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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Luxembourg
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98-0554932
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Large accelerated filer
o
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Accelerated filer
þ
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Emerging growth company
o
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September 30,
2018 |
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December 31,
2017 |
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ASSETS
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|||||||
Current assets:
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Cash and cash equivalents
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$
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102,860
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$
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105,006
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Investment in equity securities
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44,967
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49,153
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Accounts receivable, net
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46,929
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52,740
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Prepaid expenses and other current assets
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81,622
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64,742
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Total current assets
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276,378
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271,641
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Premises and equipment, net
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52,026
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73,273
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Goodwill
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84,027
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86,283
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Intangible assets, net
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98,754
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120,065
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Deferred tax assets, net
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304,383
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303,707
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Other assets
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13,697
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10,195
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Total assets
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$
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829,265
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$
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865,164
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LIABILITIES AND EQUITY
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Current liabilities:
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Accounts payable and accrued expenses
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$
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96,407
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$
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84,400
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Current portion of long-term debt
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34,440
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5,945
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Deferred revenue
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12,955
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9,802
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Other current liabilities
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7,912
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9,414
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Total current liabilities
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151,714
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109,561
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Long-term debt, less current portion
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346,544
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403,336
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Other non-current liabilities
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7,866
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12,282
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Commitments, contingencies and regulatory matters (Note 21)
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Equity:
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Common stock ($1.00 par value; 100,000 shares authorized, 25,413 issued and 17,048 outstanding as of September 30, 2018; 100,000 shares authorized, 25,413 shares issued and 17,418 outstanding as of December 31, 2017)
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25,413
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25,413
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Additional paid-in capital
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118,625
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112,475
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Retained earnings
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603,343
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626,600
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Accumulated other comprehensive income
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—
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733
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Treasury stock, at cost (8,365 shares as of September 30, 2018 and 7,995 shares as of December 31, 2017)
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(425,767
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)
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(426,609
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)
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Altisource equity
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321,614
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338,612
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Non-controlling interests
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1,527
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1,373
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Total equity
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323,141
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339,985
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Total liabilities and equity
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$
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829,265
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$
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865,164
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Three months ended
September 30, |
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Nine months ended
September 30, |
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2018
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2017
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2018
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2017
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Revenue
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$
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204,575
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$
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234,979
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$
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620,569
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$
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726,147
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Cost of revenue
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147,580
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174,898
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457,980
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538,244
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Gross profit
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56,995
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60,081
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162,589
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187,903
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Operating expenses (income):
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Selling, general and administrative expenses
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46,329
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46,622
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132,377
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146,793
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Gain on sale of business (Note 3)
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(13,688
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)
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—
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(13,688
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)
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—
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Restructuring charges (Note 20)
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3,436
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—
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3,436
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—
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Income from operations
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20,918
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13,459
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40,464
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41,110
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Other income (expense), net:
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Interest expense
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(6,725
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)
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(5,599
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)
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(19,615
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)
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(16,862
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)
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Unrealized gain (loss) on investment in equity securities (Note 4)
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1,782
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—
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(4,186
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)
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—
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Other income (expense), net
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154
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2,497
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(2,435
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)
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8,015
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Total other income (expense), net
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(4,789
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)
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(3,102
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)
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(26,236
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)
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(8,847
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)
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Income before income taxes and non-controlling interests
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16,129
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10,357
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14,228
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32,263
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Income tax provision
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(6,608
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)
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(2,591
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)
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(6,059
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)
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(7,615
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)
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Net income
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9,521
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7,766
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8,169
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24,648
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Net income attributable to non-controlling interests
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(854
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)
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(805
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)
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(2,066
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)
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(2,107
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)
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Net income attributable to Altisource
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$
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8,667
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$
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6,961
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$
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6,103
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$
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22,541
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Earnings per share:
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Basic
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$
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0.51
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$
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0.39
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$
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0.36
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$
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1.23
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Diluted
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$
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0.49
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$
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0.38
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$
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0.35
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$
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1.20
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Weighted average shares outstanding:
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||||||||
Basic
|
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17,033
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18,023
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17,184
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18,337
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Diluted
|
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17,575
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18,429
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17,669
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18,854
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Comprehensive income:
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Net income
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$
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9,521
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$
|
7,766
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$
|
8,169
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$
|
24,648
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Other comprehensive income (loss), net of tax:
|
|
|
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Reclassification of unrealized gain on investment in equity securities, net of income tax provision of $200, to retained earnings from the cumulative effect of an accounting change (Note 1)
|
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—
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—
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(733
|
)
|
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—
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|
||||
Unrealized (loss) gain on investment in equity securities, net of income tax benefit (provision) of $0, $2,054, $0, $(78)
|
|
—
|
|
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(5,530
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)
|
|
—
|
|
|
212
|
|
||||
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|
|
|
|
|
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Comprehensive income, net of tax
|
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9,521
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|
|
2,236
|
|
|
7,436
|
|
|
24,860
|
|
||||
Comprehensive income attributable to non-controlling interests
|
|
(854
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)
|
|
(805
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)
|
|
(2,066
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)
|
|
(2,107
|
)
|
||||
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|
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Comprehensive income attributable to Altisource
|
|
$
|
8,667
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$
|
1,431
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|
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$
|
5,370
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|
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$
|
22,753
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Altisource Equity
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Common stock
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Additional paid-in capital
|
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Retained earnings
|
|
Accumulated other comprehensive income (loss)
|
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Treasury stock, at cost
|
|
Non-controlling interests
|
|
Total
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|||||||||||||||||
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Shares
|
|
|
|
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|
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|
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Balance, December 31, 2016
|
25,413
|
|
|
$
|
25,413
|
|
|
$
|
107,288
|
|
|
$
|
333,786
|
|
|
$
|
(1,745
|
)
|
|
$
|
(403,953
|
)
|
|
$
|
1,405
|
|
|
$
|
62,194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|||||||||||||||
Comprehensive income:
|
|
|
|
|
|
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|
|
|
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|
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|
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Net income
|
—
|
|
|
—
|
|
|
—
|
|
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22,541
|
|
|
—
|
|
|
—
|
|
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2,107
|
|
|
24,648
|
|
|||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
212
|
|
|
—
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|
|
—
|
|
|
212
|
|
|||||||
Distributions to non-controlling interest holders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
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|
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(2,143
|
)
|
|
(2,143
|
)
|
|||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
3,237
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,237
|
|
|||||||
Cumulative effect of an accounting change (Note 14)
|
—
|
|
|
—
|
|
|
932
|
|
|
(932
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
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|
|||||||
Exercise of stock options and issuance of restricted shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,787
|
)
|
|
—
|
|
|
13,871
|
|
|
—
|
|
|
2,084
|
|
|||||||
Treasury shares withheld for the payment of tax on restricted share issuances
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,497
|
)
|
|
—
|
|
|
409
|
|
|
—
|
|
|
(1,088
|
)
|
|||||||
Repurchase of shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,995
|
)
|
|
—
|
|
|
(24,995
|
)
|
|||||||
|
|
|
|
|
|
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|||||||||||||||
Balance, September 30, 2017
|
25,413
|
|
|
$
|
25,413
|
|
|
$
|
111,457
|
|
|
$
|
342,111
|
|
|
$
|
(1,533
|
)
|
|
$
|
(414,668
|
)
|
|
$
|
1,369
|
|
|
$
|
64,149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, December 31, 2017
|
25,413
|
|
|
$
|
25,413
|
|
|
$
|
112,475
|
|
|
$
|
626,600
|
|
|
$
|
733
|
|
|
$
|
(426,609
|
)
|
|
$
|
1,373
|
|
|
$
|
339,985
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
6,103
|
|
|
—
|
|
|
—
|
|
|
2,066
|
|
|
8,169
|
|
|||||||
Distributions to non-controlling interest holders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,912
|
)
|
|
(1,912
|
)
|
|||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
6,150
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,150
|
|
|||||||
Cumulative effect of accounting changes (Note 1)
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,715
|
)
|
|
(733
|
)
|
|
—
|
|
|
—
|
|
|
(10,448
|
)
|
|||||||
Exercise of stock options and issuance of restricted shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,524
|
)
|
|
—
|
|
|
22,100
|
|
|
—
|
|
|
3,576
|
|
|||||||
Treasury shares withheld for the payment of tax on restricted share issuances and stock option exercises
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,121
|
)
|
|
—
|
|
|
513
|
|
|
—
|
|
|
(608
|
)
|
|||||||
Repurchase of shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,771
|
)
|
|
—
|
|
|
(21,771
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, September 30, 2018
|
25,413
|
|
|
$
|
25,413
|
|
|
$
|
118,625
|
|
|
$
|
603,343
|
|
|
$
|
—
|
|
|
$
|
(425,767
|
)
|
|
$
|
1,527
|
|
|
$
|
323,141
|
|
|
Nine months ended
September 30, |
||||||
|
2018
|
|
2017
|
||||
|
|
|
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net income
|
$
|
8,169
|
|
|
$
|
24,648
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
24,743
|
|
|
27,411
|
|
||
Amortization of intangible assets
|
21,311
|
|
|
27,143
|
|
||
Change in the fair value of acquisition related contingent consideration
|
—
|
|
|
24
|
|
||
Unrealized loss on investment in equity securities
|
4,186
|
|
|
—
|
|
||
Share-based compensation expense
|
6,150
|
|
|
3,237
|
|
||
Bad debt expense
|
2,408
|
|
|
3,101
|
|
||
Gain on early extinguishment of debt
|
—
|
|
|
(5,419
|
)
|
||
Amortization of debt discount
|
513
|
|
|
225
|
|
||
Amortization of debt issuance costs
|
739
|
|
|
625
|
|
||
Deferred income taxes
|
(676
|
)
|
|
—
|
|
||
Loss on disposal of fixed assets
|
723
|
|
|
2,776
|
|
||
Gain on sale of business (Note 3)
|
(13,688
|
)
|
|
—
|
|
||
Loss on debt refinancing (Note 11)
|
4,434
|
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable
|
4,515
|
|
|
21,543
|
|
||
Prepaid expenses and other current assets
|
(16,880
|
)
|
|
(17,272
|
)
|
||
Other assets
|
554
|
|
|
760
|
|
||
Accounts payable and accrued expenses
|
10,774
|
|
|
165
|
|
||
Other current and non-current liabilities
|
(14,325
|
)
|
|
(41,838
|
)
|
||
Net cash provided by operating activities
|
43,650
|
|
|
47,129
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
||
Additions to premises and equipment
|
(4,207
|
)
|
|
(7,485
|
)
|
||
Proceeds from the sale of business (Note 3)
|
15,000
|
|
|
—
|
|
||
Net cash provided by (used in) investing activities
|
10,793
|
|
|
(7,485
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
||
Proceeds from issuance of long-term debt
|
407,880
|
|
|
—
|
|
||
Repayments and repurchases of long-term debt
|
(436,821
|
)
|
|
(48,600
|
)
|
||
Debt issuance costs
|
(5,042
|
)
|
|
—
|
|
||
Proceeds from stock option exercises
|
3,576
|
|
|
2,084
|
|
||
Purchase of treasury shares
|
(21,771
|
)
|
|
(24,995
|
)
|
||
Distributions to non-controlling interests
|
(1,912
|
)
|
|
(2,143
|
)
|
||
Payment of tax withholding on issuance of restricted shares and stock option exercises
|
(608
|
)
|
|
(1,088
|
)
|
||
Net cash used in financing activities
|
(54,698
|
)
|
|
(74,742
|
)
|
||
|
|
|
|
||||
Net decrease in cash, cash equivalents and restricted cash
|
(255
|
)
|
|
(35,098
|
)
|
||
Cash, cash equivalents and restricted cash at the beginning of the period
|
108,843
|
|
|
153,421
|
|
||
|
|
|
|
||||
Cash, cash equivalents and restricted cash at the end of the period
|
$
|
108,588
|
|
|
$
|
118,323
|
|
|
|
|
|
|
|||
Supplemental cash flow information:
|
|
|
|
|
|
||
Interest paid
|
$
|
17,889
|
|
|
$
|
16,203
|
|
Income taxes paid, net
|
4,162
|
|
|
15,445
|
|
||
|
|
|
|
||||
Non-cash investing and financing activities:
|
|
|
|
|
|
||
Increase in payables for purchases of premises and equipment
|
$
|
12
|
|
|
$
|
52
|
|
•
|
For the majority of the services we provide through the Mortgage Market segment, we recognize transactional revenue when the service is provided.
