Current Report Filing (8-k)
02 December 2014 - 11:25PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 2, 2014
ALTISOURCE PORTFOLIO SOLUTIONS S.A.
(Exact name of Registrant as specified in its charter)
Luxembourg |
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001-34354 |
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98-0554932 |
(State or other jurisdiction of
incorporation) |
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(Commission File Number) |
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(I.R.S. Employer
Identification No.) |
40, avenue Monterey
L-2163 Luxembourg
Grand Duchy of Luxembourg
(Address of principal executive offices including zip code)
+352 2469 7900
(Registrants telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 7.01 Regulation FD Disclosure.
Altisource Portfolio Solutions S.A. (the Company) has made available on its corporate website (www.altisource.com) its most recent investor presentation. The Company intends to use the investor presentation at the Bank of America Merrill Lynch 2014 Leveraged Finance Conference on December 2, 2014 and from time to time in conversations with investors, analysts and others. A copy of the presentation dated December 2014 is filed herewith as Exhibit 99.1.
The Company is furnishing this 8-K pursuant to Item 7.01, Regulation FD Disclosure. The information contained in this 8-K (including Exhibit 99.1) shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. |
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Description |
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Exhibit 99.1 |
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Altisource Portfolio Solutions S.A. Investor Presentation dated December 2014 |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: December 2, 2014
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Altisource Portfolio Solutions S.A. |
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By: |
/s/ Michelle D. Esterman |
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Name: |
Michelle D. Esterman |
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Title: |
Chief Financial Officer |
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Exhibit 99.1
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© 2014
Altisource. All rights reserved. Proprietary and Confidential. December 2014
Bank of America Merrill Lynch 2014 Leveraged Finance Conference
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Forward-Looking Statements / Non-GAAP Measures This presentation contains
forward-looking statements. These statements may be identified by words such
as anticipate, intend, expect, may, could, should, would,
plan, estimate, seek, believe and similar expressions. We caution
that forward-looking statements are qualified to certain risks and
uncertainties that could cause actual results and events to differ materially
from what is contemplated by the forward-looking statements. Factors which could
cause actual results to differ materially from these forward-looking
statements may include, without limitation, general economic conditions,
conditions in the markets in which Altisource is engaged, behavior of
customers, suppliers and/or competitors, technological developments and
regulatory rules. In addition, financial risks such as currency movements,
liquidity and credit risks could influence future results. The foregoing list
of factors should not be construed as exhaustive. Altisource disclaims any
intention or obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise. Altisource management utilizes certain non-GAAP measures such as
earnings before interest, taxes, depreciation and amortization (EBITDA),
earnings before interest and taxes (EBIT) and EBITDA minus capital
expenditures (Free Cash Flow) as key metrics in evaluating its financial
performance. EBITDA, EBIT and Free Cash Flow should be considered in addition
to, rather than as a substitute for, income before income taxes, net income
attributable to Altisource and cash flows from operations. These non-GAAP
measures are presented as supplemental information and reconciled to net
income attributable to Altisource in the Appendix.
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Altisource. All rights reserved. Proprietary and Confidential. Page | 2 Table
of Contents Business Overview 3 Growth Initiatives 8 Financial Performance 11
Appendix . 15
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Business Overview
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Business Overview . Services to the real estate and mortgage marketplaces
that are typically outsourced by loan servicers, originators and home owners
. Accounts receivable management and customer relationship management
services . Business process management solutions and distribution solutions
to enable the real estate and mortgage marketplaces and infrastructure support
Technology Services Mortgage Services Consolidated Altisource - 9/30/2014 LTM
Service Revenue: $913.3mm Operating Income: $207.7mm EBITDA(1): $270.1mm
