Altisource Portfolio Solutions S.a. · NASDAQ:ASPS
Altisource Portfolio Solutions — Morgan Stanley Leveraged Finance Conference 2018
37 slides from Altisource Portfolio Solutions's conference presentation, Jun 5, 2018
Slide 1: Morgan Stanley Leveraged Finance Conference
Exhibit 99.1 Morgan Stanley Leveraged Finance Conference June 5, 2018 Any copying, distribution or use of any of the information contained herein that is not expressly permitted by Altisource in writing is STRICTLY PROHIBITED. Altisource, the Altisource logo, the “REAL” family of trademarks and serv
Slide 2: Forward-Looking Statements and Estimates
Forward-Looking Statements and Estimates This presentation contains forward-looking statements that involve a number of risks and uncertainties. These forward- looking statements include all statements that are not historical fact, including statements about management’s beliefs and expectations. Th
Slide 3: Non-GAAP Measures
Non-GAAP Measures Adjusted Operating Income, Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), Adjusted EBITDA, Cash Flows From Operating Activities Less Capital Expenditures, Adjusted Cash Flows From Operating Activities Less Capital Expenditures, Net Debt Less Marketable S
Slide 4: Table of Contents
Table of Contents Altisource Overview ……………..……………………………........ 4 Key Investment Highlights ….……………………………….......... 12 Core Businesses in Focus …...….…………….……………......... 24 Appendix ………………………….………………………………… 29 © 2018 Altisource. All rights reserved. 3
Slide 5: Altisource Overview
Altisource Overview © 2018 Altisource. All rights reserved. 4
Slide 6: Vision
Vision: To be the premier real estate and mortgage marketplace connecting market participants and providing related services © 2018 Altisource. All rights reserved. 5
Slide 7: About Altisource
About Altisource Altisource is a leading provider of services and technologies for the mortgage and real estate industries, focusing on the needs of servicers, real estate investors, originators and consumers TTM 3/31/18 2017 Total Service Revenue1 Addressable U.S. Market2 Servicer Services and tech
Slide 8: Our Services and Technologies
Our Services and Technologies1 Altisource has scalable, nationwide businesses that can drive growth across our strategic businesses Real Estate Title and Property Valuation Online Insurance Property Brokerage Escrow Preservation and Auction Management Inspection Servicer Solutions √ √ √ √ √ √ √ Orig
Slide 9: Servicer Solutions
Servicer Solutions Real Estate Loan Pre- Asset Home Servicing Delinquency Foreclosure Brokerage Origination Foreclosure Management Management Our Solutions We provide services and technologies for loan servicers to manage delinquencies, preserve, maintain, market and sell homes Property Foreclosure
Slide 10: Real Estate Investor Solutions
Real Estate Investor Solutions Real Estate Loan Pre- Asset Home Servicing Delinquency Foreclosure Brokerage Origination Foreclosure Management Management Our Solutions We provide services and technologies for residential real estate investors to buy, manage, renovate, lease and sell investment homes
Slide 11: Origination Solutions
Origination Solutions Real Estate Loan Pre- Asset Home Servicing Delinquency Foreclosure Brokerage Origination Foreclosure Management Management Our solutions We provide services and technologies for loan originators to grow their business and underwrite and sell loans Background Origination Solutio
Slide 12: Consumer Real Estate Solutions
Consumer Real Estate Solutions Real Estate Loan Pre- Asset Home Servicing Delinquency Foreclosure Brokerage Origination Foreclosure Management Management Our Solutions We provide consumers with a technology enabled real estate brokerage and the suite of services typically used in connection with a h
