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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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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Common Stock, $1.00 par value
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ASPS
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NASDAQ Global Select Market
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Large accelerated filer o
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Accelerated filer þ
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Non-accelerated filer o
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Smaller reporting company o
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Emerging growth company o
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Page
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September 30,
2019 |
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December 31,
2018 |
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ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
66,901
|
|
|
$
|
58,294
|
|
Investment in equity securities (Note 4)
|
40,093
|
|
|
36,181
|
|
||
Accounts receivable, net
|
64,083
|
|
|
36,466
|
|
||
Short-term investments in real estate (Note 7)
|
—
|
|
|
39,873
|
|
||
Prepaid expenses and other current assets
|
16,254
|
|
|
30,720
|
|
||
Total current assets
|
187,331
|
|
|
201,534
|
|
||
|
|
|
|
||||
Premises and equipment, net (Note 8)
|
28,431
|
|
|
45,631
|
|
||
Right-of-use assets under operating leases (Notes 1 and 9)
|
26,028
|
|
|
—
|
|
||
Goodwill
|
79,009
|
|
|
81,387
|
|
||
Intangible assets, net
|
65,318
|
|
|
91,653
|
|
||
Deferred tax assets, net
|
293,412
|
|
|
309,089
|
|
||
Other assets
|
9,600
|
|
|
12,406
|
|
||
|
|
|
|
||||
Total assets
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$
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689,129
|
|
|
$
|
741,700
|
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|
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LIABILITIES AND EQUITY
|
|||||||
Current liabilities:
|
|
|
|
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Accounts payable and accrued expenses
|
$
|
66,999
|
|
|
$
|
87,240
|
|
Deferred revenue
|
5,274
|
|
|
10,108
|
|
||
Other current liabilities (Notes 1 and 12)
|
16,721
|
|
|
7,030
|
|
||
Total current liabilities
|
88,994
|
|
|
104,378
|
|
||
|
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|
|
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Long-term debt
|
287,707
|
|
|
331,476
|
|
||
Other non-current liabilities (Notes 1 and 14)
|
23,772
|
|
|
9,178
|
|
||
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|
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Commitments, contingencies and regulatory matters (Note 24)
|
|
|
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|
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Equity:
|
|
|
|
||||
Common stock ($1.00 par value; 100,000 shares authorized, 25,413 issued and 15,778 outstanding as of September 30, 2019; 16,276 outstanding as of December 31, 2018)
|
25,413
|
|
|
25,413
|
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Additional paid-in capital
|
130,951
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|
|
122,667
|
|
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Retained earnings
|
579,557
|
|
|
590,655
|
|
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Treasury stock, at cost (9,635 shares as of September 30, 2019 and 9,137 shares as of
December 31, 2018) |
(448,590
|
)
|
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(443,304
|
)
|
||
Altisource equity
|
287,331
|
|
|
295,431
|
|
||
|
|
|
|
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Non-controlling interests
|
1,325
|
|
|
1,237
|
|
||
Total equity
|
288,656
|
|
|
296,668
|
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|
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Total liabilities and equity
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$
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689,129
|
|
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$
|
741,700
|
|
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Three months ended
September 30, |
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Nine months ended September 30,
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||||||||||||
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2019
|
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2018
|
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2019
|
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2018
|
||||||||
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Revenue
|
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$
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141,493
|
|
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$
|
204,575
|
|
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$
|
507,963
|
|
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$
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620,569
|
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Cost of revenue
|
|
110,906
|
|
|
147,580
|
|
|
387,651
|
|
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457,980
|
|
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|
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Gross profit
|
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30,587
|
|
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56,995
|
|
|
120,312
|
|
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162,589
|
|
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Operating expenses (income):
|
|
|
|
|
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Selling, general and administrative expenses
|
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27,184
|
|
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46,329
|
|
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104,275
|
|
|
132,377
|
|
||||
Gain on sale of businesses (Note 3)
|
|
(17,558
|
)
|
|
(13,688
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)
|
|
(17,558
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)
|
|
(13,688
|
)
|
||||
Restructuring charges (Note 23)
|
|
2,761
|
|
|
3,436
|
|
|
9,080
|
|
|
3,436
|
|
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|
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Income from operations
|
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18,200
|
|
|
20,918
|
|
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24,515
|
|
|
40,464
|
|
||||
Other income (expense), net:
|
|
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Interest expense
|
|
(3,357
|
)
|
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(6,725
|
)
|
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(16,656
|
)
|
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(19,615
|
)
|
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Unrealized (loss) gain on investment in equity securities (Note 4)
|
|
(2,294
|
)
|
|
1,782
|
|
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11,731
|
|
|
(4,186
|
)
|
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Other income (expense), net
|
|
406
|
|
|
154
|
|
|
1,308
|
|
|
(2,435
|
)
|
||||
Total other income (expense), net
|
|
(5,245
|
)
|
|
(4,789
|
)
|
