Altisource Portfolio Solutions S.A.(ASPS)

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Altisource Portfolio Solutions S.A.(ASPS) - 2020 Q3 - Earnings Call Transcript
2020-10-31 03:25
Altisource Portfolio Solutions SA. (NASDAQ:ASPS) Q3 2020 Results Earnings Conference Call October 29, 2020 8:30 AM ET Company Participants Michelle Esterman - CFO William Shepro - Chairman & CEO Conference Call Participants Mike Grondahl - Northland Security Operator Good morning, ladies and gentlemen, and welcome to the Altisource Third Quarter 2020 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to your host, Miss. Michelle Esterman, Chief Financial Officer. Michel ...
Altisource Portfolio Solutions S.A.(ASPS) - 2020 Q3 - Quarterly Report
2020-10-29 10:50
Financial Performance - Total revenue for the three months ended September 30, 2020, was $88.8 million, a decrease of 37.2% compared to $141.5 million for the same period in 2019[6]. - Gross profit for the three months ended September 30, 2020, was $16.2 million, down 47.4% from $30.8 million in the prior year[6]. - Net loss attributable to Altisource for the three months ended September 30, 2020, was $13.2 million, compared to a net income of $7.2 million in the same period of 2019[6]. - Basic loss per share for the three months ended September 30, 2020, was $(0.85), compared to earnings per share of $0.45 for the same period in 2019[6]. - Service revenue for the three months ended September 30, 2020, was $85.4 million, a decrease of 36.1% compared to $133.8 million for the same period in 2019[96]. - Total revenue for the nine months ended September 30, 2020, was $305.6 million, down 39.9% from $508.0 million for the same period in 2019[96]. - For the nine months ended September 30, 2020, Altisource reported a net loss attributable to the company of $59.9 million, compared to a net income of $7.2 million for the same period in 2019[107]. - Basic and diluted loss per share for the nine months ended September 30, 2020, was $(3.85), compared to $(0.12) for the same period in 2019[107]. Assets and Liabilities - Total current assets decreased to $140.0 million as of September 30, 2020, from $184.2 million as of December 31, 2019, representing a decline of 24%[4]. - Total liabilities increased slightly to $288.9 million as of September 30, 2020, compared to $287.9 million as of December 31, 2019[4]. - Cash and cash equivalents decreased to $67.0 million as of September 30, 2020, from $82.7 million as of December 31, 2019, a decline of 19%[4]. - Total assets decreased to $310.1 million as of September 30, 2020, from $385.1 million as of December 31, 2019, a decline of 19.5%[4]. - The total equity deficit was reported at $(76,578) as of September 30, 2020, underscoring financial instability[11]. - Total non-current liabilities decreased from $31.0 million as of December 31, 2019, to $26.3 million as of September 30, 2020[71]. Cash Flow and Expenses - Cash used in operating activities was $14.077 million, a decrease from cash provided of $22.194 million in the prior year[14]. - Cash flows used in operating activities were $(14.1) million, or approximately $(0.05) for every dollar of service revenue, compared to cash flows provided of $22.2 million, or approximately $0.05 for every dollar of service revenue in the same period of 2019[187]. - Operating expenses for the three months ended September 30, 2020, were $20.8 million, down 19.5% from $25.8 million in the same period of 2019[6]. - Selling, general and administrative expenses for the three months ended September 30, 2020, were $20.8 million, down 19.4% from $25.8 million for the same period in 2019[104]. - Compensation and benefits decreased by 21% to $23.9 million for the third quarter of 2020 compared to $30.5 million for the same quarter in 2019[168]. Revenue Sources - The company derived 57% of its revenue from Ocwen for the nine months ended September 30, 2020, and 48% for the third quarter of 2020[78]. - Revenue from Ocwen for the nine months ended September 30, 2020, was estimated at $72.3 million for Field Services referrals, down from $115.6 million in 2019[117]. - Revenue from Ocwen for the third quarter of 2020 was $42.5 million, representing 48% of total revenue, down from $89.8 million and 63% in the third quarter of 2019[31]. - Service revenue from customers other than Ocwen, NRZ, and RESI grew by 11% for the nine months