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 second quarter 2022.
“I am pleased with our second quarter results
and performance as we continue to execute on our strategic plan.
Our Servicer and Real Estate segment is benefiting from the restart
of the default business with both sequential and year-over-year
revenue and Adjusted EBITDA growth. In our Origination segment, we
grew the average weighted sales pipeline to $32 million, a 54%
increase since last quarter, as our Lenders One members are
increasingly focused on buying our solutions which are designed to
help them reduce costs,” said Chairman and Chief Executive Officer
William B. Shepro.
Mr. Shepro further commented, “As we continue to
execute on our plan, win more business and benefit from market
tailwinds, we anticipate that the Company will return to growth and
create substantial value for our stakeholders.”
Second Quarter 2022
Highlights(1)
Corporate and Financial:
- Ended the second
quarter 2022 with $70.7 million of cash and cash equivalents, a
100% increase from the second quarter of 2021
- Ended the second
quarter 2022 with $176.5 million of net debt(2), a 17% reduction
from the second quarter of 2021
- Second quarter
Adjusted EBITDA loss of $6.6 million represents a $0.1 million
improvement over the second quarter of 2021
- Reduced second
quarter 2022 Corporate costs by $6.8 million, representing a 28%
reduction, compared to the second quarter 2021 from costs savings
initiatives and the sale of Pointillist, partially offset by the
assignment of sales and marketing employees to the segments
beginning on January 1, 2022
Business Highlights:
- The Servicer and
Real Estate segment is benefiting from the restart of the default
business with both sequential and year-over-year revenue and
Adjusted EBITDA growth
- The current
unweighted sales pipeline in the Servicer and Real Estate business
is approximately $105 million on a stabilized basis, representing
$30 million to $37 million in annual revenue based upon our
forecasted probability of closing
- The current
unweighted sales pipeline in the Origination business is
approximately $97 million on a stabilized basis, representing $28
million to $35 million in annual revenue based upon our forecasted
probability of closing
Industry Highlights:
- Industrywide
foreclosure initiations were 442% higher for the three months ended
June 30, 2022, compared to the same period in 2021(3)
(although still 47% lower than the same pre-COVID-19 period in
2019), as the foreclosure market is beginning to normalize
following expiration of the Federal government’s foreclosure
moratorium on July 31, 2021 and the CFPB’s temporary loss
mitigation measures on December 31, 2021
- Industrywide
mortgage originations are forecasted to be 35% lower for the three
months ended June 30, 2022, compared to the same period in
