Exhibit 99.1
Press Release
Investors: | Media: | |||
| Parag Bhansali | Michelle Kersch | |||
| (904) 854-8640 | (904) 854-5043 |
Lender Processing Services, Inc. Reports Second Quarter Earnings
Year-over-year revenues up 8.3%
Reiterates Full-Year Revenue and Earnings Guidance
Year-over-year revenues up 8.3%
Reiterates Full-Year Revenue and Earnings Guidance
JACKSONVILLE, Fla. – August 5, 2008 – Lender Processing Services, Inc. (NYSE:LPS), a leading provider of integrated technology and services to the mortgage industry, today reported consolidated and combined revenues of $460.4 million for second quarter 2008, an increase of 8.3% compared to second quarter 2007, and net earnings of $63.5 million compared to $60.5 million in the prior year quarter.
On a pro forma basis, adjusted net income for second quarter 2008 was $57.8 million or 61 cents per share, compared to $51.5 million or 53 cents per share in the second quarter of 2007, up 15.1% on a per share basis. Second quarter 2008 adjustments included: a non-recurring charge of 3 cents per share, pro forma interest expense of 15 cents per share and purchase amortization of 6 cents per share. Second quarter 2007 adjustments included: pro forma interest expense of 16 cents per share and purchase amortization of 6 cents per share.
“Second quarter results were very strong despite difficult market conditions and overall weakness in the economy. LPS, with its solid market position and unique capabilities, remains well-positioned as a stand-alone public company to grow in the second half of 2008 and beyond,” said William P. Foley, Chairman of LPS. “Overall, earnings were in line with our
expectations. Strong results in our Default Services business more than offset a decline in our Loan Facilitation business,” added Jeff Carbiener, President and CEO of LPS.
Adjusted operating income (excluding the non-recurring charge noted earlier) of $109.1 million in the quarter grew 8.7% compared to second quarter 2007. Subsequent references to operating income later in this release are on a similar basis.
Pro forma adjusted free cash flow (net cash provided by operating activities excluding the non-recurring charges and including the pro forma interest expense noted earlier, minus additions to property and equipment and capitalized software) for the six months ended June 30, 2008, was $86.7 million compared to $78.1 million for the same period in 2007.
Technology Data and Analytics
Revenue for the segment of $141.7 million was essentially flat compared to second quarter 2007 while adjusted operating income of $45.1 million was $1.8 million below the prior year. Mortgage Processing revenue was $82.0 million compared to $83.2 million in the prior year quarter primarily due to the deconversion of ABN’s 1.5 million loan portfolio in the fourth quarter of 2007. Other TD&A revenues were $59.7 million compared to $58.8 million in second quarter 2007 mainly due to strong growth in our Desktop application partially offset by declines in loan origination software offerings. Overall adjusted operating income declined primarily due to fewer sales of higher margin loan origination software and lower income in some of our data and analytics offerings, somewhat offset by higher contributions from mortgage processing and Desktop.
Loan Transaction Services
For the quarter, revenues of $322.3 million and adjusted operating income of $75.8 million were 14.4% and 22.7% above second quarter 2007, respectively. Loan Facilitation Services revenues of $125.1 million declined 29.6% compared to the same period last year primarily due to lower appraisal volumes and, tax and other loan origination related revenues.
Default Services, on the other hand, more than offset this decline with revenues of $197.2 million which grew 89.7% over second quarter 2007 mainly due to strong market growth and our ability to continue to gain market share. Overall adjusted operating income grew due to higher income in Default Services partially offset by lower contributions from some of our loan origination related services like tax and our property exchange business.
Other Items
Net corporate expenses, excluding the non-recurring charges noted earlier, totaled $11.8 million compared to $8.3 million in second quarter 2007. Expenses increased primarily due to higher incentive and stock related compensation charges.
Outlook
“We’re off to a strong start as an independent public company and while the broader economic environment and the real estate market in particular, remain challenging, LPS with its unique mix of businesses is well-positioned for the future” said Carbiener. “Accordingly, our outlook for full year adjusted earnings remains unchanged, which, based on lower shares outstanding, now translates to $2.36 to $2.48 per diluted share compared to our earlier guidance of $2.34 to $2.46 per diluted share.”
Use of Non-GAAP Financial Information
LPS reports several non-GAAP measures, including adjusted operating income (EBIT) and adjusted net earnings. The adjusted results exclude non-recurring and acquisition related amortization costs and include pro forma debt related interest expenses. Non-GAAP measures should be considered in conjunction with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP net earnings. A reconciliation of these non-GAAP measures to related GAAP measures is included in the attachments to this release.
