Altisource Asset Management Corporation Reports Second Quarter 2021 Results
16 August 2021 - 8:14PM
Altisource Asset Management Corporation (“AAMC” or the “Company”)
(NYSE American: AAMC) today announced financial and operating
results for the second quarter of 2021.
Second Quarter 2021 Highlights and Recent
Developments
- Net income from continuing operations
of $2.2 million for the second quarter was fueled in part by (i)
the realized gains on sales of the equity securities and the
associated dividend income, and (ii) reduced expenses on salaries
and benefits due to forfeited bonuses from departed
executives.
- Maintained liquidity to position the
Company to have access to capital to consummate prospective
business opportunities. Liquidity consists of $52.0 million in cash
and $39.8 million in equity securities.
- Paid off the $28.4 million outstanding
balance on the margin loan from proceeds of sales of equity
securities.
- Hired Stephen Krallman as the new
Chief Financial Officer of the Company.
- Hired Kevin Sullivan to be the new
General Counsel and Chief Compliance Officer of the Company.
“The Company’s attention and focus,” stated Thomas
K. McCarthy, Interim Chief Executive Officer, “continues to be to
identify and evaluate business opportunities and acquisition
targets in which to potentially focus the Company’s resources. In
addition to the fund management and mortgage businesses more
closely related to the Company's history, management has explored
separate and distinct new business lines. While no final decision
has been made on the new businesses that the Company will pursue,
the Company is in different stages of discussion with several
potential acquisition or merger targets including the fix and flip
lending space, one in fee based real estate investment banking and
one in a cryptocurrency related business.”
Second Quarter 2021 Financial
Results
AAMC’s net income to common shareholders for the
second quarter of 2021 was $2.2 million compared to a net loss of
$(7.8) million for the same period in 2020. Diluted earnings per
share was $1.01 for the quarter, compared with a diluted net loss
per share of $(4.81) for the same period in 2020.
AAMC's net income to common shareholders for the
six months ended June 30, 2021 was $8.1 million compared to a net
loss of $(11.6) million for the same period in 2020. Due to a $71.9
million gain on settlement of preferred shares in the first quarter
of 2021, 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 six months ended June 30,
2021, compared with a diluted net loss per share of $(7.17) 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 June 30, |
|
Six months ended June 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Expenses: |
|
|
|
|
|
|
Salaries and employee benefits |
$ |
(345 |
) |
|
$ |
3,319 |
|
|
$ |
3,200 |
|
|
$ |
6,413 |
|
Legal and professional fees |
2,655 |
|
|
1,746 |
|
|
4,540 |
|
|
3,226 |
|
General and administrative |
611 |
|
|
564 |
|
|
1,364 |
|
|
1,150 |
|
Total expenses |
2,921 |
|
|
5,629 |
|
|
9,104 |
|
|
10,789 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (loss): |
|
|
|
|
|
|
Change in fair value of Front Yard common stock |
— |
|
|
(5,279 |
) |
|
146 |
|
|
(5,913 |
) |
Dividend income on Front Yard common stock |
— |
|
|
— |
|
|
— |
|
|
244 |
|
Change in fair value of equity securities |
(2,411 |
) |
|
— |
|
|
3,310 |
|
|
— |
|
Dividend income |
887 |
|
|
— |
|
|
3,041 |
|
|
— |
|
Gain on sale of equity securities |
6,360 |
|
|
— |
|
|
6,360 |
|
|
— |
|
Interest expense |
(24 |
) |
|
— |
|
|
(60 |
) |
|
— |
|
Other income |
4 |
|
|
6 |
|
|
139 |
|
|
24 |
|
Total other income (loss) |
4,816 |
|
|
(5,273 |
) |
|
12,936 |
|
|
(5,645 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations before income
taxes |
1,895 |
|
|
(10,902 |
) |
|
3,832 |
|
|
(16,434 |
) |
Income tax (benefit) expense |
(333 |
) |
|
(690 |
) |
|
1,961 |
|
|
(568 |
) |
Net income (loss) from continuing operations |
2,228 |
|
|
(10,212 |
) |
|
1,871 |
|
|
(15,866 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations related to Front Yard, net of tax |
— |
|
|
2,377 |
|
|
— |
|
|
4,274 |
|
Gain on disposal of operations related to Front Yard |
— |
|
|
— |
|
|
7,485 |
|
|
— |
|
Income tax expense related to disposal |
— |
|
|
— |
|
|
1,272 |
|
|
— |
|
Net gain on discontinued operations |
— |
|
|
2,377 |
|
|
6,213 |
|
|
4,274 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
2,228 |
|
|
(7,835 |
) |
|
8,084 |
|
|
(11,592 |
