Altisource Asset Management Corporation Reports Third Quarter 2021 Results
15 November 2021 - 10:30PM
Altisource Asset Management Corporation (“AAMC” or the “Company”)
(NYSE American: AAMC) today announced financial and operating
results for the second quarter of 2021.
Third Quarter 2021 Highlights and
Recent Developments
- Maintained liquidity to position the Company to have access to
capital to consummate prospective business opportunities. Liquidity
consists of $84.5 million in cash.
- Negotiated a settlement agreement on 18,200 shares of our
Series A Convertible Preferred Stock (“Series A Shares”) with
certain investors which resulted in a $16.1 million increase to
equity on the balance sheet, and reduced the overall Series A
Shares balance to $150 million.
- All remaining equity securities were divested during the
quarter.
- The Company is no longer an “investment company” as defined
under the Investment Company Act of 1940, as amended, and expects
to principally remain invested in cash and government securities
until it commences new businesses.
- Hired Kevin Sullivan to be the new General Counsel and Chief
Compliance Officer of the Company.
Mr. Thomas K. McCarthy, Interim Chief Executive Officer, stated,
“The Company’s attention and focus continues to be the evaluation
and pursuit of certain business opportunities and acquisition
targets in which to focus the Company’s resources and enhance
shareholder value. The Company has liquidated its
equity holdings and is now in an all-cash position in preparation
of an acquisition event.
During the third quarter, the Company also engaged the services
of both an investment bank, Cowen and Company, LLC, and the law
firm, Norton Rose Fulbright, LLP, to assist us in identifying and
reviewing potential acquisition and merger opportunities. While no
final decision has been made, the Company is in discussions with
several potential acquisition or merger targets including
cryptocurrency and brokerage related businesses”.
Third Quarter 2021 Financial Results
AAMC’s net loss to common shareholders for the third quarter of
2021 was $(5.7) million compared to net income of $11.8 million for
the same period in 2020. Due to a $16.1 million gain on settlement
of preferred shares, which was recorded directly to equity, but is
included in the numerator of our earnings per share calculations,
diluted earnings per share was $4.76 for the quarter, compared to
$7.20 for the same period in 2020.
AAMC's net income to common shareholders for the nine months
ended September 30, 2021 was $2.4 million compared to net income of
$0.1 million for the same period in 2020. Due to a $88.0 million
gain on settlement of preferred shares in 2021, which was recorded
directly to equity, but is included in the numerator for our
earnings per share calculations; diluted earnings per share was
$41.94 for the nine months ended September 30, 2021, compared with
$0.07 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 September 30, |
|
Nine months ended September 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Expenses: |
|
|
|
|
|
|
|
Salaries and employee benefits |
$ |
878 |
|
|
$ |
1,668 |
|
|
$ |
4,078 |
|
|
$ |
8,081 |
|
Legal and professional
fees |
3,725 |
|
|
1,455 |
|
|
8,265 |
|
|
4,681 |
|
General and
administrative |
585 |
|
|
559 |
|
|
1,949 |
|
|
1,709 |
|
Total expenses |
5,188 |
|
|
3,682 |
|
|
14,292 |
|
|
14,471 |
|
|
|
|
|
|
|
|
|
Other income
(loss): |
|
|
|
|
|
|
|
Change in fair value of Front
Yard common stock |
— |
|
|
65 |
|
|
146 |
|
|
(5,848 |
) |
Dividend income on Front Yard
common stock |
— |
|
|
— |
|
|
— |
|
|
244 |
|
Change in fair value of equity
securities |
(3,310 |
) |
|
— |
|
|
— |
|
|
— |
|
Dividend income |
20 |
|
|
— |
|
|
3,061 |
|
|
— |
|
Gain on sale of equity
securities |
6,360 |
|
|
— |
|
|
8,347 |
|
|
— |
|
Interest expense |
— |
|
|
— |
|
|
(60 |
) |
|
— |
|
Other income |
8 |
|
|
5 |
|
|
147 |
|
|
29 |
|
Total other income (loss) |
(1,295 |
) |
|
70 |
|
|
11,641 |
|
|
(5,575 |
) |
|
|
|
|
|
|
|
|
Net income (loss) from
continuing operations before income taxes |
(6,483 |
) |
|
(3,612 |
) |
|
(2,651 |
) |
|
(20,046 |
) |
Income tax (benefit)
expense |
(786 |
) |
|
(523 |
) |
|
1,175 |
|
|
(1,091 |
) |
Net income (loss) from continuing operations |
(5,697 |
) |
|
(3,089 |
) |
|
(3,826 |
) |
|
(18,955 |
) |
|
|
|
|
|
|
|
|
Discontinued
operations: |
|
|
|
|
|
|
|
Income from operations related
to Front Yard, net of tax |
— |
|
|
14,843 |
|
|
— |
|
|
19,117 |
|
Gain on disposal of operations
related to Front Yard |
— |
|
|
— |
|
|
7,485 |
|
|
— |
|
Income tax expense related to
disposal |
