Altisource Announces 3rd Quarter Results
LUXEMBOURG, Nov 11, 2009 (GlobeNewswire via COMTEX News Network) -- Altisource Portfolio Solutions S.A. ("Altisource" or "the Company") (Nasdaq:ASPS), a provider of services focused on high-value, knowledge based functions principally related to real estate and mortgage portfolio management, asset recovery and customer relationship management, today announced financial results for the third quarter and nine months ended September 30, 2009.
Third Quarter 2009 Highlights
* On August 10, 2009, Altisource became a stand-alone public company
in connection with its separation from Ocwen Financial Corporation
("Ocwen") and commenced trading on the NASDAQ Global Select Market;
* Revenues were $54.1 million for the quarter ended September 30,
2009 reflecting an 8.6% increase over the second quarter and a
42.2% increase over the same quarter in 2008. Year-to-date
revenues were $146.5 million as compared to $121.4 million, an
increase of 20.6%, for the nine-months ended September 30, 2008.
* EBITDA was $14.3 million for the quarter ended September 30, 2009
reflecting an 11.5% increase over the second quarter and a 197.0%
increase over the same quarter in 2008. Year-to-date EBITDA was
$36.4 million as compared to $19.5 million, an increase of 87.1%,
for the nine-months ended September 30, 2008.
* Net income was $8.6 million, or $0.36 per fully-diluted share on a
pro forma basis, for the quarter ended September 30, 2009 compared
to net income of $0.9 million, or $0.04 per fully-diluted share on
a pro forma basis, for the same quarter in 2008. Year-to-date net
income was $20.1 million, or $0.83 per fully-diluted share on a pro
forma basis, compared to net income of $6.9 million, or $0.29 per
fully-diluted share on a pro forma basis, for the same period in
2008.
Financial Results
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
(in thousands,
except per share data) 2009 2008 2009 2008
---------------------- --------- --------- --------- ---------
Revenue $ 54,064 $ 38,007 $146,486 $121,423
Cost of revenue 33,453 28,927 91,805 88,636
--------- --------- --------- ---------
Gross profit 20,611 9,080 54,681 32,787
Selling, general and
administrative expenses 11,065 7,142 27,216 21,285
--------- --------- --------- ---------
Income from operations 9,546 1,938 27,465 11,502
Other income (expense), net
Interest expense, net (191) (608) (1,601) (1,931)
Other, net 2,737 (19) 2,756 (12)
--------- --------- --------- ---------
Total other income
(expense), net 2,546 (627) 1,155 (1,943)
--------- --------- --------- ---------
Income before income taxes 12,092 1,311 28,620 9,559
Income tax provision (3,448) (368) (8,522) (2,683)
--------- --------- --------- ---------
Net income $ 8,644 $ 943 $ 20,098 $ 6,876
========= ========= ========= =========
Earnings per share(1):
Basic $ 0.36 $ 0.04 $ 0.84 $ 0.29
========= ========= ========= =========
Diluted $ 0.36 $ 0.04 $ 0.83 $ 0.29
========= ========= ========= =========
Weighted average shares
outstanding(1):
Basic 24,050 24,050 24,050 24,050
========= ========= ========= =========
Diluted 24,303 24,050 24,303 24,050
========= ========= ========= =========
Transactions with related
parties included above:
Revenue $ 23,214 $ 13,472 $ 62,549 $ 44,716
========= ========= ========= =========
Selling, general and
administrative expenses $ 522 $ 1,501 $ 4,308 $ 4,571
========= ========= ========= =========
Interest expense $ 193 $ 532 $ 1,290 $ 1,698
========= ========= ========= =========
Reconciliation to EBITDA:
Income before income taxes $ 12,092 $ 1,311 $ 28,620 $ 9,559
Interest expense, net 191 608 1,601 1,931
Depreciation and
amortization 1,393 2,282 4,188 6,047
Amortization of intangibles 668 628 2,004 1,924
--------- --------- --------- ---------
EBITDA $ 14,344 $ 4,829 $ 36,413 $ 19,461
========= ========= ========= =========
(1) Earnings per share and weighted average shares outstanding for
the three and nine months ended September 30, 2009 and 2008 are
reflected on a pro forma basis.