Conference Call and Webcast
LPS will host a joint conference call with Fidelity National Information Services (NYSE:FIS) to discuss these results on Tuesday, August 5, 2008, at 5:00 pm Eastern time. Interested parties are invited to listen to the live webcast by logging on the Investor Relations section atwww.lpsvcs.com. Supplemental materials will be available on the website. Those wishing to participate via the conference call may do so by calling 800-762-4832 (USA) or 480-248-5088 (International). A replay of the webcast will be available on the website shortly after the call where it will be archived for one month. A replay of the conference call will be available through August 12, 2008 by dialing 800-475-6701 (USA) or 320-365-3844 (International). The access code will be 953904.
To access a printer friendly version of this release and accompanying exhibits, go to http://www.lpsvcs.com/investor.
About Lender Processing Services
Lender Processing Services, Inc. (LPS) is a leading provider of integrated technology and services to the mortgage industry.LPS offers solutions that span the mortgage continuum, including lead generation, origination, workflow automation (Desktop), servicing, portfolio retention and default, augmented by the company’s award-winning customer support and professional services. Approximately 50 percent of all U.S. mortgages are serviced using LPS’ Mortgage Servicing Package (MSP). In fact, many of the nation’s top servicers rely on MSP, including seven of the top 10 and 16 of the top 20. LPS also offers proprietary mortgage and real estate data and analytics for the mortgage and capital markets industries. For more information about LPS, please visit www.lpsvcs.com.
Forward Looking Statements
This press release contains forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements are based on management’s beliefs, as well as assumptions made by, and information currently
available to, management. Because such statements are based on expectations as to future economic performance and are not statements of fact, actual results may differ materially from those projected. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The risks and uncertainties which forward-looking statements are subject to include, but are not limited to changes in general economic, business and political conditions and other risks detailed in the “Statement Regarding Forward-Looking Information,” “Risk Factors” and other sections of the Company’s Form 10 and other filings with the Securities and Exchange Commission.
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Exhibit A
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES AND AFFILIATES
Consolidated and Combined Statements of Earnings
(In thousands, except per share amounts)
Consolidated and Combined Statements of Earnings
(In thousands, except per share amounts)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Processing and services revenues | $ | 460,380 | $ | 425,010 | $ | 913,106 | $ | 826,438 | ||||||||
| Cost of revenues | 294,963 | 269,042 | 585,137 | 526,823 | ||||||||||||
| Selling, general and administrative expenses | 60,782 | 55,603 | 118,999 | 109,072 | ||||||||||||
| Operating income | 104,635 | 100,365 | 208,970 | 190,543 | ||||||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | 303 | 395 | 563 | 745 | ||||||||||||
| Interest expense | (40 | ) | (35 | ) | (58 | ) | (77 | ) | ||||||||
| Other income, net | 282 | — | 282 | — | ||||||||||||
| Total other income (expense) | 545 | 360 | 787 | 668 | ||||||||||||
| Earnings before income taxes, equity in losses of unconsolidated entity and minority interest | 105,180 | 100,725 | 209,757 | 191,211 | ||||||||||||
