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Altisource Announces Third Quarter Results

Altisource Announces Third Quarter Results

LUXEMBOURG, Oct. 25, 2012 (GLOBE NEWSWIRE) -- Altisource™ (Nasdaq:ASPS) today
reported net income attributable to Altisource of $27.0 million or $1.08 per
diluted share for the three months ended September 30, 2012, an increase in
net income and diluted earnings per share from the three months ended
September 30, 2011 of 57% and 61%, respectively. Service revenue was $118.6
million for the three months ended September 30, 2012, a 38% increase when
compared to the three months ended September 30, 2011.

The increase in net income is primarily from stronger service revenue growth
in the higher margin Mortgage Services segment relative to the other segments.
This was driven by the servicing portfolio growth experienced by the Company's
largest customer, Ocwen Financial Corporation ("Ocwen"), and the Company's
expanded capture rate of default related business on the portfolio.

Third quarter highlights include:

  *Average number of loans serviced by Ocwen^® on the REALServicing^®
    platform was 0.8 million for the quarter
  *Cash flows from operations for the quarter were $43.1 million representing
    $0.36 for each dollar of service revenue
  *The consumer real estate portal was relaunched under the new Hubzu^TM
    brand; over 6,000 REO assets were sold through Hubzu during the quarter
  *Origination related service revenue increased 69% to $10.1 million in the
    quarter compared to the third quarter of 2011
  *On October 3, 2012, Ocwen announced its agreement to acquire Homeward
    Residential Holdings Inc. from WL Ross & Co. LLC
  *On October 24, 2012, Ocwen and Walter Investment Management Corp.
    announced they were jointly awarded the highest and best bid for the
    mortgage servicing and origination platform assets of Residential Capital,
    LLC
  *Altisource Residential Corporation and Altisource Asset Management
    Corporation filed Form 10s with the Securities Exchange Commission in
    September 2012

Gross profit as a percentage of service revenue remained constant at 42% for
the three months ended September 30, 2012 and the three months ended September
30, 2011. Margin improvement in the Mortgage Services segment was offset by
higher costs in the Technology Services segment as the Company continues to
invest in the development of its next generation technology.

Income from operations as a percentage of service revenue improved to 26% for
the three months ended September 30, 2012 compared to 25% for the three months
ended September 30, 2011 as selling, general and administrative costs are
growing at a slower pace than service revenue.

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 Portfolio Solutions S.A. (Nasdaq:ASPS) is a global 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 www.altisource.com.

                                                              
ALTISOURCE PORTFOLIO SOLUTIONS S.A.                                          
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited, in thousands, except per share data)
                                                              
Financial Results                                     
Results of operations for the three and nine months ended September 30, 2012
and 2011 are as follows:
                                                     
                                 Three months ended   Nine months ended
                                 September 30,        September 30,
                                 2012       2011      2012       2011
                                                              
Service revenue                                                
Mortgage Services                 $ 90,607   $ 58,915  $ 259,926  $ 147,768
Financial Services                15,283     16,934    49,100     53,067
Technology Services               19,076     14,827    53,984     41,115
Eliminations                      (6,364)    (4,507)   (17,820)   (11,547)
                                 118,602    86,169    345,190    230,403
Reimbursable expenses             24,326     21,833    77,846     56,933
Non-controlling interests         1,060      1,791     4,223      4,395
Total revenue                     143,988    109,793   427,259    291,731
Cost of revenue                   69,961     51,506    200,939    134,452
Reimbursable expenses             24,326     21,833    77,846     56,933
Gross profit                      49,701     36,454    148,474    100,346
Selling, general and              18,452     15,329    54,485     45,487
administrative expenses
Income from operations            31,249     21,125    93,989     54,859
Other (expense) income, net       (267)      (320)     (939)      294
Income before income taxes and    30,982     20,805    93,050     55,153
non-controlling interests
Income tax provision              (2,898)    (1,843)   (8,493)    (5,377)
Net income                        28,084     18,962    84,557     49,776
Net income attributable to        (1,060)    (1,791)   (4,223)    (4,395)
non-controlling interests
Net income attributable to        $ 27,024   $ 17,171  $ 80,334   $ 45,381
Altisource
                                                              
Earnings per share:                                            
Basic                             $ 1.16     $ 0.71    $ 3.44     $ 1.84
Diluted                           $ 1.08     $ 0.67    $ 3.23     $ 1.76
                                                              
Weighted average shares                                        
outstanding:
Basic                             23,338     24,341    23,347     24,602
Diluted                           25,016     25,489    24,895     25,720
                                                              
Transactions with related                                      
parties:
Revenue                           $ 86,558   $ 63,827  $ 257,491  $ 166,311
Selling, general and              $ 621      $ 506     $ 1,801    $ 1,352
administrative expenses
                                                              

                                                                
ALTISOURCE PORTFOLIO SOLUTIONS S.A.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except per share data)
                                                                
                                                   September 30, December 31,
                                                   2012          2011
ASSETS                                                           
                                                                
Current assets:                                                  
Cash and cash equivalents                           $ 84,429      $ 32,125
Accounts receivable, net                            62,497        52,005
Prepaid expenses and other current assets           9,060         5,002
Deferred tax assets, net                            3,570         1,133
Total current assets                                159,556       90,265
                                                                
Premises and equipment, net                         46,352        25,600
Deferred tax assets, net                            4,460         4,373
Intangible assets, net                              58,593        64,950
Goodwill                                           14,915        14,915
Investment in equity affiliate                      13,598        14,470
Other assets                                       8,777         9,586
                                                   $ 306,251     $ 224,159
Total assets                                                     
                                                                
LIABILITIES AND EQUITY                                           
                                                                
Current liabilities:                                             
Accounts payable and accrued expenses               $ 61,264      $ 44,867
Capital lease obligations – current                345           634
Other current liabilities                          9,806         9,939
Total current liabilities                           71,415        55,440
                                                                
Capital lease obligations – non-current            --            202
Other non-current liabilities                       2,441         2,574
                                                                
Commitments and contingencies                                    
                                                                
Equity:                                                          
Common stock ($1.00 par value; 100,000 shares
authorized; 25,413 issued and 23,363 outstanding as 25,413        25,413
of September 30, 2012; 25,413 issued and 23,405
outstanding as of December 31, 2011)
Additional paid-in-capital                          85,267        83,229
Retained earnings                                   200,736       126,161
Treasury stock, at cost (2,049 shares as of
September 30, 2012 and 2,008 shares as of December  (80,451)      (72,048)
31, 2011)
Altisource equity                                   230,965       162,755
                                                                
Non-controlling interests                           1,430         3,188
Total equity                                        232,395       165,943
Total liabilities and equity                       $ 306,251     $ 224,159

CONTACT: Michelle D. Esterman
         Chief Financial Officer
         T:  +352 2469 7950
         E:  michelle.esterman@altisource.lu
 
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