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Oct 24, 2013

Altisource Announces Record EPS of $1.42 and Net Income Attributable to Altisource of $36 Million in the Third Quarter 2013

LUXEMBOURG, Oct. 24, 2013 (GLOBE NEWSWIRE) -- Altisource Portfolio Solutions S.A. ("Altisource") (Nasdaq:ASPS) today reported record third quarter 2013 service revenue of $180.4 million and net income attributable to shareholders of $36.0 million, or $1.42 per diluted share. Service revenue for the third quarter 2013 increased by 52% compared to the third quarter 2012 and 12% compared to the second quarter 2013. Net income attributable to Altisource for the third quarter 2013 increased 33% compared to the third quarter 2012 and 16% compared to the second quarter 2013.

The growth in service revenue and earnings is primarily driven by the Homeward Residential, Inc. ("Homeward") and Residential Capital, LLC ("ResCap") loans that Ocwen Financial Corporation ("Ocwen") boarded onto the REALServicing® platform during 2013 and growth in the mortgage charge-off collections business and customer relationship management business.   

Third quarter highlights include:

  • The average number of loans serviced by Ocwen on REALServicing totaled 1.2 million loans in the third quarter 2013 compared to 0.8 million loans in the third quarter 2012;
  • Cash flows from operating activities totaled $67.2 million, or 37% of service revenue, in the third quarter 2013 compared to $43.1 million, or 36% of service revenue, in the third quarter 2012;
  • On August 21, 2013, Altisource announced the acquisition of Equator, LLC, a national leader in mortgage and real estate related business process management solutions at an initial price of $70.0 million plus contingent earn-out consideration of up to an additional $80.0 million over three years, subject to Equator, LLC achieving annual performance targets;
  • Altisource Residential ("Residential"), the company we provide rental management services to under a 15-year services agreement, increased its loan and REO portfolio from 1,372 at June 30, 2013 to 6,234 on September 30, 2013 (including announced acquisitions closed in October 2013); and
  • Altisource acquired 266,300 shares of its common stock during the third quarter 2013 at an average price of $134.86 per share.

"We are very pleased with our third quarter results and our execution against plan. With our focus on developing marketplaces for the very large real estate and mortgage spaces, we believe that we have exciting growth prospects," said Chairman William Erbey.

William Shepro, Chief Executive Officer, further commented "Our strong service revenue, net income and cash flow growth provide us with the resources to grow our existing businesses, to invest in new businesses and to repurchase our common stock."

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.

Webcast

Altisource will host a webcast at 11:00 a.m. EDT today to discuss third 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 and will remain available for approximately 30 days.

About Altisource:

Altisource is a premier marketplace and transaction solutions provider for the real estate, mortgage and consumer debt industries offering both distribution and content. We leverage proprietary business process, vendor and electronic payment management software and behavioral science based analytics to improve outcomes for marketplace participants. Additional information is available at www.altisource.com.

ALTISOURCE PORTFOLIO SOLUTIONS S.A.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
         
         
  Three months ended Nine months ended
  September 30, September 30,
  2013 2012 2013 2012
         
Service revenue        
Mortgage Services $134,317 $90,607 $350,581 $259,926
Financial Services 27,168 15,283 66,259 49,100
Technology Services 25,175 19,076 70,189 53,984
Eliminations (6,268) (6,364) (17,411) (17,820)
  180,392 118,602 469,618 345,190
Reimbursable expenses 29,496 24,326 73,061 77,846
Non-controlling interests 947 1,060 3,093 4,223
Total revenue 210,835 143,988 545,772 427,259
Cost of revenue 104,765 69,961 275,134 200,939
Reimbursable expenses 29,496 24,326 73,061 77,846
Gross profit 76,574 49,701 197,577 148,474
Selling, general and administrative expenses 31,519 18,452 80,027 54,485
Income from operations 45,055 31,249 117,550 93,989
Other income (expense), net:        
Interest expense (6,188) (10) (14,302) (39)
Other income (expense), net (253) (257) 529 (900)
Total other income (expense), net (6,441) (267) (13,773) (939)
Income before income taxes and non-controlling interests 38,614 30,982 103,777 93,050
Income tax provision (1,659) (2,898) (6,227) (8,493)
Net income 36,955 28,084 97,550 84,557
Net income attributable to non-controlling interests (947) (1,060) (3,093) (4,223)
Net income attributable to Altisource $36,008 $27,024 $94,457 $80,334
         
Earnings per share:        
Basic  $1.56 $1.16 $4.07 $3.44
Diluted $1.42 $1.08 $3.77 $3.23
         
Weighted average shares outstanding:        
Basic  23,025 23,338 23,185 23,347
Diluted 25,333 25,016 25,070 24,895
         
Transactions with related parties:        
Revenue $143,557 $86,558 $354,889 $257,491
Selling, general and administrative expenses 720 621 2,133 1,801
Other income -- -- 773 --
 
ALTISOURCE PORTFOLIO SOLUTIONS S.A.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
     
     
  September 30, 2013 December 31, 2012
ASSETS
     
Current assets:    
Cash and cash equivalents $212,585 $105,502
Accounts receivable, net 83,851 88,955
Prepaid expenses and other current assets 13,760 7,618
Deferred tax assets, net 1,775 1,775
Total current assets 311,971 203,850
     
Premises and equipment, net 59,464 50,399
Deferred tax assets, net 4,073 4,073
Intangible assets, net 242,088 56,586
Goodwill  14,915 14,915
Investment in Correspondent One -- 12,729
Loan to Ocwen -- 75,000
Other assets  15,243 11,674
     
Total assets  $647,754  $429,226
     
LIABILITIES AND EQUITY
     
Current liabilities:    
Accounts payable and accrued expenses $66,848 $58,976
Current portion of long-term debt 4,000 2,000
Current portion of capital lease obligations -- 233
Other current liabilities  9,371 10,423
Total current liabilities 80,219 71,632
     
Long-term debt, less current portion 392,708 196,027
Other non-current liabilities 1,296 1,738
     
Equity:    
Common stock ($1.00 par value; 100,000 shares authorized; 25,413 issued and 22,866 outstanding as of September 30, 2013; 25,413 issued and 23,427 outstanding as of December 31, 2012) 25,413 25,413
Additional paid-in-capital 88,949 86,873
Retained earnings 209,783 124,127
Treasury stock, at cost (2,547 shares as of September 30, 2013 and 1,986 shares as of December 31, 2012) (151,861) (77,954)
Altisource equity 172,284 158,459
     
Non-controlling interests 1,247 1,370
Total equity 173,531 159,829
     
Total liabilities and equity $647,754 $429,226 
CONTACT: Michelle D. Esterman

         Chief Financial Officer

         T:  +352 2469 7950

         E:  Michelle.Esterman@altisource.lu
Source: Altisource Portfolio Solutions S.A.

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