ASPS - Earnings call transcript Q1 2019 | Altisource Portfolio Solutions S.A.

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Operator

Good day, ladies and gentlemen, and welcome to the Altisource First Quarter 2019 Earnings Conference Call. [Operator instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Michelle Esterman, Chief Financial Officer. Ma'am, you may begin.

Michelle Esterman

Thank you, operator. remind slides the website are to XX-Q release, at want quarterly and available first you earnings that Form www.altisource.com. We on our additional provide information may useful. These investors find

number that cause actual XX-Q slides to include which forward-looking section Our Forward-Looking a XX-Q, may our in XXXX review and XX-K which contained as We results describe Form no future and earnings these factors in remarks could new involve to Form the differ. factors to today company's a risk that the or uncertainties undertake lead and of Form results. the result different update statements, as XXXX Statements Please well information risks events. quarterly obligation release, statements of as

both our slides. the measures. non-GAAP measures you to present GAAP is non-GAAP quarterly regarding slides, GAAP in During and earnings to find and A the this In quarterly additional disclosures measures. non-GAAP included will the we financial release of call, reconciliation will appendix

is Joining I'd call me Bill. for today's over to turn Bill Shepro, like to now Chief the Officer. Executive our call

Bill Shepro

to you even plan on substantially incurring we joining anticipated This generate balance million we and we thank our totaling and and $XX flow, businesses approximately anticipate and to operating we restructuring reduce costs and a to doing that well cash after million. for quarter. debt of losses our million Project to adjusted $XX opportunities. morning, today's financially $XX operationally, earlier-stage had Catalyst in separate call. continue Altisource will streamline solid our Good larger first focus We We're that year,

this greater our taking shareholder on Altisource be of value. update morning, of reflects current detail, will worth we unlock in much I This potential we're believe we I'll sum of than an that may that could and items. the provide share these price believe more steps parts As the discuss

share, earnings $XX.X of service million and income the operating of scenarios. million our generated adjusted Slides approximately and year and revenue. As X, of of XX% $XX.X $XXX per share on diluted earnings you can on adjusted both full of we million midpoint adjusted income Adjusted $X.XX X see income represent of pretax net adjusted per

is first are we for Notably, to typically XX%. first quarter, adjusted first quarter believe and rest quarter adjusted was than our from improved lower we of operating the the well XX% the a earnings quarter positioned operating XXXX income of As margins higher XXXX. X.X%

of income year. The compared first prior quarter quarter marks in to the straight third growth adjusted operating same quarters our the

a generated in Keep compared adjusted From first Our flow $XXX,XXX discussion release as $XX same and cash that bonus of perspective, period operating and, $XX our approximately the provide cash detailed quarter anticipate of results our cash from full of for year. first XX-Q year. typically to our earnings quarter to we the because a payments last mind just lowest we of annual million million mentioned, generation quarter cash is I operating adjusted operations.

securities continued plan announced this announcement, possession quarter begin shares to financing investing With have as during after simplify non-public and repurchasing we activities, put our net after in of shares marketable our During our million market decline longer-term price Shortly debt shares Homes, in plan securities, sell because doesn't of $XXX BRS value used in quarter, relating company. fully value the of stock XXXX. proceeds reduce the less less million didn't of to business. the reducing million our quarter stock investing sell $X we book reflect in RESI agreement the stock Services the and marketable part for $XXX of with the to use to not activities. which the capital respect than are believe repay plan. and sell to place We the as organization respect respect to further Financial material footprint. With for we our the debt of is information plan repurchase our we recently the time owning we to to activities, over With and because we financing requirements our we we a ended the to to

brokerage on front, and Hubzu auctions with and includes asset the transaction sales. Hubzu, we to real which and Beginning real business highlight the progress On for like marketplace residential Services management, our businesses. I'd considerable Field are estate our estate online making

foreclosure sale We are and of by winning customer customers our for auctions RESI. business than new and growing homes demonstrated NRZ other diversifying from base inventory is and as our Ocwen,

you Hubzu inventory X, in total the XXX% represents has year customers a see of XX Slide grown inventory on Hubzu compared months these by XX% in XX% and can quarter. As the XX% last ago and first to from

continued and position customers. demonstrates for Our Hubzu's success leadership strong performance our

market We to use customers, grow wins growth a pipeline rising business, opportunities. from where and recent is to a share online optimistic industry with delinquencies we its continue receive an as existing auction expanding strategy. countercyclical opportunities wins enhance disposition this expand is in are as of that referrals as would our we convert also environment will the Further,

