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): April 29, 2014
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 April 29, 2014, Altisource Asset Management Corporation issued a press release announcing financial results for its first quarter ended March 31, 2014. 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 April 29, 2014 | |
SIGNATURES
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 | ||
April 29, 2014 | 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: 340-713-7722 E: Kenneth.Najour@AltisourceAMC.com | |
Altisource Asset Management Corporation Reports First Quarter 2014 Results
FREDERIKSTED, U.S. Virgin Islands, April 29, 2014 (GLOBE NEWSWIRE) - Altisource Asset Management Corporation (“AAMC” or the “Company”) (NYSE MKT: AAMC) announced today financial and operating results for the first quarter of 2014. Net income attributable to stockholders for the first quarter of 2014 totaled $6.8 million, or $2.39 per diluted share,1 compared to a net loss attributable to stockholders of $840,000, or $0.36 per share,2 for the first quarter of 2013.
First quarter business performance highlights:
• | Achieved first quarter of positive net income since inception. |
• | Issued 250,000 shares of a new non-voting Series A Convertible Preferred Stock to institutional investors for aggregate net proceeds of $248.9 million. The preferred stock is convertible into AAMC’s common stock at a conversion price of $1,250 per share and does not entitle the holders to dividends. |
• | Facilitated the resolution of 822 loans by Altisource Residential Corporation (“Residential”) in the first quarter of 2014 versus 288 loans in the fourth quarter of 2013. |
• | Facilitated Residential’s agreement to purchase a portfolio with an aggregate of 915 mortgage loans and real estate owned (“REO”) properties having an aggregate market value of underlying properties of $180.0 million. |
Chief Executive Officer Ashish Pandey stated, “We expect Residential’s improved loan resolution results will have a meaningful impact on the growth of Residential’s rental portfolio.”
“Under the management of AAMC, Residential has been able to pay an increased dividend for the second consecutive quarter,” said Chairman William Erbey.
Webcast and conference call
The Company will host a webcast and conference call on Tuesday, April 29, 2014, at 11:00 a.m. Eastern Time to discuss its financial results for the first quarter of 2014. 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 “Shareholders” link.
About AAMC
AAMC is an asset management company that provides portfolio management and corporate governance services to investment vehicles. 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.
1 Based on a weighted average of 2.9 million diluted shares outstanding during the quarter.
2 Based on a weighted average of 2.3 million shares outstanding during the quarter.
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 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 and its 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 March 31, 2014 | Three months ended March 31, 2013 | ||||||
Rental revenues and net gain on investments: | |||||||
Rental revenues | $ | 69 | $ | — | |||
Net unrealized gain on mortgage loans | 65,130 | 1,128 | |||||
Net realized gain on mortgage loans | 9,321 | 387 | |||||
Total revenues | 74,520 | 1,515 | |||||
Expenses: | |||||||
Residential property operating expenses | 1,050 | — | |||||
Real estate depreciation and amortization | 48 | — | |||||
Mortgage loan servicing costs | 11,437 | 392 | |||||
Interest expense | 5,708 | 42 | |||||
General and administrative | 5,955 | 2,698 | |||||
Related party general and administrative | 923 | 207 | |||||
Total expenses | 25,121 | 3,339 | |||||
Other income | 108 | — | |||||