Financial Services (1) EBITDA is defined as net income attributable to
Altisource plus income taxes, net interest expense, depreciation and
amortization. Please see appendix for reconciliation
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Mortgage Services Summary (1) Operating margin is calculated using service
revenue, which we define as revenue less revenue from expense reimbursement
and non-controlling interest (2) Does not include eliminations. Some
categories include default and originations related revenue 55.0 71.7 135.7
224.9 351.9 490.3 644.7 $0 $100 $200 $300 $400 $500 $600 $700 2008 2009 2010
2011 2012 2013 9/30/14 LTM Segment Service Revenue ($mm) . Service revenue
growth principally from growth of Ocwen and services expansion . Operating
margins are lower in 2013 and 2014 due to amortization of the intangible
assets associated with the 2013 acquisition of the fee-based businesses
Overview 13.5 26.3 55.7 94.6 142.1 174.9 232.0 24.6% 36.7% 41.1% 42.1% 40.4%
35.7% 36.0% 0% 10% 20% 30% 40% 50% $0 $50 $100 $150 $200 $250 2008 2009 2010
2011 2012 2013 9/30/14 LTM Operating Income ($mm) (2) Operating Margin % (1)
Asset Management Services, 52% Insurance Services, 26% Residential Property
Valuation Services, 16% Default Management Services, 4% Origination
Management Services, 2% 9/30/14 LTM Service Revenue Composition (2)
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Financial Services Summary (1) Operating margin is calculated using service
revenue, which we define as revenue less revenue from expense reimbursement
and non-controlling interest (2) Operating income and margin exclude $2.8mm
of goodwill impairment recognized in 2010 55 . During 2013, asset recovery
management significantly expanded its higher margin mortgage charge-off
collections services . Operating margins have expanded due to our expense
management initiatives and customer base evolution toward the more stable and
profitable customer relationship management and mortgage charge-off
collections businesses Overview 62.8 51.0 45.2 37.4 29.6 46.8 50.6 11.1 28.7
29.6 31.9 34.4 45.7 52.1 73.8 79.7 74.7 69.2 64.0 92.5 102.7 $0 $20 $40 $60
$80 $100 $120 2008 2009 2010 2011 2012 2013 9/30/14 LTM Segment Service
Revenue ($mm) Asset Recovery Management Customer Relationship Management
(5.9) 2.7 3.1 4.5 4.4 22.1 21.8 -8.0% 3.4% 4.2% 6.4% 6.8% 23.9% 21.3% -10% 0%
10% 20% 30% -$10 $0 $10 $20 $30 2008 2009 2010 2011 2012 2013 9/30/14 LTM
Operating Income ($mm) (1) (2) Operating Margin % Asset Recovery Management,
49% Customer Relationship Management, 51% 9/30/14 LTM Service Revenue
Composition
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Technology Services Summary 45.3 47.5 52.0 56.1 74.2 103.9 200.9 $0 $30 $60
$90 $120 $150 $180 $210 $240 2008 2009 2010 2011 2012 2013 9/30/14 LTM Segment
Service Revenue ($mm) . Revenue growth primarily from Ocwens portfolio
growth and the 2013 Equator acquisition . Operating margins have recently
declined as we invest in personnel to accelerate our next generation
technology development to support our anticipated growth and amortization of
the intangible asset associated with the 2013 acquisitions of the feebased
businesses and Equator Overview (1) Operating margin is calculated using
service revenue, which we define as revenue less revenue from expense
reimbursement and non-controlling interest 9.4 18.2 18.1 14.4 10.7 6.9 7.9
20.7% 38.4% 34.8% 25.6% 14.4% 6.7% 3.9% 0% 10% 20% 30% 40% 50% $0 $5 $10 $15
$20 2008 2009 2010 2011 2012 2013 9/30/14 LTM Operating Income ($mm) (1)
Operating Margin % REALSuiteTM, Equator and Mortgage Builder, 70% IT
Infrastructure Services, 30% 9/30/14 LTM Service Revenue Composition
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Growth Initiatives
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Supporting Ocwen Expanding Hubzu to other institutions and the
non-distressed home sale market Providing asset management services to the
single family rental market Marketplace: Real Estate Supporting Ocwen
Growing our origination and cooperative related services Growing our
customer base Developing NextGen REALDoc®, REALAnalytics, REALTrans®,
REALRemit® technologies, among others Deploying platform business process
outsourcing offerings leveraging our next generation software with
traditional BPO services Marketplace: Mortgage Distribution and Transaction
Solutions Growth Initiatives
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Owners.com Acquisition About Owners.com . One of the largest
for-sale-by-owner and flat fee nationwide Multiple Listing Service . Offers
home sellers access to the key professional listing boards necessary to
market a home and professional transaction support during the process . Last
year consumers listed approximately 35,000 properties for sale on Owners.com
with an aggregate asking price of approximately $11.5 billion . Generated
revenue of approximately $4.4 million and EBITDA of approximately $1.5
million during the nine months ended September 30, 2014 Market Opportunity .
