Exhibit 99.1
 | Press Release |
| Investors: | Media: | |
| Parag Bhansali | Michelle Kersch | |
| (904) 854-8640 | (904) 854-5043 |
Lender Processing Services, Inc. Reports Strong First Quarter Earnings
Year-over-year revenues up 19.4 %
Adjusted EPS of 64 cents per diluted share
Year-over-year revenues up 19.4 %
Adjusted EPS of 64 cents per diluted share
JACKSONVILLE, Fla. – April 29, 2009 – Lender Processing Services, Inc. (NYSE:LPS), a leading provider of integrated technology and services to the mortgage industry, today reported consolidated revenues of $529.8 million for the first quarter of 2009, an increase of 19.4% compared to the first quarter of 2008, and net earnings of $50.0 million or 53 cents per share.
Pro forma adjusted net earnings for the first quarter of 2009 were $60.6 million, or 64 cents per share, compared to $54.1 million, or 55 cents per share, in the first quarter of 2008. Pro forma adjusted net earnings in the current quarter include $2.6 million in after-tax incremental public company costs incurred as a result of LPS being spun-off on July 2, 2008. Also, these results exclude an after-tax charge of 6 cents per share primarily relating to the recent retirement of three members of LPS’s Board and include an adjustment for purchase amortization of 5 cents per share for the first quarter of 2009 while adjustments for the prior year quarter included pro forma interest expense of 15 cents per share and purchase amortization of 6 cents per share.
“LPS is off to a strong start in 2009 despite a difficult macro-economic environment and challenging market conditions in some of its businesses. LPS, with its market leading presence
and unique portfolio of services, remains well positioned to grow profitably in 2009 and beyond,” said Lee A. Kennedy, Chairman of LPS. “First quarter earnings were solid across most of our businesses. Our Default Services business continued to deliver strong results which more than offset a decline in our Loan Facilitation Services. Also, our Mortgage Processing business had a strong quarter,” added Jeff Carbiener, President and CEO of LPS.
Operating income was $103.9 million in the quarter compared to $100.1 million in the first quarter of 2008. Adjusting for certain unusual items including the retirement related charges noted earlier, operating income was $112.9 million compared to $101.1 million in the prior year quarter.
Pro forma adjusted free cash flow (net cash provided by operating activities including the pro forma interest expense noted earlier, minus additions to property and equipment, capitalized software and certain non-recurring charges) for the quarter of $57.1 million compared to $122.0 million in the first quarter of 2008, primarily due to the timing of $82 million in pass-through customer payments received in the prior year period that were subsequently paid out in the second quarter of 2008.
Technology, Data and Analytics
Revenues for the segment were $159.9 million compared to $135.8 million in the first quarter of 2008 while operating income of $53.4 million compared to $45.5 million in the prior year quarter. Mortgage Processing revenues of $91.2 million were 13.7% above the first quarter of 2008, primarily due to higher activity based fees. Other TD&A revenues increased by 23.5% to $68.7 million compared to the prior year quarter, mainly due to strong growth in our Desktop application and Data and Analytics services. Overall operating income for the segment was higher primarily due to higher activity based fees and higher contributions from Desktop.
Loan Transaction Services
Revenues for the segment increased by 20.4% to $374.5 million compared to the first quarter of 2008 while operating income of $78.2 million compared to $68.1 million in the prior year period. Loan Facilitation Services revenues of $119.2 million declined 16.1% compared to the same period last year, mainly due to decreased appraisal volumes and lower tax and other loan origination related revenues. Default Services, on the other hand, more than offset this decline with revenues of $255.3 million which increased 51.0% over the first quarter of 2008, primarily due to continued strength in the default market and our ability to gain market share. Overall operating income for the segment grew due to higher income in Default Services, partially offset by lower contributions from loan origination related services like appraisal.
Other Items
Net corporate expenses, excluding the charge primarily relating to the recent retirement of three directors, were $18.7 million compared to $12.4 million in the first quarter of 2008 and were higher primarily due to the incremental public company costs and higher incentive compensation expenses in the current quarter.
Outlook
“We are off to a solid start in 2009 and while the broader economy and some of our markets in general pose challenges, LPS has a strong presence in each of its businesses and remains in a good position to grow earnings in 2009,” said Jeff Carbiener. “Building on the strong first quarter, we expect second quarter adjusted earnings to be in the range of $0.66-$0.68 per diluted share. For full year 2009, we now expect revenues to grow 13%-15% compared to 2008 and adjusted earnings to come in at the higher end of the $2.64-$2.74 per diluted share guidance.”