Slide 13: Key Investment Highlights
Key Investment Highlights © 2018 Altisource. All rights reserved. 12
Slide 14: Key Investment Highlights
Key Investment Highlights Counter-cyclical businesses positioned to benefit from loosening Attractive Industry Dynamics 1 credit standards and growing FHA issuance A client base that includes some of the largest players in the Large Growth Opportunities 2 servicing and origination industry consolida
Slide 15: Attractive Industry Dynamics
1 Attractive Industry Dynamics Aggregate household debt is increasing Conventional and FHA purchase money since its most recent trough in Q2 2013 mortgages exhibit decreasing FICO scores Total Debt Balance and its Composition ($ trillions) 100% 745 14 740 80% 12 735 10 60% 730 8 40% 725 6 720 20% 4
Slide 16: Attractive Industry Dynamics: FHA loans outstanding are growing
1 Attractive Industry Dynamics FHA loans outstanding are growing Outstanding Residential Debt ($ billions) 9,506 9,493 9,434 9,516 9,056 9,192 8,868 8,916 8,787 8,771 8,781 8,942 8,019 2,828 2,729 2,528 2,768 7,082 2,533 2,711 2,852 2,611 2,595 2,559 2,563 2,630 6,319 2,857 296 5,528 1,134 203 1,360
Slide 17: Large Growth Opportunities
2 Large Growth Opportunities Our clients represent some of the largest Servicers and Fixed income FHA is growing its Slowing origination players in the originators are investors are driving market share of total volumes are driving servicing and consolidating their demand for single originations pro
Slide 18: Historical Track Record
3 Historical Track Record Historical record of incubating, launching and expanding services Service Revenue1,2 ($ million) 808 795 Year Services Launched 746 5 7 40 46 2017 24 669 49 44 27 14 2016 50 160 152 2015 49 151 484 49 2014 5 126 40 25 55 2013 53 44 336 50 2012 1 40 2011 345 423 218 49 202 2
Slide 19: Attractive Financial Profile
4 Attractive Financial Profile Altisource has used some of its cash flow to reduce Debt and Net Debt while maintaining strong liquidity 700 Total Debt ($ millions) Net Debt Less Marketable 250 Cash and Cash Equivalents and 500 Securities1 Marketable Securities 600 30% 450 ($ millions) ($ millions) 2
Slide 20: Attractive Financial Profile: Free Cash Flow
4 Attractive Financial Profile Significant Free Cash Flow Generation as a Limited Capital Expenditures Percentage of Debt Adjusted Cash Flows From Operating Activities less Capital Expenditures1 (A) ` Net Debt less Marketable Securities1 (B) Capital Expenditures ($ millions) 70.0 $500.00 A as % of B
Slide 21: Strong Cash Flow Coverage
5 Strong Cash Flow Coverage We anticipate that the existing Ocwen and NRZ portfolios, with UPB of $179 billion as of December 31, 2017, will provide an estimated $2.1 billion of revenue and approximately $770 million of EBITDA through 20251 600 $ millions 500 535 Service Revenue EBITDA 400 413 300 3
Slide 22: Strong Cash Flow Coverage: Scenarios
5 Strong Cash Flow Coverage Estimated cash flows from the Ocwen and NRZ portfolio provide significant coverage Table A – Non-GSE Delinquency Rate Scenarios 2018 2019 2020 2021 2022 2023 2024 2025 1 2 Present Value of OCN / NRZ Cash Flow as % -2 pp 5 15.6% 14.0% 12.5% 11.2% 10.0% 9.0% 8.0% 7.1% 3,7 o
Slide 23: Ocwen's Acquisition of PHH Corporation
5 Strong Cash Flow Coverage Ocwen’s recent announcement of its acquisition of PHH Corporation positions it for growth • Anticipate providing the PHH portfolio with the same fee-based services that we provide on Ocwen’s current portfolio following the closing of Ocwen’s announced anticipated acquisit
Slide 24: Experienced Management Team
