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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Black Knight Inc | NYSE:BKI | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 75.76 | 0 | 01:00:00 |
JACKSONVILLE, Fla., Aug. 3, 2023 /PRNewswire/ -- Black Knight, Inc. (NYSE: BKI), a leading provider of software, data and analytics solutions to the mortgage and consumer loan, real estate and capital markets verticals, today announced unaudited financial results for the second quarter and the six months ended June 30, 2023, as compared to the prior year periods.
Commentary:
Black Knight Executive Chairman Anthony Jabbour said, "Our second quarter results were solid in the face of a very challenging operating environment. As we look ahead to the balance of the year, we remain focused on executing our strategic initiatives and improving the company's performance, yet we acknowledge that market conditions remain uncertain. As such, we remain steadfast in our focus to control what we can control and provide innovative solutions and exceptional service to our clients to drive shareholder value over the long-term."
Black Knight Chief Executive Officer Joe Nackashi added, "Our second quarter results reflect a weaker than expected mortgage market coupled with the near-term effects of the proposed merger with Intercontinental Exchange. Revenue declined 4% on an organic basis driven by lower origination volumes as well as indirect effects of the mortgage market on our Originations Software business. We remain very optimistic about our long-term growth opportunities and commitment to creating value for all stakeholders. I want to thank my Black Knight colleagues for their focus and contributions and our clients for the trust they place in us to help them achieve their strategic goals."
Second Quarter 2023 Highlights:
Second Quarter 2023 Segment Highlights:
Software Solutions
Data and Analytics
Year-to-Date 2023 Highlights:
Year-to-Date 2023 Segment Highlights:
Software Solutions
Data and Analytics
Other Highlights:
ICE Transaction
On May 4, 2022, we entered into a definitive agreement to be acquired by Intercontinental Exchange, Inc. ("ICE") (the "Original Merger Agreement") a leading global provider of data, technology, and market infrastructure. On March 7, 2023, we entered into Amendment No. 1 to the Original Merger Agreement (the "Amendment" and the Original Merger Agreement, as amended by the Amendment, the "Merger Agreement"), which provides for, among other things, a reduction in the merger consideration, valuing Black Knight at $75.00 per share, or a market value of $11.7 billion, with consideration in the form of a mix of approximately $68.00 per share in cash and stock with an exchange ratio of 0.0682 based on ICE's 10-day volume weighted average price as of March 3, 2023 of $102.62 (the "ICE Transaction"). The ICE Transaction is expected to close in the third or fourth quarter of 2023, subject to regulatory clearance and the satisfaction of customary closing conditions.
In connection with entering into the Amendment, on March 7, 2023, we entered into an Equity Purchase Agreement (the "Empower Divestiture Agreement") with Constellation Web Solutions Inc., a subsidiary of Constellation Software Inc. ("Constellation") and (solely for the purposes set forth in the Empower Divestiture Agreement) ICE, pursuant to which, after the closing of the ICE Transaction, Constellation will purchase our Empower® LOS business, including its ExchangeSM, LendingSpace and AIVA solutions (the "Empower Divestiture Transaction").
On July 14, 2023, we entered into an Equity Purchase Agreement (the "OB Divestiture Agreement") with a subsidiary of Constellation, and (solely for the purposes set forth in the OB Divestiture Agreement) ICE, pursuant to which, after the closing of the ICE Transaction, Constellation will purchase our Optimal Blue business (the "OB Divestiture Transaction").
Each of the Empower Divestiture Agreement and the OB Divestiture Agreement was entered into in order to address certain alleged antitrust concerns raised by the United States Federal Trade Commission ("FTC") regarding the ICE Transaction and each is subject to customary closing conditions, including but not limited to the prior completion of the ICE Transaction.
Business Outlook
As a result of the proposed ICE Transaction, Black Knight has suspended the practice of providing forward-looking guidance. In addition, Black Knight will not be hosting a conference call related to its second quarter 2023 financial results.
Definitions of non-GAAP financial measures and the reconciliations to the most directly comparable GAAP measures are provided in subsequent sections of the press release narrative and supplemental schedules.
About Black Knight
Black Knight, Inc. (NYSE:BKI) is an award-winning software, data and analytics company that drives innovation in the mortgage lending and servicing and real estate industries, as well as the capital and secondary markets. Businesses leverage our robust, integrated solutions across the entire homeownership life cycle to help retain existing customers, gain new customers, mitigate risk and operate more effectively.
