(1,330 |
) |
Treasury stock, at
cost, 1,289,069 and 1,215,912 shares as of December 31, 2018 and
2017, respectively |
(275,988 |
) |
|
(272,328 |
) |
Total stockholders'
deficit |
(207,156 |
) |
|
(196,895 |
) |
Total
liabilities and equity |
$ |
49,367 |
|
|
$ |
60,387 |
|
|
|
|
|
|
|
|
|
FOR FURTHER INFORMATION CONTACT:Robin N.
LoweChief Financial OfficerT: +1-345-815-9919E:
Robin.Lowe@AltisourceAMC.com
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