Altisource Portfolio Solutions S.A. (“Altisource” or the “Company”)
(NASDAQ: ASPS), a leading provider and marketplace for the real
estate and mortgage industries, today reported financial results
for the third quarter 2021.
“We believe Altisource is well positioned for
2022 and beyond. Our Default business should generate significant
revenue and earnings growth as we return to a more normal
post-pandemic operating environment. We are executing on our
strategic plan in our Origination business and believe this will
also be a significant driver for growth. As a result, we anticipate
that we will generate positive cash flow in the second half of 2022
on a significantly reduced cost structure. Finally, the anticipated
sale of our equity interest in Pointillist significantly
strengthens our balance sheet by adding an estimated $100 million
of cash at closing,” said Chairman and Chief Executive Officer
William B. Shepro.
Third Quarter 2021
Highlights(1)
Corporate and Financial:
- On October 6,
2021, the shareholders of Pointillist, Inc. (“Pointillist”), a
majority owned subsidiary of Altisource, entered into a definitive
Stock Purchase Agreement to sell Pointillist to Genesys Cloud
Services, Inc. (“Genesys”) for $150 million (the “Purchase Price”)
- The Purchase
Price consists of an up-front payment of $145 million, subject to
certain adjustments at closing, including a working capital
adjustment, and an additional $5 million to be held in an escrow
account to satisfy certain Genesys indemnification claims that may
arise on or prior to the first anniversary of the sale closing,
with the balance to be paid thereafter
- On a fully
diluted basis, Altisource owns approximately 69% of the equity at
Pointillist
- Altisource
estimates that it will receive approximately $100 million in cash
at closing, subject to a working capital adjustment, and an
additional $3.7 million following the on-year anniversary of
closing, assuming no indemnification claims
- The Company
estimates the sale will generate a pre-tax and after-tax gain of
$107 million before any potential reduction of goodwill
- The transaction
is anticipated to close before the end of the 2021 calendar year,
subject to the satisfaction or waiver of customary closing
conditions including regulatory approval
- Ended the third
quarter 2021 with $36.5 million of cash and cash equivalents
- Ended the third
quarter 2021 with $230.7 million of net debt(2)
Business Highlights:
- Third quarter
2021 Hubzu referrals were 107% higher than the third quarter of
2020 and ending Hubzu inventory of close to 6,200 marks the second
consecutive quarter of inventory growth
- Service revenue
from our Origination business grew by 23% in the nine months ended
September 30, 2021 to $45.5 million compared to the nine
months ended September 30, 2020
- The Company
continued to aggressively reduce cash costs and simplify the
organization; third quarter 2021 cash operating costs (excluding
outside fees and services) were $2.4 million, or 6%, lower than
second quarter 2021 cash operating costs and $12.0 million, or 26%,
lower than third quarter 2020 cash operating costs
Third Quarter 2021 Financial
Results
- Service revenue of $41.6
million
- Loss before income taxes and
non-controlling interests of $(17.9) million
- Adjusted pre-tax loss attributable
to Altisource(2) of $(12.4) million
- Adjusted EBITDA(2) of $(7.5)
million
- Net loss attributable to Altisource
of $(18.3) million, or $(1.15) per diluted share
- Adjusted net
loss attributable to Altisource(2) of $(12.6) million, or $(0.80)
per diluted share
Third Quarter and Year-to-Date September
30, 2021 Results Compared to the Third Quarter and Year-to-Date
September 30, 2020:
(in thousands, except per
share data) |
Third Quarter 2021 |
|
Third Quarter 2020 |
|
% Change |
|
Year-to-DateSept. 30, 2021 |
|
Year-to-DateSept. 30, 2020 |
|
% Change |
Service revenue |
$ |
41,626 |
|
|
$ |
85,386 |
|
|
(51 |
) |
|
$ |
133,672 |
|
|
$ |
289,570 |
|
|
(54 |
) |
Loss from operations |
(14,028 |
) |
|
(6,814 |
) |
|
(106 |
) |
|
(47,159 |
) |
|
(28,725 |
) |
|
(64 |
) |
Adjusted operating (loss)
income(2) |
(8,279 |
) |
|
3,658 |
|
|
(326 |
) |
|
(26,122 |
) |
|
7,390 |
|
|
N/M |
|
Loss before income taxes and
non-controlling interests |
(17,898 |
) |
|
(11,140 |
) |
|
(61 |
) |
|
(57,040 |
) |
|
(54,011 |
) |
|
(6 |
) |
Pretax loss attributable to
Altisource(2) |
(17,839 |
) |
|
(11,480 |
) |
|
(55 |
) |
|
(56,889 |
) |
|
(54,653 |
) |
|
(4 |
) |
Adjusted pretax loss
attributable to Altisource(2) |
(12,350 |
) |
|
(1,406 |
) |
|
N/M |
|
|
(36,715 |
) |
|
(7,004 |
) |
|
(424 |
) |
Adjusted EBITDA(2) |
(7,545 |
) |
|
6,426 |
|
|
(217 |
) |
|
(22,793 |
) |
|
17,521 |
|
|
(230 |
) |
Net loss attributable to
Altisource |
(18,269 |
) |
|
(13,237 |
) |
|
(38 |
) |
|
(58,746 |
) |
|
(59,948 |
) |
|
2 |
|
Adjusted net loss attributable
to Altisource(2) |
(12,646 |
) |
|
(3,764 |
) |
|
(236 |
) |
|
(37,899 |
) |
|
(11,833 |
) |
|
(220 |
) |
Diluted loss per share |
(1.15 |
) |
|
(0.85 |
) |
|
(36 |
) |
|
(3.71 |
) |
|
(3.85 |
) |
|
3 |
|
Adjusted diluted loss per
share(2) |
(0.80 |
) |
|
(0.24 |
) |
|
(233 |
) |
|
(2.40 |
) |
|
(0.76 |
) |
|
(215 |
) |
Cash flows used in operating
activities |
(18,358 |
) |
|
(2,861 |
) |
|
N/M |
|
|
(41,133 |
) |
|
(14,077 |
) |
|
(192 |
) |
Adjusted cash flows used in
operating activities less additions to premises and
equipment(2) |
(18,790 |
) |
|
(3,897 |
) |
|
(382 |
) |
|
(42,258 |
) |
|
(16,579 |
) |
|
(155 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/M - not meaningful.