Net income (loss) before income taxes | 49,507 | (1,824 | ) | ||||
Income tax expense | 766 | — | |||||
Net income (loss) | 48,741 | (1,824 | ) | ||||
Net (income) loss attributable to noncontrolling interest in consolidated affiliate | (41,913 | ) | 984 | ||||
Net income (loss) attributable to common stockholders | $ | 6,828 | $ | (840 | ) | ||
Net income (loss) per share of common stock – basic: | |||||||
Net income (loss) per basic share | $ | 2.88 | $ | (0.36 | ) | ||
Weighted average common stock outstanding – basic | 2,367,202 | 2,343,213 | |||||
Net income (loss) per share of common stock – diluted: | |||||||
Net income (loss) per diluted share | $ | 2.39 | $ | (0.36 | ) | ||
Weighted average common stock outstanding – diluted | 2,856,079 | 2,343,213 | |||||
Altisource Asset Management Corporation
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
(Unaudited)
March 31, 2014 | December 31, 2013 | ||||||
Assets: | |||||||
Real estate assets: | |||||||
Land (from consolidated VIE) | $ | 1,367 | $ | 478 | |||
Rental residential properties, net (from consolidated VIE) | 6,488 | 3,092 | |||||
Real estate owned (from consolidated VIE) | 121,895 | 32,332 | |||||
129,750 | 35,902 | ||||||
Real estate assets held for sale (from consolidated VIE) | 4,224 | 1,186 | |||||
Mortgage loans (from consolidated VIE) | 1,766,142 | 1,207,163 | |||||
Cash and cash equivalents (including from consolidated VIE $48,022 and $115,988, respectively) | 280,466 | 140,000 | |||||
Restricted cash (from consolidated VIE) | 7,334 | 5,878 | |||||
Accounts receivable (including from consolidated VIE $681 and $1,428, respectively) | 926 | 1,428 | |||||
Related party receivables (including from consolidated VIE $10,444 and $9,260, respectively) | 10,560 | 9,260 | |||||
Deferred leasing and financing costs, net (from consolidated VIE) | 1,808 | 2,293 | |||||
Prepaid expenses and other assets (including from consolidated VIE $353 and $1,542, respectively) | 1,200 | 1,994 | |||||
Total assets | $ | 2,202,410 | $ | 1,405,104 | |||
Liabilities: | |||||||
Repurchase agreements (from consolidated VIE) | $ | 699,950 | $ | 602,382 | |||
Accounts payable and accrued liabilities (including from consolidated VIE $5,835 and $4,952, respectively) | 8,250 | 6,872 | |||||
Related party payables (including from consolidated VIE $359 and $1,409, respectively) | 3,754 | 2,883 | |||||
Total liabilities | 711,954 | 612,137 | |||||
Commitments and contingencies | |||||||
Mezzanine Equity | |||||||
Preferred stock, $0.01 par value, 250,000 shares issued and outstanding as of March 31, 2014 and none issued or outstanding as of December 31, 2013; redemption value $250,000 | 248,886 | — | |||||
Equity: | |||||||
Common stock, $.01 par value, 5,000,000 authorized shares; 2,396,203 and 2,353,963 shares issued and outstanding, respectively as of March 31, 2014 and 2,354,774 shares issued and outstanding as of December 31, 2013 | 24 | 24 | |||||
Additional paid-in capital | 16,189 | 12,855 | |||||
Retained earnings | 1,489 | (5,339 | ) | ||||
Treasury stock, at cost, 42,240 shares as of March 31, 2014 and none as of December 31, 2013 | (44,565 | ) | — | ||||
Total stockholders' equity | (26,863 | ) | 7,540 | ||||
Noncontrolling interest in consolidated affiliate | 1,268,433 | 785,427 | |||||
Total equity | 1,241,570 | 792,967 | |||||
Total liabilities and equity | $ | 2,202,410 | $ | 1,405,104 | |||
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 March 31, 2014
(In thousands, unaudited)
Residential (GAAP) | NewSource Stand-alone (Non-GAAP) | AAMC Stand-alone (Non-GAAP) | Consolidating Entries | AAMC Consolidated (GAAP) | |||||||||||
Revenues and net gain on investments: | |||||||||||||||
Rental revenues | $ | 69 | $ | — | $ | — | $ | — | $ | 69 | |||||
Net unrealized gain on mortgage loans | 65,130 | — | — | — | 65,130 | ||||||||||