| Provision for income taxes | 40,810 | 38,987 | 81,386 | 74,010 | ||||||||||||
| Earnings before equity in losses of unconsolidated entity and minority interest | 64,370 | 61,738 | 128,371 | 117,201 | ||||||||||||
| Equity in losses of unconsolidated entity | (413 | ) | (958 | ) | (2,370 | ) | (1,720 | ) | ||||||||
| Minority interest | (411 | ) | (274 | ) | (723 | ) | (436 | ) | ||||||||
| Net earnings | $ | 63,546 | $ | 60,506 | $ | 125,278 | $ | 115,045 | ||||||||
Exhibit B
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES AND AFFILIATES
Condensed Consolidated and Combined Balance Sheets
(In thousands)
Condensed Consolidated and Combined Balance Sheets
(In thousands)
| June 30, 2008 | December 31, | |||||||
| (Unaudited) | 2007 | |||||||
Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 18,628 | $ | 39,566 | ||||
| Trade receivables, net of allowance for doubtful accounts | 350,565 | 286,236 | ||||||
| Other current assets | 71,725 | 81,734 | ||||||
| Total current assets | 440,918 | 407,536 | ||||||
| Property and equipment, net of accumulated depreciation and amortization | 92,487 | 95,620 | ||||||
| Goodwill | 1,086,606 | 1,078,154 | ||||||
| Intangible assets, net of accumulated amortization | 103,347 | 118,129 | ||||||
| Computer software, net of accumulated amortization | 149,562 | 150,372 | ||||||
| Other non-current assets | 112,820 | 112,232 | ||||||
| Total assets | $ | 1,985,740 | $ | 1,962,043 | ||||
Liabilities and Stockholder’s Equity | ||||||||
| Total current liabilities | $ | 192,533 | $ | 168,193 | ||||
| Total non-current liabilities | 107,933 | 112,761 | ||||||
| Total liabilities | 300,466 | 280,954 | ||||||
| Minority interest | 10,773 | 10,050 | ||||||
| Stockholder’s equity | 1,674,501 | 1,671,039 | ||||||
| Total liabilities and stockholder’s equity | $ | 1,985,740 | $ | 1,962,043 | ||||
Exhibit C
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES AND AFFILIATES
Consolidated and Combined Statements of Cash Flows
(In thousands)
Consolidated and Combined Statements of Cash Flows
(In thousands)
| Six months ended | ||||||||
| June 30, | ||||||||
| 2008 | 2007 | |||||||
| (Unaudited) | ||||||||
Cash flows from operating activities: | ||||||||
| Net earnings | $ | 125,278 | $ | 115,045 | ||||
| Adjustment to reconcile net earnings to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 44,576 | 52,373 | ||||||
| Deferred income taxes | 3,968 | 13,634 | ||||||
| Stock-based compensation cost | 9,120 | 7,215 | ||||||
| Equity in losses of unconsolidated entity | 2,370 | 1,720 | ||||||
| Minority interest | 723 | 436 | ||||||
| Changes in assets and liabilities, net of effects from acquisitions | ||||||||
| Net increase in trade receivables | (63,750 | ) | (55,628 | ) | ||||
| Net (increase) decrease in other receivables | (4,348 | ) | 22,286 | |||||
| Net decrease (increase) in prepaid expenses and other assets | 7,931 | (13,444 | ) | |||||
| Net increase in deferred contract costs | (3,420 | ) | (18,674 | ) | ||||
| Net decrease (increase) in deferred revenue | 8,235 | (18,249 | ) | |||||
| Net decrease in accounts payable, accrued liabilities and other liabilities | 6,000 | 26,675 | ||||||
| Net cash provided by operating activities | 136,683 | 133,389 | ||||||
Cash flows from investing activities: | ||||||||
| Additions to property and equipment | (9,376 | ) | (6,099 | ) | ||||
| Additions to capitalized software | (15,761 | ) | (18,937 | ) | ||||
| Acquisitions, net of cash acquired | (15,488 | ) | (37,420 | ) | ||||
| Net cash used in investing activities | (40,625 | ) | (62,456 | ) | ||||
