Altisource Asset Management Corporation Reports First Quarter 2021 Results

May 18, 2021 8:18 AM EDT

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CHRISTIANSTED, U.S. Virgin Islands, May 18, 2021 (GLOBE NEWSWIRE) -- Altisource Asset Management Corporation (“AAMC” or the “Company”) (NYSE American: AAMC) today announced financial and operating results for the first quarter of 2021.

First Quarter 2021 Highlights and Recent Developments

  • Fueled by cash resources emanating from the sales and termination of discontinued operations late last year, the Company invested in equity securities concentrated in Real Estate Investment Trusts (“REITs”). The purpose was to secure investment income while the Company reviews new business opportunities.
  • Net income of $5.9 million for the first quarter was fueled in part by (i) the market value appreciation of those REIT equity securities as well as the associated dividend income, and (ii) the gain on the sale of subsidiaries to Front Yard Residential Corporation.
  • Settled ongoing litigation with Putnam Investments, LLC and its affiliates (collectively “Putnam”), one of the plaintiffs in the litigation related to the Company’s Series A Convertible Preferred Stock.

“The Company’s attention and focus,” stated Thomas K. McCarthy, Interim Chief Executive Officer, “is to identify, evaluate and where applicable, pursue new business opportunities. In the meantime, the Company is keeping its options open and no final decision has been made.”

First Quarter 2021 Financial Results

AAMC’s net income for the first quarter of 2021 was $5.9 million compared to a net loss of $3.8 million for the same period in 2020. Due to a $71.9 million gain on the settlement of preferred shares, which was recorded directly to equity, but is included in the numerator for our earnings per share calculations, diluted earnings per share was $37.41 for the quarter, compared with a diluted net loss per share of $2.35 for the same period in 2020.

About AAMC

AAMC has historically been an asset management company that provides portfolio management and corporate governance services to investment vehicles but given the sale and discontinuance of certain operations the Company is in the process of repositioning itself. 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 new businesses or, to the extent such businesses are developed, our ability to make them successful or sustain the performance of any such businesses; developments in the litigation regarding our redemption obligations under the Certificate of Designations of our Series A Convertible Preferred Stock; 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,
 2021 2020
Expenses:   
Salaries and employee benefits$3,545  $3,094 
Legal and professional fees1,885  1,480 
General and administrative753  586 
Total expenses6,183  5,160 
    
Other income (loss):   
Change in fair value of Front Yard common stock146  (634)
Dividend income on Front Yard common stock  244 
Change in fair value of equity securities5,721   
Dividend income2,154   
Interest expense(36)  
Other income135  18 
Total other income (loss)8,120  (372)
    
Net income (loss) from continuing operations before income taxes1,937  (5,532)
Income tax expense2,294  122 
Net loss from continuing operations(357) (5,654)
    
Discontinued operations:   
Income from operations related to Front Yard, net of tax  1,897 
Gain on disposal of operations related to Front Yard7,485   
Income tax expense related to disposal1,272   
Net gain on discontinued operations6,213  1,897 
    
Net income (loss)5,856  (3,757)
Amortization of preferred stock issuance costs  (42)
Net income (loss) attributable to common stockholders$5,856  $(3,799)
    
Continuing operations earnings per share   
Net loss from continuing operations$(357) (5,654)
Reverse amortization of preferred stock issuance costs  42 
Gain on preferred stock transaction71,883   
Numerator for earnings per share from continuing operations$71,526  $(5,612)
    
Discontinued operations earnings per share   
Net income from discontinued operations$6,213  $1,897 
    
Earnings (loss) per share of common stock – basic:   
Continuing operations – basic$38.78  $(3.52)
Discontinued operations – basic3.37  1.17 
Earnings (loss) per basic common share$42.15  $(2.35)
Weighted average common stock outstanding – basic1,844,212  1,615,710 
    
Earnings (loss) per share of common stock – diluted:   
Continuing operations – diluted$34.42  $(3.52)
Discontinued operations – diluted2.99  1.17 
Earnings (loss) per diluted common share$37.41  $(2.35)
Weighted average common stock outstanding – diluted2,078,077  1,615,710 


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

 March 31, 2021 December 31, 2020
 (unaudited)  
Current assets:   
Cash and cash equivalents$14,902  $41,623 
Equity securities, at fair value102,672   
Front Yard common stock, at fair value  47,355 
Receivable from Front Yard  3,414 
Dividends receivable2,012   
Prepaid expenses and other assets2,882  3,328 
Current assets held for sale  894 
Total current assets122,468  96,614 
    
Non-current assets:   
Right-of-use lease assets932  656 
Other non-current assets587  503 
Non-current assets held for sale  1,979 
Total non-current assets1,519  3,138 
Total assets$123,987  $99,752 
    
Current liabilities:   
Accrued salaries and employee benefits$404  $2,539 
Accounts payable and accrued liabilities1,668  9,152 
Interest payable36   
Borrowed funds28,407   
Short-term lease liabilities126  75 
Current liabilities held for sale  1,338 
Total current liabilities30,641  13,104 
    
Non-current liabilities:   
Long-term lease liabilities830  600 
Other non-current liabilities4,523  1,027 
Non-current liabilities held for sale  1,599 
Total non-current liabilities5,353  3,226 
Total liabilities35,994  16,330 
    
Commitments and contingencies (Note 6)    
    
Redeemable preferred stock:   
Preferred stock, $0.01 par value, 250,000 and 250,000 shares issued as March 31, 2021 and
December 31, 2020, respectively. 168,200 shares outstanding and $168,200 redemption value as of
March 31, 2021 and 250,000 shares outstanding and $250,000 redemption value as of December 31,
2020
168,200  250,000 
    
Stockholders' deficit:   
Common stock, $0.01 par value, 5,000,000 authorized shares; 3,407,919 and 2,048,319 shares issued
and outstanding, respectively, as of March 31, 2021 and 2,966,207 and 1,650,212 shares issued and
outstanding, respectively, as of December 31, 2020
34  30 
Additional paid-in capital127,953  46,574 
Retained earnings69,310  63,426 
Accumulated other comprehensive loss58  (65)
Treasury stock, at cost, 1,359,600 shares as of March 31, 2021 and 1,315,995 shares as of
December 31, 2020
(277,562) (276,543)
Total stockholders' deficit(80,207) (166,578)
Total liabilities and equity$123,987  $99,752 


 FOR FURTHER INFORMATION CONTACT:
 Investor Relations
 T: +1-704-275-9113
 E: IR@AltisourceAMC.com



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