Great Ajax Corp. Announces Results for the Quarter Ended June 30, 2024
Great Ajax Corp. (NYSE: AJX) reported financial results for Q2 2024, showing a GAAP Net Loss of $(12.7) million, or $(0.32) per diluted common share. The company's Book Value per common share decreased to $5.56, primarily due to the net loss and equity issuance related to the Strategic Transaction with Rithm Capital Corp. Key highlights include:
- Completion of the Strategic Transaction with Rithm Capital, transitioning to a new external manager and focusing on commercial real estate opportunities.
- Loan sales of approximately $305 million in unpaid principal balance, generating $45.1 million in net proceeds.
- Redemption of 7.25% convertible senior notes.
- Dividend declaration of $0.06 per common share, payable on August 30, 2024.
The company aims to reposition its portfolio towards higher-yielding assets in the commercial real estate sector, leveraging Rithm's platform to create shareholder value.
Great Ajax Corp. (NYSE: AJX) ha riportato i risultati finanziari per il Q2 2024, evidenziando una perdita netta GAAP di $(12.7) milioni, ovvero $(0.32) per azione ordinaria diluita. Il valore contabile per azione ordinaria della società è sceso a $5.56, principalmente a causa della perdita netta e dell'emissione di capitale legata alla Transazione Strategica con Rithm Capital Corp. I punti salienti includono:
- Completamento della Transazione Strategica con Rithm Capital, con transizione a un nuovo gestore esterno e focus sulle opportunità nel settore immobiliare commerciale.
- Vendita di prestiti per un totale di circa $305 milioni di saldo principale non pagato, generando $45.1 milioni di ricavi netti.
- Rimborso di note senior convertibili al 7.25%.
- Dichiarazione del dividendo di $0.06 per azione ordinaria, pagabile il 30 agosto 2024.
La società si propone di riposizionare il proprio portafoglio verso attività a rendimento più elevato nel settore immobiliare commerciale, sfruttando la piattaforma di Rithm per creare valore per gli azionisti.
Great Ajax Corp. (NYSE: AJX) reportó resultados financieros para el Q2 2024, mostrando una pérdida neta GAAP de $(12.7) millones, o $(0.32) por acción común diluida. El valor contable por acción común de la compañía disminuyó a $5.56, principalmente debido a la pérdida neta y la emisión de capital relacionada con la Transacción Estratégica con Rithm Capital Corp. Los aspectos destacados incluyen:
- Finalización de la Transacción Estratégica con Rithm Capital, haciendo la transición a un nuevo administrador externo y enfocándose en oportunidades de bienes raíces comerciales.
- Ventas de préstamos de aproximadamente $305 millones en saldo principal no pagado, generando $45.1 millones en ingresos netos.
- Redención de notas senior convertibles al 7.25%.
- Declaración de dividendos de $0.06 por acción común, pagadero el 30 de agosto de 2024.
La compañía tiene como objetivo reposicionar su cartera hacia activos de mayor rendimiento en el sector de bienes raíces comerciales, aprovechando la plataforma de Rithm para crear valor para los accionistas.
그레이트 아작스 Corp. (NYSE: AJX)는 2024년 2분기 재무 결과를 보고하며 GAAP 기준으로 $(12.7) 백만 달러의 순손실, 즉 희석된 보통주당 $(0.32)를 기록했습니다. 회사의 보통주당 장부 가치는 전략적 거래와 관련된 순손실 및 자본 발행으로 인해 $5.56로 감소했습니다. 주요 하이라이트는 다음과 같습니다:
- 리즘 캐피털과의 전략적 거래 완료, 새로운 외부 관리자로 전환하고 상업용 부동산 기회에 집중하기.
- 대출 판매 약 $305 백만 달러의 미지급 원금 잔액, $45.1 백만 달러의 순수익 발생.
- 7.25% 전환 가능 선순위 채권의 상환.
- 보통주당 $0.06의 배당금 선언, 2024년 8월 30일 지급 예정.
회사는 리즘의 플랫폼을 활용하여 상업용 부동산 부문에서 더 높은 수익률의 자산으로 포트폴리오를 재편성하는 것을 목표로 하고 있으며, 주주 가치를 창출하기 위해 노력하고 있습니다.
