EX-99.1 2 pressreleaseforperiodended.htm PRESS RELEASE FOR PERIOD ENDED SEPTEMBER 30, 2011 Press Release for Period Ended September 30, 2011



 
NEWS
FOR
IMMEDIATE
RELEASE
Exhibit 99.1

Media Contact:
 
Investor Contact:
Alyson Austin
 
Dan Smith
Corporate Communications
 
Investor Relations
714-250-6180
 
703-610-5410
aaustin@corelogic.com    
 
danlsmith@corelogic.com


CORELOGIC REPORTS THIRD QUARTER 2011 FINANCIAL RESULTS

Third quarter results exceed expectations on higher refinancing volumes and cost actions.

Company to exit five non-core businesses.

Annualized cost reduction targets increased to $80 - $100 million.

Full-year 2011 guidance increased to $290 - $300 million in adjusted EBITDA and $0.75 - $0.80 in adjusted EPS.


Santa Ana, Calif., November 2, 2011 - CoreLogic (NYSE:CLGX), a leading provider of consumer, financial and property information, analytics and services, today reported financial results for the quarter ended September 30, 2011.

Anand Nallathambi, President and Chief Executive Officer, commented on the quarter, “During the third quarter, we took aggressive actions to sharpen our focus on our core businesses and better position CoreLogic to capitalize on our competitive strengths in the data and analytics and core mortgage origination services areas. These core businesses benefit from their leading market presence, unique data assets, intellectual property and world-class domain expertise.”

Nallathambi continued, “With a more focused set of businesses and an aggressive cost reduction plan, we believe CoreLogic is positioned for stronger financial results in 2012 and beyond with less dependency on improvement in the mortgage market. Going forward, we believe CoreLogic shareholders will benefit from balanced revenue growth and enhanced margin profiles across our core businesses.”

Frank Martell, Chief Financial Officer, commented on the increased cost reduction targets, “We believe the actions taken this quarter, along with our continuing program of aggressive cost reductions and productivity improvements, will allow CoreLogic to reach its goal of 30% adjusted EBITDA margins through 2013. As a result of accelerated progress on our cost reduction plans and stronger mortgage refinancing activity in the second half of 2011, we are increasing our full-year 2011 guidance to $290 - $300 million in adjusted EBITDA and $0.75 - $0.80 in adjusted EPS.”


In the discussion below of the business segments and of CoreLogic as a firm, certain information is presented on an adjusted basis. For more information about the Company's adjusted results, as well as other non-GAAP financial measures used by management, please see the Company's quarterly financial supplement on the CoreLogic investor website and discussion on the Use of Non-GAAP Financial Measures found on page 4 of this release.

1

Third Quarter Financial Highlights (continuing operations)

Revenues, equity in earnings of affiliates and income from continuing operations were positively impacted by higher-than-anticipated mortgage loan refinancing volumes, cost reduction initiatives and the acquisitions of RP Data Limited and Dorado Network Systems.

Revenues increased 5.5% year-over-year to $348.4 million, driven by a 14.5% jump in Data and Analytics segment revenues which reflected the acquisition of RP Data in the second quarter of 2011 as well as higher project-related revenues. Business and Information Services segment revenues totaled $169.6 million, down 3.1% from the third quarter of 2010 reflecting an estimated 22.4% year-over-year decrease in mortgage origination volumes offset partially by the acquisition of Dorado Network Systems.

Third quarter pretax income from continuing operations totaled $9.3 million. Compared to the third quarter of 2010, pretax income from continuing operations was down $31.0 million due mainly to higher expenses including depreciation and amortization ($11.3 million), interest expense ($6.3 million), investments in improving operating efficiency ($10.1 million), and other one-time charges ($8.1 million); which together more than offset the impact of higher revenues. Third quarter net loss of $107.2 million was primarily due to the pre-tax write-down of goodwill and intangibles of $139.5 million related to the exit of the LeadClick business and other charges attributable to discontinued operations.

Total adjusted EBITDA for the third quarter was $85.4 million (23.6% of adjusted revenues), a decline of 12.1% from the same prior year period. This decline was primarily attributable to the impact of lower mortgage originations.

Adjusted EBITDA for the Data & Analytics segment totaled $54.9 million in the third quarter, up 5.4% from the third quarter of 2010, reflecting the acquisition of RP Data. Adjusted EBITDA margin for the third quarter was 29.4%, down from 31.5% in the third quarter of 2010 reflecting a greater proportion of advisory project revenue, costs incurred as a result of new product development initiatives and increased external cost of consumer credit data.