2021(4)
Second Quarter 2022 Financial
Results
- Service revenue of $37.6
million
- Gross profit of $4.1 million,
representing 11% of service revenue
- Loss before income taxes and
non-controlling interests of $(13.8) million
- Adjusted pre-tax loss attributable
to Altisource(2) of $(11.0) million
- Adjusted earnings before interest,
tax, depreciation and amortization (“EBITDA”)(2) of $(6.6)
million
- Net loss attributable to Altisource
of $(15.5) million, or $(0.96) per diluted share
- Adjusted net
loss attributable to Altisource(2) of $(11.2) million, or $(0.70)
per diluted share
Second Quarter 2022 Results Compared to
the Second Quarter 2021:
|
(in thousands, except per share data) |
Second Quarter 2022 |
|
Second Quarter 2021 |
|
% Change |
|
Year-to-DateJune 30, 2022 |
|
Year-to-DateJune 30, 2021 |
|
% Change |
|
Service revenue |
$ |
37,638 |
|
|
$ |
43,966 |
|
|
|
(14 |
) |
|
$ |
75,401 |
|
|
$ |
92,046 |
|
|
|
(18 |
) |
| Loss from operations |
|
(10,459 |
) |
|
|
(14,552 |
) |
|
|
28 |
|
|
|
(18,786 |
) |
|
|
(33,131 |
) |
|
|
43 |
|
| Adjusted operating
loss(2) |
|
(7,457 |
) |
|
|
(7,622 |
) |
|
|
2 |
|
|
|
(13,092 |
) |
|
|
(17,843 |
) |
|
|
27 |
|
| Loss before income taxes and
non-controlling interests |
|
(13,800 |
) |
|
|
(18,070 |
) |
|
|
24 |
|
|
|
(24,943 |
) |
|
|
(39,142 |
) |
|
|
36 |
|
| Pretax loss attributable to
Altisource(2) |
|
(13,974 |
) |
|
|
(17,891 |
) |
|
|
22 |
|
|
|
(25,278 |
) |
|
|
(39,050 |
) |
|
|
35 |
|
| Adjusted pretax loss
attributable to Altisource(2) |
|
(10,972 |
) |
|
|
(11,279 |
) |
|
|
3 |
|
|
|
(19,584 |
) |
|
|
(24,365 |
) |
|
|
20 |
|
| Adjusted EBITDA(2) |
|
(6,611 |
) |
|
|
(6,731 |
) |
|
|
2 |
|
|
|
(10,754 |
) |
|
|
(15,248 |
) |
|
|
29 |
|
| Net loss attributable to
Altisource |
|
(15,495 |
) |
|
|
(18,475 |
) |
|
|
16 |
|
|
|
(27,685 |
) |
|
|
(40,477 |
) |
|
|
32 |
|
| Adjusted net loss attributable
to Altisource(2) |
|
(11,225 |
) |
|
|
(10,910 |
) |
|
|
(3 |
) |
|
|
(20,520 |
) |
|
|
(25,253 |
) |
|
|
19 |
|
| Diluted loss per share |
|
(0.96 |
) |
|
|
(1.17 |
) |
|
|
18 |
|
|
|
(1.73 |
) |
|
|
(2.57 |
) |
|
|
33 |
|
| Adjusted diluted loss per
share(2) |
|
(0.70 |
) |
|
|
(0.69 |
) |
|
|
(1 |
) |
|
|
(1.28 |
) |
|
|
(1.60 |
) |
|
|
20 |
|
| Cash flows used in operating
activities |
|
(8,874 |
) |
|
|
(5,965 |
) |
|
|
(49 |
) |
|
|
(25,784 |
) |
|
|
(22,775 |
) |
|
|
(13 |
) |
| Cash flows used in operating
activities less additions to premises and equipment(2) |
|
(9,434 |
) |
|
|
(6,191 |
) |
|
|
(52 |
) |
|
|
(26,418 |
) |
|
|
(23,468 |
) |
|
|
(13 |
) |
-
Second quarter 2022 loss from operations includes expenses related
to cost savings initiatives and other of $0.4 million compared to
$0.8 million for the second quarter of 2021 ($0.5 million and $2.7
million for the year-to date June 30, 2022 and 2021, respectively).
