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Altisource Announces Fourth Quarter And Full Year Results

Stocks in this article: ASPS

LUXEMBOURG, Feb. 13, 2013 (GLOBE NEWSWIRE) -- Altisourceā„¢ (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 Hubzu TM 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;
  • 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.

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