ended September 30, 2020, compared to the same period in 2019[161]. - Service revenue from origination businesses increased by 38% for the nine months ended September 30, 2020, with a 30% growth in the third quarter of 2020[161]. Restructuring and Charges - The company reported a restructuring charge of $2.2 million for the three months ended September 30, 2020[6]. - Altisource incurred restructuring charges of $10.9 million during the nine months ended September 30, 2020, up from $9.1 million in the same period of 2019[108]. - The company expects future costs related to Project Catalyst to be in the range of approximately $2 million to $3 million[108]. Market Conditions and Future Outlook - The COVID-19 pandemic negatively impacted default-related services, while origination-related businesses benefited from lower interest rates and a strengthening housing market[141]. - The company anticipates continued negative impacts on default-related services due to ongoing economic and regulatory factors affecting mortgage delinquency and foreclosure rates[142]. - The company aims to grow referrals from existing customers and attract new customers to enhance its service offerings in the mortgage and real estate sectors[136]. - The unemployment rate in the United States reached 7.9% in September 2020, significantly impacting the real estate and mortgage markets[143]. - Foreclosure initiations were 83% lower from April 2020 to August 2020 compared to the same period in 2019, despite a 87% increase in non-current mortgages in August 2020 year-over-year[143]. Investments and Assets - The fair value of Altisource's investment in Front Yard Residential Corporation (RESI) was $30.2 million as of September 30, 2020, down from $42.6 million at the end of 2019[43]. - The company recognized an unrealized loss of $(12.4) million from the change in fair value of its investment in RESI for the nine months ended September 30, 2020[161]. - The company has consolidated Best Partners Mortgage Cooperative, Inc., which had total assets of $2.4 million and total liabilities of $0.5 million as of September 30, 2020[18]. Share Repurchase and Equity - As of September 30, 2020, approximately 2.4 million shares of common stock remain available for repurchase under the share repurchase program[79]. - The company has a limit of approximately $448 million on share repurchases as of September 30, 2020, which may be affected by the leverage ratio[80]. - The total additional paid-in capital increased to $140,225 by September 30, 2020, showing a positive trend in capital contributions[11].
Altisource Portfolio Solutions S.A.(ASPS) - 2020 Q2 - Earnings Call Transcript
2020-08-09 07:38
Altisource Portfolio Solutions SA (NASDAQ:ASPS) Q2 2020 Earnings Conference Call August 6, 2020 8:30 AM ET Company Participants Michelle Esterman - CFO William Shepro - Chairman & CEO Conference Call Participants Rajiv Sharma - B. Riley FBR, Inc. Michael Grondahl - Northland Capital Markets Operator Good morning, and welcome to the Altisource Second Quarter 2020 Earnings Conference Call. My name is Brandon, and I'll be your operator for today. [Operator Instructions]. And I will now turn it over to Michelle ...
Altisource Portfolio Solutions S.A.(ASPS) - 2020 Q2 - Quarterly Report
2020-08-06 11:21
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 1-34354 ALTISOURCE PORTFOLIO SOLUTIONS S.A. (Exact name of registrant as specified in its Charter) Luxembourg 98-0554932 (State or o ...
Altisource Portfolio Solutions S.A.(ASPS) - 2020 Q1 - Earnings Call Transcript
2020-05-02 21:20
Financial Data and Key Metrics Changes - In Q1 2020, the company generated $0.17 of adjusted diluted earnings per share, $4.4 million of adjusted pre-tax income, $13.2 million of adjusted EBITDA, and $113.2 million of service revenue [6][5][7] - The first quarter financial performance was lower than the same period last year due to the disposition of certain businesses, the run-off of Ocwen's service portfolios, and COVID-19 related disruptions [5][6] Business Line Data and Key Metrics Changes - Service revenue from customers other than Ocwen, NRZ, and RESI grew by 36% year-over-year in Q1 2020, driven by customer base growth and market share expansion [7] - The company anticipates a short to medium-term negative impact on default-related revenue but expects strong long-term growth due to low interest rates [7][10] Market Data and Key Metrics Changes - The COVID-19 pandemic has led to significant disruptions in the real estate mortgage and servicing markets, with a rise in unemployment claims and borrowers in forbearance [9][10] - The Mortgage Bankers Association estimates that 7% of borrowers were in forbearance as of April 19, 2020, up from 0.25% in early March [9] Company Strategy and Development Direction - The company is focusing on maintaining employee health, adjusting operations to mitigate impacts, and preserving liquidity in anticipation of lower revenue [10][12] - The company believes it is well-positioned to capture opportunities in a low interest rate and rising delinquency environment, estimating that a 1% increase in mortgage delinquencies could increase the addressable market for default-related services by over $700 million [17][16] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the unprecedented impact of COVID-19 on the economy and the company's operations, with expectations of a challenging environment in the second and third quarters [5][49] - The company anticipates a gradual recovery starting in the fourth quarter, depending on the unemployment and delinquency rates [49][42] Other Important Information - The company has implemented cost reduction measures, including furloughs and compensation reductions, aiming to reduce cash expenses by $45 million to $50 million compared to the fourth quarter of 2019 [14][15] - The company holds $79 million in cash and equivalents, with $294 million in debt, positioning itself to manage through the current economic challenges [13] Q&A Session Summary Question: How did Ocwen-related revenues compare to forecasts? - Management indicated that they were largely on track until March when disruptions began due to the pandemic, resulting in a couple of million dollars off plan [20] Question: What is the impact of the moratorium on business flow? - Management explained that the federal and state moratoriums on foreclosures and evictions would reduce inflows into REO and referrals, with expectations of a pickup in referrals as moratoriums end [39][41] Question: What is the current state of business segments? - Management noted that the marketplace segment (Hubzu) is expected to be down about 75%, while Field Services is down but holding up reasonably well, and Mortgage Real Estate Solutions is expected to perform better than initially anticipated [53][58]
Altisource Portfolio Solutions S.A.(ASPS) - 2020 Q1 - Earnings Call Presentation
2020-04-30 22:17
Financial Performance - Altisource ended Q1 2020 with $120.4 million in cash, cash equivalents, and equity securities[6] - Net debt less marketable securities was $173.5 million at the end of Q1 2020, a 30% decrease compared to March 31, 2019[6] - Q1 2020 revenue was $121.4 million, a 29% decrease compared to Q1 2019's $169.9 million[11] - Adjusted operating income for Q1 2020 was $8.5 million, a 51% decrease compared to Q1 2019's $17.3 million[11] - Adjusted pretax income attributable to Altisource for Q1 2020 was $4.4 million, a 61% decrease compared to Q1 2019's $11.3 million[11] - Adjusted EBITDA for Q1 2020 was $13.2 million, a 42% decrease compared to Q1 2019's $22.7 million[11] Business Segment Performance - Field Services revenue from customers other than Ocwen, NRZ, and RESI grew by 177% in Q1 2020 compared to Q1 2019[9] - Hubzu revenue from customers other than Ocwen, NRZ, and RESI grew by 39% in Q1 2020 compared to Q1 2019[10] - Hubzu inventory from customers other than Ocwen, NRZ, and RESI grew by 22% since March 31, 2019, representing 38% of total Hubzu inventory as of March 31, 2020[10, 22] - Mortgage and Real Estate Solutions revenue from customers other than Ocwen, NRZ, and RESI grew by 47% in Q1 2020 compared to Q1 2019[10]
Altisource Portfolio Solutions S.A.(ASPS) - 2020 Q1 - Quarterly Report
2020-04-30 10:54