Cash flows from financing activities: | ||||||||
| Net distributions to Parent | (116,996 | ) | (69,639 | ) | ||||
| Net cash used in financing activities | (116,996 | ) | (69,639 | ) | ||||
| Net (decrease) increase in cash and cash equivalents | (20,938 | ) | 1,294 | |||||
| Cash and cash equivalents, at beginning of period | 39,566 | 47,783 | ||||||
| Cash and cash equivalents, at end of period | $ | 18,628 | $ | 49,077 | ||||
| Non-cash contribution relating to stock compensation | $ | 9,120 | $ | 7,215 | ||||
| Non-cash contribution for Espiel acquisition | $ | — | $ | 6,000 | ||||
| Non-cash redistribution of assets to Parent | $ | (13,801 | ) | $ | — | |||
Exhibit D
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES AND AFFILIATES
SUPPLEMENTAL FINANCIAL INFORMATION — UNAUDITED
(In thousands, except per share amounts)
SUPPLEMENTAL FINANCIAL INFORMATION — UNAUDITED
(In thousands, except per share amounts)
| Six Months Ended | ||||||||||||||||||||||||||||||||||||
| June 30, | Quarter Ended | Full Year | ||||||||||||||||||||||||||||||||||
| 2008 | 2007 | 6/30/2008 | 3/31/2008 | 12/31/2007 | 9/30/2007 | 6/30/2007 | 3/31/2007 | 2007 | ||||||||||||||||||||||||||||
1. Revenues | ||||||||||||||||||||||||||||||||||||
| Technology, Data and Analytics (TD&A): | ||||||||||||||||||||||||||||||||||||
| Mortgage Processing | $ | 162,228 | $ | 165,531 | $ | 82,062 | $ | 80,166 | $ | 92,883 | $ | 81,256 | $ | 83,233 | $ | 82,298 | $ | 339,670 | ||||||||||||||||||
| Other TD&A | 115,340 | 118,854 | 59,682 | 55,658 | 53,029 | 58,593 | 58,776 | 60,078 | 230,476 | |||||||||||||||||||||||||||
| Total | 277,568 | 284,385 | 141,744 | 135,824 | 145,912 | 139,849 | 142,009 | 142,376 | 570,146 | |||||||||||||||||||||||||||
| Loan Transaction Services: | ||||||||||||||||||||||||||||||||||||
| Loan Facilitation Services | 276,329 | 335,423 | 125,124 | 151,205 | 150,889 | 166,546 | 177,710 | 157,713 | 652,858 | |||||||||||||||||||||||||||
| Default Services | 366,248 | 205,506 | 197,223 | 169,025 | 144,805 | 122,710 | 103,967 | 101,539 | 473,021 | |||||||||||||||||||||||||||
| Total | 642,577 | 540,929 | 322,347 | 320,230 | 295,694 | 289,256 | 281,677 | 259,252 | 1,125,879 | |||||||||||||||||||||||||||
| Corporate and Other | (7,039 | ) | 1,124 | (3,711 | ) | (3,328 | ) | (2,940 | ) | (3,641 | ) | 1,324 | (200 | ) | (5,457 | ) | ||||||||||||||||||||
| Total Revenue | $ | 913,106 | $ | 826,438 | $ | 460,380 | $ | 452,726 | $ | 438,666 | $ | 425,464 | $ | 425,010 | $ | 401,428 | $ | 1,690,568 | ||||||||||||||||||
Revenue Growth from Prior Year Period | ||||||||||||||||||||||||||||||||||||
| Technology, Data and Analytics: | ||||||||||||||||||||||||||||||||||||
| Mortgage Processing | -2.0 | % | 3.4 | % | -1.4 | % | -2.6 | % | 13.9 | % | -1.9 | % | 5.8 | % | 1.0 | % | 4.7 | % | ||||||||||||||||||
| Other TD&A | -3.0 | % | 9.4 | % | 1.5 | % | -7.4 | % | -9.0 | % | 5.6 | % | 2.8 | % | 16.8 | % | 3.6 | % | ||||||||||||||||||
| Total | -2.4 | % | 5.8 | % | -0.2 | % | -4.6 | % | 4.4 | % | 1.1 | % | 4.5 | % | 7.1 | % | 4.2 | % | ||||||||||||||||||
| Loan Transaction Services: | ||||||||||||||||||||||||||||||||||||
| Loan Facilitation Services | -17.6 | % | 12.7 | % | -29.6 | % | -4.1 | % | -6.2 | % | 1.2 | % | 20.8 | % | 4.8 | % | 4.8 | % | ||||||||||||||||||
| Default Services | 78.2 | % | 69.9 | % | 89.7 | % | 66.5 | % | 72.1 | % | 68.8 | % | 69.2 | % | 70.6 | % | 70.3 | % | ||||||||||||||||||
| Total | 18.8 | % | 29.2 | % | 14.4 | % | 23.5 | % | 20.7 | % | 21.9 | % | 35.0 | % | 23.4 | % | 25.0 | % | ||||||||||||||||||
| Corporate and Other | -726.2 | % | -94.6 | % | -380.3 | % | nm | -140.4 | % | -140.3 | % | -89.4 | % | -102.4 | % | -114.7 | % | |||||||||||||||||||
