Strong Operating Performance Highlighted by Revenue Growth,
Margin Expansion, and Cash Flow Generation
IRVINE, Calif. — (BUSINESS WIRE) — April 30, 2020 — CoreLogic (NYSE: CLGX), a leading global provider of residential property information, analytics, and data-enabled solutions, today reported financial results for the quarter ended March 31, 2020. Operating and financial highlights appear below.
- Revenues of $444 million, up $26 million or 6%, driven by growth in core mortgage and insurance and spatial. First quarter 2019 revenues included $21 million attributable to non-core default technology units sold and the AMC transformation, which have no 2020 counterpart. Revenues were up 12% excluding these discrete items.
- Operating income from continuing operations of $67 million, up 216%, reflecting higher revenues and favorable business mix, as well as operating leverage and cost productivity benefits.
- Net income from continuing operations of $34 million, up $32 million, due to operating income upsides.
- Diluted EPS from continuing operations of $0.42, up $0.40. Adjusted EPS of $0.76, up $0.31.
- Adjusted EBITDA of $130 million, up 33%; adjusted EBITDA margin of 29% compared to 23% in the prior year.
“CoreLogic reported an outstanding operating and financial performance in the first quarter. We delivered top line growth driven by acceleration in our core mortgage, insurance and spatial, and other platform-related businesses. Profit margins expanded 6 percentage points as we capitalized on favorable revenue mix, higher market volumes in the U.S., the benefits of operating leverage, and ongoing productivity gains," said Frank Martell, President and Chief Executive Officer of CoreLogic. "During the quarter we secured several major new client wins, and captured market share which we expect to benefit second half revenues.
“During the first quarter, the CoreLogic team effectively executed our business plans and supported our clients as impacts from the COVID-19 pandemic began to emerge. While the Company did realize some revenue impacts mainly in consumer credit related businesses late in the quarter, results from our core mortgage businesses surpassed underlying industry trends. As we navigate the impacts of the pandemic, we continue to focus on the health and welfare of our associates, addressing critical needs within our communities, and delivering on our client commitments,” Martell added.
First Quarter Financial Summary
Revenues of $444 million, up $26 million or 6%, driven by growth in core mortgage and insurance and spatial. The Company’s international operations also grew on a constant-currency basis. As noted above, first quarter 2019 revenues included $21 million attributable to non-core default technology units sold and the AMC transformation, which have no 2020 counterpart. Revenues were up 12% excluding these discrete items. During the quarter we secured a number of new client wins, including significant contracts in collateral valuation and property tax solutions which are expected to benefit second half revenues.
Underwriting & Workflow Solutions (“UWS”) revenues totaled $276 million, up $31 million, or 13%, driven by higher U.S. mortgage origination volumes and organic growth fueled by market share gains. UWS first quarter 2019 revenues included $21 million attributable to non-core default technology units sold and the AMC transformation, which have no 2020 counterpart. Revenues were up 23%, excluding these discrete items.
Property Intelligence & Risk Management Solutions ("PIRM") revenues totaled $173 million, compared to $176 million in the prior year. Insurance and spatial and constant-currency international revenues were higher, offsetting the impacts of lower tenant screening volumes, the exit of a non-core business line, and currency translation which aggregated approximately $5 million.
Operating income from continuing operations totaled $67 million for the first quarter, up $46 million or 216% compared to same prior year period. Higher operating income was principally attributable to the benefits of revenue growth, operating leverage, improved business mix and cost productivity.
First quarter net income from continuing operations totaled $34 million, compared with $2 million in 2019. Diluted EPS from continuing operations totaled $0.42, an increase of $0.40 over the same prior year period. Adjusted EPS totaled $0.76, compared with $0.45 in 2019, an increase of 69%. The increases were due to the Company's strong operating performance discussed previously.
