Altisource Portfolio Solutions S.A. (“Altisource” or the “Company”)
(NASDAQ: ASPS), a leading provider and marketplace for the real
estate and mortgage industries, today reported financial results
for the first quarter 2022.
“I am pleased with our first quarter financial
results. We generated service revenue of $37.8 million, marking the
first quarter of sequential revenue growth in 11 quarters. Our
first quarter Adjusted EBITDA loss of $4.1 million represents a
$4.7 million improvement over the fourth quarter of 2021. We
benefited from revenue growth as the default market begins to
recover, a favorable revenue mix, a lower cost base and
approximately $1.8 million of non-recurring items,” said Chairman
and Chief Executive Officer William B. Shepro.
Mr. Shepro further commented, “We are executing
well on our Strategic Plan. In our Origination business, we believe
we are building an exciting and innovative business that we
anticipate will benefit from new product launches, membership
growth and a strong sales pipeline. In our Servicer and Real Estate
business, we should benefit from the market tailwinds and our
strong sales pipeline. As we continue to execute on our plan and
win more business, we anticipate Altisource will return to a growth
Company and create substantial value for our customers and
shareholders.”
First Quarter 2022
Highlights(1)
Corporate and Financial:
- Ended the first
quarter 2022 with $80.0 million of cash and cash equivalents, a 93%
increase from the first quarter of 2021
- Ended the first
quarter 2022 with $167.3 million of net debt(2), a 19% reduction
from the first quarter of 2021
- Grew service
revenue in the first quarter 2022 compared to the fourth quarter
2021, representing the first quarter of sequential service revenue
growth in eleven quarters
- First quarter
Adjusted EBITDA loss of $4.1 million represents a $4.4 million
improvement over the first quarter of 2021 and a $4.7 million
improvement over the fourth quarter of 2021
- Reduced first
quarter 2022 cash operating costs (excluding outside fees and
services) by $13.6 million, representing a 31% savings from the
first quarter 2021
Business Highlights:
- First quarter
2022 Hubzu referrals were 198% higher than the first quarter of
2021, including a 451% increase in foreclosure referrals and a 37%
increase in REO referrals. As of March 31, 2022, Hubzu
inventory was over 6,800 homes, representing a 53% increase
compared to March 31, 2021, including a 119% increase in
foreclosure inventory and a 1% decrease in REO inventory
- First quarter
2022 Trustee, Pre-foreclosure Title and Valuation referrals were
68%, 9% and 5%, respectively, higher than the first quarter of
2021
- The current
unweighted sales pipeline in the Servicer and Real Estate business
is approximately $90 million on a stabilized basis, representing
$31 million to $39 million in annual revenue based upon our
forecasted probability of closing
- The current
unweighted sales pipeline in the Origination business is over $65
million on a stabilized basis, representing $18 million to $23
million in annual revenue based upon our forecasted probability of
closing
Industry Highlights:
- Industrywide
foreclosure initiations were 458% higher for the three months ended
March 31, 2022 compared to the same period in 2021(3) as a
result of the Federal government’s foreclosure moratorium
expiration on July 1, 2021 and the CFPB’s temporary loss mitigation
measures expiration on December 31, 2021; however, industry wide
foreclosure initiations were still 20% lower for the three months
ended March 31, 2022 compared to the same period in 2020(3)
despite similar delinquency levels as the foreclosure market begins
to normalize
- Industrywide
mortgage originations were 37% lower for the three months ended
March 31, 2022 compared to the same period in 2021 and 23% lower
compared to the fourth quarter of 2021(4) resulting from a higher
interest rate environment
First Quarter 2022 Financial
Results
- Service revenue of $37.8
million
- Gross profit of $5.6 million,
representing 15% of service revenue
- Loss before income taxes and
non-controlling interests of $(11.1) million