| Total Revenue | 10.5 | % | 16.7 | % | 8.3 | % | 12.8 | % | 11.9 | % | 10.6 | % | 19.0 | % | 14.3 | % | 13.8 | % | ||||||||||||||||||
2. Depreciation and Amortization | ||||||||||||||||||||||||||||||||||||
| Depreciation and Amortization | $ | 24,827 | $ | 30,230 | $ | 11,306 | $ | 13,521 | $ | 12,831 | $ | 14,207 | $ | 15,484 | $ | 14,746 | $ | 57,268 | ||||||||||||||||||
| Purchase Price Amortization | 18,680 | 21,291 | 8,980 | 9,700 | 11,428 | 10,670 | 10,316 | 10,975 | 43,389 | |||||||||||||||||||||||||||
| Other Amortization | 1,069 | 852 | 594 | 475 | 496 | 602 | 452 | 400 | 1,950 | |||||||||||||||||||||||||||
| Total Depreciation and Amortization | $ | 44,576 | $ | 52,373 | $ | 20,880 | $ | 23,696 | $ | 24,755 | $ | 25,479 | $ | 26,252 | $ | 26,121 | $ | 102,607 | ||||||||||||||||||
3. Stock Compensation Expense | ||||||||||||||||||||||||||||||||||||
| Stock Compensation Expense, Excluding Acceleration Charges | $ | 8,982 | $ | 7,215 | $ | 4,295 | $ | 4,687 | $ | 3,235 | $ | 3,607 | $ | 3,645 | $ | 3,570 | $ | 14,057 | ||||||||||||||||||
| Stock Acceleration Expense | 138 | — | 138 | — | — | — | — | — | — | |||||||||||||||||||||||||||
| Total Stock Compensation Expense | $ | 9,120 | $ | 7,215 | $ | 4,433 | $ | 4,687 | $ | 3,235 | $ | 3,607 | $ | 3,645 | $ | 3,570 | $ | 14,057 | ||||||||||||||||||
Exhibit E
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES AND AFFILIATES
NON-GAAP FINANCIAL INFORMATION — UNAUDITED
(In thousands, except per share data)
NON-GAAP FINANCIAL INFORMATION — UNAUDITED
(In thousands, except per share data)
| Six Months Ended June 30, | Quarter Ended | Full Year | ||||||||||||||||||||||||||||||||||
| 2008 | 2007 | 6/30/2008 | 3/31/2008 | 12/31/2007 | 9/30/2007 | 6/30/2007 | 3/31/2007 | 2007 | ||||||||||||||||||||||||||||
1. EBIT — Consolidated | ||||||||||||||||||||||||||||||||||||
| Revenue | $ | 913,106 | $ | 826,438 | $ | 460,380 | $ | 452,726 | $ | 438,666 | $ | 425,464 | $ | 425,010 | $ | 401,428 | $ | 1,690,568 | ||||||||||||||||||
| Cost of Sales | 585,137 | 526,823 | 294,963 | 290,174 | 270,169 | 261,655 | 269,042 | 257,781 | 1,058,647 | |||||||||||||||||||||||||||
| Selling, General and Administrative Expenses | 118,999 | 109,072 | 60,782 | 58,217 | 47,259 | 51,528 | 55,603 | 53,469 | 207,859 | |||||||||||||||||||||||||||
| Operating Income | 208,970 | 190,543 | 104,635 | 104,335 | 121,238 | 112,281 | 100,365 | 90,178 | 424,062 | |||||||||||||||||||||||||||
| Less Non-recurring Charges: | ||||||||||||||||||||||||||||||||||||
| Restructuring Costs | 2,353 | — | 2,353 | — | (4,235 | ) | — | — | — | (4,235 | ) | |||||||||||||||||||||||||
| LPS Spin Related Costs | 2,963 | — | 1,960 | 1,003 | — | — | — | — | — | |||||||||||||||||||||||||||
| Acceleration of Performance-Based Shares | 138 | — | 138 | — | — | — | — | — | — | |||||||||||||||||||||||||||
| EBIT, as adjusted | $ | 214,424 | $ | 190,543 | $ | 109,086 | $ | 105,338 | $ | 117,003 | $ | 112,281 | $ | 100,365 | $ | 90,178 | $ | 419,827 | ||||||||||||||||||
| EBIT Margin, as adjusted | 23.5 | % | 23.1 | % | 23.7 | % | 23.3 | % | 26.7 | % | 26.4 | % | 23.6 | % | 22.5 | % | 24.8 | % | ||||||||||||||||||
| Depreciation and Amortization | $ | 44,576 | $ | 52,373 | $ | 20,880 | $ | 23,696 | $ | 24,755 | $ | 25,479 | $ | 26,252 | $ | 26,121 | $ | 102,607 | ||||||||||||||||||
2. EBIT — Technology, Data and Analytics | ||||||||||||||||||||||||||||||||||||
| Revenue | $ | 277,568 | $ | 284,385 | $ | 141,744 | $ | 135,824 | $ | 145,912 | $ | 139,849 | $ | 142,009 | $ | 142,376 | $ | 570,146 | ||||||||||||||||||
| Cost of Sales | 155,507 | 160,308 | 81,397 | 74,110 | 75,048 | 78,391 | 78,187 | 82,121 | 313,747 | |||||||||||||||||||||||||||
