A replay of the webcast will be available on the CoreLogic investor website for 10 days and through the conference call number 1-877-344-7529 for U.S. participants, 855-669-9658 for Canada participants or 1-412-317-0088 for international participants using Conference ID 10116326.
About CoreLogic
CoreLogic (NYSE: CLGX) is a leading global property information, analytics and data-enabled solutions provider. The Company's combined data from public, contributory and proprietary sources includes over 4.5 billion records spanning more than 50 years, providing detailed coverage of property, mortgages and other encumbrances, consumer credit, tenancy, location, hazard risk and related performance information. The markets CoreLogic serves include real estate and mortgage finance, insurance, capital markets, and the public sector. CoreLogic delivers value to clients through unique data, analytics, workflow technology, advisory and managed solutions. Clients rely on CoreLogic to help identify and manage growth opportunities, improve performance and mitigate risk. Headquartered in Irvine, Calif., CoreLogic operates in North America, Western Europe and Asia Pacific. 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 Company's productivity excellence, the Company's overall financial performance, including future revenue and profit growth, and the Company's margin, tax rate and cash flow profile; and the Company's plans to continue to return capital to shareholders through the share repurchase program. 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 amended or updated by our Quarterly Reports on Form 10-Q. These additional risks and uncertainties include but are not limited to: 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; compromises in the security of our data, including the transmission of confidential information or systems interruptions; difficult conditions in the mortgage and consumer lending industries and the economy generally; our ability to protect proprietary rights; our cost reduction program, technology and growth strategies and our ability to effectively and efficiently implement them; risks related to the outsourcing of services and international operations; our indebtedness and the restrictions in our various debt agreements; our ability to realize the anticipated benefits of certain acquisitions and/or divestitures and the timing thereof; the inability to control the operations or dividend policies of our partially-owned affiliates; 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 (Generally Accepted Accounting Principles) Financial Measures
This press release contains certain non-GAAP financial measures which are provided only as supplemental information. Investors should consider these non-GAAP financial measures only in conjunction with the most directly comparable GAAP financial measures. These non-GAAP measures are not in accordance with or a substitute for U.S. GAAP. The Company is not able to provide a reconciliation of projected adjusted EBITDA or projected adjusted earnings per share to respective GAAP results due to the unknown effect, timing and potential significance of special charges or gains.
The Company believes that its presentation of non-GAAP measures, such as adjusted EBITDA, adjusted EPS and FCF, provides useful supplemental information to investors and management regarding the Company's financial condition and results. Adjusted EBITDA is defined as net income from continuing operations adjusted for interest, taxes, depreciation and amortization, stock compensation, non-operating gains/losses and other adjustments. Adjusted EPS is defined as income from continuing operations, net of tax per diluted share, adjusted for stock compensation, amortization of acquisition-related intangibles, non-operating gains/losses, and other adjustments; tax affected at an assumed effective tax rate of 35% and 36% for 2017 and 2016, respectively. The Company's projected 2018 effective tax rate of 26%, to be included in adjusted EPS, reflects expected benefits from the Tax Reform Act. FCF is defined as net cash provided by continuing operating activities less capital expenditures for purchases of property and equipment, capitalized data and other intangible assets. Other firms may calculate non-GAAP measures differently than CoreLogic, which limits comparability between companies.