|
•
|
For loan servicing technologies, we recognize revenue based on the number of loans on the system, on a per-transaction basis or over the estimated average number of months the loans and real estate owned (“REO”) are on the platform, as applicable. We generally recognize revenue for professional services relating to loan servicing technologies over the contract period. For our loan origination system, we generally recognize revenue over the contract term, beginning on the commencement date of each contract. For foreclosure trustee services, we recognize revenue over the period during which we perform the related services, with full recognition upon completion and/or recording the related foreclosure deed. For loan disbursement processing services, we recognize revenue over the period during which we perform the processing services with full recognition upon completion of the disbursements. We use judgment to determine the period over which we recognize revenue for certain of these services. For mortgage charge-off collections performed on behalf of our clients, we recognize revenue as a percentage of amounts collected following collection from the borrowers.
|
•
|
For real estate brokerage and auction services, we recognize revenue on a net basis as we perform services as an agent without assuming the risks and rewards of ownership of the asset and the commission earned on the sale is a fixed percentage or amount.
|
•
|
Reimbursable expenses revenue, primarily related to our property preservation and inspection services, real estate sales and our foreclosure trustee services businesses, is included in revenue with an equal amount recognized in cost of revenue. These amounts are recognized on a gross basis, principally because generally we have control over selection of vendors and the vendor relationships are with us, rather than with our customers.
|
•
|
For the majority of the services we provide through the Real Estate Market segment, we recognize transactional revenue when the service is provided.
|
•
|
For our renovation services, revenue is recognized over the period of the construction activity, based on the estimated percentage of completion of each project. We use judgment to determine the period over which we recognize revenue for certain of these services. For real estate brokerage and auction services, we recognize revenue on a net basis as we perform services as an agent without assuming the risks and rewards of ownership of the asset and the commission earned on the sale is a fixed percentage or amount. For the buy-renovate-lease-sell business, we recognize revenue associated with our sales of short-term investments in real estate on a gross basis as we assume the risks and rewards of ownership of the asset.
|
•
|
Reimbursable expenses revenue, primarily related to our real estate sales business, is included in revenue with an equal offsetting expense recognized in cost of revenue. These amounts are recognized on a gross basis, principally because generally we have control over selection of vendors and the vendor relationships are with us, rather than with our customers.
|
•
|
For the majority of the services we provide through Other Businesses, Corporate and Eliminations, we recognize transactional revenue when the service is provided. We generally earn fees for our post-charge-off consumer debt collection services as a percentage of the amount we collect on delinquent consumer receivables and recognize revenue following collection from the borrowers. We provide customer relationship management services for which we typically earn and recognize revenue on a per-person, per-call or per-minute basis as the related services are performed.
|
•
|
For the information technology (“IT”) infrastructure services we provide to Ocwen Financial Corporation (“Ocwen”), Front Yard Residential Corporation (“RESI”) and Altisource Asset Management Corporation (“AAMC”), we recognize revenue primarily based on the number of users of the applicable systems, fixed fees and the number and type of licensed platforms. We recognize revenue associated with implementation services upon completion and maintenance services ratably over the related service period.
|
|
|
Impact of the adoption of Topic 606
|
||||||||||
(in thousands)
|
|
As reported
|
|
Adjustments
|
|
Balances without adoption of Topic 606
|
||||||
|
|
|
|
|
|
|
||||||
Accounts receivable, net
|
|
$
|
46,929
|
|
|
$
|
789
|
|
|
$
|
47,718
|
|
Total current assets
|
|
276,378
|
|
|
789
|
|
|
277,167
|
|
|||
Total assets
|
|
829,265
|
|
|
789
|
|
|
830,054
|
|
|||
|
|
|
|
|
|
|
||||||
Other current liabilities
|
|
7,912
|
|
|
(2,303
|
)
|
|
5,609
|
|
|||
Deferred revenue
|
|
12,955
|
|
|
(4,048
|
)
|
|
8,907
|
|
|||
Total current liabilities
|
|
151,714
|
|
|
(6,351
|
)
|
|
145,363
|
|
|||
|
|
|
|
|
|
|
||||||
Other non-current liabilities
|
|
7,866
|
|
|
686
|
|
|
8,552
|
|
|||
|
|
|
|
|
|
|
||||||
Retained earnings
|
|
603,343
|
|
|
6,454
|
|
|
609,797
|
|
|||
Altisource equity
|
|
321,614
|
|
|
6,454
|
|
|
328,068
|
|
|||
Total equity
|
|
323,141
|
|
|
6,454
|
|
|
329,595
|
|
|||
Total liabilities and equity
|
|
829,265
|
|
|
789
|
|
|
830,054
|
|
|
|
Impact of the adoption of Topic 606
|
||||||||||
(in thousands)
|
|
As reported
|
|
Adjustments
|
|
Balances without adoption of Topic 606
|
||||||
|
|
|
|
|
|
|
||||||
Revenue
|
|
$
|
204,575
|
|
|
$
|
(3,966
|
)
|
|
$
|
200,609
|
|
Cost of revenue
|
|
147,580
|
|
|
392
|
|
|
147,972
|
|
|||
Gross profit
|
|
56,995
|
|
|
(4,358
|
)
|
|
52,637
|
|
|||
Income from operations
|
|
20,918
|
|
|
(4,358
|
)
|
|
16,560
|
|
|||
Income before income taxes and non-controlling interests
|
|
16,129
|
|
|
(4,358
|
)
|
|
11,771
|
|
|||
Income tax provision
|
|
(6,608
|
)
|
|
2,164
|
|
|
(4,444
|
)
|
|||
Net income
|
|
9,521
|
|
|
(2,194
|
)
|
|
7,327
|
|
|||
Net income attributable to Altisource
|
|
8,667
|
|
|
(2,194
|
)
|
|
6,473
|
|
|
|
Impact of the adoption of Topic 606
|
||||||||||
(in thousands)
|
|
As reported
|
|
Adjustments
|
|
Balances without adoption of Topic 606
|
||||||
|
|
|
|
|
|
|
||||||
Revenue
|
|
$
|
620,569
|
|
|
$
|
(4,757
|
)
|
|
$
|
615,812
|
|
Cost of revenue
|
|
457,980
|
|
|
1,851
|
|
|
459,831
|
|
|||
Gross profit
|
|
162,589
|
|
|
(6,608
|
)
|
|
155,981
|
|
|||
Income from operations
|
|
40,464
|
|
|
(6,608
|
)
|
|
33,856
|
|
|||
Income before income taxes and non-controlling interests
|
|
14,228
|
|
|
(6,608
|
)
|
|
7,620
|
|
|||
Income tax provision
|
|
(6,059
|
)
|
|
2,814
|
|
|
(3,245
|
)
|
|||
Net income
|
|
8,169
|
|
|
(3,794
|
)
|
|
4,375
|
|
|||
Net income attributable to Altisource
|
|
6,103
|
|
|
(3,794
|
)
|
|
2,309
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
|
|
|
|
|
|
|
|
|
||||
Mortgage Market
|
|
65
|
%
|
|
68
|
%
|
|
62
|
%
|
|
68
|
%
|
Real Estate Market
|
|
1
|
%
|
|
1
|
%
|
|
1
|
%
|
|
1
|
%
|
Other Businesses, Corporate and Eliminations
|
|
9
|
%
|
|
7
|
%
|
|
9
|
%
|
|
11
|
%
|
Consolidated revenue
|
|
56
|
%
|
|
58
|
%
|
|
53
|
%
|
|
58
|
%
|
(in thousands)
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
|
|
|
|
|
||||
Billed
|
|
$
|
44,248
|
|
|
$
|
40,787
|
|
Unbilled
|
|
14,515
|
|
|
22,532
|
|
||
Subtotal
|
|
58,763
|
|
|
63,319
|
|
||
Less: Allowance for doubtful accounts
|
|
(11,834
|
)
|
|
(10,579
|
)
|
||
|
|
|
|
|
||||
Total
|
|
$
|
46,929
|
|
|
$
|
52,740
|
|
(in thousands)
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
|
|
|
|
|
||||
Short-term investments in real estate
|
|
$
|
51,688
|
|
|
$
|
29,405
|
|
Maintenance agreements, current portion
|
|
3,860
|
|
|
8,014
|
|
||
Income taxes receivable
|
|
8,354
|
|
|
9,227
|
|
||
Prepaid expenses
|
|
7,070
|
|
|
7,898
|
|
||
Other current assets
|
|
10,650
|
|
|
10,198
|
|
||
|
|
|
|
|
||||
Total
|
|
$
|
81,622
|
|
|
$
|
64,742
|
|
(in thousands)
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
|
|
|
|
|
||||
Computer hardware and software
|
|
$
|
181,489
|
|
|
$
|
179,567
|
|
Leasehold improvements
|
|
32,413
|
|
|
33,417
|
|
||
Furniture and fixtures
|
|
13,438
|
|
|
14,092
|
|
||
Office equipment and other
|
|
8,542
|
|
|
9,388
|
|
||
|
|
235,882
|
|
|
236,464
|
|
||
Less: Accumulated depreciation and amortization
|
|
(183,856
|
)
|
|
(163,191
|
)
|
||
|
|
|
|
|
||||
Total
|
|
$
|
52,026
|
|
|
$
|
73,273
|
|
(in thousands)
|
|
Mortgage Market
|
|
Real Estate Market
|
|
Other Businesses, Corporate and Eliminations
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2017
|
|
$
|
73,259
|
|
|
$
|
10,056
|
|
|
$
|
2,968
|
|
|
$
|
86,283
|
|
Dispositions
(1)
|
|
—
|
|
|
(2,256
|
)
|
|
—
|
|
|
(2,256
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Balance as of September 30, 2018
|
|
$
|
73,259
|
|
|
$
|
7,800
|
|
|
$
|
2,968
|
|
|
$
|
84,027
|
|
(1)
|
During the third quarter of 2018, goodwill of
$2.3 million
attributable to the rental property management business was included in the gain on sale of the rental property management business to RESI (see
Note 3
).