Use of Non-GAAP Financial Information
LPS reports several non-GAAP measures, including pro forma adjusted net earnings and pro forma adjusted free cash flow. The adjusted results exclude acquisition related amortization costs and include pro forma debt related interest expenses. References to non-GAAP measures are included in order to provide a more meaningful presentation and comparison to prior periods. 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 conference call to discuss these results on Wednesday, April 29, 2009, at 5:00 p.m. Eastern time. Interested parties are invited to listen to the live webcast by logging on to the Investor Relations section at www.lpsvcs.com. Supplemental materials will be available on the website. Those wishing to participate via the conference call may do so by calling 866-823-5035. 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 May 6, 2009 by dialing 888-203-1112 (access code: 7575445).
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, servicing, workflow automation
(Desktop), 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’s Mortgage Servicing Package (MSP). In fact, many of the nation’s top servicers rely on MSP, including eight of the top 10 and 14 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. Those forward-looking statements include all statements that are not historical facts, including statements about our beliefs and expectations. 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 historical 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 to which forward-looking statements are subject include, but are not limited to: changes in general economic, business and political conditions, including changes in the financial markets; the effects of our substantial leverage on our ability to make acquisitions and invest in our business; the elimination of existing and potential customers as a result of failures and consolidations in the banking and financial services industries; changes to the laws, rules and regulations that regulate our businesses as a result of the current economic and financial environment; the impact of adverse changes in the level of real estate activity on demand for certain of our services; our ability to adapt our services to changes in technology or the marketplace; risks associated with protecting information security and privacy; the impact of any potential defects, development delays, installation difficulties or system failures on our business and reputation; risks associated with our spin-off from Fidelity National Information Services, Inc. (“FIS”), including those relating to our new stand-alone public company status and limitations on our strategic and operating flexibility as a result of the tax-free nature of the spin-off; and other risks and uncertainties detailed in the “Statement Regarding Forward-Looking
Information,” “Risk Factors” and other sections of the Company’s Form 10-K and other filings with the Securities and Exchange Commission.
###
Exhibit A
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES AND AFFILIATES
Consolidated and Combined Statements of Earnings
(In thousands)
Consolidated and Combined Statements of Earnings
(In thousands)
| Three Months Ended March 31, | ||||||||
| 2009 | 2008 | |||||||
| (Unaudited) | ||||||||
| Processing and services revenues | $ | 529,817 | $ | 443,560 | ||||
| Cost of revenues | 354,702 | 288,386 | ||||||
| Gross profit | 175,115 | 155,174 | ||||||
| Selling, general and administrative expenses | 71,178 | 55,098 | ||||||
| Operating income | 103,937 | 100,076 | ||||||
| Other income (expense): | ||||||||
| Interest income | 524 | 260 | ||||||
| Interest expense | (21,914 | ) | (18 | ) | ||||
| Other expense, net | (1 | ) | — | |||||
Totalotherincome(expense) | (21,391 | ) | 242 | |||||
