CoreLogic Reports First Quarter 2013 Financial Results Double-digit Revenue, Operating and Net Income and Earnings per Share Growth Delivered - Revenues up 10.9% to $397.2 million fueled by growth in Mortgage Origination Services and Data and Analytics segments. - Operating income up 22.2% to $55.3 million reflecting higher revenues and the benefit of operating leverage and cost reduction programs. - Adjusted EBITDA up 15.9% to $116.2 million; adjusted EBITDA margin of 29.3%, up 130 basis points. - Net income and diluted EPS from continuing operations up 18.1% to $34.2 million and 29.6% to $0.35 per share, respectively. Adjusted EPS of $0.45, up 40.6%. - Full-year common share repurchase target raised from 3 to 5 million shares; 2.9 million shares purchased during the first quarter. - Acquisition of Case-Shiller further solidifies CoreLogic's position as the leading insight provider on residential property trends and valuation. PR Newswire IRVINE, Calif., April 24, 2013 IRVINE, Calif., April 24, 2013 /PRNewswire/ --CoreLogic^® (NYSE:CLGX), a leading residential property information, analytics and services provider, today reported financial results for the quarter ended March 31, 2013. (Logo: http://photos.prnewswire.com/prnh/20100609/CLLOGO) "CoreLogic is off to a very strong start in 2013. We delivered double-digit top-line growth by capitalizing on an expanding number of opportunity areas presented by a gradually improving housing market. We also boosted margins through our relentless focus on cost productivity," said Anand Nallathambi, President and Chief Executive Officer of CoreLogic. "Continued strengthening in U.S. housing market fundamentals, low interest rates and the recently announced HARP extension should support top-line growth at improving margins throughout the remainder of 2013. Over the course of the year, we expect to continue to aggressively reinvest in strategic growth areas and our technology transformation initiatives, and to return capital to our shareholders." "We continue to transform CoreLogic into a higher-growth, higher-margin Company. During the first quarter, our Data and Analytics and Mortgage Origination segments accounted for about 85% of our revenues and continued to grow through product and service innovation, operating leverage and market share gains," added Frank Martell, Chief Financial Officer of CoreLogic. "Project 30 and our Technology Transformation Initiatives are an integral part of our transformation and continue to progress. Based on CoreLogic's continued strong financial performance and expected long-term benefits from implementing our strategic business plan we are raising our 2013 share repurchase target to 5 million shares in line with our long-established commitment to return capital to our shareholders." First Quarter Financial Highlights Consolidated first quarter revenues increased 10.9% to $397.2 million. Mortgage Origination Services segment (MOS) revenues grew 24.5% to $176.5 million primarily as a result of higher market demand for credit reports, tax services and flood certifications as well as market share gains by the tax services business. Data & Analytics segment (D&A) revenues rose 9.5% to $161.1 million driven principally by higher demand for property-related information and analytics as well as advisory services related to assisting clients with regulatory compliance. Asset Management and Processing Services segment (AMPS) revenues of $66.8 million were down 10.9% reflecting a double-digit drop in market volumes of delinquent loans and foreclosure starts as well as the impact of the exit of unprofitable product lines over the past twelve months. Operating income totaled $55.3 million for the first quarter of 2013 compared with $45.2 million for the first quarter of 2012. The 22.2% increase in operating income was principally attributable to revenue gains in the MOS and D&A segments and improved MOS operating leverage which more than offset the impact of lower AMPS revenues and margins and investments in the Technology Transformation Initiative (TTI) which have no first quarter 2012 counterpart. The primary objective of the TTI is to convert the Company's existing technology infrastructure to a new platform which is expected to provide CoreLogic with new functionality, increased performance and a reduction in application management and development costs. First quarter 2013 expenses related to the TTI were $7.4 million, of which $5.2 million were non-cash charges. First quarter 2013 operating income margins were 13.9% (15.8% excluding TTI costs discussed above) compared with 12.6% for the first quarter of 2012. Improved operating margins reflect the benefit of a shift in business mix toward higher-margin MOS and D&A revenues and well as ongoing cost reduction programs. First quarter 2013 cost reductions related to the Company's Project 30 program were approximately $4.8 million. Project 30 cost savings relate primarily to workforce productivity