Adjusted EBITDA totaled $130 million, up 33%, compared to $98 million in the prior year period. Adjusted EBITDA margin was 29%, an increase of approximately 600 basis points. The increase in adjusted EBITDA and margin was principally attributable to revenue growth, improved business mix, and the benefits of ongoing cost productivity programs. UWS adjusted EBITDA was $91 million, compared to $63 million for the prior year quarter, reflecting operating leverage benefits driven by higher revenues, favorable revenue mix, and continued productivity gains. PIRM adjusted EBITDA totaled $49 million, up from $46 million. Higher PIRM adjusted EBITDA and margins were driven by growth in insurance and spatial, international upsides, as well as the benefit of lower costs which offset lower tenant screening volumes and the impacts of currency translation.
Liquidity and Capital Resources
At March 31, 2020, the Company had cash and cash equivalents of $153 million compared with $105 million at December 31, 2019. Total debt as of March 31, 2020 and December 31, 2019 was approximately $1,687 million. As of March 31, 2020, the Company has the entire capacity on its revolving credit facility of $750 million available.
Net operating cash provided by continuing operations for the twelve months ended March 31, 2020 was $437 million. Free cash flow ("FCF") for the twelve months ended March 31, 2020 totaled $315 million, which represented 59% of adjusted EBITDA.
During the quarter, CoreLogic paid a cash dividend of $0.22 per common share ($17 million) in January 2020 and repurchased 50,000 shares.
COVID-19 Response and Impact
During the first quarter, the Company successfully implemented a programmatic response to mitigate the impacts of the unfolding COVID-19 pandemic. Principal measures taken included the repositioning of many of our personnel to a home-based work environment, adoption of social distancing, enhanced monitoring and sanitization of facilities, and augmentation of the Company’s supply chain infrastructure. During March 2020, the Company experienced business volume and revenue related impacts (mainly in consumer credit related businesses) which are estimated at approximately $6 million.
CoreLogic management will host a live webcast and conference call on Thursday, April 30, 2020, at 2:30 p.m. Pacific Time (5:30 p.m. Eastern Time) to discuss these results. All interested parties are invited to listen to the event via webcast on the CoreLogic website at http://investor.corelogic.com. Alternatively, participants may use the following dial-in numbers: 1-844-861-5502 for U.S./Canada callers or 1-412-858-4604 for international callers.
A replay of the webcast will be available on the CoreLogic investor website for 10 days and also through the conference call number 1-877-344-7529 for U.S. and Canada participants or 1-412-317-0088 for international participants using Conference ID 10143046.
CoreLogic (NYSE: CLGX), the leading provider of property insights and solutions, promotes a healthy housing market and thriving communities. Through its enhanced property data solutions, services, and technologies, CoreLogic enables real estate professionals, financial institutions, insurance carriers, government agencies, and other housing market participants to help millions of people find, buy, and protect their homes. For more information, please visit www.corelogic.com.
Safe Harbor / Forward-Looking Statements
Certain statements made in this press release are forward-looking statements within the meaning of the federal securities laws, including but not limited to those statements related to the COVID-19 pandemic and its impacts, the availability of financing under the revolving credit facility, future growth and margin expansion, and continued operational efficiencies. Risks and uncertainties exist that may cause the results to differ materially from those set forth in these forward-looking statements. Factors that could cause the anticipated results to differ from those described in the forward-looking statements include the risks and uncertainties set forth in Part I, Item 1A of our most recent Annual Report on Form 10-K, as such risk factors may be amended, supplemented, or superseded from time to time by other reports we file with the SEC. These risks and uncertainties include but are not limited to: any potential impact resulting from COVID-19; our ability to protect our information systems against data corruption, cyber-based attacks or network security breaches; limitations on access to or increase in prices for data from external sources, including government and public record sources; systems interruptions that may impair the delivery of our products and services; changes in applicable government legislation, regulations, and the level of regulatory scrutiny affecting our customers or us, including with respect to consumer financial services and the use of public records and consumer data; difficult conditions in the mortgage and consumer lending industries and the economy generally; risks related to the outsourcing of services and international operations; our ability to realize the anticipated benefits of certain acquisitions and/or divestitures and the timing thereof; impairments in our goodwill or other intangible assets; and our ability to generate sufficient cash to service our debt. The forward-looking statements speak only as of the date they are made. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.