- Third quarter
2021 and 2020 loss from operations include losses of $2.2 million
and $2.1 million, respectively, ($7.1 million and $7.2 million for
year-to-date September 30, 2021 and 2020, respectively) from
our earlier stage business. Third quarter 2021 and 2020 loss from
operations also includes $0.5 million and $0.7 million,
respectively, ($3.2 million and $0.7 million for year-to-date
September 30, 2021 and 2020, respectively), of costs related
to savings initiatives and other. Third quarter and year-to-date
September 30, 2020 loss from operations also include $2.2
million and $10.9 million, respectively, of restructuring charges
related to Project Catalyst (no comparable amounts in 2021), and
$(0.6) million for both the third quarter and year-to-date
September 30, 2020 of sales tax net accruals (reimbursements)
(no comparable amounts in 2021).
- Third quarter
and year-to-date September 30, 2020 pretax loss attributable
to Altisource(2) include unrealized mark-to-market gains (losses)
on our equity investment in RESI of $0.1 million and $(12.4)
million, respectively (no comparable amounts in 2021).
- Third quarter
2021 net loss attributable to Altisource includes $0.3 million of
expenses (no comparable amount for the third quarter of 2020) ($1.3
million and $2.4 million for year-to-date September 30, 2021
and 2020, respectively) for certain income tax items related
to adjustments to foreign income tax reserves, the impact of a
decrease in the India and Luxembourg income tax rates on deferred
tax assets and an India restructuring from net loss attributable to
Altisource.
________________________
(1) Applies to third quarter 2021 unless otherwise
indicated.(2) This is a non-GAAP measure that is
defined and reconciled to the corresponding GAAP measure
herein.
Forward-Looking Statements
This press release contains forward-looking
statements that involve a number of risks and uncertainties. These
forward-looking statements include all statements that are not
historical fact, including statements that relate to, among other
things, future events or our future performance or financial
condition. These statements may be identified by words such as
“anticipate,” “intend,” “expect,” “may,” “could,” “should,”
“would,” “plan,” “estimate,” “seek,” “believe,” “potential” or
“continue” or the negative of these terms and comparable
terminology. Such statements are based on expectations as to the
future and are not statements of historical fact. Furthermore,
forward-looking statements are not guarantees of future performance
and involve a number of assumptions, risks and uncertainties that
could cause actual results to differ materially. Important factors
that could cause actual results to differ materially from those
suggested by the forward-looking statements include, but are not
limited to, risks relating to the transaction with Genesys,
including in respect of the satisfaction of closing conditions and
the timing thereof, delays in obtaining regulatory and other third
party consents in connection with the transaction, unanticipated
expenditures relating to or liabilities arising from the
transaction, litigation or regulatory issues relating to the
transaction and the risks discussed in Item 1A of Part I “Risk
Factors” in our Form 10-K filing with the Securities and Exchange
Commission, as the same may be updated from time to time in our
Form 10-Q filings. We caution you not to place undue reliance on
these forward-looking statements which reflect our view only as of
the date of this report. We are under no obligation (and expressly
disclaim any obligation) to update or alter any forward-looking
statements contained herein to reflect any change in our
expectations with regard thereto or change in events, conditions or
circumstances on which any such statement is based. The risks and
uncertainties to which forward-looking statements are subject
include, but are not limited to, risks related to the COVID-19
pandemic, customer concentration, the timing of the anticipated
increase in default related referrals following the expiration of
foreclosure and eviction moratoriums and forbearance programs, the
timing of the expiration of such moratoriums and programs, and any
other delays occasioned by government, investor or servicer
actions, the use and success of our products and services, our
ability to retain existing customers and attract new customers and
the potential for expansion or changes in our customer
relationships, technology disruptions, our compliance with
applicable data requirements, our use of third party vendors and
contractors, our ability to effectively manage potential conflicts
of interest, macro-economic and industry specific conditions, our
ability to effectively manage our regulatory and contractual
obligations, the adequacy of our financial resources, including our
sources of liquidity and ability to repay borrowings and comply
with our Credit Agreement, including the financial and other
covenants contained therein, as well as Altisource’s ability to
retain key executives or employees, behavior of customers,
suppliers and/or competitors, technological developments,
governmental regulations, taxes and policies. The financial
projections and scenarios contained in this press release are
expressly qualified as forward-looking statements and, as with
other forward-looking statements, should not be unduly relied upon.