Second quarter and year-to-date June 30, 2021 loss from operations
includes losses from our earlier stage businesses of $2.6 million
and $5.0 million, respectively (no comparable amounts in 2022)
- Second quarter 2022 net loss
attributable to Altisource includes $1.5 million and $1.0 million,
respectively ($1.8 million and $1.0 million for year-to-date June
30, 2022 and 2021, respectively) of expense 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 June 2022 Mortgage Data
(4) Based on data from the July 18, 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 08:30 a.m. EST
today to discuss our second 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. EstermanChief Financial OfficerT: (770)
612-7007E: 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 endedJune 30, |
|
Six months endedJune 30, |
|
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
| |
|
|
|
|
|
|
|
|
|
Service revenue |
|
$ |
37,638 |
|
|
$ |
43,966 |
|
|
$ |
75,401 |
|
|
$ |
92,046 |
|
|
Reimbursable expenses |
|
|
2,609 |
|
|
|
1,936 |
|
|
|
4,201 |
|
|
|
3,949 |
|
|
Non-controlling interests |
|
|
174 |
|
|
|
139 |
|
|
|
335 |
|
|
|
511 |
|
|
Total revenue |
|
|
40,421 |
|
|
|
46,041 |
|
|
|
79,937 |
|
|
|
96,506 |
|
|
Cost of revenue |
|
|
33,746 |
|
|
|
42,101 |
|
|
|
66,023 |
|
|
|
90,246 |
|
|
Reimbursable expenses |
|
|
2,609 |
|
|
|
1,936 |
|
|
|
4,201 |
|
|
|
3,949 |
|
|
Gross profit |
|
|
4,066 |
|
|
|
2,004 |
|
|
|
9,713 |
|
|
|
2,311 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
|
14,525 |
|
|
|
16,556 |
|
|
|
28,499 |
|
|
|
35,442 |
|
| |
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(10,459 |
) |
|
|
(14,552 |
) |
|
|
(18,786 |
) |
|
|
(33,131 |
) |
|
Other income (expense), net |
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(3,534 |
) |
|
|
(3,475 |
) |
|
|
(7,090 |
) |
|
|
(6,917 |
) |
|
Other income (expense), net |
|
|
193 |
|
|
|
(43 |
) |
|
|
933 |
|
|
|
906 |
|
|
Total other income (expense), net |
|
|
(3,341 |
) |
|
|
(3,518 |
) |
|
|
(6,157 |
) |
|
|
(6,011 |
) |
| |
|
|
|
|
|
|
|
|
| Loss before income taxes and
non-controlling interests |
|
|
(13,800 |
) |
|
|
(18,070 |
) |
|
|
(24,943 |
) |
|
|
(39,142 |
) |
|
Income tax provision |
|
|
(1,521 |
) |
|
|
(584 |
) |
|
|
(2,407 |
) |
|
|
(1,427 |
) |
| |
|
|
|
|
|
|
|
|
|
Net loss |
|
|
(15,321 |
) |
|
|
(18,654 |
) |
|
|
(27,350 |
) |
|
|
(40,569 |
) |
| Net (income) loss attributable
to non-controlling interests |
|
|
(174 |
) |
|
|
179 |
|
|
|
(335 |
) |
|
|
92 |
|
| |
|
|
|
|
|
|
|
|
|
Net loss attributable to Altisource |
|
$ |
(15,495 |
) |
|
$ |
(18,475 |
) |
|
$ |
(27,685 |
) |
|
$ |
(40,477 |
) |
| |
|
|
|
|
|
|
|
|
|
Loss per share: |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.96 |
) |
|
$ |
(1.17 |
) |
|
$ |