Adjusted EBITDA for the Business and Information Services segment totaled $44.3 million, down 24.3% from the prior year due principally to lower equity earnings in the Company's affiliates, softness in default services and lower flood certification volumes. Adjusted EBITDA margin for the third quarter was 24.5% versus 30.3% in the third quarter of 2010.

Loss from continuing operations per diluted share was $0.03 for the third quarter.

Liquidity and Capital Resources

At September 30, 2011, CoreLogic had cash of $138.7 million. During the third quarter, the Company acquired Tarasoft Corporation, a leading provider of Multiple Listing Service systems software to the real estate industry for $30.3 million and also retired a pension-related note of approximately $17.0 million.

Total debt as of September 30, 2011, was $911.1 million, down $28.0 million from June 30, 2011, with available capacity on the Company's credit facility of approximately $501.7 million. Trailing twelve-month debt-to-adjusted EBITDA ratio as of September 30, 2011 was 2.85x.

Going forward, the Company will consider the repurchase of common shares and retirement of outstanding debt on an opportunistic basis.

At November 2, 2011 there were approximately 106.5 million shares of common stock outstanding.


2

Non-Core Businesses Exited

During the third quarter, Corelogic determined that five business units would be exited in order to increase the focus of the Company's core operations and to improve overall profitability.

Businesses designated as held-for-sale and reported as discontinued operations include Appraisal Management Services, American Driving Records, Inc., CompuNet Credit Services, and Consumer Credit Monitoring Services. As previously announced, LeadClick (Marketing Services) was closed during September 2011.

For the third quarter of 2011, revenues for these five businesses totaled $58.6 million and adjusted EBITDA aggregated a negative $15.6 million, of which $10.7 million was attributable to shut down costs associated with LeadClick.

Cost Reduction Program Expanded

The Company increased its estimated annualized costs savings target to $80 - $100 million. These savings measures, implemented over the course of 2011 and 2012, include information technology, corporate overhead, real estate and procurement cost reductions as well as the results of enhanced productivity in the individual business units.

During the third quarter, the Company reduced its U.S.-based workforce approximately 6% and completed the sale of its captive offshoring platform to Cognizant. The Company expects to further reduce its U.S. workforce by approximately 5% during the fourth quarter.

Increased Full Year 2011 Guidance (continuing operations)

Company increased 2011 guidance to $290 - $300 million in adjusted EBITDA and $0.75 - $0.80 in adjusted EPS. This positive revision reflects the impact of stronger-than-anticipated mortgage refinancing volumes and accelerated cost savings initiatives.

2011 adjusted revenues from continuing operations are expected to total $1,350 - $1,370 million reflecting the impact of exiting the five businesses discussed previously partially offset by higher mortgage refinancing volumes.

Strategic Alternatives Review

As previously announced on August 29, 2011, CoreLogic's Board of Directors has created a committee of independent directors to explore a wide range of options aimed at enhancing shareholder value. This review is currently ongoing.

Teleconference/Webcast
The CoreLogic management team will host a live webcast and conference call on Thursday, November 3, 2011, at 8:00 a.m. Pacific time (11:00 a.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. The discussion is also available through dial-in number 1-866-713-8564 for U.S./Canada participants or 617-597-5312 for international participants using Conference ID 48074633.

A replay of the webcast will be available on the CoreLogic investor website for 30 days and also through the conference call number 1-888-286-8010 for U.S./Canada participants or 617-801-6888 for international participants using Conference ID 45643298.

Additional detail on the Company's third quarter financial results is included in the quarterly financial supplement,

3

available on the Investor Relations page at http://investor.corelogic.com.

