CoreLogic Reports First Quarter 2012 Financial Results

Delivers Strong Double-Digit Growth in Revenue, Operating and Net Income from Continuing Operations and Earnings per Diluted Share

(PRNewswire) — �CoreLogic (NYSE: CLGX), a leading provider of information, analytics and business services, today reported financial results for the quarter ended March 31, 2012.

Anand Nallathambi, President and Chief Executive Officer, said, "CoreLogic delivered double-digit increases in revenue, operating and net income and adjusted EBITDA in the first quarter of 2012.  We grew our Data and Analytics and Mortgage Origination Services segments over 20%, achieved significant cost efficiencies and strengthened our capital structure. The Company's first quarter results clearly demonstrate the growth potential, operating leverage and resiliency resident in our "must have" data and information assets and mortgage origination related businesses."

Nallathambi continued, "Our strong operating results are a clear validation that CoreLogic is executing against the strategic business plan we established in 2011.  CoreLogic has now delivered accelerating revenue and earnings growth for the third quarter in a row."

"CoreLogic continued to aggressively reduce costs in the first quarter.  We delivered a 620 basis point expansion in adjusted EBITDA margins through a combination of improved operating leverage and achievement of our Project 30 targets.  We also increased free cash flow conversion to almost 50% of adjusted EBITDA and paid down approximately $52 million in debt," added Frank Martell, Chief Financial Officer.  "We believe CoreLogic is well positioned to deliver against our business and financial objectives in 2012 and to return capital to our shareholders."

First Quarter Financial Highlights

Revenues increased 13.2% or $41.8 million to $358.1 million for the quarter ended March 31, 2012.  Data & Analytics (D&A) revenues were up 20.3% to $141.1 million primarily as a result of the 2011 acquisitions of RP Data and Tarasoft and growth in analytics and data licensing revenues.  Mortgage Origination Services (MOS) revenues jumped 21.6% to $147.7 million fueled principally by the impact of increased demand for credit and tax services and flood certifications and the March 2011 acquisition of Dorado Network Systems.  Default Services (DS) revenues of $75.0 million were down 9.7% from the same prior year period reflecting reduced market activity and lower technology and business process outsourcing revenues, partially offset by higher field services volumes. 

Operating income from continuing operations totaled $45.2 million for the first quarter of 2012 compared with $26.6 million for the first quarter of 2011.  This increase of 70.2% was driven by higher revenues and the benefit of ongoing cost reduction and productivity initiatives.  First quarter 2012 operating income margins increased 420 basis points to 12.6%.  First quarter 2012 operating income included approximately $2.2 million in one-time costs related to the strategic review process concluded on February 27, 2012.

First quarter 2012 net income from continuing operations totaled $29.1 million, a $7.4 million or 34.5% increase from prior year.  First quarter 2011 net income from continuing operations benefited from an after-tax gain of $14.9 million related to the sale of the Company's minority investment in DealerTrack Holdings, Inc. which was partially offset by a $14.0 million adjustment to deferred tax assets associated primarily with the acquisition of Dorado.

First quarter 2012 adjusted EBITDA totaled $100.2 million, a 45.2% improvement from the same prior year period.  Adjusted EBITDA margin for the first quarter was 28.0%, up from 21.8% in the first quarter of 2011.  D&A segment adjusted EBITDA totaled $41.0 million, a $10.3 million or 33.6% increase from the prior year period attributable principally to the acquisition of RP Data and benefits from Project 30-related cost reductions.  Adjusted EBITDA for the MOS segment increased $23.3 million or 71.8% to $55.8 million driven primarily by higher origination volumes and cost reductions.  Adjusted EBITDA attributable to the DS segment was $11.2 million, a 30.3% decline mainly due to lower revenues.

Diluted earnings per share (EPS) from continuing operations totaled $0.27 for the first quarter of 2012, an increase of $0.08 or 42.1% from the first quarter of 2011.  Adjusted diluted EPS totaled $0.32, which represented a $0.13 or 68.4% increase over the same 2011 period.  Increases in diluted EPS and adjusted diluted EPS reflect higher revenues and improved margins as well as the impact of share repurchases completed during 2011.

Cost Reduction Programs

As part of its previously announced Project 30 program, the Company targeted to reduce certain costs by $60 million in 2012 in addition to the $20 million in savings achieved during 2011. Actual and planned cost reductions relate primarily 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 real estate and outside services. Reductions associated with Project 30 totaled approximately $13.5 million during the first quarter of 2012, which is in line with expectations.  During first quarter 2012, CoreLogic reduced its total U.S. workforce approximately 4% including an 18% reduction in corporate shared services staff.

CoreLogic recently entered into a multi-year strategic partnership with a leading specialist in comprehensive procurement solutions. The Company expects to reduce spending on purchased goods and services by approximately $20 million compared with current levels over the course of this five-year arrangement.

Liquidity and Capital Resources

At March 31, 2012, the Company had unrestricted cash of $256.4 million compared with $259.3 million at December 31, 2011.  Total debt as of March 31, 2012 was $856.7 million, down $51.6 million from December 31, 2011, with available capacity on the Company's credit facility of approximately $498.3 million. The reduction in outstanding debt was the result of the Company's plan to reduce indebtedness, through voluntary and scheduled principal payments, by at least $100.0 million during the first half of 2012.

Free cash flow for the first quarter of 2012  totaled $49.2 million, which represented approximately 49.1% of adjusted EBITDA. Free cash flow is defined as net cash provided by continuing operating activities, which was $69.7 million for the first quarter of 2012, less capital expenditures for purchases of property and equipment, capitalized data and other intangible assets, which totaled $20.5 million during the same period.

The Company expects to repurchase at least 5 million shares of its common stock on an opportunistic basis over the balance of 2012 as part of an existing Board of Directors authorization.

Non-GAAP Measures

This press release contains certain non-GAAP measures which the Company believes provide a useful supplement to its financial statements reported in accordance with U.S. GAAP.  Concurrent with the release of its first quarter financial results, the Company will no longer report adjusted revenues.  In addition, as previously discussed, CoreLogic has reduced the number of adjustments to its non-GAAP EBITDA metric.  The Company believes these changes will simplify the external review and analysis of its financial results. Recast historical segment results (on an unaudited basis) can be accessed at http://investor.corelogic.com

For more information about the Company's non-GAAP financial measures, refer to the discussion on the Use of Non-GAAP Financial Measures and the reconciliations of non-GAAP measures to their nearest GAAP equivalents in this release.  Additional information on non-GAAP measures can be found on the quarterly financial supplement on the CoreLogic investor website.

Financial Guidance

The following table sets forth the Company's guidance for 2012:

($ in millions, except per share amounts)

2012 Guidance

GAAP Revenue(1)

$1,400 - $1,450

Adjusted EBITDA

$340 - $360

Adjusted EPS

$1.00 - $1.05


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