Altisource Asset Management Corporation Reports Third Quarter 2019 Results
06 November 2019 - 1:30PM
Altisource Asset Management Corporation (“AAMC” or the “Company”)
(NYSE American: AAMC) today announced financial and operating
results for the third quarter of 2019.
Third Quarter 2019 Highlights and Recent
Developments
- Increased Front Yard Residential Corporation's (“Front Yard”)
rental revenues by 5% to $50.8 million compared to the third
quarter of 2018.
- Managed Front Yard's sale of 126 non-core homes for proceeds of
$22.6 million and a $2.1 million gain over carrying value.
- Negotiated the settlement of the last remaining significant
litigation outstanding against Front Yard for $10 million after
insurance proceeds.
“During the quarter we made substantial progress in addressing
Front Yard's operational challenges arising from the
internalization of property management,” stated George Ellison,
Chief Executive Officer. “While this impacted Front Yard's results
in the third quarter, we are seeing improved metrics in October
that we expect will drive stronger results in the fourth
quarter.”
Third Quarter 2019 Financial Results
AAMC’s net loss attributable to common stockholders for the
third quarter of 2019 was $3.6 million, or $2.25 per diluted common
share, which included a $(1.1) million change in the fair value of
its shares of Front Yard common stock, compared to a net loss of
$1.2 million, or $0.75 per diluted common share, which included a
$0.7 million change in the fair value of its shares of Front Yard
common stock, for the third quarter of 2018.
AAMC's net loss attributable to common stockholders for the nine
months ended September 30, 2019 was $1.2 million, or $0.77 per
diluted common share, which included a $4.6 million change in the
fair value of its shares of Front Yard common stock, compared to a
net loss attributable to common stockholders of $6.7 million, or
$4.19 per diluted common share, which included a $(1.6) million
change in the fair value of its shares of Front Yard common stock,
for the nine months ended September 30, 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; the effects of potential redemptions of our
Series A Preferred Stock commencing in March 2020, including our
ability to pay with funds legally available therefor or renegotiate
the terms thereof; 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, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Revenues: |
|
|
|
|
|
|
|
Management fees from Front Yard |
$ |
3,584 |
|
|
$ |
3,613 |
|
|
$ |
10,686 |
|
|
$ |
10,984 |
|
Conversion fees from Front
Yard |
— |
|
|
35 |
|
|
29 |
|
|
151 |
|
Expense reimbursements from
Front Yard |
250 |
|
|
286 |
|
|
920 |
|
|
767 |
|
Total revenues |
3,834 |
|
|
3,934 |
|
|
11,635 |
|
|
11,902 |
|
Expenses: |
|
|
|
|
|
|
|
Salaries and employee
benefits |
4,219 |
|
|
4,605 |
|
|
12,875 |
|
|
13,343 |
|
Legal and professional
fees |
389 |
|
|
474 |
|
|
2,087 |
|
|
1,293 |
|
General and
administrative |
1,099 |
|
|
993 |
|
|
3,018 |
|
|
2,783 |
|
Total expenses |
5,707 |
|
|
6,072 |
|
|
17,980 |
|
|
17,419 |
|
Other income
(loss): |
|
|
|
|
|
|
|
Change in fair value of Front
Yard common stock |
(1,072 |
) |
|
698 |
|
|
4,597 |
|
|
(1,641 |
) |
Dividend income on Front Yard
common stock |
244 |
|
|
244 |
|
|
731 |
|
|
731 |
|
Other income |
63 |
|
|
58 |
|
|
116 |
|
|
150 |
|
Total other (loss) income |
(765 |
) |
|
1,000 |
|
|