About CoreLogic
CoreLogic (NYSE: CLGX) is a leading provider of consumer, financial and property information, analytics and services to business and government. The Company combines public, contributory and proprietary data to develop predictive decision analytics and provide business services that bring dynamic insight and transparency to the markets it serves. CoreLogic has built one of the largest and most comprehensive U.S. real estate, mortgage application, fraud, and loan performance databases and is a recognized leading provider of mortgage and automotive credit reporting, property tax, valuation, flood determination, and geospatial analytics and services. More than one million users rely on CoreLogic to assess risk, support underwriting, investment and marketing decisions, prevent fraud, and improve business performance in their daily operations. The Company, headquartered in Santa Ana, Calif., has more than 5,000 employees globally. For more information 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 Company's overall financial performance, including future revenue and earnings growth, future margin improvement and future adjusted EBITDA and EPS performance, estimated future cost savings and the impact thereof; mortgage market trends; and anticipated workforce reductions. Risk 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 are set forth in Part I, Item 1A of our most recent Annual Report on Form 10-K for the year ended December 31, 2010, as updated by our Quarterly Reports on Form 10-Q, including but not limited to: limitations on access to 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 which may, among other things, limit the manner in which we conduct business with our customers; compromises in the security of our data transmissions, including the transmission of confidential information or systems interruptions; difficult conditions in the mortgage and consumer credit industry, including the continued decline in mortgage applications, declines in the level of loans seriously delinquent and continued delays in the default cycle, the state of the securitization market, increased unemployment, and conditions in the economy generally; risks related to our international operations and the outsourcing of various business process and information technology services to third parties, including potential disruptions to services and customers and inability to achieve cost savings; 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.

Use of Non-GAAP Financial Measures
This press release contains certain financial measures that are not presented in accordance with Generally Accepted Accounting Principles (GAAP), including adjusted revenue which includes equity in earnings of affiliates; adjusted EBITDA, adjusted EBITDA margin and adjusted pretax margin which is adjusted to exclude historical corporate expense of the spun-off businesses, net realized investment gains/losses, employee separation costs, and other adjustments. Although these exclusions represent actual losses or expenses to the Company, they may mask the periodic income and financial and operating trends associated with the Company's business. To compensate for the inherent limitations of these non-GAAP measures, the Company uses them in conjunction with the corresponding GAAP measures.

The Company is presenting these non-GAAP financial measures because the Company believes that they provide the Company's management and investors with additional insight into the operational performance of the Company relative to earlier periods. The Company does not intend for these non-GAAP financial measures to be a substitute for any GAAP financial information. In this press release, these non-GAAP financial measures have been presented with, and reconciled to, the most directly comparable GAAP financial measures. Investors should use these non-GAAP financial measures only in conjunction with the comparable GAAP financial measures.


(Additional Financial Data Follows)

4

CORELOGIC, INC.
CONDENSED CONSOLIDATED INCOME STATEMENTS
UNAUDITED

 
For the Three Months Ended
 
For the Nine Months Ended
 
September 30,
 
September 30,
(in thousands, except per share amounts)
2011
 
2010
 
2011
 
2010
Operating revenues
$
348,446

 
$
330,146

 
$
993,149

 
$
964,910

External cost of revenues
78,178

 
76,543

 
211,457

 
214,713

Salaries and benefits
131,523

 
133,812

 
414,545

 
406,097

Other operating expenses
76,061

 
50,604

 
209,739

 
191,418

Depreciation and amortization
34,844

 
23,495

 
84,160

 
72,198

Total operating expenses
320,606

 
284,454

 
919,901

 
884,426

Income from continuing operations
27,840

 
45,692

 
73,248

 
80,484

Interest income/(expense), net:
 

 
 

 
 

 
 

Interest income
817

 
1,541

 
4,005

 
2,829

Interest expense
(15,236
)
 
(8,956
)
 
(47,783
)
 
(25,325
)
Total interest expense,  net
(14,419
)
 
(7,415
)
 
(43,778
)
 
(22,496
)
(Loss)/gain on investment and other income
(4,118
)
 
2,072

 
86,783

 
(659
)
Income from continuing operations before equity in earnings of affiliates and income taxes
9,303

 
40,349

 
116,253

 
57,329

Provision/(benefit) for income taxes
20,535

 
(5,580
)
 
76,829

 
4,193

(Loss)/income from continuing operations before equity in earnings of affiliates
(11,232
)
 
45,929

 
39,424

 
53,136

Equity in earnings of affiliates, net of tax
8,340

 
13,507

 
20,393

 
29,593

(Loss)/income from continuing operations
(2,892
)
 
59,436

 
59,817

 
82,729

Loss from discontinued operations, net of tax
(104,220
)
 
(142,479
)
 
(111,125
)
 
(93,688
)
Net loss
(107,112
)
 
(83,043
)
 
(51,308
)
 
(10,959
)
Less:  Net income attributable to noncontrolling interests
78

 
10,372

 
1,142

 
28,629

Net loss attributable to Corelogic
$
(107,190
)
 
$
(93,415
)
 
$
(52,450
)
 
$
(39,588
)
Amounts attributable to Corelogic stockholders:
 

 
 

 
 

 
 

