July 23, 2013

Altisource Asset Management Corporation Reports Second Quarter 2013 Results

FREDERIKSTED, U.S. Virgin Islands, July 23, 2013 (GLOBE NEWSWIRE) -- Altisource Asset Management Corporation (AAMC or the Company) (OTCQX:AAMC) announced today financial and operating results for the second quarter of 2013. Net loss for the second quarter of 2013 totaled $1.5 million or $0.64 per share based on a weighted average of 2.3 million shares outstanding.

Net loss for the six months ended June 30, 2013 totaled $2.3 million or $1.00 per share based on a weighted average of 2.3 million shares outstanding.

Second quarter business performance highlights:

  • On April 5, 2013, we completed an acquisition of a portfolio of non-performing residential mortgage loans (NPLs) for Residential having an unpaid principal balance, or UPB, of $172.1 million.
  • On May 1, 2013, we completed a follow-on equity offering for Residential of 17,250,000 shares at $18.75 per share from which Residential received net proceeds of $309.5 million.
  • In addition, during the quarter we agreed to acquire two NPL portfolios for Residential with $470 million in UPB. These recent transactions are expected to close in July 2013.
  • Net investment gains for the quarter totaled $8.9 million.

Chairman William Erbey stated, "I am pleased with the continued strong performance of AAMC and its management team on behalf of Residential in NPL acquisitions, loan resolutions and capital raising, three key pillars of Residential's business. Upon closing of the most recent transactions, Residential's NPL acquisitions will total approximately 4,100 loans representing $820 million in UPB and $625 million in underlying property value. Through AAMC's efforts, Residential is well on its way to achieve its first year goal of acquiring loans that will eventually result in 5,000 rental properties."

"I am encouraged by the early results of Residential's NPL portfolio and the progress made in loan resolutions in the short time period since inception of operations," said Chief Executive Officer Ashish Pandey. "Our success in portfolio acquisitions for Residential and the positive early results in loan resolution reflect our sound execution of Residential's business plan and strategy."

Webcast and conference call

The Company will host a webcast and conference call on Tuesday, July 23, 2013, at 11:00 A.M Eastern Time to discuss its financial results for the second quarter of 2013. The conference call will be webcast live over the internet from the Company's website at www.altisourceamc.com and can be accessed by clicking on the "Shareholder" section.

About AAMC

AAMC is an asset management company that provides portfolio management and corporate governance services to investment vehicles that own real estate related assets. Its initial client is Residential, a real estate investment trust that is focused on providing affordable rental homes to families throughout the United States. 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. AAMC undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise. The risks and uncertainties to which forward-looking statements are subject include, but are not limited to: AAMC's ability to achieve its business and strategy and implement its business plan; AAMC's ability to leverage strategic relationships on an efficient and cost-effective basis; its ability to compete; general economic and market conditions; governmental regulations, taxes and policies; availability of adequate and timely sources of liquidity and financing; and other risks and uncertainties detailed in the "Forward-Looking Statements," "Risk Factors" and other sections of AAMC's Registration Statement on Form 10, its Annual Report on Form 10-K, its Quarterly Report on Form 10-Q for the first quarter of 2013 and other filings with the Securities and Exchange Commission.

 
 
Altisource Asset Management Corporation 
Consolidated Statements of Operations 
(In thousands, except share and per share amounts)
(Unaudited)
     
     
     
 Three months ended
June 30, 2013
Six months ended
June 30, 2013
     
Net gain on investments:    
Net unrealized gain on mortgage loans $ 7,165 $ 8,293
Net realized gain on mortgage loans 1,719 2,106
Total net gain on investments 8,884 10,399
Expenses:    
Residential rental property operating expenses 84 84
Related party mortgage loan servicing costs 1,242 1,634
Interest expense 654 696
General and administrative 3,369 6,067
Related party general and administrative 207
Total expenses 5,349 8,688
Other income 193 193
Net income 3,677 1,904
Net income attributable to noncontrolling interest in consolidated affiliate (5,227) (4,243)
Net loss attributable to common stockholders $ (1,499) $ (2,339)
     
Loss per share of common stock — basic:    
Loss per basic share $ (0.64) $ (1.00)
Weighted average common stock outstanding — basic 2,343,462 2,343,338
Loss per share of common stock — diluted:    
Loss per diluted share $ (0.64) $ (1.00)
Weighted average common stock outstanding — diluted 2,343,462 2,343,338
 
 
Altisource Asset Management Corporation 
Consolidated Balance Sheets 
(In thousands, except share and per share amounts)
(Unaudited)
     
 June 30, 2013December 31, 2012
Assets:    
Land (from consolidated VIE) $ 4 $ —
Rental residential properties, net (from consolidated VIE) 54
Real estate owned (from consolidated VIE) 3,749
  3,807
Real estate assets held for sale (from consolidated VIE) 901
Mortgage loans (from consolidated VIE) 163,520
Cash and cash equivalents (including from consolidated VIE $223,315 and $100,005, respectively) 227,846 105,014
Related party receivables (including from consolidated VIE $2,931 and $0, respectively) 3,220 361
Deferred leasing and financing costs, net (from consolidated VIE) 868
Prepaid expenses and other assets (including from consolidated VIE $20,262 and $6, respectively) 20,857 440
Total assets 421,019 105,815
Liabilities:    
Repurchase agreement (from consolidated VIE) 472
Accounts payable and accrued liabilities (including from consolidated VIE $1,138 and $46, respectively) 2,113 406
Related party payables (including from consolidated VIE $149 and $5, respectively) 762 528
Total liabilities 3,347 934
Equity:    
Common stock, $.01 par value, 5,000,000 authorized shares; and 2,345,425 and 2,343,213 shares issued and outstanding, respectively 23 23
Additional paid-in capital 6,289 4,993
Accumulated deficit (2,385) (46)
Total stockholders' equity 3,927 4,970
Noncontrolling interest in consolidated affiliate 413,745 99,911
Total equity 417,672 104,881
Total liabilities and equity $ 421,019 $ 105,815