Revenue
Revenue for the third quarter of 2009 increased to $54.1 million, a 42.2% increase over the comparable period in 2008. In addition, Altisource continues to see sequential increase in revenue per quarter as third quarter of 2009 revenue was 8.6% greater than second quarter of 2009 revenue.
The following table presents revenue by segment for the periods ended September 30, 2009 and 2008:
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- --------------------------
(in % %
thousands) 2009 2008 Change 2009 2008 Change
----------- --------- --------- ------- --------- --------- ------
Mortgage
Services $ 29,141 $ 11,617 150.8% $ 70,861 $ 40,176 76.4%
Financial
Services 15,837 18,653 (15.1) 49,624 57,182 (13.2)
Technology
Products 12,451 11,672 6.7 35,133 34,566 1.6
Corporate and
Eliminations (3,365) (3,935) 14.5 (9,132) (10,501) 13.0
--------- --------- --------- ---------
Total
Revenue $ 54,064 $ 38,007 42.2% $146,486 $121,423 20.6%
========= ========= ========= =========
Transactions
with related
parties:
Mortgage
Services $ 18,141 $ 8,154 122.5% $ 46,685 $ 30,352 53.8%
========= ========= ========= =========
Financial
Services $ 27 $ -- N/M $ 64 $ -- N/M
========= ========= ========= =========
Technology
Products $ 5,046 $ 5,318 (5.1)% $ 15,800 $ 14,364 10.0%
========= ========= ========= =========
N/M - not meaningful.
The significant revenue trends in the current quarter include:
* 150.8% increase in Mortgage Services revenue for the third quarter of 2009 over the comparable quarter in 2008 driven principally by the introduction and growth of new default associated services including property inspection and property preservation, closing and title services, real estate sales and default management services. In addition, during the second quarter of 2009, Altisource also renewed and expanded a relationship with a component services customer. Mortgage Services revenue for the third quarter increased 21.3% over the second quarter as the Company continued to expand its geographic presence; * 15.1% decrease in Financial Services revenue for the third quarter of 2009 over the comparable quarter in 2008 driven by overall economic conditions. Generally during an economic downturn, Altisource experiences a decrease in collection rates offset by an increase in placements due to rising delinquencies. Uncharacteristically, and despite continued strong performance for its customers, during the third quarter Altisource has seen a decrease in debt placements even though unemployment has continued to rise. The Company believes this is the result of tightened credit standards and reduced consumer spending. This has led to an overall decrease in Financial Services revenue. Altisource was able to partially offset this impact with an increase in mortgage charge-off placements and placements with new customers; and a * 6.7% increase in Technology Products revenue for the third quarter of 2009 over the comparable quarter in 2008 from higher REAL suite revenues due to the expansion of a relationship in the second quarter of 2008 with a customer for its use of REALServicing(R), partially offset by decreases in IT infrastructure services (due to cost reduction efforts in other segments which for certain of these costs equate to a corresponding reduction of revenue in this segment).
EBITDA
EBITDA for the third quarter of 2009 increased over the comparable period in 2008 by $9.5 million to $14.3 million, a 197.0% increase. The following table presents EBITDA by segment for the periods ended September 30, 2009 and 2008:
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- --------------------------
(in % %
thousands) 2009 2008 Change 2009 2008 Change
----------- --------- --------- ------- --------- --------- ------
Mortgage
Services $ 10,719 $ 3,146 240.7% $ 24,985 $ 9,904 152.3%
Financial
Services 597 (1,578) 137.8 1,324 (570) 332.3
Technology
Products 6,238 3,261 91.3 15,164 10,127 49.7
Corporate and
Eliminations (3,210) -- N/M (5,060) -- N/M
--------- --------- --------- ---------
Total
EBITDA $ 14,344 $ 4,829 197.0% $ 36,413 $ 19,461 87.1%
========= ========= ========= =========
* Gross margin percentage increased to 38.1% for the third quarter
of 2009 from 23.9% for the same period in 2008. The increase in
gross margin is primarily a result of the composition of revenue
being more weighted towards Mortgage Services which have higher
margins. In addition, Altisource has been reducing compensation
costs within the Financial Services segment both by reducing the
overall number of collectors as well as redistributing collectors
to less expensive locations.