We undertake no obligation to update these statements, scenarios
and projections as a result of a change in circumstances, new
information or future events.
Webcast
Altisource will host a webcast at 11:00 a.m. EDT
today to discuss our third quarter. A link to the live audio
webcast will be available on Altisource’s website in the Investor
Relations section. Those who want to listen to the call should go
to the website at least 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 an
integrated service provider and marketplace for the real estate and
mortgage industries. Combining operational excellence with a suite
of innovative services and technologies, Altisource helps solve the
demands of the ever-changing markets we serve. Additional
information is available at www.Altisource.com.
FOR FURTHER INFORMATION
CONTACT:
Michelle EstermanChief Financial OfficerT: (770)
612-7007E: Michelle.Esterman@altisource.com
ALTISOURCE PORTFOLIO SOLUTIONS
S.A.CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS(in thousands, except per share
data)(unaudited)
|
|
Three months ended September
30, |
|
Nine months ended September
30, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
|
|
|
|
|
|
|
Service revenue |
|
$ |
41,626 |
|
|
$ |
85,386 |
|
|
$ |
133,672 |
|
|
$ |
289,570 |
|
Reimbursable expenses |
|
1,416 |
|
|
2,810 |
|
|
5,365 |
|
|
14,495 |
|
Non-controlling interests |
|
201 |
|
|
599 |
|
|
712 |
|
|
1,516 |
|
Total revenue |
|
43,243 |
|
|
88,795 |
|
|
139,749 |
|
|
305,581 |
|
Cost of revenue |
|
39,251 |
|
|
69,760 |
|
|
129,497 |
|
|
235,284 |
|
Reimbursable expenses |
|
1,416 |
|
|
2,810 |
|
|
5,365 |
|
|
14,495 |
|
Gross profit |
|
2,576 |
|
|
16,225 |
|
|
4,887 |
|
|
55,802 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
16,604 |
|
|
20,812 |
|
|
52,046 |
|
|
73,606 |
|
Restructuring charges |
|
— |
|
|
2,227 |
|
|
— |
|
|
10,921 |
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
(14,028 |
) |
|
(6,814 |
) |
|
(47,159 |
) |
|
(28,725 |
) |
Other income (expense),
net |
|
|
|
|
|
|
|
|
Interest expense |
|
(3,755 |
) |
|
(4,103 |
) |
|
(10,672 |
) |
|
(13,265 |
) |
Unrealized gain (loss) on investment in equity securities |
|
— |
|
|
138 |
|
|
— |
|
|
(12,433 |
) |
Other (expense) income, net |
|
(115 |
) |
|
(361 |
) |
|
791 |
|
|
412 |
|
Total other income (expense), net |
|
(3,870 |
) |
|
(4,326 |
) |
|
(9,881 |
) |
|
(25,286 |
) |
|
|
|
|
|
|
|
|
|
Loss before income taxes and
non-controlling interests |
|
(17,898 |
) |
|
(11,140 |
) |
|
(57,040 |
) |
|
(54,011 |
) |
Income tax provision |
|
(430 |
) |
|
(1,757 |
) |
|
(1,857 |
) |
|
(5,295 |
) |
|
|
|
|
|
|
|
|
|
Net loss |
|
(18,328 |
) |
|
(12,897 |
) |
|
(58,897 |
) |
|
(59,306 |
) |
Net loss (income) attributable
to non-controlling interests |
|
59 |
|
|
(340 |
) |
|
151 |
|
|
(642 |
) |
|
|
|
|
|
|
|
|
|
Net loss attributable to
Altisource |
|
$ |
(18,269 |
) |
|
$ |
(13,237 |
) |
|
$ |
(58,746 |
) |
|
$ |
(59,948 |
) |
|
|
|
|
|
|
|
|
|
Loss per share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(1.15 |
) |
|
$ |
(0.85 |
) |
|
$ |
(3.71 |
) |
|
$ |
(3.85 |
) |
Diluted |
|
$ |
(1.15 |
) |
|
$ |
(0.85 |
) |
|
$ |
(3.71 |
) |
|
$ |
(3.85 |
) |
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
15,831 |
|
|
15,637 |
|
|
15,816 |
|
|
15,578 |
|
Diluted |
|
15,831 |
|
|
15,637 |
|
|
15,816 |
|
|
15,578 |
|
|
|
|
|
|
|
|
|
|
Comprehensive loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss, net of
tax |
|
$ |
(18,328 |
) |
|
$ |
(12,897 |
) |
|
$ |
(58,897 |
) |
|
$ |
(59,306 |
) |
Comprehensive loss (income)
attributable to non-controlling interests |
|
59 |
|
|
(340 |
) |
|
151 |
|
|
(642 |
) |
|
|
|
|
|
|
|
|
|
Comprehensive loss
attributable to Altisource |
|
$ |
(18,269 |
) |
|
$ |
(13,237 |
) |
|
$ |
(58,746 |
) |
|
$ |
(59,948 |
) |
ALTISOURCE PORTFOLIO SOLUTIONS
S.A.CONSOLIDATED BALANCE
SHEETS(in thousands, except for per share
data)(unaudited)
|
September 30,2021 |
|
December 31,2020 |
|
|
|
|
ASSETS |
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
36,492 |
|
|
$ |
58,263 |
|
Accounts receivable, net |
19,299 |
|
|
22,413 |
|
Prepaid expenses and other current assets |
18,881 |
|
|
19,479 |
|
Total current assets |
74,672 |
|
|
100,155 |
|
|
|
|
|
Premises and equipment,
net |
9,376 |
|
|
11,894 |
|
Right-of-use assets under
operating leases |
13,184 |
|
|
18,213 |
|
Goodwill |
73,849 |
|
|
73,849 |
|
Intangible assets, net |
38,143 |
|
|
46,326 |
|
Deferred tax assets, net |
5,279 |
|
|
5,398 |
|
Other assets |
6,427 |
|
|
9,850 |
|
|
|
|
|
Total assets |
$ |
220,930 |
|
|
$ |
265,685 |
|
|
|
|
|
LIABILITIES AND EQUITY |
Current liabilities: |
|
|
|
Accounts payable and accrued expenses |
$ |
53,994 |
|
|
$ |
56,779 |
|
Current portion of long-term debt |
5,000 |