Turning to business. our Services Field

We making are also excellent progress.

include intend customers that share. top market give than recently which they X with the servicers, business to doing now of of more us Ocwen. XX customers other X are X us notified We These

we strong Altisource's results the focusing because our larger seeing financial relationship our environment, top quality the existing of expanding and winning customers opportunities and our are the believe performance. addition, in receiving business are have streamlined by We In through scale and X we we on anticipate third process and control referrals management. quarter. with new on-boarding organization servicer completing another and with Operationally,

benefits XXXX. During was quarter, million compensation the than quarter first $XX.X and the or XX% first lower of

there XXXX, the a through continue into data migrating automation other While Catalyst and certain we've initiatives. completed of cloud our that are centers activities lot work, XXXX the including will to and

in products you internal end-to-end for when of strong further and single leader. our portfolio of the XX-Q. operating Altisource a review competitor We believe operations service positions our more structure under market with our connection operating efficiencies. businesses the another and leveraging Catalyst by product effectively our we notice our as opportunities new and provides You consolidated In impact may a reorganization,

a and single providing As are no have of a now these segment reporting. longer result changes, segment we

As we year, business, exiting worked -- have BRS and be earlier-stage our $XX to to business agreement reorganize million, opportunities, positioning entered and sold raise for are management In venture Financial March, property will began of last million an and separate we we business Services we recently, company sell $XX our the into we capital. on we the larger businesses to and and which third relationship at our the announced and that anniversary will revenue received anticipate million and in asset mortgage XXXX service Financial million. scenarios Services occurred. these $X.X businesses. XXXX the our of was quarter balance adjusted was has consists charge-off of on sale and and the closing the management, We closing businesses to closing $XX the pretax customer financial reflect the of recovery from adjust income one-year approximately after management closing. the focus

Owners.com Turning and to our earlier-stage Pointillist. businesses,

growing We attracting revenue bookings continue good and and to new customers. make progress

businesses and cash venture it while are burn work price. that on a of has fully our easier in we to progress, monetization management run businesses raise the to prepare basis. make from continuing assets Altisource objective businesses capital upside. of collection them that a and very We noncore separate potential to these certain of our believe not benefit should Altisource. of illustrate fund reflected stand-alone rental The financial for value services to the businesses property This the valuable share eliminating are us Altisource's with to these the Given beginning of

assets raising our don't that businesses. for an businesses the the venture and other capital eliminate value. for these are our earlier-stage cash much will money, market losing establish believe For believe assigning valuation, burn but is earlier-stage We appropriate like external businesses demonstrate growing upside we

multiples expectations. quarter transaction value Finally, the first of for we line our was competitors XXXX we XXXX. even a progress inherent performance our With are our businesses. ongoing for Altisource mature highlight creation an certain solid and In we potential pipeline, believe and and conclusion, customers positioning with some in new believe for paid Altisource in a shareholders strong with existing more the better

customers, to now like winning focus open larger I'd up questions. Operator? business rationalizing strategic organization businesses call opportunities. monetizing to noncore We on streamlining and for the and the from are

Operator

[Operator instructions] Our first Advisors. question Lee Cooperman comes with Omega from

now is line open. Your

Lee Cooperman

religion have you like of a all Seems sudden.

see happens. what Let's

plans Just and is status what the And explain current the announced? in you capacity of to me the What have buyback. you've authorization? way an your given financial your do of what

Bill Shepro

me give one Lee, second. Yes.

So there's X.X shares yes, -- authorization, go terms ahead. in of Lee. under the And million

Lee Cooperman

And at of what, the had, outstanding? the we quarter, end XX-something?

Bill Shepro

shares. down I think yes, We're nondiluted -- to, million XX.X no. shares No, of XX.X it's

Lee Cooperman

the and authorized Okay. in And What's them, available. buyback. attitude they buying your capacity you were assuming X.X the towards million financial have

Bill Shepro

Yes.

it now buy. does in make sense believe we're and So market the to we

I disclosing we what of shares capacity to think back. we're not a have but program Lee, our buy meaningful is, amount

Lee Cooperman

Well, just would the X.X offered the in buy tomorrow if market, million confines you somebody of shares you it?

Bill Shepro

as and not around reducing million. we're We're approach So as going back a -- much to buy Lee, taking not balanced debt, buying X.X still back. we're buying the shares

Lee Cooperman

interested in my I'm cash selling question. flow. your not financial your I'm your just appetite that's What your you. in So situation, given appetite? to is interested is projected what

Bill Shepro

Sure.

here. Give we So Michelle? us buy what buy give much think back, did X disclosing to second not how Lee, year, I going but, we're we're -- me -- Roughly? last

we So million. last spend Lee. about much that spent $XX we'll year, year, anticipate don't I this

during around I million or $XX $XX -- think the is our for authorization million probably year.