Great Ajax Corp. (NYSE: AJX) a publié ses résultats financiers pour le deuxième trimestre de 2024, affichant une perte nette GAAP de $(12.7) millions, soit $(0.32) par action ordinaire diluée. La valeur comptable par action ordinaire de l'entreprise a diminué à $5.56, principalement en raison de la perte nette et de l'émission de capitaux liée à la Transaction Stratégique avec Rithm Capital Corp. Les points forts comprennent :
- Achèvement de la Transaction Stratégique avec Rithm Capital, transition vers un nouveau gestionnaire externe et concentration sur des opportunités immobilières commerciales.
- Ventes de prêts d'environ $305 millions de solde principal impayé, générant $45.1 millions de produits nets.
- Remboursement des obligations senior convertibles à 7.25%.
- Déclaration d'un dividende de $0.06 par action ordinaire, payable le 30 août 2024.
L'entreprise vise à repositionner son portefeuille vers des actifs à rendement plus élevé dans le secteur de l'immobilier commercial, en utilisant la plateforme de Rithm pour créer de la valeur pour les actionnaires.
Great Ajax Corp. (NYSE: AJX) hat die Finanzergebnisse für das 2. Quartal 2024 veröffentlicht, die einen GAAP-Nettverlust von $(12.7) Millionen oder $(0.32) pro verwässerter Stammaktie zeigen. Der Buchwert pro Stammaktie des Unternehmens sank auf $5.56, hauptsächlich bedingt durch den Nettverlust und die Eigenkapitalemission im Zusammenhang mit der Strategischen Transaktion mit Rithm Capital Corp. Die wichtigsten Highlights sind:
- Abschluss der Strategischen Transaktion mit Rithm Capital, Wechsel zu einem neuen externen Manager und Fokussierung auf gewerbliche Immobilienchancen.
- Kreditverkäufe von etwa $305 Millionen im ausstehenden Hauptsaldo, die $45.1 Millionen an Nettoerlösen generieren.
- Rückzahlung der 7.25% konvertierbaren Senior Notes.
- Bekanntgabe einer Dividende von $0.06 pro Stammaktie, zahlbar am 30. August 2024.
Das Unternehmen zielt darauf ab, sein Portfolio in Richtung ertragreicherer Vermögenswerte im gewerblichen Immobiliensektor umzuorientieren und nutzt die Plattform von Rithm, um den Shareholder-Value zu steigern.
- Strategic partnership with Rithm Capital, potentially opening new opportunities in commercial real estate
- Loan sales generating $45.1 million in net proceeds
- Transition to more favorable repurchase financing terms
- Continued dividend payment, albeit reduced, at $0.06 per common share
- GAAP Net Loss of $(12.7) million, or $(0.32) per diluted common share
- Decrease in Book Value per common share from $6.87 to $5.56
- Negative Earnings Available for Distribution of $(9.6) million
- Reduction in quarterly dividend from $0.10 to $0.06 per share
Insights
The financial results of Great Ajax Corp. for Q2 2024 are a mixed bag. On the positive side, the company's GAAP net loss has decreased significantly from Q1 2024, where it was $(74.3) million, to $(12.7) million in Q2 2024. However, the company still reports a net loss, which can be concerning for investors. The book value per common share also dropped from $6.87 to $5.56, indicating a decrease in the company's intrinsic value. The common dividend per share decreased from $0.10 to $0.06, further reflecting reduced earnings and possibly impacting investor sentiment.
Despite these negative financial metrics, the company's strategic transaction with Rithm Capital Corp. could be a game-changer. The move away from legacy strategies towards higher-yielding assets in commercial real estate may prove beneficial in the long run. However, the immediate financial implications are negative.
The strategic transaction and change in management to Rithm Capital Corp. marks a significant shift in the company’s strategic direction. By focusing on higher-yielding commercial real estate assets, Great Ajax Corp. aims to improve its earnings potential. This shift could attract new institutional investors who are focused on long-term growth in the real estate sector.
