CoreLogic Reports First Quarter 2019 Financial Results

Outperformance of Mortgage Market Trends and Margin Expansion Highlight Strong Operational Execution; Accelerated AMC Transformation Program and Wind-down of Non-Core Mortgage and Default Technology Units Progressing as Planned

IRVINE, Calif. — (BUSINESS WIRE) — April 24, 2019 — CoreLogic (NYSE: CLGX), a leading global provider of residential property information, insight, analytics and data-enabled solutions, today reported financial results for the quarter ended March 31, 2019. Operating and financial highlights appear below.

  • Revenues of $418 million, down 6% primarily reflecting the impacts of an estimated 10% to 15% drop in U.S. mortgage volumes and lower revenues attributable to appraisal management company (AMC) operations and non-core mortgage and default technology related platforms.
  • Operating and net income from continuing operations were $21 million and $2 million, 52% and 94% below prior year levels, driven by the impacts of lower revenues and higher costs related to productivity programs and efficiency actions.
  • Diluted EPS from continuing operations of $0.02, compared to $0.34. Adjusted EPS totaled $0.45, down 14%.
  • Adjusted EBITDA of $98 million, down 5%. Adjusted EBITDA margins were up approximately 20 basis points.
  • The Company made $23 million in voluntary principal payments against its outstanding term loan obligations.

“CoreLogic is off to a strong start in 2019. We delivered solid financial results highlighted by adjusted EBITDA above our expected range, despite significant mortgage market headwinds. We also reduced our run-rate costs significantly and drove productivity. In addition, we pressed forward with our AMC transformation and the exit of non-core mortgage and default technology units," said Frank Martell, President and Chief Executive Officer of CoreLogic. “As market leaders, we are continuing to reinvest in our business with a focus on building our core capabilities in data and technology, which we expect will be a foundation for future growth and margin expansion,” Martell added.

First Quarter Financial Summary

First quarter reported revenues totaled $418 million, down 6% from 2018. The decline in revenue resulted principally from lower U.S. mortgage market activity, AMC volumes, and the wind-down of non-core mortgage and default technology related platforms, partially offset by 2018 acquisitions. Property Intelligence & Risk Management Solutions (PIRM) revenues rose 1% from 2018 levels to $176 million. Underwriting & Workflow Solutions (UWS) revenues totaled $245 million, down 11% from 2018 levels.

Operating income from continuing operations totaled $21 million for the first quarter compared with $44 million in 2018. The decline in operating income was driven by the impact of lower revenues, partially offset by cost management benefits. The Company also incurred higher levels of investments related to productivity programs which totaled $8 million and discrete efficiency-related charges of $5 million.

First quarter net income from continuing operations totaled $2 million, compared with $28 million, reflecting lower operating income levels discussed previously and modestly higher interest expense and tax provisions. Diluted EPS from continuing operations totaled $0.02 for the first quarter of 2019 compared with $0.34 in 2018. Adjusted EPS totaled $0.45 compared with $0.52 in the first quarter of 2018.

Adjusted EBITDA totaled $98 million in the first quarter compared with $103 million in the same prior year period. The year-over-year reduction in adjusted EBITDA resulted principally from lower revenues, partially offset by cost management benefits. Adjusted EBITDA margin was 23%, up approximately 20 basis points. PIRM segment adjusted EBITDA totaled $46 million compared to $50 million in 2018. UWS adjusted EBITDA was $63 million, compared to $65 million in 2018.

Liquidity and Capital Resources

At March 31, 2019, the Company had cash and cash equivalents of $87 million compared with $85 million at December 31, 2018. Total debt as of March 31, 2019 was $1,774 million compared with $1,797 million as of December 31, 2018. As of March 31, 2018, the Company had available capacity on its revolving credit facility of $522 million. During the first quarter of 2019, the Company made $23 million in voluntary principal payments against its outstanding term loan obligations.

Net operating cash provided by continuing operations for the twelve months ended March 31, 2019 was $319 million. Free cash flow (FCF) for the twelve months ended March 31, 2019 totaled $209 million, which represented 43% of adjusted EBITDA.

Business Exits, AMC Transformation and Productivity Programs

In December 2018, the Company announced the acceleration of its AMC transformation program and the wind-down of non-core mortgage and default technology related platforms which is expected to significantly reduce UWS revenues and adjusted EBITDA in 2019. We believe these actions will expand our overall profit margins and provide for enhanced long-term organic growth trends. We may incur additional cash and non-cash charges (beyond those contemplated in the Company’s 2019 guidance) as these programs are actioned.

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