Front Yard Residential Corporation (NYSE:RESI) Q1 2020 Earnings Conference Call - Final Transcript

May 11, 2020 • 08:30 am ET


Front Yard Residential Corporation (NYSE:RESI) Q1 2020 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by, and welcome to the Front Yard Residential First Quarter 2020 Earnings Call. At this time all participant lines are in a listen-only mode. After the speakers presentation, there will be a question and answer session. [Operator Instructions].

I would now like to hand today's conference over to Alysia Cherry, Head of Investor Relations. Please go ahead.

Alysia Cherry

Thank you, Stephanie. Good morning and thank you for joining us for Front Yard's First Quarter 2020 Earnings Conference Call. Joining me on today's call is George Ellison, Chief Executive Officer; Miles Adams, Senior Vice President of Property Operations; and Robin Lowe, Chief Financial Officer.

I'd like to guide everyone to the earnings slide presentation available through the Investors section of our website at These slides were created to accompany our remarks and provide additional information investors may find useful. I'd also like to inform you that our comments today may contain forward-looking statements relating to the future performance of our business, the company's financial results, capital allocation and other nonhistorical information. These statements may involve risks and uncertainties that could cause the company's actual results to differ materially from those discussed in the forward-looking statements, particularly in light of the ongoing COVID-19 pandemic. We described some of these risks and potential differences in our earnings release as well as the company's filings with the SEC, including the Form 10-Q we filed today. We may also discuss certain non-GAAP financial measures. You can find additional information on these measures, including a reconciliation to GAAP within our earnings release and earnings presentation located in the Investors section of our website.

I'll now turn the call over to George Ellison, Chief Executive Officer. George?

George Ellison

Thanks, Alysia. Good morning, everyone. It's good to be speaking with all of you again. All of us here at the Front Yard family, I hope that those of you listening are safe and successfully weathering this terrible storm. If the virus has touched you personally or your family or your friends, our prayers go out to you. Now let's get into today's call.

First, as most of you know, Front Yard's merger agreement with Amherst has been terminated. As all of you will appreciate, I can't really go into the details about why the deal ultimately didn't close. But what's important is this, what does Front Yard Residential look like now. As our announcement detailed, the settlement with Amherst has 3 distinct features. One, Amherst paid $25 million to Front Yard. Two, Front Yard is issuing 4.4 million shares of new stock at $12.50 to Amherst. This represents a roughly 7.5% stake in Front Yard and speaks to Amherst continued commitment to the SFR space, specifically the Front Yard's business model and management team.

And last, Amherst is providing a $20 million, two year committed unsecured revolving credit facility that will be drawn down at any time with no transaction fees and with very attractive pricing. All told, this provides roughly an additional