Altisource Asset Management Corporation Reports Fourth Quarter and Full Year 2020 Results
March 03 2021 - 3:20PM
Altisource Asset Management Corporation (“AAMC” or the “Company”)
(NYSE American: AAMC) today announced financial and operating
results for the fourth quarter and full year of 2020.
Fourth Quarter 2020 Highlights and
Recent Developments
-
Successfully completed the transition plan on December 31, 2020,
over a month ahead of the outside date of February 9, 2021
described in the Termination and Transition Agreement, dated August
13, 2020, by and among Front Yard Residential Corporation (“Front
Yard”), Front Yard Residential, L.P., and the Company received an
aggregate termination fee of $46 million in connection with the
termination of the Amended and Restated Asset management Agreement
with Front Yard (the “Management Agreement”).
-
On December 31, 2020 and January 1, 2021, AAMC transferred the
equity interests of the Company’s Cayman Islands subsidiary and
India subsidiary, respectively, to Front Yard. The aggregate
purchase price paid to AAMC by Front Yard for the subsidiaries was
$8,200,000.
-
Prior to the termination of the Management Agreement, negotiated on
behalf of Front Yard the entry into an Agreement and Plan of Merger
to be acquired by a partnership led by Pretium, resulting in Front
Yard being taken private at $16.25 per share, a 63% premium to the
market value of Front Yard’s common stock on the date of the
announcement, which subsequently closed on January 11, 2021.
-
Subsequent to year end, negotiated the settlement of litigation
with the holder of 81,800 shares of Series A Preferred stock
previously issued at $1,000 per share for aggregate cash
consideration of $2.9 million dollars paid in two installments and
the exchange of such shares of Series A Preferred stock for 288,283
shares of AAMC common stock.
-
Made substantial progress in launching new business lines,
including certain investment funds that will be managed by
AAMC.
“When this management team took over the
operations of AAMC, we announced our commitment to increase
shareholder value and become cash flow positive. Since that time,
we have established a track record of acting in the best interest
of our stakeholders to maximize income, reduce costs, and actively
manage cash on hand. We have negotiated and signed a master loan
purchase agreement with a leading originator to implement our loan
aggregation strategy and are actively engaged in process of
evaluating similar strategic relationships with other originators.
With 2020 and the first major milestones of 2021 behind us, we can
narrow our focus to creating new lines of business and making
strategic acquisitions to increase shareholder value and achieve
our goal of being cash flow positive. We also made short-term
investments in mortgage REITs,” stated Chief Executive Officer
Indroneel Chatterjee.
Fourth Quarter and Full Year 2020 GAAP
Financial Results
Net income for the fourth quarter of 2020
totaled $39.7 million, or $20.35 per diluted common share, which
included a $12.1 million change in the fair value of its shares of
Front Yard common stock, compared to a net loss of $(1.5) million,
or $(1.00) per diluted common share, for the fourth quarter of
2019, which included a $1.3 million change in the fair value of its
shares of Front Yard common stock.
Net income for the year ended December 31, 2020
totaled $39.8 million, or $24.38 per diluted common share, which
included a $6.3 million change in the fair value of its shares of
Front Yard common stock, compared to net loss of $(2.6) million, or
$(1.77) per diluted common share, for the year ended December 31,
2019, which included a $5.9 million change in the fair value of its
shares of Front Yard common stock.
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 within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended, regarding management’s beliefs, estimates,
projections, anticipations and assumptions with respect to, among
other things, the Company’s financial results, future operations,
business plans and investment strategies as well as industry and
market conditions. These statements may be identified by words such
as “anticipate,” “intend,” “expect,” “may,” “could,” “should,”
“would,” “plan,” “estimate,” “target,” “seek,” “believe” and other
expressions or words of similar meaning. We caution that
forward-looking statements are qualified by the existence of
certain risks and uncertainties that could cause actual results and
events to differ materially from what is contemplated by the
forward-looking statements. Factors that could cause our actual
results to differ materially from these forward-looking statements
may include, without limitation, our ability to implement our
business strategy; our ability to develop and implement new
businesses or, to the extent such businesses are developed, our
ability to make them successful or sustain the performance of any
such businesses; our ability to retain and maintain our strategic
relationships; our ability to obtain additional asset management
clients or businesses; our ability to effectively compete with our
competitors; developments in the litigation regarding our
redemption obligations under the Certificate of Designations of our
Series A Convertible Preferred Stock (the “Series A Shares”),
including our ability to obtain declaratory relief confirming that
we were not obligated to redeem any of the Series A Shares on the
March 15, 2020 redemption date if we do not have funds legally
available to redeem all, but not less than all, of the Series A
Shares requested to be redeemed on that redemption date; 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 Securities and Exchange Commission. The
foregoing list of factors should not be construed as
exhaustive.
