Altisource Portfolio Solutions S.A. (“Altisource” or the “Company”)
(NASDAQ:ASPS) today reported financial results for the second
quarter of 2017, reporting sequential growth in service revenue,
net income and earnings per share. Compared to the first
quarter of 2017, Altisource’s service revenue grew by 4% to $238.1
million, net income attributable to Altisource grew by 38% to $9.0
million and diluted earnings per share grew by 41% to $0.48.
Further, adjusted net income attributable to Altisource(1) of $16.5
million and adjusted diluted earnings per share(1) of $0.88
increased from the first quarter of 2017 by 25% and 28%,
respectively.
Compared to the first quarter of 2017, service
revenue growth was driven by 15% growth in non-Ocwen revenue.
Service revenue relating to Ocwen and its portfolio was flat as
growth from seasonality in the property inspection and preservation
business was offset by lower technology related revenue and fewer
delinquent loans. Each of the Company’s four initiatives
contributed to the 15% non-Ocwen revenue growth. Compared to
the second quarter of 2016, the 1% decline in service revenue was
primarily from the normal runoff of Ocwen’s portfolio and
Altisource Residential Corporation’s smaller portfolio of
non-performing loans and REO partially offset by growth in
referrals of higher fee property preservation services and growth
in home sales revenue in the buy-renovate-sell business which began
operations in the second half of 2016.
Compared to the first quarter of 2017, growth in
diluted earnings per share and adjusted diluted earnings per
share(1) was driven by service revenue growth, margin expansion in
the property preservation and REO sales businesses and a positive
second quarter income tax accrual adjustment. The second
quarter $3.9 million gain on the repurchase of debt ($0 in the
first quarter of 2017) was largely offset by other non-recurring
expenses relating to facility closures, litigation related costs
and severance. Compared to the second quarter of 2016,
diluted earnings per share and adjusted diluted earnings per
share(1) decreased 53% and 44%, respectively. These declines
were driven by higher investments to support the Company’s growth
initiatives and service revenue mix changes. Revenue mix
changes were the result of growth in the lower margin property
preservation and buy-renovate-sell businesses and revenue declines
in other higher margin businesses. Diluted earnings per share
and adjusted diluted earnings per share(1) were further impacted by
a higher effective tax rate in the second quarter of 2017 compared
to the second quarter of 2016.
“I am pleased with our solid second quarter 2017
financial results and our accomplishments since last quarter.
We continue to develop our four initiatives to build a diversified
and growing company. We also opportunistically purchased our
debt and equity at very attractive prices,” said Chief Executive
Officer William B. Shepro.
Mr. Shepro further commented, “As Ocwen and New
Residential Investment Corp. (“NRZ”) have previously disclosed,
they recently entered into agreements to transfer Ocwen’s remaining
interests in certain MSRs to NRZ with Ocwen continuing to service
these portfolios.(2) While Altisource has long-term
agreements in place to provide various fee-based services on an
exclusive basis to portfolios serviced by Ocwen, we believe there
are benefits to also establishing a relationship with NRZ. We
are actively negotiating long-term agreements with NRZ to be the
provider for downstream services. We are making good progress
and believe we are close to reaching agreement which we believe
would be beneficial for both parties. However, there can be no
assurance that we will be able to reach agreement on acceptable
terms in the near future or at all.”
