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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Altisource Portfolio Solutions SA | NASDAQ:ASPS | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 1.99 | 1.82 | 3.18 | 0 | 09:05:11 |
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(Mark One)
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☑
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Luxembourg
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98-0554932
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Common Stock, $1.00 par value
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ASPS
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NASDAQ Global Select Market
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Large accelerated filer
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☐
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Accelerated filer
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☑
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Page
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June 30,
2020 |
|
December 31,
2019 |
||||
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ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
68,177
|
|
|
$
|
82,741
|
|
Investment in equity securities
|
30,047
|
|
|
42,618
|
|
||
Accounts receivable, net
|
35,337
|
|
|
43,615
|
|
||
Prepaid expenses and other current assets
|
14,157
|
|
|
15,214
|
|
||
Total current assets
|
147,718
|
|
|
184,188
|
|
||
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|
|
|
||||
Premises and equipment, net
|
18,661
|
|
|
24,526
|
|
||
Right-of-use assets under operating leases, net
|
22,843
|
|
|
29,074
|
|
||
Goodwill
|
73,849
|
|
|
73,849
|
|
||
Intangible assets, net
|
53,997
|
|
|
61,046
|
|
||
Other assets
|
11,281
|
|
|
12,436
|
|
||
|
|
|
|
||||
Total assets
|
$
|
328,349
|
|
|
$
|
385,119
|
|
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|
|
||||
LIABILITIES AND EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
61,406
|
|
|
$
|
67,671
|
|
Deferred revenue
|
5,203
|
|
|
5,183
|
|
||
Other current liabilities
|
11,991
|
|
|
14,724
|
|
||
Total current liabilities
|
78,600
|
|
|
87,578
|
|
||
|
|
|
|
||||
Long-term debt
|
288,581
|
|
|
287,882
|
|
||
Other non-current liabilities
|
26,018
|
|
|
31,016
|
|
||
|
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|
||||
Commitments, contingencies and regulatory matters (Note 24)
|
|
|
|
|
|
||
|
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|
|
||||
Equity (deficit):
|
|
|
|
||||
Common stock ($1.00 par value; 100,000 shares authorized, 25,413 issued and 15,629 outstanding as of June 30, 2020; 15,454 outstanding as of December 31, 2019)
|
25,413
|
|
|
25,413
|
|
||
Additional paid-in capital
|
138,493
|
|
|
133,669
|
|
||
Retained earnings
|
213,023
|
|
|
272,026
|
|
||
Treasury stock, at cost (9,784 shares as of June 30, 2020 and 9,959 shares as of
December 31, 2019) |
(443,059
|
)
|
|
(453,934
|
)
|
||
Altisource deficit
|
(66,130
|
)
|
|
(22,826
|
)
|
||
|
|
|
|
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Non-controlling interests
|
1,280
|
|
|
1,469
|
|
||
Total deficit
|
(64,850
|
)
|
|
(21,357
|
)
|
||
|
|
|
|
||||
Total liabilities and deficit
|
$
|
328,349
|
|
|
$
|
385,119
|
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
|
$
|
95,342
|
|
|
$
|
196,535
|
|
|
$
|
216,786
|
|
|
$
|
366,470
|
|
Cost of revenue
|
|
82,628
|
|
|
152,714
|
|
|
177,209
|
|
|
276,929
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Gross profit
|
|
12,714
|
|
|
43,821
|
|
|
39,577
|
|
|
89,541
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
|
24,701
|
|
|
36,516
|
|
|
52,794
|
|
|
78,442
|
|
||||
Restructuring charges
|
|
5,769
|
|
|
1,899
|
|
|
8,694
|
|
|
6,319
|
|
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|
||||||||
(Loss) income from operations
|
|
(17,756
|
)
|
|
5,406
|
|
|
(21,911
|
)
|
|
4,780
|
|
||||
Other income (expense), net
|
|
|
|
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|
|
|
|
||||||||
Interest expense
|
|
(4,446
|
)
|
|
(5,812
|
)
|
|
(9,162
|
)
|
|
(11,764
|
)
|
||||
Unrealized (loss) gain on investment in equity securities
|
|
(11,224
|
)
|
|
11,787
|
|
|
(12,571
|
)
|
|
14,025
|
|
||||
Other (expense) income, net
|
|
(321
|
)
|
|
528
|
|
|
773
|
|
|
902
|
|
||||
Total other income (expense), net
|
|
(15,991
|
)
|
|
6,503
|
|
|
(20,960
|
)
|
|
3,163
|
|
||||
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|
|
|
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|
|
|
|
||||||||
(Loss) income before income taxes and non-controlling interests
|
|
(33,747
|
)
|
|
11,909
|
|
|
(42,871
|
)
|
|
7,943
|
|
||||
Income tax provision
|
|
(1,117
|
)
|
|
(16,513
|
)
|
|
(3,538
|
)
|
|
(15,291
|
)
|
||||
|
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|
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|
|
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|
||||||||
Net loss
|
|
(34,864
|
)
|
|
(4,604
|
)
|
|
(46,409
|
)
|
|
(7,348
|
)
|
||||
Net income attributable to non-controlling interests
|
|
(197
|
)
|
|
(1,240
|
)
|
|
(302
|
)
|
|
(1,680
|
)
|
||||
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|
||||||||
Net loss attributable to Altisource
|
|
$
|
(35,061
|
)
|
|
$
|
(5,844
|
)
|
|
$
|
(46,711
|
)
|
|
$
|
(9,028
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Loss per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
(2.25
|
)
|
|
$
|
(0.36
|
)
|
|
$
|
(3.00
|
)
|
|
$
|
(0.56
|
)
|
Diluted
|
|
$
|
(2.25
|
)
|
|
$
|
(0.36
|
)
|
|
$
|
(3.00
|
)
|
|
$
|
(0.56
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
15,601
|
|
|
16,214
|
|
|
15,549
|
|
|
16,253
|
|
||||
Diluted
|
|
15,601
|
|
|
16,214
|
|
|
15,549
|
|
|
16,253
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive loss:
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive loss, net of tax
|
|
$
|
(34,864
|
)
|
|
$
|
