CoreLogic Reports Third Quarter 2018 Financial Results

Outperformance of Market Trends and Cost Management Highlight Strong Underlying Operational Performance; Company Expands Insurance and International Footprint

IRVINE, Calif. — (BUSINESS WIRE) — October 24, 2018 — 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, 2018. Operating and financial highlights for the third quarter appear below.

  • Revenues of $452 million were down 6% reflecting the impact of a greater than 15% decline in U.S. mortgage origination unit volumes which more than offset organic growth in the Property Intelligence & Risk Management (PIRM) segment and market outperformance in the Underwriting & Workflow Solutions (UWS) segment.
  • Operating income totaled $60 million compared with $62 million in the prior year as a 7% reduction in operating expenses largely offset the impact of lower U.S. mortgage market volumes.
  • Net income from continuing operations decreased $8 million to $23 million after reflecting a $13 million one-time transition tax for certain foreign earnings in connection with the Tax Cuts and Job Act (TCJA).
  • Diluted EPS from continuing operations were $0.27 compared with $0.36 in the prior year. Adjusted EPS totaled $0.72, in-line with 2017.
  • Adjusted EBITDA totaled $128 million, 7% below prior year as organic growth and cost productivity were offset by the impact of lower market volumes. Adjusted EBITDA margin was 28%, largely in-line with 2017.
  • A total of 479,000 common shares were repurchased in the third quarter (1.8 million repurchased year-to-date).
  • Company to acquire full ownership of Symbility Solutions, Inc. (Symbility), further scaling its insurance vertical and international operations.

“CoreLogic delivered a strong set of operating and financial results in the third quarter and for the first nine months of 2018. Year-to-date, despite a double-digit contraction in U.S. mortgage loan volumes, we grew overall profits, expanded margins and repurchased 2% of our outstanding shares. We achieved these positive results through aggressive cost management, growing our non-mortgage and international footprint, and leveraging benefits attributable to our market leadership in underwriting solutions,” said Frank Martell, President and Chief Executive Officer of CoreLogic.

“The acquisition of Symbility further scales our insurance and international footprint and offers the potential for significant non-cyclical growth in line with our long-term goal of sourcing at least 50% of our revenues from non-U.S. mortgage. Symbility is a leading provider of subscription cloud-based property insurance claims workflow solutions and also provides a growing array of innovative enterprise mobile and application software solutions. Symbility is a great strategic fit for CoreLogic on many levels offering significant future revenue and cost synergies,” Martell added.

Third Quarter Financial Summary

Third quarter revenues totaled $452 million compared with $483 million in the same 2017 period, a decrease of 6%. PIRM revenues totaled $181 million, equivalent to 2017 as organic growth in property insights, including real estate-related and international operations, as well as contributions from insurance & spatial solutions acquisitions completed in 2017 were offset by the impacts of declining U.S. mortgage loan unit volumes, lower weather event-related revenues and unfavorable foreign currency translation. UWS segment revenues were down 10% to $274 million, driven by lower mortgage market unit volumes and vendor diversification by two key appraisal management clients, which more than offset market outperformance in the segment's property tax, credit and flood operations. UWS revenue also benefited from the scaling of CoreLogic's valuation solutions platform through organic growth and the acquisition of Mercury Network and a la mode technologies.

Operating income totaled $60 million for the third quarter compared with $62 million for the third quarter of 2017 as the impacts of U.S. mortgage market headwinds were largely offset by aggressive cost management as well as organic and acquisition-related growth discussed previously. Operating income for the third quarter of 2017 also included a legal settlement charge which had no 2018 counterpart. Third quarter operating income margin was up approximately 30 basis points to 13%.

Third quarter net income from continuing operations totaled $23 million compared with $31 million in the same 2017 period. The $8 million decrease was primarily attributable to a one-time $13 million provisional tax expense related to the transition tax for certain foreign earnings in connection with the TCJA. Third quarter diluted EPS from continuing operations totaled $0.27 compared with $0.36 in 2017. Adjusted diluted EPS totaled $0.72, in line with the third quarter of 2017.

Adjusted EBITDA totaled $128 million in the third quarter compared with $139 million in the same prior year period. Adjusted EBITDA margin was largely in-line with 2017 levels at 28%. The 7% decline in adjusted EBITDA was primarily driven by the impact of reduced U.S. mortgage loan unit volumes, lower revenues from weather-related events, unfavorable foreign currency translation and lower appraisal revenues discussed previously, which were partially offset by benefits of higher platform revenues, pricing and aggressive cost management. Third quarter adjusted EBITDA included $3 million in R&D expenses related to the enhancement of the Company's data visualization and solutions delivery capabilities. PIRM adjusted EBITDA decreased 5% to $54 million. UWS adjusted EBITDA decreased 12% to $80 million.

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