Second Quarter 2017 Highlights
Include(3):
Servicer Solutions
- Grew non-Ocwen service revenue by 11% over the first quarter of
2017 and 9% over the second quarter of 2016
- Selected by a top 25 bank to provide REO asset management and
brokerage services
Origination Solutions
- Grew non-Ocwen service revenue by 12% over the first quarter of
2017 and 11% over the second quarter of 2016
- Recently signed an agreement with and began providing mortgage
underwriting services for a top 5 correspondent lender
Consumer Real Estate
Solutions
- Grew the number of home purchase and sale transactions to 222,
a 55% increase in unit transactions and an 82% increase in service
revenue over the first quarter of 2017
- Launched Owners.com Loans as part of our strategy to provide a
broader suite of services to customers
Real Estate Investor
Solutions
- Grew non-Ocwen service revenue by 25% over the first quarter of
2017 (a 4% decline compared to the second quarter of 2016)
- Sold 46 homes in the buy-renovate-sell program, generating 49%
revenue growth in this program over the first quarter of 2017, and
had 101 homes in inventory at June 30, 2017
Corporate
- Purchased $26.0 million of the Company’s senior secured term
loan at an average discount of 16.5%, generating a $3.9 million
gain
- Repurchased 416 thousand shares of Altisource’s common stock at
$19.17 per share
Second Quarter 2017 Results Compared to
First Quarter of 2017 and Second Quarter 2016
- Service revenue of $238.1 million, a 4% increase compared to
the first quarter 2017 and a 1% decrease compared to the second
quarter 2016
- Income before income taxes and non-controlling interests of
$12.2 million, a 25% increase compared to the first quarter 2017
and a 49% decrease compared to the second quarter 2016
- Pretax income attributable to Altisource(1) of $11.5 million, a
26% increase compared to the first quarter 2017 and a 51% decrease
compared to the second quarter 2016
- Adjusted pretax income attributable to Altisource(1) of $20.9
million, a 14% increase compared to the first quarter 2017 and a
42% decrease compared to the second quarter 2016
- Net income attributable to Altisource of $9.0 million, a 38%
increase compared to the first quarter 2017 and a 55% decrease
compared to the second quarter 2016
- Adjusted net income attributable to Altisource(1) of $16.5
million, a 25% increase compared to the first quarter 2017 and a
47% decrease compared to the second quarter 2016
- Diluted earnings per share of $0.48, a 41% increase compared to
the first quarter 2017 and a 53% decrease compared to the second
quarter 2016
- Adjusted diluted earnings per share(1) of $0.88, a 28% increase
compared to the first quarter 2017 and a 44% decrease compared to
the second quarter 2016
- Cash from operations of $30.9 million compared to cash used in
operations of $18.4 million in the first quarter of 2017 (primarily
driven by the $28.0 million net litigation settlement paid in the
first quarter 2017) and cash from operations of $40.4 million in
the second quarter 2016
________________________
|
(1) |
This is a
non-GAAP measure that is defined and reconciled to the
corresponding GAAP measure herein. |
|
(2) |
This
information is based on disclosures made by Ocwen and NRZ in their
filings with the Securities and Exchange Commission, including
their Second Quarter 2017 Form 10-Qs, Ocwen’s July 24, 2017 Form
8-K and NRZ’s July 27, 2017 Form 8-K. Altisource takes no
responsibility for the accuracy of any information provided in
filings made by Ocwen and NRZ. |
|
(3) |
Applies to the
second quarter of 2017 unless otherwise indicated. |
