Altisource Announces First Quarter Results

Altisource Announces First Quarter Results

LUXEMBOURG, April 25, 2013 (GLOBE NEWSWIRE) -- Altisource Portfolio Solutions
S.A. ("Altisource") (Nasdaq:ASPS) today reported net income attributable to
Altisource of $27.5 million or $1.10 per diluted share for the three months
ended March 31, 2013, an increase in net income and diluted earnings per share
from the three months ended March 31, 2012 of 9% and 8%, respectively. Service
revenue was $127.6 million for the three months ended March 31, 2013, an 18%
increase when compared to the three months ended March 31, 2012.

The first quarter 2013 increase in net income over the same period in the
prior year is primarily from stronger service revenue growth in the higher
margin Mortgage Services segment even with limited benefit from the Ocwen
Financial Corporation ("Ocwen") acquisition of the Homeward Residential, Inc.
("Homeward") servicing platform and no benefit from Ocwen's acquisition of the
Residential Capital, LLC ("ResCap") servicing platform and the Ally Financial
Inc. ("Ally") servicing rights. The improvement was partially offset by
interest expense on our $200.0 million Senior Secured Term Loan that was
funded in the fourth quarter of 2012, increased technology expenses to support
our growth and the carrying of Mortgage Services employee and facility
expenses in anticipation of the near doubling of the number of non-GSE loans
serviced by Ocwen on the REALServicing^® platform by the fourth quarter of
2013 (compared to the fourth quarter of 2012).

"With Ocwen's recent and anticipated servicing portfolio growth coupled with
our development of new default related services and our other growth
initiatives, we believe we are well positioned for long-term growth in revenue
and earnings even with the cyclical changes anticipated in the default and
origination markets," said Chairman William Erbey.

William Shepro, Chief Executive Officer, further commented, "We are very
pleased with our first quarter results particularly given that our Mortgage
Services segment is almost fully staffed to support the near doubling of the
non-GSE loans on REALServicing by the fourth quarter of 2013. We accomplished
our results with only modest benefit from the Homeward servicing portfolio and
no benefit from the ResCap and Ally servicing portfolios. This bolsters our
confidence that our default businesses' operating margins will increase by
approximately seven percentage points by year-end 2013, even after amortizing
the intangible assets associated with the Homeward and ResCap transactions."

First quarter business performance highlights include:

  *On March 29, completed the acquisition of Homeward fee-based businesses
    from Ocwen for an aggregate purchase price of $87.0 million;
  *Based on portfolio acquisitions announced by Ocwen, we anticipate boarding
    up to 1.5 million additional loans to REALServicing over the next 12
    months, less service transfers and run-off;
  *Ocwen boarded all of the Homeward non-GSE loans on the REALServicing
    platform by April 1, 2013;
  *From January 1 through April 5, 2013, Altisource Residential Corporation
    ("Residential") acquired primarily non-performing loan portfolios with a
    total unpaid principal balance of $349.6 million, representing 1,410
    loans; and
  *Acquired 0.3 million shares of Altisource common stock during the quarter
    at an average price of $82.58 per share.

Gross profit as a percentage of service revenue was 41% and 44% for the three
months ended March 31, 2013 and 2012, respectively. The margin decline is
primarily from higher compensation costs in our Technology Services segment as
we continue to invest in the development of our next generation technology to
support our growth initiatives. The decline was partially offset by the
improvement in Mortgage Services gross profit margins from 46% to 47%
primarily from workforce and vendor efficiencies, even after incurring the
carrying costs to support Mortgage Services' anticipated growth.

On a consolidated basis, income from operations as a percentage of service
revenue declined from 28% for the three months ended March 31, 2012 to 26% for
the three months ended March 31, 2013 as a result of lower gross margins
mentioned above, partially offset by the slower growth of selling, general and
administrative expenses compared to 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 first
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 months ended March 31:
                                                                 
                                                        2013      2012
                                                                 
Service revenue                                                   
Mortgage Services                                        $96,377 $79,320
Financial Services                                       16,132    17,760
Technology Services                                      20,231    17,022
Eliminations                                             (5,188)   (5,633)
                                                        127,552   108,469
Reimbursable expenses                                    20,266    28,705
Non-controlling interests                                1,009     1,892
Total revenue                                            148,827   139,066
Cost of revenue                                          76,696    63,055
Reimbursable expenses                                    20,266    28,705
Gross profit                                             51,865    47,306
Selling, general and administrative expenses             18,680    17,015
Income from operations                                   33,185    30,291
Other income (expense), net:                                      
Interest expense                                         (3,212)   (15)
Other income (expense), net                              705       (336)
Total other income (expense), net                        (2,507)   (351)
Income before income taxes and non-controlling interests 30,678    29,940
Income tax provision                                     (2,151)   (2,819)
Net income                                               28,527    27,121
Net income attributable to non-controlling interests     (1,009)   (1,892)
Net income attributable to Altisource                    $27,518 $25,229
                                                                 
Earnings per share:                                               
Basic                                                    $1.18   $1.08
Diluted                                                  $1.10   $1.02
                                                                 
Weighted average shares outstanding:                              
Basic                                                    23,374    23,381
Diluted                                                  25,058    24,844
                                                                 
Transactions with related parties:                                
Revenue                                                  $90,098 $82,780
Selling, general and administrative expenses             673       574
Other income                                             773       —

                                                                
ALTISOURCE PORTFOLIO SOLUTIONS S.A.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
                                                                
                                                      March 31,  December 31,
                                                      2013       2012
ASSETS                                                           
                                                                
Current assets:                                                  
Cash and cash equivalents                              $77,303  $105,502
Accounts receivable, net                               109,238    88,955
Prepaid expenses and other current assets              21,760     7,618
Deferred tax assets, net                               1,775      1,775
Total current assets                                   210,076    203,850
                                                                
Premises and equipment, net                            53,344     50,399
Deferred tax assets, net                               4,073      4,073
Intangible assets, net                                 135,774    56,586
Goodwill                                               14,915     14,915
Investment in Correspondent One                        —          12,729
Loan to Ocwen                                          —          75,000
Other assets                                           13,250     11,674
                                                                
Total assets                                           $431,432 $429,226
                                                                
LIABILITIES AND EQUITY                                           
                                                                
Current liabilities:                                             
Accounts payable and accrued expenses                  $57,704  $58,976
Current portion of long-term debt                      2,000      2,000
Current portion of capital lease obligations           57         233
Other current liabilities                              7,185      10,423
Total current liabilities                              66,946     71,632
                                                                
Long-term debt, less current portion                   195,622    196,027
Other non-current liabilities                          1,703      1,738
                                                                
Commitments and contingencies                                    
                                                                
Equity:                                                          
Common stock ($1.00 par value; 100,000 shares
authorized; 25,413 issued and 23,177 outstanding as of 25,413     25,413
March 31, 2013; 25,413 issued and 23,427 outstanding
as of December 31, 2012)
Additional paid-in-capital                             88,297     86,873
Retained earnings                                      151,441    124,127
Treasury stock, at cost (2,236 shares as of March 31,  (99,291)   (77,954)
2013 and 1,986 shares as of December 31, 2012)
Altisource equity                                      165,860    158,459
                                                                
Non-controlling interests                              1,301      1,370
Total equity                                           167,161    159,829
                                                                
Total liabilities and equity                           $431,432 $429,226

CONTACT: Mark F. A. Kearns
         Chief Accounting Officer
         T:  +352 2469 7954
         E:  mark.kearns@altisource.lu
 
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