LUXEMBOURG, March 2, 2015 (GLOBE NEWSWIRE) -- Altisource Portfolio Solutions S.A. ("Altisource") (Nasdaq:ASPS) today reported financial results for the fourth quarter and full year 2014.
Full Year 2014 Results Compared to 2013:
- Service revenue of $938.7 million, a 42% increase
- Net income attributable to Altisource of $134.5 million, a 3% increase
- Diluted earnings per share of $5.69, a 10% increase
- Adjusted diluted earnings per share of $7.17, a 15% increase
- Cash from operations of $197.5 million, a 6% increase
Fourth Quarter 2014 Results Compared to Fourth Quarter 2013:
- Service revenue of $217.8 million, a 13% increase
- Net loss attributable to Altisource of $1.5 million compared to net income attributable to Altisource of $35.5 million in the fourth quarter 2013
- Diluted loss per share of $0.08 compared to diluted earnings per share of $1.42 in the fourth quarter 2013
- Adjusted diluted earnings per share of $0.30, an 83% decrease
- Cash from operations of $71.8 million, a 41% increase
Outside of the discontinuation of the lender placed insurance brokerage line of business, the fourth quarter 2014 net loss was from higher costs than in the fourth quarter of 2013, partially as a result of expenses to support anticipated business growth. To quickly address the change in expectations for Ocwen's growth, the Company has begun to execute on a plan that includes eliminating non-revenue generating businesses, reducing vendor fees and eliminating staff to reduce costs.
"Our 2014 performance was driven by strong revenue growth. During 2014, our earnings grew at a lower rate than our revenue as we incurred expenses for people and infrastructure to support a larger Ocwen and certain longer-term initiatives that had no revenue associated with them. We developed and are implementing a plan to reduce costs and eliminate certain of these initiatives to be a leaner, more focused organization," said Chief Executive Officer William B. Shepro.
Full year and fourth quarter 2014 highlights include:
- The average number of loans serviced by Ocwen on REALServicing® totaled 2.2 million, a 91% increase compared to the year ended December 31, 2013 and 2.4 million for the fourth quarter 2014, a 59% increase compared to the fourth quarter 2013
- On November 21, 2014, we acquired certain assets and assumed certain liabilities of Owners Advantage, LLC ("Owners.com"), a leading self-directed online real estate marketplace, for an initial purchase price of $19.8 million plus contingent earn out consideration of up to an additional $7.0 million over two years, subject to Owners.com achieving annual performance targets
- On September 12, 2014, we completed the acquisition of certain assets and assumed certain liabilities of Mortgage Builder Software, Inc. ("Mortgage Builder"), a provider of mortgage loan origination and servicing software systems, for an initial purchase price of $15.7 million plus contingent earn out consideration of up to an additional $7.0 million over three years, subject to Mortgage Builder achieving annual performance targets
- On August 1, 2014, we amended our senior secured term loan agreement and increased our borrowings by $200.0 million.
William Shepro commented further, "We have begun 2015 very focused on our customer and product diversification initiatives while continuing to support Ocwen, a very important and strategic customer to us."
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. Altisource 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 on Wednesday, March 4, 2015 at 11:00 a.m. EST to discuss our fourth quarter and full year results. A link to the live audio webcast will be available on Altisource'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. is a premier marketplace and transaction solutions provider for the real estate, mortgage and consumer debt industries offering both distribution and content. Altisource leverages proprietary business process, vendor and electronic payment management software and behavioral science based analytics to improve outcomes for marketplace participants. Altisource has been named to Fortune's fastest growing global companies two years in a row. Additional information is available at www.Altisource.com.