Lee Cooperman

might buy So X something like back or million shares that. you

Bill Shepro

more buy could million back, We or X yes. Yes.

Lee Cooperman

your Right. Why mean, totally buyback flawed. it back? been are I has you buying

years X, You you're at I how $XXX started over ago. many when having with X ago. least share. Time $XXX can't say years X, would million fun. I at remember a flies

Bill Shepro

Yes.

believed And value back to sense. -- right view a to and of risk the we continue sense the trading if it's believe discount. continue growth our of lot believe, we Altisource, to given sense made substantial at our Lee, also saying. of makes company, profile the now, the debt. hindsight, makes our that you're So to Lee, buy expectations, it we it shares that what time, we reduce At so of a given in And

Lee Cooperman

shareholders? Is could you been to deliver is last think this to the the about a deliver to X longer year XXXX you've Or value years? shareholders you the your where for talking a to take process going what

Bill Shepro

year, other deck, X to to to REO Lee, compared really from XXX to I NRZ think of I to And scenarios -- We're receiving our you last our to last plan Close have look referrals Ocwen, year in were -- this really, where customers XXX. I year's be interesting. grow earnings last set think compared find we think and We if Slide to what Lee, No. a at scenarios. than today is close RESI. compared

so than business. is growing inventory month. you're We was last in hold me our earnings sales price Ocwen. growing $X,XXX a through XXX I because Hubzu in is about quickly quarter. from a a number, was this XXX yet substantially this seeing non-RESI/NRZ and to sold on think on Slide been We're the it the it over if average that think start sales it's first average, it from the the And pretty think I And I per home. about sales, revenue math results you but or don't do to going customers to other month on exciting X, our flow that not non-Ocwen, that's the in customers, year,

Lee Cooperman

you changes is these in to, the the you're substantially than was that and businesses that at for of made earnings them wrong sell structural are longer-term long bring to time company. moves paying have I in value that going the been that picture, shareholders? might the you What Because market venture don't more the businesses really where a fit positive in Yes. desert. a waited referring the will capital, you create worth company in have for results XXXX lot within off for the like direction. are you They've contemplating for think Do a the shareholders references

a stock, a the And are reflect the back moves That's humanly because should you sum the question. you against the event be the not think event or Do say that whatever? really as buying or XXXX you're does possible contemplating You probably your parts. as XXXX you're trading open that shareholders. making if of stock you're

so information You're You you the that it's back not believe that the buy to you're undervalued, we them "We're to ought going think all because leads telling to stock your give against have you -- undervalued." shareholders. trading you shareholders, don't it's

Bill Shepro

at think about we're I pretty Lee, we're transparent what Altisource. doing

moves in the of I Absolutely. making our we're scenarios. years think shareholder think we -- value. the we've couple And we've I hit numbers the said would increase today our for last will

Lee Cooperman

and wait We'll and We'll see. here. wait see

Operator

next Securities. with question Mike from Our Northland comes Grondahl instructions] [Operator

Mike Grondahl

Bill and couple of Michelle, questions.

million. management the about off, $XX First sold business, property you've

winding million. $XX You're down around BRS,

Now What $XX roughly you've you left? there nonstrategic? or Is sold are thinking business, sort much is Financial else the of What million. Services streamlining? selling else about

Bill Shepro

So RESI stock at worth million apologize. Mike, -- a you still $XX have about $XX which, is the $XX million, share, I

have So the you we stock, on plan RESI selling. which

million, You've venture are plan the an burn essentially in Financial -- will book growing we Services homes businesses, $XX sale value which then The be $XX capital, at is to businesses Homes. an stop which pace. got the about Altisource on raise the of of we own, we the total two you've got those which earlier-stage BRS million. And while stop will maintaining at attractive from the separate Altisource will and those which option hope cash

then And so left you're with...