|
|
— |
|
Deferred revenue |
7,124 |
|
|
5,461 |
|
Other current liabilities |
6,462 |
|
|
9,305 |
|
Total current liabilities |
72,580 |
|
|
71,545 |
|
|
|
|
|
Long-term debt, less current
portion |
258,247 |
|
|
242,656 |
|
Deferred tax liabilities,
net |
9,264 |
|
|
8,801 |
|
Convertible debt payable to
related parties |
1,337 |
|
|
— |
|
Other non-current
liabilities |
21,185 |
|
|
25,239 |
|
|
|
|
|
Commitments, contingencies and
regulatory matters |
|
|
|
|
|
|
|
Equity (deficit): |
|
|
|
Common stock ($1.00 par value; 100,000 shares authorized, 25,413
issued and 15,899 outstanding as of September 30, 2021; 15,664
outstanding as of December 31, 2020) |
25,413 |
|
|
25,413 |
|
Additional paid-in capital |
143,983 |
|
|
141,473 |
|
Retained earnings |
116,881 |
|
|
190,383 |
|
Treasury stock, at cost (9,514 shares as of September 30, 2021
and 9,749 shares as of December 31, 2020) |
(427,214 |
) |
|
(441,034 |
) |
Altisource deficit |
(140,937 |
) |
|
(83,765 |
) |
|
|
|
|
Non-controlling interests |
(746 |
) |
|
1,209 |
|
Total deficit |
(141,683 |
) |
|
(82,556 |
) |
|
|
|
|
Total liabilities and
deficit |
$ |
220,930 |
|
|
$ |
265,685 |
|
ALTISOURCE PORTFOLIO SOLUTIONS
S.A.CONSOLIDATED STATEMENTS OF CASH
FLOWS(in
thousands)(unaudited)
|
Nine months ended September
30, |
|
2021 |
|
2020 |
|
|
|
|
Cash flows from operating
activities: |
|
|
|
Net loss |
$ |
(58,897 |
) |
|
$ |
(59,306 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
Depreciation and amortization |
3,479 |
|
|
11,521 |
|
Amortization of right-of-use assets under operating leases |
6,340 |
|
|
8,107 |
|
Amortization of intangible assets |
8,183 |
|
|
11,344 |
|
Unrealized loss on investment in equity securities |
— |
|
|
12,433 |
|
Share-based compensation expense |
2,510 |
|
|
6,556 |
|
Bad debt expense |
1,268 |
|
|
1,423 |
|
Amortization of debt discount |
499 |
|
|
500 |
|
Amortization of debt issuance costs |
623 |
|
|
548 |
|
Deferred income taxes |
8 |
|
|
274 |
|
Loss on disposal of fixed assets |
117 |
|
|
459 |
|
Other non-cash items |
137 |
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
1,846 |
|
|
10,136 |
|
Prepaid expenses and other current assets |
598 |
|
|
621 |
|
Other assets |
1,439 |
|
|
853 |
|
Accounts payable and accrued expenses |
(2,738 |
) |
|
(10,676 |
) |
Current and non-current operating lease liabilities |
(6,958 |
) |
|
(8,518 |
) |
Other current and non-current liabilities |
413 |
|
|
(352 |
) |
Net cash used in operating
activities |
(41,133 |
) |
|
(14,077 |
) |
|
|
|
|
Cash flows from investing
activities: |
|
|
|
Additions to premises and equipment |
(1,125 |
) |
|
(2,502 |
) |
Proceeds from the sale of business |
3,000 |
|
|
3,307 |
|
Net cash provided by investing
activities |
1,875 |
|
|
805 |
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
Proceeds from revolving credit facility |
20,000 |
|
|
— |
|
Debt issuance costs |
(531 |
) |
|
— |
|
Proceeds from convertible debt payable to related parties |
1,200 |
|
|
— |
|
Distributions to non-controlling interests |
(1,804 |
) |
|
(976 |
) |
Payments of tax withholding on issuance of restricted share units
and restricted shares |
(936 |
) |
|
(1,495 |
) |
Net cash provided by (used in)
financing activities |
17,929 |
|
|
(2,471 |
) |
|
|
|
|
Net decrease in cash, cash
equivalents and restricted cash |
(21,329 |
) |
|
(15,743 |
) |
Cash, cash equivalents and
restricted cash at the beginning of the period |
62,096 |
|
|
86,583 |
|
|
|
|
|
Cash, cash equivalents and
restricted cash at the end of the period |
$ |
40,767 |
|
|
$ |
70,840 |
|
|
|
|
|
Supplemental cash flow
information: |
|
|
|
Interest paid |
$ |
9,373 |
|
|
$ |
12,218 |
|
Income taxes paid, net |
2,736 |
|
|
742 |
|
Acquisition of right-of-use assets with operating lease
liabilities |
6,976 |
|
|
1,051 |
|
Reduction of right-of-use assets from operating lease modifications
or reassessments |
(5,665 |
) |
|
(1,715 |
) |
|
|
|
|
Non-cash investing and
financing activities: |
|
|
|
Net (decrease) increase in payables for purchases of premises and
equipment |
$ |
(47 |
) |
|
$ |
60 |
|
ALTISOURCE PORTFOLIO SOLUTIONS
S.A.NON-GAAP MEASURES(in
thousands, except per share
data)(unaudited)
Adjusted operating (loss) income, pretax loss
attributable to Altisource, adjusted pretax loss attributable to
Altisource, adjusted earnings before interest, taxes, depreciation
and amortization (“EBITDA”), adjusted net loss attributable to
Altisource, adjusted diluted loss per share, cash flows used in
operating activities less additions to premises and equipment and
net debt less investment in equity securities, which are presented
elsewhere in this earnings release, are non-GAAP measures used by
management, existing shareholders, potential shareholders and other
