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 2023.
“The first quarter represented a strong start
for 2023 as we execute on our plan to recover from the impact of
the COVID-19 pandemic. Our first quarter financial performance was
better than plan with $1.5 million of Adjusted EBITDA and gross
profit margins of 23%, representing a $5.6 million improvement in
Adjusted EBITDA and an eight hundred basis point improvement in
gross profit margins over the first quarter 2022. These results
were primarily driven by revenue growth in pre-foreclosure
solutions in our Servicer and Real Estate segment from the ongoing
recovery of the default market, company-wide cost savings measures
we took in 2022 and early 2023 and $1.3 million in other income
related to an India tax refund,” said Chairman and Chief Executive
Officer William B. Shepro.
Mr. Shepro further commented, “We believe we are
well positioned in 2023 to return to year-over-year revenue growth
and generate positive Adjusted EBITDA. In our countercyclical
Servicer and Real Estate business, we anticipate revenue and
Adjusted EBITDA growth from market tailwinds, sales pipeline and
wins, and scale. In our Origination business, we are maintaining a
strong sales pipeline and making good progress converting sales
wins to revenue. Our sales progress and efficiency initiatives
should help return our Origination segment to revenue growth and
improved Adjusted EBITDA for the year in what is forecasted to be a
very difficult origination market. The stronger performance of our
segments, combined with cost discipline in corporate and the steps
we took to strengthen our balance sheet, should help us return to a
growth Company and create substantial value for our
stakeholders.”
First Quarter
2023
Highlights(1)
Corporate and Financial:
- Focused on
growing the sale pipeline, improving operational efficiencies,
reducing costs, and strengthening liquidity as the Company
continued to seek to mitigate the impacts of the COVID-19 pandemic,
governmental moratoriums and loss mitigation measures that affect
the timing of the recovery of the market for default-related
services
- Ended the first
quarter 2023 with $43.1 million of cash and cash equivalents
- Ended the first
quarter 2023 with $184.1 million of net debt(2)
- First quarter
Adjusted earnings before interest, tax, depreciation and
amortization (“EBITDA”)(2) of $1.5 million
- Executed
amendments to the Company’s senior secured term loans credit
agreement and revolving credit facility (together, “Credit
Agreements”) that, among other things, extended the maturity dates
to April 2025, with an option to extend to April 2026, subject to
certain terms and conditions(3)
- Generated $20.5
million in net proceeds from the sale of Altisource common
stock
- Used $20 million
of proceeds of the stock sale to repay a portion of the senior
secured term loans
Business and Industry:
- The Servicer and
Real Estate segment continues to benefit from the restart of the
default market and efficiency initiatives
- Service revenue of $29.8 million, a
10% increase compared to the first quarter of 2022
- Gross profit of $12.2 million, a
39% increase compared to the first quarter of 2022
- Gross profit margin of 41% compared
to 32% in the first quarter of 2022
- Income from operations of $9.9
million, a 73% increase compared to the first quarter of 2022
- Adjusted EBITDA(2) of $11.1
million, a 63% increase compared to the first quarter of 2022
- Adjusted EBITDA
margin(2) of 37% compared to 25% in the first quarter of 2022
- Industrywide
foreclosure initiations were 10% lower for the first quarter of