- Adjusted pre-tax loss attributable
to Altisource(2) of $(8.6) million
- Adjusted earnings before interest,
tax, depreciation and amortization (“EBITDA”)(2) of $(4.1)
million
- Net loss attributable to Altisource
of $(12.2) million, or $(0.76) per diluted share
- Adjusted net loss attributable to
Altisource(2) of $(9.3) million, or $(0.58) per diluted share
- Net cash used in
operating activities of $(16.9) million included approximately
$(10.6) million of cash used to pay for certain items that are not
expected to recur in the remaining quarters of 2022. These items
include previously accrued taxes related to a large one-time
repatriation of cash from certain of the Company’s subsidiaries,
annual bonuses, and certain prepaid expenses that relate to the
entire year
First Quarter 2022 Results Compared to
the First Quarter 2021:
(in thousands, except per
share data) |
First Quarter 2022 |
|
First Quarter 2021 |
|
% Change |
Service revenue |
$ |
37,763 |
|
|
$ |
48,080 |
|
|
(21 |
) |
Loss from operations |
|
(8,327 |
) |
|
|
(18,579 |
) |
|
55 |
|
Adjusted operating
loss(2) |
|
(5,635 |
) |
|
|
(10,221 |
) |
|
45 |
|
Loss before income taxes and
non-controlling interests |
|
(11,143 |
) |
|
|
(21,072 |
) |
|
47 |
|
Pretax loss attributable to
Altisource(2) |
|
(11,304 |
) |
|
|
(21,159 |
) |
|
47 |
|
Adjusted pretax loss
attributable to Altisource(2) |
|
(8,612 |
) |
|
|
(13,086 |
) |
|
34 |
|
Adjusted EBITDA(2) |
|
(4,143 |
) |
|
|
(8,517 |
) |
|
51 |
|
Net loss attributable to
Altisource |
|
(12,190 |
) |
|
|
(22,002 |
) |
|
45 |
|
Adjusted net loss attributable
to Altisource(2) |
|
(9,294 |
) |
|
|
(14,341 |
) |
|
35 |
|
Diluted loss per share |
|
(0.76 |
) |
|
|
(1.40 |
) |
|
45 |
|
Adjusted diluted loss per
share(2) |
|
(0.58 |
) |
|
|
(0.91 |
) |
|
36 |
|
Cash flows used in operating
activities |
|
(16,910 |
) |
|
|
(16,810 |
) |
|
(1 |
) |
Cash flows used in operating
activities less additions to premises and equipment(2) |
|
(16,984 |
) |
|
|
(17,277 |
) |
|
2 |
|
-
First quarter 2022 loss from operations include expenses related to
cost savings initiatives and other of $0.1 million compared to $2.0
million for the first quarter of 2021. First quarter 2021 loss from
operations also includes losses from our earlier stage businesses
of $2.4 million (no comparable amounts for the first quarter of
2022).
- First quarter 2022 net loss
attributable to Altisource includes $0.3 million of expense (no
comparable amount for the first quarter of 2021) for certain income
tax items related to adjustments to foreign income tax reserves and
withholding tax on previously accrued taxes related to a large
one-time repatriation of cash from certain of our
subsidiaries.
________________________
(1) |
Applies to 2022 unless otherwise indicated. |
(2) |
This is a non-GAAP measure that is defined and reconciled to the
corresponding GAAP measure herein. |
(3) |
Based on data from Black Knight’s First Look at March 2022 Mortgage
Data |
(4) |
Based on data from the April 13, 2022 MBA Mortgage Finance
Forecast |
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 that relate to, among other
things, future events or our future performance or financial
condition. These statements may be identified by words such as
“anticipate,” “intend,” “expect,” “may,” “could,” “should,”
“would,” “plan,” “estimate,” “seek,” “believe,” “potential” or
“continue” or the negative of these terms and comparable
terminology. Such statements are based on expectations as to the
future and are not statements of historical fact. Furthermore,
forward-looking statements are not guarantees of future performance
and involve a number of assumptions, risks and uncertainties that
could cause actual results to differ materially. Important factors
that could cause actual results to differ materially from those
suggested by the forward-looking statements include, but are not
limited to, the risks discussed in Item 1A of Part I “Risk Factors”
in our Form 10-K filing with the Securities and Exchange
Commission, as the same may be updated from time to time in our
Form 10-Q filings. We caution you not to place undue reliance on
