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Altisource(R) Announces Second Quarter Results

Stocks in this article: ASPS

LUXEMBOURG, July 25, 2013 (GLOBE NEWSWIRE) -- Altisource Portfolio Solutions S.A. ("Altisource") (Nasdaq:ASPS) today reported record service revenue of $161.7 million for the quarter ended June 30, 2013, an increase of 37% when compared to the quarter ended June 30, 2012. Net income attributable to Altisource was a record $30.9 million or $1.25 per diluted share for the quarter ended June 30, 2013, an increase of 10% and 11%, respectively, compared to the quarter ended June 30, 2012.

The growth in revenue is primarily from the initial referrals on the Homeward non-Government Sponsored Enterprise ("non-GSE") loans that Ocwen Financial Corporation ("Ocwen") boarded onto the REALServicing ® platform in the first quarter and the expansion of the Financial Services segment which is gaining traction. Altisource generally begins receiving referrals once portfolios are boarded onto the REALServicing platform. During the second quarter of 2013, the Mortgage and Technology Services segments recognized virtually no benefit from the Residential Capital, LLC ("ResCap") non-GSE portfolio that is expected to board on REALServicing in the third quarter of 2013. Including Ocwen's recently announced agreement to purchase $78 billion of mortgage servicing rights from OneWest Bank, FSB ("OneWest"), the number of non-GSE loans on which Altisource earns revenue is expected to be 65% higher in the fourth quarter of 2013 compared to the second quarter of 2013. 

Net income increased in the second quarter of 2013 over the same period in the prior year from service revenue growth, partially offset by interest expense on the $400 million Senior Secured Term Loan ($200 million was funded in the fourth quarter of 2012 and $200 million was funded in the second quarter of 2013), intangible asset amortization expense in connection with the Homeward and ResCap fee-based business transactions and increased technology expenditures to support our growth. In addition, the Mortgage Services segment was almost fully staffed to meet the anticipated 65% higher non-GSE loan count on REALServicing in the fourth quarter of 2013 (compared to the second quarter of 2013). This 65% increase in loans with very little increase in compensation and benefits will be the major contributor to our goal of improving default related margins by seven percent by the end of this year compared to 2012.

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