5,444 |
|
|
(760 |
) |
Loss before income taxes |
(2,638 |
) |
|
(1,138 |
) |
|
(901 |
) |
|
(6,277 |
) |
Income tax expense |
885 |
|
|
17 |
|
|
173 |
|
|
309 |
|
Net loss attributable to stockholders |
(3,523 |
) |
|
(1,155 |
) |
|
(1,074 |
) |
|
(6,586 |
) |
Amortization of preferred
stock issuance costs |
(52 |
) |
|
(52 |
) |
|
(155 |
) |
|
(155 |
) |
Net loss attributable to common stockholders |
$ |
(3,575 |
) |
|
$ |
(1,207 |
) |
|
$ |
(1,229 |
) |
|
$ |
(6,741 |
) |
|
|
|
|
|
|
|
|
Loss per share of
common stock – basic: |
|
|
|
|
|
|
|
Loss per basic common
share |
$ |
(2.25 |
) |
|
$ |
(0.75 |
) |
|
$ |
(0.77 |
) |
|
$ |
(4.19 |
) |
Weighted average common stock
outstanding – basic |
1,590,739 |
|
|
1,613,413 |
|
|
1,587,448 |
|
|
1,609,932 |
|
|
|
|
|
|
|
|
|
Loss per share of
common stock – diluted: |
|
|
|
|
|
|
|
Loss per diluted common
share |
$ |
(2.25 |
) |
|
$ |
(0.75 |
) |
|
$ |
(0.77 |
) |
|
$ |
(4.19 |
) |
Weighted average common stock
outstanding – diluted |
1,590,739 |
|
|
1,613,413 |
|
|
1,587,448 |
|
|
1,609,932 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Altisource Asset Management
CorporationCondensed Consolidated Balance
Sheets(In thousands, except share and per share
amounts)
|
|
September 30, 2019 |
|
December 31, 2018 |
|
|
(unaudited) |
|
|
Current
assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
21,558 |
|
|
$ |
27,171 |
|
Short-term investments |
|
955 |
|
|
584 |
|
Front Yard common stock, at
fair value |
|
18,779 |
|
|
14,182 |
|
Receivable from Front
Yard |
|
4,168 |
|
|
3,968 |
|
Prepaid expenses and other
assets |
|
2,010 |
|
|
1,552 |
|
Total current assets |
|
47,470 |
|
|
47,457 |
|
|
|
|
|
|
Non-current
assets: |
|
|
|
|
Right-of-use lease assets |
|
4,458 |
|
|
— |
|
Other non-current assets |
|
1,708 |
|
|
1,910 |
|
Total non-current assets |
|
6,166 |
|
|
1,910 |
|
Total assets |
|
$ |
53,636 |
|
|
$ |
49,367 |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
Accrued salaries and employee
benefits |
|
$ |
4,809 |
|
|
$ |
5,583 |
|
Accounts payable and accrued
liabilities |
|
1,204 |
|
|
1,188 |
|
Short-term lease
liabilities |
|
242 |
|
|
— |
|
Total current liabilities |
|
6,255 |
|
|
6,771 |
|
Long-term lease
liabilities |
|
4,291 |
|
|
— |
|
Total liabilities |
|
10,546 |
|
|
6,771 |
|
|
|
|
|
|
Commitments and
contingencies |
|
— |
|
|
— |
|
|
|
|
|
|
Redeemable preferred
stock: |
|
|
|
|
Preferred stock, $0.01 par
value, 250,000 shares issued and outstanding as of September 30,
2019 and December 31, 2018; redemption value $250,000 |
|
249,907 |
|
|
249,752 |
|
|
|
|
|
|
Stockholders'
deficit: |
|
|
|
|
Common stock, $0.01 par value,
5,000,000 authorized shares; 2,886,009 and 1,590,739 shares issued
and outstanding, respectively, as of September 30, 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 |
|
44,111 |
|
|
42,245 |
|
Retained earnings |
|
25,252 |
|
|
26,558 |
|
Accumulated other
comprehensive loss |
|
(20 |
) |
|
— |
|
Treasury stock, at cost,
1,295,270 shares as of September 30, 2019 and 1,289,069 shares as
of December 31, 2018 |
|
(276,189 |
) |
|
(275,988 |
) |
Total stockholders' deficit |
|
(206,817 |
) |
|
(207,156 |
) |
Total liabilities and equity |
|
$ |
53,636 |
|
|
$ |
49,367 |
|
|
|
|
|
|
|
|
|
|
FOR FURTHER
INFORMATION CONTACT: |
Investor Relations |
T: 1-704-558-3068 |
E:
InvestorRelations@AltisourceAMC.com |
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