PART I — Financial Information [Item 1. Interim Condensed Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201%20Interim%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Altisource's unaudited Q1 2020 consolidated financial statements detail key financial positions, performance, and cash flows Condensed Consolidated Balance Sheets | Metric (in thousands) | March 31, 2020 | December 31, 2019 | | :-------------------- | :------------- | :---------------- | | **ASSETS** | | | | Total current assets | $181,605 | $184,188 | | Total assets | $368,595 | $385,119 | | **LIABILITIES AND EQUITY** | | | | Total current liabilities | $84,722 | $87,578 | | Long-term debt | $288,233 | $287,882 | | Total deficit | $(31,524) | $(21,357) | | Total liabilities and deficit | $368,595 | $385,119 | - Total assets **decreased** from **$385.1 million** at December 31, 2019, to **$368.6 million** at March 31, 2020[5](index=5&type=chunk) - Total deficit **increased** from **$(21.4) million** at December 31, 2019, to **$(31.5) million** at March 31, 2020[5](index=5&type=chunk) Condensed Consolidated Statements of Operations and Comprehensive Loss | Metric (in thousands, except per share) | 2020 | 2019 | | :------------------------------------ | :---------- | :---------- | | Revenue | $121,444 | $169,935 | | Gross profit | $26,863 | $45,720 | | Loss from operations | $(4,155) | $(626) | | Net loss attributable to Altisource | $(11,650) | $(3,184) | | Basic loss per share | $(0.75) | $(0.20) | | Diluted loss per share | $(0.75) | $(0.20) | - Revenue **decreased by 28.5%** from **$169.9 million** in Q1 2019 to **$121.4 million** in Q1 2020[8](index=8&type=chunk) - Net loss attributable to Altisource **significantly increased** from **$(3.2) million** in Q1 2019 to **$(11.7) million** in Q1 2020[8](index=8&type=chunk) Condensed Consolidated Statements of Equity | Metric (in thousands) | March 31, 2020 | December 31, 2019 | | :-------------------- | :------------- | :---------------- | | Common stock | $25,413 | $25,413 | | Additional paid-in capital | $136,563 | $133,669 | | Retained earnings | $252,466 | $272,026 | | Treasury stock, at cost | $(447,229) | $(453,934) |\ | Altisource deficit | $(32,787) | $(22,826) | | Non-controlling interests | $1,263 | $1,469 | | Total deficit | $(31,524) | $(21,357) | - Altisource's total deficit **increased** from **$(21.4) million** at December 31, 2019, to **$(31.5) million** at March 31, 2020, primarily due to a **net loss of $(11.65) million**[9](index=9&type=chunk) - Additional paid-in capital **increased by $2.9 million**, mainly from share-based compensation expense[9](index=9&type=chunk) Condensed Consolidated Statements of Cash Flows | Metric (in thousands) | 2020 | 2019 | | :-------------------- | :---------- | :---------- | | Net cash used in operating activities | $(1,648) | $(6,655) | | Net cash used in investing activities | $(511) | $(790) | | Net cash used in financing activities | $(1,516) | $(1,177) | | Net decrease in cash, cash equivalents and restricted cash | $(3,675) | $(8,622) | | Cash, cash equivalents and restricted cash at the end of the period | $82,908 | $55,424 | - Net cash used in operating activities **decreased by 75%** from **$(6.7) million** in Q1 2019 to **$(1.6) million** in Q1 2020[11](index=11&type=chunk) - Cash, cash equivalents and restricted cash at period-end **increased by 49.6%** from **$55.4 million** in Q1 2019 to **$82.9 million** in Q1 2020[11](index=11&type=chunk) Notes to Condensed Consolidated Financial Statements [NOTE 1 — ORGANIZATION AND BASIS OF PRESENTATION](index=8&type=section&id=NOTE%201%20%E2%80%94%20ORGANIZATION%20AND%20BASIS%20OF%20PRESENTATION) Altisource, a NASDAQ-traded real estate and mortgage service provider, presents unaudited GAAP financials, consolidating key entities - Altisource is an integrated service provider and marketplace for the real estate and mortgage industries, publicly traded on NASDAQ under '**ASPS**'[12](index=12&type=chunk)[13](index=13&type=chunk) - The company consolidates Lenders One, a mortgage cooperative, and Pointillist, Inc., a customer journey analytics business, due to primary beneficiary or controlling interests[15](index=15&type=chunk)[16](index=16&type=chunk)[17](index=17&type=chunk) - Lenders One had total assets of **$2.0 million** and liabilities of **$0.6 million** as of March 31, 2020, compared to **$1.6 million** and **$0.3 million** respectively, as of December 31, 2019[16](index=16&type=chunk) [NOTE 2 — CUSTOMER CONCENTRATION](index=11&type=section&id=NOTE%202%20%E2%80%94%20CUSTOMER%20CONCENTRATION) Ocwen remains Altisource's largest customer, contributing 61% of Q1 2020 revenue, impacted by platform transition Revenue from Ocwen (Three Months Ended March 31) | Metric (in millions) | 2020 | 2019 | | :------------------- | :---- | :---- | | Revenue from Ocwen | $74.2 | $98.3 | | % of consolidated revenue | 61% | 