However, the near-term effects might not be immediately positive. Investors may need to be patient as the company transitions and executes its new strategy. The success of this shift will depend heavily on Rithm Capital's ability to leverage its operating platform and network effectively. While this could set a strong foundation for future growth, the immediate impact on the stock may be neutral.
The termination of the previous management agreement with Thetis Asset Management and the associated termination fees, along with the new issuance of stock and warrants, are significant legal maneuvers. These actions are part of the broader strategic transaction aimed at repositioning the company. From a legal standpoint, the change in external management and the transition of loan servicing agreements to an affiliate of Rithm are critical steps that could have implications for operational efficiency and regulatory compliance.
These legal changes might streamline operations in the long run, but they also come with risks such as integration challenges and potential conflicts of interest. The issuance of warrants and new shares could dilute existing shareholder value if not managed carefully.
Second Quarter Financial Highlights
-
GAAP Net Loss attributable to common stockholders of
$(12.7) million $(0.32) -
Earnings Available for Distribution of
$(9.6) million $(0.24) -
Book value per common share of
$5.56 -
Common dividend of
$2.2 million $0.06
|
|
Q2 2024 |
|
Q1 2024 |
|
||||
Summary of Operating Results |
|
|
|
|
|
||||
GAAP Net Loss per Diluted Common Sharei |
|
$ |
(0.32 |
) |
|
$ |
(2.41 |
) |
|
GAAP Net Loss |
|
$ |
(12.7 |
) |
million |
$ |
(74.3 |
) |
million |
|
|
|
|
|
|
||||
Non-GAAP Results |
|
|
|
|
|
||||
Earnings Available for Distribution per Diluted Common Sharei, ii |
|
$ |
(0.24 |
) |
|
$ |
(0.16 |
) |
|
Earnings Available for Distributionii |
|
$ |
(9.6 |
) |
million |
$ |
(4.8 |
) |
million |
|
|
|
|
|
|
||||
Book Value |
|
|
|
|
|
||||
Book Value per Common Sharei |
|
$ |
5.56 |
|
|
$ |
6.87 |
|
|
Book Value |
|
$ |
253.6 |
|
million |
$ |
254.3 |
|
million |
|
|
|
|
|
|
||||
Common Dividend |
|
|
|
|
|
||||
Common Dividend per Share |
|
$ |
0.06 |
|
|
$ |
0.10 |
|
|
Common Dividend |
|
$ |
2.2 |
|
million |
$ |
3.7 |
|
million |
“We are very excited to be taking over the management of Great Ajax,” said Michael Nierenberg, Chief Executive Officer of Rithm Capital. “As we transition away from the legacy strategy, we will be repositioning the portfolio to take advantage of attractive opportunities in the commercial real estate sector. We have already begun deploying capital into higher yielding assets and expect to see earnings grow over time. We look forward to creating value for shareholders and are excited about the future of Great Ajax.”
Second Quarter Company Highlights
- The Company's Book Value per share decreased for the quarter ended June 30, 2024, primarily as a result of its GAAP net loss and by equity issuance in connection with the Strategic Transaction.
-
Strategic Transaction: The Company completed the previously announced strategic transaction (such transactions together, the “Strategic Transaction”) with Rithm Capital Corp. (“Rithm”) whereby an affiliate of Rithm, RCM GA Manager LLC (“RCM GA”), became the Company’s new external manager.
- Marks a significant milestone for the Company, with plans to transition into an opportunistic vehicle focused on commercial real estate.
- The Company expects to leverage the scope of Rithm's operating platform and network to realize strategic benefits as it transforms its investment focus.
-
The Strategic Transaction also included: (i) termination of the Company’s previous management agreement with Thetis Asset Management (the “Former Manager”) and payment of the applicable termination fees, (ii) the issuance to an affiliate of Rithm in May 2024 of five-year warrants to purchase up to approximately 3.3 million shares of the Company’s common stock, (iii) the issuance to Rithm in June 2024 of 2.9 million shares of the Company’s common stock pursuant to the terms of a stock purchase agreement and (iv) the entry in February 2024 into a
$70.0 million
-
Loan Sales & Redemption of Convertible Notes: Sold loans with approximately
$305 million $45.1 million -
A portion of the net proceeds was used to redeem the Company’s
7.25% convertible senior notes that matured on April 30, 2024.
