Altisource Asset Management Corporation Reports First Quarter 2019 Results; Announces New Asset Management Agreement with Fro...
08 Mai 2019 - 1:30PM
Altisource Asset Management Corporation (“AAMC” or the “Company”)
(NYSE American: AAMC) today announced financial and operating
results for the first quarter of 2019.
First Quarter 2019 Highlights and Recent
Developments
- Entered into a new asset management agreement with Front Yard
Residential Corporation (“Front Yard”) on May 7, 2019, providing an
improved fee structure that further aligns interests and
incentivizes performance and growth.
- Completed the transition of Front Yard's rental homes to its
internal property management platform ahead of schedule.
- Maintained strong operating metrics for Front Yard.
- Managed Front Yard's sale of 576 non-core assets for proceeds
to Front Yard of $125.3 million and a $7.5 million gain over
carrying value during the first quarter of 2019.
- Advised Front Yard on the amendment of its Credit Suisse and
Nomura warehouse lines, improving fee structures and reducing
interest rate spreads from 3.00% to 2.30% on borrowings secured by
rental properties.
“We are pleased to announce the renegotiation of our asset
management agreement with Front Yard, which we believe creates an
avenue for growth in management fees while providing a sustainable
fee structure for Front Yard,” stated George Ellison, Chief
Executive Officer. “Along with the completion of Front Yard's
internalization of property management and continued strong
operating metrics under our management, both companies are now well
positioned to deliver value to stockholders.”
First Quarter 2019 Financial Results
AAMC’s net loss attributable to common stockholders for the
first quarter of 2019 was $0.9 million, or $0.56 per diluted share,
which included a $0.9 million change in the fair value of its
shares of Front Yard common stock, compared to $4.4 million, or
$2.75 per diluted share, which included a $(2.9) million change in
the fair value of its shares of Front Yard common stock, for the
first quarter of 2018.
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-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; 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 ended March 31, |
|
2019 |
|
2018 |
Revenues: |
|
|
|
Management fees from Front
Yard |
$ |
3,546 |
|
|
$ |
3,727 |
|
Conversion fees from Front
Yard |
29 |
|
|
63 |
|
Expense reimbursements from
Front Yard |
328 |
|
|
262 |
|
Total revenues |
3,903 |
|
|
4,052 |
|
Expenses: |
|
|
|
Salaries and employee
benefits |
4,418 |
|
|
4,214 |
|
Legal and professional
fees |
342 |
|
|
352 |
|
General and
administrative |
1,039 |
|
|
947 |
|
Total expenses |
5,799 |
|
|
5,513 |
|
Other income
(loss): |
|
|
|
Change in fair value of Front
Yard common stock |
877 |
|
|
(2,940 |
) |
Dividend income on Front Yard
common stock |
244 |
|
|
244 |
|
Other income |
4 |
|
|
43 |
|
Total other income (loss) |
1,125 |
|
|
(2,653 |
) |
Loss before income taxes |
(771 |
) |
|
(4,114 |
) |
Income tax expense |
69 |
|
|
250 |
|
Net loss attributable to stockholders |
(840 |
) |
|
(4,364 |
) |
Amortization of preferred
stock issuance costs |
(51 |
) |
|
(51 |
) |
Net loss attributable to common stockholders |
$ |
(891 |
) |
|
$ |
(4,415 |
) |
|
|
|
|
Loss per share of
common stock – basic: |
|
|
|
Loss per basic common
share |
$ |
(0.56 |
) |
|
$ |
(2.75 |
) |
Weighted average common stock
outstanding – basic |
1,582,016 |
|
|
1,603,898 |
|
|
|
|
|
Loss per share of
common stock – diluted: |
|
|
|
Loss per diluted common
share |
$ |
(0.56 |
) |
|
$ |
(2.75 |
) |
Weighted average common stock
outstanding – diluted |
1,582,016 |
|
|
1,603,898 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Altisource Asset Management
CorporationCondensed Consolidated Balance
Sheets(In thousands, except share and per share
amounts)
|
March 31, 2019 |
|
December 31, 2018 |
|
(unaudited) |
|
|
Current
assets: |
|
|
|
Cash and cash equivalents |
$ |
22,154 |
|
|
$ |
27,171 |
|
Short-term investments |
656 |
|
|
584 |
|
Front Yard common stock, at
fair value |
15,059 |
|
|
14,182 |
|
Receivable from Front
Yard |
3,711 |
|
|
3,968 |
|
Prepaid expenses and other
assets |
2,102 |
|
|
1,552 |
|
Total current assets |
43,682 |
|
|
47,457 |
|
|
|
|
|
Non-current
assets: |
|
|
|
Right-of-use lease assets |
2,782 |
|
|
— |
|
Other non-current assets |
1,534 |
|
|
1,910 |
|
Total non-current assets |
4,316 |
|
|
1,910 |
|
Total assets |
$ |
47,998 |
|
|
$ |
49,367 |
|
|
|
|
|
Current
liabilities: |
|
|
|
Accrued salaries and employee
benefits |
$ |
2,125 |
|
|
$ |
5,583 |
|
Accounts payable and accrued
liabilities |
871 |
|
|
1,188 |
|
Short-term lease
liabilities |
165 |
|
|
— |
|
Total current liabilities |
3,161 |
|
|
6,771 |
|
Long-term lease
liabilities |
2,643 |
|
|
— |
|
Total liabilities |
5,804 |
|
|
6,771 |
|
|
|
|
|
Commitments and
contingencies |
— |
|
|
— |
|
|
|
|
|
Redeemable preferred
stock: |
|
|
|
Preferred stock, $0.01 par
value, 250,000 shares issued and outstanding as of March 31, 2019
and December 31, 2018; redemption value $250,000 |
249,803 |
|
|
249,752 |
|
|
|
|
|
Stockholders'
deficit: |
|
|
|
Common stock, $0.01 par value,
5,000,000 authorized shares; 2,884,143 and 1,589,321 shares issued
and outstanding, respectively, as of March 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 |
42,943 |
|
|
42,245 |
|
Retained earnings |
25,590 |
|
|
26,558 |
|
Accumulated other
comprehensive income |
12 |
|
|
— |
|
Treasury stock, at cost,
1,294,822 shares as of March 31, 2019 and 1,289,069 shares as of
December 31, 2018 |
(276,183 |
) |
|
(275,988 |
) |
Total stockholders' deficit |
(207,609 |
) |
|
(207,156 |
) |
Total liabilities and equity |
$ |
47,998 |
|
|
$ |
49,367 |
|
|
FOR FURTHER
INFORMATION CONTACT: |
Robin N. Lowe |
Chief Financial Officer |
T: +1-345-815-9919 |
E:
Robin.Lowe@AltisourceAMC.com |
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