×

Altisource Announces Strong First Quarter Results

LUXEMBOURG, April 28, 2016 (GLOBE NEWSWIRE) -- Altisource Portfolio Solutions S.A. (“Altisource”) (NASDAQ:ASPS) today reported strong financial results for the first quarter 2016, generating the highest first quarter revenue and service revenue in Altisource’s history. Compared to the first quarter of 2015, revenue growth was driven by a higher volume of property inspection and preservation referrals and growth in the number of non-Ocwen homes sold on Hubzu.

Diluted earnings per share of $0.92 and Adjusted diluted earnings per share(1) of $1.47 for the first quarter of 2016 were significantly higher than the first quarter of 2015 primarily from service revenue growth coupled with the benefit of the 2015 cost reduction initiative.

First Quarter 2016 Results Compared to First Quarter 2015:

  • Service revenue of $234.3 million, a 13% increase
  • Net income attributable to Altisource of $18.5 million, a 400% increase
  • Adjusted net income attributable to Altisource(1) of $29.4 million, a 148% increase
  • Diluted earnings per share of $0.92, a 411% increase
  • Adjusted diluted earnings per share(1) of $1.47, a 163% increase
  • Cash from operations of $29.0 million compared to cash used in operations of $(15.9) million

“I am very pleased with our first quarter financial results. We continue to make strong gains to diversify and grow our customer base. Service revenue unrelated to Ocwen for the first quarter of 2016 was 22% higher than the fourth quarter of 2015 and 38% higher than the first quarter of 2015,” said Chief Executive Officer William B. Shepro.

Shepro further commented, “First quarter 2016 service revenue of $234.3 million is 26% of the mid-point of our full year 2016 scenarios and adjusted diluted earnings per share of $1.47 is 25% of the mid-point. Given the fact that the 2nd and 3rd quarters have historically been our seasonally strongest of the year, we believe we are well positioned to achieve the mid-point of our 2016 financial scenarios.”

First quarter 2016 highlights include:

Initiatives

  • Launched the Owners.com® buyer rebate program in Atlanta and South Florida
  • Supported Altisource Residential Corporation’s acquisition of more than 600 properties
  • Completed the integration work for our new top-4 bank customer and plan to commence property inspection and preservation services in early May 2016
  • Launched VendorlyTM, a vendor oversight platform for Lenders One members

Capital Allocation

  • Repurchased $11.7 million of our common stock (0.5 million shares at an average price of $25.17 per share)
  • Purchased 2.5 million shares of Altisource Residential Corporation’s common stock for $29.4 million in the open market
  • On April 6, 2016, we repurchased $28.0 million of our senior secured term loan for $24.3 million (a 13.1% discount)

__________________________

(1) This is a non-GAAP measure that is defined and reconciled to the corresponding GAAP measure herein.

Forward-Looking Statements

This press release contains forward-looking statements that involve a number of risks and uncertainties. These forward-looking statements include all statements that are not historical fact, including statements about management’s beliefs and expectations. These statements may be identified by words such as “anticipate,” “intend,” “expect,” “may,” “could,” “should,” “would,” “plan,” “estimate,” “seek,” “believe,” “potential” and similar expressions. Forward-looking statements are based on management’s beliefs as well as assumptions made by and information currently available to management. Because such statements are based on expectations as to the future and are not statements of historical fact, actual results may differ materially from what is contemplated by the forward-looking statements. Altisource undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise. The risks and uncertainties to which forward-looking statements are subject include, but are not limited to, Altisource’s ability to integrate acquired businesses, retain key executives or employees, retain existing customers and attract new customers, general economic and market conditions, behavior of customers, suppliers and/or competitors, technological developments, governmental regulations, taxes and policies, availability of adequate and timely sources of liquidity and other risks and uncertainties detailed in the “Forward-Looking Statements,” “Risk Factors” and other sections of Altisource’s Form 10-K and other filings with the Securities and Exchange Commission.

Webcast

Altisource will host a webcast at 11:00 a.m. EDT today to discuss our first quarter results. A link to the live audio webcast will be available on Altisource’s website in the Investor Relations section. Those who want to listen to the call should go to the website at least fifteen minutes prior to the call to register, download and install any necessary audio software. A replay of the conference call will be available via the website approximately two hours after the conclusion of the call and will remain available for approximately 30 days.