these forward-looking statements which reflect our view only as of
the date of this report. We are under no obligation (and expressly
disclaim any obligation) to update or alter any forward-looking
statements contained herein to reflect any change in our
expectations with regard thereto or change in events, conditions or
circumstances on which any such statement is based. The risks and
uncertainties to which forward-looking statements are subject
include, but are not limited to, risks related to the COVID-19
pandemic, customer concentration, the timing of the anticipated
increase in default related referrals following the expiration of
foreclosure and eviction moratoriums and forbearance programs, the
timing of the expiration of such moratoriums and programs, and any
other delays occasioned by government, investor or servicer
actions, the use and success of our products and services, our
ability to retain existing customers and attract new customers and
the potential for expansion or changes in our customer
relationships, technology disruptions, our compliance with
applicable data requirements, our use of third party vendors and
contractors, our ability to effectively manage potential conflicts
of interest, macro-economic and industry specific conditions, our
ability to effectively manage our regulatory and contractual
obligations, the adequacy of our financial resources, including our
sources of liquidity and ability to repay borrowings and comply
with our Credit Agreement, including the financial and other
covenants contained therein, as well as Altisource’s ability to
retain key executives or employees, behavior of customers,
suppliers and/or competitors, technological developments,
governmental regulations, taxes and policies. The financial
projections and scenarios contained in this press release are
expressly qualified as forward-looking statements and, as with
other forward-looking statements, should not be unduly relied upon.
We undertake no obligation to update these statements, scenarios
and projections as a result of a change in circumstances, new
information or future events.
Webcast
Altisource will host a webcast at 10:30 a.m. EDT
today to discuss our first quarter. 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 markets we serve. Additional
information is available at www.Altisource.com.
FOR FURTHER
INFORMATION CONTACT: |
|
Michelle D. Esterman |
Chief Financial Officer |
T: (770) 612-7007 |
E:
Michelle.Esterman@altisource.com |
ALTISOURCE PORTFOLIO SOLUTIONS
S.A.CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS(in thousands, except per share
data)(unaudited)
|
|
Three months ended March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
Service revenue |
|
$ |
37,763 |
|
|
$ |
48,080 |
|
Reimbursable expenses |
|
|
1,592 |
|
|
|
2,013 |
|
Non-controlling interests |
|
|
161 |
|
|
|
372 |
|
Total revenue |
|
|
39,516 |
|
|
|
50,465 |
|
Cost of revenue |
|
|
32,277 |
|
|
|
48,145 |
|
Reimbursable expenses |
|
|
1,592 |
|
|
|
2,013 |
|
Gross profit |
|
|
5,647 |
|
|
|
307 |
|
Operating expenses: |
|
|
|
|
Selling, general and administrative expenses |
|
|
13,974 |
|
|
|
18,886 |
|
|
|
|
|
|
Loss from operations |
|
|
(8,327 |
) |
|
|
(18,579 |
) |
Other income (expense),
net |
|
|
|
|
Interest expense |
|
|
(3,556 |
) |
|
|
(3,442 |
) |
Other income, net |
|
|
740 |
|
|
|
949 |
|
Total other income (expense), net |
|
|
(2,816 |
) |
|
|
(2,493 |
) |
|
|
|
|
|
Loss before income taxes and
non-controlling interests |
|
|
(11,143 |
) |
|
|
(21,072 |
) |
Income tax provision |
|
|
(886 |
) |
|
|
(843 |
) |
|
|
|
|
|
Net loss |
|
|
(12,029 |
) |
|
|
(21,915 |
) |
Net income attributable to
non-controlling interests |
|
|
(161 |
) |
|
|
(87 |
) |
|
|
|
|
|
Net loss attributable to
Altisource |
|
$ |
(12,190 |
) |
|
$ |
(22,002 |
) |
|
|
|
|
|
Loss per share: |
|
|
|
|
Basic |
|
$ |
(0.76 |
) |
|
$ |
(1.40 |
) |
Diluted |
|
$ |
(0.76 |
) |
|
$ |
(1.40 |
) |
|
|
|
|
|
Weighted average shares
outstanding: |
|
|
|
|
Basic |
|
|
15,956 |
|
|
|
15,717 |
|
Diluted |
|
|
15,956 |
|
|
|
15,717 |
|
|
|
|
|
|
Comprehensive loss: |
|
|
|
|
|
|
|
|
|
Comprehensive loss, net of