6 Experienced Management Team • Management with significant experience within our industry • Named Executive Officers collectively own approximately 6.89% of our common stock1 William B. Indroneel Kevin J. John A. Vella Michelle D. Shepro Chatterjee Wilcox Chief Revenue Esterman Chief Executive Chie
Slide 25: Core Businesses in Focus
Core Businesses in Focus © 2018 Altisource. All rights reserved. 24
Slide 26: Strong Historical Growth of the Core Businesses
Strong Historical Growth of the Core Businesses Altisource has grown its Field Services and Hubzu businesses Altisource Service Revenue ($ millions) $1,000.00 938.7 940.9 942.6 899.6 $900.00 Altisource Field Services Hubzu $800.00 662.1 $700.00 $600.00 466.9 $500.00 198.2 $400.00 334.8 213.7 247.0 2
Slide 27: Financial Overview
Financial Overview © 2018 Altisource. All rights reserved. 26
Slide 28: Financial Performance
Financial Performance Service Revenue ($ millions) Capital Expenditures ($ millions) Operating Income Margin% 68.0 Adjusted Operating Income1 Margin% 58.0 $1,000 35% 28% 29% 29% $900 27% 30% 48.0 $800 22% 25% $700 20% 27% 38.0 20% $600 26% 24% 18% 16% 28.0 $500 22% 9% 15% $400 10% 18.0 8% 7% 10% $30
Slide 29: Strong Free Cash Flow Coverage
Strong Free Cash Flow Coverage Strong Free Cash Flow Generation, Interest Coverage and Debt Coverage Ratios Adjusted Cash Flows From Operating Activities less Adjusted EBITDA1 less Capital Net Debt less Marketable Capital Expenditures1 (A) Expenditures to Cash Interest Securities1 to Adjusted EBITDA
Slide 30: Appendix
Appendix © 2018 Altisource. All rights reserved. 29
Slide 31: 2018 Scenarios
2018 Scenarios 2018 Scenarios Midpoint of $ millions Scenario A Scenario B Scenarios A and B Service Revenue $ 810 $ 900 $ 855 Related to Ocwen / NRZ $ 510 $ 560 $ 535 Unrelated to Ocwen / NRZ $ 300 $ 340 $ 320 Investments $ 45 $ 35 $ 40 Net Income Attributable to Altisource $ 6 $ 10 $ 8 1 $ 105 $ 1
Slide 32: Non-GAAP Measures
Non-GAAP Measures • Adjusted Operating Income, EBITDA, Adjusted EBITDA, Cash Flows From Operating Activities Less Capital Expenditures, Adjusted Cash Flows From Operating Activities Less Capital Expenditures, Net Debt Less Marketable Securities and Cash Interest Expense, are non-GAAP measures used b
Slide 33: Non-GAAP Measures
Non-GAAP Measures • Net Debt Less Marketable Securities is calculated as long-term debt, including current portion, minus cash and cash equivalents and marketable securities • Cash Interest Expense is calculated by deducting amortization of debt discount and debt issuance costs from GAAP interest ex
Slide 34: Non-GAAP Measures Reconciliation
Non-GAAP Measures Reconciliation LTM 2010 2011 2012 2013 2014 2015 2016 2017 ($ in millions) 3/31/2018 Cash Flows From Operating Activities 52.8 111.6 116.5 185.5 197.5 195.4 126.8 66.1 75.9 Add: Litigation settlement loss1 - - - - - - - 28.0 - Add: Increase in short-term real estate investments rel
Slide 35: Non-GAAP Measures Reconciliation
Non-GAAP Measures Reconciliation LTM 2010 2011 2012 2013 2014 2015 2016 2017 ($ in millions) 3/31/2018 Operating Income (Loss) 55.0 85.7 127.4 162.1 170.5 79.1 65.1 49.7 42.0 Add: Intangible asset amortization expense 4.9 5.3 5.0 28.2 37.7 41.1 47.6 35.4 33.4 Add:Share-based compensation 3.1 3.9 3.6
Slide 36: Non-GAAP Measures 2018 Scenarios Reconciliation
Non-GAAP Measures 2018 Scenarios 1 Reconciliation ($ in millions ) A B Midpoint Net Income Attributable to Altisource 6 10 8 Add: Income tax provision 4 6 5 Add: Interest expense, net of interest income 27 27 27 Add: Depreciation and amortization 56 57 56 Add: Share-based compensation 8 9 9 Add: Los
Slide 37: © 2018 Altisource. All rights reserved.
© 2018 Altisource. All rights reserved.
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