The following tables set forth consolidating financial information which should be considered in addition to, and not as a substitute for, our consolidated financial statements presented in accordance with U.S. GAAP:

 
Altisource Asset Management Corporation 
Consolidating Statement of Operations
Three months ended June 30, 2013
(Unaudited, in thousands)
         
 Residential
(GAAP)
 AAMC Stand-alone
(Non-GAAP)
Consolidating
Entries
 AAMC Consolidated
(GAAP)
         
Net gain on investments:        
Net unrealized gain on mortgage loans $ 7,165 $ — $ — $ 7,165
Net realized gain on mortgage loans 1,719 1,719
Expense reimbursements 1,156 (1,156)
Total net gain on investments 8,884 1,156 (1,156) 8,884
Expenses:        
Residential rental property operating expenses 84 84
Related party mortgage loan servicing costs 1,242 1,242
Interest expense 654 654
General and administrative 714 2,655 3,369
Related party general and administrative 1,156 (1,156)
Total expenses 3,850 2,655 (1,156) 5,349
Other income 193 193
Net income (loss) 5,227 (1,499) 3,728
Net income attributable to noncontrolling interest in consolidated affiliate (5,227) (5,227)
Net income (loss) attributable to common stockholders $ 5,227 $ (1,499) $ (5,227) $ (1,499)
 
 
Altisource Asset Management Corporation 
Consolidating Statement of Operations
Six months ended June 30, 2013
(Unaudited, in thousands)
         
 Residential
(GAAP)
 AAMC Stand-alone
(Non-GAAP)
Consolidating
Entries
 AAMC Consolidated
(GAAP)
         
Net gain on investments:        
Net unrealized gain on mortgage loans $ 8,293 $ — $ — $ 8,293
Net realized gain on mortgage loans 2,106 2,106
Expense reimbursements 2,057 (2,057)
Total net gain on investments 10,399 2,057 (2,057) 10,399
Expenses:        
Residential rental property operating expenses 84 84
Related party mortgage loan servicing costs 1,634 1,634
Interest expense 696 696
General and administrative 1,701 4,366 6,067
Related party general and administrative 2,234 30 (2,057) 207
Total expenses 6,349 4,396 (2,057) 8,688
Other income 193 193
Net income (loss) 4,243 (2,339) 1,904
Net income attributable to noncontrolling interest in consolidated affiliate (4,243) (4,243)
Net income (loss) attributable to common stockholders $ 4,243 $ (2,339) $ (4,243) $ (2,339)
 
 
Altisource Asset Management Corporation
Consolidating Balance Sheet
June 30, 2013
(Unaudited, in thousands)
         
  Residential
(GAAP)
 AAMC Stand-alone
(Non-GAAP)
Consolidating
Entries
 AAMC Consolidated
(GAAP)
         
Assets:        
Real estate assets, net:        
Land $ 4 $ — $ — $ 4
Rental residential properties, net 54 54
Real estate owned 3,749 3,749
  3,807 3,807
Real estate assets held for sale 901 901
Mortgage loans 163,520 163,520
Cash and cash equivalents 223,315 4,531 227,846
Related party receivables 3,183 389 (352) 3,220
Deferred leasing and financing costs, net 868 868
Prepaid expenses and other assets 20,262 595 20,857
Total assets 415,856 5,515 (352) 421,019
Liabilities:        
Repurchase agreement 472 472
Accounts payable and accrued liabilities 1,138 975 2,113
Related party payables 501 613 (352) 762
Total liabilities 2,111 1,588 (352) 3,347
Equity:        
Common stock 251 23 (251) 23
Additional paid-in capital 409,340 6,289 (409,340) 6,289
Retained earnings/(accumulated deficit) 4,154 (2,385) (4,154) (2,385)
Total stockholders' equity 413,745 3,927 (413,745) 3,927
Noncontrolling interest in consolidated affiliate 413,745 413,745
Total equity 413,745 3,927 417,672
Total liabilities and equity $ 415,856 $ 5,515 $ (352) $ 421,019
 
 
Altisource Asset Management Corporation 
Consolidating Balance Sheet
December 31, 2012
(Unaudited, in thousands)
         
  Residential
(GAAP)
 AAMC Stand-alone
(Non-GAAP)
Consolidating
Entries
 AAMC Consolidated
(GAAP)
Assets:        
Cash and cash equivalents $ 100,005 $ 5,009 $ — $ 105,014
Related party receivables 410 (49) 361
Prepaid expenses and other assets 6 434 440
Total assets 100,011 5,853 (49) 105,815
Liabilities:        
Accounts payable and accrued liabilities 46 360 406
Related party payables 54 523 (49) 528
Total liabilities 100 883 (49) 934
Equity:        
Common stock 78 23 (78) 23
Additional paid-in capital 99,922 4,993 (99,922) 4,993
Deficit accumulated during the development stage (89) (46) 89 (46)
Total stockholders' equity 99,911 4,970 (99,911) 4,970
Noncontrolling interest in consolidated affiliate 99,911 99,911
Total equity 99,911 4,970 104,881
Total liabilities and equity $ 100,011 $ 5,853 $ (49) $ 105,815
CONTACT: Kenneth D. Najour

         Chief Financial Officer

         T: 561-682-8947

         E: Kenneth.Najour@AltisourceAMC.com


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