Revenue Growth, Favorable Business Mix and the Benefits of Cost Productivity and Operating Leverage Power Outstanding Fourth Quarter Results
IRVINE, Calif. — (BUSINESS WIRE) — February 26, 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 December 31, 2019. Operating and financial highlights appear below.
- Revenues of $426 million, up 6%, driven by growth in real estate solutions and valuation and insurance-related platform businesses as well as higher U.S. mortgage market origination volumes.
- Operating income from continuing operations of $56 million, up 95%, due primarily to higher revenues and favorable business mix, as well as operating leverage and cost productivity benefits.
- Net income from continuing operations of $30 million, up 131%, reflecting operating income upsides.
- Diluted EPS from continuing operations of $0.37, up 131%. Adjusted EPS of $0.77, up 60%.
- Adjusted EBITDA of $129 million, up 26%; adjusted EBITDA margin of 30% compared to 25% in the prior year.
- Completed AMC transformation program, positioning the business for future growth and margin expansion.
- Repurchased 625,000 common shares for $25 million and reduced outstanding debt by $39 million.
- Announced initiation of quarterly cash dividend program.
“CoreLogic topped off a very strong 2019 with an outstanding operating and financial performance in the fourth quarter. We delivered top line growth and significantly higher margins in the fourth quarter, driven by acceleration in our high-margin core mortgage and platform-related businesses, and the benefits of operating leverage. We also capitalized on higher market volumes in the U.S. and ongoing productivity gains which helped us drive adjusted EBITDA margins above 30%," said Frank Martell, President and Chief Executive Officer of CoreLogic.
“We exited 2019 with expanded organic revenue growth trends underpinned by unique data, analytics and data-enabled solutions that, collectively, help millions of people find, buy and protect the homes they love. Favorable revenue growth and mix trends, the launch of several strategic growth initiatives as well as our ongoing drive for first-quartile operational efficiency provides a path to expanded organic growth and profitability in 2020 and beyond,” Martell added.
Fourth Quarter Financial Summary
Fourth quarter revenues totaled $426 million, up 6% or $23 million, compared with $403 million in 2018, driven primarily by growth in core mortgage, real estate solutions, as well as improved U.S. mortgage origination volumes and an insurance-related acquisition closed in December 2018. The transformation of the AMC and exit of non-core mortgage and default technology units impacted 2019 fourth quarter revenues by $24 million. Excluding the effect of the AMC transformation and non-core technology units, revenues increased approximately 12%.
Underwriting & Workflow Solutions (“UWS”) revenues totaled $259 million, up 8% from 2018 levels led by the benefits of higher U.S. mortgage origination volumes and organic growth. Excluding the effect of the AMC transformation and non-core technology units discussed above, UWS revenues increased approximately 20%. Property Intelligence & Risk Management Solutions ("PIRM") revenues rose to $171 million, an increase of 2%, as growth in insurance and real estate solutions more than offset the impacts of lower tenant screening volumes, currency translation and reduced housing market activity in Australia, which aggregated approximately $5 million.
Operating income from continuing operations totaled $56 million for the fourth quarter compared with $29 million in 2018. Operating margins increased approximately 600 basis points to 13%. Higher operating income was principally attributable to the benefits of revenue growth, operating leverage, improved business mix and cost productivity.
Fourth quarter net income from continuing operations totaled $30 million, compared with $13 million in 2018, an increase of 131%. Diluted EPS from continuing operations totaled $0.37, compared with $0.16 in 2018, an increase of 131%. Adjusted EPS totaled $0.77, compared with $0.48 in 2018, an increase of 60%. The increases were due to the Company's strong operating performance discussed previously.
Adjusted EBITDA totaled $129 million, up 26%, compared to $103 million in the prior year period. Adjusted EBITDA margin was 30%, an increase of approximately 500 basis points. The increase in adjusted EBITDA was principally attributable to revenue growth, improved business mix and the benefits of ongoing cost productivity programs. UWS adjusted EBITDA was $99 million, compared to $71 million for the prior year quarter, reflecting operating leverage benefits from higher U.S. mortgage loan volumes, organic growth, favorable revenue mix and continued productivity gains. PIRM adjusted EBITDA totaled $40 million, in line with 2018, as growth in insurance and real estate solutions as well as cost productivity actions offset investments in new products, platforms and technology, currency translation and reduced housing market activity in Australia.
Liquidity and Capital Resources
At December 31, 2019, the Company had cash and cash equivalents of $105 million compared with $85 million at December 31, 2018. Total debt as of December 31, 2019 was $1,688 million compared with $1,797 million as of December 31, 2018. As of December 31, 2019, the Company had available capacity on its revolving credit facility of $750 million.
Net operating cash provided by continuing operations for the year ended December 31, 2019 was $389 million. Free cash flow ("FCF") for the year ended December 31, 2019 totaled $257 million, which represented 52% of adjusted EBITDA.
In 2019, the Company repurchased 2,025,000, or 3% of its common shares for $87 million.
CoreLogic management will host a live webcast and conference call on Wednesday, February 26, 2020, at 3:00 p.m. Pacific Time (6:00 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: 1-800-367-2403 for U.S. and Canada callers or 1-334-777-6978 for international callers using Confirmation Code 5448416.
A replay of the webcast will be available on the CoreLogic investor website for 10 days and also through the conference call number 1-888-203-1112 for U.S. and Canada participants or 1-719-457-0820 for international participants using Conference ID 5448416.
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 transformation of the Company’s AMC business and future growth and margin expansion, continued operational efficiencies, revenue growth and the expected financial impact of its strategic and operating actions. 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. These risks and uncertainties include but are not limited to: 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; 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; systems interruptions that may impair the delivery of our products and services; 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; and impairments in our goodwill or other intangible assets. 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.