As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 2/13/13  Altisource Port Solutions S.A.    8-K:2,9     2/13/13    2:221K                                   Merrill Corp-MD/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                      HTML     19K 
 2: EX-99.1     Miscellaneous Exhibit                               HTML    124K 

Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE		FOR FURTHER INFORMATION CONTACT:
		Michelle D. Esterman
		Chief Financial Officer
		T:  +352 2469 7950
		E:  michelle.esterman@altisource.lu

 

ALTISOURCE ANNOUNCES FOURTH QUARTER AND FULL YEAR RESULTS

 

Luxembourg, Luxembourg, 13 February 2013

 

Altisource™ (NASDAQ: ASPS) today reported net income attributable to Altisource of $110.6 million or $4.43 per diluted share for the year ended December 31, 2012, an increase in net income and diluted earnings per share from the year ended December 31, 2011 of 56% and 60%, respectively.  Service revenue was $466.9 million for the year ended December 31, 2012, a 39% increase when compared to the year ended December 31, 2011.

 

“2012 was a very strong year for Altisource.  We focused on providing high quality services to our largest customer, Ocwen Financial Corporation (“Ocwen”), while intensifying our efforts on our strategic initiatives to diversify and expand our revenue base” said William Shepro, Chief Executive Officer of Altisource.

 

Net income attributable to Altisource was $30.3 million or $1.20 per diluted share for the quarter ended December 31, 2012, an increase in net income and diluted earnings per share from the quarter ended September 30, 2012 of 12% and 11%, respectively.  Fourth quarter 2012 operating profit margins increased from 26% in the third quarter of 2012 to 27%.

 

William Erbey, Chairman of the Board of Directors, commented “We are very pleased with the fourth quarter margin expansion particularly given that we incurred $2.7 million of costs in the fourth quarter related to the creation and separation of the residential asset businesses and we were growing the staff required to support the approximate doubling of Ocwen’s private label servicing portfolio.”

 

Highlights for the year ended December 31, 2012 include:

 

·                  Capitalized Altisource Residential Corporation (“Residential”) and Altisource Asset Management Corporation (“AAMC”) with $100.0 million and $5.0 million, respectively, and distributed ownership in these entities to Altisource shareholders;

 

·                  Relaunched the consumer real estate portal under the new HubzuTM brand; over 25,000 real estate owned (“REO”) assets were sold through Hubzu during the year;

 

·                  Recognized origination related service revenue of $37.8 million, representing a 72% increase over the year ended December 31, 2011;

 

1

 

·                  Prepared for 2013 growth from Ocwen’s December 28, 2012 acquisition of Homeward Residential Holdings, Inc. (“Homeward Residential”) and its anticipated acquisition of a portion of the Residential Capital, LLC (“Residential Capital”) loan servicing portfolio and

 

·                  Borrowed $200.0 million under a seven-year senior secured term loan facility.

 

The increase in net income is primarily from stronger service revenue growth in the higher margin Mortgage Services segment relative to the other segments.  This was driven by the servicing portfolio growth experienced by Ocwen and expanded origination related services to the Lenders One members.

 

Gross profit as a percentage of service revenue was 43% for the year ended December 31, 2012 compared to 44% for the year ended December 31, 2011.  The decline in gross profit margin is primarily attributable to the costs incurred to develop the rental property management businesses and higher costs in the Technology Services segment to support the accelerated development of the next generation vendor technologies. The Company’s next generation technologies are expected to help the Company and its customers substantially reduce employee and vendor costs while maintaining high quality.  Excluding the costs to develop the rental property management business and separate Residential and AAMC, the Company’s gross profit as a percentage of service revenue was 44% for the year ended December 31, 2012.

 

Income from operations as a percentage of service revenue improved to 27% for the year ended December 31, 2012 compared to 26% for the year ended December 31, 2011 as selling, general and administrative expenses are growing at a slower pace than service revenue.  The benefit was partially offset by the costs incurred to develop the rental property management business.  Excluding the costs to develop the rental property management business and separate Residential and AAMC, the Company’s income from operations as a percentage of service revenue was 28% for the year ended December 31, 2012.

 

Separation of Residential and AAMC

 

In December 2012, the Company completed the capitalization and separation of Residential and AAMC into two separate publicly traded companies. In addition, Altisource completed its platform to provide residential property management, lease brokerage and renovation management services to Residential.  Residential and AAMC plan to enter the growing residential single-family rental market with Residential acquiring residential related assets and AAMC providing asset management and advisory services to Residential. With $100 million of initial equity, the Company believes Residential is poised to execute on its strategy of achieving above market returns by acquiring non-performing loans at a lower cost than directly acquiring real estate owned and operating at a lower cost than its competitors.

 

Outlook

 

As a result of the growth recently experienced by Ocwen and its announced plans for future growth, the Company expects 2013 to be a strong year and 2014 to be a stronger year.  The mortgage servicing industry continues to experience a shift of servicing from traditional financial institutions to non-bank servicers.  Altisource believes Ocwen has significant competitive advantages and will continue to grow as a result of the changing landscape, providing growth to Altisource.  The Homeward Residential and Residential Capital servicing platforms are expected to be boarded on the Altisource platform during 2013 with the full year benefit experienced in 2014.  Further, the Company expects to experience margin expansion in 2014 as it benefits from the operating leverage of the platform.

 

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

 

2