CoreLogic Delivers Strong Second Quarter Revenue and Profit Growth and Record Free Cash Flow; Raises Full-year 2020 Financial Guidance

Commits to $1 Billion Share Repurchase by End of 2022, Including at Least $500 Million in 2020;

Increases Quarterly Dividend by 50%;

Will Exit Lower-Margin Reseller Businesses

IRVINE, Calif. — (BUSINESS WIRE) — July 23, 2020 — CoreLogic (NYSE: CLGX), a leading global provider of property information, insight, analytics and data-enabled solutions, today reported strong operating and financial results for the three months ended June 30, 2020, increased 2020 financial guidance, and announced plans to divest two lower-margin reseller businesses. The Company also announced a 50% increase in its quarterly dividend and plans to repurchase $1 billion of its shares by the end of 2022, including at least $500 million by the end of 2020.

“CoreLogic delivered exceptional operating and financial results during the second quarter and first half of 2020. Despite the challenges attributable to the COVID-19 pandemic, our record performance stands as a clear confirmation of the value creation upside inherent in our strategic plan,” said Frank Martell, President and Chief Executive Officer. “Based on accelerating growth trends, competitive wins and share gains, as well as expanded profitability, we are looking ahead to an even stronger second half of the year. Our financial results in the first half of 2020, our views of current market conditions and our internal business plans give us high confidence in achieving our longer-term targets in 2021 and beyond.”

A discussion of second quarter financial results, guidance updates and details regarding the Company’s planned divestiture of its reseller operations and capital allocation program follow.

Second Quarter Results – Strong Growth and Margin Trends Drive Record Free Cash Flow

Growth Focus – Share Gains, Mega Wins and Pricing Drive Organic Growth Rates

  • Reported revenues of $477 million were up 4%. Revenues were up 15% normalizing for $28 million of second quarter 2019 revenues attributable to non-core default technology units sold and the AMC transformation, which have no 2020 counterpart and a $15 million impact attributable to COVID-19
  • Organic revenue growth of approximately 5%, up from more than 2% for the previous quarter, fueled by broad-based market share gains, value pricing and solutions bundles
  • Secured two mega wins in insurance and spatial solutions including a significant strategic win of a top 5 U.S. insurance carrier for CoreLogic’s next-generation integrated insurance solution
  • Core Mortgage market outperformance in tax and flood zone solutions and double-digit growth in credit solutions and valuations platforms

Profitability – High Operating Leverage and Productivity Fuel Expanded Margins

  • Operating income from continuing operations of $91 million, up by $76 million
  • Operating leverage and productivity demonstrated by 3% reduction in operating costs on higher revenues
  • Net income from continuing operations of $59 million compared with prior year loss of $6 million
  • Diluted EPS from continuing operations of $0.73 cents; Adjusted EPS of $1.02, up 29%
  • Adjusted EBITDA of $158 million, up 18%
  • Adjusted EBITDA margin of 33%, up 400 basis points

Liquidity and Capital Return – Durable Cash Generation Powers Capital Return and Debt Reduction

  • Net operating cash provided by continuing operations for the 12 months ended June 30, 2020 was $512 million. Free cash flow ("FCF") for the 12 months ended June 30, 2020 period totaled $393 million or 71% of adjusted EBITDA
  • Retired $101 million of debt outstanding; covenant debt leverage at 2.8 times
  • Total debt outstanding at June 30, 2020 of $1.59 billion compared with $1.69 billion at December 31, 2019; $750 million available on revolving credit facility
  • Repurchased 150,000 common shares and paid $18 million in dividends to shareholders

2020 Third Quarter Guidance – Continuing Acceleration of Revenue and Profit Growth

  • Guidance ranges reflect internal run rates of revenues and costs, benefits from market share gains, cost productivity as well as expected US mortgage market unit volumes. Guidance ranges for third quarter results follow:
    • Revenues of $485 to $515 million
    • Adjusted EBITDA of $160 to $175 million
    • Financial impacts attributable to COVID-19 of approximately $10 to $15 million in both revenue and adjusted EBITDA

2020 Full-Year Guidance Raise – Realizing the Benefits of Higher Mortgage Market Volumes (Purchase and Refinancing), Market Share Gains and Operating Leverage

  • Increased guidance reflects financial and operating outperformance from the first half of 2020 as well as higher than expected cost productivity and continued market share gains
  • Strategic mega wins in Insurance and Spatial solutions and core mortgage expected to benefit the second half of 2020 and more significantly 2021
  • Mortgage market unit volume estimates for 2020 remain unchanged from previous guidance (approximately +25% year-over-year)
  • Expected financial impacts attributable to COVID-19 (approximately $40 to $45 million in both revenue and adjusted EBITDA)

($ in Millions except per-share amounts)

 

Previous Guidance

 

Updated Guidance

Revenue

 

$1,840 - $1,880

 

$1,860 - $1,895

Adjusted EBITDA(1)

 

$565 - $585

 

$580 - $600

Adjusted EPS(1), (2)

 

$3.40 - $3.60

 

$3.60 - $3.75

(1) Definition of adjusted results, 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.
(2) Adjusted EPS does not reflect the impact of the expected share repurchase of $500 million in 2020.

2021-2022 Guidance Details – Approximately 60% of Organic Growth Target Achieved via Contract Wins; Lower Mortgage Rates and Strengthening Purchase Market Volumes Further Bolster Outlook

  • Approximately 60% of our 2021 assumed organic revenue growth target of 5%, or $95 million, is secured by contract wins (including four mega wins)
  • Flow-through benefits of 2020 financial outperformance benefits 2021 revenues and profitability
  • Gains from next-generation integrated insurance solution adoption and 2020 launch and national expansion of CoreLogic OneHome™ and HomeVisit™ solutions expected to benefit results from 2021 onward
  • Approximately 95% of our revenues are recurring in nature
  • 2020 financial impacts attributable to COVID-19 are expected to largely recover in 2021
  • Overall U.S. mortgage market unit volumes expected to be down approximately 10% to 15% in 2021 and down 5% in 2022 with growth in purchase volume transactions offset by lower refinancing

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