Altisource Announces Fourth Quarter and Full Year Results

Altisource Announces Fourth Quarter and Full Year Results

LUXEMBOURG, Feb. 13, 2013 (GLOBE NEWSWIRE) -- Altisource™ (Nasdaq:ASPS) today
reported net income attributable to Altisource of $110.6 million or $4.43 per
diluted share for the year ended December 31, 2012, an increase in net income
and diluted earnings per share from the year ended December 31, 2011 of 56%
and 60%, respectively. Service revenue was $466.9 million for the year ended
December 31, 2012, a 39% increase when compared to the year ended December 31,
2011.

"2012 was a very strong year for Altisource. We focused on providing high
quality services to our largest customer, Ocwen Financial Corporation
("Ocwen"), while intensifying our efforts on our strategic initiatives to
diversify and expand our revenue base," said William Shepro, Chief Executive
Officer of Altisource.

Net income attributable to Altisource was $30.3 million or $1.20 per diluted
share for the quarter ended December 31, 2012, an increase in net income and
diluted earnings per share from the quarter ended September 30, 2012 of 12%
and 11%, respectively. Fourth quarter 2012 operating profit margins increased
from 26% in the third quarter of 2012 to 27%.

William Erbey, Chairman of the Board of Directors, commented, "We are very
pleased with the fourth quarter margin expansion particularly given that we
incurred $2.7 million of costs in the fourth quarter related to the creation
and separation of the residential asset businesses and we were growing the
staff required to support the approximate doubling of Ocwen's private label
servicing portfolio."

Highlights for the year ended December 31, 2012 include:

  *Capitalized Altisource Residential Corporation ("Residential") and
    Altisource Asset Management Corporation ("AAMC") with $100.0 million and
    $5.0 million, respectively, and distributed ownership in these entities to
    Altisource shareholders;
  *Relaunched the consumer real estate portal under the new Hubzu^TM brand;
    over 25,000 real estate owned ("REO") assets were sold through Hubzu
    during the year;
  *Recognized origination related service revenue of $37.8 million,
    representing a 72% increase over the year ended December 31, 2011;
  *Prepared for 2013 growth from Ocwen's December 28, 2012 acquisition of
    Homeward Residential Holdings, Inc. ("Homeward Residential") and its
    anticipated acquisition of a portion of the Residential Capital, LLC
    ("Residential Capital") loan servicing portfolio and
  *Borrowed $200.0 million under a seven-year senior secured term loan
    facility.

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
Ocwen and expanded origination related services to the Lenders One members.

Gross profit as a percentage of service revenue was 43% for the year ended
December 31, 2012 compared to 44% for the year ended December 31, 2011.The
decline in gross profit margin is primarily attributable to the costs incurred
to develop the rental property management businesses and higher costs in the
Technology Services segment to support the accelerated development of the next
generation vendor technologies. The Company's next generation technologies are
expected to help the Company and its customers substantially reduce employee
and vendor costs while maintaining high quality.Excluding the costs to
develop the rental property management business and separate Residential and
AAMC, the Company's gross profit as a percentage of service revenue was 44%
for the year ended December 31, 2012.

Income from operations as a percentage of service revenue improved to 27% for
the year ended December 31, 2012 compared to 26% for the year ended December
31, 2011 as selling, general and administrative expenses are growing at a
slower pace than service revenue.The benefit was partially offset by the
costs incurred to develop the rental property management business.Excluding
the costs to develop the rental property management business and separate
Residential and AAMC, the Company's income from operations as a percentage of
service revenue was 28% for the year ended December 31, 2012.

Separation of Residential and AAMC

In December 2012, the Company completed the capitalization and separation of
Residential and AAMC into two separate publicly traded companies. In addition,
Altisource completed its platform to provide residential property management,
lease brokerage and renovation management services to Residential. Residential
and AAMC plan to enter the growing residential single-family rental market
with Residential acquiring residential related assets and AAMC providing asset
management and advisory services to Residential. With $100 million of initial
equity, the Company believes Residential is poised to execute on its strategy
of achieving above market returns by acquiring non-performing loans at a lower
cost than directly acquiring real estate owned and operating at a lower cost
than its competitors.

Outlook

As a result of the growth recently experienced by Ocwen and its announced
plans for future growth, the Company expects 2013 to be a strong year and 2014
to be a stronger year.The mortgage servicing industry continues to experience
a shift of servicing from traditional financial institutions to non-bank
servicers.Altisource believes Ocwen has significant competitive advantages
and will continue to grow as a result of the changing landscape, providing
growth to Altisource.The Homeward Residential and Residential Capital
servicing platforms are expected to be boarded on the Altisource platform
during 2013 with the full year benefit experienced in 2014.Further, the
Company expects to experience margin expansion in 2014 as it benefits from the
operating leverage of the platform.