and cuts in spending on real estate and outside services. Net income from continuing operations totaled $34.2 million, up 18.1% from the prior year. Diluted earnings per share (EPS) from continuing operations totaled $0.35 for the first quarter of 2013 compared with $0.27 in the first quarter of 2012. Adjusted diluted EPS totaled $0.45, which represented a $0.13 or 40.6% increase over the same 2012 period. Increases in EPS and adjusted EPS reflect higher revenue and profit margins as well as the impact of share repurchases during 2012 and 2013. Adjusted EBITDA totaled $116.2 million in the first quarter 2013, up $15.9 million or 15.9% from first quarter 2012. First quarter 2013 adjusted EBITDA included cash investments of $2.2 million related to the launch of the TTI which had no 2012 counterpart. The Company's first quarter 2013 adjusted EBITDA margin was 29.3% compared with 28.0% in the first quarter of 2012. First quarter 2013 adjusted EBITDA margin excluding TTI cash investment was 29.8%. MOS adjusted EBITDA increased 34.1% to $72.5 million compared with prior-year levels driven by higher origination volumes, market share gains and operating leverage. D&A adjusted EBITDA totaled $45.7 million, a 6.9% increase from first quarter 2012 as growth in advisory services revenues and increased demand for property information and analytical solutions more than offset continued reinvestment in new product and service capabilities. Adjusted EBITDA attributable to AMPS was $7.7 million; 31.4% below prior year levels. Liquidity and Capital Resources At March 31, 2013, the Company had cash and cash equivalents of $125.6 million compared with $148.9 million at December 31, 2012. During the first quarter, the Company repurchased 2.9 million common shares for a total of $75.7 million. First quarter 2013 free cash flow (FCF) totaled $65.4 million, which represented 56.3% of adjusted EBITDA. FCF is defined as net cash provided by continuing operating activities less capital expenditures for purchases of property and equipment, capitalized data and other intangible assets. Total debt as of March 31, 2013 was $788.2 million, down $4.3 million from December 31, 2012. As of March 31, 2013, the Company had available capacity on its revolving credit facility of $500 million. Case-Shiller Acquisition On March 20, 2013, the Company acquired Case-Shiller from Fiserv, Inc. for approximately $6.0 million. Case-Shiller, one of the most widely recognized experts in home price trends and property valuation services, is a highly complementary addition to CoreLogic's existing residential property insights platform. The acquisition underscores CoreLogic's ongoing commitment to provide comprehensive data, analytics and services to financial services, government and real estate professionals. The acquisition is expected to be accretive to 2013 earnings. Teleconference/Webcast CoreLogic management will host a live webcast and conference call on Thursday, April 25, 2013, at 8:00 a.m. Pacific time (11:00 a.m. Eastern Time) to discuss these results. All interested parties are invited to listen to the event via webcast on the CoreLogic website at http://investor.corelogic.com. Alternatively, participants may use the following dial-in numbers: 1-866-318-8616 for U.S./Canada callers or 617-399-5135 for international callers. The Conference ID for the call is 70198418. Additional detail on the Company's first quarter results is included in the quarterly financial supplement, available on the Investor Relations page at http://investor.corelogic.com. A replay of the webcast will be available on the CoreLogic investor website for 30 days and also through the conference call number 1-888-286-8010 for U.S./Canada participants or 617-801-6888 for international participants using Conference ID 59123845. About CoreLogic CoreLogic (NYSE: CLGX) is a leading property information, analytics and services provider in the United States and Australia. The Company's combined data from public, contributory, and proprietary sources includes over 3.3 billion records spanning more than 40 years, providing detailed coverage of property, mortgages and other encumbrances, consumer credit, tenancy, location, hazard risk and related performance information. The markets CoreLogic serves include real estate and mortgage finance, insurance, capital markets, transportation and government. CoreLogic delivers value to clients through unique data, analytics, workflow technology, advisory and managed services. Clients rely on CoreLogic to help identify and manage growth opportunities, improve performance and mitigate risk. Headquartered in Irvine, Calif., CoreLogic operates in seven countries. For more information, please visit www.corelogic.com. Safe Harbor / Forward Looking Statements Certain statements made in this press release are forward-looking statements within the meaning of the federal securities laws, including but not limited to those statements related to the