CoreLogic Exits 2012 on a High Note
CoreLogic. (CLGX) reported fourth quarter adjusted earnings of 36 cents per share, surpassing the Zacks Consensus Estimate of 32 cents. Results also exceeded the year-ago quarter’s earnings by 140%.
The solid performance came on back of increase in revenue, profit margins and share repurchases.
Including one-time impairment charges associated with facility consolidations of $14.2 million, one-time investments in improving operating efficiency and the review of strategic alternatives of $7.1 million, and Project-30 related severance of $6.2 million, loss from discontinued operations of $3.1 million and loss from sale of discontinued operations of $5.4 million, CoreLogic reported net income of 15 cents per share rebounding from a net loss of 21 cents per share in the year-ago quarter.
Quarterly Operational Update
Operating revenues increased 18.8% year over year to $410.4 million in the fourth quarter, driven by solid contribution from Mortgage Origination Services segment (up 37.6% year over year) and Data & Analytics segment revenue (up 12.3% year over year). It surpassed the Zacks Consensus Estimate of $387 million.
Total operating expenses in the quarter increased 9.8% year over year to $362.3 million. The increase was driven by higher cost of services (up 14.9% year over year) and depreciation and amortization (up 28.3% year over year).
The magnitude of increase in revenues more than offset the magnitude of increase in expenses, thus driving up operating income 211.5% year over year to $48.1 million.
Adjusted earnings before interest tax, depreciation and amortization (:EBITDA) increased 49.5% year over year to $106.4 million.
Quarterly Segment Update
The Data & Analytics segment revenues increased 12.3% year over year to $162.4 million, primarily due to higher demand for property-related information and analytics as well as advisory services related to assisting clients with regulatory compliance
Adjusted EBITDA of $43.3 million were up 4.8% year over year.
The Mortgage Origination Services segment revenues increased 32.7% year over year to $176.4 million, due to increased market demand for credit and tax services and flood certifications, market-share gains and improved pricing in certain product lines.
Adjusted EBITDA of $68.4 million were up 55.5% year over year.
The Asset Management & Processing Services segment revenues decreased 2.1% year over year to $77.2 million, due to lower field services revenues, partially offset by growth in loss mitigation and collateral solutions revenues.
Adjusted EBITDA of $9.7 million were up 4.6% year over year.
Full Year Highlights
In 2012, the company reported adjusted earnings of $1.58 per share, up 116.4% year over year.
CoreLogic reported net income of $1.09 per share in 2012, rebounding from a loss of 68 cents in 2011.
Operating revenues for full year 2012 increased 17.1% year over year to $1.6 billion.
Adjusted EBITDA increased 54.5% year over year to $450.5 million.
Cost Reduction Programs
Cost reductions related to the Company's previously announced Project 30 program were approximately $62.2 million in 2012.
In 2012, CoreLogic launched the Technology Transformation Initiative (TTI), an expansion and extension of Project 30, a cost saving program related to workforce reductions in corporate shared services and information technology (IT), outsourcing of certain IT and business process functions and cuts in spending on real estate and outside services. TTI was launched to provide a new platform to the Company's existing technology infrastructure. This is expected to augment the functionality and performance of CoreLogic and reduce application management and development costs. TTI implementation charges were $10.8 million and $33.2 million, in the fourth quarter and full year 2012 respectively.
Share Repurchases
In 2012, the company repurchased 10 million common shares for a total of $226.6 million.
In Dec 2012, the board of directors approved a new share buyback program which enables it to repurchase up to $250 million worth of shares. The new program replaced the previous one which had $156 million remaining under its authorization
Financial Position
CoreLogic exited 2012 with cash and cash equivalents of $148.9 million, down 42.6% year over year.
Net cash flow from operating activities increased 111.1% year over year to $362.3 million.
Free cash flow in for the full year 2012 was $277.8 million.
Long-term debt of the company declined 6.3% year over year to $792.4 million. Debt to capital ratio improved 2 basis points year over year to 40%.
As of Dec 31, 2012, the Company had approximately $500.0 million available in its revolving credit facility.
Business Update
In Dec 2012, CoreLogic in an effort to solidify its position as a leading provider of geo-spatial property data and analytics purchased Middletown, Conn.-based CDS Business Mapping, LLC (“CDS”) for $78 million.
The Company's geo-spatial property data and analytics business operations are now reported as part of the D&A segment.
CoreLogic has renamed its Default Services segment as Asset Management and Processing Solutions or AMPS
The company has now has a functional operating statement which includes expense categories for costs of services and selling, general and administrative.
Performance of Few Other Consultants
CRA International Inc’s (CRAI) non-GAAP net income for the forth quarter was 43 cents per share compared with 40 cents in the year-earlier quarter. Non-GAAP earnings beat the Zacks Consensus Estimate of 36 cents.
Navigant Consulting Inc. (NCI) reported adjusted earnings per share of 31 cents versus 22 cents in the year-ago quarter, representing a 40.9% year over year increase. Adjusted earnings for the reported quarter exceeded the Zacks Consensus Estimate by 7 cents.
Towers Watson (TW) reported adjusted earnings per share of $1.48 cents for the second quarter of fiscal year 2013, ending Dec 31, 2012, representing a 10% year over year increase. Adjusted earnings for the reported quarter exceeded the Zacks Consensus Estimate by 23.3%.
Zacks Rank
CoreLogic currently carries a Zacks Rank #2 (Buy).
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