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 Consolidated Statements of
Operations (In thousands, except share and per
share amounts)
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
(unaudited) |
|
(unaudited) |
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
Salaries and employee benefits |
$ |
3,896 |
|
|
|
$ |
2,733 |
|
|
|
$ |
11,977 |
|
|
|
$ |
11,367 |
|
|
Legal and professional
fees |
1,524 |
|
|
|
1,480 |
|
|
|
6,205 |
|
|
|
3,444 |
|
|
General and
administrative |
619 |
|
|
|
644 |
|
|
|
2,328 |
|
|
|
2,334 |
|
|
Total expenses |
6,039 |
|
|
|
4,857 |
|
|
|
20,510 |
|
|
|
17,145 |
|
|
|
|
|
|
|
|
|
|
Other
income: |
|
|
|
|
|
|
|
Change in fair value of Front
Yard common stock |
12,118 |
|
|
|
1,267 |
|
|
|
6,270 |
|
|
|
5,864 |
|
|
Dividend income on Front Yard
common stock |
— |
|
|
|
— |
|
|
|
244 |
|
|
|
731 |
|
|
Other income |
16 |
|
|
|
28 |
|
|
|
45 |
|
|
|
158 |
|
|
Total other income |
12,134 |
|
|
|
1,295 |
|
|
|
6,559 |
|
|
|
6,753 |
|
|
|
|
|
|
|
|
|
|
Net income (loss) from
continuing operations before income taxes |
6,095 |
|
|
|
(3,562 |
) |
|
|
(13,951 |
) |
|
|
(10,392 |
) |
|
Income tax expense |
1,860 |
|
|
|
136 |
|
|
|
769 |
|
|
|
165 |
|
|
Net income (loss) from continuing operations |
4,235 |
|
|
|
(3,698 |
) |
|
|
(14,720 |
) |
|
|
(10,557 |
) |
|
|
|
|
|
|
|
|
|
Discontinued
Operations: |
|
|
|
|
|
|
|
Income from operations related
to Front Yard, net of tax |
35,526 |
|
|
|
2,159 |
|
|
|
54,643 |
|
|
|
7,944 |
|
|
Loss on disposal of operation
related to Front Yard |
(102 |
) |
|
|
— |
|
|
|
(102 |
) |
|
|
— |
|
|
Net gain on discontinued operations |
35,424 |
|
|
|
2,159 |
|
|
|
54,541 |
|
|
|
7,944 |
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
39,659 |
|
|
|
(1,539 |
) |
|
|
39,821 |
|
|
|
(2,613 |
) |
|
Amortization of preferred
stock issuance costs |
— |
|
|
|
(51 |
) |
|
|
(42 |
) |
|
|
(206 |
) |
|
Net income (loss) attributable to common stockholders |
$ |
39,659 |
|
|
|
$ |
(1,590 |
) |
|
|
$ |
39,779 |
|
|
|
$ |
(2,819 |
) |
|
|
|
|
|
|
|
|
|
Net earnings (loss)
per share of common stock – basic: |
|
|
|
|
|
|
|
Continuing operations –
basic |
$ |
2.57 |
|
|
|
$ |
(2.35 |
) |
|
|
$ |
(9.05 |
) |
|
|
$ |
(6.77 |
) |
|
Discontinued operations –
basic |
|
21.49 |
|
|
|
|
1.35 |
|
|
|
|
33.43 |
|
|
|
|
5.00 |
|
|
Earnings (loss) per basic common share |
$ |
24.06 |
|
|
|
$ |
(1.00 |
) |
|
|
$ |
24.38 |
|
|
|
$ |
(1.77 |
) |
|
Weighted average common stock
outstanding – basic |
|
1,648,000 |
|
|
|
|
1,597,384 |
|
|
|
|
1,631,326 |
|
|
|
|
1,589,952 |
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
per share of common stock – diluted: |
|
|
|
|
|
|
|
Continuing operations –
diluted |
$ |
2.17 |
|
|
|
$ |
(2.35 |
) |
|
|
$ |
(9.05 |
) |
|
|
$ |
(6.77 |
) |
|
Discontinued operations –
diluted |
18.18 |
|
|
|
1.35 |
|
|
|
33.43 |
|
|
|
5.00 |
|
|
Earnings (loss) per diluted common share |
