- CoreLogic Delivers Record Quarterly Revenue and Strong Double Digit Growth in Operating Income, Margins and Cash Flow
- Double-Digit Revenue Growth Fueled by Housing Market Activity, Competitive Wins and Share Gains
- Significant Increases in Profits and Margin Reflect Favorable Mix and Operating Leverage
- Company Expects to Achieve 2020 Results at Upper End of Guidance
As previously announced, the Company’s financial results reflect its reseller operations as discontinued for all periods presented. A discussion of third quarter financial results from continuing operations follows: Third Quarter Results – Strong and Accelerating Revenue, Margin and Cash Flow Growth Trends. Growth Focus – Share Gains, Mega Wins and Pricing Drive Organic Growth Rates
- Reported revenues of $437 million were up 16% over the year-ago third quarter. Revenues were up 22% normalizing for $17 million of third quarter 2019 revenues attributable to non-core default technology units sold and the AMC transformation, which have no 2020 counterpart
- Organic revenue growth of approximately 8% in the third quarter of 2020, up from 5% in the second quarter of 2020, fueled by continued share gains, pricing and new products
- Strong performance in insurance and spatial solutions and international which collectively grew at mid-single digit rates
- Core mortgage market out-performance in Property Tax and Flood Data solutions and double-digit growth in valuation platforms
Profitability – High Operating Leverage and Productivity Fuel Expanded Margins
- Operating income from continuing operations of $73 million, up 18% over the 2019 third quarter
- Net income from continuing operations of $102 million, up $71 million
- Diluted EPS from continuing operations of $1.26, up 223%; Adjusted EPS of $1.21, up 70%
- Adjusted EBITDA of $176 million, up 46%
- Adjusted EBITDA margin of 40%, up more than 800 basis points
Liquidity and Capital Return– Record Free Cash Flow Generation
- Net operating cash provided by continuing operations for the 12 months ended September 30, 2020 was $508 million. Free cash flow (“FCF”) for the 12 months ended September 30, 2020 totaled $403 million or 73% of adjusted EBITDA
- Secured gross proceeds of $46 million from the sale of an equity investment at a gain of $35 million
- Debt outstanding at September 30, 2020 of $1.59 billion compared with $1.69 billion at December 31, 2019
- $750 million available on revolving credit facility; covenant debt leverage at 2.5 times
- Dividends paid to shareholders totaled $26 million
During July 2020, the Company announced its intention to exit its reseller operations focused on mortgage credit and borrower verification and multi-family tenant screening. Although market leaders in their respective business areas, these reseller businesses are not compatible with the Company’s long-term strategic imperatives. The divestiture of these operations is expected to improve the Company’s revenue growth trends, revenue mix, and significantly enhance profit margins.
As outlined in the Company’s October 16, 2020 press release, CoreLogic’s reseller operations have been classified as discontinued operations as of September 30, 2020. Prior period results have been presented on a comparable basis. For the third quarter and nine months ended September 30, 2020, these businesses generated revenues of $103 million and $287 million, and operating income of $14 million and $38 million, respectively. The Company’s consolidated financial statements reflecting the effect of discontinued operations for prior periods have been provided separately.
“Building off an excellent first half, CoreLogic delivered record revenue and the strongest operational and financial performance in its ten-year history in the third quarter. We generated double-digit top line growth with 8% organic revenue gains. Our organic growth rate more than doubled in the third quarter from the first half as we picked up momentum from mega wins and share gains secured over the past four quarters. During the quarter, we continued to boost our percentage of fixed recurring revenue in line with our strategic planning objectives. Strong top line growth, favorable markets and mix, operating leverage and our ongoing cost management programs also drove profitability to record levels during the quarter,” said Frank Martell, President and Chief Executive Officer.
“Looking ahead, third quarter revenue growth trends, underpinned by share gains, pricing and the launch of new innovative solutions in insurance, geospatial and core mortgage position us well to achieve our 2021 financial objectives. Our market outlook for 2021 and beyond is supported by continued increases in external forecasts. CoreLogic is firing on all cylinders and we are exiting 2020 with accelerating momentum and believe we are well positioned to capitalize on our many value-creation opportunities to drive continuing organic growth and margin gains,” Martell added.
CoreLogic issued a statement on 10/30/2020 stating that its Board is conducting a thorough strategic review to maximize shareholder value.
CoreLogic’s highly experienced Board is committed to acting in the best interests of all CoreLogic shareholders. The Board is open to all paths to create value and is focused on reviewing strategic alternatives. The Board’s willingness to engage with third parties has already resulted in interest at levels far in excess of Senator/Cannae’s lowball $66 per share proposal. The Board is willing to engage with all credible potential buyers expressing interest at an appropriate price level.
Source: CoreLogic Earnings Report