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 second 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 an
integrated service provider and marketplace for the real estate and
mortgage industries. Combining operational excellence with a
suite of innovative services and technologies, Altisource helps
solve the demands of the ever-changing market. 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 June 30, |
|
Six months ended June 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
Service revenue |
|
|
|
|
|
|
|
|
Mortgage
Market |
|
$ |
198,414 |
|
|
$ |
197,479 |
|
|
$ |
393,387 |
|
|
$ |
385,564 |
|
Real
Estate Market |
|
24,347 |
|
|
24,173 |
|
|
43,536 |
|
|
47,574 |
|
Other
Businesses, Corporate and Eliminations |
|
15,346 |
|
|
19,672 |
|
|
31,023 |
|
|
42,466 |
|
Total
service revenue |
|
238,107 |
|
|
241,324 |
|
|
467,946 |
|
|
475,604 |
|
Reimbursable
expenses |
|
11,891 |
|
|
13,783 |
|
|
21,920 |
|
|
29,237 |
|
Non-controlling
interests |
|
687 |
|
|
692 |
|
|
1,302 |
|
|
1,090 |
|
Total revenue |
|
250,685 |
|
|
255,799 |
|
|
491,168 |
|
|
505,931 |
|
Cost of revenue |
|
173,502 |
|
|
160,588 |
|
|
341,426 |
|
|
313,997 |
|
Reimbursable
expenses |
|
11,891 |
|
|
13,783 |
|
|
21,920 |
|
|
29,237 |
|
Gross profit |
|
65,292 |
|
|
81,428 |
|
|
127,822 |
|
|
162,697 |
|
Selling, general and
administrative expenses |
|
52,470 |
|
|
54,207 |
|
|
100,171 |
|
|
107,823 |
|
Income from
operations |
|
12,822 |
|
|
27,221 |
|
|
27,651 |
|
|
54,874 |
|
Other income (expense),
net: |
|
|
|
|
|
|
|
|
Interest
expense |
|
(5,465 |
) |
|
(5,988 |
) |
|
(11,263 |
) |
|
(12,529 |
) |
Other
income (expense), net |
|
4,803 |
|
|
2,744 |
|
|
5,518 |
|
|
2,717 |
|
Total
other income (expense), net |
|
(662 |
) |
|
(3,244 |
) |
|
(5,745 |
) |
|
(9,812 |
) |
|
|
|
|
|
|
|
|
|
Income before income
taxes and non-controlling interests |
|
12,160 |
|
|
23,977 |
|
|
21,906 |
|
|
45,062 |
|
Income tax
provision |
|
(2,438 |
) |
|
(3,291 |
) |
|
(5,024 |
) |
|
(5,484 |
) |
|
|
|
|
|
|
|
|
|
Net income |
|
9,722 |
|
|
20,686 |
|
|
16,882 |
|
|
39,578 |
|
Net income attributable
to non-controlling interests |
|
(687 |
) |
|
(692 |
) |
|
(1,302 |
) |
|
(1,090 |
) |
|
|
|
|
|
|
|
|
|
Net income attributable
to Altisource |
|
$ |
9,035 |
|
|
$ |
19,994 |
|
|
$ |
15,580 |
|
|
$ |
38,488 |
|
|
|
|
|
|
|
|
|
|
Earnings per
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.49 |
|
|
$ |
1.08 |
|
|
$ |
0.84 |
|
|
$ |
2.06 |
|
Diluted |
|
$ |
0.48 |
|
|
$ |
1.02 |
|
|
$ |
0.82 |
|
|
$ |
1.94 |
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
18,335 |
|
|
18,437 |
|
|
18,497 |
|
|
18,646 |
|
Diluted |
|
18,836 |
|
|
19,604 |
|
|
19,069 |
|
|
19,822 |
|
|
|
|
|
|
|
|
|
|
Comprehensive
income: |
|
|
|
|
|
|
|
|
Net
income |
|
$ |
9,722 |
|
|
$ |
20,686 |
|
|
$ |
16,882 |
|
|
$ |
39,578 |
|
Other
comprehensive income (loss), net of tax: |
|
|
|
|
|
|
|
|
Unrealized gain (loss) on securities, net of income tax (provision)
benefit of $2,593, $3,249, $(2,132), $2,960 |
|
(6,981 |
) |
|
(7,871 |
) |
|
5,742 |
|
|
(7,172 |
) |
|
|
|
|
|
|
|
|
|
Comprehensive income,
net of tax |
|
2,741 |
|
|
12,815 |
|
|
22,624 |
|
|
32,406 |
|
Comprehensive income
attributable to non-controlling interests |
|
(687 |
) |
|
(692 |
) |
|
(1,302 |
) |
|
(1,090 |
) |
|
|
|
|
|
|
|
|
|
Comprehensive income
attributable to Altisource |
|
$ |
2,054 |
|
|
$ |
12,123 |
|
|
$ |
21,322 |
|
|
$ |
31,316 |
|
ALTISOURCE PORTFOLIO SOLUTIONS
S.A.SEGMENT FINANCIAL
INFORMATION(1)(in
thousands)(unaudited) |
|
|
|
|
|
Three months ended June 30, 2017 |
(in thousands) |
|
MortgageMarket |
|
Real EstateMarket |
|
OtherBusinesses,Corporate
andEliminations |
|
ConsolidatedAltisource |