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(3,617
|
)
|
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(26,236
|
)
|
||||
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Income before income taxes and non-controlling interests
|
|
12,955
|
|
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16,129
|
|
|
20,898
|
|
|
14,228
|
|
||||
Income tax provision
|
|
(5,379
|
)
|
|
(6,608
|
)
|
|
(20,670
|
)
|
|
(6,059
|
)
|
||||
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|
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Net income
|
|
7,576
|
|
|
9,521
|
|
|
228
|
|
|
8,169
|
|
||||
Net income attributable to non-controlling interests
|
|
(411
|
)
|
|
(854
|
)
|
|
(2,091
|
)
|
|
(2,066
|
)
|
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|
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Net income (loss) attributable to Altisource
|
|
$
|
7,165
|
|
|
$
|
8,667
|
|
|
$
|
(1,863
|
)
|
|
$
|
6,103
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
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Basic
|
|
$
|
0.45
|
|
|
$
|
0.51
|
|
|
$
|
(0.12
|
)
|
|
$
|
0.36
|
|
Diluted
|
|
$
|
0.44
|
|
|
$
|
0.49
|
|
|
$
|
(0.12
|
)
|
|
$
|
0.35
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
15,897
|
|
|
17,033
|
|
|
16,133
|
|
|
17,184
|
|
||||
Diluted
|
|
16,151
|
|
|
17,575
|
|
|
16,133
|
|
|
17,669
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive income (loss):
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
7,576
|
|
|
$
|
9,521
|
|
|
$
|
228
|
|
|
$
|
8,169
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
|
|
||||||||
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 |
|
—
|
|
|
—
|
|
|
—
|
|
|
(733
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive income, net of tax
|
|
7,576
|
|
|
9,521
|
|
|
228
|
|
|
7,436
|
|
||||
Comprehensive income attributable to non-controlling interests
|
|
(411
|
)
|
|
(854
|
)
|
|
(2,091
|
)
|
|
(2,066
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive income (loss) attributable to Altisource
|
|
$
|
7,165
|
|
|
$
|
8,667
|
|
|
$
|
(1,863
|
)
|
|
$
|
5,370
|
|
|
Altisource Equity
|
|
|
|
|
|||||||||||||||||||||||||
|
Common stock
|
|
Additional paid-in capital
|
|
Retained earnings
|
|
Accumulated other comprehensive income (loss)
|
|
Treasury stock, at cost
|
|
Non-controlling interests
|
|
Total
|
|||||||||||||||||
|
Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, December 31, 2017
|
25,413
|
|
|
$
|
25,413
|
|
|
$
|
112,475
|
|
|
$
|
626,600
|
|
|
$
|
733
|
|
|
$
|
(426,609
|
)
|
|
$
|
1,373
|
|
|
$
|
339,985
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net (loss) income
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,132
|
)
|
|
—
|
|
|
—
|
|
|
525
|
|
|
(3,607
|
)
|
|||||||
Distributions to non-controlling interest holders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(672
|
)
|
|
(672
|
)
|
|||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
2,201
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,201
|
|
|||||||
Cumulative effect of accounting changes
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,715
|
)
|
|
(733
|
)
|
|
—
|
|
|
—
|
|
|
(10,448
|
)
|
|||||||
Exercise of stock options and issuance of restricted share units and restricted shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,500
|
)
|
|
—
|
|
|
15,117
|
|
|
—
|
|
|
2,617
|
|
|||||||
Repurchase of shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,994
|
)
|
|
—
|
|
|
(9,994
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, March 31, 2018
|
25,413
|
|
|
25,413
|
|
|
114,676
|
|
|
600,253
|
|
|
—
|
|
|
(421,486
|
)
|
|
1,226
|
|
|
320,082
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,568
|
|
|
—
|
|
|
—
|
|
|
687
|
|
|
2,255
|
|
|||||||
Distributions to non-controlling interest holders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(509
|
)
|
|
(509
|
)
|
|||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
1,910
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,910
|
|
|||||||
Exercise of stock options and issuance of restricted share units and restricted shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,737
|
)
|
|
—
|
|
|
4,827
|
|
|
—
|
|
|
90
|
|
|||||||
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances and stock option exercises
|
—
|
|
|
—
|
|
|
—
|
|
|
(816
|
)
|
|
—
|
|
|
406
|
|
|
—
|
|
|
(410
|
)
|
|||||||
Repurchase of shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,127
|
)
|
|
—
|
|
|
(11,127
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, June 30, 2018
|
25,413
|
|
|
25,413
|
|
|
116,586
|
|
|
596,268
|
|
|
—
|
|
|
(427,380
|
)
|
|
1,404
|
|
|
312,291
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
8,667
|
|
|
—
|
|
|
—
|
|
|
854
|
|
|
9,521
|
|
|||||||
Distributions to non-controlling interest holders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(731
|
)
|
|
(731
|
)
|
|||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
2,039
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,039
|
|
|||||||
Exercise of stock options and issuance of restricted share units and restricted shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,287
|
)
|
|
—
|
|
|
2,156
|
|
|
—
|
|
|
869
|
|
|||||||
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances and stock option exercises
|
—
|
|
|
—
|
|
|
—
|
|
|
(305
|
)
|
|
—
|
|
|
107
|
|
|
—
|
|
|
(198
|
)
|
|||||||
Repurchase of shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(650
|
)
|
|
—
|
|
|
(650
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, September 30, 2018
|
25,413
|
|
|
$
|
25,413
|
|
|
$
|
118,625
|
|
|
$
|
603,343
|
|
|
$
|
—
|
|
|
$
|
(425,767
|
)
|
|
$
|
1,527
|
|
|
$
|
323,141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Altisource Equity
|
|
|
|
|
|||||||||||||||||||||||||
|
Common stock
|
|
Additional paid-in capital
|
|
Retained earnings
|
|
Accumulated other comprehensive income
|
|
Treasury stock, at cost
|
|
Non-controlling interests
|
|
Total
|
|||||||||||||||||
|
Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, December 31, 2018
|
25,413
|
|
|
$
|
25,413
|
|
|
$
|
122,667
|
|
|
$
|
590,655
|
|
|
$
|
—
|
|
|
$
|
(443,304
|
)
|
|
$
|
1,237
|
|
|
$
|
296,668
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net (loss) income
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,184
|
)
|
|
—
|
|
|
—
|
|
|
440
|
|
|
(2,744
|
)
|
|||||||
Distributions to non-controlling interest holders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(620
|
)
|
|
(620
|
)
|
|||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
2,621
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,621
|
|
|||||||
Exercise of stock options and issuance of restricted share units and restricted shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,549
|
)
|
|
—
|
|
|
1,577
|
|
|
—
|
|
|
28
|
|
|||||||
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances and stock option exercises
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,163
|
)
|
|
—
|
|
|
578
|
|
|
—
|
|
|
(585
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, March 31, 2019
|
25,413
|
|
|
25,413
|
|
|
125,288
|
|
|
584,759
|
|
|
—
|
|
|
(441,149
|
)
|
|
1,057
|
|
|
295,368
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net (loss) income
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,844
|
)
|
|
—
|
|
|
—
|
|
|
1,240
|
|
|
(4,604
|
)
|
|||||||