Earnings before income taxes, equity in losses of unconsolidated entity,minorityinterestanddiscontinuedoperation | 82,546 | 100,318 | ||||||
| Provision for income taxes | 31,575 | 38,923 | ||||||
Earnings before equity in losses of unconsolidated entity, minorityinterestanddiscontinuedoperation | 50,971 | 61,395 | ||||||
| Equity in losses of unconsolidated entity | (37 | ) | (1,957 | ) | ||||
| Minority interest | (384 | ) | (312 | ) | ||||
| Net earnings from continuing operations | 50,550 | 59,126 | ||||||
| Discontinued operation, net of tax | (504 | ) | 2,606 | |||||
| Net earnings | $ | 50,046 | $ | 61,732 | ||||
Exhibit B
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES AND AFFILIATES
Consolidated Balance Sheets
(In thousands)
Consolidated Balance Sheets
(In thousands)
| March 31, 2009 | ||||||||
| (Unaudited) | December 31, 2008 | |||||||
Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 57,910 | $ | 125,966 | ||||
| Trade receivables, net of allowance for doubtful accounts | 376,643 | 344,848 | ||||||
| Other receivables | 12,784 | 17,393 | ||||||
| Due from affiliates | — | 2,713 | ||||||
| Prepaid expenses and other current assets | 23,481 | 22,030 | ||||||
| Deferred income taxes | 40,757 | 40,757 | ||||||
| Total current assets | 511,575 | 553,707 | ||||||
| Property and equipment, net of accumulated depreciation | 104,398 | 95,542 | ||||||
| Computer software, net of accumulated amortization | 163,601 | 157,539 | ||||||
| Other intangible assets, net of accumulated amortization | 84,993 | 83,489 | ||||||
| Goodwill | 1,110,968 | 1,091,056 | ||||||
| Other non-current assets | 106,968 | 122,300 | ||||||
| Total assets | $ | 2,082,503 | $ | 2,103,633 | ||||
Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Current portion of long-term debt | $ | 107,896 | $ | 145,101 | ||||
| Trade accounts payable | 43,625 | 31,720 | ||||||
| Accrued salaries and benefits | 27,595 | 36,492 | ||||||
| Recording and transfer tax liabilities | 14,466 | 14,639 | ||||||
| Due to affiliates | 1,509 | 1,573 | ||||||
| Other accrued liabilities | 112,924 | 101,612 | ||||||
| Deferred revenues | 49,060 | 51,628 | ||||||
| Total current liabilities | 357,075 | 382,765 | ||||||
| Deferred revenues | 43,428 | 40,343 | ||||||
| Deferred income taxes, net | 24,429 | 36,557 | ||||||
| Long-term debt, net of current portion | 1,367,439 | 1,402,350 | ||||||
| Other non-current liabilities | 37,705 | 39,217 | ||||||
| Total liabilities | 1,830,076 | 1,901,232 | ||||||
| Stockholders’ equity: | ||||||||
| Preferred stock $0.0001 par value; 50 million shares authorized, none issued at March 31, 2009 or December 31, 2008 | — | — | ||||||
| Common stock $0.0001 par value; 500 million shares authorized, 95.7 million and 95.3 million shares issued at March 31, 2009 and December 31, 2008 | 10 | 9 | ||||||
| Treasury stock $0.0001 par value; 202,557 and 19,870 shares at March 31, 2009 and December 31, 2008 | (5,734 | ) | (582 | ) | ||||
| Additional paid-in capital | 125,345 | 111,849 | ||||||
| Retained earnings | 134,105 | 93,540 | ||||||
| Accumulated other comprehensive earnings (loss) | (12,935 | ) | (13,667 | ) | ||||
| Noncontrolling minority interest | 11,636 | 11,252 | ||||||
| Total stockholders’ equity | 252,427 | 202,401 | ||||||
| Total liabilities and stockholders’ equity | $ | 2,082,503 | $ | 2,103,633 | ||||
Exhibit C
LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES AND AFFILIATES
Condensed Consolidated and Combined Statements of Cash Flows
(In thousands)
Condensed Consolidated and Combined Statements of Cash Flows
(In thousands)
| Three Months Ended March 31, | ||||||||
| 2009 | 2008 | |||||||
| (Unaudited) | ||||||||
Cash flows from operating activities: | ||||||||
| Net earnings | $ | 50,046 | $ | 61,732 | ||||
| Adjustment to reconcile net earnings to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 23,991 | 23,697 | ||||||