(Loss)/income from continuing operations
$
(2,970
)
 
$
49,064

 
$
58,675

 
$
54,100

Loss from discontinued operations, net of tax
(104,220
)
 
(142,479
)
 
(111,125
)
 
(93,688
)
Net loss
$
(107,190
)
 
$
(93,415
)
 
$
(52,450
)
 
$
(39,588
)
Basic (loss)/income per share:
 

 
 

 
 

 
 

(Loss)/income from continuing operations attributable to Corelogic stockholders
$
(0.03
)
 
$
0.42

 
$
0.53

 
$
0.49

Loss from discontinued operations attributable to Corelogic stockholders, net of tax
(0.98
)
 
(1.22
)
 
(1.01
)
 
(0.85
)
Net loss attributable to Corelogic
$
(1.01
)
 
$
(0.80
)
 
$
(0.48
)
 
$
(0.36
)
Diluted (loss)/income per share:
 

 
 

 
 

 
 

(Loss)/income from continuing operations attributable to Corelogic stockholders
$
(0.03
)
 
$
0.42

 
$
0.53

 
$
0.49

Loss from discontinued operations attributable to Corelogic stockholders, net of tax
(0.98
)
 
(1.22
)
 
(1.01
)
 
(0.85
)
Net (loss)/income attributable to Corelogic
$
(1.01
)
 
$
(0.80
)
 
$
(0.48
)
 
$
(0.36
)
Weighted-average common shares outstanding:
 

 
 

 
 

 
 

Basic
106,414

 
116,991

 
109,993

 
109,800

Diluted
106,414

 
117,829

 
110,591

 
110,669




5

CORELOGIC, INC
CONDENSED CONSOLIDATED BALANCE SHEETS
UNAUDITED
 
(in thousands, except per share value)
September 30,
 
December 31,
Assets
2011
 
2010
Current assets:
 
 
 
Cash and cash equivalents
$
138,668

 
$
426,212

Marketable securities
34,970

 
75,221

Accounts receivable (less allowance for doubtful accounts of $15,437 and $12,314 in 2011 and 2010, respectively)
215,205

 
176,413

Prepaid expenses and other current assets
54,715

 
42,793

Income tax receivable
61,510

 
30,587

Deferred tax asset, current
28,157

 
13,150

Due from FAFC, net
581

 

Assets of discontinued operations
76,111

 
262,275

Total current assets
609,917

 
1,026,651

Property and equipment, net
231,294

 
197,426

Goodwill, net
1,468,663

 
1,289,888

Other identifiable intangible assets, net
170,408

 
109,850

Capitalized data and database costs, net
298,887

 
211,331

Investment in affiliates
143,850

 
165,709

Deferred income tax assets, long-term
28,361

 
33,548

Restricted cash
20,924

 
21,095

Other assets
149,800

 
180,882

Total assets
$
3,122,104

 
$
3,236,380

Liabilities and Equity
 

 
 

Current liabilities:
 

 
 

Accounts payable and accrued expenses
$
151,763

 
$
123,936

Accrued salaries and benefits
60,629

 
76,212

Income taxes payable
4,288

 

Deferred revenue, current
200,505

 
186,031

Mandatorily redeemable noncontrolling interests

 
72,000

Current portion of long-term debt
62,482

 
233,452

Due to FAFC, net

 
18,097

Liabilities of discontinued operations
42,505

 
40,162

Total current liabilities
522,172

 
749,890

Long-term debt, net of current
848,616

 
487,437

Deferred revenue, net of current
335,322

 
350,827

Deferred income tax liabilities, long term
10,279

 

Other liabilities
136,908

 
101,531

Total liabilities
1,853,297

 
1,689,685


 
 
 
Equity:
 

 
 

CoreLogic, Inc.'s (Corelogic) stockholders' equity:
 

 
 

Preferred stock, $0.00001 par value; 500 shares authorized, no shares issued or outstanding

 

Common stock, $0.00001 par value; 180,000 shares authorized; 106,481 and 115,499 shares issued and outstanding as of September 30, 2011 and December 31, 2010, respectively
1

 
1

Additional paid-in capital
1,052,587

 
1,229,806

Retained earnings
246,140

 
298,590

Accumulated other comprehensive (loss)/income
(32,384
)
 
15,943

Total Corelogic's stockholders' equity
1,266,344

 
1,544,340

Noncontrolling interests
2,463

 
2,355

Total equity
1,268,807

 
1,546,695

Total liabilities and equity
$
3,122,104

 
$
3,236,380



6

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR CONSOLIDATED CORELOGIC, INC.