|
|
|
Weighted average estimated useful life
(in years) |
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net book value
|
||||||||||||||||||
(in thousands)
|
|
|
September 30,
2018 |
|
December 31,
2017 |
|
September 30,
2018 |
|
December 31,
2017 |
|
September 30,
2018 |
|
December 31,
2017 |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Definite lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer related intangible assets
|
|
10
|
|
$
|
273,172
|
|
|
$
|
277,828
|
|
|
$
|
(202,501
|
)
|
|
$
|
(188,258
|
)
|
|
$
|
70,671
|
|
|
$
|
89,570
|
|
Operating agreement
|
|
20
|
|
35,000
|
|
|
35,000
|
|
|
(14,896
|
)
|
|
(13,865
|
)
|
|
20,104
|
|
|
21,135
|
|
||||||
Trademarks and trade names
|
|
14
|
|
12,554
|
|
|
15,354
|
|
|
(6,611
|
)
|
|
(8,881
|
)
|
|
5,943
|
|
|
6,473
|
|
||||||
Non-compete agreements
|
|
4
|
|
1,230
|
|
|
1,560
|
|
|
(897
|
)
|
|
(897
|
)
|
|
333
|
|
|
663
|
|
||||||
Intellectual property
|
|
10
|
|
300
|
|
|
300
|
|
|
(132
|
)
|
|
(115
|
)
|
|
168
|
|
|
185
|
|
||||||
Other intangible assets
|
|
5
|
|
3,745
|
|
|
3,745
|
|
|
(2,210
|
)
|
|
(1,706
|
)
|
|
1,535
|
|
|
2,039
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
|
|
|
$
|
326,001
|
|
|
$
|
333,787
|
|
|
$
|
(227,247
|
)
|
|
$
|
(213,722
|
)
|
|
$
|
98,754
|
|
|
$
|
120,065
|
|
(in thousands)
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
|
|
|
|
|
||||
Security deposits
|
|
$
|
4,063
|
|
|
$
|
5,304
|
|
Restricted cash
|
|
5,728
|
|
|
3,837
|
|
||
Other
|
|
3,906
|
|
|
1,054
|
|
||
|
|
|
|
|
||||
Total
|
|
$
|
13,697
|
|
|
$
|
10,195
|
|
(in thousands)
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
|
|
|
|
|
||||
Accounts payable
|
|
$
|
30,065
|
|
|
$
|
15,682
|
|
Accrued expenses - general
|
|
31,208
|
|
|
27,268
|
|
||
Accrued salaries and benefits
|
|
33,153
|
|
|
41,363
|
|
||
Income taxes payable
|
|
1,981
|
|
|
87
|
|
||
|
|
|
|
|
||||
Total
|
|
$
|
96,407
|
|
|
$
|
84,400
|
|
(in thousands)
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
|
|
|
|
|
||||
Unfunded cash account balances
|
|
$
|
3,643
|
|
|
$
|
5,900
|
|
Other
|
|
4,269
|
|
|
3,514
|
|
||
|
|
|
|
|
||||
Total
|
|
$
|
7,912
|
|
|
$
|
9,414
|
|
(in thousands)
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
|
|
|
|
|
||||
Senior secured term loans
|
|
$
|
388,760
|
|
|
$
|
413,581
|
|
Less: Debt issuance costs, net
|
|
(4,080
|
)
|
|
(3,158
|
)
|
||
Less: Unamortized discount, net
|
|
(3,696
|
)
|
|
(1,142
|
)
|
||
Net long-term debt
|
|
380,984
|
|
|
409,281
|
|
||
Less: Current portion
|
|
(34,440
|
)
|
|
(5,945
|
)
|
||
|
|
|
|
|
||||
Long-term debt, less current portion
|
|
$
|
346,544
|
|
|
$
|
403,336
|
|
(in thousands)
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
|
|
|
|
|
||||
Income tax liabilities
|
|
$
|
5,227
|
|
|
$
|
5,955
|
|
Deferred revenue
|
|
21
|
|
|
2,101
|
|
||
Other non-current liabilities
|
|
2,618
|
|
|
4,226
|
|
||
|
|
|
|
|
||||
Total
|
|
$
|
7,866
|
|
|
$
|
12,282
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||||||||
(in thousands)
|
|
Carrying amount
|
|
Fair value
|
|
Carrying amount
|
|
Fair value
|
||||||||||||||||||||||||
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash and cash equivalents
|
|
$
|
102,860
|
|
|
$
|
102,860
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
105,006
|
|
|
$
|
105,006
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted cash
|
|
5,728
|
|
|
5,728
|
|
|
—
|
|
|
—
|
|
|
3,837
|
|
|
3,837
|
|
|
—
|
|
|
—
|
|
||||||||
Investment in equity securities
|
|
44,967
|
|
|
44,967
|
|
|
—
|
|
|
—
|
|
|
49,153
|
|
|
49,153
|
|
|
—
|
|
|
—
|
|
||||||||
Long-term receivable (Note 3)
|
|
2,165
|
|
|
—
|
|
|
—
|
|
|
2,165
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Long-term debt
|
|
388,760
|
|
|
—
|
|
|
388,760
|
|
|
—
|
|
|
413,581
|
|
|
—
|
|
|
407,377
|
|
|
—
|
|
|
|
Nine months ended
September 30, 2018 |
|
Nine months ended
September 30, 2017 |
||||||||
|
|
Black-Scholes
|
|
Binomial
|
|
Black-Scholes
|
|
Binomial
|
||||
|
|
|
|
|
|
|
|
|
||||
Risk-free interest rate (%)
|
|
2.66 – 2.98
|
|
|
1.64 – 2.83
|
|
|
1.89 – 2.29
|
|
|
0.77 – 2.38
|
|
Expected stock price volatility (%)
|
|
70.31 – 71.86
|
|
|
71.81 – 71.86
|
|
|
61.49 – 71.31
|
|
|
66.68 – 71.31
|
|
Expected dividend yield
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Expected option life (in years)
|
|
6.00 – 6.25
|
|
|
2.56 – 4.32
|
|
|
6.00 – 7.50
|
|
|
2.55 – 4.32
|
|
Fair value
|
|
$16.17 – $19.06
|
|
|
$14.67 – $18.28
|
|
|
$13.57 – $24.80
|
|
|
$11.94 – $24.30
|
|
|
|
Nine months ended September 30,
|
||||||
(in thousands, except per share amounts)
|
|
2018
|
|
2017
|
||||
|
|
|
|
|
||||
Weighted average grant date fair value of stock options granted per share
|
|
$
|
16.27
|
|
|
$
|
20.95
|
|
Intrinsic value of options exercised
|
|
4,584
|
|
|
2,524
|
|
||
Grant date fair value of stock options that vested
|
|
1,598
|
|
|
2,063
|
|
|
Number of options
|
|
Weighted average exercise price
|
|
Weighted average contractual term
(in years)
|
|
Aggregate intrinsic value
(in thousands)
|
|||||
|
|
|
|
|
|
|
|
|||||
Outstanding at December 31, 2017
|
1,745,906
|
|
|
$
|
28.20
|
|
|
4.96
|
|
$
|
10,202
|
|
Granted
|
271,876
|
|
|
25.06
|
|
|
|
|
|
|||
Exercised
|
(326,737
|
)
|
|
11.24
|
|
|
|
|
|
|
||
Forfeited
|
(232,247
|
)
|
|
32.47
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|||||
Outstanding at September 30, 2018
|
1,458,798
|
|
|
30.73
|
|
|
5.40
|
|
10,053
|
|
||
|
|
|
|
|
|
|
|
|||||
Exercisable at September 30, 2018
|
886,720
|
|
|
27.18
|
|
|
3.67
|
|
7,364
|
|
|
Number of restricted shares
|
|
|
|
|
Outstanding at December 31, 2017
|
356,509
|
|
Granted
|
317,524
|
|
Issued
|
(99,500
|
)
|
Forfeited/canceled
|
(115,301
|
)
|
|
|
|
Outstanding at September 30, 2018
|
459,232
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Service revenue
|
|
$
|
196,906
|
|
|
$
|
224,308
|
|
|
$
|
594,533
|
|
|
$
|
692,254
|
|
Reimbursable expenses
|
|
6,815
|
|
|
9,866
|
|
|
23,970
|
|
|
31,786
|
|
||||
Non-controlling interests
|
|
854
|
|
|
805
|
|
|
2,066
|
|
|
2,107
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
$
|
204,575
|
|
|
$
|
234,979
|
|
|
$
|
620,569
|
|
|
$
|
726,147
|
|
|
|
Three months ended September 30, 2018
|
||||||||||||||
(in thousands)
|
|
Revenue recognized when services are performed or assets are sold
|
|
Revenue related to technology platforms and professional services
|
|
Reimbursable expenses revenue
|
|
Total revenue
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Mortgage Market:
|
|
|
|
|
|
|
|
|
||||||||
Servicer Solutions
|
|
$
|
135,395
|
|
|
$
|
20,565
|
|
|
$
|
6,530
|
|
|
$
|
162,490
|
|
Origination Solutions
|
|
11,223
|
|
|
2,160
|
|
|
87
|
|
|
13,470
|
|
||||
Total Mortgage Market
|
|
146,618
|
|
|
22,725
|
|
|
6,617
|
|
|
175,960
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Real Estate Market:
|
|
|
|
|
|
|
|
|
||||||||
Consumer Real Estate Solutions
|
|
2,693
|
|
|
—
|
|
|
—
|
|
|
2,693
|
|
||||
Real Estate Investor Solutions
|
|
10,132
|
|
|
—
|
|
|
185
|
|
|
10,317
|
|
||||
Total Real Estate Market
|
|
12,825
|
|
|
—
|
|
|
185
|
|
|
13,010
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other Businesses, Corporate and Eliminations
|
|
14,138
|
|
|
1,454
|
|
|
13
|
|
|
15,605
|
|
||||
Total revenue
|
|
$
|
173,581
|
|
|
$
|
24,179
|
|
|
$
|
6,815
|
|
|
$
|
204,575
|
|
|
|
Nine months ended September 30, 2018
|
||||||||||||||
(in thousands)
|
|
Revenue recognized when services are performed or assets are sold
|
|
Revenue related to technology platforms and professional services
|
|
Reimbursable expenses revenue
|
|
Total revenue
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Mortgage Market:
|
|
|
|
|
|
|
|
|
||||||||
Servicer Solutions
|
|
$
|
404,015
|
|
|
$
|
57,363
|
|
|
$
|
22,592
|
|
|
$
|
483,970
|
|
Origination Solutions
|
|
30,651
|
|
|
7,138
|
|
|
201
|
|
|
37,990
|
|
||||
Total Mortgage Market
|
|
434,666
|
|
|
64,501
|
|
|
22,793
|
|
|
521,960
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Real Estate Market:
|
|
|
|
|
|
|
|
|
||||||||
Consumer Real Estate Solutions
|
|
6,410
|
|
|
—
|
|
|
2
|
|
|
6,412
|
|
||||
Real Estate Investor Solutions
|
|
44,882
|
|
|
—
|
|
|
1,141
|
|
|
46,023
|
|
||||
Total Real Estate Market
|
|
51,292
|
|
|
—
|
|
|
1,143
|
|
|
52,435
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other Businesses, Corporate and Eliminations
|
|
41,785
|
|
|
4,355
|
|
|
34
|
|
|
46,174
|
|
||||
Total revenue
|
|
$
|
527,743
|
|
|
$
|
68,856
|
|
|
$
|
23,970
|
|
|
$
|
620,569
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Compensation and benefits
|
|
$
|
49,707
|
|
|
$
|
60,332
|
|
|
$
|
159,342
|
|
|
$
|
186,090
|
|
Outside fees and services
|
|
73,096
|
|
|
83,670
|
|
|
207,073
|
|
|
250,883
|
|
||||
Cost of real estate sold
|
|
1,092
|
|
|
4,411
|
|
|
17,591
|
|
|
16,461
|
|
||||
Technology and telecommunications
|
|
10,230
|
|
|
10,389
|
|
|
30,533
|
|
|
32,681
|
|
||||
Reimbursable expenses
|
|
6,815
|
|
|
9,866
|
|
|
23,970
|
|
|
31,786
|
|
||||
Depreciation and amortization
|
|
6,640
|
|
|
6,230
|
|
|
19,471
|
|
|
20,343
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
$
|
147,580
|
|
|
$
|
174,898
|
|
|
$
|
457,980
|
|
|
$
|
538,244
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Compensation and benefits
|
|
$
|
11,991
|
|
|
$
|
15,068
|
|
|
$
|
37,757
|
|
|
$
|
43,115
|
|
Occupancy related costs
|
|
7,428
|
|
|
8,536
|
|
|
23,051
|
|
|
28,347
|
|
||||
Amortization of intangible assets
|
|
6,620
|
|
|
8,604
|
|
|
21,311
|
|
|
27,143
|
|
||||
Marketing costs
|
|
4,267
|
|
|
3,992
|
|
|
11,852
|
|
|
11,958
|
|
||||
Professional services
|
|
4,915
|
|
|
3,886
|
|
|
12,469
|
|
|
11,983
|
|
||||
Depreciation and amortization
|
|
1,054
|
|
|
2,286
|
|
|
5,272
|
|
|
7,068
|
|
||||
Other
|
|
10,054
|
|
|
4,250
|
|
|
20,665
|
|
|
17,179
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
$
|
46,329
|
|
|
$
|
46,622
|
|
|
$
|
132,377
|
|
|
$
|
146,793
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Loss on debt refinancing
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(4,434
|
)
|
|
$
|
—
|
|
Gain on early extinguishment of debt
|
|
—
|
|
|
1,482
|
|
|
—
|
|
|
5,419
|
|
||||
Interest income
|
|
224
|
|
|
27
|
|
|
455
|
|
|
169
|
|
||||
Other, net
|
|
(70
|
)
|
|
988
|
|
|
1,544
|
|
|
2,427
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
$
|
154
|
|
|
$
|
2,497
|
|
|
$
|
(2,435
|
)
|
|
$
|
8,015
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
(in thousands, except per share data)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Altisource
|
|
$
|
8,667
|
|
|
$
|
6,961
|
|
|
$
|
6,103
|
|
|
$
|
22,541
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding, basic
|
|
17,033
|
|
|
18,023
|
|
|
17,184
|
|
|
18,337
|
|
||||
Dilutive effect of stock options, restricted shares and
restricted share units |
|
542
|
|
|
406
|
|
|
485
|
|
|
517
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding, diluted
|
|
17,575
|
|
|
18,429
|
|
|
17,669
|
|
|
18,854
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.51
|
|
|
$
|
0.39
|
|
|
$
|
0.36
|
|
|
$
|
1.23
|
|
Diluted
|
|
$
|
0.49
|
|
|
$
|
0.38
|
|
|
$
|
0.35
|
|
|
$
|
1.20
|
|
•
|