| Amortization of debt issuance costs | 1,282 | — | ||||||
| Gain on sale of operations | (2,574 | ) | — | |||||
| Deferred income taxes | (651 | ) | 11,843 | |||||
| Stock-based compensation cost | 6,843 | 4,687 | ||||||
| Income tax benefit from exercise of stock options | (1,222 | ) | — | |||||
| Equity in losses of unconsolidated entity | 37 | 1,957 | ||||||
| Minority interest | 384 | 312 | ||||||
| Changes in assets and liabilities, net of effects from acquisitions | ||||||||
| Trade receivables | (25,871 | ) | (30,515 | ) | ||||
| Other receivables | 4,622 | (6,001 | ) | |||||
| Prepaid expenses and other assets | (6,347 | ) | 3,228 | |||||
| Deferred revenue | (479 | ) | (346 | ) | ||||
| Accounts payable, accrued liabilities and other liabilities | 25,312 | 75,756 | ||||||
| Net cash provided by operating activities | 75,373 | 146,350 | ||||||
Cash flows from investing activities: | ||||||||
| Additions to property and equipment | (11,659 | ) | (5,345 | ) | ||||
| Additions to capitalized software | (10,912 | ) | (5,448 | ) | ||||
| Net impact of acquistions and dispositions | (37,037 | ) | — | |||||
| Net cash used in investing activities | (59,608 | ) | (10,793 | ) | ||||
Cash flows from financing activities: | ||||||||
| Debt service payments | (76,276 | ) | — | |||||
| Net distributions to FIS | — | (72,144 | ) | |||||
| Stock options exercised | 714 | — | ||||||
| Income tax benefit from exercise of stock options | 1,222 | — | ||||||
| Dividends paid | (9,481 | ) | — | |||||
| Net cash used in financing activities | (83,821 | ) | (72,144 | ) | ||||
| Net (decrease) increase in cash and cash equivalents | (68,056 | ) | 63,413 | |||||
| Cash and cash equivalents, at beginning of period | 125,966 | 39,566 | ||||||
| Cash and cash equivalents, at end of period | $ | 57,910 | $ | 102,979 | ||||
| Cash paid for interest | $ | 28,763 | $ | — | ||||
| Cash paid for income taxes | $ | 7,746 | $ | — | ||||
| Non-cash contribution relating to stock compensation | $ | — | $ | 4,687 | ||||
| Non-cash redistribution of assets to FIS | $ | 434 | $ | — | ||||
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)
| Quarter Ended March 31 | Quarter Ended | |||||||||||||||||||||||||||
| 2009 | 2008 | 3/31/2009 | 12/31/2008 | 9/30/2008 | 6/30/2008 | 3/31/2008 | ||||||||||||||||||||||
1. Revenues — Continuing Operations | ||||||||||||||||||||||||||||
| Technology, Data and Analytics (TD&A): | ||||||||||||||||||||||||||||
| Mortgage Processing | $ | 91,150 | $ | 80,166 | $ | 91,150 | $ | 88,364 | $ | 83,592 | $ | 82,062 | $ | 80,166 | ||||||||||||||
| Other TD&A | 68,729 | 55,658 | 68,729 | 60,754 | 55,372 | 59,682 | 55,658 | |||||||||||||||||||||
| Total | 159,879 | 135,824 | 159,879 | 149,118 | 138,964 | 141,744 | 135,824 | |||||||||||||||||||||
| Loan Transaction Services: | ||||||||||||||||||||||||||||
| Loan Facilitation Services | 119,214 | 142,039 | 119,214 | 83,914 | 87,629 | 118,091 | 142,039 | |||||||||||||||||||||
| Default Services | 255,309 | 169,025 | 255,309 | 243,736 | 241,844 | 197,223 | 169,025 | |||||||||||||||||||||
| Total | 374,523 | 311,064 | 374,523 | 327,650 | 329,473 | 315,314 | 311,064 | |||||||||||||||||||||
| Corporate and Other | (4,585 | ) | (3,328 | ) | (4,585 | ) | (2,847 | ) | (1,675 | ) | (3,711 | ) | (3,328 | ) | ||||||||||||||
| Total Revenue | $ | 529,817 | $ | 443,560 | $ | 529,817 | $ | 473,921 | $ | 466,762 | $ | 453,347 | $ | 443,560 | ||||||||||||||
Revenue Growth from Prior Year Period | ||||||||||||||||||||||||||||
| Technology, Data and Analytics: | ||||||||||||||||||||||||||||
| Mortgage Processing | 13.7 | % | -2.6 | % | 13.7 | % | -4.9 | % | 2.9 | % | -1.4 | % | -2.6 | % | ||||||||||||||
| Other TD&A | 23.5 | % | -7.4 | % | 23.5 | % | 14.6 | % | -5.5 | % | 1.5 | % | -7.4 | % | ||||||||||||||
| Total | 17.7 | % | -4.6 | % | 17.7 | % | 2.2 | % | -0.6 | % | -0.2 | % | -4.6 | % | ||||||||||||||