-
A portion of the net proceeds was used to redeem the Company’s
- Repurchase Financing: Moved repurchase financing from full daily mark to market financing to either full non-mark to market or non-daily mark to market with margin holidays.
-
Dividend Declaration: On July 23, 2024, our Board declared a cash dividend of
$0.06
Earnings Conference Call
Great Ajax will host a conference call at 8:00 AM ET on Wednesday, July 24, 2024 to review its financial results for the second quarter of 2024. The conference call may be accessed by dialing 1-844-746-0740 (from within the
A simultaneous webcast of the conference call will be available to the public on a listen-only basis at www.greatajax.com. Please allow extra time prior to the call to visit the website and download any necessary software required to listen to the internet broadcast.
A telephonic replay of the conference call will also be available two hours following the call’s completion through 11:59 P.M. Eastern Time on Wednesday, July 31, 2024 by dialing 1-877-344-7529 (from within the
About Great Ajax Corp.
Great Ajax Corp. is a real estate investment platform externally managed by RCM GA Manager LLC, an affiliate of Rithm Capital Corp. Great Ajax has historically focused on acquiring, investing in and managing re-performing loans and non-performing loans secured by single-family residences and commercial properties. In connection with its recent strategic transaction with Rithm Capital, the Company expects to transition to a flexible commercial real estate focused investment strategy. Great Ajax is a
Forward-Looking Statements
This press release contains certain information which constitutes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “will,” “seek,” “believes,” “intends,” “expects,” “projects,” “anticipates,” “plans” and “future” or similar expressions are intended to identify forward-looking statements. These statements are not historical facts. These forward-looking statements represent management’s current expectations regarding future events and are subject to the inherent uncertainties in predicting future results and conditions, many of which are beyond our control. Accordingly, you should not place undue reliance on any forward-looking statements contained herein. For a discussion of some of the risks and important factors that could affect such forward-looking statements see the sections entitled “Cautionary Statement Regarding Forward-Looking Statements”, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s most recent annual and quarterly reports and other filings, including the Company’s recent proxy statements, filed with the Securities and Exchange Commission. The Company expressly disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.
GREAT AJAX CORP. AND SUBSIDIARIES
|
||||||||
|
|
Three months ended |
||||||
|
|
June 30, 2024 |
|
March 31, 2024 |
||||
|
|
(Unaudited) |
|
(Unaudited) |
||||
INCOME |
|
|
|
|
||||
Interest income |
|
$ |
11,915 |
|
|
$ |
15,738 |
|
Interest expense |
|
|
(11,567 |
) |
|
|
(14,106 |
) |
Net interest income |
|
|
348 |
|
|
|
1,632 |
|
Net change in the allowance for credit losses |
|
|
— |
|
|
|
(4,230 |
) |
Net interest income/(loss) after the net change in the allowance for credit losses |
|
|
348 |
|
|
|
(2,598 |
) |
|
|
|
|
|
||||
(Loss)/income from equity method investments |
|
|
(974 |
) |
|
|
521 |
|
Mark to market loss on mortgage loans held-for-sale, net |
|
|
(6,488 |
) |
|
|
(47,307 |
) |
Other (loss)/income |
|
|
(1,844 |
) |
|
|
3 |
|
Total loss on revenue, net |
|
|
(8,958 |
) |
|
|
(49,381 |
) |
|
|
|
|
|
||||
EXPENSE |
|
|
|
|
||||
Related party expense - loan servicing fees |
|
|
1,324 |
|
|
|
1,734 |
|
Related party expense - management fee |
