Chronicle Journal: Finance

Altisource Asset Management Corporation Reports First Quarter 2019 Results; Announces New Asset Management Agreement with Front Yard Residential

CHRISTIANSTED, U.S. Virgin Islands, May 08, 2019 (GLOBE NEWSWIRE) -- 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 Corporation
Condensed 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  $3,727 
Conversion fees from Front Yard29  63 
Expense reimbursements from Front Yard328  262 
Total revenues3,903  4,052 
Expenses:   
Salaries and employee benefits4,418  4,214 
Legal and professional fees342  352 
General and administrative1,039  947 
Total expenses5,799  5,513 
Other income (loss):   
Change in fair value of Front Yard common stock877  (2,940)
Dividend income on Front Yard common stock244  244 
Other income4  43 
Total other income (loss)1,125  (2,653)
Loss before income taxes(771) (4,114)
Income tax expense69  250 
Net loss attributable to stockholders(840) (4,364)
Amortization of preferred stock issuance costs(51) (51)
Net loss attributable to common stockholders$(891) $(4,415)
    
Loss per share of common stock – basic:   
Loss per basic common share$(0.56) $(2.75)
Weighted average common stock outstanding – basic1,582,016  1,603,898 
    
Loss per share of common stock – diluted:   
Loss per diluted common share$(0.56) $(2.75)
Weighted average common stock outstanding – diluted1,582,016  1,603,898 
      
      

Altisource Asset Management Corporation
Condensed 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 investments656  584 
Front Yard common stock, at fair value15,059  14,182 
Receivable from Front Yard3,711  3,968 
Prepaid expenses and other assets2,102  1,552 
Total current assets43,682  47,457 
    
Non-current assets:   
Right-of-use lease assets2,782   
Other non-current assets1,534  1,910 
Total non-current assets4,316  1,910 
     Total assets$47,998  $49,367 
    
Current liabilities:   
Accrued salaries and employee benefits$2,125  $5,583 
Accounts payable and accrued liabilities871  1,188 
Short-term lease liabilities165   
Total current liabilities3,161  6,771 
Long-term lease liabilities2,643   
     Total liabilities5,804  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 $250,000249,803  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, 201829  29 
Additional paid-in capital42,943  42,245 
Retained earnings25,590  26,558 
Accumulated other comprehensive income12   
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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