2023, compared to the same period in 2022 (and 28% lower than the
same pre-COVID-19 period in 2019)(4)
- Industrywide
foreclosure sales were 45% higher for the first quarter of 2023,
compared to the same period in 2022 (although still 44% lower than
the same pre-COVID-19 period in 2019)(4)
- The Servicer and
Real Estate segment and Origination segment had strong sales wins
which we estimate represent $14.4 million and $3.4 million,
respectively, of annualized revenue on a stabilized basis
- The weighted
sales pipeline in the Servicer and Real Estate segment represents
$37 million to $46 million in estimated annual revenue on a
stabilized basis based upon our forecasted probability of
closing
- The weighted
sales pipeline in the Origination segment represents $18 million to
$23 million in estimated annual revenue on a stabilized basis based
upon our forecasted probability of closing
- Service revenue
in the Origination segment of $7.3 million grew by 16.5% compared
to the fourth quarter of 2022, representing the first quarter of
sequential revenue growth in this segment in eight quarters
First Quarter
2023 Financial Results
- Service revenue of $37.1
million
- Loss before income taxes and
non-controlling interests of $(11.3) million
- Net loss attributable to Altisource
of $(12.9) million
- Adjusted
EBITDA(2) of $1.5 million
First Quarter
2023 Results Compared to the
First Quarter 2022
(unaudited):
(in thousands, except per
share data) |
First Quarter2023 |
|
First Quarter2022 |
|
%Change |
Service revenue |
$ |
37,071 |
|
|
$ |
37,763 |
|
|
(2 |
) |
Loss from operations |
|
(3,590 |
) |
|
|
(8,327 |
) |
|
57 |
|
Adjusted operating income
(loss)(2) |
|
2,275 |
|
|
|
(5,635 |
) |
|
140 |
|
Loss before income taxes and
non-controlling interests |
|
(11,338 |
) |
|
|
(11,143 |
) |
|
(2 |
) |
Pretax loss attributable to
Altisource(2) |
|
(11,418 |
) |
|
|
(11,304 |
) |
|
(1 |
) |
Adjusted pretax loss
attributable to Altisource(2) |
|
(5,553 |
) |
|
|
(8,612 |
) |
|
36 |
|
Adjusted EBITDA(2) |
|
1,472 |
|
|
|
(4,143 |
) |
|
136 |
|
Net loss attributable to
Altisource |
|
(12,947 |
) |
|
|
(12,190 |
) |
|
(6 |
) |
Adjusted net loss attributable
to Altisource(2) |
|
(7,086 |
) |
|
|
(9,294 |
) |
|
24 |
|
Diluted loss per share |
|
(0.70 |
) |
|
|
(0.76 |
) |
|
8 |
|
Adjusted diluted loss per
share(2) |
|
(0.38 |
) |
|
|
(0.58 |
) |
|
34 |
|
Net cash used in operating
activities |
|
(3,058 |
) |
|
|
(16,910 |
) |
|
82 |
|
Net cash used in operating
activities less additions to premises and equipment(2) |
|
(3,058 |
) |
|
|
(16,984 |
) |
|
82 |
|
- First quarter 2023
loss before income taxes and non-controlling interests includes
$3.2 million of debt amendment costs (no comparative amount for the
first quarter of 2022) and $0.7 million of other income related to
the change in fair value of warrant liability (no comparative
amount for the first quarter of 2022).
________________________
(1) |
Applies to 2023 unless otherwise indicated |
(2) |
This is a non-GAAP measure that
is defined and reconciled to the corresponding GAAP measure
herein |
(3) |
For additional information on our
Credit Agreements, refer to our SEC filings. The foregoing
description of the Credit Agreements does not purport to be
complete and is qualified in its entirety by reference to the filed
Credit Agreements |
(4) |
Based on data from Black Knight’s Mortgage Monitor and First Look
reports through March 2023 |
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. 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. 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 ended March 31, |