* Operating margin percentage increased to 17.7% for the third
quarter of 2009 from 5.1% for the same period in 2008. The
increase in operating margin is primarily a result of an increase
in gross margins as discussed above, partially offset by an
increase to selling, general and administrative expenses primarily
related to:
* $1.5 million of costs for the third quarter of 2009 incurred
as part of the separation from Ocwen; and
* $2.3 million of facility closure costs recorded in the third
quarter of 2009 primarily consisting of lease exit costs and
severance for the closure of two facilities. The Company
expects these facility closures will reduce occupancy costs in
future periods.
* Income before income taxes increased by $10.8 million to $12.1
million for the third quarter of 2009 as compared to $1.3 million
in the same period in 2008. In addition to the changes discussed
above, the following items also impacted income before income
taxes:
* $2.3 million of other income recorded in the third quarter of
2009 relating to a litigation settlement; and
* $0.4 million reduction in interest expense allocated from
Ocwen prior to the separation date.
Income Taxes
The income tax provision was $3.4 million for the third quarter of 2009. The effective tax rate was 28.5% in the third quarter of 2009 compared to 28.1% in the same period in 2008. Income tax provision on income before income tax differs from amounts that would be computed by applying the Luxembourg federal corporate income tax rate of 28.6% primarily because of the effect of differing tax rates outside of Luxembourg, indefinite deferral on earnings of non-U.S. affiliates and additional foreign income taxes. The additional non-U.S. foreign income taxes were the primary reason for the increase in the effective tax rate between periods.
Non-GAAP measures
The Company utilizes a number of different financial measures, both United States generally accepted accounting principles ("GAAP") and non-GAAP, in analyzing and assessing its overall business performance, for making operating decisions, for compensation decisions and for forecasting and planning future periods. The Company considers the use of non-GAAP financial measures, including EBITDA, helpful in assessing its current financial performance, ongoing operations and prospects for the future. While the Company uses non-GAAP financial measures as a tool to enhance its understanding of certain aspects of its financial performance and to provide incremental insight into the underlying factors and trends affecting both the Company's performance and its cash-generating potential, the Company does not consider these measures to be a substitute for, or superior to, the information provided by GAAP financial measures. Consistent with this approach, the Company believes that disclosing non-GAAP financial measures to the readers of its financial statements provides such readers with useful supplemental data that, while not a substitute for GAAP financial measures, allows for greater transparency in the review of its financial and operational performance and enables investors to more fully understand trends in its current and future performance.
Forward-Looking Statements
This press release contains forward-looking statements that involve a number of risks and uncertainties. Those forward-looking statements include all statements that are not historical fact, including statements about our beliefs and expectations. Forward-looking statements are based on management's beliefs as well as assumptions made by and information currently available to management. Because such statements are based on expectations as to future economic performance and are not statements of historical fact, actual results may differ materially from those projected. We undertake no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise. The risks and uncertainties to which forward-looking statements are subject include, but are not limited to: our ability to retain existing customers and attract new customers; general economic and market conditions; governmental regulations, taxes and policies; availability of adequate and timely sources of liquidity and other risks and uncertainties detailed in the "Statement Regarding Forward-Looking Information," "Risk Factors" and other sections of the Company's Form 10, the Company's subsequent reports on Form 10-Q and other filings with the Securities and Exchange Commission.
About Altisource
Altisource Portfolio Solutions S.A. (Nasdaq:ASPS) is a provider of services focused on high value, knowledge-based functions principally related to real estate and mortgage portfolio management, asset recovery and customer relationship management. Utilizing our integrated technology that includes decision models and behavioral based scripting engines, we provide solutions that improve our clients' performance and maximize their returns. Additional information is available at www.altisource.com.
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: Altisource Portfolio Solutions S.A.
CONTACT: Altisource Portfolio Solutions S.A. Robert D. Stiles, Chief Financial Officer +352 2469 7903 robert.stiles@altisource.lu
(C) Copyright 2009 GlobeNewswire, Inc. All rights reserved.
News Provided by COMTEX