About Altisource

Altisource Portfolio Solutions S.A. is a premier marketplace and transaction solutions provider for the real estate, mortgage and consumer debt industries. Altisource’s proprietary business processes, vendor and electronic payment management software and behavioral science-based analytics improve outcomes for marketplace participants. Additional information is available at www.Altisource.com.

ALTISOURCE PORTFOLIO SOLUTIONS S.A.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(in thousands, except per share data)
(unaudited)
Three months ended March 31,
2016 2015
Service revenue
Mortgage Services $183,162 $144,381
Financial Services 20,076 22,313
Technology Services 40,647 51,970
Eliminations (9,605) (10,848)
Total service revenue 234,280 207,816
Reimbursable expenses 15,454 31,956
Non-controlling interests 398 710
Total revenue 250,132 240,482
Cost of revenue 153,409 140,870
Reimbursable expenses 15,454 31,956
Gross profit 81,269 67,656
Selling, general and administrative expenses 53,616 52,406
Income from operations 27,653 15,250
Other income (expense), net:
Interest expense (6,541) (7,160)
Other than temporary impairment loss on securities (3,285)
Other income (expense), net (27) 3
Total other income (expense), net (6,568) (10,442)
Income before income taxes and non-controlling interests 21,085 4,808
Income tax provision (2,193) (400)
Net income 18,892 4,408
Net income attributable to non-controlling interests (398) (710)
Net income attributable to Altisource $18,494 $3,698
Earnings per share:
Basic $0.98 $0.18
Diluted $0.92 $0.18
Weighted average shares outstanding:
Basic 18,855 20,172
Diluted 20,040 20,995
Comprehensive income:
Net income $18,892 $4,408
Other comprehensive income, net of tax:
Unrealized gain on securities, net of income tax expense of
$289 and $0
699
Comprehensive income, net of tax 19,591 4,408
Comprehensive income attributable to non-controlling interests (398) (710)
Comprehensive income attributable to Altisource $19,193 $3,698


ALTISOURCE PORTFOLIO SOLUTIONS S.A.
SEGMENT FINANCIAL INFORMATION
(in thousands)
(unaudited)
Three months ended March 31, 2016
Mortgage
Services
Financial
Services
Technology
Services
Corporate
Items and
Eliminations
Consolidated
Altisource
Revenue
Service revenue $183,162 $20,076 $40,647 $(9,605) $234,280
Reimbursable expenses 15,426 28 15,454
Non-controlling interests 398 398
198,986 20,104 40,647 (9,605) 250,132
Cost of revenue 121,518 14,258 41,893 (8,806) 168,863
Gross profit (loss) 77,468 5,846 (1,246) (799) 81,269
Selling, general and administrative expenses 26,969 4,309 6,558 15,780 53,616
Income (loss) from operations 50,499 1,537 (7,804) (16,579) 27,653
Other income (expense), net 14 13 7 (6,602) (6,568)
Income (loss) before income taxes and
non-controlling interests
$50,513 $1,550 $(7,797) $(23,181) $21,085


Three months ended March 31, 2015
Mortgage
Services
Financial
Services
Technology
Services
Corporate
Items and
Eliminations
Consolidated
Altisource
Revenue
Service revenue $144,381 $22,313 $51,970 $(10,848) $207,816
Reimbursable expenses 31,915 41 31,956
Non-controlling interests 710 710
177,006 22,354 51,970 (10,848) 240,482
Cost of revenue 114,804 15,103 52,723 (9,804) 172,826
Gross profit (loss) 62,202 7,251 (753) (1,044) 67,656
Selling, general and administrative expenses 20,561 4,715 7,315 19,815 52,406
Income (loss) from operations 41,641 2,536 (8,068) (20,859) 15,250
Other income (expense), net (4) (12) 1 (10,427) (10,442)
Income (loss) before income taxes and
non-controlling interests
$41,637 $2,524 $(8,067) $(31,286) $4,808