Distributions to non-controlling interest holders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(518
|
)
|
|
(518
|
)
|
|||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
2,832
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,832
|
|
|||||||
Exercise of stock options and issuance of restricted share units and restricted shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,473
|
)
|
|
—
|
|
|
3,680
|
|
|
—
|
|
|
207
|
|
|||||||
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances and stock option exercises
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,402
|
)
|
|
—
|
|
|
689
|
|
|
—
|
|
|
(713
|
)
|
|||||||
Repurchase of shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,700
|
)
|
|
—
|
|
|
(6,700
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, June 30, 2019
|
25,413
|
|
|
25,413
|
|
|
128,120
|
|
|
574,040
|
|
|
—
|
|
|
(443,480
|
)
|
|
1,779
|
|
|
285,872
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
7,165
|
|
|
—
|
|
|
—
|
|
|
411
|
|
|
7,576
|
|
|||||||
Distributions to non-controlling interest holders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(865
|
)
|
|
(865
|
)
|
|||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
2,831
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,831
|
|
|||||||
Exercise of stock options and issuance of restricted share units and restricted shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,214
|
)
|
|
—
|
|
|
1,371
|
|
|
—
|
|
|
157
|
|
|||||||
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances and stock option exercises
|
—
|
|
|
—
|
|
|
—
|
|
|
(434
|
)
|
|
—
|
|
|
216
|
|
|
—
|
|
|
(218
|
)
|
|||||||
Repurchase of shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,697
|
)
|
|
—
|
|
|
(6,697
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, September 30, 2019
|
25,413
|
|
|
$
|
25,413
|
|
|
$
|
130,951
|
|
|
$
|
579,557
|
|
|
$
|
—
|
|
|
$
|
(448,590
|
)
|
|
$
|
1,325
|
|
|
$
|
288,656
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net income
|
$
|
228
|
|
|
$
|
8,169
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
14,196
|
|
|
24,743
|
|
||
Amortization of right-of-use assets under operating leases
|
9,145
|
|
|
—
|
|
||
Amortization of intangible assets
|
15,489
|
|
|
21,311
|
|
||
Unrealized (gain) loss on investment in equity securities
|
(11,731
|
)
|
|
4,186
|
|
||
Share-based compensation expense
|
8,284
|
|
|
6,150
|
|
||
Bad debt expense
|
114
|
|
|
2,408
|
|
||
Amortization of debt discount
|
499
|
|
|
513
|
|
||
Amortization of debt issuance costs
|
552
|
|
|
739
|
|
||
Deferred income taxes
|
15,568
|
|
|
(676
|
)
|
||
Loss on disposal of fixed assets
|
330
|
|
|
723
|
|
||
Gain on sale of businesses (Note 3)
|
(17,558
|
)
|
|
(13,688
|
)
|
||
Loss on debt refinancing (Note 13)
|
—
|
|
|
4,434
|
|
||
Changes in operating assets and liabilities (excludes effect of sale of businesses):
|
|
|
|
|
|
||
Accounts receivable
|
(31,580
|
)
|
|
4,515
|
|
||
Short-term investments in real estate
|
39,873
|
|
|
(22,283
|
)
|
||
Prepaid expenses and other current assets
|
12,588
|
|
|
5,403
|
|
||
Other assets
|
(55
|
)
|
|
554
|
|
||
Accounts payable and accrued expenses
|
(17,058
|
)
|
|
10,774
|
|
||
Current and non-current operating lease liabilities
|
(9,713
|
)
|
|
—
|
|
||
Other current and non-current liabilities
|
(6,977
|
)
|
|
(14,325
|
)
|
||
Net cash provided by operating activities
|
22,194
|
|
|
43,650
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
||
Additions to premises and equipment
|
(1,204
|
)
|
|
(4,207
|
)
|
||
Proceeds received from sale of equity securities
|
7,819
|
|
|
—
|
|
||
Proceeds from the sale of a business
|
38,027
|
|
|
15,000
|
|
||
Other
|
1,087
|
|
|
—
|
|
||
Net cash provided by investing activities
|
45,729
|
|
|
10,793
|
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
||
Proceeds from issuance of long-term debt
|
—
|
|
|
407,880
|
|
||
Repayments and repurchases of long-term debt
|
(44,820
|
)
|
|
(436,821
|
)
|
||
Debt issuance costs
|
—
|
|
|
(5,042
|
)
|
||
Proceeds from stock option exercises
|
392
|
|
|
3,576
|
|
||
Purchase of treasury shares
|
(13,397
|
)
|
|
(21,771
|
)
|
||
Distributions to non-controlling interests
|
(2,003
|
)
|
|
(1,912
|
)
|
||
Payments of tax withholding on issuance of restricted share units and restricted shares
|
(1,516
|
)
|
|
(608
|
)
|
||
Net cash used in financing activities
|
(61,344
|
)
|
|
(54,698
|
)
|
||
|
|
|
|
||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
6,579
|
|
|
(255
|
)
|
||
Cash, cash equivalents and restricted cash at the beginning of the period
|
64,046
|
|
|
108,843
|
|
||
|
|
|
|
||||
Cash, cash equivalents and restricted cash at the end of the period
|
$
|
70,625
|
|
|
$
|
108,588
|
|
|
|
|
|
|
|||
Supplemental cash flow information:
|
|
|
|
|
|
||
Interest paid
|
$
|
16,271
|
|
|
$
|
17,889
|
|
Income taxes paid, net
|
2,397
|
|
|
4,162
|
|
||
Acquisition of right-of-use assets with operating lease liabilities
|
5,888
|
|
|
—
|
|
||
Reduction of right-of-use assets from operating lease modifications or reassessments
|
(3,458
|
)
|
|
—
|
|
||
|
|
|
|
||||
Non-cash investing and financing activities:
|
|
|
|
|
|
||
Net increase in payables for purchases of premises and equipment
|
$
|
203
|
|
|
$
|
12
|
|
(in thousands)
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
|
|
|
|
|
||||
Billed
|
|
$
|
58,467
|
|
|
$
|
35,590
|
|
Unbilled
|
|
12,678
|
|
|
11,759
|
|
||
|
|
71,145
|
|
|
47,349
|
|
||
Less: Allowance for doubtful accounts
|
|
(7,062
|
)
|
|
(10,883
|
)
|
||
|
|
|
|
|
||||
Total
|
|
$
|
64,083
|
|
|
$
|
36,466
|
|
(in thousands)
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
|
|
|
|
|
||||
Maintenance agreements, current portion
|
|
$
|
1,442
|
|
|
$
|
5,600
|
|
Income taxes receivable
|
|
6,287
|
|
|
7,940
|
|
||
Prepaid expenses
|
|
4,313
|
|
|
7,484
|
|
||
Other current assets
|
|
4,212
|
|
|
9,696
|
|
||
|
|
|
|
|
||||
Total
|
|
$
|
16,254
|
|
|
$
|
30,720
|
|
(in thousands)
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
|
|
|
|
|
||||
Computer hardware and software
|
|
$
|
169,719
|
|
|
$
|
182,215
|
|
Furniture and fixtures
|
|
9,730
|
|
|
13,313
|
|
||
Office equipment and other
|
|
4,367
|
|
|
7,384
|
|
||
Leasehold improvements
|
|
24,064
|
|
|
29,781
|
|
||
|
|
207,880
|
|
|
232,693
|
|
||
Less: Accumulated depreciation and amortization
|
|
(179,449
|
)
|
|
(187,062
|
)
|
||
|
|
|
|
|
||||
Total
|
|
$
|
28,431
|
|
|
$
|
45,631
|
|
(in thousands)
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
|
|
|
|
|
||||
United States
|
|
$
|
14,964
|
|
|
$
|
25,693
|
|
India
|
|
708
|
|
|
3,154
|
|
||
Luxembourg
|
|
12,615
|
|
|
14,975
|
|
||
Philippines
|
|
104
|
|
|
1,754
|
|
||
Other
|
|
40
|
|
|
55
|
|
||
|
|
|
|
|
||||
Total
|
|
$
|
28,431
|
|
|
$
|
45,631
|
|
(in thousands)
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
|
|
|
|
|
||||
Right-of-use assets under operating leases
|
|
$
|
34,422
|
|
|
$
|
—
|
|
Less: Accumulated amortization
|
|
(8,394
|
)
|
|
—
|
|
||
|
|
|
|
|
||||
Total
|
|
$
|
26,028
|
|
|
$
|
—
|
|
(in thousands)
|
|
Total
|
||
|
|
|
||
Balance as of December 31, 2018
|
|
$
|
81,387
|
|
Disposition(1)
|
|
(2,378
|
)
|
|
|
|
|
||
Balance as of September 30, 2019
|
|
$
|
79,009
|
|
(1)
|
During the third quarter of 2019, the Company sold the Financial Services Business (see Note 3) which had $2.4 million of goodwill attributed to it.