(4,604
|
)
|
|
$
|
(46,409
|
)
|
|
$
|
(7,348
|
)
|
Comprehensive income attributable to non-controlling interests
|
|
(197
|
)
|
|
(1,240
|
)
|
|
(302
|
)
|
|
(1,680
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive loss attributable to Altisource
|
|
$
|
(35,061
|
)
|
|
$
|
(5,844
|
)
|
|
$
|
(46,711
|
)
|
|
$
|
(9,028
|
)
|
|
Altisource Equity (Deficit)
|
|
|
|
|
|||||||||||||||||||||
|
Common stock
|
|
Additional paid-in capital
|
|
Retained earnings
|
|
Treasury stock, at cost
|
|
Non-controlling interests
|
|
Total
|
|||||||||||||||
|
Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, December 31, 2018
|
25,413
|
|
|
$
|
25,413
|
|
|
$
|
122,667
|
|
|
$
|
590,655
|
|
|
$
|
(443,304
|
)
|
|
$
|
1,237
|
|
|
$
|
296,668
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,184
|
)
|
|
—
|
|
|
440
|
|
|
(2,744
|
)
|
||||||
Distributions to non-controlling interest holders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(620
|
)
|
|
(620
|
)
|
||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
2,621
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,621
|
|
||||||
Exercise of stock options and issuance of restricted share units and restricted shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,549
|
)
|
|
1,577
|
|
|
—
|
|
|
28
|
|
||||||
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,163
|
)
|
|
578
|
|
|
—
|
|
|
(585
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, March 31, 2019
|
25,413
|
|
|
25,413
|
|
|
125,288
|
|
|
584,759
|
|
|
(441,149
|
)
|
|
1,057
|
|
|
295,368
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,844
|
)
|
|
—
|
|
|
1,240
|
|
|
(4,604
|
)
|
||||||
Distributions to non-controlling interest holders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(518
|
)
|
|
(518
|
)
|
||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
2,832
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,832
|
|
||||||
Exercise of stock options and issuance of restricted share units and restricted shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,473
|
)
|
|
3,680
|
|
|
—
|
|
|
207
|
|
||||||
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,402
|
)
|
|
689
|
|
|
—
|
|
|
(713
|
)
|
||||||
Repurchase of shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,700
|
)
|
|
—
|
|
|
(6,700
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, June 30, 2019
|
25,413
|
|
|
$
|
25,413
|
|
|
$
|
128,120
|
|
|
$
|
574,040
|
|
|
$
|
(443,480
|
)
|
|
$
|
1,779
|
|
|
$
|
285,872
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, December 31, 2019
|
25,413
|
|
|
$
|
25,413
|
|
|
$
|
133,669
|
|
|
$
|
272,026
|
|
|
$
|
(453,934
|
)
|
|
$
|
1,469
|
|
|
$
|
(21,357
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,650
|
)
|
|
—
|
|
|
105
|
|
|
(11,545
|
)
|
||||||
Distributions to non-controlling interest holders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(311
|
)
|
|
(311
|
)
|
||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
2,894
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,894
|
|
||||||
Issuance of restricted share units and restricted shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,796
|
)
|
|
4,796
|
|
|
—
|
|
|
—
|
|
||||||
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,114
|
)
|
|
1,909
|
|
|
—
|
|
|
(1,205
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, March 31, 2020
|
25,413
|
|
|
25,413
|
|
|
136,563
|
|
|
252,466
|
|
|
(447,229
|
)
|
|
1,263
|
|
|
(31,524
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(35,061
|
)
|
|
—
|
|
|
197
|
|
|
(34,864
|
)
|
||||||
Distributions to non-controlling interest holders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(180
|
)
|
|
(180
|
)
|
||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
1,930
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,930
|
|
||||||
Issuance of restricted share units and restricted shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,177
|
)
|
|
3,177
|
|
|
—
|
|
|
—
|
|
||||||
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,205
|
)
|
|
993
|
|
|
—
|
|
|
(212
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, June 30, 2020
|
25,413
|
|
|
$
|
25,413
|
|
|
$
|
138,493
|
|
|
$
|
213,023
|
|
|
$
|
(443,059
|
)
|
|
$
|
1,280
|
|
|
$
|
(64,850
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
June 30, |
||||||
|
2020
|
|
2019
|
||||
|
|
|
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net loss
|
$
|
(46,409
|
)
|
|
$
|
(7,348
|
)
|
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
7,701
|
|
|
10,522
|
|
||
Amortization of right-of-use assets under operating leases
|
5,474
|
|
|
6,793
|
|
||
Amortization of intangible assets
|
7,049
|
|
|
12,191
|
|
||
Unrealized loss (gain) on investment in equity securities
|
12,571
|
|
|
(14,025
|
)
|
||
Share-based compensation expense
|
4,824
|
|
|
5,453
|
|
||
Bad debt expense
|
1,066
|
|
|
131
|
|
||
Amortization of debt discount
|
333
|
|
|
327
|
|
||
Amortization of debt issuance costs
|
366
|
|
|
363
|
|
||
Deferred income taxes
|
261
|
|
|
15,846
|
|
||
Loss on disposal of fixed assets
|
99
|
|
|
908
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable
|
7,212
|
|
|
(15,789
|
)
|
||
Short-term investments in real estate
|
—
|
|
|
39,459
|
|
||
Prepaid expenses and other current assets
|
1,057
|
|
|
5,239
|
|
||
Other assets
|
868
|
|
|
(511
|
)
|
||
Accounts payable and accrued expenses
|
(6,734
|
)
|
|
(16,587
|
)
|
||
Current and non-current operating lease liabilities
|
(6,024
|
)
|
|
(6,734
|
)
|
||
Other current and non-current liabilities
|
(930
|
)
|
|
(3,082
|
)
|
||
Net cash (used in) provided by operating activities
|
(11,216
|
)
|
|
33,156
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
||
Additions to premises and equipment
|
(1,466
|
)
|
|
(934
|
)
|
||
Proceeds received from sale of equity securities
|
—
|
|
|
6,476
|
|
||
Other
|
—
|
|
|
1,087
|
|
||
Net cash (used in) provided by investing activities
|
(1,466
|
)