CORELOGIC, INC. |
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CONSOLIDATED STATEMENTS OF OPERATIONS |
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UNAUDITED |
||||||||||||||||||
For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||||
December 31, | December 31, | |||||||||||||||||
(in thousands, except per share amounts) | 2017 | 2016 | 2017 | 2016 | ||||||||||||||
Operating revenues | $ | 454,157 | $ | 474,914 | $ | 1,851,117 | $ | 1,952,557 | ||||||||||
Cost of services (exclusive of depreciation and amortization) | 229,537 | 258,360 | 974,851 | 1,043,937 | ||||||||||||||
Selling, general and administrative expenses | 113,117 | 113,813 | 459,842 | 458,102 | ||||||||||||||
Depreciation and amortization | 46,137 | 45,145 | 177,806 | 172,578 | ||||||||||||||
Total operating expenses |
388,791 | 417,318 | 1,612,499 | 1,674,617 | ||||||||||||||
Operating income | 65,366 | 57,596 | 238,618 | 277,940 | ||||||||||||||
Interest expense: | ||||||||||||||||||
Interest income | 209 | 1,132 | 1,532 | 3,052 | ||||||||||||||
Interest expense | 18,004 | 14,354 | 63,356 | 63,392 | ||||||||||||||
Total interest expense, net | (17,795 | ) | (13,222 | ) | (61,824 | ) | (60,340 | ) | ||||||||||
Loss on early extinguishment of debt | — | (2,188 | ) | (1,775 | ) | (26,624 | ) | |||||||||||
Tax indemnification release | — | (23,350 | ) | — | (23,350 | ) | ||||||||||||
Impairment loss on investment in affiliates | (3,412 | ) | (23,431 | ) | (3,811 | ) | (23,431 | ) | ||||||||||
Gain/(loss) on investments and other, net | 2,023 | 13,216 | (2,316 | ) | 19,779 | |||||||||||||
Income from continuing operations before equity in earnings/(losses) of affiliates and income taxes | 46,182 | 8,621 | 168,892 | 163,974 | ||||||||||||||
(Benefit)/provision for income taxes | (18,588 | ) | 2,540 | 18,172 | 54,524 | |||||||||||||
Income from continuing operations before equity in earnings/(losses) of affiliates | 64,770 | 6,081 | 150,720 | 109,450 | ||||||||||||||
Equity in earnings/(losses) of affiliates, net of tax | 46 | (99 | ) | (1,186 | ) | 496 | ||||||||||||
Net income from continuing operations | 64,816 | 5,982 | 149,534 | 109,946 | ||||||||||||||
(Loss)/income from discontinued operations, net of tax | (106 | ) | (468 | ) | 2,315 | (1,466 | ) | |||||||||||
(Loss)/gain from sale of discontinued operations, net of tax | — | (1,930 | ) | 313 | (1,930 | ) | ||||||||||||
Net income | $ | 64,710 | $ | 3,584 | $ | 152,162 | $ | 106,550 | ||||||||||
Basic income per share: | ||||||||||||||||||
Net income from continuing operations | $ | 0.79 | $ | 0.07 | $ | 1.79 | $ | 1.26 | ||||||||||
(Loss)/income from discontinued operations, net of tax | — | (0.01 | ) | 0.03 | (0.02 | ) | ||||||||||||
(Loss)/gain from sale of discontinued operations, net of tax | — | (0.02 | ) | — | (0.02 | ) | ||||||||||||
Net income | $ | 0.79 | $ | 0.04 | $ | 1.82 | $ | 1.22 | ||||||||||
Diluted income per share: | ||||||||||||||||||
Net income from continuing operations | $ | 0.78 | $ | 0.07 | $ | 1.75 | $ | 1.23 | ||||||||||
(Loss)/income from discontinued operations, net of tax | — | (0.01 | ) | 0.03 | (0.02 | ) | ||||||||||||
(Loss)/gain from sale of discontinued operations, net of tax | — | (0.02 | ) | — | (0.02 | ) | ||||||||||||
Net income | $ | 0.78 | $ | 0.04 | $ | 1.78 | $ | 1.19 | ||||||||||
Weighted-average common shares outstanding: | ||||||||||||||||||
Basic | 81,656 | 85,534 | 83,499 | 87,502 | ||||||||||||||
Diluted | 83,539 | 87,289 | 85,234 | 89,122 | ||||||||||||||
