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: email@example.com
Altisource Announces First Quarter Results
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