— |
|
|
— |
|
|
1,272 |
|
|
— |
|
Net gain on discontinued operations |
— |
|
|
14,843 |
|
|
6,213 |
|
|
19,117 |
|
|
|
|
|
|
|
|
|
Net income (loss) |
(5,697 |
) |
|
11,754 |
|
|
2,387 |
|
|
162 |
|
Amortization of preferred
stock issuance costs |
— |
|
|
— |
|
|
— |
|
|
(42 |
) |
Net income (loss) attributable to common stockholders |
$ |
(5,697 |
) |
|
$ |
11,754 |
|
|
$ |
2,387 |
|
|
$ |
120 |
|
|
|
|
|
|
|
|
|
Continuing operations earnings
per share |
|
|
|
|
|
|
|
Net income (loss) from
continuing operations |
$ |
(5,697 |
) |
|
(3,089 |
) |
|
(3,826 |
) |
|
(18,955 |
) |
Reverse amortization of
preferred stock issuance costs |
— |
|
|
— |
|
|
— |
|
|
42 |
|
Gain on preferred stock
transaction |
16,101 |
|
|
— |
|
|
87,984 |
|
|
— |
|
Numerator for earnings
per share from continuing operations |
$ |
10,404 |
|
|
$ |
(3,089 |
) |
|
$ |
84,158 |
|
|
$ |
(18,913 |
) |
|
|
|
|
|
|
|
|
Discontinued operations
earnings per share |
|
|
|
|
|
|
|
Net income from
discontinued operations |
$ |
— |
|
|
$ |
14,843 |
|
|
$ |
6,213 |
|
|
$ |
19,117 |
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share of common stock – basic: |
|
|
|
|
|
|
|
Continuing operations –
basic |
$ |
5.06 |
|
|
$ |
(1.89 |
) |
|
$ |
42.41 |
|
|
$ |
(11.69 |
) |
Discontinued operations –
basic |
— |
|
|
9.09 |
|
|
3.13 |
|
|
11.76 |
|
Earnings (loss) per basic
common share |
$ |
5.06 |
|
|
$ |
7.20 |
|
|
$ |
45.54 |
|
|
$ |
0.07 |
|
Weighted average common stock
outstanding – basic |
2,055,561 |
|
|
1,632,117 |
|
|
1,984,294 |
|
|
1,625,727 |
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share of common stock – diluted: |
|
|
|
|
|
|
|
Continuing operations –
diluted |
$ |
4.76 |
|
|
$ |
(1.89 |
) |
|
$ |
39.06 |
|
|
$ |
(11.69 |
) |
Discontinued operations –
diluted |
— |
|
|
9.09 |
|
|
2.88 |
|
|
11.76 |
|
Earnings (loss) per diluted
common share |
$ |
4.76 |
|
|
$ |
7.20 |
|
|
$ |
41.94 |
|
|
$ |
0.07 |
|
Weighted average common stock
outstanding – diluted |
2,187,585 |
|
|
1,632,117 |
|
|
2,154,597 |
|
|
1,625,727 |
|
Altisource Asset Management
Corporation Condensed Consolidated Balance
Sheets (In thousands, except share and per share
amounts)
|
September 30, 2021 |
|
December 31, 2020 |
|
(unaudited) |
|
|
Current
assets: |
|
|
|
Cash and cash equivalents |
$ |
84,544 |
|
|
$ |
41,623 |
|
Equity securities, at fair
value |
— |
|
|
— |
|
Front Yard common stock, at
fair value |
— |
|
|
47,355 |
|
Receivable from Front
Yard |
— |
|
|
3,414 |
|
Prepaid expenses and other
assets |
2,883 |
|
|
3,328 |
|
Current assets held for
sale |
— |
|
|
894 |
|
Total current assets |
87,427 |
|
|
96,614 |
|
|
|
|
|
Non-current
assets: |
|
|
|
Right-of-use lease assets |
860 |
|
|
656 |
|
Other non-current assets |
476 |
|
|
503 |
|
Non-current assets held for
sale |
— |
|
|
1,979 |
|
Total non-current assets |
1,336 |
|
|
3,138 |
|
Total assets |
$ |
88,763 |
|
|
$ |
99,752 |
|
|
|
|
|
Current
liabilities: |
|
|
|
Accrued salaries and employee
benefits |
$ |
467 |
|
|
$ |
2,539 |
|
Accounts payable and accrued
liabilities |
2,879 |
|
|
9,152 |
|
Short-term lease
liabilities |
133 |
|
|
75 |
|
Current liabilities held for
sale |
— |
|
|
1,338 |
|
Total current liabilities |
3,479 |
|
|
13,104 |
|
|
|
|
|
Non-current
liabilities: |
|
|
|
Long-term lease
liabilities |
757 |
|
|
600 |
|
Other non-current
liabilities |
2,697 |
|
|
1,027 |
|
Non-current liabilities held
for sale |
— |
|
|
1,599 |
|
Total non-current liabilities |
3,454 |
|
|
3,226 |
|
Total liabilities |
6,933 |
|
|
16,330 |
|
|
|
|
|
Commitments and
contingencies: |
— |
|
|
— |
|
|
|
|
|
Redeemable preferred
stock: |
|
|
|
Preferred stock, $0.01 par
value, 250,000 and 250,000 shares issued as September 30, 2021
and December 31, 2020, respectively. 150,000 shares
outstanding and $150,000 redemption value as of September 30,
2021 and 250,000 shares outstanding and $250,000 redemption value
as of December 31, 2020. |
150,000 |
|
|
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 September 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 |
143,490 |
|
|
46,574 |
|
Retained earnings |
65,841 |
|
|
63,426 |
|
Accumulated other
comprehensive loss |
54 |
|
|
(65 |
) |
Treasury stock, at cost,
1,360,980 shares as of September 30, 2021 and 1,315,995 shares
as of December 31, 2020 |
(277,589 |
) |
|
(276,543 |
) |
Total stockholders' deficit |
(68,170 |
) |
|
(166,578 |
) |
Total liabilities and equity |
$ |
88,763 |
|
|
$ |
99,752 |
|
|
|
|
|
|
|
|
|
FOR FURTHER
INFORMATION CONTACT: |
Investor Relations |
T: +1-704-275-9113 |
E:
IR@AltisourceAMC.com |
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