NEWS FOR IMMEDIATE RELEASE CORELOGIC REPORTS SECOND QUARTER 2017 FINANCIAL RESULTS Irvine, Calif., July 25, 2017 – CoreLogic ® (NYSE: CLGX), a leading global provider of property information, insight, analytics and data-enabled solutions, today reported financial results for the quarter ended June 30, 2017. Strong Operating Performance Highlighted by Revenue Outperformance Of Market Trends and Significant Margin Expansion; Full-Year Financial Guidance and Share Repurchase Targets Enhanced • Revenues of $474 million were down 5% as the benefits of new products, market share gains and pricing actions partially offset the impacts of an estimated 15% decline in total U.S. mortgage volumes. • Valuation Solutions footprint expanded through the acquisition of a 45% ownership stake in Mercury Network, LLC and diversification of appraisal management services revenues. • Operating income from continuing operations rose 3% to $78 million as productivity and cost management programs more than offset lower mortgage market volumes and investments in technology, innovation and compliance-related capabilities. • Net income from continuing operations increased 2% to $41 million driven by higher operating income and lower interest expense and tax provisions. Diluted EPS from continuing operations of $0.48 per share was up 7%. Adjusted EPS of $0.72 per share was 11% above prior year. • Adjusted EBITDA totaled $135 million, essentially equivalent to prior year as productivity and operating leverage offset lower U.S. mortgage market volumes. • Company announces plan to refinance its current credit agreement to expand capacity and extend tenor. • Company repurchased 0.5 million common shares in the quarter. Year-to-date share repurchases totaled 1 million shares for $41 million. • Company enhances 2017 financial guidance ranges and raises share repurchase target 10%. “CoreLogic delivered a very strong operating performance for the second quarter and first half of 2017. In terms of revenues, we materially outperformed market volume trends in U.S. mortgage and grew our insurance, spatial and international operations. Underlying organic growth accelerated to 4% in the quarter buoyed by new product
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NEWS FOR - CoreLogic · NEWS FORIMMEDIATE RELEASE CORELOGIC REPORTS SECOND QUARTER 2017 FINANCIAL RESULTS Irvine, Calif., July 25, 2017 – CoreLogic® (NYSE: CLGX), a leading global
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NEWS FOR
IMMEDIATE
RELEASE
CORELOGIC REPORTS SECOND QUARTER 2017 FINANCIAL RESULTS
Irvine, Calif., July 25, 2017 – CoreLogic® (NYSE: CLGX), a leading global provider of property information, insight,
analytics and data-enabled solutions, today reported financial results for the quarter ended June 30, 2017.
Strong Operating Performance Highlighted by Revenue Outperformance
Of Market Trends and Significant Margin Expansion;
Full-Year Financial Guidance and Share Repurchase Targets Enhanced
• Revenues of $474 million were down 5% as the benefits of new products, market share gains and pricing
actions partially offset the impacts of an estimated 15% decline in total U.S. mortgage volumes.
• Valuation Solutions footprint expanded through the acquisition of a 45% ownership stake in Mercury Network,
LLC and diversification of appraisal management services revenues.
• Operating income from continuing operations rose 3% to $78 million as productivity and cost management
programs more than offset lower mortgage market volumes and investments in technology, innovation and
compliance-related capabilities.
• Net income from continuing operations increased 2% to $41 million driven by higher operating income and
lower interest expense and tax provisions. Diluted EPS from continuing operations of $0.48 per share was up
7%. Adjusted EPS of $0.72 per share was 11% above prior year.
• Adjusted EBITDA totaled $135 million, essentially equivalent to prior year as productivity and operating leverage
offset lower U.S. mortgage market volumes.
• Company announces plan to refinance its current credit agreement to expand capacity and extend tenor.
• Company repurchased 0.5 million common shares in the quarter. Year-to-date share repurchases totaled 1
million shares for $41 million.
• Company enhances 2017 financial guidance ranges and raises share repurchase target 10%.
“CoreLogic delivered a very strong operating performance for the second quarter and first half of 2017. In terms of
revenues, we materially outperformed market volume trends in U.S. mortgage and grew our insurance, spatial and
international operations. Underlying organic growth accelerated to 4% in the quarter buoyed by new product
growth, share gains and pricing actions across our core solution sets,” said Frank Martell, President and Chief
Executive Officer of CoreLogic. “We also made major strides in our collateral valuations business during the quarter
by expanding our platform-related revenues and footprint, aggressively building our roster of new clients, and
significantly boosting operating efficiency and margins.”
