Company Expands Insurance and International Footprint and Outperforms U.S. Mortgage Market Trends; Margin Expansion and Free Cash Flow Generation Highlight Strong Operating Execution

IRVINE, Calif. — (BUSINESS WIRE) — February 26, 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 and year ended December 31, 2018.

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CoreLogic President & CEO Frank Martell (Photo: Business Wire)

Full-Year Highlights

• Revenues of $1,788 million, down 3% as organic growth and benefits of acquisitions partially offset an estimated 15% drop in U.S. mortgage origination unit volumes and lower appraisal management company ("AMC") revenues.
• Operating income from continuing operations of $223 million, down 7% as cost productivity benefits and favorable revenue mix partially offset U.S. mortgage market headwinds, increased investment spending and a 2018 $8 million non-cash impairment charge related to the planned exit of certain non-core software units.
• Net income from continuing operations of $122 million, down 18% , reflecting a one-time benefit of $38 million in the 2017 tax provision, attributable to the U.S. Tax Cuts and Jobs Act.
• Diluted EPS from continuing operations of $1.49, down 15%. Adjusted EPS of $2.72, up 15%.
• Adjusted EBITDA of $493 million, up 3%; adjusted EBITDA margin of 28%.
• Repurchased 2.3 million shares, or 3% of outstanding shares, for $109 million.

Fourth Quarter Highlights

• Revenues of $403 million, down 11%, primarily driven by an estimated 25% drop in U.S. mortgage volumes and lower AMC revenues.
• Operating income from continuing operations of $29 million, down 56%, on lower mortgage market volumes, elevated investment spending, and the above described 2018 non-cash impairment charge.
• Net income from continuing operations of $13 million, down from $65 million reflecting the effects of U.S. mortgage market headwinds, the 2017 tax benefit and the 2018 non-cash impairment charge.
• Adjusted EBITDA of $103 million, compared to $117 million in 2017.

“CoreLogic continued to successfully execute against its long-term strategic plan in 2018 despite significant U.S. mortgage market headwinds. We also reduced our costs significantly and drove productivity. In addition, we continued to scale our core operations, expanded our international and insurance business, accelerated the transformation of our AMC and initiated the exit of certain non-core legacy units," said Frank Martell, President and Chief Executive Officer of CoreLogic. “Throughout 2018, we reinvested in our business with a focus on building our core capabilities in data and technology, which we expect will be a foundation for future growth and margin expansion,” Martell added.

Fourth Quarter Financial Summary

Fourth quarter reported revenues totaled $403 million compared with $454 million in the same 2017 period. During the quarter, U.S. mortgage market volumes declined by an estimated 25% on lower refinancing activity and home sales. Property Intelligence & Risk Management Solutions (“PIRM”) revenues fell 7% from 2017 levels to $168 million, due mainly to lower contributions from weather-related natural hazard solutions, the impact of lower U.S. mortgage loan volumes and unfavorable foreign currency translation. Underwriting & Workflow Solutions (“UWS”) revenues totaled $239 million, down 14% from 2017 levels, as benefits from market outperformance and higher collateral valuation platform revenues partially offset mortgage market unit declines and lower AMC volumes.

Operating income from continuing operations totaled $29 million for the fourth quarter compared with $65 million in 2017. Lower operating income was principally attributable to the impact of a 25% decline in origination unit volumes, lower weather-related natural hazard revenues, higher investment spend, and the 2018 non-cash impairment charge discussed previously.

Fourth quarter net income from continuing operations totaled $13 million, a decline of $52 million when compared to 2017. The decline was primarily driven by U.S. mortgage market headwinds, the above described 2017 tax benefit and the 2018 non-cash impairment charge. Diluted EPS from continuing operations totaled $0.16 for the fourth quarter of 2018 compared with $0.78 in 2017. Adjusted EPS totaled $0.48 compared with $0.55 in the fourth quarter of 2017.