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
Service
revenue |
|
$ |
198,414 |
|
|
$ |
24,347 |
|
|
$ |
15,346 |
|
|
$ |
238,107 |
|
Reimbursable expenses |
|
11,094 |
|
|
783 |
|
|
14 |
|
|
11,891 |
|
Non-controlling interests |
|
687 |
|
|
— |
|
|
— |
|
|
687 |
|
|
|
210,195 |
|
|
25,130 |
|
|
15,360 |
|
|
250,685 |
|
Cost of revenue |
|
144,326 |
|
|
26,844 |
|
|
14,223 |
|
|
185,393 |
|
Gross profit
(loss) |
|
65,869 |
|
|
(1,714 |
) |
|
1,137 |
|
|
65,292 |
|
Selling, general and
administrative expenses |
|
29,805 |
|
|
5,551 |
|
|
17,114 |
|
|
52,470 |
|
Income (loss) from
operations |
|
36,064 |
|
|
(7,265 |
) |
|
(15,977 |
) |
|
12,822 |
|
Total other income
(expense), net |
|
102 |
|
|
— |
|
|
(764 |
) |
|
(662 |
) |
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes and non-controlling interests |
|
$ |
36,166 |
|
|
$ |
(7,265 |
) |
|
$ |
(16,741 |
) |
|
$ |
12,160 |
|
|
|
Three months ended June 30, 2016 |
(in thousands) |
|
MortgageMarket |
|
Real EstateMarket |
|
OtherBusinesses,Corporate
andEliminations |
|
ConsolidatedAltisource |
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
Service
revenue |
|
$ |
197,479 |
|
|
$ |
24,173 |
|
|
$ |
19,672 |
|
|
$ |
241,324 |
|
Reimbursable expenses |
|
13,129 |
|
|
631 |
|
|
23 |
|
|
13,783 |
|
Non-controlling interests |
|
692 |
|
|
— |
|
|
— |
|
|
692 |
|
|
|
211,300 |
|
|
24,804 |
|
|
19,695 |
|
|
255,799 |
|
Cost of revenue |
|
135,723 |
|
|
16,854 |
|
|
21,794 |
|
|
174,371 |
|
Gross profit
(loss) |
|
75,577 |
|
|
7,950 |
|
|
(2,099 |
) |
|
81,428 |
|
Selling, general and
administrative expenses |
|
31,141 |
|
|
5,620 |
|
|
17,446 |
|
|
54,207 |
|
Income (loss) from
operations |
|
44,436 |
|
|
2,330 |
|
|
(19,545 |
) |
|
27,221 |
|
Total other income
(expense), net |
|
74 |
|
|
4 |
|
|
(3,322 |
) |
|
(3,244 |
) |
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes and non-controlling interests |
|
$ |
44,510 |
|
|
$ |
2,334 |
|
|
$ |
(22,867 |
) |
|
$ |
23,977 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Effective January 1, 2017, our
reportable segments changed as a result of changes in our internal
organization. Prior year comparable period segment disclosures
have been restated to conform to the current year presentation.
ALTISOURCE PORTFOLIO SOLUTIONS
S.A.SEGMENT FINANCIAL
INFORMATION(1)(in
thousands)(unaudited) |
|
|
|
|
|
Six months ended June 30, 2017 |
(in thousands) |
|
MortgageMarket |
|
Real EstateMarket |
|
OtherBusinesses,Corporate
andEliminations |
|
ConsolidatedAltisource |
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
Service
revenue |
|
$ |
393,387 |
|
|
$ |
43,536 |
|
|
$ |
31,023 |
|
|
$ |
467,946 |
|
Reimbursable expenses |
|
20,229 |
|
|
1,657 |
|
|
34 |
|
|
21,920 |
|
Non-controlling interests |
|
1,302 |
|
|
— |
|
|
— |
|
|
1,302 |
|
|
|
414,918 |
|
|
45,193 |
|
|
31,057 |
|
|
491,168 |
|
Cost of revenue |
|
284,476 |
|
|
48,987 |
|
|
29,883 |
|
|
363,346 |
|
Gross profit
(loss) |
|
130,442 |
|
|
(3,794 |
) |
|
1,174 |
|
|
127,822 |
|
Selling, general and
administrative expenses |
|
58,487 |
|
|
9,876 |
|
|
31,808 |
|
|
100,171 |
|
Income (loss) from
operations |
|
71,955 |
|
|
(13,670 |
) |
|
(30,634 |
) |
|
27,651 |
|
Total other income
(expense), net |
|
112 |
|
|
— |
|
|
(5,857 |
) |
|
(5,745 |
) |
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes and non-controlling interests |
|
$ |
72,067 |
|
|
$ |
(13,670 |
) |
|
$ |
(36,491 |
) |
|
$ |
21,906 |
|
|
|
Six months ended June 30, 2016 |
(in thousands) |
|
MortgageMarket |
|
Real EstateMarket |
|
OtherBusinesses, Corporate
andEliminations |
|
ConsolidatedAltisource |
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
Service
revenue |
|
$ |