(1.73 |
) |
|
$ |
(2.57 |
) |
|
Diluted |
|
$ |
(0.96 |
) |
|
$ |
(1.17 |
) |
|
$ |
(1.73 |
) |
|
$ |
(2.57 |
) |
| |
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
16,083 |
|
|
|
15,830 |
|
|
|
16,020 |
|
|
|
15,774 |
|
|
Diluted |
|
|
16,083 |
|
|
|
15,830 |
|
|
|
16,020 |
|
|
|
15,774 |
|
| |
|
|
|
|
|
|
|
|
|
Comprehensive loss: |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Comprehensive loss, net of tax |
|
$ |
(15,321 |
) |
|
$ |
(18,654 |
) |
|
$ |
(27,350 |
) |
|
$ |
(40,569 |
) |
|
Comprehensive (income) loss attributable to non-controlling
interests |
|
|
(174 |
) |
|
|
179 |
|
|
|
(335 |
) |
|
|
92 |
|
| |
|
|
|
|
|
|
|
|
|
Comprehensive loss attributable to Altisource |
|
$ |
(15,495 |
) |
|
$ |
(18,475 |
) |
|
$ |
(27,685 |
) |
|
$ |
(40,477 |
) |
ALTISOURCE PORTFOLIO SOLUTIONS
S.A.CONSOLIDATED BALANCE
SHEETS(in thousands, except for per share
data)(unaudited)
| |
June 30,2022 |
|
December 31,2021 |
| |
|
|
|
|
ASSETS |
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
70,693 |
|
|
$ |
98,132 |
|
|
Accounts receivable, net |
|
16,580 |
|
|
|
18,008 |
|
|
Prepaid expenses and other current assets |
|
23,430 |
|
|
|
21,864 |
|
|
Total current assets |
|
110,703 |
|
|
|
138,004 |
|
| |
|
|
|
|
Premises and equipment, net |
|
5,767 |
|
|
|
6,873 |
|
|
Right-of-use assets under operating leases |
|
6,386 |
|
|
|
7,594 |
|
|
Goodwill |
|
55,960 |
|
|
|
55,960 |
|
|
Intangible assets, net |
|
34,291 |
|
|
|
36,859 |
|
|
Deferred tax assets, net |
|
6,148 |
|
|
|
6,386 |
|
|
Other assets |
|
5,584 |
|
|
|
6,132 |
|
| |
|
|
|
|
Total assets |
$ |
224,839 |
|
|
$ |
257,808 |
|
| |
|
|
|
|
LIABILITIES AND EQUITY |
|
Current liabilities: |
|
|
|
|
Accounts payable and accrued expenses |
$ |
41,781 |
|
|
$ |
46,535 |
|
|
Deferred revenue |
|
3,368 |
|
|
|
4,342 |
|
|
Other current liabilities |
|
2,688 |
|
|
|
3,870 |
|
|
Total current liabilities |
|
47,837 |
|
|
|
54,747 |
|
| |
|
|
|
|
Long-term debt |
|
244,458 |
|
|
|
243,637 |
|
|
Deferred tax liabilities, net |
|
9,194 |
|
|
|
9,028 |
|
|
Other non-current liabilities |
|
18,764 |
|
|
|
19,266 |
|
| |
|
|
|
|
Commitments, contingencies and regulatory matters |
|
|
|
| |
|
|
|
|
Equity (deficit): |
|
|
|
|
Common stock ($1.00 par value; 100,000 shares authorized, 25,413
issued and 16,111 outstanding as of June 30, 2022; 15,911
outstanding as of December 31, 2021) |
|
25,413 |
|
|
|
25,413 |
|
|
Additional paid-in capital |
|
146,877 |
|
|
|
144,298 |
|
|
Retained earnings |
|
145,879 |
|
|
|
186,592 |
|
|
Treasury stock, at cost (9,302 shares as of June 30, 2022 and
9,502 shares as of December 31, 2021) |
|
(414,440 |
) |
|
|
(426,445 |
) |
|
Altisource deficit |
|
(96,271 |
) |
|
|
(70,142 |
) |
| |
|
|
|
|
Non-controlling interests |