| Loan Transaction Services: | ||||||||||||||||||||||||||||
| Loan Facilitation Services | -16.1 | % | -1.3 | % | -16.1 | % | -39.6 | % | -42.8 | % | -28.3 | % | -1.3 | % | ||||||||||||||
| Default Services | 51.0 | % | 66.5 | % | 51.0 | % | 68.3 | % | 97.1 | % | 89.7 | % | 66.5 | % | ||||||||||||||
| Total | 20.4 | % | 26.7 | % | 20.4 | % | 15.4 | % | 19.4 | % | 17.3 | % | 26.7 | % | ||||||||||||||
| Corporate and Other | n/m | n/m | n/m | n/m | n/m | n/m | n/m | |||||||||||||||||||||
| Total Revenue | 19.4 | % | 14.4 | % | 19.4 | % | 11.0 | % | 13.3 | % | 10.0 | % | 14.4 | % | ||||||||||||||
2. Depreciation and Amortization — Continuing Operations | ||||||||||||||||||||||||||||
| Depreciation and Amortization | $ | 14,074 | $ | 13,498 | $ | 14,074 | $ | 13,697 | $ | 12,594 | $ | 11,286 | $ | 13,498 | ||||||||||||||
| Purchase Price Amortization | 8,083 | 9,700 | 8,083 | 10,711 | 10,627 | 8,980 | 9,700 | |||||||||||||||||||||
| Other Amortization | 1,829 | 475 | 1,829 | 596 | 579 | 594 | 475 | |||||||||||||||||||||
| Total Depreciation and Amortization | $ | 23,986 | $ | 23,673 | $ | 23,986 | $ | 25,004 | $ | 23,800 | $ | 20,860 | $ | 23,673 | ||||||||||||||
3. Stock Compensation Expense (1) | ||||||||||||||||||||||||||||
| Stock Compensation Expense, Excluding Acceleration Charges | $ | 6,044 | $ | 4,687 | $ | 6,044 | $ | 6,603 | $ | 5,790 | $ | 4,295 | $ | 4,687 | ||||||||||||||
| Stock Acceleration Expense | 799 | — | 799 | — | — | 138 | — | |||||||||||||||||||||
| Total Stock Compensation Expense | $ | 6,843 | $ | 4,687 | $ | 6,843 | $ | 6,603 | $ | 5,790 | $ | 4,433 | $ | 4,687 | ||||||||||||||
| (1) | As the Company does not allocate stock compensation expense to the individual business units, there is no related expense associated with the discontinued operation. |
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)
| Quarter Ended March 31 | Quarter Ended | |||||||||||||||||||||||||||
| 2009 | 2008 | 3/31/2009 | 12/31/2008 | 9/30/2008 | 6/30/2008 | 3/31/2008 | ||||||||||||||||||||||
4. Statement of Earnings | ||||||||||||||||||||||||||||
| Processing and services revenues | $ | 529,817 | $ | 443,560 | $ | 529,817 | $ | 473,921 | $ | 466,762 | $ | 453,347 | $ | 443,560 | ||||||||||||||
| Cost of revenues | 354,702 | 288,386 | 354,702 | 294,069 | 300,560 | 293,464 | 288,386 | |||||||||||||||||||||
| Gross profit | 175,115 | 155,174 | 175,115 | 179,852 | 166,202 | 159,883 | 155,174 | |||||||||||||||||||||
| Selling, general and administrative expenses | 71,178 | 55,098 | 71,178 | 58,298 | 57,909 | 58,570 | 55,098 | |||||||||||||||||||||
| Operating income | 103,937 | 100,076 | 103,937 | 121,554 | 108,293 | 101,313 | 100,076 | |||||||||||||||||||||
| Other income (expense): | ||||||||||||||||||||||||||||
| Interest income | 524 | 260 | 524 | 566 | 476 | 303 | 260 | |||||||||||||||||||||
| Interest expense | (21,914 | ) | (18 | ) | (21,914 | ) | (25,306 | ) | (24,565 | ) | (38 | ) | (18 | ) | ||||||||||||||
| Other income (expense), net | (1 | ) | — | (1 | ) | (4 | ) | (5 | ) | 282 | — | |||||||||||||||||
| Total other income (expense) | (21,391 | ) | 242 | (21,391 | ) | (24,744 | ) | (24,094 | ) | 547 | 242 | |||||||||||||||||
| Earnings before income taxes, equity in losses of unconsolidated entity, minority interest and discontinued operation | 82,546 | 100,318 | 82,546 | 96,810 | 84,199 | 101,860 | 100,318 | |||||||||||||||||||||
| Provision for income taxes | 31,575 | 38,923 | 31,575 | 35,455 | 32,669 | 39,522 | 38,923 | |||||||||||||||||||||
| Earnings before equity in losses of unconsolidated entity, minority and discontinued operation | 50,971 | 61,395 | 50,971 | 61,355 | 51,530 | 62,338 | 61,395 | |||||||||||||||||||||
| Equity in loss of unconsolidated affiliate | (37 | ) | (1,957 | ) | (37 | ) | (833 | ) | (1,484 | ) | (413 | ) | (1,957 | ) | ||||||||||||||
