Altisource Asset Management Corporation Reports Second Quarter 2020 Results; Announces Agreement to Terminate the Asset Management Agreement between AAMC and Front Yard Residential Corporation
AAMC also announced that, on
Second Quarter 2020 Highlights and Recent Developments
Increased Front Yard'srental revenues to $55.1 millionfor the second quarter of 2020, up 1.5% over the first quarter of 2020 and up 6.9% year on year.
- Managed continued improvement in Front Yard's operating metrics, yielding its best yet quarterly operational results.
- Advised Front Yard in the sale of 30 non-core homes for a
$0.3 milliongain over carrying value.
- Negotiated the settlement by Front Yard, at the direction of the board of directors of Front Yard, to terminate the previously announced merger agreement with
Amherst Residential, LLC(“Amherst”), providing Front Yard with up to $100 millionof additional liquidity.
- Negotiated and executed the Termination Agreement with Front Yard on terms resulting in payments to AAMC of over
$54 millionplus management fees through the date that Front Yard delivers written notice to AAMC that the transition has been satisfactorily completed.
- Further developed new business opportunities for AAMC, targeting market dislocation opportunities.
- Secured a firm, non-binding commitment of a
$20.0 millioninvestment from a strategic investor for a fund formed by AAMC focused on, among other things, the origination and underwriting of short duration construction loans for the single-family rental market.
“We are pleased by the continued improved and strong operational performance of Front Yard in the second quarter under our management,” stated
Second Quarter 2020 Financial Results
AAMC’s net loss for the second quarter of 2020 was
AAMC's net loss for the six months ended
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.
Additional details on the Termination Agreement can be found in the Company’s Current Report on Form 8-K that will be filed with the
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 strategy and the business strategy of Front Yard; risks associated with the termination of AAMC's asset management agreement with Front Yard, including the potential effects that the termination can have on our new business initiatives, results of operations and financial condition; AAMC’s ability to successfully complete the transition period under the Termination Agreement; AAMC's ability to retain key employees; AAMC's ability to develop and implement new businesses or, to the extent such businesses are developed, its ability to make them successful or sustain the performance of any such businesses; AAMC's ability to retain and maintain its strategic relationships; AAMC's ability to obtain additional asset management clients; the potential for the COVID-19 pandemic to adversely affect AAMC's business, financial position, operations, business prospects, customers, employees and third-party service providers; AAMC's ability to effectively compete with its competitors; Front Yard's ability to complete future or pending transactions, which could affect AAMC's management fees; the failure of AAMC's service providers to effectively perform their obligations under their agreements with AAMC; AAMC's ability to integrate newly acquired rental assets into Front Yard’s portfolio; AAMC's ability to effectively manage the performance of Front Yard’s internal property manager at the level and/or the cost that it anticipates; developments in the litigations regarding AAMC's redemption obligations under the Certificate of Designations of its Series A Convertible Preferred Stock (the “Series A Shares”), including AAMC's ability to obtain declaratory relief confirming that AAMC was not obligated to redeem any of the Series A Shares on the
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.
Condensed Consolidated Statements of Operations
(In thousands, except share and per share amounts)
|Three months ended
||Six months ended
|Management fees from Front Yard||$||3,584||$||3,556||$||7,168||$||7,102|
|Conversion fees from Front Yard||—||—||—||29|
|Expense reimbursements from Front Yard||713||342||1,081||670|
|Salaries and employee benefits||4,826||4,238||9,370||8,656|
|Legal and professional fees||1,805||1,356||3,339||1,698|
|General and administrative||892||880||1,987||1,919|
|Other (loss) income:|
|Change in fair value of Front Yard common stock||(5,279||)||4,792||(5,913||)||5,669|
|Dividend income on Front Yard common stock||—||243||244||487|
|Total other (loss) income||(5,262||)||5,084||(5,615||)||6,209|
|Net (loss) income before income taxes||(8,488||)||2,508||(12,062||)||1,737|
|Income tax benefit||(653||)||(781||)||(470||)||(712||)|
|Net (loss) income||(7,835||)||3,289||(11,592||)||2,449|
|Amortization of preferred stock issuance costs||—||(52||)||(42||)||(103||)|
|Net (loss) income attributable to common stockholders||$||(7,835||)||$||3,237||$||(11,634||)||$||2,346|
|(Loss) earnings per share of common stock – basic:|
|(Loss) earnings per basic common share||$||(4.81||)||$||2.04||$||(7.17||)||$||1.48|
|Weighted average common stock outstanding – basic||1,629,285||1,589,492||1,622,497||1,585,775|
|(Loss) earnings per share of common stock – diluted:|
|(Loss) earnings per diluted common share||$||(4.81||)||$||1.81||$||(7.17||)||$||1.34|
|Weighted average common stock outstanding – diluted||1,629,285||1,820,244||1,622,497||1,830,263|
Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts)
|Cash and cash equivalents||$||15,845||$||19,965|
|Front Yard common stock, at fair value||14,133||20,046|
|Receivable from Front Yard||3,886||5,014|
|Prepaid expenses and other assets||2,328||1,609|
|Total current assets||36,192||47,151|
|Right-of-use lease assets||4,070||4,339|
|Other non-current assets||1,980||1,758|
|Total non-current assets||6,050||6,097|
|Accrued salaries and employee benefits||$||5,577||$||5,407|
|Accounts payable and accrued liabilities||1,380||1,328|
|Short-term lease liabilities||280||265|
|Total current liabilities||7,237||7,000|
|Long-term lease liabilities||3,972||4,218|
|Commitments and contingencies||—||—|
|Redeemable preferred stock:|
|Additional paid-in capital||45,530||44,646|
|Accumulated other comprehensive loss||(126||)||(33||)|
|Total stockholders' deficit||(218,967||)||(207,928||)|
|Total liabilities and equity||$||42,242||$||53,248|
|FOR FURTHER INFORMATION CONTACT:|
Source: Altisource Asset Management Corporation