tax |
|
$ |
(12,029 |
) |
|
$ |
(21,915 |
) |
Comprehensive income
attributable to non-controlling interests |
|
|
(161 |
) |
|
|
(87 |
) |
|
|
|
|
|
Comprehensive loss
attributable to Altisource |
|
$ |
(12,190 |
) |
|
$ |
(22,002 |
) |
ALTISOURCE PORTFOLIO SOLUTIONS
S.A.CONSOLIDATED BALANCE
SHEETS(in thousands, except for per share
data)(unaudited)
|
March 31,2022 |
|
December 31,2021 |
|
|
|
|
ASSETS |
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
79,952 |
|
|
$ |
98,132 |
|
Accounts receivable, net |
|
18,318 |
|
|
|
18,008 |
|
Prepaid expenses and other current assets |
|
25,422 |
|
|
|
21,864 |
|
Total current assets |
|
123,692 |
|
|
|
138,004 |
|
|
|
|
|
Premises and equipment,
net |
|
5,927 |
|
|
|
6,873 |
|
Right-of-use assets under
operating leases |
|
6,306 |
|
|
|
7,594 |
|
Goodwill |
|
55,960 |
|
|
|
55,960 |
|
Intangible assets, net |
|
35,575 |
|
|
|
36,859 |
|
Deferred tax assets, net |
|
6,308 |
|
|
|
6,386 |
|
Other assets |
|
6,009 |
|
|
|
6,132 |
|
|
|
|
|
Total assets |
$ |
239,777 |
|
|
$ |
257,808 |
|
|
|
|
|
LIABILITIES AND EQUITY |
Current liabilities: |
|
|
|
Accounts payable and accrued expenses |
$ |
41,958 |
|
|
$ |
46,535 |
|
Deferred revenue |
|
3,947 |
|
|
|
4,342 |
|
Other current liabilities |
|
2,967 |
|
|
|
3,870 |
|
Total current liabilities |
|
48,872 |
|
|
|
54,747 |
|
|
|
|
|
Long-term debt |
|
244,079 |
|
|
|
243,637 |
|
Deferred tax liabilities,
net |
|
9,119 |
|
|
|
9,028 |
|
Other non-current
liabilities |
|
18,594 |
|
|
|
19,266 |
|
|
|
|
|
Commitments, contingencies and
regulatory matters |
|
|
|
|
|
|
|
Equity (deficit): |
|
|
|
Common stock ($1.00 par value; 100,000 shares authorized, 25,413
issued and 16,057 outstanding as of March 31, 2022; 15,911
outstanding as of December 31, 2021) |
|
25,413 |
|
|
|
25,413 |
|
Additional paid-in capital |
|
145,588 |
|
|
|
144,298 |
|
Retained earnings |
|
163,796 |
|
|
|
186,592 |
|
Treasury stock, at cost (9,356 shares as of March 31, 2022 and
9,502 shares as of December 31, 2021) |
|
(416,853 |
) |
|
|
(426,445 |
) |
Altisource deficit |
|
(82,056 |
) |
|
|
(70,142 |
) |
|
|
|
|
Non-controlling interests |
|
1,169 |
|
|
|
1,272 |
|
Total deficit |
|
(80,887 |
) |
|
|
(68,870 |
) |
|
|
|
|
Total liabilities and
deficit |
$ |
239,777 |
|
|
$ |
257,808 |
|
ALTISOURCE PORTFOLIO SOLUTIONS
S.A.CONSOLIDATED STATEMENTS OF CASH
FLOWS(in
thousands)(unaudited)
|
Three months ended March 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
Cash flows from operating
activities: |
|
|
|
Net loss |
$ |
(12,029 |
) |
|
$ |
(21,915 |
) |
Adjustments to reconcile net
loss to net cash used in operating activities: |
|
|
|
Depreciation and amortization |
|
958 |
|
|
|
1,184 |
|
Amortization of right-of-use assets under operating leases |
|
1,144 |
|
|
|
1,927 |
|
Amortization of intangible assets |
|
1,284 |
|
|
|
2,599 |
|
Share-based compensation expense |
|
1,290 |
|
|
|
1,438 |
|
Bad debt expense |
|
343 |
|
|
|
217 |
|
Amortization of debt discount |
|
166 |
|
|
|
168 |
|
Amortization of debt issuance costs |
|
276 |
|
|
|
215 |
|
Deferred income taxes |
|
67 |
|
|
|
562 |
|
Loss on disposal of fixed assets |
|
— |
|
|
|
7 |
|
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
|
(653 |
) |
|
|
2,240 |
|
Prepaid expenses and other current assets |
|
(3,558 |
) |
|
|
(1,486 |
) |
Other assets |
|
143 |
|
|
|
258 |
|
Accounts payable and accrued expenses |
|
(4,515 |
) |
|
|
11 |
|
Current and non-current operating lease liabilities |
|
(1,279 |
) |
|
|
(1,941 |
) |
Other current and non-current liabilities |
|
(547 |
) |
|
|
(2,294 |
) |
Net cash used in operating
activities |
|
(16,910 |
) |
|
|
(16,810 |
) |
|
|
|
|
Cash flows from investing
activities: |
|
|
|
Additions to premises and equipment |
|
(74 |
) |
|
|
(467 |
) |
Proceeds from the sale of business |
|
— |
|
|
|
3,000 |
|
Net cash (used in) provided by
investing activities |
|
(74 |
) |
|
|
2,533 |
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
Distributions to non-controlling interests |
|
(264 |
) |
|
|
(1,395 |
) |
Payments of tax withholding on issuance of restricted share units
and restricted shares |
|
(1,014 |
) |
|
|
