CoreLogic Reports Third Quarter 2019 Financial Results

Significant Margin Expansion, Favorable Revenue Mix and Growth Highlight Strong Operating Performance; 2019 Full-Year Guidance Increased

IRVINE, Calif. — (BUSINESS WIRE) — October 23, 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 September 30, 2019. Operating and financial highlights appear below.

  • Revenues of $459 million, up $7 million, reflecting strong performance in core mortgage, insurance and real estate solutions, which more than offset a decline of approximately $16 million attributable to the AMC transformation and wind-down of non-core mortgage and default technology units.
  • Operating income of $74 million, up $14 million, attributable to cost efficiency and productivity programs and improved revenue mix and growth.
  • Net income from continuing operations totaled $41 million, up $18 million, driven by higher operating income.
  • Diluted EPS from continuing operations of $0.50, up from $0.27. Adjusted EPS of $0.82, up from $0.72.
  • Adjusted EBITDA of $137 million, up $8 million, primarily due to revenue upsides and the benefits of cost efficiency and productivity programs; adjusted EBITDA margin was up 140 basis points to 30%.
  • Reduced debt outstanding by $54 million and repurchased 700,000 common shares.

“CoreLogic delivered a strong third quarter in terms of revenue growth, mix and margins, driven by strength in our platform-related and other high-margin businesses. We also benefited from improved origination volumes in the U.S. market. Ongoing productivity gains also helped us to boost our overall adjusted EBITDA margins which rose by 140 basis points to 30% in the quarter," said Frank Martell, President and Chief Executive Officer of CoreLogic. “As we exit the year, we believe that in-flight strategic investments and cost efficiency and productivity programs provide us with solid line of sight to our adjusted EBITDA margin objective of 30% in 2020.”

Third Quarter Financial Summary

Third quarter revenues totaled $459 million, up $7 million or 2%, from 2018 levels. Revenue growth reflected strong performance in core mortgage, insurance and real estate solutions. Revenues include a decline of approximately $16 million attributable to the AMC transformation and wind-down of non-core mortgage and default technology units. Underwriting & Workflow Solutions ("UWS") revenues totaled $281 million, up $7 million reflecting the benefits of higher U.S. mortgage origination volumes and gains from pricing and new products, which more than offset the impacts of the AMC transformation and the planned wind-down of mortgage and default technology units discussed earlier as well as lower credit services. Property Intelligence & Risk Management Solutions ("PIRM") revenues rose modestly from 2018 levels to $182 million, as growth in insurance, and real estate solutions more than offset unfavorable currency translation and reduced housing market activity in Australia, which together aggregated approximately $6 million.

Operating income from continuing operations totaled $74 million compared with $60 million in 2018. The 23% improvement in operating income was due primarily to workflow efficiency and cost productivity programs as well as favorable revenue growth and mix. Operating margin totaled 16%, an increase of approximately 280 basis points. Higher operating income drove net income from continuing operations to $41 million, compared to $23 million in the prior period. Diluted EPS from continuing operations totaled $0.50 versus $0.27. Adjusted EPS totaled $0.82 up from $0.72.

Adjusted EBITDA totaled $137 million, up 6%, compared to the same prior-year period. Adjusted EBITDA margin was 30%, an increase of approximately 140 basis points. The $8 million increase in adjusted EBITDA was principally attributable to revenue growth, improved business mix and the benefits of ongoing cost efficiency and productivity programs. UWS adjusted EBITDA was $93 million, compared to $80 million for the prior year quarter, an increase of $13 million, reflecting improved U.S. mortgage loan origination volumes, benefits from pricing and new products, favorable revenue mix and continued productivity gains which more than offset the impact of the AMC transformation and wind-down of non-core mortgage and default technology units discussed earlier. PIRM segment adjusted EBITDA totaled $53 million, in line with 2018 as growth in insurance and real estate solutions and cost productivity helped to offset unfavorable currency translation and reduced housing market activity in Australia as well as higher levels of investments in platforms and technology.

Liquidity and Capital Resources

At September 30, 2019, the Company had cash and cash equivalents of $88 million compared to $85 million at December 31, 2018. During the three months ended September 30, 2019, we repaid debt of $54 million. Total debt as of September 30, 2019 was $1,727 million compared with $1,797 million as of December 31, 2018. At September 30, 2019, the Company had available capacity on its revolving credit facility of $750 million.

Net operating cash provided by continuing operations for the twelve months ended September 30, 2019 was $351 million. Free cash flow ("FCF") for the twelve months ended September 30, 2019 totaled $227 million, which represented 48% of adjusted EBITDA.

During the third quarter of 2019, the Company completed the repurchase of 700,000 common shares, or 1% of outstanding share count, for $33 million. Through the first nine months of 2019, the Company completed the repurchase of 1.4 million of its common shares, or 2% of outstanding share count, for $62 million.

Updated Financial Guidance and Assumptions

Based on the actual year-to-date financial results and our latest estimate of full-year U.S. mortgage loan origination market unit volumes, the Company is increasing its 2019 financial guidance as follows:

($ in millions except adjusted EPS)

July 24, 2019

Guidance Update

October 23, 2019
Guidance Update

Revenue

$1,700 - $1,740

$1,740 - $1,760

Adjusted EBITDA(1)

$460 - $490

$485 - $495

Adjusted EPS(1)

$2.45 - $2.70

$2.65 - $2.75

(1) Definition of adjusted EBITDA and adjusted EPS, as well as other non-GAAP financial measures used by management, is included in the 'Use of Non-GAAP Financial Measures' section found at the end of the release.

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