Company's overall financial performance, including future revenue and profit growth, future margin improvement, future adjusted EBITDA and adjusted EPS performance, and future free cash flow generation and margin expansion, our ability to meet our 2013 business, strategic growth and financial objectives and generate longer-term positive returns including return on capital for our stockholders; the Company's full-year expected results and 2013 financial guidance; estimated future cost savings and the impact thereof; mortgage and housing market trends, including mortgage origination and mortgage delinquency volumes; net operating expense reductions, expected non-recurring cash and non-cash charges; and targeted cost reductions including Project 30 and the Technology Transformation Initiative. Risks and uncertainties exist that may cause the results to differ materially from those set forth in these forward-looking statements. Factors that could cause the anticipated results to differ from those described in the forward-looking statements are set forth in Part I, Item 1A of our most recent Annual Report on Form 10-K, as amended, as updated by our Quarterly Reports on Form 10-Q, including but not limited to: limitations on access to or increase in prices for data from various external sources; government legislation, regulations and the level of regulatory scrutiny affecting our customers or us, including the Consumer Financial Protection Bureau and with respect to the use of public records and consumer data; compromises in the security of our data transmissions, including the transmission of confidential information or systems interruptions; difficult conditions in the mortgage and consumer lending industries and the economy generally, together with our customer concentration and the impact of these factors thereon; our growth strategy and cost reduction plan and our ability to significantly decrease future allocated costs and other amounts in connection therewith; risks related to the outsourcing of services and our international operations; the inability to control the operations and dividend policies of our partially-owned affiliates; impairments in our goodwill or other intangible assets; and the restrictive covenants in the agreements governing certain of our outstanding indebtedness. The forward-looking statements speak only as of the date they are made. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made. Use of Non-GAAP (Generally Accepted Accounting Principles) Financial Measures This press release contains certain non-GAAP financial measures which are provided only as supplemental information. Investors should consider these non-GAAP financial measures only in conjunction with the comparable GAAP financial measures. These non-GAAP measures are not in accordance with or a substitute for, U.S. GAAP. The Company believes that its presentation of non-GAAP measures, such as adjusted EBITDA and adjusted EPS provides useful supplemental information to investors and management regarding CoreLogic's financial condition and results. Adjusted EBITDA is defined as earnings from continuing operations before interest, taxes, depreciation, amortization, non-cash stock compensation, non-operating gains/losses and other one-time adjustments plus pretax equity in earnings of affiliates. Adjusted net income is defined as income from continuing operations before equity earnings of affiliates, adjusted for non-cash stock compensation, non-operating gains/losses, and other adjustments plus pretax equity in earnings of affiliates, tax affected at an assumed effective tax rate of 40%. Adjusted EPS is derived by dividing adjusted net income by diluted weighted shares. Other firms may calculate non-GAAP measures differently than CoreLogic, which limits comparability between companies. (Additional Financial Data Follow) CORELOGIC, INC. CONDENSED CONSOLIDATED INCOME STATEMENTS UNAUDITED For the Three Months Ended March31, (in thousands, except per share amounts) 2013 2012 Operating revenues $ 397,168 $ 358,101 Cost of services (excluding depreciation and 216,027 197,665 amortization shown below) Selling, general and administrative expenses 91,053 85,718 Depreciation and amortization 34,814 29,491 Total operating expenses 341,894 312,874 Operating income 55,274 45,227 Interest expense: Interest income 771 700 Interest expense 12,375 14,842 Total interest expense,net (11,604) (14,142) Gain on investments and other, net 2,799 1,641 Income from continuing operations before equity in 46,469 32,726 earnings of affiliates and income taxes Provision for income taxes 21,058 13,238 Income from continuing operations before equity in 25,411 19,488 earnings of affiliates Equity in earnings of affiliates, net of tax 8,787 9,470 Net income from continuing operations 34,198 28,958 Loss from discontinued operations, net of tax (656) (8,967) Loss from sale of discontinued operations, net of — (3,454) tax Net income 33,542 16,537 Less:Net