Please refer to the full Form 10-K filing for the complete financial statements and related notes that are an integral part of the financial statements. |
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CORELOGIC, INC. |
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CONSOLIDATED BALANCE SHEETS |
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UNAUDITED |
||||||||||
(in thousands, except par value) | ||||||||||
Assets | 2017 | 2016 | ||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 118,804 | $ | 72,031 | ||||||
Accounts receivable (less allowances of $8,229 and $8,857 in 2017 and 2016, respectively) | 256,595 | 269,229 | ||||||||
Prepaid expenses and other current assets | 46,837 | 43,060 | ||||||||
Income tax receivable | 7,649 | 6,905 | ||||||||
Assets of discontinued operations | 383 | 662 | ||||||||
Total current assets | 430,268 | 391,887 | ||||||||
Property and equipment, net | 447,659 | 449,199 | ||||||||
Goodwill, net | 2,250,599 | 2,107,255 | ||||||||
Other intangible assets, net | 475,613 | 478,913 | ||||||||
Capitalized data and database costs, net | 329,403 | 327,921 | ||||||||
Investment in affiliates, net | 38,989 | 40,809 | ||||||||
Deferred income tax assets, long-term | 366 | 1,516 | ||||||||
Restricted cash | 7,565 | 17,943 | ||||||||
Other assets | 96,951 | 92,091 | ||||||||
Total assets | $ | 4,077,413 | $ | 3,907,534 | ||||||
Liabilities and Equity |
||||||||||
Current liabilities: | ||||||||||
Accounts payable and accrued expenses | $ | 143,849 | $ | 168,284 | ||||||
Accrued salaries and benefits | 93,717 | 107,234 | ||||||||
Deferred revenue, current | 303,948 | 284,622 | ||||||||
Current portion of long-term debt | 70,046 | 105,158 | ||||||||
Liabilities of discontinued operations | 1,806 | 3,123 | ||||||||
Total current liabilities | 613,366 | 668,421 | ||||||||
Long-term debt, net of current | 1,683,524 | 1,496,889 | ||||||||
Deferred revenue, net of current | 504,900 | 487,134 | ||||||||
Deferred income tax liabilities, long-term | 102,571 | 120,063 | ||||||||
Other liabilities | 165,176 | 132,043 | ||||||||
Total liabilities | 3,069,537 | 2,904,550 | ||||||||
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; 80,885 and 84,368 shares issued and outstanding as of December 31, 2017 and 2016, respectively | 1 | 1 | ||||||||
Additional paid-in capital | 224,455 | 400,452 | ||||||||
Retained earnings | 877,111 | 724,949 | ||||||||
Accumulated other comprehensive loss | (93,691 | ) | (122,418 | ) | ||||||
Total CoreLogic stockholders' equity | 1,007,876 | 1,002,984 | ||||||||
Total liabilities and equity | $ | 4,077,413 | $ | 3,907,534 | ||||||
Please refer to the full Form 10-K filing for the complete financial statements and related notes that are an integral part of the financial statements. |
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CORELOGIC, INC. |
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CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||||
UNAUDITED |
||||||||||
For the Twelve Months Ended | ||||||||||
December 31, | ||||||||||
(in thousands) |
2017 | 2016 | ||||||||
Cash flows from operating activities: | ||||||||||
Net income | $ | 152,162 | $ | 106,550 | ||||||
Less: Income/(loss) from discontinued operations, net of tax | 2,315 | (1,466 | ) | |||||||
Less: Gain/(loss) from sale of discontinued operations, net of tax | 313 | (1,930 | ) | |||||||
Net income from continuing operations |
149,534 | 109,946 | ||||||||