|
857 |
|
|
|
1,272 |
|
|
Total deficit |
|
(95,414 |
) |
|
|
(68,870 |
) |
| |
|
|
|
|
Total liabilities and deficit |
$ |
224,839 |
|
|
$ |
257,808 |
|
ALTISOURCE PORTFOLIO SOLUTIONS
S.A.CONSOLIDATED STATEMENTS OF CASH
FLOWS(in
thousands)(unaudited)
| |
Six months endedJune 30, |
|
|
|
2022 |
|
|
|
2021 |
|
| |
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
Net loss |
$ |
(27,350 |
) |
|
$ |
(40,569 |
) |
| Adjustments to reconcile net
loss to net cash used in operating activities: |
|
|
|
|
Depreciation and amortization |
|
1,846 |
|
|
|
2,335 |
|
|
Amortization of right-of-use assets under operating leases |
|
1,745 |
|
|
|
4,513 |
|
|
Amortization of intangible assets |
|
2,568 |
|
|
|
5,510 |
|
|
Share-based compensation expense |
|
2,579 |
|
|
|
2,079 |
|
|
Bad debt expense |
|
600 |
|
|
|
615 |
|
|
Amortization of debt discount |
|
329 |
|
|
|
334 |
|
|
Amortization of debt issuance costs |
|
492 |
|
|
|
396 |
|
|
Deferred income taxes |
|
75 |
|
|
|
65 |
|
|
Loss on disposal of fixed assets |
|
1 |
|
|
|
8 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
Accounts receivable |
|
828 |
|
|
|
4,042 |
|
|
Prepaid expenses and other current assets |
|
(1,566 |
) |
|
|
405 |
|
|
Other assets |
|
125 |
|
|
|
851 |
|
|
Accounts payable and accrued expenses |
|
(4,861 |
) |
|
|
2,962 |
|
|
Current and non-current operating lease liabilities |
|
(1,935 |
) |
|
|
(4,855 |
) |
|
Other current and non-current liabilities |
|
(1,260 |
) |
|
|
(1,466 |
) |
|
Net cash used in operating activities |
|
(25,784 |
) |
|
|
(22,775 |
) |
| |
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
Additions to premises and equipment |
|
(634 |
) |
|
|
(693 |
) |
|
Proceeds from the sale of business |
|
346 |
|
|
|
3,000 |
|
|
Net cash (used in) provided by investing activities |
|
(288 |
) |
|
|
2,307 |
|
| |
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
Proceeds from convertible debt payable to related parties |
|
— |
|
|
|
1,200 |
|
|
Distributions to non-controlling interests |
|
(750 |
) |
|
|
(1,751 |
) |
|
Payments of tax withholding on issuance of restricted share units
and restricted shares |
|
(1,023 |
) |
|
|
(927 |
) |
|
Net cash used in financing activities |
|
(1,773 |
) |
|
|
(1,478 |
) |
| |
|
|
|
|
Net decrease in cash, cash equivalents and restricted cash |
|
(27,845 |
) |
|
|
(21,946 |
) |
|
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 |
$ |
74,304 |
|
|
$ |
40,150 |
|
| |
|
|
|
|
Supplemental cash flow information: |
|
|
|
|
Interest paid |
$ |
6,218 |
|
|
$ |
6,214 |
|
|
Income taxes paid, net |
|
3,497 |
|
|
|
1,515 |
|
|
Acquisition of right-of-use assets with operating lease
liabilities |
|
710 |
|
|
|
2,327 |
|
|
Reduction of right-of-use assets from operating lease modifications