|
|
2,173 |
|
|
|
17,459 |
|
Professional fees |
|
|
855 |
|
|
|
705 |
|
Fair value adjustment on mark to market liabilities |
|
|
(4,430 |
) |
|
|
1,353 |
|
Other expense |
|
|
4,753 |
|
|
|
2,445 |
|
Total expense |
|
|
4,675 |
|
|
|
23,696 |
|
Loss before provision for income taxes |
|
|
(13,633 |
) |
|
|
(73,077 |
) |
Provision for income taxes (benefit) |
|
|
(772 |
) |
|
|
915 |
|
Consolidated net loss |
|
|
(12,861 |
) |
|
|
(73,992 |
) |
Less: consolidated net loss attributable to non-controlling interests |
|
|
(119 |
) |
|
|
(14 |
) |
Consolidated net loss attributable to the Company |
|
|
(12,742 |
) |
|
|
(73,978 |
) |
Less: dividends on preferred stock |
|
|
— |
|
|
|
341 |
|
Consolidated net loss attributable to common stockholders |
|
$ |
(12,742 |
) |
|
$ |
(74,319 |
) |
Basic loss per common share |
|
$ |
(0.32 |
) |
|
$ |
(2.41 |
) |
Diluted loss per common share |
|
$ |
(0.32 |
) |
|
$ |
(2.41 |
) |
|
|
|
|
|
||||
Weighted average shares – basic |
|
|
39,344,128 |
|
|
|
30,700,278 |
|
Weighted average shares – diluted |
|
|
39,344,128 |
|
|
|
30,893,391 |
|
GREAT AJAX CORP. AND SUBSIDIARIES
|
|||||||
|
June 30, 2024 |
|
December 31, 2023 |
||||
ASSETS |
(Unaudited) |
|
|
||||
Cash and cash equivalents |
$ |
72,026 |
|
|
$ |
52,834 |
|
Mortgage loans held-for-sale, net(1,2) |
|
108,868 |
|
|
|
55,718 |
|
Mortgage loans held-for-investment, net(1,2) |
|
413,916 |
|
|
|
864,551 |
|
Real estate owned properties, net(3) |
|
4,309 |
|
|
|
3,785 |
|
Investments in securities available-for-sale(4) |
|
140,614 |
|
|
|
131,558 |
|
Investments in securities held-to-maturity(5) |
|
48,050 |
|
|
|
59,691 |
|
Investments in beneficial interests(6) |
|
88,269 |
|
|
|
104,162 |
|
Receivable from servicer |
|
3,594 |
|
|
|
7,307 |
|
Investments in affiliates |
|
24,771 |
|
|
|
28,000 |
|
Prepaid expenses and other assets |
|
7,099 |
|
|
|
28,685 |
|
Total assets |
$ |
911,516 |
|
|
$ |
1,336,291 |
|
|
|
|
|
||||
LIABILITIES AND EQUITY |
|
|
|
||||
Liabilities: |
|
|
|
||||
Secured borrowings, net(1,7) |
$ |
276,458 |
|
|
$ |
411,212 |
|
Borrowings under repurchase transactions |
|
246,497 |
|
|
|
375,745 |
|
Convertible senior notes(7) |
|
— |
|
|
|
103,516 |
|
Notes payable, net(7) |
|
107,216 |
|
|
|
106,844 |
|
Management fee payable |
|
1,572 |
|
|
|
1,998 |
|
Warrant liability |
|
— |
|
|
|
16,644 |
|
Accrued expenses and other liabilities |
|
25,292 |
|
|
|
9,437 |
|
Total liabilities |
|
657,035 |
|
|
|
1,025,396 |
|
|
|
|
|
||||
Equity: |
|
|
|
||||
Preferred stock |
|
|
|
||||
Series A |
|
— |
|
|
|
9,411 |
|
Series B |
|
— |
|
|
|
25,143 |
|
Common stock |
|
466 |
|
|
|
285 |
|
Additional paid-in capital |
|
423,899 |
|
|
|
352,060 |
|
Treasury stock |
|
(9,557 |
) |
|
|
(9,557 |
) |
Retained deficit |
|
(147,361 |
) |
|
|
(54,382 |
) |
Accumulated other comprehensive loss |
|
(13,895 |
) |
|
|
(14,027 |
) |
Equity attributable to stockholders |
|
253,552 |
|
|
|
308,933 |
|
Non-controlling interests(8) |
|
929 |
|
|
|
1,962 |
|
Total equity |
|
254,481 |
|
|
|
310,895 |
|
Total liabilities and equity |
$ |
911,516 |
|
|
$ |
1,336,291 |
|
| (1) |
Mortgage loans held-for-sale, net and mortgage loans held-for-investment, net include |
|
| (2) |
As of June 30, 2024 and December 31, 2023, balances for Mortgage loans held-for-investment, net include zero and |
|
| (3) |
Real estate owned properties, net, are presented net of valuation allowances of |
|
| (4) |
Investments in securities AFS are presented at fair value. As of June 30, 2024, Investments in securities available for sale ("AFS") include an amortized cost basis of |
|
| (5) |