Net realized gain on mortgage loans | 9,321 | — | — | — | 9,321 | ||||||||||
Incentive management fee | — | — | 10,911 | (10,911 | ) | — | |||||||||
Expense reimbursements | — | 1,780 | (1,780 | ) | — | ||||||||||
Total revenues | 74,520 | — | 12,691 | (12,691 | ) | 74,520 | |||||||||
Expenses: | |||||||||||||||
Residential property operating expenses | 1,050 | — | — | — | 1,050 | ||||||||||
Real estate depreciation and amortization | 48 | — | — | — | 48 | ||||||||||
Mortgage loan servicing costs | 11,437 | — | — | — | 11,437 | ||||||||||
Interest expense | 5,708 | — | — | — | 5,708 | ||||||||||
General and administrative | 1,392 | 30 | 4,533 | — | 5,955 | ||||||||||
Related party general and administrative | 12,632 | 311 | 671 | (12,691 | ) | 923 | |||||||||
Total expenses | 32,267 | 341 | 5,204 | (12,691 | ) | 25,121 | |||||||||
Other income | 108 | — | — | — | 108 | ||||||||||
Income (loss) before income taxes | 42,361 | (341 | ) | 7,487 | — | 49,507 | |||||||||
Income tax expense | 448 | — | 318 | — | 766 | ||||||||||
Net income (loss) | 41,913 | (341 | ) | 7,169 | — | 48,741 | |||||||||
Net (income) loss attributable to noncontrolling interest in consolidated affiliate | — | — | — | (41,913 | ) | (41,913 | ) | ||||||||
Net income (loss) attributable to common stockholders | $ | 41,913 | $ | (341 | ) | $ | 7,169 | $ | (41,913 | ) | $ | 6,828 | |||
Altisource Asset Management Corporation
Consolidating Statement of Operations
Three months ended March 31, 2013
(In thousands, unaudited)
Residential (GAAP) | NewSource Stand-alone (Non-GAAP) | AAMC Stand-alone (Non-GAAP) | Consolidating Entries | AAMC Consolidated (GAAP) | |||||||||||
Revenues and net gain on investments: | |||||||||||||||
Rental revenues | $ | — | $ | — | $ | — | $ | — | $ | — | |||||
Net unrealized gain on mortgage loans | 1,128 | — | — | — | 1,128 | ||||||||||
Net realized gain on mortgage loans | 387 | — | — | — | 387 | ||||||||||
Expense reimbursements | — | — | 895 | (895 | ) | — | |||||||||
Total revenues | 1,515 | — | 895 | (895 | ) | 1,515 | |||||||||
Expenses: | |||||||||||||||
Mortgage loan servicing costs | 392 | — | — | — | 392 | ||||||||||
Interest expense | 42 | — | — | — | 42 | ||||||||||
General and administrative | 987 | — | 1,711 | — | 2,698 | ||||||||||
Related party general and administrative | 1,078 | — | 24 | (895 | ) | 207 | |||||||||
Total expenses | 2,499 | — | 1,735 | (895 | ) | 3,339 | |||||||||
Net income (loss) | (984 | ) | — | (840 | ) | — | (1,824 | ) | |||||||
Net (income) loss attributable to noncontrolling interest in consolidated affiliate | — | — | — | 984 | 984 | ||||||||||
Net income (loss) attributable to common stockholders | $ | (984 | ) | $ | — | $ | (840 | ) | $ | 984 | $ | (840 | ) | ||
Altisource Asset Management Corporation
Consolidating Balance Sheet
March 31, 2014
(In thousands, unaudited)
Residential (GAAP) | NewSource stand-alone (non-GAAP) | AAMC Stand-alone (Non-GAAP) | Consolidating Entries | AAMC Consolidated (GAAP) | |||||||||||
Assets: | |||||||||||||||
Real estate assets: | |||||||||||||||
Land | $ | 1,367 | $ | — | $ | — | $ | — | $ | 1,367 | |||||
Rental residential properties, net | 6,488 | — | — | — | 6,488 | ||||||||||
Real estate owned | 121,895 | — | — | — | 121,895 | ||||||||||
129,750 | — | — | — | 129,750 | |||||||||||
Real estate assets held for sale | 4,224 | — | — | — | 4,224 | ||||||||||
Mortgage loans | 1,766,142 | — | — | — | 1,766,142 | ||||||||||
Cash and cash equivalents | 48,022 | 19,892 | 212,552 | — | 280,466 | ||||||||||
Restricted cash | 7,334 | — | — | — | 7,334 | ||||||||||
Accounts receivable | 681 | — | 245 | — | 926 | ||||||||||
Related party receivables | 10,444 | — | 12,308 | (12,192 | ) | 10,560 | |||||||||