Mike Grondahl

anything going Any about of origination other was noncore to say, the Vendorly could that's Lenders area or I the REALSynergy? pieces that or think selling? mortgage or in just you business One

Bill Shepro

So which we evaluate. we're good we very, businesses, Lenders One of some smaller progress. very making have could Hubzu, But left where Mike, course. is left, what's really,

Services. Those business. businesses. and Services the businesses, Hubzu valuation, title, trustee, course, Field we've Field some of got largest of are other Then, our have those We really,

And and makes value. and to frankly, so the we're what sell, makes most regularly to shareholder most the optimize evaluating sense to sense what keep

and these shareholders for As as hoping been of of we're years worth of relatively our value that lot discussed, of the demonstrate Lee last the are are will shares, a price as the to some we're parts company making has we're couple Lee and the create moves flat other anxious money. and the

Mike Grondahl

an this win in and customer Owners the of Just kind of Pointillist? and what and Got Last the on or then last of of on there just it. And on color Pointillist. quarter Can some kind some Owners days. update trends you you quarter, metrics. transitioned gave terms and units provide XX

Bill Shepro

Sure.

hold but up don't think, I me to or numbers, roughly Owners, the exact XX%. at So XX% revenue was

it's learning's our last April some back months. already think in number to year. more the year, purposefully, on marketing leading seasonally from homes up April business in we contract, of April in business of XX% spring for believe to and this dialed are I close already And And strong that indicators summer double year. year. are XX% the going based last compared the under we last And from I to focus on think, revenue that still to we're of

interest Pointillist, new partners. pipeline, terms both making good In of very getting we're with we're lot progress and bookings, sales channel our of customers, and a from our

financial very, working So customers them. we're industry, Pointillist interested. consulting up and pilots as to household with bringing that in the be companies some clients their and signing solution with Those with a leading industries. very names industry appear We're to the services working telecommunications are cable

why and money And the think focused reason raise we're about excited good we getting businesses of that's them. as So in to very really well establishing so that a these have as we're can year. operations pretty the momentum venture it's both separate Pointillist again, in we're going on

Mike Grondahl

that And do is event? venture or a a XXXX you think event money XXXX

Bill Shepro

Pointillist, hard to on we're be the either on XXXX bit a quickly. we're further XXXX. it moving late behind we're get working or So but And into in little to trying Owners, process, starting for

would it hope I sooner. be not if early XXXX, So

Mike Grondahl

non-Ocwen understand was trend year-ago it the in with was overall I'm million revenue don't about $XX XX%. quarter? to or What -- Got And there non-Ocwen then trying the I the it. have the revenues. just quarter in

Bill Shepro

the the keep you're in significantly year. call business progresses. this somewhat what we seeing, from we the relatively Mike, I -- was typically business, as servicer, revenue down. the BRS to down Solutions grow slower I BRS sold management but the think flat, from Originations property think is is originations the Servicer my mind the is, year recollection, was that for what So with business opportunities And the good

Mike Grondahl

I that really What should they're it large there? or there? slid out opportunities stick that just be Got closely X very it. to Page But to X. on servicer just $XX XQ. call the anything XQ else top And from as then X another for million? you pretty tracking think out quickly quarter over basically X just maybe we really Is

Bill Shepro

top We're on the is a so household this -- country. of vendors name, that So of in X going servicer, going X them. to one the X one X services largest be the we're field provide to servicers be to providers,

we're think homes, hold the or estate in REO of way, page, ultimately portfolio directing don't the largest the and in vendors U.S., all And one of vendors over with and we're to up like to was boarded So us. their receiving institutional moved XXX investors to the providing bank that auctions. send doing then three this two And sales. we something just move originally a the servicers in real probably ramp March, what -- United REO mortgage foreclosure the bank two us The were was to definitely They decided maybe of middle the opportunity. that but that's the we be And close that, sales. it And to a starting one XXX -- of states short States. March, to homes, another whole continues stands name, me By in major household has than they're was grow. one they of I X in more us. interesting to to tremendous going out. We're one vendors to just

well That's assets. to to go us. XXX was XXX, vendors mid-tier management another sole them services. have and estate middle, the asset boarded just a we And as we've think second I title field and vendor real we're now to for to and two April So auctions, more bank brokerage, doing as client decided Hubzu go in onboarded going ultimately we that that

getting we're reception. very good So

We are into start wins have second to the a boarding other the late quarter. into third REO, the couple third going probably that more quarter quarter, in

our progress auction So good and well. management very we're Hubzu as with making and asset

Mike Grondahl

be summer Well, interesting fall to it'll Hubzu. this through some of and for see flow that

Okay.

Operator

like would not closing questions any any showing this I call to further now to I'm remarks. back time. And for Shepro the at Mr. turn

Bill Shepro

and joining day. a great for Thanks the Great. call, have

Operator

in thank conclude you does today's Ladies wonderful day. and for participating disconnect. you This gentlemen, all today's may and conference. Everyone, have a program,

Altisource Portfolio Solutions (ASPS) 27 Apr 192019 Q1 Earnings call transcript