Our clients rely on our proven, comprehensive, scalable products and our unwavering commitment to delivering superior client support to achieve their strategic goals and better serve their customers. For more information on Black Knight, please visit www.blackknightinc.com.
Non-GAAP Financial Measures
This earnings release contains non-GAAP financial measures, including Organic revenue, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted operating income, Adjusted operating margin, Adjusted net earnings and Adjusted EPS. These are important financial measures for us but are not financial measures as defined by generally accepted accounting principles ("GAAP"). The presentation of this financial information is not intended to be considered in isolation of or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
We use these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. We believe these measures provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making, including determining a portion of executive compensation. We also present these non-GAAP financial measures because we believe investors, analysts and rating agencies consider them useful in measuring our ability to meet our debt service obligations. By disclosing these non-GAAP financial measures, we believe we offer investors a greater understanding of, and an enhanced level of transparency into, the means by which our management operates the company.
These non-GAAP financial measures are not measures presented in accordance with GAAP, and our use of these terms may vary from that of others in our industry. These non-GAAP financial measures should not be considered as an alternative to revenues, operating income, operating margin, net earnings, net earnings per share, net earnings margin or any other measures derived in accordance with GAAP as measures of operating performance or liquidity. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the attached schedules.
Revenues, EBITDA, EBITDA margin, Operating income and Operating margin for the Software Solutions and Data and Analytics segments are presented in conformity with Accounting Standards Codification Topic 280, Segment Reporting. These measures are reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance. For these reasons, these measures are excluded from the definition of non-GAAP financial measures under the Securities and Exchange Commission's ("SEC") Regulation G and Item 10(e) of Regulation S-K.
Organic revenue - We define Organic revenue as the change in Revenues for the current period compared to an adjusted revenue base for the prior period, which is adjusted to add pre-acquisition revenues of acquired businesses for the portion of the prior year matching the portion of the current year that we owned the acquired businesses, and subtract pre-divestiture revenues for divested businesses for the portion of the prior year matching the portion of the current year for which the business was not owned.
Adjusted EBITDA - We define Adjusted EBITDA as Net earnings attributable to Black Knight, with adjustments to reflect the addition or elimination of certain statement of earnings items including, but not limited to:
These adjustments are reflected in Corporate and Other.
Adjusted EBITDA margin - Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by Revenues.
Adjusted operating income -- We define Adjusted operating income as Operating income, with adjustments to reflect the addition or elimination of certain statement of earnings items including, but not limited to:
These adjustments are reflected in Corporate and Other.
Adjusted operating margin - Adjusted operating margin is calculated by dividing Adjusted operating income by Revenues.
Adjusted net earnings - We define Adjusted net earnings as Net earnings attributable to Black Knight with adjustments to reflect the addition or elimination of certain statement of earnings items including, but not limited to:
Adjusted EPS - Adjusted EPS is calculated by dividing Adjusted net earnings by the diluted weighted average shares of common stock outstanding.