users of our financial information to measure Altisource’s
performance and do not purport to be alternatives to loss from
operations, loss before income taxes and non-controlling interests,
net loss attributable to Altisource, diluted loss per share, cash
flows used in operating activities and long-term debt, including
current portion, as measures of Altisource’s performance. We
believe these measures are useful to management, existing
shareholders, potential shareholders and other users of our
financial information in evaluating operating profitability and
cash flow generation more on the basis of continuing cost and cash
flows as they exclude amortization expense related to acquisitions
that occurred in prior periods and non-cash share-based
compensation, as well as the effect of more significant
non-operational items from earnings, cash flows from operating
activities and long-term debt net of cash on-hand and investment in
equity securities. We believe these measures are also useful in
evaluating the effectiveness of our operations and underlying
business trends in a manner that is consistent with management’s
evaluation of business performance. Furthermore, we believe the
exclusion of more significant non-operational items enables
comparability to prior period performance and trend analysis.
It is management’s intent to provide non-GAAP
financial information to enhance the understanding of Altisource’s
GAAP financial information, and it should be considered by the
reader in addition to, but not instead of, the financial statements
prepared in accordance with GAAP. Each non-GAAP financial measure
is presented along with the corresponding GAAP measure so as not to
imply that more emphasis should be placed on the non-GAAP measure.
The non-GAAP financial information presented may be determined or
calculated differently by other companies. The non-GAAP financial
information should not be unduly relied upon.
Adjusted operating (loss) income is calculated
by removing intangible asset amortization expense, share-based
compensation expense, Pointillist losses, cost of cost savings
initiatives and other, restructuring charges and sales tax net
accrual (reimbursement) from loss from operations. Pretax loss
attributable to Altisource is calculated by removing
non-controlling interests from loss before income taxes and
non-controlling interests. Adjusted pretax loss attributable to
Altisource is calculated by removing non-controlling interests,
intangible asset amortization expense, share-based compensation
expense, Pointillist losses, cost of cost savings initiatives and
other, restructuring charges, unrealized (gain) loss on investment
in equity securities and sales tax net accrual (reimbursement) from
loss before income taxes and non-controlling interests. Adjusted
EBITDA is calculated by removing the income tax provision, interest
expense (net of interest income), depreciation and amortization,
share-based compensation expense, Pointillist losses, cost of cost
savings initiatives and other, restructuring charges, unrealized
(gain) loss on investment in equity securities and sales tax net
accrual (reimbursement) from net loss attributable to Altisource.
Adjusted net loss attributable to Altisource is calculated by
removing intangible asset amortization expense (net of tax),
share-based compensation expense (net of tax), Pointillist losses
(net of tax), cost of cost savings initiatives and other (net of
tax), restructuring charges (net of tax), unrealized (gain) loss on
investment in equity securities (net of tax), sales tax net accrual
(reimbursement) (net of tax) and certain income tax items related
to the decrease in the India income tax rate from adjustments to
deferred tax assets and adjustments to foreign income tax reserves
from net loss attributable to Altisource. Adjusted diluted loss per
share is calculated by dividing net loss attributable to Altisource
after removing intangible asset amortization expense (net of tax),
share-based compensation expense (net of tax), Pointillist losses
(net of tax), cost of cost savings initiatives and other (net of
tax), restructuring charges (net of tax), unrealized (gain) loss on
investment in equity securities (net of tax), sales tax net accrual
(reimbursement) (net of tax) and certain income tax related items
by the weighted average number of diluted shares. Cash flows used
in operating activities less additions to premises and equipment is
calculated by removing additions to premises and equipment from
cash flows used in operating activities. Net debt less investment
in equity securities is calculated as long-term debt, including
current portion, minus cash and cash equivalents and investment in
equity securities.
