Altisource(R) Announces Second Quarter Results

Altisource(R) Announces Second Quarter Results

LUXEMBOURG, July 25, 2013 (GLOBE NEWSWIRE) -- Altisource Portfolio Solutions
S.A. ("Altisource") (Nasdaq:ASPS) today reported record service revenue of
$161.7 million for the quarter ended June 30, 2013, an increase of 37% when
compared to the quarter ended June 30, 2012. Net income attributable to
Altisource was a record $30.9 million or $1.25 per diluted share for the
quarter ended June 30, 2013, an increase of 10% and 11%, respectively,
compared to the quarter ended June 30, 2012.

The growth in revenue is primarily from the initial referrals on the Homeward
non-Government Sponsored Enterprise ("non-GSE") loans that Ocwen Financial
Corporation ("Ocwen") boarded onto the REALServicing^® platform in the first
quarter and the expansion of the Financial Services segment which is gaining
traction. Altisource generally begins receiving referrals once portfolios are
boarded onto the REALServicing platform. During the second quarter of 2013,
the Mortgage and Technology Services segments recognized virtually no benefit
from the Residential Capital, LLC ("ResCap") non-GSE portfolio that is
expected to board on REALServicing in the third quarter of 2013. Including
Ocwen's recently announced agreement to purchase $78 billion of mortgage
servicing rights from OneWest Bank, FSB ("OneWest"), the number of non-GSE
loans on which Altisource earns revenue is expected to be 65% higher in the
fourth quarter of 2013 compared to the second quarter of 2013.

Net income increased in the second quarter of 2013 over the same period in the
prior year from service revenue growth, partially offset by interest expense
on the $400 million Senior Secured Term Loan ($200 million was funded in the
fourth quarter of 2012 and $200 million was funded in the second quarter of
2013), intangible asset amortization expense in connection with the Homeward
and ResCap fee-based business transactions and increased technology
expenditures to support our growth.In addition, the Mortgage Services segment
was almost fully staffed to meet the anticipated 65% higher non-GSE loan count
on REALServicing in the fourth quarter of 2013 (compared to the second quarter
of 2013).This 65% increase in loans with very little increase in compensation
and benefits will be the major contributor to our goal of improving default
related margins by seven percent by the end of this year compared to 2012.

"We are encouraged by Ocwen's recently announced agreement to purchase
mortgage servicing rights from OneWest which, along with the ResCap portfolio,
will drive meaningful default and technology related revenue growth to
Altisource. Given the traction we see in our strategic initiatives along with
Ocwen's ability to acquire additional mortgage servicing rights, Altisource's
long term growth prospects are very bright," said Chairman William Erbey.

William Shepro, Chief Executive Officer, further commented "We expect earnings
for the second half of 2013 and full year 2014 to be very strong as we begin
to benefit from the ResCap and OneWest non-GSE servicing portfolio referrals
and the higher margin Homeward referrals.We also remain intensely focused on
margin improvement and believe we are making good progress toward
accomplishing the seven percent margin improvement in our default related
businesses by the end of the year."

Second quarter 2013 business performance highlights include:

  *On April 12, 2013, Altisource completed the ResCap fee-based businesses
    transaction with Ocwen for an aggregate purchase price of $128.8 million;
  *The average number of loans serviced by Ocwen on REALServicing totaled 1.0
    million loans in the second quarter of 2013 compared to 0.8 million loans
    in the second quarter of 2012;
  *Based on portfolio acquisitions announced by Ocwen, Altisource anticipates
    that Ocwen will board approximately 619 thousand additional non-GSE loans
    on REALServicing by the end of 2013, less service transfers and run-off;
  *Altisource Residential Corporation ("Residential") had a portfolio of
    1,372 loans and real estate owned ("REO") at the end of the second quarter
    of 2013.Additionally, Residential announced acquisitions totaling $470.0
    million in unpaid principal balance that are expected to close in the
    third quarter of 2013;
  *In May, Altisource borrowed an additional $200 million under the amended
    Senior Secured Term Loan agreement to fund the remaining transaction
    consideration related to the ResCap fee-based businesses, common stock
    repurchases and general corporate purposes, including potential
    acquisitions; and
  *Altisource acquired 313 thousand shares of its common stock during the
    quarter at an average price of $94.49 per share.

Gross profit as a percentage of service revenue was 43% and 44% for the
quarters ended June 30, 2013 and 2012, respectively.Gross margins were
impacted by Mortgage Services' higher staffing levels to support the 619
thousand loans we anticipate boarding over the next 6 months, higher costs in
the Technology Services segment as Altisource continues to invest in the
development of the next generation technology to support its growth
initiatives and revenue mix.During the quarter ended June 30, 2013,
Altisource had disproportionately high growth in the lower margin property
inspection and preservation business principally from the Homeward
acquisition.The decline in margins was partially offset by the expansion of
the higher margin mortgage charge-off business.