(830 |
) |
Net cash used in financing
activities |
|
(1,278 |
) |
|
|
(2,225 |
) |
|
|
|
|
Net decrease in cash, cash
equivalents and restricted cash |
|
(18,262 |
) |
|
|
(16,502 |
) |
Cash, cash equivalents and
restricted cash at the beginning of the period |
|
102,149 |
|
|
|
62,096 |
|
|
|
|
|
Cash, cash equivalents and
restricted cash at the end of the period |
$ |
83,887 |
|
|
$ |
45,594 |
|
|
|
|
|
Supplemental cash flow
information: |
|
|
|
Interest paid |
$ |
3,090 |
|
|
$ |
3,090 |
|
Income taxes paid, net |
|
3,257 |
|
|
|
902 |
|
Acquisition of right-of-use assets with operating lease
liabilities |
|
29 |
|
|
|
15 |
|
Reduction of right-of-use assets from operating lease modifications
or reassessments |
|
(173 |
) |
|
|
— |
|
|
|
|
|
Non-cash investing and
financing activities: |
|
|
|
Net decrease in payables for purchases of premises and
equipment |
$ |
(62 |
) |
|
$ |
(78 |
) |
ALTISOURCE PORTFOLIO SOLUTIONS
S.A.NON-GAAP MEASURES(in
thousands, except per share
data)(unaudited)
Adjusted operating loss, pretax loss
attributable to Altisource, adjusted pretax loss attributable to
Altisource, adjusted EBITDA, adjusted net loss attributable to
Altisource, adjusted diluted loss per share, cash flows used in
operating activities less additions to premises and equipment and
net debt, which are presented elsewhere in this earnings release,
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 loss from operations, loss before income taxes and
non-controlling interests, net loss attributable to Altisource,
diluted loss per share, cash flows used in operating activities and
long-term debt, including current portion, 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 and cash flow generation more on the basis of
continuing cost and cash flows as they exclude amortization expense
related to acquisitions that occurred in prior periods and non-cash
share-based compensation, as well as the effect of more significant
non-operational items from earnings, cash flows from operating
activities and long-term debt net of cash on-hand. 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-operational items enables comparability to prior period
performance and trend analysis. Specifically, management uses
adjusted net loss attributable to Altisource to measure the
on-going after tax performance of the Company because the measure
adjusts for the after tax impact of more significant non-recurring
items, amortization expense relating to prior acquisitions (some of
which fluctuates with revenue from certain customers and some of
which is amortized on a straight-line basis) and non-cash
share-based compensation expense which can fluctuate based on
vesting schedules, grant date timing and the value attributable to
awards. We believe adjusted net loss attributable to Altisource is
useful to existing shareholders, potential shareholders and other
users of our financial information because it provides an after-tax
measure of Altisource’s on-going performance that enables these
users to perform trend analysis using comparable data. Management
uses adjusted diluted loss per share to further evaluate adjusted
net loss attributable to Altisource while taking into account
changes in the number of diluted shares over the comparable
periods. We believe adjusted diluted loss per share is useful to
existing shareholders, potential shareholders and other users of
our financial information because it also enables these users to
evaluate adjusted net loss attributable to Altisource on a per
share basis. Management uses Adjusted EBITDA to measure the
Company’s overall performance (with the adjustments discussed
earlier with regard to adjusted net loss attributable to
Altisource) without regard to its capitalization (debt vs. equity)
or its income taxes and to perform trend analysis of the Company’s
performance over time. Our effective income tax rate can vary based
on the jurisdictional mix of our income. Additionally, as the
Company’s capital expenditures have significantly declined over
time, it provides a measure for management to evaluate the
Company’s performance without regard to prior capital expenditures.