|
|
6,629
|
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
||
Repayments and repurchases of long-term debt
|
—
|
|
|
(5,810
|
)
|
||
Proceeds from stock option exercises
|
—
|
|
|
235
|
|
||
Purchase of treasury shares
|
—
|
|
|
(6,700
|
)
|
||
Distributions to non-controlling interests
|
(491
|
)
|
|
(1,138
|
)
|
||
Payments of tax withholding on issuance of restricted share units and restricted shares
|
(1,417
|
)
|
|
(1,298
|
)
|
||
Net cash used in financing activities
|
(1,908
|
)
|
|
(14,711
|
)
|
||
|
|
|
|
||||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
(14,590
|
)
|
|
25,074
|
|
||
Cash, cash equivalents and restricted cash at the beginning of the period
|
86,583
|
|
|
64,046
|
|
||
|
|
|
|
||||
Cash, cash equivalents and restricted cash at the end of the period
|
$
|
71,993
|
|
|
$
|
89,120
|
|
|
|
|
|
|
|||
Supplemental cash flow information:
|
|
|
|
|
|
||
Interest paid
|
$
|
8,463
|
|
|
$
|
11,279
|
|
Income taxes received, net
|
(944
|
)
|
|
(27
|
)
|
||
Acquisition of right-of-use assets with operating lease liabilities
|
958
|
|
|
6,200
|
|
||
Reduction of right-of-use assets from operating lease modifications or reassessments
|
(1,715
|
)
|
|
(3,409
|
)
|
||
|
|
|
|
||||
Non-cash investing and financing activities:
|
|
|
|
|
|
||
Net increase (decrease) in payables for purchases of premises and equipment
|
$
|
469
|
|
|
$
|
(25
|
)
|
(in thousands)
|
|
June 30,
2020 |
|
December 31,
2019 |
||||
|
|
|
|
|
||||
Billed
|
|
$
|
30,850
|
|
|
$
|
35,921
|
|
Unbilled
|
|
9,800
|
|
|
12,166
|
|
||
|
|
40,650
|
|
|
48,087
|
|
||
Less: Allowance for credit losses
|
|
(5,313
|
)
|
|
(4,472
|
)
|
||
|
|
|
|
|
||||
Total
|
|
$
|
35,337
|
|
|
$
|
43,615
|
|
(in thousands)
|
|
June 30,
2020 |
|
December 31,
2019 |
||||
|
|
|
|
|
||||
Income taxes receivable
|
|
$
|
2,572
|
|
|
$
|
5,098
|
|
Maintenance agreements, current portion
|
|
1,340
|
|
|
1,923
|
|
||
Prepaid expenses
|
|
5,439
|
|
|
3,924
|
|
||
Other current assets
|
|
4,806
|
|
|
4,269
|
|
||
|
|
|
|
|
||||
Total
|
|
$
|
14,157
|
|
|
$
|
15,214
|
|
(in thousands)
|
|
June 30,
2020 |
|
December 31,
2019 |
||||
|
|
|
|
|
||||
Computer hardware and software
|
|
$
|
129,966
|
|
|
$
|
144,608
|
|
Leasehold improvements
|
|
21,807
|
|
|
23,800
|
|
||
Furniture and fixtures
|
|
7,269
|
|
|
8,775
|
|
||
Office equipment and other
|
|
3,798
|
|
|
4,004
|
|
||
|
|
162,840
|
|
|
181,187
|
|
||
Less: Accumulated depreciation and amortization
|
|
(144,179
|
)
|
|
(156,661
|
)
|
||
|
|
|
|
|
||||
Total
|
|
$
|
18,661
|
|
|
$
|
24,526
|
|
(in thousands)
|
|
June 30,
2020 |
|
December 31,
2019 |
||||
|
|
|
|
|
||||
United States
|
|
$
|
9,779
|
|
|
$
|
13,426
|
|
Luxembourg
|
|
7,660
|
|
|
10,295
|
|
||
India
|
|
1,030
|
|
|
671
|
|
||
Uruguay
|
|
115
|
|
|
39
|
|
||
Philippines
|
|
77
|
|
|
95
|
|
||
|
|
|
|
|
||||
Total
|
|
$
|
18,661
|
|
|
$
|
24,526
|
|
(in thousands)
|
|
June 30,
2020 |
|
December 31,
2019 |
||||
|
|
|
|
|
||||
Right-of-use assets under operating leases
|
|
$
|
38,685
|
|
|
$
|
39,729
|
|
Less: Accumulated amortization
|
|
(15,842
|
)
|
|
(10,655
|
)
|
||
|
|
|
|
|
||||
Total
|
|
$
|
22,843
|
|
|
$
|
29,074
|
|
(in thousands)
|
|
Total
|
||
|
|
|
||
Balance as of June 30, 2020 and December 31, 2019
|
|
$
|
73,849
|
|
|
|
Weighted average estimated useful life
(in years) |
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net book value
|
||||||||||||||||||
(in thousands)
|
|
|
June 30,
2020 |
|
December 31,
2019 |
|
June 30,
2020 |
|
December 31,
2019 |
|
June 30,
2020 |
|
December 31,
2019 |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Definite lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer related intangible assets
|
|
9
|
|
$
|
214,973
|
|
|
$
|
214,973
|
|
|
$
|
(181,367
|
)
|
|
$
|
(176,043
|
)
|
|
$
|
33,606
|
|
|
$
|
38,930
|
|
Operating agreement
|
|
20
|
|
35,000
|
|
|
35,000
|
|
|
(18,251
|
)
|
|
(17,376
|
)
|
|
16,749
|
|
|
17,624
|
|
||||||
Trademarks and trade names
|
|
16
|
|
9,709
|
|
|
9,709
|
|
|
(6,099
|
)
|
|
(5,893
|
)
|
|
3,610
|
|
|
3,816
|
|
||||||
Non-compete agreements
|
|
4
|
|
1,230
|
|
|
1,230
|
|
|
(1,228
|
)
|
|
(1,215
|
)
|
|
2
|
|
|
15
|
|
||||||
Intellectual property
|
|
—
|
|
—
|
|
|
300
|
|
|
—
|
|
|
(175
|
)
|
|
—
|
|
|
125
|
|
||||||
Other intangible assets
|
|
5
|
|
1,800
|
|
|
3,745
|
|
|
(1,770
|
)
|
|
(3,209
|
)
|
|
30
|
|
|
536
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
|
|
|
$
|
262,712
|
|
|
$
|
264,957
|
|
|
$
|
(208,715
|
)
|
|
$
|
(203,911
|
)
|
|
$
|
53,997
|
|
|
$
|
61,046
|
|
(in thousands)
|
|
June 30,
2020 |
|
December 31,
2019 |
||||
|
|
|
|
|
||||
Restricted cash
|
|
$
|
3,816
|
|
|
$
|
3,842
|
|
Security deposits
|
|
2,777
|
|
|
3,473
|
|
||
Deferred tax assets, net
|
|
1,126
|
|
|
1,626
|
|
||
Other
|
|
3,562
|
|
|
3,495
|
|
||
|
|
|
|
|
||||
Total
|
|
$
|
11,281
|
|
|
$
|
12,436
|
|
(in thousands)
|
|
June 30,
2020 |
|
December 31,
2019 |
||||
|
|
|
|
|
||||
Accounts payable
|
|
$
|
20,926
|
|
|
$
|
22,431
|
|
Accrued expenses - general
|
|
21,422
|
|
|
24,558
|
|
||
Accrued salaries and benefits
|
|
15,704
|
|
|
18,982
|
|
||
Income taxes payable
|
|
3,354
|
|
|
1,700
|
|
||
|
|
|
|
|
||||
Total
|
|
$
|
61,406
|
|
|
$
|
67,671
|
|
(in thousands)
|
|
June 30,
2020 |
|
December 31,
2019 |
||||
|
|
|
|
|
||||
Operating lease liabilities
|
|
$
|
9,300
|
|
|
$
|
11,398
|
|
Other
|
|
2,691
|
|
|
3,326
|
|
||
|
|
|
|
|
||||
Total
|
|
$
|
11,991
|
|
|
$
|
14,724
|
|
(in thousands)
|
|
June 30,
2020 |
|
December 31,
2019 |
||||
|
|
|
|
|
||||
Senior secured term loans
|
|
$
|
293,826
|
|
|
$
|
293,826
|
|
Less: Debt issuance costs, net
|
|
(2,753
|
)
|
|
(3,119
|
)
|
||
Less: Unamortized discount, net
|
|
(2,492
|
)
|
|
(2,825
|
)
|
||
|
|
|
|
|
||||
Long-term debt
|
|
$
|
288,581
|
|
|
$
|
287,882
|
|
(in thousands)
|
|
June 30,
2020 |
|
December 31,
2019 |
||||
|
|
|
|
|
||||
Operating lease liabilities
|
|
$
|
15,024
|
|
|
$
|