Approximately 30% of the total 5.0 million annual home sales are limited
service and self-directed real estate transactions (1) Strategy . Leverage
Altisources national brokerage operations to provide Owners.coms customers
with an improved experience and better outcomes . Offer Hubzu to Owners.com
customers . Offer ancillary services to buyers and sellers of homes on
Owners.com (e.g. title and escrow) Purchase Consideration . Upfront
consideration of $20.0 million . Earn-out consideration of up to $7.0 million
linked to achievement of revenue targets in each of the first two years (1)
Source: National Association of Realtors
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Performance
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Historical Performance 186.7 247.0 334.8 466.9 662.1 913.3 20% 22% 26% 27%
24% 23% 0% 10% 20% 30% $0 $100 $200 $300 $400 $500 $600 $700 $800 2009 2010
2011 2012 2013 9/30/14 LTM Service Revenue ($ millions)(2) Operating Margin %
47.3 61.0 92.8 138.2 205.1 270.1 25% 25% 28% 30% 31% 30% -2% 3% 8% 13% 18%
23% 28% 33% 38% $0 $50 $100 $150 $200 $250 $300 2009 2010 2011 2012 2013
9/30/14 LTM EBITDA (1)(2) ($ millions) % of Service Revenue (1) EBITDA is
defined as net income attributable to Altisource plus income taxes, net
interest expense, depreciation and amortization. Please see appendix for
reconciliation (2) On November 12, 2014, Altisource announced that it is
discontinuing its Lender Placed Insurance brokerage line of business. The
discontinuation of this business line is expected to reduce Altisources
quarterly diluted earnings per share by an average of $0.50 - $0.65 for the
period October 1, 2014 through December 31, 2015
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Altisource. All rights reserved. Proprietary and Confidential. Page | 13 26.0
49.3 71.1 110.6 130.0 171.5 14% 20% 21% 24% 20% 19% -2% 3% 8% 13% 18% 23% 28%
33% 38% $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 2009 2010 2011 2012
2013 9/30/14 LTM Net Income Attributable to Altisource(2) ($ millions) % of
Service Revenue Historical Performance 39.8 49.4 76.3 102.6 171.0 208.3 $0
$50 $100 $150 $200 $250 2009 2010 2011 2012 2013 9/30/14 LTM Free Cash Flow
(1)(2) ($ millions) (1) Free cash flow is defined as EBITDA minus capital
expenditures. Please see appendix for reconciliation (2) On November 12,
2014, Altisource announced that it is discontinuing its Lender Placed
Insurance brokerage line of business. The discontinuation of this business
line is expected to reduce Altisources quarterly diluted earnings per share
by an average of $0.50 - $0.65 for the period October 1, 2014 through
December 31, 2015
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Debt Metrics (1) Interest coverage is defined as EBIT as a ratio of interest
expense. EBIT is defined as net income attributable to Altisource plus income
taxes and net interest expense. Please see appendix for reconciliation (2)
Debt represents outstanding balance at the end of the period (3) Net debt is
defined as debt minus cash and cash equivalents at the end of the period 9.3x
2.2x 1.5x $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 Interest Coverage Debt / EBITDA
Net Debt / EBITDA Twelve Months Ended September 30, 2014 (1) (2) (3)
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Appendix
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Historical Financial Information Non-GAAP Reconciliation Year Ended
December 31, LTM ($ mm) 2009 2010 2011 2012 2013 9/30/14 Net Income
Attributable to Altisource $26.0 $49.3 $71.1 $110.6 $130.0 $171.5 Income tax
provision 11.6 (0.4) 7.9 8.8 8.5 11.6 Interest expense, net of interest income
1.6 0.1 0.1 1.0 19.4 22.0 EBIT $39.2 $49.0 $79.1 $120.4 $157.9 $205.1
Depreciation and amortization 8.1 12.0 13.7 17.8 47.2 65.0 EBITDA $47.3 $61.0
$92.8 $138.2 $205.1 $270.1 Capital Expenditures 7.5 11.6 16.5 35.6 34.1 61.8
Free Cash Flow $39.8 $49.4 $76.3 $102.6 $171.0 $208.3
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About Altisource We are 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. Contact
Information All Investor Relations inquiries should be sent to:
shareholders@altisource.lu Exchange NASDAQ Global Select Market Ticker ASPS
Headquarters Luxembourg Employees More than 9,300 Investor Relations
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