|
|
|
Weighted average estimated useful life
(in years) |
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net book value
|
||||||||||||||||||
(in thousands)
|
|
|
September 30,
2019 |
|
December 31,
2018 |
|
September 30,
2019 |
|
December 31,
2018 |
|
September 30,
2019 |
|
December 31,
2018 |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Definite lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer related intangible assets
|
|
9
|
|
$
|
214,973
|
|
|
$
|
273,172
|
|
|
$
|
(173,253
|
)
|
|
$
|
(207,639
|
)
|
|
$
|
41,720
|
|
|
$
|
65,533
|
|
Operating agreement
|
|
20
|
|
35,000
|
|
|
35,000
|
|
|
(16,939
|
)
|
|
(15,632
|
)
|
|
18,061
|
|
|
19,368
|
|
||||||
Trademarks and trade names
|
|
15
|
|
11,140
|
|
|
11,349
|
|
|
(6,481
|
)
|
|
(6,244
|
)
|
|
4,659
|
|
|
5,105
|
|
||||||
Non-compete agreements
|
|
4
|
|
1,230
|
|
|
1,230
|
|
|
(1,209
|
)
|
|
(1,026
|
)
|
|
21
|
|
|
204
|
|
||||||
Intellectual property
|
|
10
|
|
300
|
|
|
300
|
|
|
(167
|
)
|
|
(145
|
)
|
|
133
|
|
|
155
|
|
||||||
Other intangible assets
|
|
5
|
|
3,745
|
|
|
3,745
|
|
|
(3,021
|
)
|
|
(2,457
|
)
|
|
724
|
|
|
1,288
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
|
|
|
$
|
266,388
|
|
|
$
|
324,796
|
|
|
$
|
(201,070
|
)
|
|
$
|
(233,143
|
)
|
|
$
|
65,318
|
|
|
$
|
91,653
|
|
(in thousands)
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
|
|
|
|
|
||||
Security deposits
|
|
$
|
3,429
|
|
|
$
|
3,972
|
|
Restricted cash
|
|
3,724
|
|
|
5,752
|
|
||
Other
|
|
2,447
|
|
|
2,682
|
|
||
|
|
|
|
|
||||
Total
|
|
$
|
9,600
|
|
|
$
|
12,406
|
|
(in thousands)
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
|
|
|
|
|
||||
Accounts payable
|
|
$
|
18,209
|
|
|
$
|
27,853
|
|
Accrued expenses - general
|
|
26,114
|
|
|
27,866
|
|
||
Accrued salaries and benefits
|
|
21,303
|
|
|
31,356
|
|
||
Income taxes payable
|
|
1,373
|
|
|
165
|
|
||
|
|
|
|
|
||||
Total
|
|
$
|
66,999
|
|
|
$
|
87,240
|
|
(in thousands)
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
|
|
|
|
|
||||
Unfunded cash account balances
|
|
$
|
2,632
|
|
|
$
|
4,932
|
|
Operating lease liabilities
|
|
11,964
|
|
|
—
|
|
||
Other
|
|
2,125
|
|
|
2,098
|
|
||
|
|
|
|
|
||||
Total
|
|
$
|
16,721
|
|
|
$
|
7,030
|
|
(in thousands)
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
|
|
|
|
|
||||
Senior secured term loans
|
|
$
|
294,002
|
|
|
$
|
338,822
|
|
Less: Debt issuance costs, net
|
|
(3,303
|
)
|
|
(3,855
|
)
|
||
Less: Unamortized discount, net
|
|
(2,992
|
)
|
|
(3,491
|
)
|
||
|
|
|
|
|
||||
Long-term debt
|
|
$
|
287,707
|
|
|
$
|
331,476
|
|
(in thousands)
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
|
|
|
|
|
||||
Operating lease liabilities
|
|
$
|
16,301
|
|
|
$
|
—
|
|
Income tax liabilities
|
|
6,980
|
|
|
7,069
|
|
||
Deferred revenue
|
|
85
|
|
|
19
|
|
||
Other non-current liabilities
|
|
406
|
|
|
2,090
|
|
||
|
|
|
|
|
||||
Total
|
|
$
|
23,772
|
|
|
$
|
9,178
|
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||||||||||
(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
|
|
$
|
66,901
|
|
|
$
|
66,901
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
58,294
|
|
|
$
|
58,294
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted cash
|
|
3,724
|
|
|
3,724
|
|
|
—
|
|
|
—
|
|
|
5,752
|
|
|
5,752
|
|
|
—
|
|
|
—
|
|
||||||||
Investment in equity securities
|
|
40,093
|
|
|
40,093
|
|
|
—
|
|
|
—
|
|
|
36,181
|
|
|
36,181
|
|
|
—
|
|
|
—
|
|
||||||||
Long-term receivable (Note 3)
|
|
2,333
|
|
|
—
|
|
|
—
|
|
|
2,333
|
|
|
2,221
|
|
|
—
|
|
|
—
|
|
|
2,221
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Senior secured term loan
|
|
294,002
|
|
|
—
|
|
|
282,977
|
|
|
—
|
|
|
338,822
|
|
|
—
|
|
|
330,351
|
|
|
—
|
|
|
|
|
|
Nine months ended September 30, 2018
|
||||||
|
|
|
|
|
|
Black-Scholes
|
|
Binomial
|
||
|
|
|
|
|
|
|
|
|
||
Risk-free interest rate (%)
|
|
|
|
|
|
2.66 – 2.98
|
|
|
1.64 – 2.83
|
|
Expected stock price volatility (%)
|
|
|
|
|
|
70.31 – 71.86
|
|
|
71.81 – 71.86
|
|
Expected dividend yield
|
|
|
|
|
|
—
|
|
|
—
|
|
Expected option life (in years)
|
|
|
|
|
|
6.00 – 6.25
|
|
|
2.56 – 4.32
|
|
Fair value
|
|
|
|
|
|
$16.17 – $19.06
|
|
|
$14.67 – $18.28
|
|
|
|
Nine months ended September 30,
|
||||||
(in thousands, except per share amounts)
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Weighted average grant date fair value of stock options granted per share
|
|
$
|
—
|
|
|
$
|
16.27
|
|
Intrinsic value of options exercised
|
|
52
|
|
|
4,584
|
|
||
Grant date fair value of stock options that vested
|
|
3,014
|
|
|
1,598
|
|
|
Number of restricted shares and restricted share units
|
|
|
|
|
Outstanding as of December 31, 2018
|
485,806
|
|
Granted
|
401,458
|
|
Issued
|
(117,312
|
)
|
Forfeited/canceled
|
(100,244
|
)
|
|
|
|
Outstanding as of September 30, 2019
|
669,708
|
|
|
|
Three months ended
September 30, |
|
Nine months ended September 30,
|
||||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Service revenue
|
|
$
|
133,781
|
|
|
$
|
196,906
|
|
|
$
|
489,300
|
|
|
$
|
594,533
|
|
Reimbursable expenses
|
|
7,213
|
|
|
6,815
|
|
|
16,484
|
|
|
23,970
|
|
||||
Non-controlling interests
|
|
499
|
|
|
854
|
|
|
2,179
|
|
|
2,066
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
$
|
141,493
|
|
|
$
|
204,575
|
|
|
$
|
507,963
|
|
|
$
|
620,569
|
|
(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
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Three months ended September 30, 2019
|
|
$
|
125,939
|
|
|
$
|
8,341
|
|
|
$
|
7,213
|
|
|
$
|
141,493
|
|
Three months ended September 30, 2018
|
|
173,581
|
|
|
24,179
|
|
|
6,815
|
|
|
204,575
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Nine months ended September 30, 2019
|
|
452,643
|
|
|
38,836
|
|
|
16,484
|
|
|
507,963
|
|
||||
Nine months ended September 30, 2018
|
|
527,743
|
|
|
68,856
|
|
|
23,970
|
|
|
620,569
|
|
|
|
Three months ended
September 30, |
|
Nine months ended September 30,
|
||||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Compensation and benefits
|
|
$
|
30,463
|
|
|
$
|
49,707
|
|
|
$
|
108,637
|
|
|
$
|
159,342
|
|
Outside fees and services
|
|
61,314
|
|
|
73,096
|
|
|
182,483
|
|
|
207,073
|
|
||||
Cost of real estate sold
|
|
393
|
|
|
1,092
|
|
|
42,763
|
|
|
17,591
|
|
||||
Technology and telecommunications
|
|
10,298
|
|
|
10,230
|
|
|
27,124
|
|
|
30,533
|
|
||||
Reimbursable expenses
|
|
7,213
|
|
|
6,815
|
|
|
16,484
|
|
|
23,970
|
|
||||
Depreciation and amortization
|
|
1,225
|
|
|
6,640
|
|
|
10,160
|
|
|
19,471
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
$
|
110,906
|
|
|
$
|
147,580
|
|
|
$
|
387,651
|
|
|
$
|
457,980
|
|
|
|
Three months ended
September 30, |
|
Nine months ended September 30,
|
||||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Compensation and benefits
|
|
$
|
10,395
|
|
|
$
|
11,991
|
|
|
$
|
36,986
|
|
|
$
|
37,757
|
|
Occupancy related costs
|
|
12,209
|
|
|
7,428
|
|
|
19,988
|
|
|
23,051
|
|
||||
Amortization of intangible assets
|
|
3,298
|
|
|
6,620
|
|
|
15,489
|
|
|
21,311
|
|
||||
Professional services
|
|
2,588
|
|
|
4,915
|
|
|
11,384
|
|
|
12,469
|
|
||||
Marketing costs
|
|
3,481
|
|
|
4,267
|
|
|
9,402
|
|
|
11,852
|
|
||||
Depreciation and amortization
|
|
(4,344
|
)
|
|
1,054
|
|
|
4,036
|
|
|
5,272
|
|
||||
Other
|
|
(443
|
)
|
|
10,054
|
|
|
6,990
|
|
|
20,665
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
$
|
27,184
|
|
|
$
|
46,329
|
|
|
$
|
104,275
|
|
|
$
|
132,377
|
|
|
|
Three months ended
September 30, |
|
Nine months ended September 30,
|
||||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Interest income