19,707
|
|
Income tax liabilities
|
|
10,552
|
|
|
10,935
|
|
||
Other non-current liabilities
|
|
442
|
|
|
374
|
|
||
|
|
|
|
|
||||
Total
|
|
$
|
26,018
|
|
|
$
|
31,016
|
|
|
|
June 30, 2020
|
|
December 31, 2019
|
||||||||||||||||||||||||||||
(in thousands)
|
|
Carrying amount
|
|
Fair value
|
|
Carrying amount
|
|
Fair value
|
||||||||||||||||||||||||
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash and cash equivalents
|
|
$
|
68,177
|
|
|
$
|
68,177
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
82,741
|
|
|
$
|
82,741
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted cash
|
|
3,816
|
|
|
3,816
|
|
|
—
|
|
|
—
|
|
|
3,842
|
|
|
3,842
|
|
|
—
|
|
|
—
|
|
||||||||
Investment in equity securities
|
|
30,047
|
|
|
30,047
|
|
|
—
|
|
|
—
|
|
|
42,618
|
|
|
42,618
|
|
|
—
|
|
|
—
|
|
||||||||
Long-term receivable
|
|
2,436
|
|
|
—
|
|
|
—
|
|
|
2,436
|
|
|
2,371
|
|
|
—
|
|
|
—
|
|
|
2,371
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Senior secured term loan
|
|
293,826
|
|
|
—
|
|
|
214,493
|
|
|
—
|
|
|
293,826
|
|
|
—
|
|
|
277,666
|
|
|
—
|
|
|
|
Six months ended June 30,
|
||||||
(in thousands, except per share amounts)
|
|
2020
|
|
2019
|
||||
|
|
|
|
|
||||
Intrinsic value of options exercised
|
|
$
|
—
|
|
|
$
|
34
|
|
Grant date fair value of stock options that vested
|
|
2,602
|
|
|
2,752
|
|
|
Number of options
|
|
Weighted average exercise price
|
|
Weighted average contractual term (in years)
|
|
Aggregate intrinsic value (in thousands)
|
|||||
|
|
|
|
|
|
|
|
|||||
Outstanding as of December 31, 2019
|
1,468,046
|
|
|
$
|
29.19
|
|
|
4.60
|
|
$
|
94
|
|
Forfeited/expired
|
(504,911
|
)
|
|
23.69
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|||||
Outstanding as of June 30, 2020
|
963,135
|
|
|
32.07
|
|
|
6.11
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|||||
Exercisable as of June 30, 2020
|
589,845
|
|
|
28.52
|
|
|
5.88
|
|
—
|
|
|
Number of restricted shares and restricted share units
|
|
|
|
|
Outstanding as of December 31, 2019
|
636,146
|
|
Granted
|
349,459
|
|
Issued
|
(175,533
|
)
|
Forfeited/canceled
|
(133,622
|
)
|
|
|
|
Outstanding as of June 30, 2020
|
676,450
|
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Service revenue
|
|
$
|
91,008
|
|
|
$
|
190,520
|
|
|
$
|
204,184
|
|
|
$
|
355,519
|
|
Reimbursable expenses
|
|
3,840
|
|
|
4,775
|
|
|
11,685
|
|
|
9,271
|
|
||||
Non-controlling interests
|
|
494
|
|
|
1,240
|
|
|
917
|
|
|
1,680
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
$
|
95,342
|
|
|
$
|
196,535
|
|
|
$
|
216,786
|
|
|
$
|
366,470
|
|
(in thousands)
|
|
Revenue recognized when services are performed or assets are sold
|
|
Revenue related to technology platforms and professional services
|
|
Reimbursable expenses revenue
|
|
Total revenue
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Three months ended June 30, 2020
|
|
$
|
87,447
|
|
|
$
|
4,055
|
|
|
$
|
3,840
|
|
|
$
|
95,342
|
|
Three months ended June 30, 2019
|
|
178,949
|
|
|
12,811
|
|
|
4,775
|
|
|
196,535
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Six months ended June 30, 2020
|
|
195,455
|
|
|
9,646
|
|
|
11,685
|
|
|
216,786
|
|
||||
Six months ended June 30, 2019
|
|
326,704
|
|
|
30,495
|
|
|
9,271
|
|
|
366,470
|
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Compensation and benefits
|
|
$
|
24,913
|
|
|
$
|
36,806
|
|
|
$
|
50,829
|
|
|
$
|
78,174
|
|
Outside fees and services
|
|
41,761
|
|
|
58,588
|
|
|
89,901
|
|
|
121,169
|
|
||||
Technology and telecommunications
|
|
9,074
|
|
|
9,060
|
|
|
18,306
|
|
|
18,538
|
|
||||
Reimbursable expenses
|
|
3,840
|
|
|
4,775
|
|
|
11,685
|
|
|
9,271
|
|
||||
Depreciation and amortization
|
|
3,040
|
|
|
3,209
|
|
|
6,488
|
|
|
7,407
|
|
||||
Cost of real estate sold
|
|
—
|
|
|
40,276
|
|
|
—
|
|
|
42,370
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
$
|
82,628
|
|
|
$
|
152,714
|
|
|
$
|
177,209
|
|
|
$
|
276,929
|
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Compensation and benefits
|
|
$
|
9,307
|
|
|
$
|
15,238
|
|
|
$
|
21,319
|
|
|
$
|
26,591
|
|
Occupancy related costs
|
|
5,668
|
|
|
6,921
|
|
|
11,089
|
|
|
14,395
|
|
||||
Amortization of intangible assets
|
|
2,840
|
|
|
3,544
|
|
|
7,049
|
|
|
12,191
|
|
||||
Professional services
|
|
3,841
|
|
|
3,320
|
|
|
6,476
|
|
|
8,796
|
|
||||
Marketing costs
|
|
951
|
|
|
2,989
|
|
|
2,388
|
|
|
5,921
|
|
||||
Depreciation and amortization
|
|
544
|
|
|
1,682
|
|
|
1,213
|
|
|
3,115
|
|
||||
Other
|
|
1,550
|
|
|
2,822
|
|
|
3,260
|
|
|
7,433
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
$
|
24,701
|
|
|
$
|
36,516
|
|
|
$
|
52,794
|
|
|
$
|
78,442
|
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Interest income
|
|
$
|
6
|
|
|
$
|
116
|
|
|
$
|
80
|
|
|
$
|
267
|
|
Other, net
|
|
(327
|
)
|
|
412
|
|
|
693
|
|
|
635
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
$
|
(321
|
)
|
|
$
|
528
|
|
|
$
|
773
|
|
|
$
|
902
|
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
(in thousands, except per share data)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net loss attributable to Altisource
|
|
$
|
(35,061
|
)
|
|
$
|
(5,844
|
)
|
|
$
|
(46,711
|
)
|
|
$
|
(9,028
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding, basic
|
|
15,601
|
|
|
16,214
|
|
|
15,549
|
|
|
16,253
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding, diluted
|
|
15,601
|
|
|
16,214
|
|
|
15,549
|
|
|
16,253
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Loss per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
(2.25
|
)
|
|
$
|
(0.36
|
)
|
|
$
|
(3.00
|
)
|
|
$
|
(0.56
|
)
|
Diluted
|
|
$
|
(2.25
|
)
|
|
$
|
(0.36
|
)
|
|
$
|
(3.00
|
)
|
|
$
|
(0.56
|
)
|
•
|
As a result of the net loss attributable to Altisource for the six months ended June 30, 2020 and 2019, 0.2 million and 0.3 million, respectively (0.1 million and 0.3 million for the second quarter of 2020 and 2019, respectively), stock options, restricted shares and restricted share units in each period were excluded from the computation of diluted loss per share, as their impacts were anti-dilutive
