CoreLogic Reports Fourth Quarter and Full-Year 2013 Financial Results

Continued Execution of Business Transformation Plan Drives 2013 Data & Analytics and Technology and Processing Solutions Segments Growth

(PRNewswire) —  CoreLogic (NYSE: CLGX), a leading residential property information, analytics and data-enabled services provider, today reported financial results for the full-year and quarter ended December 31, 2013. 

Full Year Highlights

  • Revenues up 7.7% to $1,330.6 million -- growth in Data & Analytics (D&A) and Technology and Processing Solutions (TPS) more than offset the impact of an estimated 20% decline in mortgage market volumes. 
  • Operating income from continuing operations of $172.9 million, up 1.7%.
  • Net income from continuing operations of $130.2 million, up 43.3%. Diluted EPS from continuing operations up 54.0% to $1.34 per share.  Adjusted EPS up 11.9% to $1.60 per share.   
  • Adjusted EBITDA of $389.7 million; adjusted EBITDA margin of 29.3%.
  • Exceeded Project 30 costs savings targets and launched program to reduce costs in 2014.
  • Completed 2013 share repurchase program (8.1 million common shares).

Fourth-Quarter Highlights

  • Revenues down 6.6% to $311.9 million -- impact of estimated 50% decline in mortgage market volumes partially offset by growth in D&A and TPS market share gains.
  • Operating income from continuing operations down 53.2% to $21.6 million.
  • Net income from continuing operations of $26.2 million, up 72.5%. Diluted EPS from continuing operations up 86.7% to $0.28 per share.  Adjusted EPS down 39.5% to $0.23 per share.
  • Adjusted EBITDA of $70.5 million; adjusted EBITDA margin of 22.6%.

As previously announced, effective December 31, 2013, CoreLogic reorganized into two operating segments --  D&A and TPS, and elected to divest its Asset Management and Processing Solutions (AMPS) businesses as part of its business transformation plan.  As a result, AMPS financial results are excluded from continuing operations.  In addition, reported fourth-quarter and full-year 2013 operating and net income from continuing operations as well as adjusted EPS and adjusted EBITDA reflect the impacts of acquisition-related integration costs, severance charges and other costs related to the Company's 2014 cost reduction program.

"CoreLogic had another strong year in 2013. We delivered revenue and earnings growth despite an estimated 20% drop in loan origination volumes. Importantly for the future, we continued to build-out and enhance our D&A and TPS segments in line with our strategic business plan," said Anand Nallathambi, President and Chief Executive Officer of CoreLogic. "Over the balance of 2014, we will continue to invest in areas of strategic growth and operational excellence which we believe will provide sustainable, long-term value creation for our stakeholders.  Despite significantly lower origination volumes for the second consecutive year, we expect to continue to make progress toward our imperatives of growing our D&A segment to over 50% of our total revenues and ensuring that our TPS operations are positioned to outperform their respective markets."

"We are exiting 2013 a stronger and more focused company -- uniquely positioned to capitalize on our competitive strengths in data and analytics, payment processing and data-enabled services," added Frank Martell, Chief Financial Officer of CoreLogic. "We believe the actions taken in the past 30 months to transform CoreLogic have prepared us to successfully navigate a historic reset of the mortgage market in 2014. Our strong margin and cash flow profile provides the financial flexibility to continue to invest in the key pillars of our strategic plan including driving our core growth strategies, improving cost productivity, and returning capital to our shareholders."

Fourth-Quarter Financial Highlights
Fourth quarter revenues totaled $311.9 million, a 6.6% decline from prior-year levels, as market share gains, organic growth and acquisition-related revenues partially offset the impact of an estimated 50% decline in mortgage origination volumes.  D&A revenues rose 4.2% to $147.3 million driven principally by growth in geospatial analytics, property information revenues in Australia and New Zealand (Pacific region) as well as multifamily tenant screening and realtor workflow solutions which more than offset the impact of lower mortgage origination volumes, unfavorable currency translation and declines in specialty credit.  TPS revenues decreased 15.7% to $165.5 million as the benefit of market share gains, including the acquisition of the tax and flood services operations of Bank of America (BAC acquisition), were more than offset by lower mortgage origination volumes and the timing of project-related document processing and retrieval revenues.

As a result of the planned divestiture of AMPS, reported fourth quarter and full-year 2013 operating and net income from continuing operations as well as adjusted EPS and adjusted EBITDA include certain overhead costs previously allocated to AMPS (stranded AMPS costs) totaling $1.8 million and $8.9 million for fourth quarter and full-year of 2013, respectively.  The Company also recorded a fourth quarter non-cash goodwill impairment charge of $51.8 million related to the divestiture of AMPS. 

Operating income from continuing operations totaled $21.6 million for the fourth quarter compared with $46.1 million for the fourth quarter of 2012.  The 53.2% decrease in operating income was principally the result of lower mortgage origination volumes, integration costs of $6.7 million attributable to the BAC acquisition, severance and facilities related charges of $8.3 million related to the Company's 2014 cost reduction program and stranded AMPS costs as discussed above.  D&A revenue growth, lower spending for our Technology Transformation Initiative (TTI) and the benefits of Project 30 positively impacted operating income in the fourth quarter.  Fourth quarter 2013 operating income margin was 6.9% compared with 13.8% for the fourth quarter of 2012.

Net income from continuing operations totaled $26.2 million, up 72.5% year-on-year. The increase was driven by lower provisions for income taxes which more than offset the impact of lower operating income.  Diluted EPS from continuing operations totaled $0.28 for the fourth quarter of 2013, up 86.7% from the fourth quarter of 2012.  Adjusted diluted EPS totaled $0.23, which represented a 39.5% decrease over the same 2012 period reflecting the impact of lower mortgage origination volumes, integration costs related to the BAC acquisition as well as severance and facilities charges which more than offset the benefits of higher D&A revenues, lower TTI spending and share repurchases.

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