|
|
$
|
69
|
|
|
$
|
224
|
|
|
$
|
336
|
|
|
$
|
455
|
|
Loss on debt refinancing
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,434
|
)
|
||||
Other, net
|
|
337
|
|
|
(70
|
)
|
|
972
|
|
|
1,544
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
$
|
406
|
|
|
$
|
154
|
|
|
$
|
1,308
|
|
|
$
|
(2,435
|
)
|
|
|
Three months ended
September 30, |
|
Nine months ended September 30,
|
||||||||||||
(in thousands, except per share data)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to Altisource
|
|
$
|
7,165
|
|
|
$
|
8,667
|
|
|
$
|
(1,863
|
)
|
|
$
|
6,103
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding, basic
|
|
15,897
|
|
|
17,033
|
|
|
16,133
|
|
|
17,184
|
|
||||
Dilutive effect of stock options, restricted shares and
restricted share units |
|
254
|
|
|
542
|
|
|
—
|
|
|
485
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding, diluted
|
|
16,151
|
|
|
17,575
|
|
|
16,133
|
|
|
17,669
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.45
|
|
|
$
|
0.51
|
|
|
$
|
(0.12
|
)
|
|
$
|
0.36
|
|
Diluted
|
|
$
|
0.44
|
|
|
$
|
0.49
|
|
|
$
|
(0.12
|
)
|
|
$
|
0.35
|
|
•
|
For the nine months ended September 30, 2019 and 2018, 0.5 million and 0.3 million, respectively (0.7 million and 0.1 million for the third quarter of 2019 and 2018, respectively), stock options were anti-dilutive and have been excluded from the computation of diluted EPS because their exercise price was greater than the average market price of our common stock
|
•
|
For the nine months ended September 30, 2019 and 2018, 0.8 million and 0.5 million, respectively (0.8 million and 0.5 million for the third quarter of 2019 and 2018, respectively), stock options, restricted shares and restricted share units, which begin to vest upon the achievement of certain market criteria related to our common stock price, performance criteria and an annualized rate of return to shareholders that have not yet been met, and have been excluded from the computation of diluted EPS
|
•
|
As a result of the net loss attributable to Altisource for the nine months ended September 30, 2019, 0.3 million stock options, restricted shares and restricted share units were excluded from the computation of diluted EPS, as their impacts were anti-dilutive
|
•
|
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
|
|
|
As of
September 30, 2019 |
|
|
|
|
|
Weighted average remaining lease term (in years)
|
|
3.22
|
|
Weighted average discount rate
|
|
7.14
|
%
|
(in thousands)
|
|
Three months ended
September 30, 2019 |
|
Nine months ended
September 30, 2019 |
||||
|
|
|
|
|
||||
Operating lease costs:
|
|
|
|
|
||||
Selling, general and administrative expense
|
|
$
|
3,103
|
|
|
$
|
8,368
|
|
Cost of revenue
|
|
751
|
|
|
2,279
|
|
||
|
|
|
|
|
||||
Cash used in operating activities for amounts included in the measurement
of lease liabilities |
|
3,771
|
|
|
12,228
|
|
||
Short-term (less than one year) lease costs
|
|
1,539
|
|
|
3,848
|
|
(in thousands)
|
|
Operating lease liabilities
|
||
|
|
|
||
2019
|
|
$
|
3,460
|
|
2020
|
|
11,627
|
|
|
2021
|
|
7,837
|
|
|
2022
|
|
4,736
|
|
|
2023
|
|
3,323
|
|
|
Thereafter
|
|
1,338
|
|
|
Total lease payments
|
|
32,321
|
|
|
Less interest
|
|
(4,056
|
)
|
|
|
|
|
||
Present value of lease liabilities
|
|
$
|
28,265
|
|
•
|
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 (together with its subsidiaries, “Ocwen”) as a customer or our ability to receive the anticipated volume of referrals from Ocwen;
|
•
|
our ability to retain New Residential Investment Corp. (individually, together with one or more of its subsidiaries, or one or more of its subsidiaries individually, “NRZ”) as a customer or our ability to receive the anticipated volume of referrals from NRZ;
|
•
|
our ability to comply with material agreements 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 plan;
|
•
|
our ability to retain our existing customers, expand relationships and attract new customers;
|
•
|
our ability to comply with governmental regulations and policies and any changes in such regulations and policies;
|
•
|
the level of loan delinquencies and charge-offs;
|
•
|
the level of origination volume;
|
•
|
technology incidents, data breaches and cybersecurity risks; and
|
•
|
significant changes in tax regulations and interpretations in the countries, states and local jurisdictions in which we operate.
|
•
|
Property preservation and inspection services, including vendor management, marketplace transaction management, payment management technologies and a vendor management oversight software-as-a-service (“SaaS”) platform
|
•
|
Hubzu® online real estate auction platform, real estate auction, real estate brokerage and asset management
|
•
|
Equator®, a SaaS based technology to manage real estate owned (“REO”), short sales, foreclosure, bankruptcy and eviction processes
|
•
|
Mortgage origination loan fulfillment, certification and certification insurance services and technologies
|
•
|
Title insurance (as an agent), settlement and valuation services
|
•
|
Residential and commercial construction inspection and risk mitigation services
|
•
|
Management of the Best Partners Mortgage Cooperative, Inc., doing business as Lenders One® (“Lenders One”), mortgage banking cooperative
|
•
|
Foreclosure trustee services
|
•
|
Owners.com® technology-enabled real estate brokerage and provider of related mortgage brokerage and title services (on October 8, 2019, we announced the intent to wind down and close the Owners.com business)
|
•
|
Pointillist® customer journey analytics platform
|
•
|
Financial Services business, including post-charge-off consumer debt and mortgage charge-off collection services and customer relationship management services (sold on July 1, 2019)
|
•
|
Buy-Renovate-Lease-Sell (“BRS”) short-term investments in real estate (this business was discontinued in 2019 with the majority of the BRS inventory sold in the second quarter of 2019 and the remaining inventory sold in the third quarter of 2019)
|
•
|
Residential loan servicing technologies, document management platform and information technology infrastructure management services (these services are being terminated following Ocwen’s transition to another servicing platform)
|
•
|
Commercial loan servicing technology
|
•
|
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
|
•
|
On March 28, 2019, Altisource entered into a definitive agreement to sell its Financial Services business, consisting of post-charge-off consumer debt and mortgage charge-off collection services and customer relationship management services (the “Financial Services Business”) to Transworld Systems Inc. (“TSI”) for $44.0 million consisting of an up-front payment of $40.0 million, subject to a working capital adjustment and transaction costs upon closing of the sale, and an additional $4.0 million payment on the one year anniversary of the sale closing. The sale closed on July 1, 2019 and in connection with this sale, we recognized a $17.6 million pretax gain on sale for the nine months ended September 30, 2019 and the third quarter of 2019. The parties also entered into a transition services agreement to provide for the management and orderly transition of certain services and technologies to TSI for periods ranging from 2 months to 13
|
•
|
On June 28, 2019, the Company sold the majority of its short-term investments in real estate (“BRS Inventory”) to Lafayette Real Estate for $38.9 million and incurred closing costs of $1.8 million. In September 2019, the Company sold the remaining two BRS Inventory homes for $0.4 million.