Forward-Looking Statements
This press release contains forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements regarding expectations, hopes, intentions or strategies regarding the future are forward-looking statements. Forward-looking statements are based on Black Knight management's beliefs, as well as assumptions made by, and information currently available to, them. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. Black Knight undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
The risks and uncertainties that forward-looking statements are subject to include, but are not limited to:
Information for Investors: | Information for Media: | |
Steve Eagerton | Michelle Kersch | |
Black Knight | Black Knight | |
904.854.3683 | 904.854.5043 | |
steven.eagerton@bkfs.com | michelle.kersch@bkfs.com |
BLACK KNIGHT, INC. | ||||||
Consolidated Balance Sheets | ||||||
(In millions) | ||||||
(Unaudited) | ||||||
June 30, 2023 | December 31, 2022 | |||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 15.9 | $ | 12.2 | ||
Trade receivables, net | 205.4 | 193.5 | ||||
Prepaid expenses and other current assets | 147.7 | 132.1 | ||||
Receivables from related parties | — | 0.1 | ||||
Current assets held for sale | — | 5.8 | ||||
Total current assets | 369.0 | 343.7 | ||||
Property and equipment, net | 129.2 | 143.0 | ||||
Software, net | 424.9 | 443.7 | ||||
Other intangible assets, net | 408.8 | 470.1 | ||||
Goodwill | 3,747.8 | 3,747.8 | ||||
Investments | 224.1 | 171.0 | ||||
Deferred contract costs, net | 189.2 | 192.6 | ||||
Other non-current assets | 275.5 | 246.2 | ||||
Non-current assets held for sale | — | 73.5 | ||||
Total assets | $ | 5,768.5 | $ | 5,831.6 | ||
LIABILITIES AND EQUITY | ||||||
Current liabilities: | ||||||
Trade accounts payable and other accrued liabilities | $ | 68.9 | $ | 66.5 | ||
Income taxes payable | 23.4 | 28.4 | ||||
Accrued compensation and benefits | 70.9 | 82.8 | ||||
Current portion of debt | 43.8 | 33.6 | ||||
Deferred revenues | 50.3 | 59.9 | ||||
Total current liabilities | 257.3 | 271.2 | ||||
Deferred revenues | 31.1 | 42.4 | ||||
Deferred income taxes | 204.9 | 227.5 | ||||
Long-term debt, net of current portion | 2,401.9 | 2,621.7 | ||||
Other non-current liabilities | 46.4 | 47.9 | ||||
Total liabilities | 2,941.6 | 3,210.7 | ||||
Redeemable noncontrolling interests | 43.4 | 47.6 | ||||
Equity: | ||||||
Additional paid-in capital | 1,363.7 | 1,398.2 | ||||
Retained earnings | 1,609.4 | 1,417.1 | ||||
Accumulated other comprehensive loss | (2.1) | (6.3) | ||||
Treasury stock, at cost | (187.5) | (235.7) | ||||
Total shareholders' equity | 2,783.5 | 2,573.3 | ||||
Total liabilities, redeemable noncontrolling interests and shareholders' equity | $ | 5,768.5 | $ | 5,831.6 |
BLACK KNIGHT, INC. | ||||||||||||
Consolidated Statements of Earnings | ||||||||||||
(In millions, except per share data) | ||||||||||||
(Unaudited) | ||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||
Revenues | $ | 368.2 | $ | 394.5 | $ | 750.4 | $ | 781.7 | ||||
Expenses: | ||||||||||||
Operating expenses | 214.4 | 216.8 | 427.5 | 424.7 | ||||||||
Depreciation and amortization | 82.1 | 92.5 | 164.7 | 184.0 | ||||||||
Transition and integration costs | 11.0 | 8.2 | 16.5 | 15.8 | ||||||||
Total expenses | 307.5 | 317.5 | 608.7 | 624.5 | ||||||||
Operating income | 60.7 | 77.0 | 141.7 | 157.2 | ||||||||
Other income and expense: | ||||||||||||
Interest expense, net | (33.5) | (22.6) | (63.6) | (43.7) | ||||||||
Other income (expense), net | 50.0 | (2.4) | 188.0 | (3.6) | ||||||||
Total other income (expense), net | 16.5 | (25.0) | 124.4 | (47.3) | ||||||||
Earnings before income taxes and equity in (losses) earnings of unconsolidated affiliates | 77.2 | 52.0 | 266.1 | 109.9 | ||||||||