| Minority interest | (384 | ) | (312 | ) | (384 | ) | (148 | ) | (330 | ) | (411 | ) | (312 | ) | ||||||||||||||
| Net earnings from continuing operations | 50,550 | 59,126 | 50,550 | 60,374 | 49,716 | 61,514 | 59,126 | |||||||||||||||||||||
| Discontinued operations, net of tax | (504 | ) | 2,606 | (504 | ) | (6,045 | ) | 1,565 | 2,032 | 2,606 | ||||||||||||||||||
| Net earnings | $ | 50,046 | $ | 61,732 | $ | 50,046 | $ | 54,329 | $ | 51,281 | $ | 63,546 | $ | 61,732 | ||||||||||||||
| Net earnings per diluted share — continuing operations | $ | 0.53 | $ | 0.60 | $ | 0.53 | $ | 0.63 | $ | 0.52 | $ | 0.65 | $ | 0.60 | ||||||||||||||
| Net earnings per diluted share — discontinued operations | $ | 0.00 | $ | 0.03 | $ | 0.00 | ($0.06 | ) | $ | 0.02 | $ | 0.02 | $ | 0.03 | ||||||||||||||
| Net earnings per diluted share | $ | 0.53 | $ | 0.63 | $ | 0.53 | $ | 0.57 | $ | 0.54 | $ | 0.67 | $ | 0.63 | ||||||||||||||
5. EBIT — Discontinued Operations (1) | ||||||||||||||||||||||||||||
| Revenue | $ | 296 | $ | 9,166 | $ | 296 | $ | 2,204 | $ | 5,916 | $ | 7,033 | $ | 9,166 | ||||||||||||||
| Cost of Sales | 503 | $ | 1,788 | 503 | 1,571 | 1,521 | 1,499 | 1,788 | ||||||||||||||||||||
| Selling, General and Administrative Expenses | 499 | 3,119 | 499 | 1,814 | 1,837 | 2,212 | 3,119 | |||||||||||||||||||||
| Operating Income | (706 | ) | 4,259 | (706 | ) | (1,181 | ) | 2,558 | 3,322 | 4,259 | ||||||||||||||||||
| Less Non-recurring Charges: | ||||||||||||||||||||||||||||
| Restructuring Costs | — | — | — | — | — | — | — | |||||||||||||||||||||
| LPS Spin Related Costs | — | — | — | — | — | — | — | |||||||||||||||||||||
| Acceleration of Performance-Based Shares | — | — | — | — | — | — | — | |||||||||||||||||||||
| EBIT, as adjusted | $ | (706 | ) | $ | 4,259 | $ | (706 | ) | $ | (1,181 | ) | $ | 2,558 | $ | 3,322 | $ | 4,259 | |||||||||||
| Depreciation and Amortization | $ | 5 | $ | 24 | $ | 5 | $ | 17 | $ | 19 | $ | 20 | $ | 24 | ||||||||||||||
| (1) | The business unit included in discontinued operations has historically been reported as a component of Loan Facilitation Services in the Loan Transaction Services reporting segment. |
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)
| Quarter Ended March 31 | Quarter Ended | |||||||||||||||||||||||||||
| 2009 | 2008 | 3/31/2009 | 12/31/2008 | 9/30/2008 | 6/30/2008 | 3/31/2008 | ||||||||||||||||||||||
1. EBIT — Continuing Operations | ||||||||||||||||||||||||||||
Consolidated | ||||||||||||||||||||||||||||
| Revenue | $ | 529,817 | $ | 443,560 | $ | 529,817 | $ | 473,921 | $ | 466,762 | $ | 453,347 | $ | 443,560 | ||||||||||||||
| Cost of Sales | 354,702 | 288,386 | 354,702 | 294,069 | 300,560 | 293,464 | 288,386 | |||||||||||||||||||||
| Selling, General and Administrative Expenses | 71,178 | 55,098 | 71,178 | 58,298 | 57,909 | 58,570 | 55,098 | |||||||||||||||||||||
| Operating Income | 103,937 | 100,076 | 103,937 | 121,554 | 108,293 | 101,313 | 100,076 | |||||||||||||||||||||
| Less Non-recurring Charges: | ||||||||||||||||||||||||||||
| Restructuring Costs | 8,186 | — | 8,186 | — | — | 2,353 | — | |||||||||||||||||||||
| LPS Spin Related Costs | — | 1,003 | — | — | — | 1,960 | 1,003 | |||||||||||||||||||||
| Acceleration of Performance-Based Shares | 799 | — | 799 | — | — | 138 | — | |||||||||||||||||||||
| EBIT, as adjusted | $ | 112,922 | $ | 101,079 | $ | 112,922 | $ | 121,554 | $ | 108,293 | $ | 105,764 | $ | 101,079 | ||||||||||||||
| EBIT Margin, as adjusted | 21.3 | % | 22.8 | % | 21.3 | % | 25.6 | % | 23.2 | % | 23.3 | % | 22.8 | % | ||||||||||||||
| Depreciation and Amortization | $ | 23,986 | $ | 23,673 | $ | 23,986 | $ | 25,004 | $ | 23,800 | $ | 20,860 | $ | 23,673 | ||||||||||||||
Technology, Data and Analytics | ||||||||||||||||||||||||||||
| Revenue | $ | 159,879 | $ | 135,824 | $ | 159,879 | $ | 149,118 | $ | 138,964 | $ | 141,744 | $ | 135,824 | ||||||||||||||