loss attributable to noncontrolling (26) (94) interests Net income attributable to CoreLogic $ 33,568 $ 16,631 Amounts attributable to CoreLogic stockholders: Net income from continuing operations $ 34,224 $ 29,052 Loss from discontinued operations, net of tax (656) (8,967) Loss from sale of discontinued operations, net of — (3,454) tax Net income attributable to CoreLogic $ 33,568 $ 16,631 Basic income/(loss) per share: Net income from continuing operations $ 0.35 $ 0.27 Loss from discontinued operations, net of tax (0.01) (0.08) Loss from sale of discontinued operations, net of — (0.03) tax Net income attributable to CoreLogic $ 0.34 $ 0.16 Diluted income/(loss) per share: Net income from continuing operations $ 0.35 $ 0.27 Loss from discontinued operations, net of tax (0.01) (0.08) Loss from sale of discontinued operations, net of — (0.03) tax Net income attributable to CoreLogic $ 0.34 $ 0.16 Weighted-average common shares outstanding: Basic 97,113 106,594 Diluted 99,056 107,327 Please refer to the full Form 10-Q filing for the complete financial statements and related notes that are an integral part of the financial statements. CORELOGIC, INC. CONDENSED CONSOLIDATED BALANCE SHEETS UNAUDITED (in thousands, except par value) March31, December31, Assets 2013 2012 Current assets: Cash and cash equivalents $ 125,559 $ 148,858 Marketable securities 21,871 22,168 Accounts receivable (less allowance for doubtful accounts of $23,943 and $21,643 as of March 31, 260,274 255,148 2013 and December 31, 2012, respectively) Prepaid expenses and other current assets 45,228 50,036 Income tax receivable — 14,084 Deferred income tax assets, current 98,836 98,836 Assets of discontinued operations 791 794 Total current assets 552,559 589,924 Property and equipment, net 186,399 186,617 Goodwill, net 1,504,246 1,504,232 Other intangible assets, net 170,106 171,584 Capitalized data and database costs, net 324,216 322,289 Investment in affiliates, net 97,233 94,227 Restricted cash 22,158 22,117 Other assets 151,274 138,837 Total assets $ 3,008,191 $ 3,029,827 Liabilities and Equity Current liabilities: Accounts payable and accrued expenses $ 181,921 $ 157,190 Accrued salaries and benefits 72,020 114,165 Income taxes payable 20,704 — Deferred revenue, current 224,725 242,282 Current portion of long-term debt 104 102 Liabilities of discontinued operations 3,463 3,352 Total current liabilities 502,937 517,091 Long-term debt, net of current 788,048 792,324 Deferred revenue, net of current 342,731 309,418 Deferred income tax liabilities, long term 74,947 71,361 Other liabilities 166,546 168,687 Total liabilities 1,875,209 1,858,881 Equity: CoreLogic stockholders' equity: Preferred stock, $0.00001 par value; 500 shares — — authorized, no shares issued or outstanding Common stock, $0.00001 par value; 180,000 shares authorized; 95,360 and 97,698 shares issued and 1 1 outstanding as of March 31, 2013 and December 31, 2012, respectively Additional paid-in capital 797,371 866,720 Retained earnings 351,662 318,094 Accumulated other comprehensive loss (16,052) (15,514) Total CoreLogic stockholders' equity 1,132,982 1,169,301 Noncontrolling interests — 1,645 Total equity 1,132,982 1,170,946 Total liabilities and equity $ 3,008,191 $ 3,029,827 Please refer to the full Form 10-Q filing for the complete financial statements and related notes that are an integral part of the financial statements. CORELOGIC, INC. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS UNAUDITED For the Three Months Ended March31, (in thousands) 2013 2012 Cash flows from operating activities: Net income $ 33,542 $ 16,537 Less: Loss from discontinued operations, net of tax (656) (8,967) Less: Loss from sale of discontinued operations, — (3,454) net of tax Net income from continuing operations 34,198 28,958 Adjustments to reconcile net income from continuing operations to net cash provided by operating activities: Depreciation and amortization 34,814 29,491 Provision for bad debt and claim losses 5,275 6,498 Share-based compensation 8,142 4,354 Excess tax benefit related to stock options (2,321) (56) Equity in earnings of affiliates, net of taxes (8,787) (9,470) Loss/(gain) on sale of property and equipment 8 (43) Loss on early extinguishment of debt — 326 Deferred income tax 3,342 3,113 Gain on investments and other, net (2,799) (1,641) Change in operating assets and liabilities, net of acquisitions: Accounts receivable (2,521) (8,393) Prepaid expenses and other current assets 5,043 1,945 Accounts payable and accrued expenses (22,554) (10,904) Deferred revenue 15,684 (7,795) Income taxes 29,346 19,487 Dividends received from investments in affiliates 11,236 19,020 Other assets and other liabilities (15,035) (5,164) Net cash provided by operating activities - 93,071 69,726 continuing operations Net cash used in operating activities - (543) (4,694) discontinued operations Total cash provided by operating activities $ 92,528 $ 65,032 Cash flows from investing