Altisource loses Ocwen as a customer or there is a significant reduction in the volume of services they purchase from us
|
•
|
Ocwen loses, sells or transfers a significant portion or all of its remaining non-GSE servicing rights or subservicing arrangements and Altisource fails to be retained as a service provider
|
•
|
Ocwen loses state servicing licenses in states with a significant number of loans in Ocwen’s servicing portfolio
|
•
|
The contractual relationship between Ocwen and Altisource changes significantly or there are significant changes to our pricing to Ocwen for services from which we generate material revenue
|
•
|
Altisource otherwise fails to be retained as a service provider
|
|
|
Three months ended September 30, 2018
|
||||||||||||||
(in thousands)
|
|
Mortgage Market
|
|
Real Estate Market
|
|
Other Businesses, Corporate and Eliminations
|
|
Consolidated Altisource
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
|
$
|
175,960
|
|
|
$
|
13,010
|
|
|
$
|
15,605
|
|
|
$
|
204,575
|
|
Cost of revenue
|
|
113,636
|
|
|
15,883
|
|
|
18,061
|
|
|
147,580
|
|
||||
Gross profit (loss)
|
|
62,324
|
|
|
(2,873
|
)
|
|
(2,456
|
)
|
|
56,995
|
|
||||
Operating expenses (income):
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
|
21,155
|
|
|
5,188
|
|
|
19,986
|
|
|
46,329
|
|
||||
Gain on sale of business
|
|
—
|
|
|
(13,688
|
)
|
|
—
|
|
|
(13,688
|
)
|
||||
Restructuring charges
|
|
901
|
|
|
74
|
|
|
2,461
|
|
|
3,436
|
|
||||
Income (loss) from operations
|
|
40,268
|
|
|
5,553
|
|
|
(24,903
|
)
|
|
20,918
|
|
||||
Total other income (expense), net
|
|
74
|
|
|
22
|
|
|
(4,885
|
)
|
|
(4,789
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes and
non-controlling interests |
|
$
|
40,342
|
|
|
$
|
5,575
|
|
|
$
|
(29,788
|
)
|
|
$
|
16,129
|
|
|
|
Three months ended September 30, 2017
|
||||||||||||||
(in thousands)
|
|
Mortgage Market
|
|
Real Estate Market
|
|
Other Businesses, Corporate and Eliminations
|
|
Consolidated Altisource
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
|
$
|
199,262
|
|
|
$
|
22,121
|
|
|
$
|
13,596
|
|
|
$
|
234,979
|
|
Cost of revenue
|
|
137,466
|
|
|
23,497
|
|
|
13,935
|
|
|
174,898
|
|
||||
Gross profit (loss)
|
|
61,796
|
|
|
(1,376
|
)
|
|
(339
|
)
|
|
60,081
|
|
||||
Selling, general and administrative expenses
|
|
28,006
|
|
|
4,208
|
|
|
14,408
|
|
|
46,622
|
|
||||
Income (loss) from operations
|
|
33,790
|
|
|
(5,584
|
)
|
|
(14,747
|
)
|
|
13,459
|
|
||||
Total other income (expense), net
|
|
26
|
|
|
—
|
|
|
(3,128
|
)
|
|
(3,102
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes and
non-controlling interests |
|
$
|
33,816
|
|
|
$
|
(5,584
|
)
|
|
$
|
(17,875
|
)
|
|
$
|
10,357
|
|
|
|
Nine months ended September 30, 2018
|
||||||||||||||
(in thousands)
|
|
Mortgage Market
|
|
Real Estate Market
|
|
Other Businesses, Corporate and Eliminations
|
|
Consolidated Altisource
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
|
$
|
521,960
|
|
|
$
|
52,435
|
|
|
$
|
46,174
|
|
|
$
|
620,569
|
|
Cost of revenue
|
|
340,038
|
|
|
62,628
|
|
|
55,314
|
|
|
457,980
|
|
||||
Gross profit (loss)
|
|
181,922
|
|
|
(10,193
|
)
|
|
(9,140
|
)
|
|
162,589
|
|
||||
Operating expenses (income):
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
|
65,133
|
|
|
14,486
|
|
|
52,758
|
|
|
132,377
|
|
||||
Gain on sale of business
|
|
—
|
|
|
(13,688
|
)
|
|
—
|
|
|
(13,688
|
)
|
||||
Restructuring charges
|
|
901
|
|
|
74
|
|
|
2,461
|
|
|
3,436
|
|
||||
Income (loss) from operations
|
|
115,888
|
|
|
(11,065
|
)
|
|
(64,359
|
)
|
|
40,464
|
|
||||
Total other income (expense), net
|
|
86
|
|
|
36
|
|
|
(26,358
|
)
|
|
(26,236
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes and
non-controlling interests |
|
$
|
115,974
|
|
|
$
|
(11,029
|
)
|
|
$
|
(90,717
|
)
|
|
$
|
14,228
|
|
|
|
Nine months ended September 30, 2017
|
||||||||||||||
(in thousands)
|
|
Mortgage Market
|
|
Real Estate Market
|
|
Other Businesses, Corporate and Eliminations
|
|
Consolidated Altisource
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
|
$
|
614,180
|
|
|
$
|
67,314
|
|
|
$
|
44,653
|
|
|
$
|
726,147
|
|
Cost of revenue
|
|
421,942
|
|
|
72,484
|
|
|
43,818
|
|
|
538,244
|
|
||||
Gross profit (loss)
|
|
192,238
|
|
|
(5,170
|
)
|
|
835
|
|
|
187,903
|
|
||||
Selling, general and administrative expenses
|
|
86,493
|
|
|
14,084
|
|
|
46,216
|
|
|
146,793
|
|
||||
Income (loss) from operations
|
|
105,745
|
|
|
(19,254
|
)
|
|
(45,381
|
)
|
|
41,110
|
|
||||
Total other income (expense), net
|
|
138
|
|
|
—
|
|
|
(8,985
|
)
|
|
(8,847
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes and
non-controlling interests |
|
$
|
105,883
|
|
|
$
|
(19,254
|
)
|
|
$
|
(54,366
|
)
|
|
$
|
32,263
|
|
(in thousands)
|
|
Mortgage Market
|
|
Real Estate Market
|
|
Other Businesses, Corporate and Eliminations
|
|
Consolidated Altisource
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Total assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
September 30, 2018
|
|
$
|
258,814
|
|
|
$
|
118,549
|
|
|
$
|
451,902
|
|
|
$
|
829,265
|
|
December 31, 2017
|
|
304,346
|
|
|
64,624
|
|
|
496,194
|
|
|
865,164
|
|
(in thousands)
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
|
|
|
|
|
||||
United States
|
|
$
|
29,824
|
|
|
$
|
46,268
|
|
Luxembourg
|
|
16,065
|
|
|
16,688
|
|
||
India
|
|
4,273
|
|
|
8,136
|
|
||
Philippines
|
|
1,792
|
|
|
2,038
|
|
||
Uruguay
|
|
72
|
|
|
143
|
|
||
|
|
|
|
|
||||
Total
|
|
$
|
52,026
|
|
|
$
|
73,273
|
|
•
|
assumptions related to sources of liquidity and the adequacy of financial resources;
|
•
|
assumptions about our ability to grow our business, including executing on our strategic initiatives;
|
•
|
assumptions about our ability to improve margins and anticipated expense reductions as a result of Project Catalyst;
|
•
|
assumptions regarding the impact of seasonality;
|
•
|
estimates regarding our effective tax rate; and
|
•
|
estimates regarding our reserves and valuations.
|
•
|
our ability to retain Ocwen Financial Corporation (“Ocwen”) as a customer or our ability to receive the anticipated volume of referrals from Ocwen;
|
•
|
our ability to reach agreement with New Residential Investment Corp. (individually, together with one or more of its subsidiaries, or one or more of its subsidiaries individually, “NRZ”) on a Services Agreement or the possibility of termination of the Cooperative Brokerage Agreement, as amended, and related letter agreement (collectively, the “Brokerage Agreement”);
|
•
|
if a change of control is deemed to have occurred including, among other things, through the formation of a shareholder group, this may cause a termination event or event of default under certain of our agreements;
|
•
|
our ability to execute on our strategic businesses;
|
•
|
our ability to retain our existing customers, expand relationships and attract new customers;
|
•
|
the level of loan delinquencies and charge-offs;
|
•
|
the level of origination volume;
|
•
|
technology failures;
|
•
|
the outsourcing trends;
|
•
|
our ability to raise debt;
|
•
|
our ability to retain our directors, executive officers and key personnel;
|
•
|
our ability to integrate acquired businesses;
|
•
|
our ability to comply with, and burdens imposed by, governmental regulations and policies and any changes in such regulations and policies; and
|
•
|
significant changes in tax regulations and interpretations in the countries, states and local jurisdictions in which we operate.
|
• Property preservation and inspection services
• Real estate brokerage and auction services
• Title insurance (agent and related services) and settlement services
• Appraisal management services, valuation data, broker and non-broker valuation services
• Foreclosure trustee services
• Residential and commercial loan servicing technologies
|
|
• Vendor management, marketplace transaction management and payment management technologies
• Document management platform
• Default services (real estate owned (“REO”), foreclosure, bankruptcy, eviction) technologies
• Mortgage charge-off collections
• Residential and commercial construction inspection and risk mitigation services
|
• Title insurance (agent and related services) and settlement services
• Appraisal management services, valuation data, broker and non-broker valuation services
• Fulfillment services
• Loan origination system
|
|
• Document management platform
• Certified loan insurance, certification services and mortgage fraud insurance
• Vendor management oversight platform
• Mortgage banker cooperative management
• Mortgage trading platform
|
• Real estate brokerage doing business as Owners.com
®
• Title insurance (agent and related services) and settlement services
|
|
• Mortgage brokerage
• Homeowners insurance
|
• Buy-renovate-lease-sell
• Property preservation and inspection services
• Real estate brokerage and auction services
• Data solutions
|
|
• Title insurance (agent and related services) and settlement services
• Appraisal management services, valuation data, broker and non-broker valuation services
|
•
|
Altisource loses Ocwen as a customer or there is a significant reduction in the volume of services they purchase from us
|
•
|
Ocwen loses, sells or transfers a significant portion or all of its remaining non-GSE servicing rights or subservicing arrangements and Altisource fails to be retained as a service provider
|
•
|
Ocwen loses state servicing licenses in states with a significant number of loans in Ocwen’s servicing portfolio
|
•
|
The contractual relationship between Ocwen and Altisource changes significantly or there are significant changes to our pricing to Ocwen for services from which we generate material revenue
|
•
|
Altisource otherwise fails to be retained as a service provider
|
•
|
The average number of loans serviced by Ocwen on REALServicing (including those MSRs owned by NRZ and subserviced by Ocwen) was approximately
1.1 million
for the
nine months ended
September 30, 2018
compared to
1.3 million
for the
nine months ended
September 30, 2017
, a
decrease
of
13%
(
1.1 million
for the
third quarter
of
2018
and
1.2 million
for the
third quarter
of
2017
, a
decrease
of
13%
). The average number of delinquent non-GSE loans serviced by Ocwen on REALServicing (including those MSRs owned by NRZ and subserviced by Ocwen) was approximately
156 thousand
for the
nine months ended
September 30, 2018
compared to
182 thousand
for the
nine months ended
September 30, 2017
, a
decrease
of
14%
(
144 thousand
for the
third quarter
of
2018
and
178 thousand
for the
third quarter
of
2017
, a
decrease
of
19%
).
|
•
|
In August 2018, we sold our rental property management business to RESI for total transaction proceeds of
$18.0 million
,
$15.0 million
of which was received on the closing date of August 8, 2018 and
$3.0 million
of which will be received on the earlier of a RESI change of control or August 8, 2023. We recognized a
$13.7 million
pretax gain on the sale of this business during the third quarter of 2018 in the condensed consolidated statements of operations and comprehensive income in connection with this transaction. See
Note 3
to the condensed consolidated financial statements.