| Cost of Sales | 90,463 | 74,110 | 90,463 | 80,482 | 73,980 | 81,397 | 74,110 | |||||||||||||||||||||
| Selling, General and Administrative Expenses | 16,066 | 16,258 | 16,066 | 15,121 | 15,790 | 17,471 | 16,258 | |||||||||||||||||||||
| Operating Income | 53,350 | 45,456 | 53,350 | 53,515 | 49,194 | 42,876 | 45,456 | |||||||||||||||||||||
| Less Non-recurring Charges: | ||||||||||||||||||||||||||||
| Restructuring Costs | — | — | — | — | — | 2,178 | — | |||||||||||||||||||||
| LPS Spin Related Costs | — | — | — | — | — | — | — | |||||||||||||||||||||
| Acceleration of Performance-Based Shares | — | — | — | — | — | — | — | |||||||||||||||||||||
| EBIT, as adjusted | $ | 53,350 | $ | 45,456 | $ | 53,350 | $ | 53,515 | $ | 49,194 | $ | 45,054 | $ | 45,456 | ||||||||||||||
| EBIT Margin, as adjusted | 33.4 | % | 33.5 | % | 33.4 | % | 35.9 | % | 35.4 | % | 31.8 | % | 33.5 | % | ||||||||||||||
| Depreciation and Amortization | $ | 17,375 | $ | 16,015 | $ | 17,375 | $ | 15,990 | $ | 15,229 | $ | 13,971 | $ | 16,015 | ||||||||||||||
Loan Transaction Services | ||||||||||||||||||||||||||||
| Revenue | $ | 374,523 | $ | 311,064 | $ | 374,523 | $ | 327,650 | $ | 329,473 | $ | 315,314 | $ | 311,064 | ||||||||||||||
| Cost of Sales | 268,936 | 217,668 | 268,936 | 217,242 | 228,283 | 215,838 | 217,668 | |||||||||||||||||||||
| Selling, General and Administrative Expenses | 27,359 | 25,344 | 27,359 | 26,314 | 26,487 | 27,154 | 25,344 | |||||||||||||||||||||
| Operating Income | 78,228 | 68,052 | 78,228 | 84,094 | 74,703 | 72,322 | 68,052 | |||||||||||||||||||||
| Less Non-recurring Charges: | ||||||||||||||||||||||||||||
| Restructuring Costs | — | — | — | — | — | 163 | — | |||||||||||||||||||||
| LPS Spin Related Costs | — | — | — | — | — | — | — | |||||||||||||||||||||
| Acceleration of Performance-Based Shares | — | — | — | — | — | — | — | |||||||||||||||||||||
| EBIT, as adjusted | $ | 78,228 | $ | 68,052 | $ | 78,228 | $ | 84,094 | $ | 74,703 | $ | 72,485 | $ | 68,052 | ||||||||||||||
| EBIT Margin, as adjusted | 20.9 | % | 21.9 | % | 20.9 | % | 25.7 | % | 22.7 | % | 23.0 | % | 21.9 | % | ||||||||||||||
| Depreciation and Amortization | $ | 4,608 | $ | 6,163 | $ | 4,608 | $ | 7,028 | $ | 6,651 | $ | 5,290 | $ | 6,163 | ||||||||||||||
Corporate and Other | ||||||||||||||||||||||||||||
| Revenue | $ | (4,585 | ) | $ | (3,328 | ) | $ | (4,585 | ) | $ | (2,847 | ) | $ | (1,675 | ) | $ | (3,711 | ) | $ | (3,328 | ) | |||||||
| Cost of Sales | (4,697 | ) | (3,392 | ) | (4,697 | ) | (3,655 | ) | (1,703 | ) | (3,771 | ) | (3,392 | ) | ||||||||||||||
| Selling, General and Administrative Expenses | 27,753 | 13,496 | 27,753 | 16,863 | 15,632 | 13,945 | 13,496 | |||||||||||||||||||||
| Operating Income | (27,641 | ) | (13,432 | ) | (27,641 | ) | (16,055 | ) | (15,604 | ) | (13,885 | ) | (13,432 | ) | ||||||||||||||
| Less Non-recurring Charges: | ||||||||||||||||||||||||||||
| Restructuring Costs | 8,186 | — | 8,186 | — | — | 12 | — | |||||||||||||||||||||
| LPS Spin Related Costs | — | 1,003 | — | — | — | 1,960 | 1,003 | |||||||||||||||||||||
| Acceleration of Performance-Based Shares | 799 | — | 799 | — | — | 138 | — | |||||||||||||||||||||
| EBIT, as adjusted | $ | (18,656 | ) | $ | (12,429 | ) | $ | (18,656 | ) | $ | (16,055 | ) | $ | (15,604 | ) | $ | (11,775 | ) | $ | (12,429 | ) | |||||||
| Depreciation and Amortization | $ | 2,003 | $ | 1,495 | $ | 2,003 | $ | 1,986 | $ | 1,920 | $ | 1,599 | $ | 1,495 | ||||||||||||||
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)
| Quarter Ended March 31 | Quarter Ended | |||||||||||||||||||||||||||
| 2009 | 2008 | 3/31/2009 | 12/31/2008 | 9/30/2008 | 6/30/2008 | 3/31/2008 | ||||||||||||||||||||||
2. Net Earnings — Reconciliation | ||||||||||||||||||||||||||||