Income tax expense | 21.2 | 11.6 | 67.1 | 10.5 | ||||||||
Earnings before equity in (losses) earnings of unconsolidated affiliates | 56.0 | 40.4 | 199.0 | 99.4 | ||||||||
Equity in (losses) earnings of unconsolidated affiliates, net of tax | (0.7) | (0.1) | (1.9) | 303.0 | ||||||||
Net earnings | 55.3 | 40.3 | 197.1 | 402.4 | ||||||||
Net losses attributable to redeemable noncontrolling interests | — | — | — | 2.5 | ||||||||
Net earnings attributable to Black Knight | $ | 55.3 | $ | 40.3 | $ | 197.1 | $ | 404.9 | ||||
Net earnings per share attributable to Black Knight shareholders: | ||||||||||||
Basic | $ | 0.36 | $ | 0.26 | $ | 1.27 | $ | 2.62 | ||||
Diluted | $ | 0.35 | $ | 0.26 | $ | 1.27 | $ | 2.60 | ||||
Weighted average shares of common stock outstanding: | ||||||||||||
Basic | 155.0 | 154.5 | 154.8 | 154.4 | ||||||||
Diluted | 155.9 | 155.6 | 155.7 | 155.5 |
BLACK KNIGHT, INC. | ||||||
Consolidated Statements of Cash Flows | ||||||
(In millions) | ||||||
(Unaudited) | ||||||
Six months ended June 30, | ||||||
2023 | 2022 | |||||
Cash flows from operating activities: | ||||||
Net earnings | $ | 197.1 | $ | 402.4 | ||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||
Depreciation and amortization | 164.7 | 184.0 | ||||
Amortization of debt issuance costs and original issue discount | 2.0 | 1.9 | ||||
Gain related to the TitlePoint transaction | (145.4) | — | ||||
Unrealized gain related to investment in DNB | (55.8) | — | ||||
Deferred income taxes, net | (21.8) | (144.9) | ||||
Equity in losses (earnings) of unconsolidated affiliates, net of tax | 1.9 | (303.0) | ||||
Equity-based compensation | 17.9 | 23.6 | ||||
Changes in assets and liabilities: | ||||||
Trade receivables, including receivables from related parties | (11.7) | (17.4) | ||||
Prepaid expenses and other assets | (42.3) | (28.1) | ||||
Deferred contract costs | (18.3) | (21.7) | ||||
Deferred revenues | (20.9) | (15.3) | ||||
Trade accounts payable and other liabilities | (22.9) | 8.3 | ||||
Net cash provided by operating activities | 44.5 | 89.8 | ||||
Cash flows from investing activities: | ||||||
Additions to property and equipment | (4.1) | (11.8) | ||||
Additions to software | (44.9) | (43.7) | ||||
Proceeds from the TitlePoint transaction | 224.2 | — | ||||
Other investing activities | — | (4.0) | ||||
Net cash provided by (used in) investing activities | 175.2 | (59.5) | ||||
Cash flows from financing activities: | ||||||
Revolver borrowings | 250.3 | 585.8 | ||||
Revolver payments | (443.3) | (195.1) | ||||
Term loan payments | (14.4) | (14.4) | ||||
Payments made for redeemable noncontrolling interests | — | (433.5) | ||||
Tax withholding payments for restricted share vesting | (8.4) | (11.0) | ||||
Finance lease payments | — | (0.8) | ||||
Other financing activities | (0.2) | (0.4) | ||||
Net cash used in financing activities | (216.0) | (69.4) | ||||
Net increase (decrease) in cash and cash equivalents | 3.7 | (39.1) | ||||
Cash and cash equivalents, beginning of period | 12.2 | 77.1 | ||||
Cash and cash equivalents, end of period | $ | 15.9 | $ | 38.0 | ||
Supplemental cash flow information: | ||||||
Interest paid, net | $ | (59.1) | $ | (41.9) | ||
Income taxes paid, net | $ | (94.9) | $ | (124.3) |
BLACK KNIGHT, INC. | ||||||||||||
Segment Information | ||||||||||||
(In millions) | ||||||||||||
(Unaudited) | ||||||||||||
Three months ended June 30, 2023 | ||||||||||||
Software | Data and | Corporate and | ||||||||||
Solutions | Analytics | Other | Total | |||||||||
Revenues | $ | 323.6 | $ | 44.6 | $ | — | $ | 368.2 | ||||
Expenses: | ||||||||||||
Operating expenses | 155.5 | 33.9 | 25.0 | (1) | 214.4 | |||||||
Transition and integration costs | — | — | 11.0 | (2) | 11.0 | |||||||