| Selling, General and Administrative Expenses | 33,729 | 32,776 | 17,471 | 16,258 | 15,675 | 16,319 | 16,954 | 15,822 | 64,770 | |||||||||||||||||||||||||||
| Operating Income | 88,332 | 91,301 | 42,876 | 45,456 | 55,189 | 45,139 | 46,868 | 44,433 | 191,629 | |||||||||||||||||||||||||||
| Less Non-recurring Charges: | ||||||||||||||||||||||||||||||||||||
| Restructuring Costs | 2,178 | — | 2,178 | — | — | — | — | — | — | |||||||||||||||||||||||||||
| LPS Spin Related Costs | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
| Acceleration of Performance-Based Shares | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
| EBIT, as adjusted | $ | 90,510 | $ | 91,301 | $ | 45,054 | $ | 45,456 | $ | 55,189 | $ | 45,139 | $ | 46,868 | $ | 44,433 | $ | 191,629 | ||||||||||||||||||
| EBIT Margin, as adjusted | 32.6 | % | 32.1 | % | 31.8 | % | 33.5 | % | 37.8 | % | 32.3 | % | 33.0 | % | 31.2 | % | 33.6 | % | ||||||||||||||||||
| Depreciation and Amortization | $ | 29,986 | $ | 35,619 | $ | 13,971 | $ | 16,015 | $ | 16,143 | $ | 16,958 | $ | 17,437 | $ | 18,182 | $ | 68,720 | ||||||||||||||||||
3. EBIT — Loan Transaction Services | ||||||||||||||||||||||||||||||||||||
| Revenue | $ | 642,577 | $ | 540,929 | $ | 322,347 | $ | 320,230 | $ | 295,694 | $ | 289,256 | $ | 281,677 | $ | 259,252 | $ | 1,125,879 | ||||||||||||||||||
| Cost of Sales | 436,793 | 369,167 | 217,337 | 219,456 | 196,412 | 184,595 | 192,174 | 176,993 | 750,174 | |||||||||||||||||||||||||||
| Selling, General and Administrative Expenses | 57,829 | 54,753 | 29,366 | 28,463 | 27,028 | 28,351 | 27,711 | 27,042 | 110,132 | |||||||||||||||||||||||||||
| Operating Income | 147,955 | 117,009 | 75,644 | 72,311 | 72,254 | 76,310 | 61,792 | 55,217 | 265,573 | |||||||||||||||||||||||||||
| Less Non-recurring Charges: | ||||||||||||||||||||||||||||||||||||
| Restructuring Costs | 163 | — | 163 | — | — | — | — | — | — | |||||||||||||||||||||||||||
| LPS Spin Related Costs | — | �� | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
| Acceleration of Performance-Based Shares | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
| EBIT, as adjusted | $ | 148,118 | $ | 117,009 | $ | 75,807 | $ | 72,311 | $ | 72,254 | $ | 76,310 | $ | 61,792 | $ | 55,217 | $ | 265,573 | ||||||||||||||||||
| EBIT Margin, as adjusted | 23.1 | % | 21.6 | % | 23.5 | % | 22.6 | % | 24.4 | % | 26.4 | % | 21.9 | % | 21.3 | % | 23.6 | % | ||||||||||||||||||
| Depreciation and Amortization | $ | 11,496 | $ | 14,219 | $ | 5,310 | $ | 6,186 | $ | 7,254 | $ | 7,279 | $ | 7,449 | $ | 6,770 | $ | 28,752 | ||||||||||||||||||
4. EBIT — Corporate and Other | ||||||||||||||||||||||||||||||||||||
| Revenue | $ | (7,039 | ) | $ | 1,124 | $ | (3,711 | ) | $ | (3,328 | ) | $ | (2,940 | ) | $ | (3,641 | ) | $ | 1,324 | $ | (200 | ) | $ | (5,457 | ) | |||||||||||
| Cost of Sales | (7,163 | ) | (2,652 | ) | (3,771 | ) | (3,392 | ) | (1,291 | ) | (1,331 | ) | (1,319 | ) | (1,333 | ) | (5,274 | ) | ||||||||||||||||||
| Selling, General and Administrative Expenses | 27,441 | 21,543 | 13,945 | 13,496 | 4,556 | 6,858 | 10,938 | 10,605 | 32,957 | |||||||||||||||||||||||||||
| Operating Income | (27,317 | ) | (17,767 | ) | (13,885 | ) | (13,432 | ) | (6,205 | ) | (9,168 | ) | (8,295 | ) | (9,472 | ) | (33,140 | ) | ||||||||||||||||||
| Less Non-recurring Charges: | ||||||||||||||||||||||||||||||||||||
| Restructuring Costs | 12 | — | 12 | — | (4,235 | ) | — | — | — | (4,235 | ) | |||||||||||||||||||||||||
| LPS Spin Related Costs | 2,963 | — | 1,960 | 1,003 | — | — | — | — | — | |||||||||||||||||||||||||||