or reassessments |
|
(173 |
) |
|
|
(3,740 |
) |
| |
|
|
|
|
Non-cash investing and financing activities: |
|
|
|
|
Net increase (decrease) in payables for purchases of premises and
equipment |
$ |
107 |
|
|
$ |
(48 |
) |
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 endedJune 30, |
|
Six months endedJune 30, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
| |
|
|
|
|
|
|
|
|
Loss from operations |
$ |
(10,459 |
) |
|
$ |
(14,552 |
) |
|
$ |
(18,786 |
) |
|
$ |
(33,131 |
) |
| |
|
|
|
|
|
|
|
|
Intangible asset amortization expense |
|
1,284 |
|
|
|
2,911 |
|
|
|
2,568 |
|
|
|
5,510 |
|
|
Share-based compensation expense |
|
1,289 |
|
|
|
641 |
|
|
|
2,579 |
|
|
|
2,079 |
|
|
Cost of cost savings initiatives and other |
|
429 |
|
|
|
770 |
|
|
|
547 |
|
|
|
2,738 |
|
|
Pointillist losses |
|
— |
|
|
|
2,608 |
|
|
|
— |
|
|
|
4,961 |
|
| |
|
|
|
|
|
|
|
|
Adjusted operating loss |
$ |
(7,457 |
) |
|
$ |
(7,622 |
) |
|
$ |
(13,092 |
) |
|
$ |
(17,843 |
) |
| |
|
|
|
|
|
|
|
| Loss before income taxes and
non-controlling interests |
$ |
(13,800 |
) |
|
$ |
(18,070 |
) |
|
$ |
(24,943 |
) |
|
$ |
(39,142 |
) |
| |
|
|
|
|
|
|
|
|
Non-controlling interests |
|
(174 |
) |
|
|
179 |
|
|
|
(335 |
) |
|
|
92 |
|
|
Pretax loss attributable to Altisource |
|
(13,974 |
) |
|
|
(17,891 |
) |
|
|
(25,278 |
) |
|
|
(39,050 |
) |
|
Intangible asset amortization expense |
|
1,284 |
|
|
|
2,911 |
|
|
|
2,568 |
|
|
|
5,510 |
|
|
Share-based compensation expense |
|
1,289 |
|
|
|
641 |
|
|
|
2,579 |
|
|
|
2,079 |
|
|
Cost of cost savings initiatives and other |
|
429 |
|
|
|
770 |
|
|
|
547 |
|
|
|
2,738 |
|
|
Pointillist losses |
|
— |
|
|
|
2,290 |
|
|
|
— |
|
|
|
4,358 |
|
| |
|
|
|
|
|
|
|
|
Adjusted pretax loss attributable to Altisource |
$ |
(10,972 |
) |
|
$ |
(11,279 |
) |
|
$ |
(19,584 |
) |
|
$ |
(24,365 |
) |
| |
|
|
|
|
|
|
|
|
Net loss attributable to Altisource |
$ |
(15,495 |
) |
|
$ |
(18,475 |
) |
|
$ |
(27,685 |
) |
|
$ |
(40,477 |
) |
| |
|
|
|
|
|
|
|
|
Income tax provision |
|
1,521 |
|
|
|
584 |
|
|
|
2,407 |
|
|
|
1,427 |
|
|
Interest expense (net of interest income) |
|
3,473 |
|
|
|
3,482 |
|
|
|
6,984 |
|
|
|
6,945 |
|
|
Depreciation and amortization |
|
2,172 |
|
|
|
4,062 |
|
|
|
4,414 |
|
|
|
7,845 |
|
|
Share-based compensation expense |
|
1,289 |
|
|
|
641 |
|
|
|
2,579 |
|
|
|
2,079 |
|
|
Cost of cost savings initiatives and other |
|
429 |
|
|
|
770 |
|
|
|
547 |
|
|
|
2,738 |
|
|
Pointillist losses |
|
— |
|
|
|
2,205 |
|
|
|
— |
|
|
|
4,195 |
|
| |
|
|
|
|
|
|
|
| Adjusted EBITDA |
$ |
(6,611 |
) |
|
$ |
(6,731 |
) |
|
$ |
(10,754 |
) |
|
$ |
(15,248 |
) |
| |
|
|
|
|
|
|
|
|
Net loss attributable to Altisource |
$ |
(15,495 |
) |
|
$ |
(18,475 |
) |
|
$ |
(27,685 |