|
|
2023 |
|
2022 |
|
|
|
|
|
Service revenue |
|
|
37,071 |
|
|
|
37,763 |
|
Reimbursable expenses |
|
|
2,310 |
|
|
|
1,592 |
|
Non-controlling interests |
|
|
80 |
|
|
|
161 |
|
Total revenue |
|
|
39,461 |
|
|
|
39,516 |
|
Cost of revenue |
|
|
30,957 |
|
|
|
33,869 |
|
Gross profit |
|
|
8,504 |
|
|
|
5,647 |
|
Selling, general and administrative expenses |
|
|
12,094 |
|
|
|
13,974 |
|
|
|
|
|
|
Loss from operations |
|
|
(3,590 |
) |
|
|
(8,327 |
) |
Other income (expense), net: |
|
|
|
|
Interest expense |
|
|
(6,760 |
) |
|
|
(3,556 |
) |
Change in fair value of warrant liability |
|
|
694 |
|
|
|
— |
|
Debt amendment costs |
|
|
(3,242 |
) |
|
|
— |
|
Other income (expense), net |
|
|
1,560 |
|
|
|
740 |
|
Total other income (expense), net |
|
|
(7,748 |
) |
|
|
(2,816 |
) |
|
|
|
|
|
Loss before income taxes and
non-controlling interests |
|
|
(11,338 |
) |
|
|
(11,143 |
) |
Income tax provision |
|
|
(1,529 |
) |
|
|
(886 |
) |
|
|
|
|
|
Net loss |
|
|
(12,867 |
) |
|
|
(12,029 |
) |
Net income attributable to
non-controlling interests |
|
|
(80 |
) |
|
|
(161 |
) |
|
|
|
|
|
Net loss attributable to Altisource |
|
$ |
(12,947 |
) |
|
$ |
(12,190 |
) |
|
|
|
|
|
Loss per share: |
|
|
|
|
Basic |
|
$ |
(0.70 |
) |
|
$ |
(0.76 |
) |
Diluted |
|
$ |
(0.70 |
) |
|
$ |
(0.76 |
) |
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
Basic |
|
|
18,442 |
|
|
|
15,956 |
|
Diluted |
|
|
18,442 |
|
|
|
15,956 |
|
|
|
|
|
|
Comprehensive loss: |
|
|
|
|
Comprehensive loss, net of tax |
|
$ |
(12,867 |
) |
|
$ |
(12,029 |
) |
Comprehensive income attributable to non-controlling interests |
|
|
(80 |
) |
|
|
(161 |
) |
|
|
|
|
|
Comprehensive loss attributable to Altisource |
|
$ |
(12,947 |
) |
|
$ |
(12,190 |
) |
ALTISOURCE PORTFOLIO SOLUTIONS
S.A.CONSOLIDATED BALANCE
SHEETS(in thousands, except for per share
data)(unaudited)
|
March 31,2023 |
|
December 31,2022 |
|
|
|
|
ASSETS |
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
43,113 |
|
|
$ |
51,025 |
|
Accounts receivable, net |
|
14,257 |
|
|
|
12,989 |
|
Prepaid expenses and other current assets |
|
13,061 |
|
|
|
23,544 |
|
Total current assets |
|
70,431 |
|
|
|
87,558 |
|
|
|
|
|
Premises and equipment, net |
|
3,500 |
|
|
|
4,222 |
|
Right-of-use assets under operating leases |
|
5,107 |
|
|
|
5,321 |
|
Goodwill |
|
55,960 |
|
|
|
55,960 |
|
Intangible assets, net |
|
30,450 |
|
|
|
31,730 |
|
Deferred tax assets, net |
|
5,031 |
|
|
|
5,048 |
|
Other assets |
|
7,104 |
|
|
|
5,166 |
|
|
|
|
|
Total assets |
$ |
177,583 |
|
|
$ |
195,005 |
|
|
|
|
|
LIABILITIES AND DEFICIT |
Current liabilities: |
|
|
|
Accounts payable and accrued expenses |
$ |
33,029 |
|
|
$ |
33,507 |
|
Warrant liability |
|
7,402 |
|
|
|
— |
|
Deferred revenue |
|
2,874 |
|
|
|
3,711 |
|
Other current liabilities |
|
2,680 |
|
|
|
2,867 |
|
Total current liabilities |
|
45,985 |
|
|
|
40,085 |
|
|
|
|
|
Long-term debt |
|
213,879 |
|
|
|
245,230 |
|
Deferred tax liabilities, net |
|
8,806 |
|
|
|
9,028 |
|
Other non-current liabilities |
|
19,310 |
|
|
|
19,536 |
|
|
|
|
|
Commitments, contingencies and regulatory matters |
|
|
|
|
|
|
|
Equity (deficit): |
|
|
|
Common stock ($1.00 par value; 100,000 shares authorized, 29,963
issued and 20,815 |
|
|
|
|
|
|
|
outstanding as of March 31, 2023; 16,129 outstanding as of
December 31, 2022) |
|
29,963 |
|
|
|
25,413 |
|
Additional paid-in capital |
|
166,704 |
|
|
|
149,348 |
|
Retained earnings |
|
96,243 |
|
|
|
118,948 |
|
Treasury stock, at cost (9,148 shares as of March 31, 2023 and
9,284 shares |
|
|
|
|
|
|
|