|
•
|
In August 2018, we initiated Project Catalyst, a restructuring plan intended to optimize our operations and reduce costs to align our cost structure with our anticipated revenues and improve our operating margins. During the three months ended September 30, 2018, we incurred
$3.4 million
of severance costs and professional services fees related to the restructuring plan (no comparative amounts in 2017). We expect to incur additional severance costs, facility shut-down costs and professional services fees through 2019 in connection with this restructuring and will expense those costs as incurred. Based on our preliminary analysis, we currently anticipate the future costs relating to the restructuring plan to be in the range of approximately
$25 million
to
$35 million
. We currently anticipate annual run-rate operating expense reductions in the range of approximately
$65 million
to
$90 million
following completion of the restructuring plan; however, this range could materially change based on business and/or other factors.
|
•
|
On June 21, 2018, the United States Supreme Court rendered a 5-4 majority decision in South Dakota v. Wayfair, Inc., holding that a state may require a remote seller with no physical presence in the state to collect and remit sales tax on goods and services provided to purchasers in the state, overturning existing court precedent. The Company is analyzing its services for potential exposure to sales tax in various jurisdictions in the United States and believes that the Company has a related estimated probable loss of
$5.9 million
. As a result, the Company recognized a
$5.9 million
loss in the third quarter of 2018 in selling, general and administrative expenses in the condensed consolidated statements of operations and comprehensive income. The Company is in the process of developing a solution that will enable it to invoice, collect and remit sales tax in the applicable jurisdictions. The Company is also analyzing what rights, if any, it has to seek reimbursement for sales tax payments from clients. As the Company completes its evaluation of potential sales tax exposure, the Company may increase its accrual for sales tax exposure and recognize additional losses, which are not currently estimable. These additional losses could result in a material adjustment to our consolidated financial statements which would impact our financial condition and results of operations.
|
•
|
In the
third quarter
of
2018
, we recorded an additional expense of $0.5 million related to the fourth quarter 2016 litigation settlement loss.
|
•
|
On April 3, 2018, Altisource and its wholly-owned subsidiary, Altisource S.à r.l., entered into the Credit Agreement, pursuant to which, among other things, Altisource borrowed
$412.0 million
in the form of Term B Loans. Proceeds from the Term B Loans were used to repay the Company’s prior senior secured term loan. The comparative interest rates under the Credit Agreement for the Term B Loans and the prior credit agreement were 5.91% and 4.58% for the
nine months ended
September 30, 2018
and
2017
, respectively (6.33% and 4.73% for the
third quarter
of
2018
and
2017
, respectively). In connection with the refinancing, we recognized a loss of
$4.4 million
from the write-off of the unamortized debt issuance costs and debt discount for the
nine months ended
September 30, 2018
(no comparative amount in
2017
). See
Note 11
to the condensed consolidated financial statements.
|
•
|
Effective January 1, 2018, the Company adopted Accounting Standards Update No. 2016-01
, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities
, which requires
|
•
|
During the
nine months ended
September 30, 2017
, we repurchased portions of our senior secured term loan with an aggregate par value of
$50.1 million
at a weighted average discount of
12.2%
, recognizing a net gain of
$5.4 million
on the early extinguishment of debt (repurchased aggregate par value of
$24.1 million
at a weighted average discount of
7.5%
, recognizing a net gain of
$1.5 million
on the early extinguishment of debt for the
third quarter
of
2017
). There were
no
similar repurchases that resulted in a gain or loss on the early extinguishment of debt in
2018
.
|
•
|
The effective income tax rate increased to
42.6%
for the
nine months ended
September 30, 2018
from 23.6% for the
nine months ended
September 30, 2017
(increased to
41.0%
for the
third quarter
of
2018
from 25.0% for the
third quarter
of
2017
). The effective income tax rate increases for the
nine months ended
September 30, 2018
and
third quarter
of
2018
were primarily due to adjustments of $1.6 million to certain foreign income tax reserves (and related interest) in the
third quarter
of
2018
and changes in the expected mix of taxable income across the jurisdictions in which we operate.
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||
(in thousands, except per share data)
|
|
2018
|
|
2017
|
|
% Increase (decrease)
|
|
2018
|
|
2017
|
|
% Increase (decrease)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Service revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Mortgage Market
|
|
$
|
168,489
|
|
|
$
|
189,615
|
|
|
(11
|
)
|
|
$
|
497,101
|
|
|
$
|
583,002
|
|
|
(15
|
)
|
Real Estate Market
|
|
12,825
|
|
|
21,113
|
|
|
(39
|
)
|
|
51,292
|
|
|
64,649
|
|
|
(21
|
)
|
||||
Other Businesses, Corporate and Eliminations
|
|
15,592
|
|
|
13,580
|
|
|
15
|
|
|
46,140
|
|
|
44,603
|
|
|
3
|
|
||||
Total service revenue
|
|
196,906
|
|
|
224,308
|
|
|
(12
|
)
|
|
594,533
|
|
|
692,254
|
|
|
(14
|
)
|
||||
Reimbursable expenses
|
|
6,815
|
|
|
9,866
|
|
|
(31
|
)
|
|
23,970
|
|
|
31,786
|
|
|
(25
|
)
|
||||
Non-controlling interests
|
|
854
|
|
|
805
|
|
|
6
|
|
|
2,066
|
|
|
2,107
|
|
|
(2
|
)
|
||||
Total revenue
|
|
204,575
|
|
|
234,979
|
|
|
(13
|
)
|
|
620,569
|
|
|
726,147
|
|
|
(15
|
)
|
||||
Cost of revenue
|
|
147,580
|
|
|
174,898
|
|
|
(16
|
)
|
|
457,980
|
|
|
538,244
|
|
|
(15
|
)
|
||||
Gross profit
|
|
56,995
|
|
|
60,081
|
|
|
(5
|
)
|
|
162,589
|
|
|
187,903
|
|
|
(13
|
)
|
||||
Operating expenses (income):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
|
46,329
|
|
|
46,622
|
|
|
(1
|
)
|
|
132,377
|
|
|
146,793
|
|
|
(10
|
)
|
||||
Gain on sale of business
|
|
(13,688
|
)
|
|
—
|
|
|
N/M
|
|
|
(13,688
|
)
|
|
—
|
|
|
N/M
|
|
||||
Restructuring charges
|
|
3,436
|
|
|
—
|
|
|
N/M
|
|
|
3,436
|
|
|
—
|
|
|
N/M
|
|
||||
Income from operations
|
|
20,918
|
|
|
13,459
|
|
|
55
|
|
|
40,464
|
|
|
41,110
|
|
|
(2
|
)
|
||||
Other income (expense), net:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
|
(6,725
|
)
|
|
(5,599
|
)
|
|
20
|
|
|
(19,615
|
)
|
|
(16,862
|
)
|
|
16
|
|
||||
Unrealized gain (
loss)
on investments in equity securities
|
|
1,782
|
|
|
—
|
|
|
N/M
|
|
|
(4,186
|
)
|
|
—
|
|
|
N/M
|
|
||||
Other income (expense), net
|
|
154
|
|
|
2,497
|
|
|
(94
|
)
|
|
(2,435
|
)
|
|
8,015
|
|
|
(130
|
)
|
||||
Total other income (expense), net
|
|
(4,789
|
)
|
|
(3,102
|
)
|
|
54
|
|
|
(26,236
|
)
|
|
(8,847
|
)
|
|
197
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before income taxes and non-controlling interests
|
|
16,129
|
|
|
10,357
|
|
|
56
|
|
|
14,228
|
|
|
32,263
|
|
|
(56
|
)
|
||||
Income tax provision
|
|
(6,608
|
)
|
|
(2,591
|
)
|
|
155
|
|
|
(6,059
|
)
|
|
(7,615
|
)
|
|
(20
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
9,521
|
|
|
7,766
|
|
|
23
|
|
|
8,169
|
|
|
24,648
|
|
|
(67
|
)
|
||||
Net income attributable to non-controlling interests
|
|
(854
|
)
|
|
(805
|
)
|
|
6
|
|
|
(2,066
|
)
|
|
(2,107
|
)
|
|
(2
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income attributable to Altisource
|
|
$
|
8,667
|
|
|
$
|
6,961
|
|
|
25
|
|
|
$
|
6,103
|
|
|
$
|
22,541
|
|
|
(73
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Margins:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Gross profit/service revenue
|
|
29
|
%
|
|
27
|
%
|
|
|
|
27
|
%
|
|
27
|
%
|
|
|
|
|||||
Income from operations/service revenue
|
|
11
|
%
|
|
6
|
%
|
|
|
|
7
|
%
|
|
6
|
%
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
0.51
|
|
|
$
|
0.39
|
|
|
31
|
|
|
$
|
0.36
|
|
|
$
|
1.23
|
|
|
(71
|
)
|
Diluted
|
|
$
|
0.49
|
|
|
$
|
0.38
|
|
|
29
|
|
|
$
|
0.35
|
|
|
$
|
1.20
|
|
|
(71
|
)
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
% Increase (decrease)
|
|
2018
|
|
2017
|
|
% Increase (decrease)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and benefits
|
|
$
|
49,707
|
|
|
$
|
60,332
|
|
|
(18
|
)
|
|
$
|
159,342
|
|
|
$
|
186,090
|
|
|
(14
|
)
|
Outside fees and services
|
|
73,096
|
|
|
83,670
|
|
|
(13
|
)
|
|
207,073
|
|
|
250,883
|
|
|
(17
|
)
|
||||
Cost of real estate sold
|
|
1,092
|
|
|
4,411
|
|
|
(75
|
)
|
|
17,591
|
|
|
16,461
|
|
|
7
|
|
||||
Technology and telecommunications
|
|
10,230
|
|
|
10,389
|
|
|
(2
|
)
|
|
30,533
|
|
|
32,681
|
|
|
(7
|
)
|
||||
Reimbursable expenses
|
|
6,815
|
|
|
9,866
|
|
|
(31
|
)
|
|
23,970
|
|
|
31,786
|
|
|
(25
|
)
|
||||
Depreciation and amortization
|
|
6,640
|
|
|
6,230
|
|
|
7
|
|
|
19,471
|
|
|
20,343
|
|
|
(4
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of revenue
|
|
$
|
147,580
|
|
|
$
|
174,898
|
|
|
(16
|
)
|
|
$
|
457,980
|
|
|
$
|
538,244
|
|
|
(15
|
)
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
% Increase (decrease)
|
|
2018
|
|
2017
|
|
% Increase (decrease)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and benefits
|
|
$
|
11,991
|
|
|
$
|
15,068
|
|
|
(20
|
)
|
|
$
|
37,757
|
|
|
$
|
43,115
|
|
|
(12
