UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 22, 2013
ALTISOURCE ASSET MANAGEMENT CORPORATION
(Exact name of Registrant as specified in its charter)
United States Virgin Islands | 000-54809 | 66-0783125 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||
402 Strand Street
Frederiksted, United States Virgin Islands 00840-3531
(Address of principal executive offices including zip code)
(340) 692-1055
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On October 22, 2013, Altisource Asset Management Corporation issued a press release announcing financial results for its quarter ended September 30, 2013. A copy of the press release is attached hereto as Exhibit 99.1.
The information in this Item 2.02, including the information in Exhibit 99.1, is furnished solely pursuant to Item 2.02 of this Form 8-K. Consequently, it is not deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that Section. It may only be incorporated by reference in another filing under the Securities Exchange Act of 1934 or Securities Act of 1933 if such subsequent filing specifically references this Item 2.02 of this Form 8-K.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
Exhibit No. | Description | |
Exhibit 99.1 | Press Release of Altisource Asset Management Corporation dated October 22, 2013 | |
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Altisource Asset Management Corporation | ||
October 22, 2013 | By: | /s/ Stephen H. Gray |
Stephen H. Gray General Counsel and Secretary | ||
FOR IMMEDIATE RELEASE | |
FOR FURTHER INFORMATION CONTACT: Kenneth D. Najour Chief Financial Officer T: 561-682-8947 E: Kenneth.Najour@AltisourceAMC.com | |
Altisource Asset Management Corporation Reports Third Quarter 2013 Results
FREDERIKSTED, USVI October 22, 2013 (GLOBE NEWSWIRE) - Altisource Asset Management Corporation ("AAMC" or the "Company") (NYSE MKT: AAMC) announced today financial and operating results for the third quarter of 2013. Net loss for the third quarter of 2013 totaled $2.6 million or $1.09 per share based on a weighted average of 2.3 million shares outstanding.
Net loss for the nine months ended September 30, 2013 totaled $4.9 million or $2.09 per share based on a weighted average of 2.3 million shares outstanding.
Third quarter business performance highlights:
• | We facilitated the purchase of three portfolios of non-performing residential mortgage loans ("NPLs") for Altisource Residential Corporation ("Residential") having an aggregate market value of underlying properties of $712 million. |
• | We facilitated the entry into two master repurchase agreements with major financial institutions for Residential which have provided $325 million of additional borrowing capacity to finance the acquisition and ownership of sub-performing and non-performing residential mortgage loans and REO properties. |
• | We earned incentive management fees from Residential of $51,000 based on Residential's payment of a dividend of $0.10 per share to its stockholders. |
• | We priced the second accretive equity offering for Residential which closed on October 1, 2013, raising a total of $350 million. |
• | We transferred the listing of our common stock from the OTCQX to the NYSE MKT. |
Chief Executive Officer Ashish Pandey stated, “AAMC and its management team have continued to provide sound asset management services to Residential in growing Residential’s NPL portfolio, providing additional accretive equity and debt capital for Residential to deploy and in managing the resolution of Residential’s loans.”
“We are proud of our implementation of Residential’s differentiated business plan. We believe that, with AAMC’s guidance, Residential’s acquisition cost, efficient operating structure and low cost of capital provide it with a competitive advantage in the single-family rental REIT space," said Chairman William Erbey.