Investment in affiliate | 18,000 | — | 2,000 | (20,000 | ) | — | |||||||||
Deferred leasing and financing costs, net | 1,808 | — | — | — | 1,808 | ||||||||||
Prepaid expenses and other assets | 353 | 25 | 822 | — | 1,200 | ||||||||||
Total assets | 1,986,758 | 19,917 | 227,927 | (32,192 | ) | 2,202,410 | |||||||||
Liabilities: | |||||||||||||||
Repurchase agreements | 699,950 | — | — | — | 699,950 | ||||||||||
Accounts payable and accrued liabilities | 5,835 | 17 | 2,398 | — | 8,250 | ||||||||||
Related party payables | 12,540 | 320 | 3,086 | (12,192 | ) | 3,754 | |||||||||
Total liabilities | 718,325 | 337 | 5,484 | (12,192 | ) | 711,954 | |||||||||
Commitments and contingencies | |||||||||||||||
Preferred stock | — | — | 248,886 | — | 248,886 | ||||||||||
Equity: | |||||||||||||||
Common stock | 571 | — | 24 | (571 | ) | 24 | |||||||||
Additional paid-in capital | 1,226,927 | 20,000 | 16,189 | (1,246,927 | ) | 16,189 | |||||||||
Retained earnings/(accumulated deficit) | 40,935 | (420 | ) | 1,909 | (40,935 | ) | 1,489 | ||||||||
Treasury stock | — | — | (44,565 | ) | — | (44,565 | ) | ||||||||
Total stockholders' equity | 1,268,433 | 19,580 | (26,443 | ) | (1,288,433 | ) | (26,863 | ) | |||||||
Noncontrolling interest in consolidated affiliate | — | — | — | 1,268,433 | 1,268,433 | ||||||||||
Total equity | 1,268,433 | 19,580 | (26,443 | ) | (20,000 | ) | 1,241,570 | ||||||||
Total liabilities and equity | $ | 1,986,758 | $ | 19,917 | $ | 227,927 | $ | (32,192 | ) | $ | 2,202,410 | ||||
Altisource Asset Management Corporation
Consolidating Balance Sheet
December 31, 2013
(In thousands, unaudited)
Residential (GAAP) | NewSource stand-alone (non-GAAP) | AAMC Stand-alone (Non-GAAP) | Consolidating Entries | AAMC Consolidated (GAAP) | |||||||||||
Assets: | |||||||||||||||
Real estate assets: | |||||||||||||||
Land | $ | 478 | $ | — | $ | — | $ | — | $ | 478 | |||||
Rental residential properties, net | 3,092 | — | — | — | 3,092 | ||||||||||
Real estate owned | 32,332 | — | — | — | 32,332 | ||||||||||
35,902 | — | — | — | 35,902 | |||||||||||
Real estate assets held for sale | 1,186 | — | — | — | 1,186 | ||||||||||
Mortgage loans | 1,207,163 | — | — | — | 1,207,163 | ||||||||||
Cash and cash equivalents | 115,988 | 19,923 | 4,089 | — | 140,000 | ||||||||||
Restricted cash | 5,878 | — | — | — | 5,878 | ||||||||||
Accounts receivable | 1,428 | — | — | — | 1,428 | ||||||||||
Related party receivables | 9,260 | — | 4,486 | (4,486 | ) | 9,260 | |||||||||
Investment in affiliate | 18,000 | — | 2,000 | (20,000 | ) | — | |||||||||
Deferred leasing and financing costs, net | 2,293 | — | — | — | 2,293 | ||||||||||
Prepaid expenses and other assets | 1,542 | — | 452 | — | 1,994 | ||||||||||
Total assets | 1,398,640 | 19,923 | 11,027 | (24,486 | ) | 1,405,104 | |||||||||
Liabilities: | |||||||||||||||
Repurchase agreement | 602,382 | — | — | — | 602,382 | ||||||||||
Accounts payable and accrued liabilities | 4,952 | — | 1,920 | — | 6,872 | ||||||||||
Related party payables | 5,879 | — | 1,490 | (4,486 | ) | 2,883 | |||||||||
Total liabilities | 613,213 | — | 3,410 | (4,486 | ) | 612,137 | |||||||||
Commitments and contingencies | |||||||||||||||
Equity: | |||||||||||||||
Common stock | 423 | — | 24 | (423 | ) | 24 | |||||||||
Additional paid-in capital | 758,584 | 20,000 | 12,855 | (778,584 | ) | 12,855 | |||||||||
Retained earnings (accumulated deficit) | 26,420 | (77 | ) | (5,262 | ) | (26,420 | ) | (5,339 | ) | ||||||
Total stockholders' equity | 785,427 | 19,923 | 7,617 | (805,427 | ) | 7,540 | |||||||||
Noncontrolling interest in consolidated affiliate | — | — | 785,427 | 785,427 | |||||||||||
Total equity | 785,427 | 19,923 | 7,617 | (20,000 | ) | 792,967 | |||||||||
Total liabilities and equity | $ | 1,398,640 | $ | 19,923 | $ | 11,027 | $ | (24,486 | ) | $ | 1,405,104 | ||||