Altisource Announces Record Results

Altisource Announces Record Results

LUXEMBOURG, July 24, 2014 (GLOBE NEWSWIRE) -- Altisource Portfolio Solutions
S.A. ("Altisource") (Nasdaq:ASPS) today reported record second quarter service
revenue, net income attributable to shareholders and diluted earnings per
share.

Second Quarter 2014 Results Compared to Second Quarter 2013:

  *Service revenue of $263.2 million, a 63% increase
  *Net income attributable to Altisource of $54.1 million, a 75% increase
  *Diluted earnings per share of $2.24, a 79% increase
  *Cash from operations of $75.2 million, a 30% increase

"Next month marks our five year anniversary as a stand-alone public company.
During this five year period, we have had 43% cumulative annual service
revenue growth, 47% cumulative annual earnings growth and have focused on
providing best-in-class services, developing new services, driving down costs
through efficiency initiatives and investing in our future. This is exactly
what we set out to do five years ago," said Chairman William Erbey.

William Shepro, Chief Executive Officer, further commented, "We believe our
strategic initiatives, coupled with our strong revenue, earnings and operating
cash flow, position us for attractive growth in the next five years and
beyond.We plan to continue to invest in our next generation technology,
develop our newer services and pursue potential acquisitions, in line with our
marketplace strategy.We also plan to continue our share repurchase program
when the stock is trading at attractive prices."

Second quarter 2014 highlights include:

  *The average number of loans serviced by Ocwen on REALServicing ^ was 2.3
    million for the second quarter of 2014, an increase of 118% compared to
    the second quarter of 2013
  *The average number of delinquent non-Government-Sponsored Enterprise loans
    serviced by Ocwen on REALServicing was 352 thousand for the second quarter
    of 2014, an increase of 24% compared to the second quarter of 2013
  *We repurchased 0.4 million shares of our common stock under our stock
    repurchase program at an average price of $108.24 per share during the
    second quarter of 2014
  *Altisource Residential Corporation, the company we provide rental
    management services to, increased its non-performing loan and real estate
    owned portfolio from 12,405 at March 31, 2014 to 14,907 at June 30, 2014

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 our 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 premier marketplace and transaction solutions provider for the
real estate, mortgage and consumer debt industries offering both distribution
and content. We leverage proprietary business process, vendor and electronic
payment management software and behavioral science based analytics to improve
outcomes for marketplace participants. Additional information is available at
www.altisource.com.


ALTISOURCE PORTFOLIO SOLUTIONS S.A.

CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)

                                      Three months ended  Six months ended
                                       June 30,            June 30,
                                      2014      2013      2014      2013
Service revenue                                                   
Mortgage Services                      $ 188,477 $ 119,887 $ 334,971 $ 216,264
Financial Services                     25,436    22,959    49,693    39,091
Technology Services                    57,983    24,783    105,487   45,014
Eliminations                           (8,731)   (5,955)   (17,027)  (11,143)
                                      263,165   161,674   473,124   289,226
Reimbursable expenses                  32,276    23,299    61,071    43,565
Non-controlling interests              631       1,137     1,146     2,146
Total revenue                          296,072   186,110   535,341   334,937
Cost of revenue                        151,723   93,673    270,733   170,369
Reimbursable expenses                  32,276    23,299    61,071    43,565
Gross profit                           112,073   69,138    203,537   121,003
Selling, general and administrative    49,021    29,828    92,555    48,508
expenses
Income from operations                 63,052    39,310    110,982   72,495
Other income (expense), net:                                      
Interest expense                       (4,784)   (4,902)   (9,560)   (8,114)
Other income (expense), net            (43)      77        4         782
Total other income (expense), net      (4,827)   (4,825)   (9,556)   (7,332)
Income before income taxes and         58,225    34,485    101,426   65,163
non-controlling interests
Income tax provision                   (3,493)   (2,417)   (6,548)   (4,568)
Net income                             54,732    32,068    94,878    60,595
Net income attributable to             (631)     (1,137)   (1,146)   (2,146)
non-controlling interests
                                      $ 54,101  $ 30,931  $ 93,732  $ 58,449
Net income attributable to Altisource
                                                                 
Earnings per share:                                               
Basic                                  $ 2.45    $ 1.34    $ 4.20    $ 2.51
Diluted                                $ 2.24    $ 1.25    $ 3.84    $ 2.34
                                                                 
Weighted average shares outstanding:                              
Basic                                  22,089    23,161    22,301    23,267
Diluted                                24,166    24,823    24,415    24,940
                                                                 
                                                                 

ALTISOURCE PORTFOLIO SOLUTIONS S.A.

CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)

                                                     June 30,   December 31,
                                                     2014       2013
ASSETS
                                                               
Current assets:
Cash and cash equivalents                             $ 127,884  $ 130,429
Accounts receivable, net                              125,047    104,787
Prepaid expenses and other current assets             16,022     10,891
Deferred tax assets, net                              2,837      2,837
Total current assets                                 271,790    248,944
Premises and equipment, net                           100,962    87,252
Deferred tax assets, net                              160        622
Intangible assets, net                                256,889    276,162
Goodwill                                              61,941     99,414
Other assets                                          19,258     17,658
                                                               
Total assets                                          $ 711,000  $ 730,052

LIABILITIES AND EQUITY
Current liabilities:                                            
Accounts payable and accrued expenses                 $ 102,686  $ 84,706
Current portion of long-term debt                     3,975      3,975
Deferred revenue                                      21,785     36,742
Other current liabilities                             8,957      10,131
Total current liabilities                            137,403    135,554
                                                               
Long-term debt, less current portion                  389,385    391,281
Other non-current liabilities                         11,733     45,476
                                                               
Equity:
Common stock ($1.00 par value; 100,000 shares
authorized;
25,413 issued and 21,941 outstanding as of June 30,   25,413     25,413
2014;
25,413 issued and 22,629 outstanding as of December
31, 2013)
Additional paid-in capital                            90,403     89,273
Retained earnings                                     330,361    239,561
Treasury stock, at cost (3,472 shares as of June 30,
2014 and                                              (274,679)  (197,548)
2,784 shares as of December 31, 2013)
Altisource equity                                    171,498    156,699
                                                               
Non-controlling interests                             981        1,042
Total equity                                         172,479    157,741
                                                     $ 711,000  $ 730,052
Total liabilities and equity



ALTISOURCE PORTFOLIO SOLUTIONS S.A.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

                                                    Six months ended June 30,
                                                    2014         2013
                                                                
Cash flows from operating activities:
Net income                                           $ 94,878     $ 60,595
Adjustments to reconcile net income to net cash                  
provided by operating activities:
Depreciation and amortization                        13,375       9,306
Amortization of intangible assets                    19,573       10,237
Changes in the fair value of Equator Earn Out        (37,924)     --
Goodwill impairment                                  37,473       --
Share-based compensation expense                     1,130        1,519
Equity in losses of investment in affiliate          --           122
Bad debt expense                                     4,250        452
Amortization of debt discount                        90           152
Amortization of debt issuance costs                  483          451
Deferred income taxes                                462          --
Loss on disposal of fixed assets                     98           926
Changes in operating assets and liabilities, net of              
effects of acquisitions:
Accounts receivable                                  (24,510)     (10,813)
Prepaid expenses and other current assets            (5,131)      (3,009)
Other assets                                         (2,089)      (1,440)
Accounts payable and accrued expenses                21,319       917
Other current and non-current liabilities            (11,950)     (1,947)
Net cash provided by operating activities            111,527      67,468
                                                                
Cash flows from investing activities:
Additions to premises and equipment                  (30,522)     (13,397)
Acquisition of businesses, net of cash acquired      --           (215,700)
Proceeds from loan to Ocwen                          --           75,000
Proceeds from sale of equity affiliate               --           12,648
Other investing activities                           (294)        (50)
Net cash used in investing activities                (30,816)     (141,499)
                                                                
Cash flows from financing activities:                            
Proceeds from issuance of long-term debt             --           201,000
Repayment of long-term debt and payments on capital  (1,986)      (1,733)
lease obligations
Debt issuance costs                                  --           (2,400)
Proceeds from stock option exercises                 639          2,914
Purchase of treasury stock                           (80,702)     (51,573)
Contributions from non-controlling interests         --           15
Distributions to non-controlling interests           (1,207)      (1,889)
Net cash (used in) provided by financing activities  (83,256)     146,334
                                                                
                                                                
Net (decrease) increase in cash and cash equivalents (2,545)      72,303
Cash and cash equivalents at the beginning of the    130,429      105,502
period
Cash and cash equivalents at the end of the period   $ 127,884    $ 177,805
                                                                
Supplemental cash flow information:                              
Interest paid                                        $ 9,074      $ 7,562
Income taxes paid, net                               1,561        1,165
                                                                
Non-cash investing and financing activities:                     
(Decrease) increase in payables for purchases of     $ (3,339)    $ 891
premises and equipment
(Decrease) increase in acquisition of businesses     (3,711)      11,133
from subsequent working capitaltrue-ups

CONTACT: Michelle D. Esterman
         Chief Financial Officer
         T:  +352 2469 7950
         E:  Michelle.Esterman@altisource.lu
 
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