|
)
|
Occupancy related costs
|
|
7,428
|
|
|
8,536
|
|
|
(13
|
)
|
|
23,051
|
|
|
28,347
|
|
|
(19
|
)
|
||||
Amortization of intangible assets
|
|
6,620
|
|
|
8,604
|
|
|
(23
|
)
|
|
21,311
|
|
|
27,143
|
|
|
(21
|
)
|
||||
Marketing costs
|
|
4,267
|
|
|
3,992
|
|
|
7
|
|
|
11,852
|
|
|
11,958
|
|
|
(1
|
)
|
||||
Professional services
|
|
4,915
|
|
|
3,886
|
|
|
26
|
|
|
12,469
|
|
|
11,983
|
|
|
4
|
|
||||
Depreciation and amortization
|
|
1,054
|
|
|
2,286
|
|
|
(54
|
)
|
|
5,272
|
|
|
7,068
|
|
|
(25
|
)
|
||||
Other
|
|
10,054
|
|
|
4,250
|
|
|
137
|
|
|
20,665
|
|
|
17,179
|
|
|
20
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
|
$
|
46,329
|
|
|
$
|
46,622
|
|
|
(1
|
)
|
|
$
|
132,377
|
|
|
$
|
146,793
|
|
|
(10
|
)
|
|
|
Three months ended September 30, 2018
|
||||||||||||||
(in thousands)
|
|
Mortgage Market
|
|
Real Estate Market
|
|
Other Businesses, Corporate and Eliminations
|
|
Consolidated Altisource
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
||||||||
Service revenue
|
|
$
|
168,489
|
|
|
$
|
12,825
|
|
|
$
|
15,592
|
|
|
$
|
196,906
|
|
Reimbursable expenses
|
|
6,617
|
|
|
185
|
|
|
13
|
|
|
6,815
|
|
||||
Non-controlling interests
|
|
854
|
|
|
—
|
|
|
—
|
|
|
854
|
|
||||
|
|
175,960
|
|
|
13,010
|
|
|
15,605
|
|
|
204,575
|
|
||||
Cost of revenue
|
|
113,636
|
|
|
15,883
|
|
|
18,061
|
|
|
147,580
|
|
||||
Gross profit (loss)
|
|
62,324
|
|
|
(2,873
|
)
|
|
(2,456
|
)
|
|
56,995
|
|
||||
Operating expenses (income):
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
|
21,155
|
|
|
5,188
|
|
|
19,986
|
|
|
46,329
|
|
||||
Gain on sale of business
|
|
—
|
|
|
(13,688
|
)
|
|
—
|
|
|
(13,688
|
)
|
||||
Restructuring charges
|
|
901
|
|
|
74
|
|
|
2,461
|
|
|
3,436
|
|
||||
Income (loss) from operations
|
|
40,268
|
|
|
5,553
|
|
|
(24,903
|
)
|
|
20,918
|
|
||||
Total other income (expense), net
|
|
74
|
|
|
22
|
|
|
(4,885
|
)
|
|
(4,789
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes and
non-controlling interests |
|
$
|
40,342
|
|
|
$
|
5,575
|
|
|
$
|
(29,788
|
)
|
|
$
|
16,129
|
|
|
|
|
|
|
|
|
|
|
||||||||
Margins:
|
|
|
|
|
|
|
|
|
||||||||
Gross profit (loss)/service revenue
|
|
37
|
%
|
|
(22
|
)%
|
|
(16
|
)%
|
|
29
|
%
|
||||
Income (loss) from operations/service revenue
|
|
24
|
%
|
|
43
|
%
|
|
(160
|
)%
|
|
11
|
%
|
|
|
Three months ended September 30, 2017
|
||||||||||||||
(in thousands)
|
|
Mortgage Market
|
|
Real Estate Market
|
|
Other Businesses, Corporate and Eliminations
|
|
Consolidated Altisource
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
||||||||
Service revenue
|
|
$
|
189,615
|
|
|
$
|
21,113
|
|
|
$
|
13,580
|
|
|
$
|
224,308
|
|
Reimbursable expenses
|
|
8,842
|
|
|
1,008
|
|
|
16
|
|
|
9,866
|
|
||||
Non-controlling interests
|
|
805
|
|
|
—
|
|
|
—
|
|
|
805
|
|
||||
|
|
199,262
|
|
|
22,121
|
|
|
13,596
|
|
|
234,979
|
|
||||
Cost of revenue
|
|
137,466
|
|
|
23,497
|
|
|
13,935
|
|
|
174,898
|
|
||||
Gross profit (loss)
|
|
61,796
|
|
|
(1,376
|
)
|
|
(339
|
)
|
|
60,081
|
|
||||
Selling, general and administrative expenses
|
|
28,006
|
|
|
4,208
|
|
|
14,408
|
|
|
46,622
|
|
||||
Income (loss) from operations
|
|
33,790
|
|
|
(5,584
|
)
|
|
(14,747
|
)
|
|
13,459
|
|
||||
Total other income (expense), net
|
|
26
|
|
|
—
|
|
|
(3,128
|
)
|
|
(3,102
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes and
non-controlling interests |
|
$
|
33,816
|
|
|
$
|
(5,584
|
)
|
|
$
|
(17,875
|
)
|
|
$
|
10,357
|
|
|
|
|
|
|
|
|
|
|
||||||||
Margins:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross profit (loss)/service revenue
|
|
33
|
%
|
|
(7
|
)%
|
|
(2
|
)%
|
|
27
|
%
|
||||
Income (loss) from operations/service revenue
|
|
18
|
%
|
|
(26
|
)%
|
|
(109
|
)%
|
|
6
|
%
|
|
|
Nine months ended September 30, 2018
|
||||||||||||||
(in thousands)
|
|
Mortgage Market
|
|
Real Estate Market
|
|
Other Businesses, Corporate and Eliminations
|
|
Consolidated Altisource
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Service revenue
|
|
$
|
497,101
|
|
|
$
|
51,292
|
|
|
$
|
46,140
|
|
|
$
|
594,533
|
|
Reimbursable expenses
|
|
22,793
|
|
|
1,143
|
|
|
34
|
|
|
23,970
|
|
||||
Non-controlling interests
|
|
2,066
|
|
|
—
|
|
|
—
|
|
|
2,066
|
|
||||
|
|
521,960
|
|
|
52,435
|
|
|
46,174
|
|
|
620,569
|
|
||||
Cost of revenue
|
|
340,038
|
|
|
62,628
|
|
|
55,314
|
|
|
457,980
|
|
||||
Gross profit (loss)
|
|
181,922
|
|
|
(10,193
|
)
|
|
(9,140
|
)
|
|
162,589
|
|
||||
Operating expenses (income):
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
|
65,133
|
|
|
14,486
|
|
|
52,758
|
|
|
132,377
|
|
||||
Gain on sale of business
|
|
—
|
|
|
(13,688
|
)
|
|
—
|
|
|
(13,688
|
)
|
||||
Restructuring charges
|
|
901
|
|
|
74
|
|
|
2,461
|
|
|
3,436
|
|
||||
Income (loss) from operations
|
|
115,888
|
|
|
(11,065
|
)
|
|
(64,359
|
)
|
|
40,464
|
|
||||
Total other income (expense), net
|
|
86
|
|
|
36
|
|
|
(26,358
|
)
|
|
(26,236
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes and
non-controlling interests |
|
$
|
115,974
|
|
|
$
|
(11,029
|
)
|
|
$
|
(90,717
|
)
|
|
$
|
14,228
|
|
|
|
|
|
|
|
|
|
|
||||||||
Margins:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross profit (loss)/service revenue
|
|
37
|
%
|
|
(20
|
)%
|
|
(20
|
)%
|
|
27
|
%
|
||||
Income (loss) from operations/service revenue
|
|
23
|
%
|
|
(22
|
)%
|
|
(139
|
)%
|
|
7
|
%
|
|
|
Nine months ended September 30, 2017
|
||||||||||||||
(in thousands)
|
|
Mortgage Market
|
|
Real Estate Market
|
|
Other Businesses, Corporate and Eliminations
|
|
Consolidated Altisource
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Service revenue
|
|
$
|
583,002
|
|
|
$
|
64,649
|
|
|
$
|
44,603
|
|
|
$
|
692,254
|
|
Reimbursable expenses
|
|
29,071
|
|
|
2,665
|
|
|
50
|
|
|
31,786
|
|
||||
Non-controlling interests
|
|
2,107
|
|
|
—
|
|
|
—
|
|
|
2,107
|
|
||||
|
|
614,180
|
|
|
67,314
|
|
|
44,653
|
|
|
726,147
|
|
||||
Cost of revenue
|
|
421,942
|
|
|
72,484
|
|
|
43,818
|
|
|
538,244
|
|
||||
Gross profit (loss)
|
|
192,238
|
|
|
(5,170
|
)
|
|
835
|
|
|
187,903
|
|
||||
Selling, general and administrative expenses
|
|
86,493
|
|
|
14,084
|
|
|
46,216
|
|
|
146,793
|
|
||||
Income (loss) from operations
|
|
105,745
|
|
|
(19,254
|
)
|
|
(45,381
|
)
|
|
41,110
|
|
||||
Total other income (expense), net
|
|
138
|
|
|
—
|
|
|
(8,985
|
)
|
|
(8,847
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes and
non-controlling interests |
|
$
|
105,883
|
|
|
$
|
(19,254
|
)
|
|
$
|
(54,366
|
)
|
|
$
|
32,263
|
|
|
|
|
|
|
|
|
|
|
||||||||
Margins:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross profit (loss)/service revenue
|
|
33
|
%
|
|
(8
|
)%
|
|
2
|
%
|
|
27
|
%
|
||||
Income (loss) from operations/service revenue
|
|
18
|
%
|
|
(30
|
)%
|
|
(102
|
)%
|
|
6
|
%
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
% Increase (decrease)
|
|
2018
|
|
2017
|
|
% Increase (decrease)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Service revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Servicer Solutions
|
|
$
|
155,960
|
|
|
$
|
176,258
|
|
|
(12
|
)
|
|
$
|
461,378
|
|
|
$
|
545,447
|
|
|
(15
|
)
|
Origination Solutions
|
|
12,529
|
|
|
13,357
|
|
|
(6
|
)
|
|
35,723
|
|
|
37,555
|
|
|
(5
|
)
|
||||
Total service revenue
|
|
168,489
|
|
|
189,615
|
|
|
(11
|
)
|
|
497,101
|
|
|
583,002
|
|
|
(15
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reimbursable expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Servicer Solutions
|
|
6,530
|
|
|
8,803
|
|
|
(26
|
)
|
|
22,592
|
|
|
28,854
|
|
|
(22
|
)
|
||||
Origination Solutions
|
|
87
|
|
|
39
|
|
|
123
|
|
|
201
|
|
|
217
|
|
|
(7
|
)
|
||||
Total reimbursable expenses
|
|
6,617
|
|
|
8,842
|
|
|
(25
|
)
|
|
22,793
|
|
|
29,071
|
|
|
(22
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-controlling interests
|
|
854
|
|
|
805
|
|
|
6
|
|
|
2,066
|
|
|
2,107
|
|
|
(2
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue
|
|
$
|
175,960
|
|
|
$
|
199,262
|
|
|
(12
|
)
|
|
$
|
521,960
|
|
|
$
|
614,180
|
|
|
(15
|
)
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
% Increase (decrease)
|
|
2018
|
|
2017
|
|
% Increase (decrease)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and benefits
|
|
$
|
31,300
|
|
|
$
|
41,475
|
|
|
(25
|
)
|
|
$
|
99,925
|
|
|
$
|
126,153
|
|
|
(21
|
)
|
Outside fees and services
|
|
64,836
|
|
|
74,902
|
|
|
(13
|
)
|
|
184,629
|
|
|
228,982
|
|
|
(19
|
)
|
||||
Reimbursable expenses
|
|
6,617
|
|
|
8,842
|
|
|
(25
|
)
|
|
22,793
|
|
|
29,071
|
|
|
(22
|
)
|
||||
Technology and telecommunications
|
|
6,123
|
|
|
7,708
|
|
|
(21
|
)
|
|
18,813
|
|
|
23,589
|
|
|
(20
|
)
|
||||
Depreciation and amortization
|
|
4,760
|
|
|
4,539
|
|
|
5
|
|
|
13,878
|
|
|
14,147
|
|
|
(2
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of revenue
|
|
$
|
113,636
|
|
|
$
|
137,466
|
|
|
(17
|
)
|
|
$
|
340,038
|
|
|
$
|
421,942
|
|
|
(19
|
)
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
% Increase (decrease)
|
|
2018
|
|
2017
|
|
% Increase (decrease)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and benefits
|
|
$
|
4,007
|
|
|
$
|
6,292
|
|
|
(36
|
)
|
|
$
|
11,976
|
|
|
$
|
17,393
|
|
|
(31
|
)
|
Occupancy related costs
|
|
4,122
|
|
|
5,648
|
|
|
(27
|
)
|
|
13,300
|
|
|
17,687
|
|
|
(25
|
)
|
||||
Amortization of intangible assets
|
|
6,020
|
|
|
7,975
|
|
|
(25
|
)
|
|
19,157
|
|
|
25,119
|
|
|
(24
|
)
|
||||
Professional services
|
|
2,227
|
|
|
2,319
|
|
|
(4
|
)
|
|
5,498
|
|
|
7,018
|
|
|
(22
|
)
|
||||
Marketing costs
|
|
1,728
|
|
|