385,564 |
|
|
$ |
47,574 |
|
|
$ |
42,466 |
|
|
$ |
475,604 |
|
Reimbursable expenses |
|
28,047 |
|
|
1,139 |
|
|
51 |
|
|
29,237 |
|
Non-controlling interests |
|
1,090 |
|
|
— |
|
|
— |
|
|
1,090 |
|
|
|
414,701 |
|
|
48,713 |
|
|
42,517 |
|
|
505,931 |
|
Cost of revenue |
|
269,766 |
|
|
31,312 |
|
|
42,156 |
|
|
343,234 |
|
Gross profit |
|
144,935 |
|
|
17,401 |
|
|
361 |
|
|
162,697 |
|
Selling, general and
administrative expenses |
|
60,595 |
|
|
11,794 |
|
|
35,434 |
|
|
107,823 |
|
Income (loss) from
operations |
|
84,340 |
|
|
5,607 |
|
|
(35,073 |
) |
|
54,874 |
|
Total other income
(expense), net |
|
134 |
|
|
— |
|
|
(9,946 |
) |
|
(9,812 |
) |
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes and non-controlling interests |
|
$ |
84,474 |
|
|
$ |
5,607 |
|
|
$ |
(45,019 |
) |
|
$ |
45,062 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Effective January 1, 2017, our reportable segments
changed as a result of changes in our internal
organization. Prior year comparable period segment disclosures
have been restated to conform to the current year presentation.
ALTISOURCE PORTFOLIO SOLUTIONS
S.A.CONSOLIDATED BALANCE
SHEETS(in thousands, except per share
data)(unaudited) |
|
|
|
|
|
June 30, 2017 |
|
December 31, 2016 |
|
|
|
|
ASSETS |
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
114,205 |
|
|
$ |
149,294 |
|
Available
for sale securities |
53,628 |
|
|
45,754 |
|
Accounts
receivable, net |
72,977 |
|
|
87,821 |
|
Prepaid
expenses and other current assets |
49,419 |
|
|
42,608 |
|
Total
current assets |
290,229 |
|
|
325,477 |
|
|
|
|
|
Premises and equipment,
net |
87,060 |
|
|
103,473 |
|
Goodwill |
86,283 |
|
|
86,283 |
|
Intangible assets,
net |
136,893 |
|
|
155,432 |
|
Deferred tax assets,
net |
5,160 |
|
|
7,292 |
|
Other assets |
11,003 |
|
|
11,255 |
|
|
|
|
|
Total assets |
$ |
616,628 |
|
|
$ |
689,212 |
|
|
|
|
|
LIABILITIES AND EQUITY |
Current
liabilities: |
|
|
|
Accounts
payable and accrued expenses |
$ |
75,162 |
|
|
$ |
83,135 |
|
Accrued
litigation settlement |
— |
|
|
32,000 |
|
Current
portion of long-term debt |
5,945 |
|
|
5,945 |
|
Deferred
revenue |
9,886 |
|
|
8,797 |
|
Other
current liabilities |
10,520 |
|
|
19,061 |
|
Total
current liabilities |
101,513 |
|
|
148,938 |
|
|
|
|
|
Long-term debt, less
current portion |
439,486 |
|
|
467,600 |
|
Other non-current
liabilities |
8,906 |
|
|
10,480 |
|
|
|
|
|
Commitments,
contingencies and regulatory matters |
|
|
|
|
|
|
|
Equity: |
|
|
|
Common
stock ($1.00 par value; 100,000 shares authorized, 25,413 issued
and 18,034 outstanding as of June 30, 2017; 25,413 shares
authorized and issued and 18,774 outstanding as of
December 31, 2016) |
25,413 |
|
|
25,413 |
|
Additional paid-in capital |
110,078 |
|
|
107,288 |
|
Retained
earnings |
341,926 |
|
|
333,786 |
|
Accumulated other comprehensive income (loss) |
3,997 |
|
|
(1,745 |
) |
Treasury
stock, at cost (7,379 shares as of June 30, 2017 and 6,639
shares as of December 31, 2016) |
(416,342 |
) |
|
(403,953 |
) |
Altisource equity |
65,072 |
|
|
60,789 |
|
|
|
|
|
Non-controlling interests |
1,651 |
|
|
1,405 |
|
Total
equity |
66,723 |
|
|
62,194 |
|
|
|
|
|
Total liabilities and
equity |
$ |
616,628 |
|
|
$ |
689,212 |
|
ALTISOURCE PORTFOLIO SOLUTIONS
S.A.CONSOLIDATED STATEMENTS OF CASH
FLOWS(in
thousands)(unaudited) |
|
|
|
Six months ended June 30, |
|
2017 |
|
2016 |
|
|
|
|
Cash flows from
operating activities: |
|
|
|
Net income |
$ |
16,882 |
|
|
$ |
39,578 |
|
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
Depreciation and amortization |
18,895 |
|
|
18,346 |
|
Amortization of intangible assets |
18,539 |
|
|
24,967 |
|
Change in
