CoreLogic Reports Third Quarter 2017 Financial Results

—Strong Operating Results Highlighted by Significant Revenue Outperformance of Market Trends and Margin Expansion; Share Repurchase Targets Increased—

IRVINE, Calif. — (BUSINESS WIRE) — October 25, 2017 — CoreLogic® (NYSE: CLGX), a leading global provider of property information, insight, analytics and data-enabled solutions, today reported financial results for the quarter ended September 30, 2017.

  • Revenues of $483 million down 8% as the benefits of growth in insurance, spatial and international operations as well as new products, market share gains and pricing actions in mortgage and real estate solutions were more than offset by the impact of an estimated 25% decline in U.S. mortgage origination unit volumes.
  • Operating income from continuing operations totaled $62 million, a 27% decline attributable primarily to legal settlement costs and lower U.S. mortgage origination unit volumes which more than offset the revenue upsides discussed above, as well as productivity and cost management program benefits.
  • Net income from continuing operations was down 14% to $31 million driven principally by legal settlement costs and lower U.S. mortgage origination unit volumes which more than offset operating benefits discussed above. Diluted EPS from continuing operations was $0.36, a decrease of 10%. Adjusted EPS of $0.72 was largely in-line with the prior year.
  • Adjusted EBITDA totaled $139 million, 3% below prior year, as revenue mix, cost productivity and operating leverage benefits drove Adjusted EBITDA margin to 29% compared to 27% in the prior year.
  • Mercury Network acquisition completed to further expand the Company’s collateral valuation technology and platform solutions offerings.
  • Credit facility amended to extend tenor and increase borrowing capacity by more than $500 million.
  • Company repurchased 2 million common shares in the quarter. Year-to-date share repurchases totaled 3 million shares for $132 million.
  • Company raises full-year 2017 share repurchase target by 10%.

“CoreLogic delivered a very strong operating performance in the third quarter. As we did throughout the first half, we expanded revenues in our insurance, spatial and international operations and continued to deploy new products, pick up market share and take pricing actions in mortgage and real estate solutions. Our core mortgage operations have unmatched scale and capabilities which ensure we are strategic partners to our clients and allow us to continue to significantly outperform U.S. mortgage market volume trends,” said Frank Martell, President and Chief Executive Officer of CoreLogic. “Demand for unique property-related solutions and insights has never been greater across the real estate ecosystem. This demand is reflected in our organic growth rate for 2017 which we believe to be a very strong result in the face of the ongoing reset of the U.S. mortgage market to a purchase-driven cycle.”

“Adjusted EBITDA margins were up substantially versus the prior year to 29%. We believe these gains demonstrate the positive impacts of improving revenue mix, efficiency and operating leverage and help validate we are on track to hit our longer term adjusted EBITDA margin goals. Our relentless focus on building unique and market-leading solutions and driving for best-in-class operational and cost efficiencies has resulted in the creation of a durable and highly cash generative business model. This model has allowed us to return $1.2 billion to our shareholders over the past 6 years. This year alone, we have repurchased almost 4% of our outstanding shares for $132 million,” Martell added.

Financial Highlights

Third quarter reported revenues totaled $483 million compared with $524 million in the same 2016 period and $474 million in the second quarter of this year. During the quarter, market share and pricing-related gains as well as contributions from new products in both the Property Intelligence (PI) and the Risk Management and Work Flow (RMW) segments helped to partially offset the impact of an estimated 25% decline in U.S. mortgage origination unit volumes. RMW revenues totaled $227 million, a decline of 8%, as the benefits from market outperformance, pricing and new product growth partially offset lower mortgage market volumes. PI revenues declined 8% to $258 million as higher insurance, spatial solutions and international revenues were more than offset by lower valuation solutions revenues attributable to reduced U.S. mortgage market volumes and planned vendor diversification by a significant appraisal management client.

Operating income from continuing operations totaled $62 million for the third quarter, 27% below the same 2016 period. The year-over-year decline in operating income was primarily driven by legal settlement costs totaling approximately $18 million and the impact of an estimated 25% decline in U.S. mortgage loan origination volumes that collectively more than offset the revenue upsides discussed above, as well as the benefits of ongoing productivity and cost management programs. Operating margin was 13% of revenues, including the unfavorable impact of approximately 360 basis points attributable to the previously discussed legal settlement costs, compared with 16% in the prior year.

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