Altisource Portfolio Solutions S.A.(US:ASPS)2020-10-29 10:50Financial 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].