Reconciliations of the non-GAAP measures to the
corresponding GAAP measures are as follows:
|
Three months ended September
30, |
|
Nine months ended September
30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
|
|
|
|
|
|
Loss from operations |
$ |
(14,028 |
) |
|
$ |
(6,814 |
) |
|
$ |
(47,159 |
) |
|
$ |
(28,725 |
) |
|
|
|
|
|
|
|
|
Intangible asset amortization expense |
2,673 |
|
|
4,295 |
|
|
8,183 |
|
|
11,344 |
|
Share-based compensation expense |
431 |
|
|
1,732 |
|
|
2,510 |
|
|
6,556 |
|
Pointillist losses |
2,155 |
|
|
2,139 |
|
|
7,116 |
|
|
7,215 |
|
Cost of cost savings initiatives and other |
490 |
|
|
697 |
|
|
3,228 |
|
|
697 |
|
Restructuring charges |
— |
|
|
2,227 |
|
|
— |
|
|
10,921 |
|
Sales tax net accrual (reimbursement) |
— |
|
|
(618 |
) |
|
— |
|
|
(618 |
) |
|
|
|
|
|
|
|
|
Adjusted operating (loss) income |
$ |
(8,279 |
) |
|
$ |
3,658 |
|
|
$ |
(26,122 |
) |
|
$ |
7,390 |
|
|
|
|
|
|
|
|
|
Loss
before income taxes and non-controlling interests |
$ |
(17,898 |
) |
|
$ |
(11,140 |
) |
|
$ |
(57,040 |
) |
|
$ |
(54,011 |
) |
|
|
|
|
|
|
|
|
Non-controlling interests |
59 |
|
|
(340 |
) |
|
151 |
|
|
(642 |
) |
Pretax loss attributable to Altisource |
(17,839 |
) |
|
(11,480 |
) |
|
(56,889 |
) |
|
(54,653 |
) |
Intangible asset amortization expense |
2,673 |
|
|
4,295 |
|
|
8,183 |
|
|
11,344 |
|
Share-based compensation expense |
431 |
|
|
1,732 |
|
|
2,510 |
|
|
6,556 |
|
Pointillist losses |
1,895 |
|
|
1,879 |
|
|
6,253 |
|
|
6,316 |
|
Cost of cost savings initiatives and other |
490 |
|
|
697 |
|
|
3,228 |
|
|
697 |
|
Restructuring charges |
— |
|
|
2,227 |
|
|
— |
|
|
10,921 |
|
Unrealized (gain) loss on investment in equity securities |
— |
|
|
(138 |
) |
|
— |
|
|
12,433 |
|
Sales tax net accrual (reimbursement) |
— |
|
|
(618 |
) |
|
— |
|
|
(618 |
) |
|
|
|
|
|
|
|
|
Adjusted pretax loss attributable to Altisource |
$ |
(12,350 |
) |
|
$ |
(1,406 |
) |
|
$ |
(36,715 |
) |
|
$ |
(7,004 |
) |
|
|
|
|
|
|
|
|
Net
loss attributable to Altisource |
$ |
(18,269 |
) |
|
$ |
(13,237 |
) |
|
$ |
(58,746 |
) |
|
$ |
(59,948 |
) |
|
|
|
|
|
|
|
|
Income tax provision |
430 |
|
|
1,757 |
|
|
1,857 |
|
|
5,295 |
|
Interest expense (net of interest income) |
3,755 |
|
|
4,078 |
|
|
10,700 |
|
|
13,160 |
|
Depreciation and amortization |
3,817 |
|
|
8,115 |
|
|
11,662 |
|
|
22,865 |
|
Share-based compensation expense |
431 |
|
|
1,732 |
|
|
2,510 |
|
|
6,556 |
|
Pointillist losses |
1,801 |
|
|
1,813 |
|
|
5,996 |
|
|
6,160 |
|
Cost of cost savings initiatives and other |
490 |
|
|
697 |
|
|
3,228 |
|
|
697 |
|
Restructuring charges |
— |
|
|
2,227 |
|
|
— |
|
|
10,921 |
|
Unrealized (gain) loss on investment in equity securities |
— |
|
|
(138 |
) |
|
— |
|
|
12,433 |
|
Sales tax net accrual (reimbursement) |
— |
|
|
(618 |
) |
|
— |
|
|
(618 |
) |
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
(7,545 |
) |
|
$ |
6,426 |
|
|
$ |
(22,793 |
) |
|
$ |
17,521 |
|
|
|
|
|
|
|
|
|
Net
loss attributable to Altisource |
$ |
(18,269 |
) |
|
$ |
(13,237 |
) |
|
$ |
(58,746 |
) |
|
$ |
(59,948 |
) |
|
|
|
|
|
|
|
|
Intangible asset amortization expense, net of tax |
2,670 |
|
|
4,284 |
|
|
8,172 |
|
|
11,283 |
|
Share-based compensation expense, net of tax |
325 |
|
|
1,558 |
|
|
2,284 |
|
|
5,943 |
|
Pointillist losses, net of tax |
1,895 |
|
|
1,879 |
|
|
6,253 |
|
|
6,316 |
|
Cost of cost savings initiatives and other, net of tax |
464 |
|
|
565 |
|
|
2,832 |
|
|
565 |
|
Restructuring charges, net of tax |
— |
|
|
1,943 |
|
|
— |
|
|
9,801 |
|
Unrealized (gain) loss on investment in equity securities, net of
tax |
— |
|
|
(138 |