| Acceleration of Performance-Based Shares | 138 | — | 138 | — | — | — | — | — | — | |||||||||||||||||||||||||||
| EBIT, as adjusted | $ | (24,204 | ) | $ | (17,767 | ) | $ | (11,775 | ) | $ | (12,429 | ) | $ | (10,440 | ) | $ | (9,168 | ) | $ | (8,295 | ) | $ | (9,472 | ) | $ | (37,375 | ) | |||||||||
| Depreciation and Amortization | $ | 3,094 | $ | 2,535 | $ | 1,599 | $ | 1,495 | $ | 1,358 | $ | 1,242 | $ | 1,366 | $ | 1,169 | $ | 5,135 | ||||||||||||||||||
Exhibit E
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES AND AFFILIATES
NON-GAAP FINANCIAL INFORMATION — UNAUDITED
(In thousands, except per share data)
NON-GAAP FINANCIAL INFORMATION — UNAUDITED
(In thousands, except per share data)
| Six Months Ended June 30, | Quarter Ended | Full Year | ||||||||||||||||||||||||||||||||||
| 2008 | 2007 | 6/30/2008 | 3/31/2008 | 12/31/2007 | 9/30/2007 | 6/30/2007 | 3/31/2007 | 2007 | ||||||||||||||||||||||||||||
5. Net Earnings — Reconciliation | ||||||||||||||||||||||||||||||||||||
| Net Earnings | $ | 125,278 | $ | 115,045 | $ | 63,546 | $ | 61,732 | $ | 73,769 | $ | 67,991 | $ | 60,506 | $ | 54,539 | $ | 256,805 | ||||||||||||||||||
| Less Non-recurring Charges: | ||||||||||||||||||||||||||||||||||||
| Restructuring Costs, net of tax | 1,440 | — | 1,440 | — | (2,596 | ) | — | — | — | (2,596 | ) | |||||||||||||||||||||||||
| LPS Spin Related Costs, net of tax | 1,814 | — | 1,200 | 614 | — | — | — | — | — | |||||||||||||||||||||||||||
| Acceleration of Performance-Based Shares, net of tax | 84 | — | 84 | — | — | — | — | — | — | |||||||||||||||||||||||||||
| Net Earnings, excluding non-recurring items | 128,616 | 115,045 | 66,270 | 62,346 | 71,173 | 67,991 | 60,506 | 54,539 | 254,209 | |||||||||||||||||||||||||||
| Pro Forma Interest Expense, net of tax (1) | 28,131 | 30,230 | 13,951 | 14,180 | 14,588 | 14,805 | 15,326 | 14,904 | 59,623 | |||||||||||||||||||||||||||
| Pro Forma Net Earnings | 100,485 | 84,815 | 52,319 | 48,166 | 56,585 | 53,186 | 45,180 | 39,635 | 194,586 | |||||||||||||||||||||||||||
| Purchase Price Amortization, net of tax | 11,432 | 13,050 | 5,496 | 5,936 | 7,005 | 6,540 | 6,323 | 6,727 | 26,595 | |||||||||||||||||||||||||||
| Pro Forma Adjusted Net Earnings | $ | 111,917 | $ | 97,865 | $ | 57,815 | $ | 54,102 | $ | 63,590 | $ | 59,726 | $ | 51,503 | $ | 46,362 | $ | 221,181 | ||||||||||||||||||
| Pro Forma Net Earnings Per Share | $ | 1.04 | $ | 0.87 | $ | 0.55 | $ | 0.49 | $ | 0.58 | $ | 0.54 | $ | 0.46 | $ | 0.41 | $ | 1.99 | ||||||||||||||||||
| Pro Forma Adjusted Net Earnings Per Share (2) | $ | 1.16 | $ | 1.00 | $ | 0.61 | $ | 0.55 | $ | 0.65 | $ | 0.61 | $ | 0.53 | $ | 0.47 | $ | 2.26 | ||||||||||||||||||
| Pro Forma Diluted Weighted Average Shares (2) | 96,334 | 97,697 | 95,070 | 97,597 | 97,697 | 97,697 | 97,697 | 97,697 | 97,697 | |||||||||||||||||||||||||||
6. Cashflow — Reconciliation | ||||||||||||||||||||||||||||||||||||
| Cash Flows from Operating Activities: | ||||||||||||||||||||||||||||||||||||
| Net Earnings | $ | 125,278 | $ | 115,045 | $ | 63,546 | $ | 61,732 | $ | 73,769 | $ | 67,991 | $ | 60,506 | $ | 54,539 | $ | 256,805 | ||||||||||||||||||
| Less Non-recurring Charges: | ||||||||||||||||||||||||||||||||||||
| Restructuring Costs, net of tax | 1,440 | — | 1,440 | — | (2,596 | ) | — | — | — | (2,596 | ) | |||||||||||||||||||||||||
| LPS Spin Related Costs, net of tax | 1,814 | — | 1,200 | 614 | — | — | — | — | — | |||||||||||||||||||||||||||
| Net Earnings, excluding non-recurring items | 128,532 | 115,045 | 66,186 | 62,346 | 71,173 | 67,991 | 60,506 | 54,539 | 254,209 | |||||||||||||||||||||||||||
| Pro Forma Interest Expense, net of tax | 28,131 | 30,230 | 13,951 | 14,180 | 14,588 | 14,805 | 15,326 | 14,904 | 59,623 | |||||||||||||||||||||||||||