as of December 31, 2022) |
|
(404,060 |
) |
|
|
(413,358 |
) |
Altisource deficit |
|
(111,150 |
) |
|
|
(119,649 |
) |
|
|
|
|
Non-controlling interests |
|
753 |
|
|
|
775 |
|
Total deficit |
|
(110,397 |
) |
|
|
(118,874 |
) |
|
|
|
|
Total liabilities and deficit |
$ |
177,583 |
|
|
$ |
195,005 |
|
ALTISOURCE PORTFOLIO SOLUTIONS
S.A.CONSOLIDATED STATEMENTS OF CASH
FLOWS(in
thousands)(unaudited)
|
Three months ended March 31, |
|
2023 |
|
2022 |
|
|
|
|
Cash flows from operating activities: |
|
|
|
Net loss |
$ |
(12,867 |
) |
|
$ |
(12,029 |
) |
Adjustments to reconcile net
loss to net cash used in operating activities: |
|
|
|
Depreciation and
amortization |
|
699 |
|
|
|
958 |
|
Amortization of right-of-use
assets under operating leases |
|
472 |
|
|
|
1,144 |
|
Amortization of intangible
assets |
|
1,280 |
|
|
|
1,284 |
|
Share-based compensation
expense |
|
1,445 |
|
|
|
1,290 |
|
Bad debt expense |
|
40 |
|
|
|
343 |
|
Amortization of debt
discount |
|
904 |
|
|
|
166 |
|
Amortization of debt issuance
costs |
|
627 |
|
|
|
276 |
|
Deferred income taxes |
|
(155 |
) |
|
|
67 |
|
Loss on disposal of fixed
assets |
|
23 |
|
|
|
— |
|
Change in fair value of
warrant liability |
|
(694 |
) |
|
|
— |
|
Changes in operating assets
and liabilities: |
|
|
|
Accounts receivable |
|
(1,308 |
) |
|
|
(653 |
) |
Prepaid expenses and other current assets |
|
10,506 |
|
|
|
(3,558 |
) |
Other assets |
|
(2,044 |
) |
|
|
143 |
|
Accounts payable and accrued expenses |
|
(478 |
) |
|
|
(4,515 |
) |
Current and non-current operating lease liabilities |
|
(465 |
) |
|
|
(1,279 |
) |
Other current and non-current liabilities |
|
(1,043 |
) |
|
|
(547 |
) |
Net cash used in operating activities |
|
(3,058 |
) |
|
|
(16,910 |
) |
|
|
|
|
Cash flows from investing activities: |
|
|
|
Additions to premises and equipment |
|
— |
|
|
|
(74 |
) |
Net cash used in investing activities |
|
— |
|
|
|
(74 |
) |
|
|
|
|
Cash flows from financing activities: |
|
|
|
Proceeds from issuance of common stock, net of issuance costs |
|
20,461 |
|
|
|
— |
|
Debt issuance and amendment costs |
|
(4,786 |
) |
|
|
— |
|
Repayments of long-term debt |
|
(20,000 |
) |
|
|
— |
|
Distributions to non-controlling interests |
|
(102 |
) |
|
|
(264 |
) |
Payments of tax withholding on issuance of restricted share units
and restricted shares |
|
(460 |
) |
|
|
(1,014 |
) |
Net cash used in financing activities |
|
(4,887 |
) |
|
|
(1,278 |
) |
|
|
|
|
Net decrease in cash, cash equivalents and restricted cash |
|
(7,945 |
) |
|
|
(18,262 |
) |
Cash, cash equivalents and restricted cash at the beginning of the
period |
|
54,273 |
|
|
|
102,149 |
|
|
|
|
|
Cash, cash equivalents and restricted cash at the end of the
period |
$ |
46,328 |
|
|
$ |
83,887 |
|
|
|
|
|
Supplemental cash flow information: |
|
|
|
Interest paid |
$ |
5,221 |
|
|
$ |
3,090 |
|
Income taxes (refunded) paid, net |
|
(4,663 |
) |
|
|
3,257 |
|
Acquisition of right-of-use
assets with operating lease liabilities |
|
258 |
|
|
|
29 |
|
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 |
) |
Warrants issued in connection with Amended Credit Agreement |
|
8,096 |
|
|
|
— |
|
ALTISOURCE PORTFOLIO SOLUTIONS
S.A.NON-GAAP MEASURES(in
thousands, except per share
data)(unaudited)
Adjusted operating income (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, net cash 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, net cash 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. 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 2023 and 2022, the Company
has an effective tax rate of close to 0% in Luxembourg.
