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Altisource Asset Management Corporation Reports Third Quarter 2018 Results
CHRISTIANSTED,
Third Quarter 2018 Highlights and Recent Developments
- Advised
Front Yard Residential Corporation (“Front Yard”) on the acquisition of property managerHavenBrook Partners, LLC (“HavenBrook”) and the 3,236 affordable single-family rental (“SFR”) homes managed by HavenBrook, growing Front Yard's SFR portfolio to approximately 15,000 homes. - Transition of ASPS-managed homes to Front Yard's HavenBrook platform is ahead of schedule: 2,245 homes were transferred by
October 31, 2018 and the remaining 1,815 homes will be moved by the end ofNovember 2018 . - Following this transition, approximately 7,300 homes will be internally managed by Front Yard.
- Maintained strong operating metrics for Front Yard during integration of HavenBrook.
Reduced Front Yard's remaining legacy REOs to 133, down 30% from 190 at June 30, 2018 and 73% from 490 atDecember 31, 2017 .- Obtained
$508.7 million of 10-year, fixed rate financing for Front Yard as part ofFreddie Mac's affordable SFR pilot program in connection with the HavenBrook acquisition. - Continued optimization of Front Yard's financing: capped an additional
$172.4 million of financing onOctober 16, 2018 , bringing its fixed-rate or capped financing of total debt to 88% with a weighted average maturity of five years.
“Front Yard’s internalization of property management under our guidance is ahead of schedule, and we continue to maintain strong operating metrics for Front Yard despite the costs associated with the integration of HavenBrook,” stated Chief Executive Officer
Third Quarter 2018 Financial Results
AAMC’s net loss attributable to common stockholders for the third quarter of 2018 was
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-rental real estate 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 successfully and efficiently integrate and manage Front Yard’s newly acquired property manager or effectively manage the performance of Front Yard’s internal property manager at the level and/or the cost that it anticipates; the failure of external property managers to effectively perform their obligations under their agreements with 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
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) |
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| Three months ended September 30, |
Nine months ended September 30, |
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| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Revenues: | |||||||||||||||
| Management fees from Front Yard | $ | 3,613 | $ | 3,966 | $ | 10,984 | $ | 12,176 | |||||||
| Conversion fees from Front Yard | 35 | 163 | 151 | 1,201 | |||||||||||
| Expense reimbursements from Front Yard | 286 | 300 | 767 | 706 | |||||||||||
| Total revenues | 3,934 | 4,429 | 11,902 | 14,083 | |||||||||||
| Expenses: | |||||||||||||||
| Salaries and employee benefits | 4,605 | 5,035 | 13,343 | 15,003 | |||||||||||
| Legal and professional fees | 474 | 899 | 1,293 | 1,919 | |||||||||||
| General and administrative | 993 | 778 | 2,783 | 2,661 | |||||||||||
| Total expenses | 6,072 | 6,712 | 17,419 | 19,583 | |||||||||||
| Other income (loss): | |||||||||||||||
| Change in fair value of Front Yard common stock | 698 | — | (1,641 | ) | — | ||||||||||
| Dividend income on Front Yard common stock | 244 | 244 | 731 | 731 | |||||||||||
| Other income | 58 | 41 | 150 | 68 | |||||||||||
| Total other income (loss) | 1,000 | 285 | (760 | ) | 799 | ||||||||||
| Loss before income taxes | (1,138 | ) | (1,998 | ) | (6,277 | ) | (4,701 | ) | |||||||
| Income tax expense | 17 | 127 | 309 | 484 | |||||||||||
| Net loss | (1,155 | ) | (2,125 | ) | (6,586 | ) | (5,185 | ) | |||||||
| Amortization of preferred stock issuance costs | (52 | ) | (52 | ) | (155 | ) | (155 | ) | |||||||
| Net loss attributable to common stockholders | $ | (1,207 | ) | $ | (2,177 | ) | $ | (6,741 | ) | $ | (5,340 | ) | |||
| Loss per share of common stock – basic: | |||||||||||||||
| Loss per basic share | $ | (0.75 | ) | $ | (1.38 | ) | $ | (4.19 | ) | $ | (3.42 | ) | |||
| Weighted average common stock outstanding – basic | 1,613,413 | 1,574,822 | 1,609,932 | 1,562,056 | |||||||||||
| Loss per share of common stock – diluted: | |||||||||||||||
| Loss per diluted share | $ | (0.75 | ) | $ | (1.38 | ) | $ | (4.19 | ) | $ | (3.42 | ) | |||
| Weighted average common stock outstanding – diluted | 1,613,413 | 1,574,822 | 1,609,932 | 1,562,056 | |||||||||||
| Altisource Asset Management Corporation Condensed Consolidated Balance Sheets (In thousands, except share and per share amounts) |
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| September 30, 2018 | December 31, 2017 | ||||||
| (unaudited) | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 30,194 | $ | 33,349 | |||
| Short-term investments | 279 | 625 | |||||
| Front Yard common stock, at fair value | 17,625 | 19,266 | |||||
| Receivable from Front Yard | 4,006 | 4,151 | |||||
| Prepaid expenses and other assets | 1,172 | 1,022 | |||||
| Total current assets | 53,276 | 58,413 | |||||
| Other non-current assets | 1,638 | 1,974 | |||||
| Total assets | $ | 54,914 | $ | 60,387 | |||
| Current liabilities: | |||||||
| Accrued salaries and employee benefits | $ | 4,603 | $ | 5,651 | |||
| Accounts payable and other accrued liabilities | 888 | 2,085 | |||||
| Total liabilities | 5,491 | 7,736 | |||||
| Commitments and contingencies | — | — | |||||
| Redeemable preferred stock: | |||||||
| Preferred stock, $0.01 par value, 250,000 shares issued and outstanding as of September 30, 2018 and December 31, 2017; redemption value $250,000 | 249,701 | 249,546 | |||||
| Stockholders' deficit: | |||||||
| Common stock, $0.01 par value, 5,000,000 authorized shares; 2,835,046 and 1,613,852 shares issued and outstanding, respectively, as of September 30, 2018 and 2,815,122 and 1,599,210 shares issued and outstanding, respectively, as of December 31, 2017 | 28 | 28 | |||||
| Additional paid-in capital | 41,475 | 37,765 | |||||
| Retained earnings | 30,899 | 38,970 | |||||
| Accumulated other comprehensive loss | — | (1,330 | ) | ||||
| Treasury stock, at cost, 1,221,194 shares as of September 30, 2018 and 1,215,912 shares as of December 31, 2017 | (272,680 | ) | (272,328 | ) | |||
| Total stockholders' deficit | (200,278 | ) | (196,895 | ) | |||
| Total liabilities and equity | $ | 54,914 | $ | 60,387 | |||
| FOR FURTHER INFORMATION CONTACT: |
| Robin N. Lowe |
| Chief Financial Officer |
| T: +1-345-815-9919 |
| E: Robin.Lowe@AltisourceAMC.com |
Source: Altisource Asset Management Corporation