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities: | ||||||||||
Depreciation and amortization | 177,806 | 172,578 | ||||||||
Amortization of debt issuance costs | 5,650 | 5,785 | ||||||||
Provision for bad debt and claim losses | 16,725 | 18,869 | ||||||||
Share-based compensation | 35,867 | 39,849 | ||||||||
Tax benefit related to stock options | — | (2,315 | ) | |||||||
Equity in losses/(earnings) of affiliates, net of taxes | 1,186 | (496 | ) | |||||||
Gain on sale of property and equipment | (246 | ) | (31 | ) | ||||||
Loss on early extinguishment of debt | 1,775 | 26,624 | ||||||||
Deferred income tax | (40,769 | ) | 18,213 | |||||||
Impairment loss on investment in affiliates | 3,811 | 23,431 | ||||||||
Tax indemnification release | — | 23,350 | ||||||||
Loss/(gain) on investments and other, net | 2,316 | (19,779 | ) | |||||||
Change in operating assets and liabilities, net of acquisitions: | ||||||||||
Accounts receivable | 15,522 | (24,391 | ) | |||||||
Prepaid expenses and other current assets | 4,942 | 2,823 | ||||||||
Accounts payable and accrued expenses | (44,629 | ) | (29,267 | ) | ||||||
Deferred revenue | 36,577 | 53,682 | ||||||||
Income taxes | (43 | ) | 28,740 | |||||||
Dividends received from investments in affiliates | 1,198 | 9,044 | ||||||||
Other assets and other liabilities | 12,708 | (42,652 | ) | |||||||
Net cash provided by operating activities - continuing operations | 379,930 | 414,003 | ||||||||
Net cash provided by/(used in) operating activities - discontinued operations | 3,655 | (444 | ) | |||||||
Total cash provided by operating activities | $ | 383,585 | $ | 413,559 | ||||||
Cash flows from investing activities: | ||||||||||
Purchases of subsidiary shares from and other decreases in noncontrolling interests | $ | — | $ | (18,023 | ) | |||||
Purchases of property and equipment | (40,508 | ) | (45,211 | ) | ||||||
Purchases of capitalized data and other intangible assets | (34,990 | ) | (35,507 | ) | ||||||
Cash paid for acquisitions, net of cash acquired | (189,923 | ) | (396,941 | ) | ||||||
Purchases of investments | (5,900 | ) | (3,366 | ) | ||||||
Proceeds from sale of marketable securities | — | 21,819 | ||||||||
Proceeds from sale of property and equipment | 335 | 31 | ||||||||
Proceeds from sale of investments | 1,000 | 2,451 | ||||||||
Change in restricted cash | 7,947 | (7,017 | ) | |||||||
Net cash used in investing activities - continuing operations | (262,039 | ) | (481,764 | ) | ||||||
Net cash provided by investing activities - discontinued operations | — | — | ||||||||
Total cash used in investing activities | $ | (262,039 | ) | $ | (481,764 | ) | ||||
Cash flows from financing activities: | ||||||||||
Proceeds from long-term debt | $ | 1,995,000 | $ | 962,000 | ||||||
Debt issuance costs | (14,294 | ) | (6,314 | ) | ||||||
Debt extinguishment premium | — | (16,271 | ) | |||||||
Repayment of long-term debt | (1,842,290 | ) | (709,983 | ) | ||||||
Shares repurchased and retired | (207,416 | ) | (195,003 | ) | ||||||
Proceeds from issuance of shares in connection with share-based compensation | 9,595 | 14,907 | ||||||||
Minimum tax withholdings related to net share settlements | (14,043 | ) | (10,507 | ) | ||||||
Tax benefit related to stock options | — | 2,315 | ||||||||
Net cash (used in)/provided by financing activities - continuing operations | (73,448 | ) | 41,144 | |||||||
Net cash used in financing activities - discontinued operations | — | — | ||||||||