| ALTISOURCE PORTFOLIO SOLUTIONS S.A. | ||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| (in thousands, except per share data) | ||||
| Three months ended | Years ended | |||
| December 31, | December 31, | |||
| 2014 | 2013 | 2014 | 2013 | |
| Service revenue | ||||
| Mortgage Services | $ 145,037 | $ 139,752 | $ 650,026 | $ 490,333 |
| Financial Services | 21,816 | 26,220 | 98,312 | 92,479 |
| Technology Services | 63,154 | 33,702 | 230,367 | 103,891 |
| Eliminations | (12,163) | (7,233) | (40,026) | (24,644) |
| 217,844 | 192,441 | 938,679 | 662,059 | |
| Reimbursable expenses | 37,414 | 29,417 | 137,634 | 102,478 |
| Non-controlling interests | 629 | 727 | 2,603 | 3,820 |
| Total revenue | 255,887 | 222,585 | 1,078,916 | 768,357 |
| Cost of revenue | 149,238 | 114,868 | 569,546 | 390,002 |
| Reimbursable expenses | 37,414 | 29,417 | 137,634 | 102,478 |
| Gross profit | 69,235 | 78,300 | 371,736 | 275,877 |
| Selling, general and administrative expenses | 61,979 | 33,783 | 201,282 | 113,810 |
| Income from operations | 7,256 | 44,517 | 170,454 | 162,067 |
| Other income (expense), net: | ||||
| Interest expense | (7,323) | (5,989) | (23,363) | (20,291) |
| Other income (expense), net | 39 | 28 | 174 | 557 |
| Total other income (expense), net | (7,284) | (5,961) | (23,189) | (19,734) |
| Income (loss) before income taxes and non-controlling interests | (28) | 38,556 | 147,265 | 142,333 |
| Income tax provision | (878) | (2,313) | (10,178) | (8,540) |
| Net income (loss) | (906) | 36,243 | 137,087 | 133,793 |
| Net income attributable to non-controlling interests | (629) | (727) | (2,603) | (3,820) |
| Net income (loss) attributable to Altisource | $ (1,535) | $ 35,516 | $ 134,484 | $ 129,973 |
| Earnings (loss) per share: | ||||
| Basic | $ (0.08) | $ 1.56 | $ 6.22 | $ 5.63 |
| Diluted | $ (0.08) | $ 1.42 | $ 5.69 | $ 5.19 |
| Weighted average shares outstanding: | ||||
| Basic | 20,306 | 22,734 | 21,625 | 23,072 |
| Diluted | 20,306 | 25,005 | 23,634 | 25,053 |
| Transactions with related parties: | ||||
| Revenue | $ 164,064 | $ 147,198 | $ 666,800 | $ 502,087 |
| Cost of revenue | 10,706 | 6,024 | 38,610 | 19,983 |
| Selling, general and administrative expenses | 196 | 240 | (268) | 569 |
| Other income | -- | -- | -- | 773 |
| ALTISOURCE PORTFOLIO SOLUTIONS S.A. | ||
| CONSOLIDATED BALANCE SHEETS | ||
| (in thousands, except per share data) | ||
| December 31, | ||
| 2014 | 2013 | |
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 161,361 | $ 130,324 |
| Accounts receivable, net | 112,183 | 104,787 |
| Prepaid expenses and other current assets | 23,567 | 10,996 |
| Deferred tax assets, net | 4,987 | 2,837 |
| Total current assets | 302,098 | 248,944 |
| Premises and equipment, net | 127,759 | 87,252 |
| Deferred tax assets, net | -- | 622 |
| Goodwill | 90,851 | 99,414 |
| Intangible assets, net | 245,246 | 276,162 |
| Other assets | 22,267 | 17,658 |
| Total assets | $ 788,221 | $ 730,052 |
| LIABILITIES AND EQUITY | ||
| Current liabilities: | ||
| Accounts payable and accrued expenses | $ 111,766 | $ 84,706 |
| Current portion of long-term debt | 5,945 | 3,975 |
| Deferred revenue | 9,829 | 36,742 |
| Other current liabilities | 13,227 | 10,131 |
| Total current liabilities | 140,767 | 135,554 |
| Long-term debt, less current portion | 582,669 | 391,281 |
| Deferred tax liabilities, net | 2,694 | -- |
| Other non-current liabilities | 20,648 | 45,476 |
| Equity: | ||
|