On January 1, 2023, we transferred certain of our Investments in securities AFS to held to maturity ("HTM") due to European risk retention regulations. As of June 30, 2024, Investments in securities HTM includes an allowance for expected credit losses of zero and remaining discount of |
|
| (6) |
Investments in beneficial interests includes allowance for expected credit losses of |
|
| (7) |
Secured borrowings, net are presented net of deferred issuance costs of |
|
| (8) |
As of June 30, 2024, non-controlling interests includes |
|
Appendix A - Earnings per share
The following table sets forth the components of basic and diluted EPS ($ in thousands, except per share):
|
|
Three months ended |
||||||||||||||||||
|
|
June 30, 2024 |
|
March 31, 2024 |
||||||||||||||||
|
|
Income
|
|
Shares
|
|
Per Share
|
|
Income
|
|
Shares
|
|
Per Share
|
||||||||
|
|
(Unaudited) |
|
(Unaudited) |
||||||||||||||||
Basic EPS |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Consolidated net loss attributable to common stockholders |
|
$ |
(12,742 |
) |
|
39,344,128 |
|
|
|
$ |
(74,319 |
) |
|
30,700,278 |
|
|
||||
Allocation of loss to participating restricted shares |
|
|
55 |
|
|
— |
|
|
|
|
465 |
|
|
— |
|
|
||||
Consolidated net loss attributable to unrestricted common stockholders |
|
$ |
(12,687 |
) |
|
39,344,128 |
|
$ |
(0.32 |
) |
|
$ |
(73,854 |
) |
|
30,700,278 |
|
$ |
(2.41 |
) |
Effect of dilutive securities(1,2) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Restricted stock grants and director fee shares(3) |
|
|
— |
|
|
— |
|
|
|
|
(465 |
) |
|
193,113 |
|
|
||||
Diluted EPS |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Consolidated net loss attributable to common stockholders and dilutive securities |
|
$ |
(12,687 |
) |
|
39,344,128 |
|
$ |
(0.32 |
) |
|
$ |
(74,319 |
) |
|
30,893,391 |
|
$ |
(2.41 |
) |
____________________________________________________________ |
||
| (1) | Our outstanding warrants and the effect of the interest expense and assumed conversion of shares from convertible notes would have an anti-dilutive effect on diluted earnings per share for all periods shown and have not been included in the calculation. |
|
| (2) | The effect of the amortization of put option on our diluted earnings per share ("EPS") calculation for all periods shown would have been anti-dilutive and has been removed from the calculation. |
|
| (3) | The effect of restricted stock grants and manager and director fee shares on our diluted EPS calculation for the three months ended June 30, 2024 would have been anti-dilutive and has been removed from the calculation. |
|
NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP NET LOSS
“Earnings available for distribution” is a non-GAAP financial measure of the Company’s operating performance, which is used by management to evaluate the Company’s performance excluding: (i) net realized and unrealized gains and losses on certain assets and liabilities; (ii) other net income and losses not related to the performance of the investment portfolio; and (iii) non-capitalized transaction related expenses.
The Company has three primary variables that impact its performance: (i) Net interest margin on assets held within the investment portfolio; (ii) realized and unrealized gains or losses on assets held within the investment portfolio, including any impairment or reserve for expected credit losses; and, (iii) the Company’s operating expenses and taxes.
The Company’s definition of earnings available for distribution excludes certain realized and unrealized losses, which although they represent a part of the Company’s recurring operations, are subject to significant variability and are generally limited to a potential indicator of future economic performance. Within other net income and losses, management primarily excludes equity-based compensation expenses.