| Net Earnings | $ | 50,046 | $ | 61,732 | $ | 50,046 | $ | 54,329 | $ | 51,281 | $ | 63,546 | $ | 61,732 | ||||||||||||||
| Less Non-recurring Charges: | ||||||||||||||||||||||||||||
| Restructuring Costs, net of tax | 5,055 | — | 5,055 | — | — | 1,440 | — | |||||||||||||||||||||
| LPS Spin Related Costs, net of tax | — | 614 | — | — | — | 1,200 | 614 | |||||||||||||||||||||
| Acceleration of Performance-Based Shares, net of tax | 493 | — | 493 | — | — | 84 | — | |||||||||||||||||||||
| Impact of change in tax rate on non-recurring items | — | — | — | (223 | ) | — | — | — | ||||||||||||||||||||
| Net Earnings, excluding non-recurring items | 55,594 | 62,346 | 55,594 | 54,106 | 51,281 | 66,270 | 62,346 | |||||||||||||||||||||
| Pro Forma Interest Expense, net of tax (1) | — | 14,180 | — | — | — | 13,951 | 14,180 | |||||||||||||||||||||
| Pro Forma Net Earnings | 55,594 | 48,166 | 55,594 | 54,106 | 51,281 | 52,319 | 48,166 | |||||||||||||||||||||
| Purchase Price Amortization, net of tax (2) | 4,991 | 5,936 | 4,991 | 6,815 | 6,504 | 5,496 | 5,936 | |||||||||||||||||||||
| Pro Forma Adjusted Net Earnings | $ | 60,585 | $ | 54,102 | $ | 60,585 | $ | 60,921 | $ | 57,785 | $ | 57,815 | $ | 54,102 | ||||||||||||||
| Pro Forma Net Earnings Per Share | $ | 0.58 | $ | 0.49 | $ | 0.58 | $ | 0.57 | $ | 0.54 | $ | 0.55 | $ | 0.49 | ||||||||||||||
| Pro Forma Adjusted Net Earnings Per Share (3) | $ | 0.64 | $ | 0.55 | $ | 0.64 | $ | 0.64 | $ | 0.61 | $ | 0.61 | $ | 0.55 | ||||||||||||||
| Pro Forma Diluted Weighted Average Shares (3) | 95,284 | 97,597 | 95,284 | 95,126 | 95,223 | 95,070 | 97,597 | |||||||||||||||||||||
3. Cashflow — Reconciliation | ||||||||||||||||||||||||||||
| Cash Flows from Operating Activities: | ||||||||||||||||||||||||||||
| Net Earnings | $ | 50,046 | $ | 61,732 | $ | 50,046 | $ | 54,329 | $ | 51,281 | $ | 63,546 | $ | 61,732 | ||||||||||||||
| Less Non-recurring Charges: | ||||||||||||||||||||||||||||
| Restructuring Costs, net of tax | 4,304 | — | 4,304 | — | — | 1,440 | — | |||||||||||||||||||||
| LPS Spin Related Costs, net of tax | — | 614 | — | — | — | 1,200 | 614 | |||||||||||||||||||||
| Impact of change in tax rate on non-recurring items | — | — | — | (223 | ) | — | — | — | ||||||||||||||||||||
| Net Earnings, excluding non-recurring items | 54,350 | 62,346 | 54,350 | 54,106 | 51,281 | 66,186 | 62,346 | |||||||||||||||||||||
| Pro Forma Interest Expense, net of tax | — | 14,180 | — | — | — | 13,951 | 14,180 | |||||||||||||||||||||
| Pro Forma Adjusted Net Earnings | 54,350 | 48,166 | 54,350 | 54,106 | 51,281 | 52,235 | 48,166 | |||||||||||||||||||||
| Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||||||||||||||||||||
| Non-cash adjustments | 30,185 | 42,496 | 30,185 | 30,081 | 32,420 | 18,262 | 42,496 | |||||||||||||||||||||
| Working capital adjustments | (4,858 | ) | 42,122 | (4,858 | ) | 32,158 | 26,908 | (91,474 | ) | 42,122 | ||||||||||||||||||
| Net cash provided by (used in) operating activities | 79,677 | 132,784 | 79,677 | 116,345 | 110,609 | (20,977 | ) | 132,784 | ||||||||||||||||||||
| Capital expenditures included in investing activities | (22,571 | ) | (10,793 | ) | (22,571 | ) | (23,946 | ) | (13,205 | ) | (14,344 | ) | (10,793 | ) | ||||||||||||||
| Pro Forma Adjusted Net Free Cash Flow | $ | 57,106 | $ | 121,991 | $ | 57,106 | $ | 92,399 | $ | 97,404 | $ | (35,321 | ) | $ | 121,991 | |||||||||||||
| Notes: | ||
| (1) | Pro forma interest expense for each of the two quarters in the period ended June 30, 2008 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 $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. | |
| (2) | Purchase price amortization, net of tax represents the periodic amortization of intangible assets acquired through business combinations primarily relating to customer lists, trademarks and non-compete agreements. | |
| (3) | 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. | |