Common stock ($1.00 par value; 25,413 shares authorized and issued, and 20,279 outstanding, as of December 31, 2014; 100,000 shares authorized, 25,413 issued and 22,629 outstanding as of December 31, 2013) |
25,413 | 25,413 |
| Additional paid-in capital | 91,509 | 89,273 |
| Retained earnings | 367,967 | 239,561 |
|
Treasury stock, at cost (5,134 shares as of December 31, 2014 and 2,784 shares as of December 31, 2013) |
(444,495) | (197,548) |
| Altisource equity | 40,394 | 156,699 |
| Non-controlling interests | 1,049 | 1,042 |
| Total equity | 41,443 | 157,741 |
| Total liabilities and equity | $ 788,221 | $ 730,052 |
| ALTISOURCE PORTFOLIO SOLUTIONS S.A. | ||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| (in thousands) | ||
| Years ended December 31, | ||
| 2014 | 2013 | |
| Cash flows from operating activities: | ||
| Net income | $ 137,087 | $ 133,793 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization | 29,046 | 19,056 |
| Amortization of intangible assets | 37,680 | 28,176 |
| Change in the fair value of Equator Earn Out | (37,924) | -- |
| Goodwill impairment | 37,473 | -- |
| Share-based compensation expense | 2,236 | 2,400 |
| Equity in losses of investment in affiliate | -- | 176 |
| Bad debt expense | 16,257 | 2,549 |
| Amortization of debt discount | 317 | 223 |
| Amortization of debt issuance costs | 1,151 | 958 |
| Deferred income taxes | 1,166 | 2,015 |
| Loss on disposal of fixed assets | 184 | 1,309 |
| Changes in operating assets and liabilities, net of acquisitions: | ||
| Accounts receivable | (22,492) | (5,602) |
| Prepaid expenses and other current assets | (12,501) | (2,817) |
| Other assets | (1,750) | (1,586) |
| Accounts payable and accrued expenses | 24,285 | 7,381 |
| Other current and non-current liabilities | (14,722) | (2,557) |
| Net cash provided by operating activities | 197,493 | 185,474 |
| Cash flows from investing activities: | ||
| Additions to premises and equipment | (64,846) | (34,134) |
| Acquisition of businesses, net of cash acquired | (34,720) | (267,946) |
| Proceeds from loan to Ocwen | -- | 75,000 |
| Proceeds from sale of equity affiliate | -- | 12,648 |
| Other investing activities | (300) | (50) |
| Change in restricted cash | (1,402) | (1,462) |
| Net cash used in investing activities | (101,268) | (215,944) |
| Cash flows from financing activities: | ||
| Repayment of long-term debt and payments on capital lease obligations | (4,959) | (3,729) |
| Proceeds from issuance of long-term debt | 198,000 | 200,502 |
| Debt issuance costs | (2,608) | (3,200) |
| Proceeds from stock option exercises | 2,688 | 6,885 |
| Purchases of treasury stock | (255,713) | (141,018) |
| Contributions from non-controlling interests | -- | 28 |
| Distributions to non-controlling interests | (2,596) | (4,176) |
| Net cash (used in) provided by financing activities | (65,188) | 55,292 |
| Net increase in cash and cash equivalents | 31,037 | 24,822 |
| Cash and cash equivalents at the beginning of the period | 130,324 | 105,502 |
| Cash and cash equivalents at the end of the period | $ 161,361 | $ 130,324 |
| Supplemental cash flow information: | ||
| Interest paid | $ 21,829 | $ 19,325 |
| Income taxes paid, net | 13,340 | 3,671 |
| Non-cash investing and financing activities: | ||
| (Decrease) increase in payables for purchases of premises and equipment | $ (2,328) | $ 4,552 |
| Decrease in acquisition of businesses from subsequent working capital true-ups | (3,711) | (2,039) |