|
•
|
For the six months ended June 30, 2020 and 2019, 0.6 million and 0.4 million, respectively (0.3 million and 0.5 million for the second quarter of 2020 and 2019, respectively), stock options were anti-dilutive and have been excluded from the computation of diluted loss per share because their exercise price was greater than the average market price of our common stock
|
•
|
For the six months ended June 30, 2020 and 2019, 1.0 million and 0.8 million, respectively (1.1 million and 0.7 million for the second quarter of 2020 and 2019, respectively), stock options, restricted shares and restricted share units, which begin to vest upon the achievement of certain market criteria related to our common stock price, performance criteria and an annualized rate of return to shareholders that have not yet been met in each period have been excluded from the computation of diluted loss per share
|
•
|
Altisource loses Ocwen as a customer or there is an additional significant reduction in the volume of services they purchase from us
|
•
|
Ocwen loses, sells or transfers a significant portion of its GSE and Federal Housing Administration servicing rights or subservicing arrangements or remaining non-GSE servicing rights or subservicing arrangements and Altisource fails to be retained as a service provider
|
•
|
The contractual relationship between Ocwen and NRZ changes significantly and this change results in a change in our status as a provider of services related to the Subject MSRs
|
•
|
Ocwen loses state servicing licenses in states with a significant number of loans in Ocwen’s servicing portfolio
|
•
|
The contractual relationship between Ocwen and Altisource changes significantly or there are significant changes to our pricing to Ocwen for services from which we generate material revenue
|
•
|
Altisource otherwise fails to be retained as a service provider
|
|
|
As of
June 30, 2020 |
|
|
|
|
|
Weighted average remaining lease term (in years)
|
|
3.37
|
|
Weighted average discount rate
|
|
6.99
|
%
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Operating lease costs:
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expense
|
|
$
|
2,529
|
|
|
$
|
3,050
|
|
|
$
|
4,810
|
|
|
$
|
6,616
|
|
Cost of revenue
|
|
635
|
|
|
743
|
|
|
1,269
|
|
|
1,712
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Cash used in operating activities for amounts included in the measurement of lease liabilities
|
|
$
|
3,447
|
|
|
$
|
3,720
|
|
|
$
|
6,758
|
|
|
$
|
8,457
|
|
Short-term (less than one year) lease costs
|
|
1,222
|
|
|
1,152
|
|
|
2,427
|
|
|
2,309
|
|
(in thousands)
|
|
Operating lease obligations
|
||
|
|
|
||
2020
|
|
$
|
5,652
|
|
2021
|
|
8,056
|
|
|
2022
|
|
5,630
|
|
|
2023
|
|
4,582
|
|
|
2024
|
|
2,863
|
|
|
Thereafter
|
|
599
|
|
|
Total lease payments
|
|
27,382
|
|
|
Less: interest
|
|
(3,058
|
)
|
|
|
|
|
||
Present value of lease liabilities
|
|
$
|
24,324
|
|
•
|
assumptions related to sources of liquidity and the adequacy of financial resources;
|
•
|
assumptions about our ability to grow our business, including executing on our strategic initiatives;
|
•
|
assumptions about our ability to improve margins and affect anticipated expense reductions as a result of Project Catalyst and otherwise in response to lower revenues due to COVID-19, the transfer of certain Field Services referrals to another service provider discussed below, or other factors;
|
•
|
assumptions about the variable nature of our cost structure that would allow us to realign our cost structure in line with revenue;
|
•
|
assumptions regarding the impact of seasonality;
|
•
|
assumptions regarding the impacts of the COVID-19 pandemic and the timeliness and effectiveness of actions taken in response thereto;
|
•
|
estimates regarding our effective tax rate; and
|
•
|
estimates regarding our reserves and valuations.
|
•
|
our ability to retain Ocwen Financial Corporation (together with its subsidiaries, “Ocwen”) as a customer or our ability to receive the anticipated volume of referrals from Ocwen;
|
•
|
our ability to retain New Residential Investment Corp. (individually, together with one or more of its subsidiaries, or one or more of its subsidiaries individually, “NRZ”) as a customer or our ability to receive the anticipated volume of referrals from NRZ;
|
•
|
our ability to comply with material agreements if a change of control is deemed to have occurred including, among other things, through the formation of a shareholder group, which may cause a termination event or event of default under certain of our agreements;
|
•
|
our ability to execute on our strategic plan;
|
•
|
our ability to retain our existing customers, expand relationships and attract new customers;
|
•
|
our ability to comply with governmental regulations and policies and any changes in such regulations and policies;
|
•
|
the level of loan delinquencies and charge-offs;
|
•
|
the level of origination volume;
|
•
|
technology incidents, data breaches and cybersecurity risks;
|
•
|
significant changes in tax regulations and interpretations in the countries, states and local jurisdictions in which we operate; and
|
•
|
the risks and uncertainties related to pandemics, epidemics or other force majeure events, including the COVID-19 pandemic, and associated impacts on the economy, supply chain, transportation, movement of people, availability of vendors and demand for our products or services as well as increased costs, recommendations or restrictions imposed by governmental entities, changes in relevant business practices undertaken or imposed by our clients, vendors or regulators, impacts on contracts and client relationships and potential litigation exposure.