Management also uses Adjusted EBITDA as one of the measures in
determining bonus compensation for certain employees. We believe
Adjusted EBITDA is useful to existing shareholders, potential
shareholders and other users of our financial information for the
same reasons that management finds the measure useful. Management
uses net debt in evaluating the amount of debt the Company has that
is in excess of cash and cash equivalents and equity securities. We
deduct investment in equity securities from debt in arriving at
this measure because our Senior Secured Term Loan requires the
Company to use any proceeds from the sale of equity securities to
repay the Senior Secured Term Loan. We believe net debt is useful
to existing shareholders, potential shareholders and other users of
our financial information for the same reasons management finds the
measure useful.
Altisource operates in several countries,
including Luxembourg, India, the United States and Uruguay. The
Company has differing effective tax rates in each country and these
rates may change from year to year. In determining the tax effects
related to the adjustments in calculating adjusted net loss
attributable to Altisource and adjusted diluted loss per share, we
use the tax rate in the country in which the adjustment applies or,
if the adjustment is recognized in more than one country, we
separate the adjustment by country, apply the relevant tax rate for
each country to the applicable adjustment, and then sum the result
to arrive at the total adjustment, net of tax. In 2019, the Company
recognized a full valuation allowance on its net deferred tax
assets in Luxembourg. Accordingly, for 2022 and 2021, the Company
has an effective tax rate of close to 0% in Luxembourg.
Following the 2019 creation of Pointillist as a
separate legal entity, Altisource had no ongoing obligation to fund
Pointillist, Pointillist was positioned to and focused on raising
third-party capital and Pointillist was an unrestricted subsidiary
under our Senior Secured Term Loan. Additionally, Pointillist was
not part of Altisource’s core, normal, recurring business. For
these reasons, in 2020 we began adding back the losses of
Pointillist in calculating adjusted net loss attributable to
Altisource, adjusted diluted loss per share, and Adjusted
EBITDA.
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.
Adjusted operating loss is calculated by
removing intangible asset amortization expense, share-based
compensation expense, cost of cost savings initiatives and other
and Pointillist losses from loss from operations. Pretax loss
attributable to Altisource is calculated by removing
non-controlling interests from loss before income taxes and
non-controlling interests. Adjusted pretax loss attributable to
Altisource is calculated by removing non-controlling interests,
intangible asset amortization expense, share-based compensation
expense, cost of cost savings initiatives and other and Pointillist
losses from loss before income taxes and non-controlling interests.
Adjusted EBITDA is calculated by removing the income tax provision,
interest expense (net of interest income), depreciation and
amortization, share-based compensation expense, cost of cost
savings initiatives and other and Pointillist losses from net loss
attributable to Altisource. Adjusted net loss attributable to
Altisource is calculated by removing intangible asset amortization
expense (net of tax), share-based compensation expense (net of
tax), cost of cost savings initiatives and other (net of tax),
Pointillist losses (net of tax), and certain income tax related
items, net from net loss attributable to Altisource. Adjusted
diluted loss per share is calculated by dividing net loss
attributable to Altisource after removing intangible asset
amortization expense (net of tax), share-based compensation expense
(net of tax), cost of cost savings initiatives and other (net of
tax), Pointillist losses (net of tax) and certain income tax
related items by the weighted average number of diluted shares.
