CoreLogic Reports Fourth-Quarter and Full-Year 2011 Financial Results

-- Fourth quarter and full year results for 2011 exceed previous guidance.

(PRNewswire) — CoreLogic (NYSE: CLGX), a leading provider of information, analytics and business services, today reported financial results for the fourth quarter and full-year ended December 31, 2011.

Anand Nallathambi, President and Chief Executive Officer, said, "CoreLogic is exiting 2011 with strong and accelerating momentum.  During the fourth quarter we reorganized the business to focus on three core segments: data and analytics, mortgage origination services and default services.  This new streamlined organization, together with CoreLogic's exit of non-core businesses in the third quarter and the recent addition of key senior leadership talent, has sharpened our management and client focus which we believe will allow us to deliver superior results."

Nallathambi continued, "We enter 2012 with a streamlined, higher-margin business portfolio that is focused on delivering world-class data, analytics and services to our clients.  This year we expect double-digit revenue growth in our data and analytics segment and we believe our mortgage origination and default services segments are well positioned to outperform their respective markets."

"During the fourth quarter we continued to aggressively drive productivity and reduce costs.  We realized $20 million in cost reductions in 2011 and, importantly, took actions that should secure about half of our 2012 Project 30 savings targets" added Frank Martell, Chief Financial Officer.  "CoreLogic nearly doubled its cash on hand during the fourth quarter and we plan to deploy some of those funds in the first half of 2012 to reduce our debt balances by at least $100 million.  We also expect to build our liquidity and capital resources in 2012."

Certain information contained in this document is presented on a non-GAAP adjusted basis. For more information about the Company's adjusted results, as well as other non-GAAP financial measures used by management, please refer to the Company's quarterly financial supplement on the CoreLogic investor website and discussion on the Use of Non-GAAP Financial Measures, as well as the Reconciliation of certain GAAP to Non-GAAP Financial Measures For Consolidated CoreLogic, Inc. contained in this release.

Fourth Quarter Financial Highlights

  • Consolidated fourth quarter revenues increased 9.5% year-over-year to $345.4 million. Data & Analytics (D&A) revenues were up 25.8% to $138.5 million reflecting the acquisition of RP Data, higher analytics revenues and growth in advisory projects. Mortgage Origination Services (MOS) revenues rose 9.4% to $134.4 million due primarily to the acquisition of Dorado Network Systems and higher flood certification volumes which more than offset the impact of lower origination volumes. Default Services (DS) revenues of $78.9 million were down 11.8% from the prior year reflecting the exit of unprofitable product lines and lower software and business process outsourcing revenues, partially offset by higher field services volumes.
  • Fourth quarter income from continuing operations totaled $15.4 million, a $17.8 million decrease from the same prior year period. Fourth quarter 2011 income from continuing operations included a non-recurring charge associated with facility consolidations of $14.2 million, one-time investments in improving operating efficiency and the review of strategic alternatives totaling $7.1 million, Project 30-related severance of $6.2 million and higher depreciation and amortization of $8.7 million. These items were partially offset by an $8.1 million gain on the sale of real estate assets and the benefits of higher revenues and cost savings.
  • Fourth quarter adjusted EBITDA totaled $84.3 million, a decline of 8.2% from the prior year. Adjusted EBITDA margins for the fourth quarter were 23.4%. D&A segment adjusted EBITDA increased 28.0% reflecting revenue growth and the benefit of cost savings initiatives. Adjusted EBITDA for the MOS segment was modestly below prior year levels as cost productivity in the Company's origination-related servicing businesses was more than offset by lower equity in earnings of affiliates. Adjusted EBITDA attributable to the DS segment was down 48.8% primarily as a result of lower revenues, an unfavorable shift in product mix and higher technology-related expenses.
  • Loss from continuing operations, net of tax per diluted share was $0.06 for the fourth quarter. Adjusted income from continuing operations, net of tax per diluted share from continuing operations totaled $0.23 for the fourth quarter.

Cost Reduction Program

  • As part of its previously announced Project 30 program, the Company achieved $20.0 million in cost savings during 2011. These cost reductions were principally related to workforce reductions in corporate shared services and information technology (IT), the outsourcing of certain IT and business process functions and cuts in spending on outside services.
  • The Company expects to achieve an incremental $60 million in cost savings in 2012. Specific actions, including reductions in force, taken during the second half of 2011 in the areas of IT and corporate shared support functions and real estate consolidation are expected to account for over half of the 2012 targeted savings. During the fourth quarter, the Company reduced its U.S.-based workforce by approximately 7%. In addition, the Company completed real estate consolidations which are expected to generate ongoing cost savings in 2012 and beyond.

Liquidity and Capital Resources

  • At December 31, 2011, the Company had cash of $259.3 million, up $120.6 million from September 30, 2011. Increased cash balances reflect positive cash inflows from operations, proceeds from the sale of certain minority equity investments and Company-owned real estate as well as a tax refund related to the 2010 sale of the Company's employer and litigation services business.
  • Total debt as of December 31, 2011 was $908.3 million, down $2.8 million from September 30, 2011, with available capacity on the Company's credit facility of approximately $499.0 million. The Company expects to reduce indebtedness by at least $100 million during the first half of 2012 through scheduled and voluntary principal payments.
  • The Company will continue to consider the repurchase of common shares on an opportunistic basis as part of an existing Board of Directors authorization.

Revised Segment Reporting

  • As part of the Company's focus on creating a more streamlined and higher-margin business, the Company exited certain non-core businesses during the third quarter and simplified its organizational structure and financial presentation in the fourth quarter of 2011. As a result, effective with the fourth quarter of 2011 the Company will be reporting its financial results in three business segments: Data and Analytics; Mortgage Origination Services; and Default Services. The Company believes this new organization structure will simplify the external review and analysis of its results. Revised segment results (on an unaudited basis) can be accessed at

Financial Guidance

  • Full year 2011 adjusted revenues, adjusted EBITDA and adjusted EPS from continuing operations totaled $1,390.6 million, $310.3 million and $0.85, respectively, which exceeded previous guidance.
  • The Company reconfirms its guidance for 2012 which was issued on January 19, 2012.

($ in millions, except per share amounts)

2012 Guidance

Adjusted Revenue

$1,425 - $1,475

Adjusted EBITDA

$335 - $360

Adjusted EPS

$0.95 - $1.05

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