|
•
|
In May 2019, the Company began selling its investment in Front Yard Residential Corporation (“RESI”) common stock. During the nine months ended September 30, 2019, the Company sold 0.7 million shares for net proceeds of $7.8 million (0.1 million shares for net proceeds of $1.3 million for the third quarter of 2019). As required by the senior secured term loan agreement, the Company is using the net proceeds to repay a portion of its senior secured term loan.
|
•
|
During the nine months ended September 30, 2019 and 2018, the Company recognized an unrealized gain (loss) of $11.7 million and $(4.2) million, respectively ($(2.3) million and $1.8 million for the third quarter of 2019 and 2018, respectively) on its investment in RESI common shares in other income (expense), net in the accompanying condensed consolidated statements of operations and comprehensive income (loss) from changes in the market value of RESI common shares.
|
•
|
Effective January 1, 2019, the Company implemented a new accounting standard on leases which required the recognition of operating leases by companies as operating lease liabilities on their balance sheets and also required the recognition of right-of-use assets. Adoption of this new standard resulted in the recognition of $42.1 million of right-of-use assets in right-of-use assets under operating leases, $45.5 million of operating lease liabilities ($16.7 million in other current liabilities and $28.8 million in other non-current liabilities) and reduced accrued rent and lease incentives by $3.4 million in accounts payable and accrued liabilities and other non-current liabilities on the accompanying condensed consolidated balance sheets (see Notes 1 and 24 to the condensed consolidated financial statements for additional information regarding this accounting change). In connection with the adoption of the new accounting standard on leases, the Company initially recorded the operating lease expense as components of depreciation and amortization and interest expense. During the third quarter of 2019, the Company reclassified certain operating lease items recorded in the first half of 2019. This resulted in a $1.6 million increase in technology and telecommunications expense and a $1.5 million decrease in depreciation and amortization expense in cost of revenue, a $6.2 million increase in occupancy related costs and a $5.3 million decrease in depreciation and amortization expense in selling, general and administrative expense (“SG&A”), and a $1.5 million decrease in interest expense, for the third quarter of 2019. For the nine months ended September 30, 2019, operating lease expenses in cost of revenue, SG&A and interest expense are consistent with the new accounting standard on leases and comparable with the prior year.
|
•
|
In August 2018, Altisource initiated Project Catalyst, a project intended to optimize its operations and reduce costs to better align its cost structure with its anticipated revenues and improve its operating margins. During the nine months ended September 30, 2019 and 2018, Altisource incurred $9.1 million and $3.4 million, respectively, of severance costs, professional services fees and technology costs related to the reorganization plan ($2.8 million and $3.4 million for the third quarter of 2019 and 2018, respectively). Altisource expects to incur additional severance costs, professional services fees, technology costs and facility consolidation costs in connection with this internal reorganization, automation and other technology related activities and will expense those costs as incurred. Based on the Company’s analysis, it currently anticipates the future costs relating to Project Catalyst to be in the range of approximately $12 million to $15 million.
|
•
|
In August 2018, the Company sold its 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. The Company 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 (loss) in connection with this transaction. See Note 3 to the condensed consolidated financial statements.
|
•
|
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 certain existing court precedent. During the nine months ended September 30, 2019, the Company completed the analysis of its services for potential exposure to sales tax in various jurisdictions in the United States. The Company recognized a $0.4 million and $5.9 million loss for the nine months ended September 30, 2019 and 2018, respectively ($1.7 million gain and $5.9 million loss for the third quarter of 2019 and 2018, respectively), in SG&A in the accompanying condensed consolidated statements of operations and comprehensive income (loss). During the third quarter of 2019, we recognized a net reimbursement from clients of $1.7 million of sales taxes. The Company began invoicing, collecting and remitting sales tax in applicable jurisdictions in 2019. The Company is also in the process of seeking additional reimbursements for sales tax payments from clients; however, there can be no assurance that the Company will be successful in collecting some or all of such additional reimbursements. Future changes in our estimated sales tax exposure could result in a material adjustment to our condensed consolidated financial statements which would impact our financial condition and results of operations.
|
•
|
On April 3, 2018, Altisource and its wholly-owned subsidiary, Altisource S.à r.l. entered into a credit agreement (the “Credit Agreement”) with Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, and certain lenders, 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. In connection with the refinancing, we recognized a loss of $4.4 million from the write-off of unamortized debt issuance costs and debt discount for the nine months ended September 30, 2018 and third quarter of 2018 (no comparative amounts for the nine months ended September 30, 2019 and the third quarter of 2019).
|
•
|
The Company recognized an income tax provision of $20.7 million and $6.1 million for the nine months ended September 30, 2019 and 2018, respectively ($5.4 million and $6.6 million for the third quarter of 2019 and 2018, respectively). The effective income tax rate increased to 98.9% for the nine months ended September 30, 2019 from 42.6% for the nine months ended September 30, 2018 (increased slightly to 41.5% for the third quarter of 2019 from 41.0% for the third quarter of 2018). The increase in the income tax provision for the nine months ended September 30, 2019 was driven by a $12.3 million reduction in Luxembourg deferred tax assets in connection with a decrease in the Luxembourg statutory income tax rate from 26.0% to 24.9% in the second quarter of 2019. The increase in the income tax provision for the nine months ended September 30, 2019 and the third quarter of 2019 was also due to a higher effective tax rate on the sale of the Financial Services Business, as discussed above, as a result of the jurisdictional mix of the net pretax gain on the sale of this business. A component of the net gain represented a capital loss that did not result in a tax benefit due to a valuation allowance applied to the tax benefit. Excluding these items, the effective tax rate would have been 6.5% for the nine months ended September 30, 2019 and 40.0% for the third quarter of 2019.
