CoreLogic Reports Second Quarter 2017 Financial Results

IRVINE, Calif. — (BUSINESS WIRE) — July 25, 2017 — CoreLogic® (NYSE: CLGX), a leading global provider of property information, insight, analytics and data-enabled solutions, today reported financial results for the quarter ended June 30, 2017.

Strong Operating Performance Highlighted by Revenue Outperformance
Of Market Trends and Significant Margin Expansion;
Full-Year Financial Guidance and Share Repurchase Targets Enhanced

  • Revenues of $474 million were down 5% as the benefits of new products, market share gains and pricing actions partially offset the impacts of an estimated 15% decline in total U.S. mortgage volumes.
  • Valuation Solutions footprint expanded through the acquisition of a 45% ownership stake in Mercury Network, LLC and diversification of appraisal management services revenues.
  • Operating income from continuing operations rose 3% to $78 million as productivity and cost management programs more than offset lower mortgage market volumes and investments in technology, innovation and compliance-related capabilities.
  • Net income from continuing operations increased 2% to $41 million driven by higher operating income and lower interest expense and tax provisions. Diluted EPS from continuing operations of $0.48 per share was up 7%. Adjusted EPS of $0.72 per share was 11% above prior year.
  • Adjusted EBITDA totaled $135 million, essentially equivalent to prior year as productivity and operating leverage offset lower U.S. mortgage market volumes.
  • Company announces plan to refinance its current credit agreement to expand capacity and extend tenor.
  • Company repurchased 0.5 million common shares in the quarter. Year-to-date share repurchases totaled 1 million shares for $41 million.
  • Company enhances 2017 financial guidance ranges and raises share repurchase target 10%.

“CoreLogic delivered a very strong operating performance for the second quarter and first half of 2017. In terms of revenues, we materially outperformed market volume trends in U.S. mortgage and grew our insurance, spatial and international operations. Underlying organic growth accelerated to 4% in the quarter buoyed by new product growth, share gains and pricing actions across our core solution sets,” said Frank Martell, President and Chief Executive Officer of CoreLogic. “We also made major strides in our collateral valuations business during the quarter by expanding our platform-related revenues and footprint, aggressively building our roster of new clients, and significantly boosting operating efficiency and margins.”

“Second quarter results also demonstrate how aggressively we are pursuing and achieving efficiency and operating leverage targets that support our strategic adjusted EBITDA margin goals. Our relentless focus on building unique and market-leading solutions and driving for best-in-class operational and cost efficiencies has resulted in the creation of a durable and highly cash generative business model. This model has allowed us to return $1.1 billion to our shareholders over the past 6 years, including $41 million in share repurchases in the first half of 2017,” Martell added.

Financial Highlights

Second quarter reported revenues totaled $474 million compared with $500 million in the same 2016 period. During the quarter, market share and pricing-related gains as well as contributions from new products in both the Property Intelligence (PI) and the Risk Management and Work Flow (RMW) segments helped to partially offset the impact of an estimated 15% decline in U.S. mortgage market unit volumes. RMW revenues totaled $225 million, largely consistent with 2016 levels, as the benefits from organic growth mostly offset lower mortgage market volumes. PI revenues declined 9% to $251 million as higher insurance, spatial solutions and international revenues were more than offset by lower valuation solutions revenues attributable to reduced U.S. mortgage market volumes and planned vendor diversification by a significant appraisal management client.

Operating income from continuing operations totaled $78 million for the second quarter, 3% higher than the same 2016 period. Operating margin was 17% of revenues, compared with 15% in the prior year. The year-over-year growth in operating income was driven by significant efficiency gains from ongoing productivity initiatives which more than offset investments in technology and innovation platforms as well as compliance capabilities.

Second quarter net income from continuing operations totaled $41 million, up 2% from prior year. The increase resulted primarily from higher operating income and lower interest expense and tax provisions offset partially by a one-time $6 million charge associated with the final settlement of a previously terminated pension plan. Diluted EPS from continuing operations totaled $0.48 for the second quarter of 2017 compared with $0.45 in 2016. Adjusted diluted EPS totaled $0.72, up 11%, reflecting operating upsides, lower interest expense and the positive impacts of share repurchases.

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