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Altisource Asset Management Corporation Reports First Quarter 2019 Results; Announces New Asset Management Agreement with Front Yard Residential

CHRISTIANSTED, U.S. Virgin Islands, May 08, 2019 (GLOBE NEWSWIRE) -- Altisource Asset Management Corporation (“AAMC” or the “Company”) (NYSE American: AAMC) today announced financial and operating results for the first quarter of 2019.

First Quarter 2019 Highlights and Recent Developments

  • Entered into a new asset management agreement with Front Yard Residential Corporation (“Front Yard”) on May 7, 2019, providing an improved fee structure that further aligns interests and incentivizes performance and growth.
  • Completed the transition of Front Yard's rental homes to its internal property management platform ahead of schedule.
  • Maintained strong operating metrics for Front Yard.
  • Managed Front Yard's sale of 576 non-core assets for proceeds to Front Yard of $125.3 million and a $7.5 million gain over carrying value during the first quarter of 2019.
  • Advised Front Yard on the amendment of its Credit Suisse and Nomura warehouse lines, improving fee structures and reducing interest rate spreads from 3.00% to 2.30% on borrowings secured by rental properties.

“We are pleased to announce the renegotiation of our asset management agreement with Front Yard, which we believe creates an avenue for growth in management fees while providing a sustainable fee structure for Front Yard,” stated George Ellison, Chief Executive Officer. “Along with the completion of Front Yard's internalization of property management and continued strong operating metrics under our management, both companies are now well positioned to deliver value to stockholders.”

First Quarter 2019 Financial Results

AAMC’s net loss attributable to common stockholders for the first quarter of 2019 was $0.9 million, or $0.56 per diluted share, which included a $0.9 million change in the fair value of its shares of Front Yard common stock, compared to $4.4 million, or $2.75 per diluted share, which included a $(2.9) million change in the fair value of its shares of Front Yard common stock, for the first quarter of 2018.

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-core 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 effectively manage the performance of Front Yard’s internal property manager at the level and/or the cost that it anticipates; the failure of third party vendors to effectively perform their obligations under their respective agreements with AAMC or 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 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
Condensed Consolidated Statements of Operations
(In thousands, except share and per share amounts)
(Unaudited)

  Three months ended March 31,
  2019   2018
Revenues:      
Management fees from Front Yard $ 3,546     $ 3,727  
Conversion fees from Front Yard 29     63  
Expense reimbursements from Front Yard 328     262  
Total revenues 3,903     4,052  
Expenses:      
Salaries and employee benefits 4,418     4,214  
Legal and professional fees 342     352  
General and administrative 1,039     947  
Total expenses 5,799     5,513  
Other income (loss):      
Change in fair value of Front Yard common stock 877     (2,940 )
Dividend income on Front Yard common stock 244     244  
Other income 4     43  
Total other income (loss) 1,125     (2,653 )
Loss before income taxes (771 )   (4,114 )
Income tax expense 69     250  
Net loss attributable to stockholders (840 )   (4,364 )
Amortization of preferred stock issuance costs (51 )   (51 )
Net loss attributable to common stockholders $ (891 )   $ (4,415 )
       
Loss per share of common stock – basic:      
Loss per basic common share $ (0.56 )   $ (2.75 )
Weighted average common stock outstanding – basic 1,582,016     1,603,898  
       
Loss per share of common stock – diluted:      
Loss per diluted common share $ (0.56 )   $ (2.75 )
Weighted average common stock outstanding – diluted 1,582,016     1,603,898  
           
           

Altisource Asset Management Corporation
Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts)

  March 31, 2019   December 31, 2018
  (unaudited)    
Current assets:      
Cash and cash equivalents $ 22,154     $ 27,171  
Short-term investments 656     584  
Front Yard common stock, at fair value 15,059     14,182  
Receivable from Front Yard 3,711     3,968  
Prepaid expenses and other assets 2,102     1,552  
Total current assets 43,682     47,457  
       
Non-current assets:      
Right-of-use lease assets 2,782      
Other non-current assets 1,534     1,910  
Total non-current assets 4,316     1,910  
     Total assets $ 47,998     $ 49,367  
       
Current liabilities:      
Accrued salaries and employee benefits $ 2,125     $ 5,583  
Accounts payable and accrued liabilities 871     1,188  
Short-term lease liabilities 165      
Total current liabilities 3,161     6,771  
Long-term lease liabilities 2,643      
     Total liabilities 5,804     6,771  
       
Commitments and contingencies      
       
Redeemable preferred stock:      
Preferred stock, $0.01 par value, 250,000 shares issued and outstanding as of March 31, 2019 and December 31, 2018; redemption value $250,000 249,803     249,752  
       
Stockholders' deficit:      
Common stock, $0.01 par value, 5,000,000 authorized shares; 2,884,143 and 1,589,321 shares issued and outstanding, respectively, as of March 31, 2019 and 2,862,760 and 1,573,691 shares issued and outstanding, respectively, as of December 31, 2018 29     29  
Additional paid-in capital 42,943     42,245  
Retained earnings 25,590     26,558  
Accumulated other comprehensive income 12      
Treasury stock, at cost, 1,294,822 shares as of March 31, 2019 and 1,289,069 shares as of December 31, 2018 (276,183 )   (275,988 )
Total stockholders' deficit (207,609 )   (207,156 )
     Total liabilities and equity $ 47,998     $ 49,367  


 
FOR FURTHER INFORMATION CONTACT:
Robin N. Lowe
Chief Financial Officer
T: +1-345-815-9919
E: Robin.Lowe@AltisourceAMC.com