) |
|
$ |
(40,477 |
) |
| |
|
|
|
|
|
|
|
|
Intangible asset amortization expense, net of tax |
|
1,282 |
|
|
|
2,907 |
|
|
|
2,563 |
|
|
|
5,502 |
|
|
Share-based compensation expense, net of tax |
|
1,122 |
|
|
|
677 |
|
|
|
2,298 |
|
|
|
1,959 |
|
|
Cost of cost savings initiatives and other, net of tax |
|
361 |
|
|
|
665 |
|
|
|
488 |
|
|
|
2,368 |
|
|
Pointillist losses, net of tax |
|
— |
|
|
|
2,290 |
|
|
|
— |
|
|
|
4,358 |
|
|
Certain income tax related items |
|
1,505 |
|
|
|
1,026 |
|
|
|
1,816 |
|
|
|
1,037 |
|
| |
|
|
|
|
|
|
|
|
Adjusted net loss attributable to Altisource |
$ |
(11,225 |
) |
|
$ |
(10,910 |
) |
|
$ |
(20,520 |
) |
|
$ |
(25,253 |
) |
| |
|
|
|
|
|
|
|
|
Diluted loss per share |
$ |
(0.96 |
) |
|
$ |
(1.17 |
) |
|
$ |
(1.73 |
) |
|
$ |
(2.57 |
) |
| |
|
|
|
|
|
|
|
|
Intangible asset amortization expense, net of tax, per diluted
share |
|
0.08 |
|
|
|
0.18 |
|
|
|
0.16 |
|
|
|
0.35 |
|
|
Share-based compensation expense, net of tax, per diluted
share |
|
0.07 |
|
|
|
0.04 |
|
|
|
0.14 |
|
|
|
0.12 |
|
|
Cost of cost savings initiatives and other, net of tax, per diluted
share |
|
0.02 |
|
|
|
0.04 |
|
|
|
0.03 |
|
|
|
0.15 |
|
|
Pointillist losses, net of tax, per diluted share |
|
— |
|
|
|
0.14 |
|
|
|
— |
|
|
|
0.28 |
|
|
Certain income tax related items per diluted share |
|
0.09 |
|
|
|
0.06 |
|
|
|
0.11 |
|
|
|
0.07 |
|
| |
|
|
|
|
|
|
|
|
Adjusted diluted loss per share |
$ |
(0.70 |
) |
|
$ |
(0.69 |
) |
|
$ |
(1.28 |
) |
|
$ |
(1.60 |
) |
| |
|
|
|
|
|
|
|
| Calculation of the impact of
intangible asset amortization expense, net of tax |
|
|
|
|
|
|
|
|
Intangible asset amortization expense |
$ |
1,284 |
|
|
$ |
2,911 |
|
|
$ |
2,568 |
|
|
$ |
5,510 |
|
|
Tax benefit from intangible asset amortization |
|
(2 |
) |
|
|
(4 |
) |
|
|
(5 |
) |
|
|
(8 |
) |
|
Intangible asset amortization expense, net of tax |
|
1,282 |
|
|
|
2,907 |
|
|
|
2,563 |
|
|
|
5,502 |
|
|
Diluted share count |
|
16,083 |
|
|
|
15,830 |
|
|
|
16,020 |
|
|
|
15,774 |
|
| |
|
|
|
|
|
|
|
| Intangible asset amortization
expense, net of tax, per diluted share |
$ |
0.08 |
|
|
$ |
0.18 |
|
|
$ |
0.16 |
|
|
$ |
0.35 |
|
| |
|
|
|
|
|
|
|
| Calculation of the impact of
share-based compensation expense, net of tax |
|
|
|
|
|
|
|
|
Share-based compensation expense |
$ |
1,289 |
|
|
$ |
641 |
|
|
$ |
2,579 |
|
|
$ |
2,079 |
|
|
Tax (benefit) provision from share-based compensation expense |
|
(167 |
) |
|
|
36 |
|
|
|
(281 |
) |
|
|
(120 |
) |
|
Share-based compensation expense, net of tax |
|
1,122 |
|
|
|
677 |
|
|
|
2,298 |
|
|
|
1,959 |
|
|
Diluted share count |
|
16,083 |
|
|
|
15,830 |
|
|
|
16,020 |
|
|
|
15,774 |
|
| |
|
|
|
|
|
|
|
| Share-based compensation
expense, net of tax, per diluted share |
