Financial Performance - In Q4 2022, the company reported a loss of $4.1 million on revenue of $2.5 million, which was an improvement of $600,000 or 33% compared to Q3 [5][6] - Adjusted Q4 loss, excluding non-recurring items, was $3 million, down from $4 million in Q3 [6] Business Lines and Key Metrics - The company focuses on capital-light origination of private credit products, including residential transitional loans (RTL) and debt service coverage ratio (DSCR) loans [7] - Expected gross revenue per loan for RTLs is between 300 to 450 basis points, while for DSCR loans, it is between 200 to 350 basis points [10][11] Market Data and Key Metrics - The company has a pipeline of $35 million in direct borrower channel origination and is negotiating an additional $25 million [12] - Committed volume in the wholesale channel is $15 million, with plans to roll out a broker direct channel soon [12] Company Strategy and Industry Competition - The company aims to partner with institutions like insurance companies and pension funds, which have over a trillion dollars allocated for alternative fixed income assets [9] - The current market environment is seen as beneficial, as banks are pulling back on lending, allowing the company to capture more market share and pricing power [55] Management's Comments on Operating Environment and Future Outlook - Management believes the current environment is advantageous, as it allows the company to take advantage of reduced competition and increased demand for their products [55] - The company is focused on ramping up production across all three channels: direct borrower, wholesale, and broker [52] Other Important Information - The company has closed a $50 million warehouse line and a $55 million takeout with a major money manager [10] - The company is actively working on improving operational processes to handle increased loan origination efficiently [35][36] Q&A Session Summary Question: Impact of the U.S. regional banking sector crisis - Management stated that they have not experienced issues due to their capital partners being unaffected by market fluctuations [15] Question: Status of credit lines - Management confirmed that they have not lost access to any lines of credit and are in discussions to increase their credit line [17] Question: Stock repurchase plan - The company has repurchased approximately $1.2 million in stock, with details to be included in their upcoming 10-K filing [19] Question: Clarification on the $35 million pipeline - Management explained that the $35 million represents borrowers who have signed term sheets and are in the process of closing [21] Question: Profitability timeline - Management is focused on production and aims to achieve profitability on a monthly basis as soon as possible, though no specific timeline was provided [30] Question: Underwriting capacity for increased loan volume - Management expressed confidence in their staffing levels and ability to handle increased loan volume, with plans to hire additional processors if necessary [32] Question: Updates on lawsuits - Management indicated that updates on ongoing lawsuits would be available in the upcoming 10-K filing [61]
Altisource Asset Management(AAMC) - 2022 Q4 - Earnings Call Transcript