First quarter business performance highlights include:
- On March 29, completed the acquisition of Homeward fee-based businesses from Ocwen for an aggregate purchase price of $87.0 million;
- Based on portfolio acquisitions announced by Ocwen, we anticipate boarding up to 1.5 million additional loans to REALServicing over the next 12 months, less service transfers and run-off;
- Ocwen boarded all of the Homeward non-GSE loans on the REALServicing platform by April 1, 2013;
- From January 1 through April 5, 2013, Altisource Residential Corporation ("Residential") acquired primarily non-performing loan portfolios with a total unpaid principal balance of $349.6 million, representing 1,410 loans; and
- Acquired 0.3 million shares of Altisource common stock during the quarter at an average price of $82.58 per share.
Gross profit as a percentage of service revenue was 41% and 44% for the three months ended March 31, 2013 and 2012, respectively. The margin decline is primarily from higher compensation costs in our Technology Services segment as we continue to invest in the development of our next generation technology to support our growth initiatives. The decline was partially offset by the improvement in Mortgage Services gross profit margins from 46% to 47% primarily from workforce and vendor efficiencies, even after incurring the carrying costs to support Mortgage Services' anticipated growth.
On a consolidated basis, income from operations as a percentage of service revenue declined from 28% for the three months ended March 31, 2012 to 26% for the three months ended March 31, 2013 as a result of lower gross margins mentioned above, partially offset by the slower growth of selling, general and administrative expenses compared to service revenue.
Forward-Looking StatementsThis press release contains forward-looking statements that involve a number of risks and uncertainties. Those forward-looking statements include all statements that are not historical fact, including statements about management's beliefs and expectations. Forward-looking statements are based on management's beliefs as well as assumptions made by and information currently available to management. Because such statements are based on expectations as to future economic performance and are not statements of historical fact, actual results may differ materially from those projected. The Company undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise. The risks and uncertainties to which forward-looking statements are subject include, but are not limited to: Altisource's ability to retain existing customers and attract new customers; general economic and market conditions; governmental regulations, taxes and policies; availability of adequate and timely sources of liquidity; and other risks and uncertainties detailed in the "Forward-Looking Statements," "Risk Factors" and other sections of the Company's Form 10-K and other filings with the Securities and Exchange Commission.
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