Great Ajax Corp. Announces Results for the Quarter Ended June 30, 2024

NEW YORK--(BUSINESS WIRE)--July 24, 2024-- 

Great Ajax Corp. (NYSE: AJX, "Great Ajax" or the "Company"), a Maryland corporation today announced the following financial results for the quarter ended June 30, 2024.

Second Quarter Financial Highlights

   --  GAAP Net Loss attributable to common stockholders of $(12.7) million, 
      or $(0.32) per diluted common sharei 
 
   --  Earnings Available for Distribution of $(9.6) million or $(0.24) per 
      diluted common sharei,ii 
 
   --  Book value per common share of $5.56 at June 30, 2024i 
 
   --  Common dividend of $2.2 million paid, or $0.06 per common share 
 
                                  Q2 2024           Q1 2024 
                                  -------           ------- 
Summary of Operating Results 
   GAAP Net Loss per Diluted 
    Common Share(i)               $(0.32)           $(2.41) 
   GAAP Net Loss                  $(12.7)  million  $(74.3)  million 
 
Non-GAAP Results 
   Earnings Available for 
    Distribution per Diluted 
    Common Share(i, ii)           $(0.24)           $(0.16) 
   Earnings Available for 
    Distribution(ii)              $ (9.6)  million  $ (4.8)  million 
 
Book Value 
   Book Value per Common 
    Share(i)                      $ 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 term loan 
             with NIC RMBS LLC, an affiliate of Rithm, which remains undrawn. 
             In connection with the Strategic Transaction, the Company 
             terminated its agreement with its former loan servicer, Gregory 
             Funding LLC. On June 1, 2024, the Company assigned all of the 
             servicing agreements for its mortgage loans and real property to 
             Newrez LLC, an affiliate of Rithm. The terms of the agreements 
             remain unchanged. 
 
 
 
   --  Loan Sales & Redemption of Convertible Notes: Sold loans with 
      approximately $305 million in unpaid principal balance, generating net 
      proceeds of approximately $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. 
 
 
 
   --  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 per common share to be paid on August 30, 2024, to 
      stockholders of record as of August 15, 2024. 

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 U.S.) or 1-412-317-5106 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference "Great Ajax Second Quarter 2024 Earnings Call."

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 U.S.) or 1-412-317-0088 (from outside of the U.S.); please reference access code "8087714."

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 Maryland corporation that is organized and conducts its operations to qualify as a real estate investment trust $(REIT)$ for federal income tax purposes.

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 
                  CONSOLIDATED STATEMENTS OF OPERATIONS 
             (Dollars in thousands except per share amounts) 
 
 
                                             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 

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