EBITDA | 168.1 | 10.7 | (36.0) | 142.8 | ||||||||
Depreciation and amortization | 34.0 | 3.9 | 44.2 | (3) | 82.1 | |||||||
Operating income (loss) | 134.1 | 6.8 | (80.2) | 60.7 | ||||||||
Interest expense, net | (33.5) | |||||||||||
Other income, net | 50.0 | |||||||||||
Earnings before income taxes and equity in losses of unconsolidated affiliates | 77.2 | |||||||||||
Income tax expense | 21.2 | |||||||||||
Earnings before equity in losses of unconsolidated affiliates | 56.0 | |||||||||||
Equity in losses of unconsolidated affiliates, net of tax | (0.7) | |||||||||||
Net earnings | $ | 55.3 | ||||||||||
Three months ended June 30, 2022 | ||||||||||||
Software | Data and | Corporate and | ||||||||||
Solutions | Analytics | Other | Total | |||||||||
Revenues | $ | 339.4 | $ | 55.1 | $ | — | $ | 394.5 | ||||
Expenses: | ||||||||||||
Operating expenses | 148.7 | 37.4 | 30.7 | (1) | 216.8 | |||||||
Transition and integration costs | — | — | 8.2 | (2) | 8.2 | |||||||
EBITDA | 190.7 | 17.7 | (38.9) | 169.5 | ||||||||
Depreciation and amortization | 35.9 | 4.0 | 52.6 | (3) | 92.5 | |||||||
Operating income (loss) | 154.8 | 13.7 | (91.5) | 77.0 | ||||||||
Interest expense, net | (22.6) | |||||||||||
Other expense, net | (2.4) | |||||||||||
Earnings before income taxes and equity in losses of unconsolidated affiliates | 52.0 | |||||||||||
Income tax expense | 11.6 | |||||||||||
Earnings before equity in losses of unconsolidated affiliates | 40.4 | |||||||||||
Equity in losses of unconsolidated affiliates, net of tax | (0.1) | |||||||||||
Net earnings attributable to Black Knight | $ | 40.3 |
BLACK KNIGHT, INC. | ||||||||||||
Segment Information (Continued) | ||||||||||||
(In millions) | ||||||||||||
(Unaudited) | ||||||||||||
Six months ended June 30, 2023 | ||||||||||||
Software | Data and | Corporate | ||||||||||
Solutions | Analytics | and Other | Total | |||||||||
Revenues | $ | 660.3 | $ | 90.1 | $ | — | $ | 750.4 | ||||
Expenses: | ||||||||||||
Operating expenses | 305.5 | 67.2 | 54.8 | (1) | 427.5 | |||||||
Transition and integration costs | — | — | 16.5 | (2) | 16.5 | |||||||
EBITDA | 354.8 | 22.9 | (71.3) | 306.4 | ||||||||
Depreciation and amortization | 68.1 | 7.9 | 88.7 | (3) | 164.7 | |||||||
Operating income (loss) | 286.7 | 15.0 | (160.0) | 141.7 | ||||||||
Interest expense, net | (63.6) | |||||||||||
Other income, net | 188.0 | |||||||||||
Earnings before income taxes and equity in losses of unconsolidated affiliates | 266.1 | |||||||||||
Income tax expense | 67.1 | |||||||||||
Earnings before equity in losses of unconsolidated affiliates | 199.0 | |||||||||||
Equity in losses of unconsolidated affiliates, net of tax | (1.9) | |||||||||||
Net earnings | $ | 197.1 | ||||||||||
Six months ended June 30, 2022 | ||||||||||||
Software | Data and | Corporate | ||||||||||
Solutions | Analytics | and Other | Total | |||||||||
Revenues | $ | 670.1 | $ | 111.6 | $ | — | $ | 781.7 | ||||
Expenses: | ||||||||||||
Operating expenses | 291.2 | 74.9 | 58.6 | (1) | 424.7 | |||||||
Transition and integration costs | — | — | 15.8 | (2) | 15.8 | |||||||
EBITDA | 378.9 | 36.7 | (74.4) | 341.2 | ||||||||
Depreciation and amortization | 71.0 | 7.8 | 105.2 | (3) | 184.0 | |||||||
Operating income (loss) | 307.9 | 28.9 | (179.6) | 157.2 | ||||||||
Interest expense, net | (43.7) | |||||||||||
Other expense, net | (3.6) | |||||||||||
Earnings before income taxes and equity in earnings of unconsolidated affiliates | 109.9 | |||||||||||
Income tax expense | 10.5 | |||||||||||
Earnings before equity in earnings of unconsolidated affiliates | 99.4 | |||||||||||
Equity in earnings of unconsolidated affiliates, net of tax | 303.0 | |||||||||||
Net earnings | 402.4 | |||||||||||