With regard to non-capitalized transaction-related expenses, management does not view these costs as part of the Company’s core operations, as they are considered by management to be similar to realized losses incurred at acquisition. Non-capitalized transaction-related expenses generally relate to legal and valuation service costs, as well as other professional service fees, incurred when the Company acquires certain investments.
Management believes that the adjustments to compute “earnings available for distribution” specified above allow investors and analysts to readily identify and track the operating performance of the assets that form the core of the Company’s activity, assist in comparing the core operating results between periods, and enable investors to evaluate the Company’s current core performance using the same financial measure that management uses to operate the business. Management also utilizes earnings available for distribution as a financial measure in its decision-making process relating to improvements to the underlying fundamental operations of the Company’s investments, as well as the allocation of resources between those investments, and management also relies on earnings available for distribution as an indicator of the results of such decisions. Earnings available for distribution excludes certain recurring items, such as gains and losses (including impairment) and non-capitalized transaction-related expenses, because they are not considered by management to be part of the Company’s core operations for the reasons described herein. As such earnings available for distribution is not intended to reflect all of the Company’s activity and should be considered as only one of the factors used by management in assessing the Company’s performance, along with GAAP net income which is inclusive of all of the Company’s activities.
The Company views earnings available for distribution as a consistent financial measure of its portfolio’s ability to generate income for distribution to common stockholders. Earnings available for distribution does not represent and should not be considered as a substitute for, or superior to, net income or as a substitute for, or superior to, cash flows from operating activities, each as determined in accordance with GAAP, and the Company’s calculation of this financial measure may not be comparable to similarly entitled financial measures reported by other companies. Furthermore, to maintain qualification as a REIT,
The table below provides a reconciliation of earnings available for distribution to the most directly comparable GAAP financial measure (dollars in thousands, except share and per share data):
Appendix B - Reconciliation of GAAP Net Loss to Earnings Available for Distribution
|
||||||||
|
|
Three months ended |
||||||
|
|
June 30, 2024 |
|
March 31, 2024 |
||||
|
|
(Unaudited) |
|
(Unaudited) |
||||
Consolidated net loss attributable to common stockholders |
|
$ |
(12,742 |
) |
|
$ |
(74,319 |
) |
Adjustments |
|
|
|
|
||||
Dividends on preferred stock |
|
|
— |
|
|
|
341 |
|
Provision for income taxes (benefit) |
|
|
(772 |
) |
|
|
915 |
|
Consolidated net loss attributable to non-controlling interest |
|
|
(119 |
) |
|
|
(14 |
) |
Realized and Unrealized Gains and Losses |
|
|
2,058 |
|
|
|
48,660 |
|
Expenses related to the Strategic Transaction |
|
|
883 |
|
|
|
15,506 |
|
Net change in the allowance for credit losses |
|
|
— |
|
|
|
4,230 |
|
Other adjustments |
|
|
1,094 |
|
|
|
(125 |
) |
Earnings Available for Distribution |
|
$ |
(9,598 |
) |
|
$ |
(4,806 |
) |
Basic Earnings Available for Distribution per common share |
|
$ |
(0.24 |
) |
|
$ |
(0.16 |
) |
Diluted Earnings Available for Distribution per common share |
|
$ |
(0.24 |
) |
|
$ |
(0.16 |
) |
____________________________________________________________ |
i Per common share calculations for both GAAP Net Loss and Earnings Available for Distribution are based on 39,344,128 and 30,893,391 weighted average diluted shares for the quarters ended June 30, 2024 and March 31, 2024, respectively. Per share calculations of Book Value are based on 45,605,549 common shares outstanding as of June 30, 2024. |
ii Earnings Available for Distribution is a non-GAAP financial measure. For a reconciliation of Earnings Available for Distribution to GAAP Net Loss, as well as an explanation of this measure, please refer to the section entitled Non-GAAP Financial Measures and Reconciliation to GAAP Net (Loss). |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240724564223/en/
Investor Relations
646-868-5483
IR@great-ajax.com
Source: Great Ajax Corp.
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