| Pro Forma Adjusted Net Earnings | 100,401 | 84,815 | 52,235 | 48,166 | 56,585 | 53,186 | 45,180 | 39,635 | 194,586 | |||||||||||||||||||||||||||
| Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||||||||||||||||||||||||||||
| Non-cash adjustments | 60,757 | 75,378 | 18,262 | 42,495 | 27,980 | 30,213 | 31,633 | 43,745 | 133,571 | |||||||||||||||||||||||||||
| Working capital adjustments | (49,352 | ) | (57,034 | ) | (91,474 | ) | 42,122 | (13,903 | ) | (36,445 | ) | (26,149 | ) | (30,885 | ) | (107,382 | ) | |||||||||||||||||||
| Net cash provided by (used in) operating activities | 111,806 | 103,159 | (20,977 | ) | 132,783 | 70,662 | 46,954 | 50,664 | 52,495 | 220,775 | ||||||||||||||||||||||||||
| Capital expenditures included in investing activities | (25,137 | ) | (25,036 | ) | (14,344 | ) | (10,793 | ) | (36,068 | ) | (9,448 | ) | (14,531 | ) | (10,505 | ) | (70,552 | ) | ||||||||||||||||||
| Pro Forma Adjusted Net Free Cashflow | $ | 86,669 | $ | 78,123 | $ | (35,321 | ) | $ | 121,990 | $ | 34,594 | $ | 37,506 | $ | 36,133 | $ | 41,990 | $ | 150,223 | |||||||||||||||||
Notes:
| (1) | This amount represents the interest expense associated with the $1,610.7 million in debt incurred by us in connection with the spin-off assuming the spin-off occurred on January 1, 2007. Our new bank debt bears interest at a floating rate which we estimate would have been 4.96% on the revolving credit agreement, Term Loan A and Term Loan B based on the one month LIBOR rate on June 30, 2008 (2.46%) plus a spread of 2.5%. Our new senior notes bear interest at a fixed rate of 8.125%. Amortization of capitalized debt issuance costs in connection with the borrowings included in pro forma interest expense total approximately $5.7 million for the year ended December 31, 2007 and $2.7 million for the six months ended June 30, 2008. These projections also reflect principal paydowns of approximately $36.3 million ($35 million of Term Loan A, $1.3 million of Term Loan B) per quarter under the credit agreement (other than in the first quarter after closing, in which only $1.3 million is payable) and the paydown of the revolver of $25.7 million during the first quarter of 2007. On July 10, 2008, we entered into an amortizing interest rate swap agreement to fix the one month LIBOR component of our interest expense on a portion of our floating rate debt balances at 3.275%. The notional amount of our floating rate debt fixed under the swap arrangement currently totals $420.0 million and will amortize over the life of the swap in relation to our mandatory principal repayments such that, at a minimum, 50% of the total of our term loans and unsecured senior note debt balances will be fixed. The swap arrangement terminates in July 2010. The impact of the swap is not reflected in the pro forma interest expense above. | |
| (2) | Pro forma earnings per share and pro forma diluted weighted average shares for the quarter ended June 30, 2008 are provided based on the 94,611 shares of Lender Processing Services, Inc. common stock issued to FIS shareholders on the July 2, 2008 spin date along with dilutive common stock equivalents calculated under the treasury stock method using the $33 per share closing price of LPS on July 2, 2008 as the average market price and the number of LPS options and awards issued to our employees per the terms of the spin-off. Pro forma earnings per share and pro forma diluted weighted average shares for all other periods presented above are based on the pro forma diluted shares as included in the Company’s Form 10 filed on June 20, 2008. |