) |
Amortization of preferred stock issuance costs |
— |
|
|
— |
|
|
— |
|
|
(42 |
) |
Net income (loss) attributable to common stockholders |
$ |
2,228 |
|
|
$ |
(7,835 |
) |
|
$ |
8,084 |
|
|
$ |
(11,634 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations |
$ |
2,228 |
|
|
(10,212 |
) |
|
1,871 |
|
|
(15,866 |
) |
Reverse amortization of preferred stock issuance costs |
— |
|
|
— |
|
|
— |
|
|
42 |
|
Gain on preferred stock transaction |
— |
|
|
— |
|
|
71,883 |
|
|
— |
|
Numerator for earnings per share from continuing
operations |
$ |
2,228 |
|
|
$ |
(10,212 |
) |
|
$ |
73,754 |
|
|
$ |
(15,824 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from discontinued operations |
$ |
— |
|
|
$ |
2,377 |
|
|
$ |
6,213 |
|
|
$ |
4,274 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share of common stock –
basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations – basic |
$ |
1.09 |
|
|
$ |
(6.27 |
) |
|
$ |
37.86 |
|
|
$ |
(9.80 |
) |
Discontinued operations – basic |
— |
|
|
1.46 |
|
|
3.19 |
|
|
2.63 |
|
Earnings (loss) per basic common share |
$ |
1.09 |
|
|
$ |
(4.81 |
) |
|
$ |
41.05 |
|
|
$ |
(7.17 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common stock outstanding – basic |
2,050,786 |
|
|
1,629,285 |
|
|
1,948,070 |
|
|
1,622,497 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share of common stock –
diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations – diluted |
$ |
1.01 |
|
|
$ |
(6.27 |
) |
|
$ |
34.50 |
|
|
$ |
(9.80 |
) |
Discontinued operations – diluted |
— |
|
|
1.46 |
|
|
2.91 |
|
|
2.63 |
|
Earnings (loss) per diluted common share |
$ |
1.01 |
|
|
$ |
(4.81 |
) |
|
$ |
37.41 |
|
|
$ |
(7.17 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common stock outstanding – diluted |
2,195,806 |
|
|
1,629,285 |
|
|
2,137,513 |
|
|
1,622,497 |
|
|
Altisource Asset Management Corporation Condensed
Consolidated Balance Sheets (In thousands, except
share and per share amounts) |
|
June 30, 2021 |
|
December 31, 2020 |
|
(unaudited) |
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
52,027 |
|
|
$ |
41,623 |
|
Equity securities, at fair value |
39,804 |
|
|
— |
|
Front Yard common stock, at fair value |
— |
|
|
47,355 |
|
Receivable from Front Yard |
— |
|
|
3,414 |
|
Dividends receivable |
681 |
|
|
— |
|
Prepaid expenses and other assets |
2,875 |
|
|
3,328 |
|
Current assets held for sale |
— |
|
|
894 |
|
Total current assets |
95,387 |
|
|
96,614 |
|
|
|
|
|
Non-current assets: |
|
|
|
Right-of-use lease assets |
894 |
|
|
656 |
|
Other non-current assets |
419 |
|
|
503 |
|
Non-current assets held for sale |
— |
|
|
1,979 |
|
Total non-current assets |
1,313 |
|
|
3,138 |
|
Total assets |
$ |
96,700 |
|
|
$ |
99,752 |
|
|
|
|
|
Current liabilities: |
|
|
|
Accrued salaries and employee benefits |
$ |
299 |
|
|
$ |
2,539 |
|
Accounts payable and accrued liabilities |
2,374 |
|
|
9,152 |
|
Short-term lease liabilities |
128 |
|
|
75 |
|
Current liabilities held for sale |
— |
|
|
1,338 |
|
Total current liabilities |
2,801 |
|
|
13,104 |
|
|
|
|
|
Non-current liabilities: |
|
|
|
Long-term lease liabilities |
793 |
|
|
600 |
|
Other non-current liabilities |
3,497 |
|
|
1,027 |
|
Non-current liabilities held for sale |
— |
|
|
1,599 |
|
Total non-current liabilities |
4,290 |
|
|
3,226 |
|
Total liabilities |
7,091 |
|
|
16,330 |
|
|
|
|
|
Commitments and contingencies: |
— |
|
|
— |
|
|
|
|
|
Redeemable preferred stock: |
|
|
|
Preferred stock, $0.01 par value, 250,000 and 250,000 shares issued
as June 30, 2021 and December 31, 2020, respectively.
168,200 shares outstanding and $168,200 redemption value as of
June 30, 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;
3,416,541 and 2,055,561 shares issued and outstanding,
respectively, as of June 30, 2021 and 2,966,207 and 1,650,212
shares issued and outstanding, respectively, as of
December 31, 2020 |
34 |
|
|
30 |
|
Additional paid-in capital |
127,372 |
|
|
46,574 |
|
Retained earnings |
71,538 |
|
|
63,426 |
|
Accumulated other comprehensive loss |
54 |
|
|
(65 |
) |
Treasury stock, at cost, 1,360,980 shares as of June 30, 2021
and 1,315,995 shares as of December 31, 2020 |
(277,589 |
) |
|
(276,543 |
) |
Total stockholders' deficit |
(78,591 |
) |
|
(166,578 |
) |
Total liabilities and equity |
$ |
96,700 |
|
|
$ |
99,752 |
|
|
|
|
|
|
|
|
|
FOR FURTHER INFORMATION
CONTACT:Investor RelationsT: +1-704-275-9113E:
IR@AltisourceAMC.com
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