$ |
20.35 |
|
|
|
$ |
(1.00 |
) |
|
|
$ |
24.38 |
|
|
|
$ |
(1.77 |
) |
|
Weighted average common stock
outstanding – diluted |
|
1,948,704 |
|
|
|
|
1,597,384 |
|
|
|
|
1,631,326 |
|
|
|
|
1,589,952 |
|
|
Altisource Asset Management
Corporation Consolidated Balance Sheets
(In thousands, except share and per share
amounts)
|
December 31, 2020 |
|
December 31, 2019 |
Current
assets: |
|
|
|
Cash and cash equivalents |
$ |
41,623 |
|
|
|
$ |
18,906 |
|
|
Front Yard common stock, at
fair value |
47,355 |
|
|
|
20,046 |
|
|
Receivable from Front
Yard |
3,414 |
|
|
|
5,014 |
|
|
Prepaid expenses and other
assets |
3,328 |
|
|
|
1,009 |
|
|
Current assets held for
sale |
894 |
|
|
|
2,176 |
|
|
Total current assets |
96,614 |
|
|
|
47,151 |
|
|
|
|
|
|
Non-current
assets: |
|
|
|
Right-of-use lease assets |
656 |
|
|
|
732 |
|
|
Other non-current assets |
503 |
|
|
|
1,470 |
|
|
Non-current assets held for
sale |
1,979 |
|
|
|
3,895 |
|
|
Total non-current assets |
3,138 |
|
|
|
6,097 |
|
|
Total assets |
99,752 |
|
|
|
53,248 |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
Accrued salaries and employee
benefits |
$ |
2,539 |
|
|
|
$ |
3,762 |
|
|
Accounts payable and accrued
liabilities |
9,152 |
|
|
|
1,165 |
|
|
Short-term lease
liabilities |
75 |
|
|
|
71 |
|
|
Current liabilities held for
sale |
1,338 |
|
|
|
2,002 |
|
|
Total current liabilities |
13,104 |
|
|
|
7,000 |
|
|
|
|
|
|
Non-current
liabilities |
|
|
|
Long-term lease
liabilities |
600 |
|
|
|
675 |
|
|
Other non-current
liabilities |
1,027 |
|
|
|
— |
|
|
Non-current liabilities held
for sale |
1,599 |
|
|
|
3,543 |
|
|
Total non-current liabilities |
3,226 |
|
|
|
4,218 |
|
|
Total liabilities |
16,330 |
|
|
|
11,218 |
|
|
|
|
|
|
Commitments and
contingencies |
— |
|
|
|
— |
|
|
|
|
|
|
Redeemable preferred
stock: |
|
|
|
Series A preferred stock,
$0.01 par value, 250,000 shares issued and outstanding as of
December 31, 2020 and 2019; redemption value $250,000 |
250,000 |
|
|
|
249,958 |
|
|
|
|
|
|
Stockholders'
deficit: |
|
|
|
Common stock, $.01 par value,
5,000,000 authorized shares; 2,966,207 and 1,650,212 shares issued
and outstanding, respectively, as of December 31, 2020 and
2,897,177 and 1,598,512 shares issued and outstanding,
respectively, as of December 31, 2019 |
30 |
|
|
|
29 |
|
|
Additional paid-in
capital |
46,574 |
|
|
|
44,646 |
|
|
Retained earnings |
63,426 |
|
|
|
23,662 |
|
|
Accumulated other
comprehensive loss |
(65 |
) |
|
|
(33 |
) |
|
Treasury stock, at cost,
1,315,995 and 1,298,665 shares as of December 31, 2020 and 2019,
respectively |
(276,543 |
) |
|
|
(276,232 |
) |
|
Total stockholders' deficit |
(166,578 |
) |
|
|
(207,928 |
) |
|
Total liabilities and equity |
$ |
99,752 |
|
|
|
$ |
53,248 |
|
|
FOR FURTHER INFORMATION CONTACT:Investor
RelationsT: +1-704-275-9113E: IR@AltisourceAMC.com
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