Total cash (used in)/provided by financing activities | $ | (73,448 | ) | $ | 41,144 | |||||
Effect of exchange rate on cash | (1,325 | ) | 2 | |||||||
Net change in cash and cash equivalents | $ | 46,773 | $ | (27,059 | ) | |||||
Cash and cash equivalents at beginning of year | 72,031 | 99,090 | ||||||||
Less: Change in cash and cash equivalents of discontinued operations | 3,655 | (444 | ) | |||||||
Plus: Cash swept from/(to) discontinued operations | 3,655 | (444 | ) | |||||||
Cash and cash equivalents at end of year | $ | 118,804 | $ | 72,031 | ||||||
Please refer to the full Form 10-K filing for the complete financial statements and related notes that are an integral part of the financial statements. |
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CORELOGIC, INC. |
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RECONCILIATION OF ADJUSTED EBITDA |
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UNAUDITED |
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For the Three Months Ended December 31, 2017 | ||||||||||||||||||||||
(in thousands) | PIRM | UWS | Corporate | Elim | CoreLogic | |||||||||||||||||
Net income/(loss) from continuing operations | $ | 28,025 | $ | 54,752 | $ | (17,961 | ) | $ | — | $ | 64,816 | |||||||||||
Income taxes | — | — | (18,558 | ) | — | (18,558 | ) | |||||||||||||||
Depreciation and amortization | 25,077 | 15,374 | 5,686 | — | 46,137 | |||||||||||||||||
Interest expense, net | 323 | 104 | 17,368 | — | 17,795 | |||||||||||||||||
Share-based compensation | 1,428 | 543 | 4,338 | — | 6,309 | |||||||||||||||||
Non-operating (gains)/losses | (4,839 | ) | 548 | 2,272 | — | (2,019 | ) | |||||||||||||||
Efficiency investments | — | — | 10 | — | 10 | |||||||||||||||||
Transaction costs | — | 779 | 1,287 | — | 2,066 | |||||||||||||||||
Amortization of acquired intangibles included in equity in losses of affiliates | 156 | — | — | — | 156 | |||||||||||||||||
Adjusted EBITDA | $ | 50,170 | $ | 72,100 | $ | (5,558 | ) | $ | — | $ | 116,712 | |||||||||||
For the Three Months Ended December 31, 2016 | ||||||||||||||||||||||
(in thousands) | PIRM | UWS | Corporate | Elim | CoreLogic | |||||||||||||||||
Net income/(loss) from continuing operations | $ | 29,986 | $ | 39,020 | $ | (63,024 | ) | $ | — | $ | 5,982 | |||||||||||
Income taxes | — | — | 2,627 | — | 2,627 | |||||||||||||||||
Depreciation and amortization | 25,101 | 15,706 | 4,338 | — | 45,145 | |||||||||||||||||
Interest expense, net | 569 | 400 | 12,253 | — | 13,222 | |||||||||||||||||
Share-based compensation | 2,186 | 2,468 | 5,337 | — | 9,991 | |||||||||||||||||
Non-operating (gains)/losses | (7,474 | ) | 17,870 | 28,075 | — | 38,471 | ||||||||||||||||
Efficiency investments | — | — | (15 | ) | — | (15 | ) | |||||||||||||||
Transaction costs | 9 | — | 25 | — | 34 | |||||||||||||||||
Amortization of acquired intangibles included in equity in losses of affiliates | 156 | 567 | — | — | 723 | |||||||||||||||||
Adjusted EBITDA | $ | 50,533 | $ | 76,031 | $ | (10,384 | ) | $ | — | $ | 116,180 | |||||||||||
For the Year Ended December 31, 2017 | |||||||||||||||||||||
(in thousands) | PIRM | UWS | Corporate | Elim | CoreLogic | ||||||||||||||||
Net income/(loss) from continuing operations | $ | 86,988 | $ | 222,928 | $ | (160,382 | ) | $ | — | $ | 149,534 | ||||||||||
Income taxes | — | — | 17,438 | — | 17,438 | ||||||||||||||||
Depreciation and amortization | 99,558 | 57,397 | 20,851 | — | 177,806 | ||||||||||||||||