Cash flows used in operating activities less additions to premises
and equipment is calculated by removing additions to premises and
equipment from cash flows used in operating activities. Net debt is
calculated as long-term debt, including current portion, minus cash
and cash equivalents.
Reconciliations of the non-GAAP measures to the
corresponding GAAP measures are as follows:
|
|
Three months ended March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
Loss from operations |
|
$ |
(8,327 |
) |
|
$ |
(18,579 |
) |
|
|
|
|
|
Intangible asset amortization expense |
|
|
1,284 |
|
|
|
2,599 |
|
Share-based compensation expense |
|
|
1,290 |
|
|
|
1,438 |
|
Cost of cost savings initiatives and other |
|
|
118 |
|
|
|
1,968 |
|
Pointillist losses |
|
|
— |
|
|
|
2,353 |
|
|
|
|
|
|
Adjusted operating loss |
|
$ |
(5,635 |
) |
|
$ |
(10,221 |
) |
|
|
|
|
|
Loss before income taxes and
non-controlling interests |
|
$ |
(11,143 |
) |
|
$ |
(21,072 |
) |
|
|
|
|
|
Non-controlling interests |
|
|
(161 |
) |
|
|
(87 |
) |
Pretax loss attributable to Altisource |
|
|
(11,304 |
) |
|
|
(21,159 |
) |
Intangible asset amortization expense |
|
|
1,284 |
|
|
|
2,599 |
|
Share-based compensation expense |
|
|
1,290 |
|
|
|
1,438 |
|
Cost of cost savings initiatives and other |
|
|
118 |
|
|
|
1,968 |
|
Pointillist losses |
|
|
— |
|
|
|
2,068 |
|
|
|
|
|
|
Adjusted pretax loss
attributable to Altisource |
|
$ |
(8,612 |
) |
|
$ |
(13,086 |
) |
|
|
|
|
|
Net loss attributable to
Altisource |
|
$ |
(12,190 |
) |
|
$ |
(22,002 |
) |
|
|
|
|
|
Income tax provision |
|
|
886 |
|
|
|
843 |
|
Interest expense (net of interest income) |
|
|
3,511 |
|
|
|
3,463 |
|
Depreciation and amortization |
|
|
2,242 |
|
|
|
3,783 |
|
Share-based compensation expense |
|
|
1,290 |
|
|
|
1,438 |
|
Cost of cost savings initiatives and other |
|
|
118 |
|
|
|
1,968 |
|
Pointillist losses |
|
|
— |
|
|
|
1,990 |
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
(4,143 |
) |
|
$ |
(8,517 |
) |
|
|
|
|
|
Net loss attributable to
Altisource |
|
$ |
(12,190 |
) |
|
$ |
(22,002 |
) |
|
|
|
|
|
Intangible asset amortization expense, net of tax |
|
|
1,282 |
|
|
|
2,595 |
|
Share-based compensation expense, net of tax |
|
|
1,176 |
|
|
|
1,283 |
|
Cost of cost savings initiatives and other, net of tax |
|
|
127 |
|
|
|
1,704 |
|
Pointillist losses, net of tax |
|
|
— |
|
|
|
2,068 |
|
Certain income tax related items |
|
|
311 |
|
|
|
11 |
|
|
|
|
|
|
Adjusted net loss attributable
to Altisource |
|
$ |
(9,294 |
) |
|
$ |
(14,341 |
) |
|
|
|
|
|
Diluted loss per share |
|
$ |
(0.76 |
) |
|
$ |
(1.40 |
) |
|
|
|
|
|
Intangible asset amortization expense, net of tax, per diluted
share |
|
|
0.08 |
|
|
|
0.17 |
|
Share-based compensation expense, net of tax, per diluted
share |
|
|
0.07 |
|
|
|
0.08 |
|
Cost of cost savings initiatives and other, net of tax, per diluted
share |
|
|
0.01 |
|
|
|
0.11 |
|
Pointillist losses, net of tax, per diluted share |
|
|
— |
|
|
|
0.13 |
|
