UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 24, 2013
ALTISOURCE PORTFOLIO SOLUTIONS S.A.
(Exact name of Registrant as specified in its charter)
|
Luxembourg |
|
001-34354 |
|
Not Applicable |
|
(State or other jurisdiction of incorporation) |
|
(Commission File Number) |
|
(I.R.S. Employer Identification No.) |
291, Route d’Arlon
L-1150 Luxembourg
Grand Duchy of Luxembourg
(Address of principal executive offices including zip code)
+352 2469 7900
(Registrant’s telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On October 24, 2013, Altisource Portfolio Solutions S.A. (“Altisource”) issued a press release announcing financial results for its quarter ended September 30, 2013. A copy of the press release is attached hereto as Exhibit 99.1.
The information in this Item 2.02, including the information in Exhibit 99.1, is furnished solely pursuant to Item 2.02 of this Form 8-K. Consequently, it is not deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that Section. It may only be incorporated by reference in another filing under the Securities Exchange Act of 1934 or Securities Act of 1933 if such subsequent filing specifically references this Item 2.02 of this Form 8-K.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
|
Exhibit No. |
|
Description |
|
Exhibit 99.1 |
|
Press Release of Altisource Portfolio Solutions S.A. dated October 24, 2013 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: October 24, 2013
|
|
Altisource Portfolio Solutions S.A. | |
|
|
| |
|
|
By: |
/s/ Michelle D. Esterman |
|
|
Name: |
Michelle D. Esterman |
|
|
Title: |
Chief Financial Officer |
Exhibit 99.1
|
FOR IMMEDIATE RELEASE |
FOR FURTHER INFORMATION |
|
|
CONTACT: |
|
|
|
|
|
Michelle D. Esterman |
|
|
Chief Financial Officer |
|
|
T: +352 2469 7950 |
|
|
E: Michelle.Esterman@altisource.lu |
ALTISOURCE ANNOUNCES RECORD EPS OF $1.42 AND NET INCOME ATTRIBUTABLE TO ALTISOURCE OF
$36 MILLION IN THE THIRD QUARTER 2013
Luxembourg, October 24, 2013 - Altisource Portfolio Solutions S.A. (“Altisource” and 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, |
|
December 31, |
| ||
|
|
|
2013 |
|
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 |
|