Interest expense | 1,721 | 944 | 59,159 | — | 61,824 | ||||||||||||||||
Share-based compensation | 5,952 | 5,990 | 23,925 | — | 35,867 | ||||||||||||||||
Non-operating losses | 12,341 | 9,606 | 6,568 | — | 28,515 | ||||||||||||||||
Efficiency investments | — | 2,220 | 1,604 | — | 3,824 | ||||||||||||||||
Transaction costs | — | 779 | 3,747 | — | 4,526 | ||||||||||||||||
Amortization of acquired intangibles included in equity in earnings of affiliates | 625 | 204 | — | — | 829 | ||||||||||||||||
Adjusted EBITDA | $ | 207,185 | $ | 300,068 | $ | (27,090 | ) | $ | — | $ | 480,163 | ||||||||||
For the Year Ended December 31, 2016 | |||||||||||||||||||||
(in thousands) | PIRM | UWS | Corporate | Elim | CoreLogic | ||||||||||||||||
Net income/(loss) from continuing operations | $ | 105,349 | $ | 237,767 | $ | (233,170 | ) | — | $ | 109,946 | |||||||||||
Income taxes | — | — | 55,537 | — | 55,537 | ||||||||||||||||
Depreciation and amortization | 101,196 | 53,823 | 17,559 | — | 172,578 | ||||||||||||||||
Interest expense | 2,393 | 1,709 | 56,238 | — | 60,340 | ||||||||||||||||
Share-based compensation | 9,782 | 8,557 | 21,510 | — | 39,849 | ||||||||||||||||
Non-operating (gains)/losses | (7,475 | ) | 17,874 | 42,783 | — | 53,182 | |||||||||||||||
Efficiency investments | — | — | 1,446 | — | 1,446 | ||||||||||||||||
Transaction costs | 39 | 2,709 | 4,111 | — | 6,859 | ||||||||||||||||
Amortization of acquired intangibles included in equity in earnings of affiliates | 625 | 2,265 | — | — | 2,890 | ||||||||||||||||
Adjusted EBITDA | $ | 211,909 | $ | 324,704 | $ | (33,986 | ) | $ | — | $ | 502,627 | ||||||||||
CORELOGIC, INC. |
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RECONCILIATION OF ADJUSTED EPS |
||||||||||
UNAUDITED |
||||||||||
For the Three Months Ended December 31, | ||||||||||
(diluted income per share) | 2017 | 2016 | ||||||||
Net income from continuing operations | $ | 0.78 | $ | 0.07 | ||||||
Share-based compensation | 0.08 | 0.11 | ||||||||
Non-operating (gains)/losses | (0.02 | ) | 0.44 | |||||||
Transaction costs | 0.02 | — | ||||||||
Depreciation and amortization of acquired software and intangibles | 0.22 | 0.19 | ||||||||
Amortization of acquired intangibles included in equity in losses of affiliates | — | 0.01 | ||||||||
Income tax effect on adjustments | (0.53 | ) | (0.26 | ) | ||||||
Adjusted EPS | $ | 0.55 | $ | 0.56 | ||||||
For the Year Ended December 31, | ||||||||||
2017 | 2016 | |||||||||
Net income from continuing operations |
$ | 1.75 | $ | 1.23 | ||||||
Share-based compensation | 0.42 | 0.45 | ||||||||
Non-operating losses | 0.33 | 0.60 | ||||||||
Efficiency investments | 0.04 | 0.02 | ||||||||
Transaction costs | 0.05 | 0.08 | ||||||||
Depreciation and amortization of acquired software and intangibles | 0.82 | 0.72 | ||||||||
Amortization of acquired intangibles included in equity in earnings of affiliates | 0.01 | 0.03 | ||||||||
Income tax effect on adjustments | (1.05 | ) | (0.71 | ) | ||||||
Adjusted EPS | $ | 2.37 | $ | 2.42 | ||||||
CORELOGIC, INC. |
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RECONCILIATION TO FREE CASH FLOW |
||||||
UNAUDITED |
||||||
(in thousands) | For the Year Ended December 31, 2017 | |||||
Net cash provided by operating activities - continuing operations | $ | 379,930 | ||||
Purchases of property and equipment | (40,508 | ) | ||||
Purchases of capitalized data and other intangible assets | (34,990 | ) | ||||
Free Cash Flow | $ | 304,432 |