ALTISOURCE PORTFOLIO SOLUTIONS S.A.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
March 31, December 31,
2016 2015
ASSETS
Current assets:
Cash and cash equivalents $159,705 $179,327
Available for sale securities 30,417
Accounts receivable, net 97,645 105,023
Prepaid expenses and other current assets 26,721 21,751
Total current assets 314,488 306,101
Premises and equipment, net 116,937 119,121
Goodwill 82,801 82,801
Intangible assets, net 184,792 197,003
Deferred tax assets, net 3,330 3,619
Other assets 13,246 13,153
Total assets $715,594 $721,798
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued expenses $80,768 $91,871
Current portion of long-term debt 5,945 5,945
Deferred revenue 12,634 15,060
Other current liabilities 18,276 16,266
Total current liabilities 117,623 129,142
Long-term debt, less current portion 521,185 522,233
Other non-current liabilities 14,821 18,153
Equity:
Common stock ($1.00 par value; 25,413 shares authorized and issued and 18,603 outstanding as of March 31, 2016; 25,413 shares authorized and issued and 19,021 outstanding as of December 31, 2015) 25,413 25,413
Additional paid-in capital 98,198 96,321
Retained earnings 385,452 369,270
Accumulated other comprehensive income 699
Treasury stock, at cost (6,810 shares as of March 31, 2016 and 6,392 shares as of December 31, 2015) (449,039) (440,026)
Altisource equity 60,723 50,978
Non-controlling interests 1,242 1,292
Total equity 61,965 52,270
Total liabilities and equity $715,594 $721,798


ALTISOURCE PORTFOLIO SOLUTIONS S.A.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three months ended March 31,
2016 2015
Cash flows from operating activities:
Net income$18,892 $4,408
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization9,208 8,826
Amortization of intangible assets12,211 8,891
Other than temporary impairment loss on HLSS securities 3,285
Change in the fair value of acquisition related contingent consideration96 148
Share-based compensation expense1,877 443
Bad debt expense876 607
Amortization of debt discount116 127
Amortization of debt issuance costs322 351
Deferred income taxes (24)
Gain on disposal of fixed assets(10) (19)
Changes in operating assets and liabilities:
Accounts receivable6,502 (15,140)
Prepaid expenses and other current assets(4,970) 2,413
Other assets(109) 127
Accounts payable and accrued expenses(12,133) (27,559)
Other current and non-current liabilities(3,844) (2,822)
Net cash provided by (used in) operating activities29,034 (15,938)
Cash flows from investing activities:
Additions to premises and equipment(5,984) (3,931)
Purchase of available for sale securities(29,429) (29,966)
Other investing activities16 (4)
Net cash used in investing activities(35,397) (33,901)
Cash flows from financing activities:
Repayment of long-term debt(1,486) (1,486)
Proceeds from stock option exercises366 203
Purchase of treasury stock(11,691) (3,959)
Distributions to non-controlling interests(448) (657)
Net cash used in financing activities(13,259) (5,899)
Net decrease in cash and cash equivalents(19,622) (55,738)
Cash and cash equivalents at the beginning of the period179,327 161,361
Cash and cash equivalents at the end of the period$159,705 $105,623
Supplemental cash flow information:
Interest paid$6,104 $6,655
Income taxes paid, net3,830 1,520
Non-cash investing and financing activities:
Increase (decrease) in payables for purchases of premises and equipment$1,030 $(3,638)






ALTISOURCE PORTFOLIO SOLUTIONS S.A.
NON-GAAP MEASURES
(in thousands, except per share data)
(unaudited)
Adjusted net income attributable to Altisource and adjusted diluted earnings per share are non-GAAP measures used by management, existing shareholders and potential shareholders to measure Altisource’s performance. Adjusted net income attributable to Altisource is calculated by adding intangible asset amortization expense (net of tax) to GAAP net income attributable to Altisource. Adjusted diluted earnings per share is calculated by dividing net income attributable to Altisource plus intangible asset amortization expense (net of tax) to GAAP net income attributable to Altisource by the weighted average number of diluted shares. Reconciliations of the non-GAAP measures to the corresponding GAAP measures are as follows:
Three months ended March 31,
2016 2015
Net income attributable to Altisource$18,494 $3,698
Amortization of intangible assets12,211 8,891
Tax benefit on amortization of intangible assets(1,270) (741)
Amortization of intangible assets, net of tax10,941 8,150
Adjusted net income attributable to Altisource$29,435 $11,848
Diluted earnings per share$0.92 $0.18
Amortization of intangible assets, net of tax,
per diluted share
0.55 0.39
Adjusted diluted earnings per share$1.47 $0.56
Weighted average shares outstanding - diluted20,040 20,995
_____________________
Note: Amounts may not add to the total due to rounding.


CONTACT: Michelle D. Esterman Chief Financial Officer T: +352 2469 7950 E: Michelle.Esterman@altisource.lu

Source:Altisource Portfolio Solutions S.A.