) |
|
— |
|
|
12,433 |
|
Sales tax net accrual (reimbursement), net of tax |
— |
|
|
(618 |
) |
|
— |
|
|
(618 |
) |
Certain income tax related items |
269 |
|
|
— |
|
|
1,306 |
|
|
2,392 |
|
|
|
|
|
|
|
|
|
Adjusted net loss attributable to Altisource |
$ |
(12,646 |
) |
|
$ |
(3,764 |
) |
|
$ |
(37,899 |
) |
|
$ |
(11,833 |
) |
|
|
|
|
|
|
|
|
Diluted loss per share |
$ |
(1.15 |
) |
|
$ |
(0.85 |
) |
|
$ |
(3.71 |
) |
|
$ |
(3.85 |
) |
|
|
|
|
|
|
|
|
Intangible asset amortization expense, net of tax, per diluted
share |
0.17 |
|
|
0.27 |
|
|
0.52 |
|
|
0.72 |
|
Share-based compensation expense, net of tax, per diluted
share |
0.02 |
|
|
0.10 |
|
|
0.14 |
|
|
0.38 |
|
Pointillist losses, net of tax, per diluted share |
0.12 |
|
|
0.12 |
|
|
0.40 |
|
|
0.41 |
|
Cost of cost savings initiatives and other, net of tax, per diluted
share |
0.03 |
|
|
0.04 |
|
|
0.18 |
|
|
0.04 |
|
Restructuring charges, net of tax, per diluted share |
— |
|
|
0.12 |
|
|
— |
|
|
0.63 |
|
Unrealized (gain) loss on investment in equity securities, net of
tax, per diluted share |
— |
|
|
(0.01 |
) |
|
— |
|
|
0.80 |
|
Sales tax net accrual (reimbursement), net of tax, per diluted
share |
— |
|
|
(0.04 |
) |
|
— |
|
|
(0.04 |
) |
Certain income tax related items per diluted share |
0.02 |
|
|
— |
|
|
0.08 |
|
|
0.15 |
|
|
|
|
|
|
|
|
|
Adjusted diluted loss per share |
$ |
(0.80 |
) |
|
$ |
(0.24 |
) |
|
$ |
(2.40 |
) |
|
$ |
(0.76 |
) |
|
|
|
|
|
|
|
|
Calculation of the impact of intangible asset amortization expense,
net of tax |
|
|
|
|
|
|
|
Intangible asset amortization expense |
$ |
2,673 |
|
|
$ |
4,295 |
|
|
$ |
8,183 |
|
|
$ |
11,344 |
|
Tax benefit from intangible asset amortization |
(3 |
) |
|
(11 |
) |
|
(11 |
) |
|
(61 |
) |
Intangible asset amortization expense, net of tax |
2,670 |
|
|
4,284 |
|
|
8,172 |
|
|
11,283 |
|
Diluted share count |
15,831 |
|
|
15,637 |
|
|
15,816 |
|
|
15,578 |
|
|
|
|
|
|
|
|
|
Intangible asset amortization expense, net of tax, per diluted
share |
$ |
0.17 |
|
|
$ |
0.27 |
|
|
$ |
0.52 |
|
|
$ |
0.72 |
|
|
|
|
|
|
|
|
|
Calculation of the impact of share-based compensation expense, net
of tax |
|
|
|
|
|
|
|
Share-based compensation expense |
$ |
431 |
|
|
$ |
1,732 |
|
|
$ |
2,510 |
|
|
$ |
6,556 |
|
Tax benefit from share-based compensation expense |
(106 |
) |
|
(174 |
) |
|
(226 |
) |
|
(613 |
) |
Share-based compensation expense, net of tax |
325 |
|
|
1,558 |
|
|
2,284 |
|
|
5,943 |
|
Diluted share count |
15,831 |
|
|
15,637 |
|
|
15,816 |
|
|
15,578 |
|
|
|
|
|
|
|
|
|
Share-based compensation expense, net of tax, per diluted
share |
$ |
0.02 |
|
|
$ |
0.10 |
|
|
$ |
0.14 |
|
|
$ |
0.38 |
|
|
|
|
|
|
|
|
|
Calculation of the impact of
Pointillist losses, net of tax |
|
|
|
|
|
|
|
Pointillist losses |
$ |
1,895 |
|
|
$ |
1,879 |
|
|
$ |
6,253 |
|
|
$ |
6,316 |
|
Tax benefit from Pointillist losses |
— |
|
|
— |
|
|
— |
|
|
— |
|
Pointillist losses, net of tax |
1,895 |
|
|
1,879 |
|
|
6,253 |
|
|
6,316 |
|
Diluted share count |
15,831 |
|
|
15,637 |
|
|
15,816 |
|
|
15,578 |
|
|
|
|
|
|
|
|
|
Pointillist losses, net of
tax, per diluted share |
$ |
0.12 |
|
|
$ |
0.12 |
|
|
$ |
0.40 |
|
|
$ |
0.41 |
|
|
|
|
|
|
|
|
|
Calculation of the impact of cost of cost savings initiatives and
other, net of tax |
|
|
|
|
|
|
|
Cost of cost savings initiatives and other |
$ |
490 |
|
|
$ |
697 |
|
|
$ |
3,228 |
|
|
$ |
697 |
|
Tax benefit from cost of cost savings initiatives and other |
(26 |
) |
|
(132 |
) |
|
(396 |
) |
|
(132 |
) |
Cost of cost savings initiatives and other, net of tax |
464 |
|
|
565 |
|
|
2,832 |
|
|
565 |
|