“Second quarter results also demonstrate how aggressively we are pursuing and achieving efficiency and operating
leverage targets that support our strategic adjusted EBITDA margin goals. Our relentless focus on building unique
and market-leading solutions and driving for best-in-class operational and cost efficiencies has resulted in the
creation of a durable and highly cash generative business model. This model has allowed us to return $1.1 billion to
our shareholders over the past 6 years, including $41 million in share repurchases in the first half of 2017,” Martell
added.
Financial Highlights
Second quarter reported revenues totaled $474 million compared with $500 million in the same 2016 period.
During the quarter, market share and pricing-related gains as well as contributions from new products in both the
Property Intelligence (PI) and the Risk Management and Work Flow (RMW) segments helped to partially offset the
impact of an estimated 15% decline in U.S. mortgage market unit volumes. RMW revenues totaled $225 million,
largely consistent with 2016 levels, as the benefits from organic growth mostly offset lower mortgage market
volumes. PI revenues declined 9% to $251 million as higher insurance, spatial solutions and international revenues
were more than offset by lower valuation solutions revenues attributable to reduced U.S. mortgage market volumes
and planned vendor diversification by a significant appraisal management client.
Operating income from continuing operations totaled $78 million for the second quarter, 3% higher than the same
2016 period. Operating margin was 17% of revenues, compared with 15% in the prior year. The year-over-year
growth in operating income was driven by significant efficiency gains from ongoing productivity initiatives which
more than offset investments in technology and innovation platforms as well as compliance capabilities.
Second quarter net income from continuing operations totaled $41 million, up 2% from prior year. The increase
resulted primarily from higher operating income and lower interest expense and tax provisions offset partially by a
one-time $6 million charge associated with the final settlement of a previously terminated pension plan. Diluted
EPS from continuing operations totaled $0.48 for the second quarter of 2017 compared with $0.45 in 2016.
Adjusted diluted EPS totaled $0.72, up 11%, reflecting operating upsides, lower interest expense and the positive
impacts of share repurchases.
Adjusted EBITDA totaled $135 million in the second quarter compared with $136 million in the same prior year
period as the impact of lower U.S. mortgage market volumes were largely offset by operating leverage and cost
productivity program benefits. Adjusted EBITDA margin was 28%, up from 27% in the same prior year period. PI
segment adjusted EBITDA totaled $70 million compared to $71 million in 2016 as the impact of lower mortgage
origination volumes were mostly offset by the benefits of cost productivity initiatives and higher margins in our
valuation solutions related businesses. PI adjusted EBITDA margin was 28%, up from 26% in the same prior year
period. RMW adjusted EBITDA was $72 million, down 3% from 2016 levels, as continued organic growth and cost
management mostly offset the impacts of lower mortgage volumes. RMW adjusted EBITDA margin was 32%, down
from 33% in the same prior year period.
Liquidity and Capital Resources
At June 30, 2017, the Company had cash and cash equivalents of $89 million compared with $72 million at
December 31, 2016. Total debt as of June 30, 2017 was $1,655 million compared with $1,619 million as of
December 31, 2016. As of June 30, 2017, the Company had available capacity on its revolving credit facility of
$178 million.
Net operating cash provided by continuing operations for the twelve months ended June 30, 2017 was $377 million.
Free cash flow (FCF) for the twelve months ended June 30, 2017 totaled $305 million, which represented 63% of
adjusted EBITDA. FCF is defined as net cash provided by continuing operating activities less capital expenditures
for purchases of property and equipment, capitalized data and other intangible assets.
In June 2017, the Company acquired a 45% ownership position in Mercury Network, LLC for $70 million which was
funded by cash on hand and through available capacity on its revolving credit facility. Mercury Network is a
technology company headquartered in Oklahoma City, servicing more than 800 small and medium-sized mortgage
lenders and appraisal management companies to manage their collateral valuation operations. The purchase of the
remaining 55% ownership of Mercury Network is expected to close in the third quarter of 2017, subject to customary
closing conditions.
During the second quarter, CoreLogic repurchased 0.5 million of its common shares for $21 million. Year-to-date,
the Company has repurchased 1 million shares for $41 million.
The Company recently initiated a process to refinance its current term loan debt and revolving credit facilities. The
purpose of this refinancing is to secure a new Credit Agreement (CA) that increases the Company’s financial
flexibility by expanding capacity and extending tenor at interest rates and terms substantially equivalent to
CoreLogic’s existing CA. This CA is expected to be closed in August 2017.
Financial Guidance and Assumptions
The Company raised the lower end of its 2017 guidance ranges as follows.