Certain income tax related items per diluted share |
|
|
0.02 |
|
|
|
— |
|
|
|
|
|
|
Adjusted diluted loss per
share |
|
$ |
(0.58 |
) |
|
$ |
(0.91 |
) |
|
|
|
|
|
|
|
|
|
|
Calculation of the impact of
intangible asset amortization expense, net of tax |
|
|
|
|
Intangible asset amortization expense |
|
$ |
1,284 |
|
|
$ |
2,599 |
|
Tax benefit from intangible asset amortization |
|
|
(2 |
) |
|
|
(4 |
) |
Intangible asset amortization expense, net of tax |
|
|
1,282 |
|
|
|
2,595 |
|
Diluted share count |
|
|
15,956 |
|
|
|
15,717 |
|
|
|
|
|
|
Intangible asset amortization
expense, net of tax, per diluted share |
|
$ |
0.08 |
|
|
$ |
0.17 |
|
|
|
|
|
|
Calculation of the impact of
share-based compensation expense, net of tax |
|
|
|
|
Share-based compensation expense |
|
$ |
1,290 |
|
|
$ |
1,438 |
|
Tax benefit from share-based compensation expense |
|
|
(114 |
) |
|
|
(155 |
) |
Share-based compensation expense, net of tax |
|
|
1,176 |
|
|
|
1,283 |
|
Diluted share count |
|
|
15,956 |
|
|
|
15,717 |
|
|
|
|
|
|
Share-based compensation
expense, net of tax, per diluted share |
|
$ |
0.07 |
|
|
$ |
0.08 |
|
|
|
|
|
|
Calculation of the impact of
cost of cost savings initiatives and other, net of tax |
|
|
|
|
Cost of cost savings initiatives and other |
|
$ |
118 |
|
|
$ |
1,968 |
|
Tax provision (benefit) from cost of cost savings initiatives and
other |
|
|
9 |
|
|
|
(264 |
) |
Cost of cost savings initiatives and other, net of tax |
|
|
127 |
|
|
|
1,704 |
|
Diluted share count |
|
|
15,956 |
|
|
|
15,717 |
|
|
|
|
|
|
Cost of cost savings
initiatives and other, net of tax, per diluted share |
|
$ |
0.01 |
|
|
$ |
0.11 |
|
|
|
|
|
|
Calculation of the impact of
Pointillist losses, net of tax |
|
|
|
|
Pointillist losses |
|
$ |
— |
|
|
$ |
2,068 |
|
Tax benefit from Pointillist losses |
|
|
— |
|
|
|
— |
|
Pointillist losses, net of tax |
|
|
— |
|
|
|
2,068 |
|
Diluted share count |
|
|
15,956 |
|
|
|
15,717 |
|
|
|
|
|
|
Pointillist losses, net of
tax, per diluted share |
|
$ |
— |
|
|
$ |
0.13 |
|
|
|
|
|
|
Certain income tax related
items resulting from: |
|
|
|
|
Foreign income tax reserves/other |
|
$ |
311 |
|
|
$ |
11 |
|
Certain income tax related items |
|
|
311 |
|
|
|
11 |
|
Diluted share count |
|
|
15,956 |
|
|
|
15,717 |
|
|
|
|
|
|
Certain income tax related
items per diluted share |
|
$ |
0.02 |
|
|
$ |
— |
|
|
|
|
|
|
Cash flows used in operating
activities |
|
$ |
(16,910 |
) |
|
$ |
(16,810 |
) |
Less: additions to premises and equipment |
|
|
(74 |
) |
|
|
(467 |
) |
|
|
|
|
|
Cash flows used in operating
activities less additions to premises and equipment |
|
$ |
(16,984 |
) |
|
$ |
(17,277 |
) |
|
March 31, 2022 |
|
March 31, 2021 |
|
|
|
|
Senior secured term loan |
$ |
247,204 |
|
|
$ |
247,204 |
|
Less: Cash and cash equivalents |
|
(79,952 |
) |
|
|
(41,335 |
) |
|
|
|
|
Net debt |
$ |
167,252 |
|
|
$ |
205,869 |
|
_______________________________Note: Amounts may not add to the
total due to rounding.
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