Net losses attributable to redeemable noncontrolling interests | 2.5 | |||||||||||
Net earnings attributable to Black Knight | $ | 404.9 |
_______________________________ | |
(1) | Operating expenses for Corporate and Other includes equity-based compensation, including certain related payroll taxes, of $6.7 million and $13.0 million for the three months ended June 30, 2023 and 2022, respectively, and $18.3 million and $24.2 million for the six months ended June 30, 2023 and 2022, respectively. |
(2) | Transition and integration costs primarily consists of costs related to the ICE Transaction and costs associated with acquisitions. |
(3) | Depreciation and amortization for Corporate and Other primarily represents net incremental depreciation and amortization adjustments associated with the application of purchase accounting recorded in accordance with GAAP. |
BLACK KNIGHT, INC. | ||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures | ||||||||||||||
(In millions) | ||||||||||||||
(Unaudited) | ||||||||||||||
Reconciliation of Revenues to Organic Revenue | ||||||||||||||
Three months ended June 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
As | As | Pre-divestiture | Adjusted | Organic | ||||||||||
reported | reported | revenues(1) | base | revenue | ||||||||||
Servicing Software | $ | 221.5 | $ | 221.7 | $ | — | $ | 221.7 | — % | |||||
Origination Software | 102.1 | 117.7 | — | 117.7 | (13) % | |||||||||
Software Solutions | 323.6 | 339.4 | — | 339.4 | (5) % | |||||||||
Data and Analytics | 44.6 | 55.1 | (10.0) | 45.1 | (1) % | |||||||||
Revenues | $ | 368.2 | $ | 394.5 | $ | (10.0) | $ | 384.5 | (4) % |
_______________________________ | |
Note: Amounts may not recalculate due to rounding. | |
(1) | Includes revenues related to the TitlePoint line of business for the three months ended June 30, 2022. |
Six months ended June 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
As | As | Pre-divestiture | Adjusted | Organic | ||||||||||
reported | reported | revenues(1) | base | revenue | ||||||||||
Servicing Software | $ | 442.6 | $ | 444.3 | $ | — | $ | 444.3 | — % | |||||
Origination Software | 217.7 | 225.8 | — | 225.8 | (4) % | |||||||||
Software Solutions | 660.3 | 670.1 | — | 670.1 | (1) % | |||||||||
Data and Analytics | 90.1 | 111.6 | (21.1) | 90.5 | — % | |||||||||
Revenues | $ | 750.4 | $ | 781.7 | $ | (21.1) | $ | 760.6 | (1) % |
_______________________________ | |
Note: Amounts may not recalculate due to rounding. | |
(1) | Includes revenues related to the TitlePoint line of business for the six months ended June 30, 2022. |
BLACK KNIGHT, INC. | |||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures (Continued) | |||||||||||||
(In millions) | |||||||||||||
(Unaudited) | |||||||||||||
Reconciliation of Net Earnings to Adjusted EBITDA | |||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||
Net earnings attributable to Black Knight | $ | 55.3 | $ | 40.3 | $ | 197.1 | $ | 404.9 | |||||
Depreciation and amortization | 82.1 | 92.5 | 164.7 | 184.0 | |||||||||
Interest expense, net | 33.5 | 22.6 | 63.6 | 43.7 | |||||||||
Income tax expense | 21.2 | 11.6 | 67.1 | 10.5 | |||||||||
Other (income) expense, net | (50.0) | 2.4 | (188.0) | 3.6 | |||||||||
Equity in losses of unconsolidated affiliates, net of tax | 0.7 | 0.1 | 1.9 | 2.4 | |||||||||
Gain related to investment in unconsolidated affiliates, net of tax | — | — | — | (305.4) | |||||||||
Net losses attributable to redeemable noncontrolling interests | — | — | — | (2.5) | |||||||||
EBITDA | 142.8 | 169.5 | 306.4 | 341.2 | |||||||||
Equity-based compensation | 6.7 | 13.0 | 18.3 | 24.2 | |||||||||
Acquisition-related costs | 0.7 | 1.1 | 0.7 | 8.7 | |||||||||
ICE Transaction-related costs | 10.3 | 6.4 | 15.8 | 6.4 | |||||||||