the fair value of acquisition related contingent consideration |
16 |
|
|
193 |
|
Share-based compensation expense |
1,858 |
|
|
3,569 |
|
Bad debt
expense |
2,890 |
|
|
1,041 |
|
Gain on
early extinguishment of debt |
(3,937 |
) |
|
(5,464 |
) |
Amortization of debt discount |
156 |
|
|
201 |
|
Amortization of debt issuance costs |
433 |
|
|
557 |
|
Deferred
income taxes |
— |
|
|
18 |
|
Loss on
disposal of fixed assets |
2,798 |
|
|
9 |
|
Changes
in operating assets and liabilities: |
|
|
|
Accounts
receivable |
11,954 |
|
|
3,407 |
|
Prepaid
expenses and other current assets |
(6,811 |
) |
|
(6,012 |
) |
Other
assets |
523 |
|
|
447 |
|
Accounts
payable and accrued expenses |
(10,637 |
) |
|
(4,454 |
) |
Other
current and non-current liabilities |
(41,042 |
) |
|
(6,998 |
) |
Net cash provided by
operating activities |
12,517 |
|
|
69,405 |
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
Additions
to premises and equipment |
(5,658 |
) |
|
(12,441 |
) |
Purchase
of available for sale securities |
— |
|
|
(48,219 |
) |
Change in
restricted cash |
(271 |
) |
|
(10 |
) |
Net cash used in
investing activities |
(5,929 |
) |
|
(60,670 |
) |
|
|
|
|
Cash flows from
financing activities: |
|
|
|
Repayment
and repurchases of long-term debt |
(24,766 |
) |
|
(47,751 |
) |
Proceeds
from stock option exercises |
765 |
|
|
986 |
|
Purchase
of treasury shares |
(15,531 |
) |
|
(19,746 |
) |
Distributions to non-controlling interests |
(1,056 |
) |
|
(1,065 |
) |
Payment
of tax withholding on issuance of restricted shares |
(1,089 |
) |
|
— |
|
Net cash used in
financing activities |
(41,677 |
) |
|
(67,576 |
) |
|
|
|
|
Net decrease in cash
and cash equivalents |
(35,089 |
) |
|
(58,841 |
) |
Cash and cash
equivalents at the beginning of the period |
149,294 |
|
|
179,327 |
|
|
|
|
|
Cash and cash
equivalents at the end of the period |
$ |
114,205 |
|
|
$ |
120,486 |
|
|
|
|
|
Supplemental cash flow
information: |
|
|
|
Interest
paid |
$ |
10,787 |
|
|
$ |
11,694 |
|
Income
taxes paid, net |
12,668 |
|
|
5,618 |
|
|
|
|
|
Non-cash investing and
financing activities: |
|
|
|
(Decrease) increase in payables for purchases of premises and
equipment |
$ |
(378 |
) |
|
$ |
1,369 |
|
Increase
in payables for purchases of treasury shares |
3,042 |
|
|
— |
|
ALTISOURCE PORTFOLIO SOLUTIONS
S.A.NON-GAAP MEASURES(in
thousands, except per share
data)(unaudited)
Pretax income attributable to Altisource,
adjusted pretax income attributable to Altisource, adjusted net
income attributable to Altisource and adjusted diluted earnings per
share are non-GAAP measures used by management, existing
shareholders, potential shareholders and other users of our
financial information to measure Altisource’s performance and do
not purport to be alternatives to income before income taxes and
non-controlling interests, net income attributable to Altisource or
diluted earnings per share as measures of Altisource’s
performance. We believe these measures are useful to
management, existing shareholders, potential shareholders and other
users of our financial information in evaluating operating
profitability more on a continuing cost basis as they exclude
amortization expense related to acquisitions that occurred in prior
periods as well as the effect of more significant non-recurring
items from earnings. We believe these measures are also
useful in evaluating the effectiveness of our operations and
underlying business trends in a manner that is consistent with
management’s evaluation of business performance. Furthermore,
we believe the exclusion of more significant non-recurring items
enables comparability to prior period performance and trend
analysis.
