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Apr 26, 2012

Altisource Announces First Quarter Results

LUXEMBOURG, April 26, 2012 (GLOBE NEWSWIRE) -- Altisource™ (Nasdaq:ASPS) today reported net income attributable to Altisource of $25.2 million or $1.02 per diluted share for the first quarter ended March 31, 2012. This compares with net income attributable to Altisource of $14.8 million or $0.57 per share for the first quarter of 2011.

Service revenue was $108.5 million for the three months ended March 31, 2012, a 51% increase when compared to the three months ended March 31, 2011. The year-over-year growth in net income and service revenue is primarily from the increase in Ocwen's residential loan servicing portfolio, impacting the Mortgage Services and Technology Services segments, coupled with the ongoing expansion of mortgage and real estate portfolio management services within the Mortgage Services segment.

First quarter highlights include:

  • Average loans serviced by the Company's largest customer, Ocwen Financial Corporation ("Ocwen"), on the REALServicing® platform, was 0.7 million for the quarter
  • Generated cash flows from operations for the quarter of $27.8 million representing $0.26 for every dollar of service revenue
  • Acquired 0.3 million shares of stock for the quarter under the stock repurchase program at an average price of $63.25 per share
  • Sold over 6,000 REO assets through the Company's web based portal during the quarter
  • Lenders One increased membership by 11 during the quarter, bringing total membership to 225

Gross margin as a percentage of service revenue decreased to 44% for the three months ended March 31, 2012 compared to 47% for the three months ended March 31, 2011. The decline is primarily from the comparative mix of revenue and the additional employee costs incurred in 2012 in anticipation of new loans to be boarded by Ocwen.

Income from operations as a percentage of service revenue improved from 24% for the three months ended March 31, 2011 to 28% for the three months ended March 31, 2012. The increase is from the stabilization of selling, general and administrative expenses on higher service revenue.

Stock Repurchase Update

For the quarter ended March 31, 2012, the Company repurchased 0.3 million shares of common stock on the open market at an average price of $63.25 per share under the stock repurchase program. Since inception of the program, 2.5 million shares of common stock have been repurchased on the open market at an average price of $37.49 per share.

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 management's 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. The Company undertakes 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: Altisource's 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 "Forward-Looking Statements," "Risk Factors" and other sections of the Company's Form 10-K and other filings with the Securities and Exchange Commission.


Altisource will host a webcast at 11:00 a.m. eastern today to discuss first quarter results. A link to the live audio webcast will be available on the Company's website through the investor relations home page. Those who want to listen to the call should go to the website 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.

About Altisource

Altisource Portfolio Solutions S.A. (Nasdaq:ASPS) is a provider of services focused on high-value, technology-enabled knowledge-based solutions principally related to real estate and mortgage portfolio management, asset recovery and customer relationship management. Additional information is available at

(Unaudited, in thousands, except per share data)
Financial Results    
Results of operations for the three months ended March 31, 2012 and 2011 are as follows:    
  Three Months Ended
  March 31,
  2012 2011
Service revenue    
Mortgage Services  $ 79,320  $ 43,340
Financial Services 17,760 18,920
Technology Services 17,022 12,716
Eliminations (5,633) (3,246)
  108,469 71,730
Reimbursable expenses 28,705 15,641
Non-controlling interests 1,892 1,299
Total revenue 139,066 88,670
Cost of revenue 63,055 39,308
Reimbursable expenses 28,705 15,641
Gross profit 47,306 33,721
Selling, general and administrative expenses 17,015 16,254
Income from operations 30,291 17,467
Other (expense) income, net (351) 344
Income before income taxes and non-controlling interests 29,940 17,811
Income tax provision (2,819) (1,687)
Net income 27,121 16,124
Net income attributable to non-controlling interests (1,892) (1,299)
Net income attributable to Altisource  $ 25,229  $ 14,825
Earnings per share:    
Basic   $ 1.08  $ 0.60
Diluted  $ 1.02  $ 0.57
Weighted average shares outstanding:    
Basic  23,381 24,845
Diluted 24,844 25,928
Transactions with related parties:    
Revenue  $ 82,780  $ 48,790
Selling, general and administrative expenses  $ 574  $ 391
(Unaudited, in thousands, except per share data)
  March 31, 2012 December 31, 2011
Current assets:    
Cash and cash equivalents  $ 26,666  $ 32,125
Accounts receivable, net 62,312 52,005
Prepaid expenses and other current assets 5,379 5,002
Deferred tax assets, net 1,975 1,133
Total current assets 96,332 90,265
Premises and equipment, net 39,081 25,600
Deferred tax assets, net 4,373 4,373
Intangible assets, net 62,768 64,950
Goodwill  14,915 14,915
Investment in equity affiliate 14,146 14,470
Other assets  8,902 9,586
   $ 240,517  $ 224,159
Total assets
Current liabilities:    
Accounts payable and accrued expenses  $ 47,797  $ 44,867
Capital lease obligations — current  578 634
Other current liabilities  13,550 9,939
Total current liabilities 61,925 55,440
Capital lease obligations — non-current  57 202
Other non-current liabilities 2,531 2,574
Commitments and contingencies (Note 15)    
Common stock ($1.00 par value; 100,000 shares authorized; 25,413 shares issued and 23,311 outstanding as of March 31, 2012; 25,413 shares issued and 23,405 outstanding as of December 31, 2011) 25,413 25,413
Additional paid-in-capital 83,045 83,229
Retained earnings 147,026 126,161
Treasury stock, at cost (2,101 shares as of March 31, 2012 and 2,008 shares as of December 31, 2011) (82,488) (72,048)
Altisource equity 172,996 162,755
Non-controlling interests 3,008 3,188
Total equity 176,004 165,943
Total liabilities and equity 240,517 224,159
CONTACT: Michelle D. Esterman

         Chief Financial Officer

         T:  +352 2469 7950

Source: Altisource Portfolio Solutions S.A.

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