Webcast and conference call
The Company will host a webcast and conference call on Tuesday, October 22, 2013, at 11 A.M Eastern Time to discuss its financial results for the third 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 Reports on Form 10-Q for the first and second 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 September 30, 2013 | Nine months ended September 30, 2013 | ||||||
Rental revenues and net gain on investments: | |||||||
Rental revenues | $ | 6 | $ | 6 | |||
Net unrealized gain on mortgage loans | 17,670 | 25,963 | |||||
Net realized gain on mortgage loans | 1,909 | 4,015 | |||||
Total rental revenues and net gain on investments | 19,585 | 29,984 | |||||
Expenses: | |||||||
Residential rental property operating expenses | 191 | 275 | |||||
Real estate depreciation and amortization | 4 | 4 | |||||
Mortgage loan servicing costs | 2,154 | 3,788 | |||||
Interest expense | 467 | 1,163 | |||||
General and administrative | 5,105 | 11,008 | |||||
Related party general and administrative | 681 | 1,052 | |||||
Total expenses | 8,602 | 17,290 | |||||
Other income | 169 | 362 | |||||
Net income | 11,152 | 13,056 | |||||
Net income attributable to noncontrolling interest in consolidated affiliate | (13,709 | ) | (17,952 | ) | |||
Net loss attributable to common stockholders | $ | (2,557 | ) | $ | (4,896 | ) | |
Loss per share of common stock – basic: | |||||||
Loss per basic share | $ | (1.09 | ) | $ | (2.09 | ) | |
Weighted average common stock outstanding – basic | 2,348,040 | 2,344,923 | |||||
Loss per share of common stock – diluted: | |||||||
Loss per diluted share | $ | (1.09 | ) | $ | (2.09 | ) | |
Weighted average common stock outstanding – diluted | 2,348,040 | 2,344,923 | |||||
Altisource Asset Management Corporation
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
(Unaudited)
September 30, 2013 | December 31, 2012 | |||||
Assets: | ||||||
Real estate assets: | ||||||
Land (from consolidated VIE) | $ | 224 | $ | — | ||
Rental residential properties, net (from consolidated VIE) | 1,128 | — | ||||
Real estate owned (from consolidated VIE) | 14,408 | — | ||||
15,760 | — | |||||
Real estate assets held for sale (from consolidated VIE) | 1,074 | — | ||||
Mortgage loans (from consolidated VIE) | 641,903 | — | ||||
Cash and cash equivalents (including from consolidated VIE $98,252 and $100,005, respectively) | 102,060 | 105,014 | ||||
Restricted cash (from consolidated VIE) | 3,092 | — | ||||
Related party receivables (including from consolidated VIE $6,272 and $0, respectively) | 6,272 | 361 | ||||
Deferred leasing and financing costs, net (from consolidated VIE) | 1,744 | — | ||||
Prepaid expenses and other assets (including from consolidated VIE $911 and $6, respectively) | 1,495 | 440 | ||||
Total assets | 773,400 | 105,815 | ||||
Liabilities: | ||||||
Repurchase agreements (from consolidated VIE) | 338,800 | — | ||||
Accounts payable and accrued liabilities (including from consolidated VIE $2,408 and $46, respectively) | 3,728 | 406 | ||||
Related party payables (including from consolidated VIE $2,746 and $54, respectively) | 2,297 | 528 | ||||
Total liabilities | 344,825 | 934 | ||||
Commitments and contingencies | ||||||
Equity: | ||||||
Common stock, $.01 par value, 5,000,000 authorized shares; 2,350,546 and 2,343,213 shares issued and outstanding, respectively | 24 | 23 | ||||
Additional paid-in capital | 8,439 | 4,993 | ||||
Accumulated deficit | (4,942 | ) | (46 | ) | ||
Total stockholders' equity | 3,521 | 4,970 | ||||
Noncontrolling interest in consolidated affiliate | 425,054 | 99,911 | ||||
Total equity | 428,575 | 104,881 | ||||
Total liabilities and equity | $ | 773,400 | $ | 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 September 30, 2013
(Unaudited, in thousands)
Residential (GAAP) | AAMC Stand-alone (Non-GAAP) | Consolidating Entries | AAMC Consolidated (GAAP) | |||||||||
Revenues and net gain on investments: | ||||||||||||
Rental revenues | $ | 6 | $ | — | $ | — | $ | 6 | ||||
Net unrealized gain on mortgage loans | 17,670 | — | — | 17,670 | ||||||||
Net realized gain on mortgage loans | 1,909 | — | — | 1,909 | ||||||||
Incentive management fee | — | 51 | (51 | ) | — | |||||||
Expense reimbursements | — | 1,307 | (1,307 | ) | — | |||||||
Total revenues | 19,585 | 1,358 | (1,358 | ) | 19,585 | |||||||
Expenses: | ||||||||||||
Residential rental property operating expenses | 191 | — | — | 191 | ||||||||