 
For the Three Months Ended September 30, 2011
(in thousands)
As Reported
Equity in Earnings
Severance
Efficiency Investments
Asset Impairments
Spin Costs
As
Adjusted
Revenue
 
 
 
 
 
 
 
Data & Analytics
$
184,509

$
2,089

$

$

$

$

$
186,598

Business and Information Services
169,587

11,639





181,226

Corporate
(5,650
)
175





(5,475
)
CoreLogic
$
348,446

$
13,903

$

$

$

$

$
362,349

 
 
 
 
 
 
 
 
Pretax Income
 
 
 
 
 
 
 
Data & Analytics
$
27,928

$
2,089

$
125

$

$
6,463

$

$
36,605

Business and Information Services
25,276

11,639

1,243


502


38,660

Corporate
(43,901
)
175

338

10,052

(600
)

(33,936
)
CoreLogic
$
9,303

$
13,903

$
1,706

$
10,052

$
6,365

$

$
41,329

 
 
 
 
 
 
 
 
EBITDA
 
 
 
 
 
 
 
Data & Analytics
$
53,665

$

$
125

$

$
1,152

$

$
54,942

Business and Information Services
43,096


1,243




44,339

Corporate
(24,290
)

338

10,052



(13,900
)
CoreLogic
$
72,471

$

$
1,706

$
10,052

$
1,152

$

$
85,381


 
For the Three Months Ended September 30, 2010
(in thousands)
As Reported
Equity in Earnings
Severance
Efficiency Investments
Asset Impairments
Spin Costs
As
Adjusted
Revenue
 
 
 
 
 
 
 
Data & Analytics
$
161,185

$
4,067

$

$

$

$

$
165,252

Business and Information Services
174,955

18,304





193,259

Corporate
(5,994
)
89





(5,905
)
CoreLogic
$
330,146

$
22,460

$

$

$

$

$
352,606

 







Pretax Income







Data & Analytics
$
34,884

$
4,067

$
218

$

$

$

$
39,169

Business and Information Services
34,434

18,304

1,100




53,838

Corporate
(28,969
)
89

433



1,697

(26,750
)
CoreLogic
$
40,349

$
22,460

$
1,751

$

$

$
1,697

$
66,257

 







EBITDA







Data & Analytics
$
51,910

$

$
218

$

$

$

$
52,128

Business and Information Services
57,469


1,100




58,569

Corporate
(15,662
)

433



1,697

(13,532
)
CoreLogic
$
93,717

$

$
1,751

$

$

$
1,697

$
97,165


7

RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR CONSOLIDATED CORELOGIC, INC.

(Unaudited, in thousands) 
3Q11
3Q10
Net income
$
(107,190
)
$
(93,415
)
Less: Discontinued operations, net of tax
(104,220
)
(142,479
)
Plus: Noncontrolling interests
78

10,372

           Income tax provision, includes income tax provision
 
 
 associated with equity in earnings of affiliates.
26,098

3,373

           Interest expense, net
14,419

7,415

           Depreciation & amortization
34,844

23,495

           Other significant adjustments
12,912

3,446

Adjusted EBITDA
$
85,381

$
97,165



RECONCILIATION OF AS REPORTED TO AS ADJUSTED FINANCIAL RESULTS FOR TOTAL DISCONTIUED OPERATIONS

(Unaudited, in thousands)
3Q11
Loss from discontinued operations before income taxes
$
(168,968
)
Plus: Impairment charges
123,348

          Depreciation & amortization
30,005

          Interest expense, net
40

Adjusted EBITDA from discontinued operations
$
(15,575
)


SIGNIFICANT ADJUSTMENTS BETWEEN GAAP & AS-ADJUSTED RESULTS

($ in Thousands)
September 30, 2011
  Description
 
 
 
Revenue
 
 
   Re-class of Equity in Earnings of Affiliates
$
13,903

Reflects GAAP equity in earnings of affiliates before tax as a component of adjusted revenue
Expenses
 
 
   Salaries and benefits
1,706

Restructuring-related severance and retention expenses
   Professional, legal and litigation
10,052

Expenses related to announced one-time efficiency investments
   Amortization & other
5,544

Software and intangibles impairment
Gain/(Loss) on Investment and Other Income
 
 
   Investment losses
821

Investment impairment
Total impact to pretax income
$
32,026

 



8