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||
(in thousands, except per share data)
|
|
2019
|
|
2018
|
|
% Increase (decrease)
|
|
2019
|
|
2018
|
|
% Increase (decrease)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Service revenue
|
|
$
|
133,781
|
|
|
$
|
196,906
|
|
|
(32
|
)
|
|
$
|
489,300
|
|
|
$
|
594,533
|
|
|
(18
|
)
|
Reimbursable expenses
|
|
7,213
|
|
|
6,815
|
|
|
6
|
|
|
16,484
|
|
|
23,970
|
|
|
(31
|
)
|
||||
Non-controlling interests
|
|
499
|
|
|
854
|
|
|
(42
|
)
|
|
2,179
|
|
|
2,066
|
|
|
5
|
|
||||
Total revenue
|
|
141,493
|
|
|
204,575
|
|
|
(31
|
)
|
|
507,963
|
|
|
620,569
|
|
|
(18
|
)
|
||||
Cost of revenue
|
|
110,906
|
|
|
147,580
|
|
|
(25
|
)
|
|
387,651
|
|
|
457,980
|
|
|
(15
|
)
|
||||
Gross profit
|
|
30,587
|
|
|
56,995
|
|
|
(46
|
)
|
|
120,312
|
|
|
162,589
|
|
|
(26
|
)
|
||||
Operating expenses (income):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
|
27,184
|
|
|
46,329
|
|
|
(41
|
)
|
|
104,275
|
|
|
132,377
|
|
|
(21
|
)
|
||||
Gain on sale of businesses
|
|
(17,558
|
)
|
|
(13,688
|
)
|
|
28
|
|
|
(17,558
|
)
|
|
(13,688
|
)
|
|
28
|
|
||||
Restructuring charges
|
|
2,761
|
|
|
3,436
|
|
|
(20
|
)
|
|
9,080
|
|
|
3,436
|
|
|
164
|
|
||||
Income from operations
|
|
18,200
|
|
|
20,918
|
|
|
(13
|
)
|
|
24,515
|
|
|
40,464
|
|
|
(39
|
)
|
||||
Other income (expense), net
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
|
(3,357
|
)
|
|
(6,725
|
)
|
|
(50
|
)
|
|
(16,656
|
)
|
|
(19,615
|
)
|
|
(15
|
)
|
||||
Unrealized (loss) gain on investment in equity securities
|
|
(2,294
|
)
|
|
1,782
|
|
|
(229
|
)
|
|
11,731
|
|
|
(4,186
|
)
|
|
380
|
|
||||
Other income (expense), net
|
|
406
|
|
|
154
|
|
|
164
|
|
|
1,308
|
|
|
(2,435
|
)
|
|
154
|
|
||||
Total other income (expense), net
|
|
(5,245
|
)
|
|
(4,789
|
)
|
|
10
|
|
|
(3,617
|
)
|
|
(26,236
|
)
|
|
(86
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before income taxes and non-controlling interests
|
|
12,955
|
|
|
16,129
|
|
|
(20
|
)
|
|
20,898
|
|
|
14,228
|
|
|
47
|
|
||||
Income tax provision
|
|
(5,379
|
)
|
|
(6,608
|
)
|
|
(19
|
)
|
|
(20,670
|
)
|
|
(6,059
|
)
|
|
241
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
7,576
|
|
|
9,521
|
|
|
(20
|
)
|
|
228
|
|
|
8,169
|
|
|
(97
|
)
|
||||
Net income attributable to non-controlling interests
|
|
(411
|
)
|
|
(854
|
)
|
|
(52
|
)
|
|
(2,091
|
)
|
|
(2,066
|
)
|
|
1
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) attributable to Altisource
|
|
$
|
7,165
|
|
|
$
|
8,667
|
|
|
(17
|
)
|
|
$
|
(1,863
|
)
|
|
$
|
6,103
|
|
|
(131
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Margins:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Gross profit/service revenue
|
|
23
|
%
|
|
29
|
%
|
|
|
|
25
|
%
|
|
27
|
%
|
|
|
|
|||||
Income from operations/service revenue
|
|
14
|
%
|
|
11
|
%
|
|
|
|
5
|
%
|
|
7
|
%
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
0.45
|
|
|
$
|
0.51
|
|
|
(12
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
0.36
|
|
|
(133
|
)
|
Diluted
|
|
$
|
0.44
|
|
|
$
|
0.49
|
|
|
(10
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
0.35
|
|
|
(134
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
15,897
|
|
|
17,033
|
|
|
(7
|
)
|
|
16,133
|
|
|
17,184
|
|
|
(6
|
)
|
||||
Diluted
|
|
16,151
|
|
|
17,575
|
|
|
(8
|
)
|
|
16,133
|
|
|
17,669
|
|
|
(9
|
)
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
% Increase (decrease)
|
|
2019
|
|
2018
|
|
% Increase (decrease)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Service revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Field Services
|
|
$
|
69,873
|
|
|
$
|
76,719
|
|
|
(9
|
)
|
|
$
|
204,355
|
|
|
$
|
217,027
|
|
|
(6
|
)
|
Marketplace
|
|
25,910
|
|
|
44,033
|
|
|
(41
|
)
|
|
95,480
|
|
|
146,489
|
|
|
(35
|
)
|
||||
Mortgage and Real Estate Solutions
|
|
31,728
|
|
|
35,749
|
|
|
(11
|
)
|
|
85,081
|
|
|
100,360
|
|
|
(15
|
)
|
||||
Earlier Stage Businesses
|
|
2,492
|
|
|
2,770
|
|
|
(10
|
)
|
|
6,903
|
|
|
6,607
|
|
|
4
|
|
||||
Other
|
|
3,778
|
|
|
37,635
|
|
|
(90
|
)
|
|
97,481
|
|
|
124,050
|
|
|
(21
|
)
|
||||
Total service revenue
|
|
133,781
|
|
|
196,906
|
|
|
(32
|
)
|
|
489,300
|
|
|
594,533
|
|
|
(18
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reimbursable expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Field Services
|
|
2,008
|
|
|
4,811
|
|
|
(58
|
)
|
|
7,082
|
|
|
17,014
|
|
|
(58
|
)
|
||||
Marketplace
|
|
4,175
|
|
|
814
|
|
|
N/M
|
|
|
6,410
|
|
|
3,109
|
|
|
106
|
|
||||
Mortgage and Real Estate Solutions
|
|
1,030
|
|
|
1,177
|
|
|
(12
|
)
|
|
2,802
|
|
|
3,812
|
|
|
(26
|
)
|
||||
Other
|
|
—
|
|
|
13
|
|
|
(100
|
)
|
|
190
|
|
|
35
|
|
|
N/M
|
|
||||
Total reimbursable expenses
|
|
7,213
|
|
|
6,815
|
|
|
6
|
|
|
16,484
|
|
|
23,970
|
|
|
(31
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-controlling interests:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage and Real Estate Solutions
|
|
499
|
|
|
854
|
|
|
(42
|
)
|
|
2,179
|
|
|
2,066
|
|
|
5
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue
|
|
$
|
141,493
|
|
|
$
|
204,575
|
|
|
(31
|
)
|
|
$
|
507,963
|
|
|
$
|
620,569
|
|
|
(18
|
)
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
% Increase (decrease)
|
|
2019
|
|
2018
|
|
% Increase (decrease)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and benefits
|
|
$
|
30,463
|
|
|
$
|
49,707
|
|
|
(39
|
)
|
|
$
|
108,637
|
|
|
$
|
159,342
|
|
|
(32
|
)
|
Outside fees and services
|
|
61,314
|
|
|
73,096
|
|
|
(16
|
)
|
|
182,483
|
|
|
207,073
|
|
|
(12
|
)
|
||||
Cost of real estate sold
|
|
393
|
|
|
1,092
|
|
|
(64
|
)
|
|
42,763
|
|
|
17,591
|
|
|
143
|
|
||||
Technology and telecommunications
|
|
10,298
|
|
|
10,230
|
|
|
1
|
|
|
27,124
|
|
|
30,533
|
|
|
(11
|
)
|
||||
Reimbursable expenses
|
|
7,213
|
|
|
6,815
|
|
|
6
|
|
|
16,484
|
|
|
23,970
|
|
|
(31
|
)
|
||||
Depreciation and amortization
|
|
1,225
|
|
|
6,640
|
|
|
(82
|
)
|
|
10,160
|
|
|
19,471
|
|
|
(48
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of revenue
|
|
$
|
110,906
|
|
|
$
|
147,580
|
|
|
(25
|
)
|
|
$
|
387,651
|
|
|
$
|
457,980
|
|
|
(15
|
)
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
% Increase (decrease)
|
|
2019
|
|
2018
|
|
% Increase (decrease)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and benefits
|
|
$
|
10,395
|
|
|
$
|
11,991
|
|
|
(13
|
)
|
|
$
|
36,986
|
|
|
$
|
37,757
|
|
|
(2
|
)
|
Occupancy related costs
|
|
12,209
|
|
|
7,428
|
|
|
64
|
|
|
19,988
|
|
|
23,051
|
|
|
(13
|