activities: Purchases of capitalized data and other intangible (9,489) (6,959) assets Purchases of property and equipment (18,150) (13,519) Cash paid for acquisitions, net of cash acquired (7,027) — Purchases of investments (2,351) — Proceeds from sale of subsidiary and other 800 — decreases in noncontrolling interest, net Proceeds from sale of property and equipment 45 Change in restricted cash (40) (186) Net cash used in investing activities - continuing (36,257) (20,619) operations Net cash provided by investing activities - — 239 discontinued operations Total cash used in investing activities $ (36,257) $ (20,380) Cash flows from financing activities: Repayment of long-term debt (4,400) (52,247) Proceeds from issuance of stock related to stock 4,621 187 options and employee benefit plans Minimum tax withholding paid on behalf of employees (6,436) — for restricted stock units Shares repurchased and retired (75,676) — Distribution to noncontrolling interests — (10) Excess tax benefit related to stock options 2,321 56 Net cash used in financing activities - continuing (79,570) (52,014) operations Net cash provided by financing activities - — 1 discontinued operations Total cash used in financing activities $ (79,570) $ (52,013) Net decrease in cash and cash equivalents (23,299) (7,361) Cash and cash equivalents at beginning of period 148,858 259,266 Less: Change in cash and cash equivalents- (543) (4,454) discontinued operations Plus: Cash swept to discontinued operations (543) — Cash and cash equivalents at end of period $ 125,559 $ 256,359 Please refer to the full Form 10-K filing for the complete financial statements and related notes that are an integral part of the financial statements. CORELOGIC, INC. RECONCILIATION OF ADJUSTED EBITDA For the three months ended March 31, 2013 Data & Mortgage (in thousands) Analytics Origination AMPS Corporate Elim CoreLogic Services Income from continuing operations before $ 24,462 $ 50,555 $ 7,010 $ (35,558) $ — $ 46,469 equity in earnings of affiliates and income taxes Pretax equity in 637 13,447 — 145 — 14,229 earnings Depreciation & 19,552 6,669 673 7,920 — 34,814 amortization Total interest (157) 130 (47) 11,678 — 11,604 expense Stock-based 1,183 1,716 39 5,203 — 8,141 compensation Efficiency — — — 915 — 915 investments Adjusted EBITDA $ 45,677 $ 72,517 $ 7,675 $ (9,697) $ — $ 116,172 For the three months ended March 31, 2012 Data & Mortgage (in thousands) Analytics Origination AMPS Corporate Elim CoreLogic Services Income from continuing operations before equity in $ 23,239 $ 30,706 $ 10,491 $ (31,725) $ 15 $ 32,726 earnings of affiliates and income taxes Pretax equity in 644 14,856 — — — 15,500 earnings Depreciation & 17,746 7,080 795 3,885 (15) 29,491 amortization Total interest 298 298 (74) 13,620 — 14,142 expense Stock-based 797 1,135 (18) 2,440 — 4,354 compensation Efficiency — — 4,035 — 4,035 investments Adjusted EBITDA $ 42,724 $ 54,075 $ 11,194 $ (7,745) $ — $ 100,248 CORELOGIC, INC. RECONCILIATION OF ADJUSTED DILUTED EPS For the three months ended March 31, 2013 (in thousands, Data & Mortgage except per share Analytics Origination AMPS Corporate Elim CoreLogic amounts) Services Income from continuing operations before $ 24,462 $ 50,555 $ 7,010 $ (35,558) $ — $ 46,469 equity in earnings of affiliates and income taxes Pretax equity in 637 13,447 — 145 — 14,229 earnings Stock-based 1,183 1,716 39 5,203 — 8,141 compensation Efficiency — — — 915 — 915 investments Accelerated — — — 4,375 — 4,375 depreciation on TTI Adjusted pretax income from $ 26,282 $ 65,718 $ 7,049 $ (24,920) $ — $ 74,129 continuing operations Tax provision (40% 29,652 rate) Less:Net loss attributable to (26) noncontrolling interests Adjusted net income attributable to $ 44,503 CoreLogic Weighted average diluted common 99,056 shares outstanding Adjusted diluted EPS $ 0.45 For the three months ended March 31, 2012 (in thousands, Data & Mortgage except per share Analytics Origination AMPS Corporate Elim CoreLogic amounts) Services Income from continuing operations before $ 23,239 $ 30,706 $ 10,491 $ (31,725) $ 15 $ 32,726 equity in earnings of affiliates and income taxes Pretax equity in 644 14,856 — — — 15,500 earnings Stock-based 797 1,135 (18) 2,440 — 4,354 compensation Efficiency — — 4,035 — 4,035 investments Adjusted pretax income from $ 24,680 $ 46,697 $ 10,473 $ (25,250) $ 15 $ 56,615 continuing operations Tax provision (40% 22,646 rate) Less:Net income attributable to (94) noncontrolling interests Adjusted net income $ 34,063 attributable to CoreLogic Weighted average diluted common 107,327 shares outstanding Adjusted diluted $ 0.32 EPS SOURCE CoreLogic Website: http://www.corelogic.com Contact: Media Contact, Alyson Austin, office phone, 949-214-1414, e-mail, email@example.com; Investor Contact, Dan Smith, office phone, 703-610-5410, e-mail, firstname.lastname@example.org
CoreLogic Reports First Quarter 2013 Financial Results
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