It is management’s intent to provide non-GAAP
financial information to enhance the understanding of Altisource’s
GAAP financial information, and it should be considered by the
reader in addition to, but not instead of, the financial statements
prepared in accordance with GAAP. Each non-GAAP financial
measure is presented along with the corresponding GAAP measure so
as not to imply that more emphasis should be placed on the non-GAAP
measure. The non-GAAP financial information presented may be
determined or calculated differently by other companies. The
non-GAAP financial information should not be unduly relied
upon.
Pretax income attributable to Altisource is
calculated by deducting non-controlling interests from income
before income taxes and non-controlling interests. Adjusted
pretax income attributable to Altisource is calculated by adding
intangible asset amortization expense to pretax income attributable
to Altisource. 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), by the weighted average number
of diluted shares.
ALTISOURCE PORTFOLIO SOLUTIONS
S.A.NON-GAAP MEASURES(in
thousands, except per share
data)(unaudited) |
|
|
|
|
|
|
Reconciliations of the non-GAAP measures to the corresponding GAAP
measures are as follows: |
|
|
|
|
|
|
|
Three months ended June 30, |
|
Three monthsended March 31, |
|
Six months ended June 30, |
|
2017 |
|
2016 |
|
2017 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
Income before income
taxes and non-controlling interests |
$ |
12,160 |
|
|
$ |
23,977 |
|
|
$ |
9,746 |
|
|
$ |
21,906 |
|
|
$ |
45,062 |
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests |
(687 |
) |
|
(692 |
) |
|
(615 |
) |
|
(1,302 |
) |
|
(1,090 |
) |
Pretax income
attributable to Altisource |
11,473 |
|
|
23,285 |
|
|
9,131 |
|
|
20,604 |
|
|
43,972 |
|
Intangible asset amortization expense |
9,393 |
|
|
12,756 |
|
|
9,146 |
|
|
18,539 |
|
|
24,967 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted pretax income
attributable to Altisource |
$ |
20,866 |
|
|
$ |
36,041 |
|
|
$ |
18,277 |
|
|
$ |
39,143 |
|
|
$ |
68,939 |
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to Altisource |
$ |
9,035 |
|
|
$ |
19,994 |
|
|
$ |
6,545 |
|
|
$ |
15,580 |
|
|
$ |
38,488 |
|
|
|
|
|
|
|
|
|
|
|
Intangible asset amortization expense |
9,393 |
|
|
12,756 |
|
|
9,146 |
|
|
18,539 |
|
|
24,967 |
|
Tax
benefit from intangible asset amortization |
(1,883 |
) |
|
(1,751 |
) |
|
(2,426 |
) |
|
(4,251 |
) |
|
(3,038 |
) |
Intangible asset amortization expense, net of tax |
7,510 |
|
|
11,005 |
|
|
6,720 |
|
|
14,288 |
|
|
21,929 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
attributable to Altisource |
$ |
16,545 |
|
|
$ |
30,999 |
|
|
$ |
13,265 |
|
|
$ |
29,868 |
|
|
$ |
60,417 |
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share |
$ |
0.48 |
|
|
$ |
1.02 |
|
|
$ |
0.34 |
|
|
$ |
0.82 |
|
|
$ |
1.94 |
|
|
|
|
|
|
|
|
|
|
|
Intangible asset amortization expense, net of tax, per diluted
share |
0.40 |
|
|
0.56 |
|
|
0.35 |
|
|
0.75 |
|
|
1.11 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted
earnings per share |
$ |
0.88 |
|
|
$ |
1.58 |
|
|
$ |
0.69 |
|
|
$ |
1.57 |
|
|
$ |
3.05 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding - diluted |
18,836 |
|
|
19,604 |
|
|
19,304 |
|
|
19,069 |
|
|
19,822 |
|
__________________________
Note: Amounts may not add to the total due to rounding.
FOR FURTHER INFORMATION CONTACT:
Michelle D. Esterman
Chief Financial Officer
T: +352 2469 7950
E: Michelle.Esterman@altisource.lu
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