|
•
|
Property preservation and inspection services and marketplace transaction management, payment management and vendor management oversight software-as-a-service (“SaaS”) technologies
|
•
|
Hubzu® online real estate auction platform, real estate auction, real estate brokerage and asset management
|
•
|
Equator®, a SaaS-based technology to manage real estate owned (“REO”), short sales, foreclosure, bankruptcy and eviction processes
|
•
|
Mortgage loan fulfillment, certification and certification insurance services and technologies
|
•
|
Title insurance (as an agent), settlement and valuation services
|
•
|
Residential and commercial construction inspection and risk mitigation services
|
•
|
Management of the Best Partners Mortgage Cooperative, Inc., doing business as Lenders One® (“Lenders One”), mortgage banking cooperative
|
•
|
Foreclosure trustee services
|
•
|
Pointillist® customer journey analytics platform
|
•
|
Financial Services business including post-charge-off consumer debt, mortgage charge-off collection services and customer relationship management services (sold on July 1, 2019)
|
•
|
Buy-Renovate-Lease-Sell (“BRS”) business (wound down in 2019)
|
•
|
Residential loan servicing technologies, document management platform and information technology (“IT”) infrastructure management services (wound down in 2019 following Ocwen’s transition to another servicing platform)
|
•
|
Commercial loan servicing technology
|
•
|
Owners.com® technology-enabled real estate brokerage and provider of related mortgage brokerage and title services (discontinued in the fourth quarter of 2019)
|
•
|
Taking steps designed to maintain the health and safety of our employees
|
•
|
Adjusting operations to mitigate the impact to its customers and business while complying with governmental orders
|
•
|
Addressing our cost structure and preserving liquidity to prepare for what could be a period of lower revenue than planned
|
•
|
Altisource loses Ocwen as a customer or there is an additional significant reduction in the volume of services they purchase from us
|
•
|
Ocwen loses, sells or transfers a significant portion of its GSE and Federal Housing Administration servicing rights or subservicing arrangements or remaining non-GSE servicing rights or subservicing arrangements and Altisource fails to be retained as a service provider
|
•
|
The contractual relationship between Ocwen and NRZ changes significantly and this change results in a change in our status as a provider of services related to the Subject MSRs
|
•
|
Ocwen loses state servicing licenses in states with a significant number of loans in Ocwen’s servicing portfolio
|
•
|
The contractual relationship between Ocwen and Altisource changes significantly or there are significant changes to our pricing to Ocwen for services from which we generate material revenue
|
•
|
Altisource otherwise fails to be retained as a service provider
|
•
|
The Company’s financial performance for the three and six months ended June 30, 2020 in its default related services businesses was negatively impacted by COVID-19 related governmental restrictions and changing vendor and consumer behavior. This impact was partially offset by stronger performance from the Company’s origination related businesses that benefited from lower interest rates for the three and six months ended June 30, 2020. Across the Company’s three core businesses, service revenue from customers other than Ocwen, NRZ and Front Yard Residential Corporation (“RESI”) for the three and six months ended June 30, 2020 grew by 5% and 19%, respectively, compared to the three and six months ended June 30, 2019, despite the COVID-19 impacts the Company started facing late in the first quarter of 2020. Compared
|
•
|
During the six months ended June 30, 2020 and 2019, we recognized an unrealized (loss) gain of $(12.6) million and $14.0 million, respectively, ($(11.2) million and $11.8 million for the second quarter of 2020 and 2019, respectively) from the change in fair value on our investment in RESI in other income (expense), net in the condensed consolidated statements of operations and comprehensive loss from a change in the market value of RESI common shares.
|
•
|
In August 2018, Altisource initiated Project Catalyst, a project intended to optimize its operations and reduce costs to better align its cost structure with its anticipated revenues and improve its operating margins. During the six months ended June 30, 2020 and 2019, Altisource incurred $8.7 million and $6.3 million, respectively, ($5.8 million and $1.9 million for the second quarter of 2020 and 2019, respectively) of severance costs, professional services fees, facility consolidation costs, technology costs and business wind down costs related to the reorganization plan. Altisource expects to incur additional severance costs, professional services fees, technology costs and facility consolidation costs in connection with this internal reorganization, automation and other technology related activities and will expense those costs as incurred. Based on the Company’s analysis, it currently anticipates the future costs relating to Project Catalyst to be in the range of approximately $4 million to $7 million and does not include any anticipated costs associated with COVID-19 cost savings initiatives or planned cost reductions in connection with Ocwen’s decision to move certain field services referrals to another provider.
|
•
|
On July 1, 2019, Altisource sold its Financial Services business, consisting of post-charge-off consumer debt and mortgage charge-off collection services and customer relationship management services (the “Financial Services Business”) to Transworld Systems Inc. (“TSI”) for $44.0 million consisting of an upfront payment of $40.0 million, subject to a working capital adjustment (finalized during 2019) and transaction costs upon closing of the sale, and an additional $4.0 million payment on the one year anniversary of the sale closing, which was received on July 1, 2020. The parties also entered into a transition services agreement to provide for the management and orderly transition of certain services and technologies to TSI for periods ranging from 2 months to 13 months, subject to additional 3 month extensions. As of July 1, 2020, nearly all of the transition services and technologies have been fully transitioned to TSI. For the three and six months ended June 30, 2019, service revenue from the Financial Services Business was $17.3 million and $33.4 million, respectively (no comparative amount for the three and six months ended June 30, 2020).
|
•
|
In February 2019, Altisource and Ocwen entered into agreements that, among other things, facilitated Ocwen’s transition from REALServicing and related technologies to another mortgage servicing software platform. The transition was completed during 2019. For the six months ended June 30, 2019, service revenue from REALServicing and related technologies was $11.6 million ($4.6 million for the second quarter of 2019).
|
•
|
In November 2018, the Company announced its plans to sell its short-term investments in real estate and exit the Company’s BRS business. For the three and six months ended June 30, 2019, service revenue from BRS was $39.7 million and $42.2 million, respectively (no comparative amount for the three and six months ended June 30, 2020).
|
•
|
In May 2019, the Company began selling its investment in RESI common stock. During the three and six months ended June 30, 2019, the Company sold 0.6 million shares for net proceeds of approximately $6.5 million (no comparative amount for the three and six months ended June 30, 2020). As required by the senior secure term loan agreement, the Company is using the net proceeds to repay a portion of its senior secured term loan.
|
•
|
In October 2019, the Company announced its plans to wind down and close the Owners.com business, which was completed by December 31, 2019. For the three and six months ended June 30, 2019, service revenue from Owners.com was $2.2 million and $3.8 million, respectively (no comparative amount for the three and six months ended June 30, 2020).
|
•
|
On June 21, 2018, the United States Supreme Court rendered a 5-4 majority decision in South Dakota v. Wayfair, Inc., holding that a state may require a remote seller with no physical presence in the state to collect and remit sales tax on goods and services provided to purchasers in the state, overturning certain existing court precedent. During the six months ended June 30, 2019, the Company completed the analysis of its services for potential exposure to sales tax in various jurisdictions in the United States. The Company recognized a $2.1 million net loss for the six months ended June 30, 2019 in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations and comprehensive loss (no comparative amount for the six months ended June 30, 2020 and the second quarter of 2020 and 2019). The Company began invoicing, collecting and remitting sales tax in applicable jurisdictions in 2019. The Company is also in the process of seeking additional reimbursements for sales tax payments from clients; however, there can be no assurance that the Company will be successful in collecting some or all of such additional reimbursements.