Expense reduction initiatives | — | 0.7 | — | 0.7 | |||||||||
Adjusted EBITDA | $ | 160.5 | $ | 190.7 | $ | 341.2 | $ | 381.2 | |||||
Net earnings margin | 15.0 % | 10.2 % | 26.3 % | 51.5 % | |||||||||
Adjusted EBITDA margin | 43.6 % | 48.3 % | 45.5 % | 48.8 % | |||||||||
Reconciliation of Operating Income to Adjusted Operating Income | |||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||
Operating income | $ | 60.7 | $ | 77.0 | $ | 141.7 | $ | 157.2 | |||||
Equity-based compensation | 6.7 | 13.0 | 18.3 | 24.2 | |||||||||
Acquisition-related costs | 0.7 | 1.1 | 0.7 | 8.7 | |||||||||
ICE Transaction-related costs | 10.3 | 6.4 | 15.8 | 6.4 | |||||||||
Expense reduction initiatives | — | 0.7 | — | 0.7 | |||||||||
Depreciation and amortization purchase accounting adjustment | 44.4 | 52.8 | 88.9 | 105.4 | |||||||||
Adjusted operating income | $ | 122.8 | $ | 151.0 | $ | 265.4 | $ | 302.6 | |||||
Operating margin | 16.5 % | 19.5 % | 18.9 % | 20.1 % | |||||||||
Adjusted operating margin | 33.4 % | 38.3 % | 35.4 % | 38.7 % |
BLACK KNIGHT, INC. | ||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures (Continued) | ||||||||||||
(In millions) | ||||||||||||
(Unaudited) | ||||||||||||
Reconciliation of Net Earnings to Adjusted Net Earnings | ||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||
Net earnings attributable to Black Knight | $ | 55.3 | $ | 40.3 | $ | 197.1 | $ | 404.9 | ||||
Equity in losses of unconsolidated affiliates, net of tax | 0.7 | 0.1 | 1.9 | 2.4 | ||||||||
Gain related to investment in unconsolidated affiliates, net of tax | — | — | — | (305.4) | ||||||||
Gain related to the TitlePoint transaction | — | — | (145.4) | — | ||||||||
Unrealized gain related to investment in DNB | (55.8) | — | (55.8) | — | ||||||||
Depreciation and amortization purchase accounting adjustment (1) | 44.4 | 52.8 | 88.9 | 105.4 | ||||||||
Equity-based compensation | 6.7 | 13.0 | 18.3 | 24.2 | ||||||||
Acquisition-related costs | 0.7 | 1.1 | 0.7 | 8.7 | ||||||||
ICE Transaction-related costs | 10.3 | 6.4 | 15.8 | 6.4 | ||||||||
Expense reduction initiatives | — | 0.7 | — | 0.7 | ||||||||
Legal matters | 5.7 | 2.4 | 13.2 | 3.7 | ||||||||
Income tax expense adjustment (2) | 1.2 | (16.3) | 22.3 | (47.4) | ||||||||
Redeemable noncontrolling interests adjustment (3) | — | — | — | (5.8) | ||||||||
Adjusted net earnings | $ | 69.2 | $ | 100.5 | $ | 157.0 | $ | 197.8 | ||||
Adjusted EPS | $ | 0.44 | $ | 0.65 | $ | 1.01 | $ | 1.27 | ||||
Weighted average shares outstanding, diluted | 155.9 | 155.6 | 155.7 | 155.5 |
_________________________________ | |
(1) | Components of the depreciation and amortization purchase accounting adjustment are as follows: |
Three months ended June 30, | Six months ended June 30, | |||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||
Other intangible assets | $ | 30.6 | $ | 36.8 | $ | 61.3 | $ | 73.6 | ||||
Software | 13.6 | 15.8 | 27.2 | 31.4 | ||||||||
Property and equipment | 0.2 | 0.2 | 0.4 | 0.4 | ||||||||
Depreciation and amortization purchase accounting adjustment | $ | 44.4 | $ | 52.8 | $ | 88.9 | $ | 105.4 |
(2) | For the six months ended June 30, 2022, the income tax expense adjustment includes a discrete income tax benefit of $14.1 million related to the establishment of a deferred tax asset as a result of our reorganization of certain wholly-owned subsidiaries within the Optimal Blue partnership investment structure. |
(3) | The redeemable noncontrolling interests adjustment primarily includes the effect of the net incremental depreciation and amortization adjustments associated with the application of purchase accounting. |
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SOURCE Black Knight, Inc.
Copyright 2023 PR Newswire
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