58% | - Ocwen was Altisource's largest customer, contributing **61% of total revenue** in Q1 2020, an **increase from 58%** in Q1 2019[28](index=28&type=chunk)[30](index=30&type=chunk) - Service revenue from REALServicing and related technologies **decreased significantly** from **$8.2 million** in Q1 2019 to **$0.9 million** in Q1 2020 due to Ocwen's platform transition[29](index=29&type=chunk) - Accounts receivable from Ocwen **increased to $21.4 million** as of March 31, 2020, from **$19.1 million** as of December 31, 2019[32](index=32&type=chunk) [NOTE 3 — SALE OF BUSINESSES](index=12&type=section&id=NOTE%203%20%E2%80%94%20SALE%20OF%20BUSINESSES) Altisource sold Financial Services and rental property management businesses, with future payments expected - Financial Services business sold to Transworld Systems Inc. for **$44.0 million** in July 2019, with **$40.0 million** upfront and **$4.0 million** due on the one-year anniversary[39](index=39&type=chunk) - Rental property management business sold to Front Yard Residential Corporation (RESI) for **$18.0 million** in August 2018. The second installment of **$3.0 million** (discounted to **$2.4 million**) is due upon a RESI change of control or by August 8, 2023[40](index=40&type=chunk) [NOTE 4 — INVESTMENT IN EQUITY SECURITIES](index=13&type=section&id=NOTE%204%20%E2%80%94%20INVESTMENT%20IN%20EQUITY%20SECURITIES) Altisource's RESI stock, valued at $41.3M, saw an unrealized loss in Q1 2020 due to a merger agreement Investment in RESI Common Stock (March 31, 2020 vs. December 31, 2019) | Metric (in millions) | March 31, 2020 | December 31, 2019 | | :------------------- | :------------- | :---------------- | | Fair value | $41.3 | $42.6 | | Unrealized (loss) gain | $(1.3) | $2.2 |\ | Dividends earned | $0.5 | $0.6 | - RESI entered a merger agreement on February 17, 2020, to be acquired for **$12.50 cash per share**, with Altisource agreeing to vote its shares in favor[42](index=42&type=chunk) [NOTE 5 — ACCOUNTS RECEIVABLE, NET](index=13&type=section&id=NOTE%205%20%E2%80%94%20ACCOUNTS%20RECEIVABLE%2C%20NET) Net accounts receivable stable at $43.6M, with minor shifts and increased allowance for credit losses Accounts Receivable, Net (March 31, 2020 vs. December 31, 2019) | Metric (in thousands) | March 31, 2020 | December 31, 2019 | | :-------------------- | :------------- | :---------------- | | Billed | $36,388 | $35,921 | | Unbilled | $12,002 | $12,166 | | Total gross | $48,390 | $48,087 | | Less: Allowance for credit losses | $(4,814) | $(4,472) | | Total net | $43,576 | $43,615 | - Unbilled accounts receivable primarily relate to real estate asset management, REO sales, title and closing services, and foreclosure trustee services, where revenue is recognized when services are provided but collection occurs later[43](index=43&type=chunk) [NOTE 6 — PREPAID EXPENSES AND OTHER CURRENT ASSETS](index=13&type=section&id=NOTE%206%20%E2%80%94%20PREPAID%20EXPENSES%20AND%20OTHER%20CURRENT%20ASSETS) Prepaid expenses and other current assets rose to $17.7M, driven by prepayments, offset by lower tax receivables Prepaid Expenses and Other Current Assets (March 31, 2020 vs. December 31, 2019) | Metric (in thousands) | March 31, 2020 | December 31, 2019 | | :-------------------- | :------------- | :---------------- | | Maintenance agreements, current portion | $1,845 | $1,923 | | Income taxes receivable | $2,605 | $5,098 | | Prepaid expenses | $6,972 | $3,924 | | Other current assets | $6,238 | $4,269 | | Total | $17,660 | $15,214 | [NOTE 7 — DISCONTINUATION OF LINES OF BUSINESS](index=14&type=section&id=NOTE%207%20%E2%80%94%20DISCONTINUATION%20OF%20LINES%20OF%20BUSINESS) Altisource wound down Owners.com and discontinued BRS business, with no material financial impact - Owners.com, a technology-enabled real estate brokerage, was wound down and closed by December 31, 2019[45](index=45&type=chunk) - The Buy-Renovate-Lease-Sell (BRS) business, focused on single-family homes for investors, was discontinued, with inventory sales completed in 2019[46](index=46&type=chunk) [NOTE 8 — PREMISES AND EQUIPMENT, NET](index=14&type=section&id=NOTE%208%20%E2%80%94%20PREMISES%20AND%20EQUIPMENT%2C%20NET) Net premises and equipment decreased to $21.0M, primarily due to Q1 2020 depreciation and amortization Premises and Equipment, Net (March 31, 2020 vs. December 31, 2019) | Metric (in thousands) | March 31,