)
|
||||
Amortization of intangible assets
|
|
3,298
|
|
|
6,620
|
|
|
(50
|
)
|
|
15,489
|
|
|
21,311
|
|
|
(27
|
)
|
||||
Professional services
|
|
2,588
|
|
|
4,915
|
|
|
(47
|
)
|
|
11,384
|
|
|
12,469
|
|
|
(9
|
)
|
||||
Marketing costs
|
|
3,481
|
|
|
4,267
|
|
|
(18
|
)
|
|
9,402
|
|
|
11,852
|
|
|
(21
|
)
|
||||
Depreciation and amortization
|
|
(4,344
|
)
|
|
1,054
|
|
|
N/M
|
|
|
4,036
|
|
|
5,272
|
|
|
(23
|
)
|
||||
Other
|
|
(443
|
)
|
|
10,054
|
|
|
(104
|
)
|
|
6,990
|
|
|
20,665
|
|
|
(66
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
|
$
|
27,184
|
|
|
$
|
46,329
|
|
|
(41
|
)
|
|
$
|
104,275
|
|
|
$
|
132,377
|
|
|
(21
|
)
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
% Increase (decrease)
|
|
2019
|
|
2018
|
|
% Increase (decrease)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gain on sale of businesses
|
|
$
|
(17,558
|
)
|
|
$
|
(13,688
|
)
|
|
28
|
|
|
$
|
(17,558
|
)
|
|
$
|
(13,688
|
)
|
|
28
|
|
Restructuring charges
|
|
2,761
|
|
|
3,436
|
|
|
(20
|
)
|
|
9,080
|
|
|
3,436
|
|
|
164
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other operating income, net
|
|
$
|
(14,797
|
)
|
|
$
|
(10,252
|
)
|
|
44
|
|
|
$
|
(8,478
|
)
|
|
$
|
(10,252
|
)
|
|
(17
|
)
|
(in thousands)
|
|
2019
|
|
2018
|
|
% Increase (decrease)
|
|||||
|
|
|
|
|
|
|
|
||||
Net income adjusted for non-cash items
|
|
$
|
35,116
|
|
|
$
|
59,012
|
|
|
(40
|
)
|
Changes in operating assets and liabilities
|
|
(12,922
|
)
|
|
(15,362
|
)
|
|
16
|
|
||
Net cash provided by operating activities
|
|
22,194
|
|
|
43,650
|
|
|
(49
|
)
|
||
Net cash provided by investing activities
|
|
45,729
|
|
|
10,793
|
|
|
324
|
|
||
Net cash used in financing activities
|
|
(61,344
|
)
|
|
(54,698
|
)
|
|
(12
|
)
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
|
6,579
|
|
|
(255
|
)
|
|
N/M
|
|
||
Cash, cash equivalents and restricted cash at the beginning of the period
|
|
64,046
|
|
|
108,843
|
|
|
(41
|
)
|
||
|
|
|
|
|
|
|
|
||||
Cash, cash equivalents and restricted cash at the end of the period
|
|
$
|
70,625
|
|
|
$
|
108,588
|
|
|
(35
|
)
|
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, 2019
|
|
138,957
|
|
|
$
|
21.03
|
|
|
138,957
|
|
|
2,923,955
|
|
August 1 - 31, 2019
|
|
162,424
|
|
|
19.54
|
|
|
162,424
|
|
|
2,761,531
|
|
|
September 1 - 30, 2019
|
|
28,966
|
|
|
20.39
|
|
|
28,966
|
|
|
2,732,565
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
330,347
|
|
|
$
|
20.24
|
|
|
330,347
|
|
|
2,732,565
|
|
(1)
|
In addition to the repurchases included in the table above, 9,167 common shares were withheld from employees to satisfy tax withholding obligations that arose from the vesting of restricted shares and restricted share units.
|
(2)
|
On May 15, 2018, our shareholders approved the renewal and replacement of the share repurchase program previously approved by the shareholders on May 17, 2017. Under the program, we are authorized to purchase up to 4.3 million shares of our common stock in the open market, subject to certain parameters, for a period of five years from the date of approval.
|
Exhibit Number
|
|
Exhibit Description
|
|
|
|
10.1 * †
|
|
|
|
|
|
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, 2019 is formatted in XBRL interactive data files: (i) Condensed Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018; (ii) Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2019 and 2018; (iii) Condensed Consolidated Statements of Equity for the nine months ended September 30, 2019 and 2018; (iv) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018; 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 24, 2019
|
|
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)
|
a.
|
To the extent not vested as of the Separation Date, the ASPS Restricted Stock Units (“RSUs”), restricted shares and outstanding ASPS stock options set forth in the table below will vest as specified in such table. In addition, the expiration of the vested and unvested stock options set forth in the table below will be as specified in such table:
|
Description
|
Number of unvested awards
|
Number of awards that will vest
|
Vesting schedule
|
Expiration of vested and unvested options
|
2019 LTIP – Type I RSUs
|
11,982
|
11,982
|
30 days following the Separation Date
|
N/A
|
2019 LTIP – Type II RSUs
|
11,982
|
0
|
N/A – Unvested award will be forfeited
|
N/A
|
2018 AIP RSUs
|
15,226
|
15,226
|
30 days following the Separation Date
|
N/A
|
2018 LTIP RSUs
|
37,500
|
37,500
|
30 days following the Separation Date
|
N/A
|
2018 performance based stock options
|
75,000 (50,000 as of the Separation Date)
|
75,000 (50,000 as of the Separation Date)
|
Immediately following the Separation Date if not previously vested
|
On the earlier of five years from the Separation Date or the option expiration date
|
2017 performance based stock options
|
2,842
|
0
|
N/A – Unvested award will be forfeited
|
N/A
|
2017 service based restricted shares
|
1,005 (0 as of the Separation Date)
|
1,005 (0 as of the Separation Date)
|
Immediately following the Separation Date if not previously vested
|
N/A
|
2015 service based stock options
|
0
|
0
|
N/A – all options from this award have vested
|
On the earlier of five years from the Separation Date or the option expiration date
|
2010 stock options
|
0
|
0
|
N/A – all options from this award have vested
|
As set forth in award agreement
|
1.
|
I have reviewed this quarterly report on Form 10-Q for the period ended September 30, 2019 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):
|
(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.
|
Date:
|
October 24, 2019
|
|
By:
|
/s/ William B. Shepro
|
|
|
|
|
William B. Shepro
|
|
|
|
|
Chairman and Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q for the period ended September 30, 2019 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):
|
(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.
|
Date:
|
October 24, 2019
|
|
By:
|
/s/ Michelle D. Esterman
|
|
|
|
|
Michelle D. Esterman
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial Officer and
Principal Accounting Officer)
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
By:
|
/s/ William B. Shepro
|
|
By:
|
/s/ Michelle D. Esterman
|
|
William B. Shepro
|
|
|
Michelle D. Esterman
|
|
Chairman and Chief Executive Officer
|
|
|
Chief Financial Officer
|
|
(Principal Executive Officer)
|
|
|
(Principal Financial Officer and
|
|
|
|
|
Principal Accounting Officer)
|
|
October 24, 2019
|
|
|
October 24, 2019
|