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 income (loss) is calculated
by removing intangible asset amortization expense, share-based
compensation expense, cost of cost savings initiatives and other,
debt amendment costs and unrealized gain on warrant liability 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, debt amendment costs and unrealized gain on warrant
liability 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, debt amendment costs and unrealized
gain on warrant liability 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), debt amendment costs,
unrealized gain on warrant liability and certain income tax related
items 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), debt amendment
costs, unrealized gain on warrant liability and certain income tax
related items by the weighted average number of diluted shares. Net
cash used in operating activities less additions to premises and
equipment is calculated by removing additions to premises and
equipment from net cash 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, |
|
2023 |
|
2022 |
|
|
|
|
Loss from operations |
$ |
(3,590 |
) |
|
$ |
(8,327 |
) |
|
|
|
|
Intangible asset amortization expense |
|
1,280 |
|
|
|
1,284 |
|
Share-based compensation expense |
|
1,445 |
|
|
|
1,290 |
|
Cost of cost savings initiatives and other |
|
591 |
|
|
|
118 |
|
Debt amendment costs |
|
3,242 |
|
|
|
— |
|
Unrealized gain on warrant liability |
|
(693 |
) |
|
|
— |
|
|
|
|
|
Adjusted operating income (loss) |
$ |
2,275 |
|
|
$ |
(5,635 |
) |
|
|
|
|
Loss before income taxes and
non-controlling interests |
$ |
(11,338 |
) |
|
$ |
(11,143 |
) |
|
|
|
|
Non-controlling interests |
|
(80 |
) |
|
|
(161 |
) |
Pretax loss attributable to Altisource |
|
(11,418 |
) |
|
|
(11,304 |
) |
Intangible asset amortization expense |
|
1,280 |
|
|
|
1,284 |
|
Share-based compensation expense |
|
1,445 |
|
|
|
1,290 |
|
Cost of cost savings initiatives and other |
|
591 |
|
|
|
118 |
|
Debt amendment costs |
|
3,242 |
|
|
|
— |
|
Unrealized gain on warrant liability |
|
(693 |
) |
|
|
— |
|
|
|
|
|
Adjusted pretax loss attributable to Altisource |
$ |
(5,553 |
) |
|
$ |
(8,612 |
) |
|
|
|
|
Net loss attributable to Altisource |
$ |
(12,947 |
) |
|
$ |
(12,190 |
) |
|
|
|
|
Income tax provision |
|
1,529 |
|
|
|
886 |
|
Interest expense (net of interest income) |
|
6,326 |
|
|
|
3,511 |
|
Depreciation and amortization |
|
1,979 |
|
|
|
2,242 |
|
Share-based compensation expense |
|
1,445 |
|
|
|
1,290 |
|
Cost of cost savings initiatives and other |
|
591 |
|
|
|
118 |
|
Debt amendment costs |
|
3,242 |
|
|
|
— |
|
Unrealized gain on warrant liability |
|
(693 |
) |
|
|
— |
|
|
|
|
|
Adjusted EBITDA |
$ |
1,472 |
|
|
$ |
(4,143 |
) |
|
|
|
|
Net loss attributable to Altisource |
$ |
(12,947 |
) |
|
$ |
(12,190 |
) |
|
|
|
|
Intangible asset amortization expense, net of tax |
|
1,278 |
|
|
|
1,282 |
|
Share-based compensation expense, net of tax |
|
1,167 |
|
|
|
1,176 |
|
Cost of cost savings initiatives and other, net of tax |
|
491 |
|
|
|
127 |
|
Debt amendment costs, net of tax |
|
3,242 |
|
|
|
— |
|
Unrealized gain on warrant liability, net of tax |
|
(693 |
) |
|
|
— |
|
Certain income tax related items |
|
376 |
|
|
|
311 |
|
|
|
|
|
Adjusted net loss attributable to Altisource |
$ |
(7,086 |
) |
|
$ |
(9,294 |
) |
|
|
|
|
Diluted loss per share |
$ |
(0.70 |
) |
|
$ |
(0.76 |
) |
|
|
|
|
Intangible asset amortization expense, net of tax, per diluted
share |
|
0.07 |
|
|
|
0.08 |
|
Share-based compensation expense, net of tax, per diluted
share |
|
0.06 |
|
|
|
0.07 |
|