|
•
|
The Company recognized an income tax provision of $3.5 million and $15.3 million for the six months ended June 30, 2020 and 2019, respectively ($1.1 million and $16.5 million for the second quarter of 2020 and 2019, respectively). The decreases in the income tax provision for the three and six months ended June 30, 2020 were primarily from a $12.3 million reduction in Luxembourg deferred tax assets in connection with a decrease in the Luxembourg statutory income tax rate from 26.0% to 24.9% in the second quarter of 2019. The income tax provisions on losses before income taxes and non-controlling interests for the three and six months ended June 30, 2020 were driven by income tax on transfer pricing income from US and foreign operations other than our Luxembourg operating company and no tax benefit on the pretax losses from our Luxembourg operating company for the three and six months ended June 30, 2020.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(in thousands, except per share data)
|
|
2020
|
|
2019
|
|
% Increase (decrease)
|
|
2020
|
|
2019
|
|
% Increase (decrease)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Service revenue
|
|
$
|
91,008
|
|
|
$
|
190,520
|
|
|
(52
|
)
|
|
$
|
204,184
|
|
|
$
|
355,519
|
|
|
(43
|
)
|
Reimbursable expenses
|
|
3,840
|
|
|
4,775
|
|
|
(20
|
)
|
|
11,685
|
|
|
9,271
|
|
|
26
|
|
||||
Non-controlling interests
|
|
494
|
|
|
1,240
|
|
|
(60
|
)
|
|
917
|
|
|
1,680
|
|
|
(45
|
)
|
||||
Total revenue
|
|
95,342
|
|
|
196,535
|
|
|
(51
|
)
|
|
216,786
|
|
|
366,470
|
|
|
(41
|
)
|
||||
Cost of revenue
|
|
82,628
|
|
|
152,714
|
|
|
(46
|
)
|
|
177,209
|
|
|
276,929
|
|
|
(36
|
)
|
||||
Gross profit
|
|
12,714
|
|
|
43,821
|
|
|
(71
|
)
|
|
39,577
|
|
|
89,541
|
|
|
(56
|
)
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
|
24,701
|
|
|
36,516
|
|
|
(32
|
)
|
|
52,794
|
|
|
78,442
|
|
|
(33
|
)
|
||||
Restructuring charges
|
|
5,769
|
|
|
1,899
|
|
|
204
|
|
|
8,694
|
|
|
6,319
|
|
|
38
|
|
||||
(Loss) income from operations
|
|
(17,756
|
)
|
|
5,406
|
|
|
N/M
|
|
|
(21,911
|
)
|
|
4,780
|
|
|
N/M
|
|
||||
Other income (expense), net
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
|
(4,446
|
)
|
|
(5,812
|
)
|
|
(24
|
)
|
|
(9,162
|
)
|
|
(11,764
|
)
|
|
(22
|
)
|
||||
Unrealized (loss) gain on investment in equity securities
|
|
(11,224
|
)
|
|
11,787
|
|
|
(195
|
)
|
|
(12,571
|
)
|
|
14,025
|
|
|
(190
|
)
|
||||
Other (expense) income, net
|
|
(321
|
)
|
|
528
|
|
|
(161
|
)
|
|
773
|
|
|
902
|
|
|
(14
|
)
|
||||
Total other income (expense), net
|
|
(15,991
|
)
|
|
6,503
|
|
|
(346
|
)
|
|
(20,960
|
)
|
|
3,163
|
|
|
N/M
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(Loss) income before income taxes and non-controlling interests
|
|
(33,747
|
)
|
|
11,909
|
|
|
(383
|
)
|
|
(42,871
|
)
|
|
7,943
|
|
|
N/M
|
|
||||
Income tax provision
|
|
(1,117
|
)
|
|
(16,513
|
)
|
|
(93
|
)
|
|
(3,538
|
)
|
|
(15,291
|
)
|
|
(77
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss
|
|
(34,864
|
)
|
|
(4,604
|
)
|
|
N/M
|
|
|
(46,409
|
)
|
|
(7,348
|
)
|
|
N/M
|
|
||||
Net income attributable to non-controlling interests
|
|
(197
|
)
|
|
(1,240
|
)
|
|
(84
|
)
|
|
(302
|
)
|
|
(1,680
|
)
|
|
(82
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss attributable to Altisource
|
|
$
|
(35,061
|
)
|
|
$
|
(5,844
|
)
|
|
N/M
|
|
|
$
|
(46,711
|
)
|
|
$
|
(9,028
|
)
|
|
N/M
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Margins:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Gross profit/service revenue
|
|
14
|
%
|
|
23
|
%
|
|
|
|
19
|
%
|
|
25
|
%
|
|
|
|
|||||
(Loss) income from operations/service revenue
|
|
(20
|
)%
|
|
3
|
%
|
|
|
|
(11
|
)%
|
|
1
|
%
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
(2.25
|
)
|
|
$
|
(0.36
|
)
|
|
N/M
|
|
|
$
|
(3.00
|
)
|
|
$
|
(0.56
|
)
|
|
N/M
|
|
Diluted
|
|
$
|
(2.25
|
)
|
|
$
|
(0.36
|
)
|
|
N/M
|
|
|
$
|
(3.00
|
)
|
|
$
|
(0.56
|
)
|
|
N/M
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
15,601
|
|
|
16,214
|
|
|
(4
|
)
|
|
15,549
|
|
|
16,253
|
|
|
(4
|
)
|
||||
Diluted
|
|
15,601
|
|
|
16,214
|
|
|
(4
|
)
|
|
15,549
|
|
|
16,253
|
|
|
(4
|
)
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
% Increase (decrease)
|
|
2020
|
|
2019
|
|
% Increase (decrease)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Service revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Field Services
|
|
$
|
47,567
|
|
|
$
|
64,388
|
|
|
(26
|
)
|
|
$
|
102,480
|
|
|
$
|
134,482
|
|
|
(24
|
)
|
Marketplace
|
|
17,161
|
|
|
32,603
|
|
|
(47
|
)
|
|
43,328
|
|
|
69,570
|
|
|
(38
|
)
|
||||
Mortgage and Real Estate Solutions
|
|
25,468
|
|
|
26,940
|
|
|
(5
|
)
|
|
55,744
|
|
|
53,353
|
|
|
4
|
|
||||
Earlier Stage Business
|
|
578
|
|
|
330
|
|
|
75
|
|
|
1,139
|
|
|
596
|
|
|
91
|
|
||||
Other
|
|
234
|
|
|
66,259
|
|
|
(100
|
)
|
|
1,493
|
|
|
97,518
|
|
|
(98
|
)
|
||||
Total service revenue
|
|
91,008
|
|
|
190,520
|
|
|
(52
|
)
|
|
204,184
|
|
|
355,519
|
|
|
(43
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reimbursable expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Field Services
|
|
848
|
|
|