2,170
|
|
|
(20
|
)
|
|
5,059
|
|
|
6,405
|
|
|
(21
|
)
|
||||
Depreciation and amortization
|
|
595
|
|
|
1,012
|
|
|
(41
|
)
|
|
2,169
|
|
|
2,881
|
|
|
(25
|
)
|
||||
Other
|
|
2,456
|
|
|
2,590
|
|
|
(5
|
)
|
|
7,974
|
|
|
9,990
|
|
|
(20
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
|
$
|
21,155
|
|
|
$
|
28,006
|
|
|
(24
|
)
|
|
$
|
65,133
|
|
|
$
|
86,493
|
|
|
(25
|
)
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
% Increase (decrease)
|
|
2018
|
|
2017
|
|
% Increase (decrease)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Service revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Consumer Real Estate Solutions
|
|
$
|
2,693
|
|
|
$
|
1,441
|
|
|
87
|
|
|
$
|
6,410
|
|
|
$
|
3,440
|
|
|
86
|
|
Real Estate Investor Solutions
|
|
10,132
|
|
|
19,672
|
|
|
(48
|
)
|
|
44,882
|
|
|
61,209
|
|
|
(27
|
)
|
||||
Total service revenue
|
|
12,825
|
|
|
21,113
|
|
|
(39
|
)
|
|
51,292
|
|
|
64,649
|
|
|
(21
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reimbursable expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consumer Real Estate Solutions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
N/M
|
|
||||
Real Estate Investor Solutions
|
|
185
|
|
|
1,008
|
|
|
(82
|
)
|
|
1,141
|
|
|
2,665
|
|
|
(57
|
)
|
||||
Total reimbursable expenses
|
|
185
|
|
|
1,008
|
|
|
(82
|
)
|
|
1,143
|
|
|
2,665
|
|
|
(57
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue
|
|
$
|
13,010
|
|
|
$
|
22,121
|
|
|
(41
|
)
|
|
$
|
52,435
|
|
|
$
|
67,314
|
|
|
(22
|
)
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
% Increase (decrease)
|
|
2018
|
|
2017
|
|
% Increase (decrease)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and benefits
|
|
$
|
5,962
|
|
|
$
|
8,777
|
|
|
(32
|
)
|
|
$
|
20,494
|
|
|
$
|
28,167
|
|
|
(27
|
)
|
Outside fees and services
|
|
7,367
|
|
|
7,865
|
|
|
(6
|
)
|
|
20,027
|
|
|
19,249
|
|
|
4
|
|
||||
Cost of real estate sold
|
|
1,092
|
|
|
4,411
|
|
|
(75
|
)
|
|
17,591
|
|
|
16,461
|
|
|
7
|
|
||||
Reimbursable expenses
|
|
185
|
|
|
1,008
|
|
|
(82
|
)
|
|
1,143
|
|
|
2,665
|
|
|
(57
|
)
|
||||
Technology and telecommunications
|
|
1,072
|
|
|
1,203
|
|
|
(11
|
)
|
|
2,782
|
|
|
4,659
|
|
|
(40
|
)
|
||||
Depreciation and amortization
|
|
205
|
|
|
233
|
|
|
(12
|
)
|
|
591
|
|
|
1,283
|
|
|
(54
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of revenue
|
|
$
|
15,883
|
|
|
$
|
23,497
|
|
|
(32
|
)
|
|
$
|
62,628
|
|
|
$
|
72,484
|
|
|
(14
|
)
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
% Increase (decrease)
|
|
2018
|
|
2017
|
|
% Increase (decrease)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and benefits
|
|
$
|
900
|
|
|
$
|
732
|
|
|
23
|
|
|
$
|
2,517
|
|
|
$
|
2,469
|
|
|
2
|
|
Occupancy related costs
|
|
382
|
|
|
631
|
|
|
(39
|
)
|
|
1,394
|
|
|
2,353
|
|
|
(41
|
)
|
||||
Amortization of intangible assets
|
|
183
|
|
|
211
|
|
|
(13
|
)
|
|
902
|
|
|
633
|
|
|
42
|
|
||||
Professional services
|
|
741
|
|
|
339
|
|
|
119
|
|
|
1,111
|
|
|
974
|
|
|
14
|
|
||||
Marketing costs
|
|
2,462
|
|
|
1,786
|
|
|
38
|
|
|
6,557
|
|
|
5,390
|
|
|
22
|
|
||||
Depreciation and amortization
|
|
121
|
|
|
180
|
|
|
(33
|
)
|
|
380
|
|
|
561
|
|
|
(32
|
)
|
||||
Other
|
|
399
|
|
|
329
|
|
|
21
|
|
|
1,625
|
|
|
1,704
|
|
|
(5
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
|
$
|
5,188
|
|
|
$
|
4,208
|
|
|
23
|
|
|
$
|
14,486
|
|
|
$
|
14,084
|
|
|
3
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
% Increase (decrease)
|
|
2018
|
|
2017
|
|
% Increase (decrease)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Service revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Customer relationship management
|
|
$
|
7,389
|
|
|
$
|
6,822
|
|
|
8
|
|
|
$
|
21,028
|
|
|
$
|
21,682
|
|
|
(3
|
)
|
Asset recovery management
|
|
6,750
|
|
|
5,743
|
|
|
18
|
|
|
20,758
|
|
|
17,940
|
|
|
16
|
|
||||
IT infrastructure services
|
|
1,453
|
|
|
1,015
|
|
|
43
|
|
|
4,354
|
|
|
4,981
|
|
|
(13
|
)
|
||||
Total service revenue
|
|
15,592
|
|
|
13,580
|
|
|
15
|
|
|
46,140
|
|
|
44,603
|
|
|
3
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reimbursable expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Asset recovery management
|
|
13
|
|
|
16
|
|
|
(19
|
)
|
|
34
|
|
|
50
|
|
|
(32
|
)
|
||||
Total reimbursable expenses
|
|
13
|
|
|
16
|
|
|
(19
|
)
|
|
34
|
|
|
50
|
|
|
(32
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue
|
|
$
|
15,605
|
|
|
$
|
13,596
|
|
|
15
|
|
|
$
|
46,174
|
|
|
$
|
44,653
|
|
|
3
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
% Increase (decrease)
|
|
2018
|
|
2017
|
|
% Increase (decrease)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and benefits
|
|
$
|
12,445
|
|
|
$
|
10,080
|
|
|
23
|
|
|
$
|
38,923
|
|
|
$
|
31,770
|
|
|
23
|
|
Outside fees and services
|
|
893
|
|
|
903
|
|
|
(1
|
)
|
|
2,417
|
|
|
2,652
|
|
|
(9
|
)
|
||||
Reimbursable expenses
|
|
13
|
|
|
16
|
|
|
(19
|
)
|
|
34
|
|
|
50
|
|
|
(32
|
)
|
||||
Technology and telecommunications
|
|
3,035
|
|
|
1,478
|
|
|
105
|
|
|
8,938
|
|
|
4,433
|
|
|
102
|
|
||||
Depreciation and amortization
|
|
1,675
|
|
|
1,458
|
|
|
15
|
|
|
5,002
|
|
|
4,913
|
|
|
2
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of revenue
|
|
$
|
18,061
|
|
|
$
|
13,935
|
|
|
30
|
|
|
$
|
55,314
|
|
|
$
|
43,818
|
|
|
26
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
% Increase (decrease)
|
|
2018
|
|
2017
|
|
% Increase (decrease)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and benefits
|
|
$
|
7,084
|
|
|
$
|
8,044
|
|
|
(12
|
)
|
|
$
|
23,264
|
|
|
$
|
23,253
|
|
|
—
|
|
Occupancy related costs
|
|
2,924
|
|
|
2,257
|
|
|
30
|
|
|
8,357
|
|
|
8,307
|
|
|
1
|
|
||||
Amortization of intangible assets
|
|
417
|
|
|
418
|
|
|
—
|
|
|
1,252
|
|
|
1,391
|
|
|
(10
|
)
|
||||
Professional services
|
|
1,947
|
|
|
1,228
|
|
|
59
|
|
|
5,860
|
|
|
3,991
|
|
|
47
|
|
||||
Marketing costs
|
|
77
|
|
|
36
|
|
|
114
|
|
|
236
|
|
|
163
|
|
|
45
|
|
||||
Depreciation and amortization
|
|
338
|
|
|
1,094
|
|
|
(69
|
)
|
|
2,723
|
|
|
3,626
|
|
|
(25
|
)
|
||||
Other
|
|
7,199
|
|
|
1,331
|
|
|
N/M
|
|
|
11,066
|
|
|
5,485
|
|
|
102
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
|
$
|
19,986
|
|
|
$
|
14,408
|
|
|
39
|
|
|
$
|
52,758
|
|
|
$
|
46,216
|
|
|
14
|
|
(in thousands)
|
|
2018
|
|
2017
|
|
% Increase (decrease)
|
|||||
|
|
|
|
|
|
|
|
||||
Net income adjusted for non-cash items
|
|
$
|
59,012
|
|
|
$
|
83,771
|
|
|
(30
|
)
|
Changes in operating assets and liabilities
|
|
(15,362
|
)
|
|
(36,642
|
)
|
|
58
|
|
||
Cash flows provided by operating activities
|
|
43,650
|
|
|
47,129
|
|
|
(7
|
)
|
||
Cash flows provided by (used in) investing activities
|
|
10,793
|
|
|
(7,485
|
)
|
|
244
|
|
||
Cash flows used in financing activities
|
|
(54,698
|
)
|
|
(74,742
|
)
|
|
27
|
|
||
Net decrease in cash, cash equivalents an
d restricted cash
|
|
(255
|
)
|
|
(35,098
|
)
|
|
99
|
|
||
Cash, cash equivalents and restricted cash at the beginn
ing of the period
|
|
108,843
|
|
|
153,421
|
|
|
(29
|
)
|
||
|
|
|
|
|
|
|
|
||||
Cash, cash equivalents and restricted cash at the
end of the period
|
|
$
|
108,588
|
|
|
$
|
118,323
|
|
|
(8
|
)
|
a)
|
Evaluation of Disclosure Controls and Procedures
|
b)
|
Internal Control over Financial Reporting
|
Period
|
|
Total number of shares purchased
(1)
|
|
Weighted average price paid per share
|
|
Total number of shares purchased as part of publicly announced plans or programs
(2)
|
|
Maximum number of shares that may yet be purchased under the plans or programs
(2)
|
|||||
|
|
|
|
|
|
|
|
|
|||||
Common stock:
|
|
|
|
|
|
|
|
|
|||||
July 1 – 31, 2018
|
|
21,007
|
|
|
$
|
30.93
|
|
|
21,007
|
|
|
4,156,739
|
|
August 1 – 31, 2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,156,739
|
|
|
September 1 – 30, 2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,156,739
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
21,007
|
|
|
$
|
30.93
|
|
|
21,007
|
|
|
4,156,739
|
|
(1)
|
In addition to the repurchases included in the table above,
5,991
common shares were withheld from employees to satisfy tax withholding obligations that arose from the vesting of restricted shares.
|
(2)
|
On
May 15, 2018
, our shareholders approved the renewal of the share repurchase program originally approved by the shareholders on
May 17, 2017
, which replaced the previous share repurchase program and authorizes us to purchase up to
4.3 million
shares of our common stock in the open market, subject to certain parameters.
|
Exhibit Number
|
|
Exhibit Description
|
|
|
|
10.1
*†
|
|
|
|
|
|
10.2
*†
|
|
|
|
|
|
|
||
|
|
|
10.4
*
|
|
|
|
|
|
10.5
*†
|
|
|
|
|
|
31.1
*
|
|
|
|
|
|
31.2
*
|
|
|
|
|
|
32.1
*
|
|
|
|
|
|
101
*
|
|
Pursuant to Rule 405 of Regulation S-T, the following financial information from the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2018 is formatted in XBRL interactive data files: (i) Condensed Consolidated Balance Sheets at September 30, 2018 and December 31, 2017; (ii) Condensed Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended September 30, 2018 and 2017; (iii) Condensed Consolidated Statements of Equity for the nine months ended September 30, 2018 and 2017; (iv) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2018 and 2017; and (v) Notes to Condensed Consolidated Financial Statements.
|
|
|
|
______________________________________
|
||
*
|
|
Filed herewith.
|
†
|
|
Denotes a management contract or compensatory arrangement.
|
|
|
|
ALTISOURCE PORTFOLIO SOLUTIONS S.A.