$ |
0.07 |
|
|
$ |
0.04 |
|
|
$ |
0.14 |
|
|
$ |
0.12 |
|
| |
|
|
|
|
|
|
|
| Calculation of the impact of
cost of cost savings initiatives and other, net of tax |
|
|
|
|
|
|
|
|
Cost of cost savings initiatives and other |
$ |
429 |
|
|
$ |
770 |
|
|
$ |
547 |
|
|
$ |
2,738 |
|
|
Tax benefit from cost of cost savings initiatives and other |
|
(68 |
) |
|
|
(105 |
) |
|
|
(59 |
) |
|
|
(370 |
) |
|
Cost of cost savings initiatives and other, net of tax |
|
361 |
|
|
|
665 |
|
|
|
488 |
|
|
|
2,368 |
|
|
Diluted share count |
|
16,083 |
|
|
|
15,830 |
|
|
|
16,020 |
|
|
|
15,774 |
|
| |
|
|
|
|
|
|
|
| Cost of cost savings
initiatives and other, net of tax, per diluted share |
$ |
0.02 |
|
|
$ |
0.04 |
|
|
$ |
0.03 |
|
|
$ |
0.15 |
|
| |
|
|
|
|
|
|
|
| Calculation of the impact of
Pointillist losses, net of tax |
|
|
|
|
|
|
|
|
Pointillist losses |
$ |
— |
|
|
$ |
2,290 |
|
|
$ |
— |
|
|
$ |
4,358 |
|
|
Tax benefit from Pointillist losses |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Pointillist losses, net of tax |
|
— |
|
|
|
2,290 |
|
|
|
— |
|
|
|
4,358 |
|
|
Diluted share count |
|
16,083 |
|
|
|
15,830 |
|
|
|
16,020 |
|
|
|
15,774 |
|
| |
|
|
|
|
|
|
|
| Pointillist losses, net of
tax, per diluted share |
$ |
— |
|
|
$ |
0.14 |
|
|
$ |
— |
|
|
$ |
0.28 |
|
| |
|
|
|
|
|
|
|
| Certain income tax related
items resulting from: |
|
|
|
|
|
|
|
|
Foreign income tax reserves/other |
|
1,505 |
|
|
|
1,026 |
|
|
$ |
1,816 |
|
|
$ |
1,037 |
|
|
Certain income tax related items |
|
1,505 |
|
|
|
1,026 |
|
|
|
1,816 |
|
|
|
1,037 |
|
|
Diluted share count |
|
16,083 |
|
|
|
15,830 |
|
|
|
16,020 |
|
|
|
15,774 |
|
| |
|
|
|
|
|
|
|
| Certain income tax related
items per diluted share |
$ |
0.09 |
|
|
$ |
0.06 |
|
|
$ |
0.11 |
|
|
$ |
0.07 |
|
| |
|
|
|
|
|
|
|
| Cash flows used in operating
activities |
$ |
(8,874 |
) |
|
$ |
(5,965 |
) |
|
$ |
(25,784 |
) |
|
$ |
(22,775 |
) |
|
Less: additions to premises and equipment |
|
(560 |
) |
|
|
(226 |
) |
|
|
(634 |
) |
|
|
(693 |
) |
| |
|
|
|
|
|
|
|
| Cash flows used in operating
activities less additions to premises and equipment |
$ |
(9,434 |
) |
|
$ |
(6,191 |
) |
|
$ |
(26,418 |
) |
|
$ |
(23,468 |
) |
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
June 30, 2022 |
|
June 30, 2021 |
| |
|
|
|
|
Senior secured term loan |
$ |
247,204 |
|
|
$ |
247,204 |
|
|
Less: Cash and cash equivalents |
|
(70,693 |
) |
|
|
(35,329 |
) |
| |
|
|
|
|
Net debt |
$ |
176,511 |
|
|
$ |
211,875 |
|
________________________
Note: Amounts may not add to the total due to
rounding.
Altisource Portfolio Sol... (NASDAQ:ASPS)
Historical Stock Chart
From Mar 2024 to Apr 2024
Altisource Portfolio Sol... (NASDAQ:ASPS)
Historical Stock Chart
From Apr 2023 to Apr 2024