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


Altisource will host a webcast at 11:00 a.m. EDT today to discuss second
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 is a global provider of outsourcing and software services focused
on high-value, technology-enabled solutions principally related to real estate
and mortgage portfolio management, asset recovery and customer relationship
management. Additional information is available at

(Dollars in thousands, except per share data)
Financial Results (unaudited)                                      
                                        Three months ended Six months ended
                                        June 30,            June 30,
                                        2013       2012     2013     2012
Service revenue                                                    
Mortgage Services                       $119,887   $89,999  $216,264 $169,319
Financial Services                      22,959     16,057   39,091   33,817
Technology Services                     24,783     17,886   45,014   34,908
Eliminations                            (5,955)    (5,823)  (11,143) (11,456)
                                        161,674    118,119  289,226  226,588
Reimbursable expenses                    23,299     24,815   43,565   53,520
Non-controlling interests                1,137      1,271    2,146    3,163
Total revenue                            186,110    144,205  334,937  283,271
Cost of revenue                          93,673     67,923   170,369  130,978
Reimbursable expenses                    23,299     24,815   43,565   53,520
Gross profit                             69,138     51,467   121,003  98,773
Selling, general and administrative      29,828     19,018   48,508   36,033
Income from operations                   39,310     32,449   72,495   62,740
Other income (expense), net:                                       
Interest expense                        (4,902)    (14)     (8,114)  (29)
Other income (expense), net             77         (307)    782      (643)
Total other income (expense), net       (4,825)    (321)    (7,332)  (672)
Income before income taxes and           34,485     32,128   65,163   62,068
non-controlling interests
Income tax provision                     (2,417)    (2,776)  (4,568)  (5,595)
Net income                               32,068     29,352   60,595   56,473
Net income attributable to               (1,137)    (1,271)  (2,146)  (3,163)
non-controlling interests
Net income attributable to Altisource    $30,931    $28,081  $58,449  $53,310
Earnings per share                                                 
Basic                                   $1.34      $1.20    $2.51    $2.28
Diluted                                  $1.25      $1.13    $2.34    $2.15
Weighted average shares outstanding:                               
Basic                                   23,161     23,316   23,267   23,353
Diluted                                  24,823     24,846   24,940   24,850
Transactions with related parties:                                 
Revenue                                  $121,234   $88,153  $211,332 $170,933
Selling, general and administrative      740        606      1,413    1,180
Other income                             --         --       773      --

(Dollars in thousands, except per share data)
                                                       June 30,  December 31,
                                                       2013      2012
Current assets:                                                  
Cash and cash equivalents                               $177,805  $105,502
Accounts receivable, net                                99,316    88,955
Prepaid expenses and other current assets               20,185    7,618
Deferred tax assets, net                                1,775     1,775
Total current assets                                   299,081   203,850
Premises and equipment, net                             57,204    50,399
Deferred tax assets, net                                4,073     4,073
Intangible assets, net                                  252,747   56,586
Goodwill                                               14,915    14,915
Investment in Correspondent One                         --        12,729
Loan to Ocwen                                           --        75,000
Other assets                                           15,113    11,674
Total assets                                           $643,133  $429,226
Current liabilities:                                             
Accounts payable and accrued expenses                   $63,789   $58,976
Current portion of long-term debt                       4,000     2,000
Current portion of capital lease obligations            --        233
Other current liabilities                              8,915     10,423
Total current liabilities                              76,704    71,632
Long-term debt, less current portion                    393,679   196,027
Other non-current liabilities                           1,340     1,738
Commitments and contingencies                                    
Common stock ($1.00 par value; 100,000 shares
authorized; 25,413 issued and 22,995 outstanding as of  25,413    25,413
June 30, 2013; 25,413 issued and 23,427 outstanding as
of December 31, 2012)
Additional paid-in-capital                              88,392    86,873
Retained earnings                                       178,937   124,127
Treasury stock, at cost (2,418 shares as of June 30,    (122,974) (77,954)
2013 and 1,986 shares as of December 31, 2012)
Altisource equity                                      169,768   158,459
Non-controlling interests                               1,642     1,370
Total equity                                           171,410   159,829
Total liabilities and equity                            $643,133  $429,226

CONTACT: Michelle D. Esterman
         Chief Financial Officer
         T:  +352 2469 7950
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