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
Date:
|
October 25, 2018
|
|
By:
|
/s/ Michelle D. Esterman
|
|
|
|
|
Michelle D. Esterman
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(On behalf of the Registrant and as its Principal Financial Officer and Principal Accounting Officer)
|
•
|
not use the information for their own benefit or the benefit of other persons inside or outside of Altisource;
|
•
|
process confidential information in accordance with Altisource policies regarding data security (including, without limitation, the End User Computing Policy and the Personally Identifiable Information Security Policy, which are available on the Altisource Intranet under “Policies and Procedures”);
|
•
|
not disclose confidential information to other Altisource employee(s) unless such employee(s) need(s) the information to carry out business responsibilities;
|
•
|
not disclose confidential information to anyone outside the Company except (i) pursuant to an agreement approved by the Law and Compliance Department obligating the person receiving confidential information to maintain the secrecy of such information or (ii) to the extent that the disclosure is authorized by the General Counsel or an Associate General Counsel;
|
•
|
properly label any and all documentation shared with or correspondence sent to the Company’s counsel or outside counsel as “Attorney-Client Privileged;” and
|
•
|
report immediately any suspected or confirmed unauthorized disclosures of confidential information.
|
•
|
operating or financial results of the Company or its major business units (including estimates of any future earnings or losses);
|
•
|
negotiations or entry into an agreement for an acquisition or sale of a substantial business or other significant transaction;
|
•
|
development of a major new product or service by the Company;
|
•
|
an increase or decrease in dividends of the Company;
|
•
|
a stock split or other recapitalization of the Company;
|
•
|
a redemption or purchase by the Company of its securities;
|
•
|
major management changes at the Company;
|
•
|
mergers, acquisitions, tender offers and restructurings;
|
•
|
securities offerings and repurchases;
|
•
|
significant litigation or litigation developments;
|
•
|
significant investigations, proceedings or regulatory audits; and
|
•
|
developments regarding customers, clients or suppliers.
|
•
|
restricting a customer’s re‑selling activity through minimum resale price maintenance (for example, by prohibiting discounts);
|
•
|
discriminating in terms and services offered to customers where a company treats one customer or group of customers differently than another;
|
•
|
exclusive dealing agreements where a company requires a customer to buy from or a supplier to sell to only that company;
|
•
|
tying arrangements where a customer or supplier is required, as a condition of purchasing one product, to also purchase a second, distinct product;
|
•
|
“bundled discounts,” in which discount or rebate programs link the level of discounts available on one product to purchases of separate but related products (for example, pencils linked to other office supplies); and
|
•
|
We may gather information about our competitors from sources such as published articles, advertisements, brochures, other non‑proprietary materials, surveys by consultants and conversations with our customers/clients, as long as those conversations are not likely to suggest that we are attempting to (a) conspire with our competitors, using the customer/client as a messenger, or (b) gather information in breach of a client’s Non-Disclosure Agreement with a competitor or through other wrongful means. You should be able to identify the source of any information about competitors.
|
•
|
We must never attempt to acquire a competitor’s trade secrets or other proprietary information through unlawful means, such as theft, spying, bribery or breach of a competitor’s Non-Disclosure Agreement.
|
•
|
If there is any indication that information that you obtain was not lawfully received by the party in possession, you should refuse to accept it. If you receive any competitive information anonymously or that is marked confidential, you should not review it and must contact the General Counsel immediately.
|
•
|
submission to such conduct is made a term or condition of employment;
|
•
|
submission to or rejection of such conduct is used as a basis for employment decisions; or
|
•
|
such conduct has the purpose or effect of unreasonably interfering with an individual’s work performance or creating an intimidating, offensive or hostile work environment.
|
•
|
verbal harassment, such as unwelcome comments, jokes or slurs of a sexual nature;
|
•
|
physical harassment, such as unnecessary or offensive touching, or impeding or blocking movement; and
|
•
|
visual harassment, such as derogatory or offensive posters, cards, cartoons, graffiti, drawings or gestures.
|
•
|
has the purpose or effect of creating an intimidating, hostile or offensive work environment; or
|
•
|
has the purpose or effect of unreasonably interfering with an individual’s work performance or otherwise adversely affects an individual’s employment.
|
|
Indroneel Chatterjee
|
|
XXX-XX-XXXX
|
1.
|
For the purpose of this Agreement, the following words shall have the following meanings:
|
a.
|
“Affiliate” shall mean any person or entity directly or indirectly controlled by, controlling or under common control with a party. For avoidance of doubt, an Affiliate of Altisource shall include, without limitation, any direct or indirect subsidiary (whether or not wholly-owned) of Altisource Portfolio Solutions S.A.
|
b.
|
“Confidential Information” means information which is disclosed to me, known by me, or generated by me as a consequence of or related to my employment with Altisource, which is not publicly known outside Altisource or its Affiliates, and which relates to the existing or reasonably contemplated scope of Altisource’s business (or the business of its Affiliates) at the time such information is disclosed to me, known by me, or generated by me. “Confidential Information” is intended to include, but is not limited to, trade secrets, inventions, processes, formulas, systems, computer programs, plans, programs, studies, techniques and business information.
|
c.
|
“Developments” shall be defined as all inventions, whether or not patentable, Confidential Information, computer programs, copyright works, algorithms, processes, patents (and applications therefor), trademarks (and applications therefor) and other intellectual property (collectively, “Works”) that (1) are made, conceived, reduced to practice, or authored by me, alone or jointly with others, while employed by Altisource, whether or not during normal business hours or on Altisource’s (or its Affiliates’) premises, that are within the existing or reasonably contemplated scope of Altisource’s business (at the time such Works are made, conceived, reduced to practice or authored) or of the business of Altisource’s Affiliates (at the time such Works are made, conceived, reduced to practice, or authored), or which result from or are suggested by any work I or others may do for or on behalf of Altisource or its Affiliates; (2) arise from, are based on, or otherwise incorporate or utilize Confidential Information; or (3) are made, conceived, reduced to practice, or authored by me during my employment with Altisource during business hours or using Altisource’s (or its Affiliates’) equipment whether related or unrelated to Altisource’s business or the business of its Affiliates. Notwithstanding anything to the contrary contained in this Agreement, any Works of which I have already conceived prior to my employment with Altisource (whether or not relating to the business of Altisource or its Affiliates) shall be excluded from the
|
2.
|
I will not disclose or induce Altisource or its Affiliates to use confidential information or trade secrets of others, unless authorized by the owner.
|
3.
|
During my employment with Altisource and thereafter, I will treat all Confidential Information as secret and confidential and I will never use or disclose or authorize anyone else to use or disclose such Confidential Information except as is expressly permitted by Altisource or its Affiliates in performance of my designated duties to Altisource or its Affiliates. I will diligently protect all Confidential Information against loss by inadvertent or unauthorized use or disclosure. I have no right to use Confidential Information after my employment with Altisource terminates.
|
4.
|
All Developments are the property of Altisource or its Affiliates (as determined by Altisource) and deemed works made for hire, to the extent applicable. To the extent any Developments and the rights therein do not become the property of Altisource or its Affiliates by operation of law, I will assign and hereby do assign to Altisource Solutions S.à r.l. (parent of Altisource Portfolio Solutions, Inc., which is the parent of Altisource) all my rights to such Developments in all countries as of the time such rights arise. I agree that I will execute all documentation necessary to document the assignment to Altisource Solutions S.à r.l. (or such other entity as specified by Altisource) of all rights, title and interest in any Developments.
|
5.
|
Notwithstanding anything to the contrary in this Agreement, no provision in this Agreement shall be interpreted to require me to assign any of my rights in, and the definition of Developments shall be construed to exclude, any Work that applicable law would preclude from being assigned from an employee to an employer in an employment agreement. For the avoidance of doubt, no provision in this Agreement is intended to require assignment of any of my rights in, and the definition of Developments shall be construed to exclude, any Work that I developed entirely on my own time without using Altisource’s (or its Affiliates’) equipment, supplies, facilities, or trade secret information except for those Works that either:
|
a.
|
relate at the time of conception or reduction to practice of the invention to Altisource’s (or its Affiliates’) business, or actual or demonstrably anticipated research or development of Altisource or its Affiliates; or
|
b.
|
result from any work performed by me for Altisource or its Affiliates.
|
6.
|
I will promptly submit to the Altisource Law Department written disclosures of all Developments, whether or not patentable, which are made or conceived by me, alone or jointly with others, while I am employed by Altisource. If I make, conceive, or develop any Work during my employment for which I do not know whether such Work falls within the existing or reasonably contemplated scope of Altisource’s or its Affiliates’ business (at the time such Work is made, conceived, or authored), I will promptly submit to the Altisource Law Department a written disclosure of such Work so that Altisource, in its sole reasonable judgment, can determine in good faith whether such Work is a Development.
|
7.
|
Upon request by Altisource or its Affiliates, at any time during my employment with Altisource and thereafter:
|
a.
|
I will submit to the Altisource Law Department written disclosures of all Developments made, conceived, or authored by me, alone or jointly with others, while employed by Altisource;
|
b.
|
I will provide proper assistance and review and execute all papers deemed by Altisource to be necessary to effectuate the intentions of the parties expressed in this Agreement and to develop and preserve legal protection for all Developments in the name of Altisource (or its Affiliates as determined by Altisource) without any compensation in addition to the compensation received from Altisource during my employment with Altisource except as required by law; and
|
c.
|
I hereby appoint Altisource as my attorney-in-fact in the event I do not or cannot perform my obligations regarding the ownership and assignment of the Developments (including, without limitation, the obligations specified in subsection (b) above) and only for such limited purpose.
|
8.
|
All written materials and other tangible objects, including copies, made or compiled by me or made available to me in the course of my employment, shall be the property of Altisource or its Affiliates and shall be delivered to Altisource upon termination of my employment or at any other time upon request.
|
9.
|
The law of the State of Michigan will govern the interpretation, validity and effect of this Agreement without regard to its place of execution or its place of performance. Should I violate this Agreement, inadvertently or otherwise, I acknowledge that irreparable harm will result to Altisource and its Affiliates, and that Altisource and its Affiliates shall be entitled to any remedy, legal or equitable, to correct any harm which results from such violation.
|
10.
|
This Agreement may not be superseded, amended, or modified except by either (a) a written agreement signed by me and a director of Human Resources or a senior vice president (or above) of Altisource; or (b) if permitted by law, the issuance of a new or updated official Altisource policy relating to the subject of this Agreement that is communicated to me via any reasonable medium (including without limitation via electronic mail), which I agree becomes effective by my continued employment at Altisource after receiving actual or constructive notice of such policy.
|
11.
|
If any provision of this Agreement is held to be unenforceable for any reason, such provision shall be conformed to prevailing law rather than voided, if possible, in order to achieve the intent of the parties to the extent possible. In any event, if any provision of this Agreement is voided, all other provisions of this Agreement shall be deemed valid and enforceable to the fullest extent possible.
|
12.
|
There is no agreement or restriction which prevents the performance of my duties under this Agreement, except an agreement with
no exception
, a copy of which is attached hereto. (If there is none, insert “no exception”.)
|
By:
|
/s/ Indroneel Chatterjee
|
|
Date:
|
8/31/2018
|
By:
|
/s/ Michelle D. Esterman
|
|
Date:
|
8/31/2018
|
By:
|
/s/Kevin J. Wilcox
|
|
By:
|
/s/Joseph A. Davila
|
|
|
Kevin J. Wilcox
|
|
|
Joseph A. Davila
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALTISOURCE S.À R.L.
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/William Shepro
|
|
|
|
|
|
William B. Shepro
|
|
|
|
|
|
Manager
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q for the period ended
September 30, 2018
of Altisource Portfolio Solutions S.A.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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October 25, 2018
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By:
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/s/ William B. Shepro
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William B. Shepro
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Director and Chief Executive Officer
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(Principal Executive Officer)
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1.
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I have reviewed this quarterly report on Form 10-Q for the period ended
September 30, 2018
of Altisource Portfolio Solutions S.A.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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October 25, 2018
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By:
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/s/ Michelle D. Esterman
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Michelle D. Esterman
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Chief Financial Officer
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(Principal Financial Officer and
Principal Accounting Officer)
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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By:
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/s/ William B. Shepro
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By:
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/s/ Michelle D. Esterman
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William B. Shepro
|
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Michelle D. Esterman
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Director and Chief Executive Officer
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|
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Chief Financial Officer
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(Principal Executive Officer)
|
|
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(Principal Financial Officer and
|
|
|
|
|
Principal Accounting Officer)
|
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October 25, 2018
|
|
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October 25, 2018
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