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. EST today to discuss fourth
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.
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in thousands, except per share data)
                                                                
Financial Results
                                                                
Results of operations are as follows for the three and twelve months ended
December 31:
                                                                
                                    Three months ended  Year ended
                                    2012      2011      2012       2011
                                                                
Service revenue                                                  
Mortgage Services                   $91,982 $77,174 $351,908 $224,942
Financial Services                  14,879   16,164   63,979    69,231
Technology Services                 20,205   14,979   74,189    56,094
Eliminations                        (5,327)  (3,962)  (23,147)  (15,509)
                                    121,739  104,355  466,929   334,758
Reimbursable expenses                18,301   25,141   96,147    82,074
Non-controlling interests            1,061    2,460    5,284     6,855
Total revenue                        141,101  131,956  568,360   423,687
Cost of revenue                      69,115   59,323   270,054   193,775
Reimbursable expenses                18,301   25,141   96,147    82,074
Gross profit                         53,685   47,492   202,159   147,838
Selling, general and administrative  20,227   16,644   74,712    62,131
expenses
Income from operations               33,458   30,848   127,447   85,707
Other (expense) income, net:                                     
Interest expense                   (1,171)  (18)     (1,210)   (85)
Other (expense) income, net         (688)    (73)     (1,588)   288
Total other (expense) income, net   (1,859)  (91)     (2,798)   203
Income before income taxes and       31,599   30,757   124,649   85,910
non-controlling interests
Income tax provision                 (245)    (2,566)  (8,738)   (7,943)
Net income                           31,354   28,191   115,911   77,967
Net income attributable to           (1,061)  (2,460)  (5,284)   (6,855)
non-controlling interests
Net income attributable to           $30,293 $25,731 $110,627 $71,112
Altisource
                                                                
Earnings per share:                                              
Basic                               $1.30   $1.09   $4.74    $2.92
Diluted                              $1.20   $1.02   $4.43    $2.77
                                                                
Weighted average shares outstanding:                             
Basic                               23,389    23,692    23,358     24,373
Diluted                              25,162    25,142    24,962     25,685
                                                                
Transactions with related parties:                               
Revenue                              $80,736 $76,367 $338,227 $245,262
Selling, general and administrative  $629    $541    $2,430   $1,893
expenses
Other income                         $86     --      $86      --


ALTISOURCE PORTFOLIO SOLUTIONS S.A.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
                                                                  
                                                        December 31,
                                                        2012       2011
ASSETS
                                                                  
Current assets:                                                    
Cash and cash equivalents                                $105,502 $32,125
Accounts receivable, net                                 88,955     52,005
Prepaid expenses and other current assets                7,618      5,002
Deferred tax assets, net                                 1,775      1,133
Total current assets                                     203,850    90,265
                                                                  
Premises and equipment, net                              50,399     25,600
Deferred tax assets, net                                 4,073      4,373
Intangible assets, net                                   56,586     64,950
Goodwill                                                14,915     14,915
Investment in equity affiliate                           12,729     14,470
Loan to Ocwen                                            75,000     --
Other assets                                            11,674     9,586
                                                                  
Total assets                                             $429,226 $224,159
                                                                  
LIABILITIES AND EQUITY
                                                                  
Current liabilities:                                               
Accounts payable and accrued expenses                    $58,976  $44,867
Current portion of long-term debt                        2,000      --
Current portion of capital lease obligations            233        634
Other current liabilities                               10,423     9,939
Total current liabilities                                71,632     55,440
                                                                  
Long-term debt, less current portion                     196,027    --
Capital lease obligations, less current portion          --         202
Other non-current liabilities                            1,738      2,574
                                                                  
Commitments and contingencies                                      
                                                                  
Equity:                                                            
Common stock ($1.00 par value; 100,000 shares
authorized; 25,413 issued and 23,427 outstanding as of   25,413    25,413
December 31, 2012; 25,413 issued and 23,405 outstanding
as of December 31, 2011)
Additional paid-in-capital                               86,873    83,229
Retained earnings                                        124,127   126,161
Treasury stock, at cost (1,986 shares as of December 31, (77,954)  (72,048)
2012 and 2,008 shares as of December 31, 2011)
Altisource equity                                        158,459   162,755
                                                                  
Non-controlling interests                                1,370     3,188
Total equity                                             159,829   165,943
                                                                  
Total liabilities and equity                             $429,226 $224,159

CONTACT: Michelle D. Esterman
         Chief Financial Officer
         T:  +352 2469 7950
         E:  michelle.esterman@altisource.lu
 
Press spacebar to pause and continue. Press esc to stop.