Diluted share count |
15,831 |
|
|
15,637 |
|
|
15,816 |
|
|
15,578 |
|
|
|
|
|
|
|
|
|
Cost of cost savings initiatives and other, net of tax, per diluted
share |
$ |
0.03 |
|
|
$ |
0.04 |
|
|
$ |
0.18 |
|
|
$ |
0.04 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of the impact of restructuring charges, net of tax |
|
|
|
|
|
|
|
Restructuring charges |
$ |
— |
|
|
$ |
2,227 |
|
|
$ |
— |
|
|
$ |
10,921 |
|
Tax benefit from restructuring charges |
— |
|
|
(284 |
) |
|
— |
|
|
(1,120 |
) |
Restructuring charges, net of tax |
— |
|
|
1,943 |
|
|
— |
|
|
9,801 |
|
Diluted share count |
15,831 |
|
|
15,637 |
|
|
15,816 |
|
|
15,578 |
|
|
|
|
|
|
|
|
|
Restructuring charges, net of tax, per diluted share |
$ |
— |
|
|
$ |
0.12 |
|
|
$ |
— |
|
|
$ |
0.63 |
|
|
|
|
|
|
|
|
|
Calculation of the impact of the unrealized (gain) loss on
investment in equity securities, net of tax |
|
|
|
|
|
|
|
Unrealized (gain) loss on investment in equity securities |
$ |
— |
|
|
$ |
(138 |
) |
|
$ |
— |
|
|
$ |
12,433 |
|
Tax provision from the unrealized (gain) loss on investment in
equity securities |
— |
|
|
— |
|
|
— |
|
|
— |
|
Unrealized (gain) loss on investment in equity securities, net of
tax |
— |
|
|
(138 |
) |
|
— |
|
|
12,433 |
|
Diluted share count |
15,831 |
|
|
15,637 |
|
|
15,816 |
|
|
15,578 |
|
|
|
|
|
|
|
|
|
Unrealized (gain) loss on investment in equity securities, net of
tax, per diluted share |
$ |
— |
|
|
$ |
(0.01 |
) |
|
$ |
— |
|
|
$ |
0.80 |
|
|
|
|
|
|
|
|
|
Calculation of the impact of sales tax net accrual (reimbursement),
net of tax |
|
|
|
|
|
|
|
Sales tax net accrual (reimbursement) |
$ |
— |
|
|
$ |
(618 |
) |
|
$ |
— |
|
|
$ |
(618 |
) |
Tax provision from sales tax net accrual (reimbursement) |
— |
|
|
— |
|
|
— |
|
|
— |
|
Sales tax net accrual (reimbursement), net of tax |
— |
|
|
(618 |
) |
|
— |
|
|
(618 |
) |
Diluted share count |
15,831 |
|
|
15,637 |
|
|
15,816 |
|
|
15,578 |
|
|
|
|
|
|
|
|
|
Sales
tax net accrual (reimbursement), net of tax, per diluted share |
$ |
— |
|
|
$ |
(0.04 |
) |
|
$ |
— |
|
|
$ |
(0.04 |
) |
|
|
|
|
|
|
|
|
Certain income tax related items resulting from: |
|
|
|
|
|
|
|
India income tax rate changes |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,384 |
|
Foreign income tax reserves/other |
269 |
|
|
— |
|
|
1,306 |
|
|
1,008 |
|
Certain income tax related items |
269 |
|
|
— |
|
|
1,306 |
|
|
2,392 |
|
Diluted share count |
15,831 |
|
|
15,637 |
|
|
15,816 |
|
|
15,578 |
|
|
|
|
|
|
|
|
|
Certain income tax related items per diluted share |
$ |
0.02 |
|
|
$ |
— |
|
|
$ |
0.08 |
|
|
$ |
0.15 |
|
|
|
|
|
|
|
|
|
Cash
flows used in operating activities |
$ |
(18,358 |
) |
|
$ |
(2,861 |
) |
|
$ |
(41,133 |
) |
|
$ |
(14,077 |
) |
Less: additions to premises and equipment |
(432 |
) |
|
(1,036 |
) |
|
(1,125 |
) |
|
(2,502 |
) |
|
|
|
|
|
|
|
|
Cash
flows used in operating activities less additions to premises and
equipment |
$ |
(18,790 |
) |
|
$ |
(3,897 |
) |
|
$ |
(42,258 |
) |
|
$ |
(16,579 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,2021 |
|
September 30,2020 |
|
|
|
|
Senior secured term loan |
$ |
247,204 |
|
|
$ |
293,826 |
|
Credit Facility |
20,000 |
|
|
— |
|
Less: Cash and cash equivalents |
(36,492 |
) |
|
(67,023 |
) |
Less: Investment in equity securities |
— |
|
|
(30,185 |
) |
|
|
|
|
Net debt less investment in
equity securities(1) |
$ |
230,712 |
|
|
$ |
196,618 |
|
___________________Note: Amounts may not add to the total due to
rounding.(1) Excludes $1.3 million of Pointillist debt that is
convertible into Pointillist equity
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