2,478
|
|
|
(66
|
)
|
|
3,168
|
|
|
5,074
|
|
|
(38
|
)
|
||||
Marketplace
|
|
1,837
|
|
|
1,544
|
|
|
19
|
|
|
6,067
|
|
|
2,235
|
|
|
171
|
|
||||
Mortgage and Real Estate Solutions
|
|
1,155
|
|
|
736
|
|
|
57
|
|
|
2,450
|
|
|
1,772
|
|
|
38
|
|
||||
Other
|
|
—
|
|
|
17
|
|
|
(100
|
)
|
|
—
|
|
|
190
|
|
|
(100
|
)
|
||||
Total reimbursable expenses
|
|
3,840
|
|
|
4,775
|
|
|
(20
|
)
|
|
11,685
|
|
|
9,271
|
|
|
26
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-controlling interests:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage and Real Estate Solutions
|
|
494
|
|
|
1,240
|
|
|
(60
|
)
|
|
917
|
|
|
1,680
|
|
|
(45
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue
|
|
$
|
95,342
|
|
|
$
|
196,535
|
|
|
(51
|
)
|
|
$
|
216,786
|
|
|
$
|
366,470
|
|
|
(41
|
)
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
% Increase (decrease)
|
|
2020
|
|
2019
|
|
% Increase (decrease)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and benefits
|
|
$
|
24,913
|
|
|
$
|
36,806
|
|
|
(32
|
)
|
|
$
|
50,829
|
|
|
$
|
78,174
|
|
|
(35
|
)
|
Outside fees and services
|
|
41,761
|
|
|
58,588
|
|
|
(29
|
)
|
|
89,901
|
|
|
121,169
|
|
|
(26
|
)
|
||||
Technology and telecommunications
|
|
9,074
|
|
|
9,060
|
|
|
—
|
|
|
18,306
|
|
|
18,538
|
|
|
(1
|
)
|
||||
Reimbursable expenses
|
|
3,840
|
|
|
4,775
|
|
|
(20
|
)
|
|
11,685
|
|
|
9,271
|
|
|
26
|
|
||||
Depreciation and amortization
|
|
3,040
|
|
|
3,209
|
|
|
(5
|
)
|
|
6,488
|
|
|
7,407
|
|
|
(12
|
)
|
||||
Cost of real estate sold
|
|
—
|
|
|
40,276
|
|
|
(100
|
)
|
|
—
|
|
|
42,370
|
|
|
(100
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of revenue
|
|
$
|
82,628
|
|
|
$
|
152,714
|
|
|
(46
|
)
|
|
$
|
177,209
|
|
|
$
|
276,929
|
|
|
(36
|
)
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
% Increase (decrease)
|
|
2020
|
|
2019
|
|
% Increase (decrease)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and benefits
|
|
$
|
9,307
|
|
|
$
|
15,238
|
|
|
(39
|
)
|
|
$
|
21,319
|
|
|
$
|
26,591
|
|
|
(20
|
)
|
Occupancy related costs
|
|
5,668
|
|
|
6,921
|
|
|
(18
|
)
|
|
11,089
|
|
|
14,395
|
|
|
(23
|
)
|
||||
Amortization of intangible assets
|
|
2,840
|
|
|
3,544
|
|
|
(20
|
)
|
|
7,049
|
|
|
12,191
|
|
|
(42
|
)
|
||||
Professional services
|
|
3,841
|
|
|
3,320
|
|
|
16
|
|
|
6,476
|
|
|
8,796
|
|
|
(26
|
)
|
||||
Marketing costs
|
|
951
|
|
|
2,989
|
|
|
(68
|
)
|
|
2,388
|
|
|
5,921
|
|
|
(60
|
)
|
||||
Depreciation and amortization
|
|
544
|
|
|
1,682
|
|
|
(68
|
)
|
|
1,213
|
|
|
3,115
|
|
|
(61
|
)
|
||||
Other
|
|
1,550
|
|
|
2,822
|
|
|
(45
|
)
|
|
3,260
|
|
|
7,433
|
|
|
(56
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
|
$
|
24,701
|
|
|
$
|
36,516
|
|
|
(32
|
)
|
|
$
|
52,794
|
|
|
$
|
78,442
|
|
|
(33
|
)
|
(in thousands)
|
|
2020
|
|
2019
|
|
% Increase (decrease)
|
|||||
|
|
|
|
|
|
|
|
||||
Net loss adjusted for non-cash items
|
|
$
|
(6,665
|
)
|
|
$
|
31,161
|
|
|
(121
|
)
|
Changes in operating assets and liabilities
|
|
(4,551
|
)
|
|
1,995
|
|
|
(328
|
)
|
||
Net cash (used in) provided by operating activities
|
|
(11,216
|
)
|
|
33,156
|
|
|
(134
|
)
|
||
Net cash (used in) provided by investing activities
|
|
(1,466
|
)
|
|
6,629
|
|
|
(122
|
)
|
||
Net cash used in financing activities
|
|
(1,908
|
)
|
|
(14,711
|
)
|
|
87
|
|
||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
|
(14,590
|
)
|
|
25,074
|
|
|
(158
|
)
|
||
Cash, cash equivalents and restricted cash at the beginning of the period
|
|
86,583
|
|
|
64,046
|
|
|
35
|
|
||
|
|
|
|
|
|
|
|
||||
Cash, cash equivalents and restricted cash at the end of the period
|
|
$
|
71,993
|
|
|
$
|
89,120
|
|
|
(19
|
)
|
a)
|
Evaluation of Disclosure Controls and Procedures
|
b)
|
Internal Control over Financial Reporting
|
Exhibit Number
|
|
Exhibit Description
|
|
|
|
10.1 * †
|
|
|
|
|
|
10.2 * †
|
|
|
|
|
|
31.1 *
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
101 *
|
|
Pursuant to Rule 405 of Regulation S-T, the following financial information from the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2020 is formatted in Inline XBRL interactive data files: (i) Condensed Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019; (ii) Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2020 and 2019; (iii) Condensed Consolidated Statements of Equity for the six months ended June 30, 2020 and 2019; (iv) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and 2019; and (v) Notes to Condensed Consolidated Financial Statements.
|
|
|
|
104 *
|
|
Cover Page Interactive Data File formatted as Inline XBRL and contained in Exhibit 101
|
|
|
|
______________________________________
|
||
*
|
|
Filed herewith.
|
†
|
|
Denotes a management contract or compensatory arrangement.
|
|
|
|
ALTISOURCE PORTFOLIO SOLUTIONS S.A.
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
Date:
|
August 6, 2020
|
|
By:
|
/s/ Michelle D. Esterman
|
|
|
|
|
Michelle D. Esterman
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(On behalf of the Registrant and as its Principal Financial Officer and Principal Accounting Officer)
|
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