Altisource Portfolio Solutions
Nov 11, 2009

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

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