Real estate depreciation and amortization | 4 | — | — | 4 | ||||||||
Mortgage loan servicing costs | 2,154 | — | — | 2,154 | ||||||||
Interest expense | 467 | — | — | 467 | ||||||||
General and administrative | 1,190 | 3,915 | — | 5,105 | ||||||||
Related party general and administrative | 2,039 | — | (1,358 | ) | 681 | |||||||
Total expenses | 6,045 | 3,915 | (1,358 | ) | 8,602 | |||||||
Other income | 169 | — | — | 169 | ||||||||
Net income (loss) | 13,709 | (2,557 | ) | — | 11,152 | |||||||
Net income attributable to noncontrolling interest in consolidated affiliate | — | — | (13,709 | ) | (13,709 | ) | ||||||
Net income (loss) attributable to common stockholders | $ | 13,709 | $ | (2,557 | ) | $ | (13,709 | ) | $ | (2,557 | ) | |
Altisource Asset Management Corporation
Consolidating Statement of Operations
Nine months ended September 30, 2013
(Unaudited, in thousands)
Residential (GAAP) | AAMC Stand-alone (Non-GAAP) | Consolidating Entries | AAMC Consolidated (GAAP) | |||||||||
Revenues and net gain on investments: | ||||||||||||
Rental revenues | $ | 6 | $ | — | $ | — | $ | 6 | ||||
Net unrealized gain on mortgage loans | 25,963 | — | — | 25,963 | ||||||||
Net realized gain on mortgage loans | 4,015 | — | — | 4,015 | ||||||||
Expense reimbursements | — | 3,371 | (3,371 | ) | — | |||||||
Incentive management fees | — | 51 | (51 | ) | — | |||||||
Total rental revenues and net gain on investments | 29,984 | 3,422 | (3,422 | ) | 29,984 | |||||||
Expenses: | ||||||||||||
Residential rental property operating expenses | 275 | — | — | 275 | ||||||||
Real estate depreciation and amortization | 4 | — | — | 4 | ||||||||
Mortgage loan servicing costs | 3,788 | — | — | 3,788 | ||||||||
Interest expense | 1,163 | — | — | 1,163 | ||||||||
General and administrative | 2,690 | 8,318 | — | 11,008 | ||||||||
Related party general and administrative | 4,474 | — | (3,422 | ) | 1,052 | |||||||
Total expenses | 12,394 | 8,318 | (3,422 | ) | 17,290 | |||||||
Other income | 362 | — | — | 362 | ||||||||
Net income (loss) | 17,952 | (4,896 | ) | — | 13,056 | |||||||
Net income attributable to noncontrolling interest in consolidated affiliate | — | — | (17,952 | ) | (17,952 | ) | ||||||
Net income (loss) attributable to common stockholders | $ | 17,952 | $ | (4,896 | ) | $ | (17,952 | ) | $ | (4,896 | ) | |
Altisource Asset Management Corporation
Consolidating Balance Sheet
September 30, 2013
(Unaudited, in thousands)
Residential (GAAP) | AAMC Stand-alone (Non-GAAP) | Consolidating Entries | AAMC Consolidated (GAAP) | |||||||||
Assets: | ||||||||||||
Real estate assets, net: | ||||||||||||
Land | $ | 224 | $ | — | $ | — | $ | 224 | ||||
Rental residential properties, net | 1,128 | — | — | 1,128 | ||||||||
Real estate owned | 14,408 | — | — | 14,408 | ||||||||
15,760 | — | — | 15,760 | |||||||||
Real estate assets held for sale | 1,074 | — | — | 1,074 | ||||||||
Mortgage loans | 641,903 | — | — | 641,903 | ||||||||
Cash and cash equivalents | 98,252 | 3,808 | — | 102,060 | ||||||||
Restricted cash | 3,092 | — | — | 3,092 | ||||||||
Related party receivables | 6,272 | 590 | (590 | ) | 6,272 | |||||||
Deferred leasing and financing costs, net | 1,744 | — | — | 1,744 | ||||||||
Prepaid expenses and other assets | 911 | 584 | — | 1,495 | ||||||||
Total assets | 769,008 | 4,982 | (590 | ) | 773,400 | |||||||
Liabilities: | ||||||||||||
Repurchase agreement | 338,800 | — | — | 338,800 | ||||||||
Accounts payable and accrued liabilities | 2,408 | 1,320 | — | 3,728 | ||||||||
Related party payables | 2,746 | 141 | (590 | ) | 2,297 | |||||||
Total liabilities | 343,954 | 1,461 | (590 | ) | 344,825 | |||||||
Commitments and contingencies | ||||||||||||
Equity: | ||||||||||||
Common stock | 251 | 24 | (251 | ) | 24 | |||||||
Additional paid-in capital | 409,449 | 8,439 | (409,449 | ) | 8,439 | |||||||
Retained earnings/(accumulated deficit) | 15,354 | (4,942 | ) | (15,354 | ) | (4,942 | ) | |||||
Total stockholders' equity | 425,054 | 3,521 | (425,054 | ) | 3,521 | |||||||
Noncontrolling interest in consolidated affiliate | — | — | 425,054 | 425,054 | ||||||||
Total equity | 425,054 | 3,521 | — | 428,575 | ||||||||
Total liabilities and equity | $ | 769,008 | $ | 4,982 | $ | (590 | ) | $ | 773,400 | |||
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 | |||||||
Commitments and contingencies | ||||||||||||
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 | |||