Cost of cost savings initiatives and other, net of tax, per diluted
share |
|
0.03 |
|
|
|
0.01 |
|
Debt amendment costs, net of tax, per diluted share |
|
0.18 |
|
|
|
— |
|
Unrealized gain on warrant liability, net of tax, per diluted
share |
|
(0.04 |
) |
|
|
— |
|
Certain income tax related items per diluted share |
|
0.02 |
|
|
|
0.02 |
|
|
|
|
|
Adjusted diluted loss per share |
$ |
(0.38 |
) |
|
$ |
(0.58 |
) |
|
|
|
|
Calculation of the impact of
intangible asset amortization expense, net of tax |
|
|
|
Intangible asset amortization expense |
$ |
1,280 |
|
|
$ |
1,284 |
|
Tax benefit from intangible asset amortization |
|
(2 |
) |
|
|
(2 |
) |
Intangible asset amortization expense, net of tax |
|
1,278 |
|
|
|
1,282 |
|
Diluted share count |
|
18,442 |
|
|
|
15,956 |
|
|
|
|
|
Intangible asset amortization
expense, net of tax, per diluted share |
$ |
0.07 |
|
|
$ |
0.08 |
|
|
|
|
|
Calculation of the impact of
share-based compensation expense, net of tax |
|
|
|
Share-based compensation expense |
$ |
1,445 |
|
|
$ |
1,290 |
|
Tax benefit from share-based compensation expense |
|
(278 |
) |
|
|
(114 |
) |
Share-based compensation expense, net of tax |
|
1,167 |
|
|
|
1,176 |
|
Diluted share count |
|
18,442 |
|
|
|
15,956 |
|
|
|
|
|
Share-based compensation
expense, net of tax, per diluted share |
$ |
0.06 |
|
|
$ |
0.07 |
|
|
|
|
|
Calculation of the impact of
cost of cost savings initiatives and other, net of tax |
|
|
|
Cost of cost savings initiatives and other |
$ |
591 |
|
|
$ |
118 |
|
Tax (benefit) provision from cost of cost savings initiatives and
other |
|
(100 |
) |
|
|
9 |
|
Cost of cost savings initiatives and other, net of tax |
|
491 |
|
|
|
127 |
|
Diluted share count |
|
18,442 |
|
|
|
15,956 |
|
|
|
|
|
Cost of cost savings
initiatives and other, net of tax, per diluted share |
$ |
0.03 |
|
|
$ |
0.01 |
|
|
|
|
|
Calculation of the impact of
debt amendment costs, net of tax |
|
|
|
Debt amendment costs |
$ |
3,242 |
|
|
$ |
— |
|
Tax benefit from debt amendment costs |
|
— |
|
|
|
— |
|
Debt amendment costs, net of tax |
|
3,242 |
|
|
|
— |
|
Diluted share count |
|
18,442 |
|
|
|
15,956 |
|
|
|
|
|
Debt amendment costs, net of
tax, per diluted share |
$ |
0.18 |
|
|
$ |
— |
|
|
|
|
|
Calculation of the impact of
unrealized gain on warrant liability, net of tax |
|
|
|
Unrealized gain on warrant liability |
$ |
(693 |
) |
|
$ |
— |
|
Tax benefit from unrealized gain on warrant liability |
|
— |
|
|
|
— |
|
Unrealized gain on warrant liability, net of tax |
|
(693 |
) |
|
|
— |
|
Diluted share count |
|
18,442 |
|
|
|
15,956 |
|
|
|
|
|
Unrealized gain on warrant
liability, net of tax, per diluted share |
$ |
(0.04 |
) |
|
$ |
— |
|
|
|
|
|
Certain income tax related
items resulting from: |
|
|
|
Certain income tax related items |
|
376 |
|
|
|
311 |
|
Diluted share count |
|
18,442 |
|
|
|
15,956 |
|
|
|
|
|
Certain income tax related
items per diluted share |
$ |
0.02 |
|
|
$ |
0.02 |
|
|
|
|
|
Net cash used in operating
activities |
$ |
(3,058 |
) |
|
$ |
(16,910 |
) |
Less: additions to premises and equipment |
|
— |
|
|
|
(74 |
) |
|
|
|
|
Net cash used in operating
activities less additions to premises and equipment |
$ |
(3,058 |
) |
|
$ |
(16,984 |
) |
|
March 31, 2023 |
|
March 31, 2022 |
|
|
|
|
Senior Secured Term Loans |
$ |
227,204 |
|
|
$ |
247,204 |
|
Less: Cash and cash equivalents |
|
(43,113 |
) |
|
|
(79,952 |
) |
|
|
|
|
Net debt |
$ |
184,091 |
|
|
$ |
167,252 |
|
__________________________________
Note: Amounts may not add to the total due to
rounding.
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