GlobeNewswire Inc | Aug 6, 2020 07:21AM EDT

August 06, 2020

Second Quarter 2020

-- Service revenue of $91.0 million -- Loss before income taxes and non-controlling interests of $(33.7) million -- Adjusted pretax loss attributable to Altisource(1) of $(10.0) million -- Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA)(1) of $(2.1) million

LUXEMBOURG, Aug. 06, 2020 (GLOBE NEWSWIRE) -- Altisource Portfolio Solutions S.A. (Altisource or the Company) (NASDAQ: ASPS), a leading provider and marketplace for the real estate and mortgage industries, today reported financial results for the second quarter 2020.

In the second quarter, Altisource faced an unprecedented and challenging business environment as a result of the COVID-19 pandemic. As anticipated, Altisources second quarter financial results reflect this impact with industrywide foreclosure initiations down by approximately 85% and lender completed foreclosures down by 75% compared to the second quarter of 2019. Despite this difficult environment, we acted quickly to reduce costs, work to mitigate the impact to our customers and support the safety of our employees. As result, the vast majority of our staff are working from home and we were able to preserve cash, ending the quarter with $68 million in cash and cash equivalents.

We anticipate this short to medium term pressure on our default related businesses to continue with governmental forbearance programs and moratoriums temporarily preventing servicers from pursuing foreclosure of delinquent loans and with the news from Ocwen that an MSR investor instructed it to move certain referrals for field services to another service provider beginning in July. To address these challenges and protect our business, we are developing a plan to further reduce our costs. Based upon our current planning, we are forecasting Altisource to generate 2021 service revenue of $250 million to $270 million, adjusted EBITDA of $35 million to $43 million and adjusted EBITDA margins of 14% to 16%, said Chairman and Chief Executive Officer William B. Shepro.

Mr. Shepro further commented, Longer term, we believe that the overall market for our default related services will stabilize at a much higher rate than it was before the pandemic began, positioning Altisource to become a stronger, more diversified and fast growing company.

Second Quarter 2020 Highlights(2)

Financial and Corporate

-- Ended the second quarter 2020 with $68.2 million of cash and cash equivalents and $30.0 million of investment in equity securities -- Ended the second quarter 2020 with $195.6 million of net debt less investment in equity securities(1), 4% lower than June30, 2019 -- The Companys second quarter 2020 financial performance in its default related services businesses, including revenue from customers other than Ocwen Financial Corporation (Ocwen), New Residential Investment Corp. (NRZ) and Front Yard Residential Corporation (RESI), was negatively impacted by COVID-19 related governmental restrictions, government measures to provide financial support to borrowers (i.e., foreclosure and eviction moratoriums, forbearance plans and higher unemployment benefits) and changing vendor and consumer behavior -- To address lower anticipated revenue as a result of the pandemic, Altisource took several measures in the second quarter 2020 to reduce its 2020 cash expenses including employee furloughs and terminations, the elimination of certain discretionary spending and temporary employee and Board compensation reductions -- To address lower than previously anticipated revenue from Ocwen and the extension of foreclosure and eviction moratoriums, the Company is developing a plan to further reduce its costs with an objective to achieve 2021 Adjusted EBITDA margins of 14% to 16%

Business Highlights

Field Services

-- Grew Field Services revenue from customers other than Ocwen, NRZ and RESI by 9% in the second quarter of 2020 compared to the second quarter of 2019

Marketplace

-- Grew Hubzu inventory from customers other than Ocwen, NRZ and RESI by 1% since June30, 2019, with such inventory representing 43% of total Hubzu inventory as of June30, 2020 -- Hubzu revenue from customers other than Ocwen, NRZ and RESI was 2% lower in the second quarter of 2020 compared to the second quarter of 2019

Mortgage and Real Estate Solutions

-- Grew Mortgage and Real Estate Solutions revenue from customers other than Ocwen, NRZ and RESI by 18% in the second quarter of 2020 compared to the second quarter of 2019

Second Quarter 2020 Financial Results

Second quarter 2020 service revenue of $91.0 million was 52% lower than the second quarter 2019 primarily from the 2019 sale, discontinuation and exit from certain businesses (resulting in a 33% decline in service revenue), including the July 1, 2019 sale of the Financial Services Business, lower REALServicing revenue from Ocwens migration to another servicing system, the discontinuation of the Buy-Renovate-Lease-Sell (BRS) business and the wind down of Owners.com. In addition, Service revenue was lower from COVID-19 pandemic related governmental restrictions and changing vendor and consumer behavior on demand for Field Services, Marketplace and default related services in Mortgage and Real Estate Solutions, the reduction in the size of Ocwens portfolio and NRZs more aggressive sale of homes at the foreclosure auction (which reduces our real estate owned auction, brokerage, field services and title service revenue). These decreases were partially offset by a 5% increase in revenue from customers other than Ocwen, NRZ and RESI in our Field Services, Marketplace and Mortgage and Real Estate Solutions businesses from new customer on-boardings, market share expansion with existing customers, and higher origination related volumes driven by lower interest rates and business development efforts.

Second quarter 2020 loss from operations of $(17.8) million was lower than second quarter 2019 income from operations of $5.4 million primarily as a result of lower revenue (as discussed above), changes in service mix with lower revenue from higher margin Marketplace businesses, the impact of the July 1, 2019 sale of the Financial Services business and higher restructuring costs. These decreases were partially offset by lower selling, general and administrative expenses and the benefits of our COVID-19 cash cost savings measures and higher revenue in the second quarter of 2019 from the sale of the majority of our BRS portfolio that resulted in a $1.8 million loss.

Second quarter 2020 adjusted operating loss(1) of $(4.8) million compared to adjusted operating income(1) of $15.5 million in the second quarter 2019, primarily from the impact of revenue declines discussed above, partially offset by the benefits of our COVID-19 cash cost savings measures.

Second quarter 2020 loss before income taxes and non-controlling interests of $(33.7) million compared to income before income taxes and non-controlling interests of $11.9 million in the second quarter 2019, primarily from an unrealized loss on our investment in RESI of $(11.2) million in the second quarter 2020 compared to an unrealized gain on our investment in RESI of $11.8 million in the second quarter 2019 and lower operating income discussed above, partially offset by lower interest expense.

Second quarter 2020 adjusted pretax loss attributable to Altisource(1) of $(10.0) million compared to adjusted pretax income attributable to Altisource(1) of $8.9 million in the second quarter 2019, primarily from lower adjusted operating income(1) discussed above, partially offset by lower interest expense.

Second quarter 2020 adjusted EBITDA(1) of $(2.1) million compared to adjusted EBITDA(1) of $19.5 million in the second quarter 2019, primarily from lower adjusted operating income(1) discussed above, excluding the decrease in depreciation and amortization of premises and equipment.

Second quarter 2020 net loss attributable to Altisource of $(35.1) million compared to $(5.8) million for the second quarter 2019, primarily due to lower income before income taxes and non-controlling interests discussed above, partially offset by a lower tax provision driven by a deferred tax adjustment of $12.3 million from an income tax rate change in Luxembourg in the second quarter 2019.

Second quarter 2020 adjusted net loss attributable to Altisource(1) of $(11.8) million compared to adjusted net income attributable to Altisource(1) of $5.9 million for the second quarter 2019, primarily from lower adjusted pretax income attributable to Altisource(1) discussed above, partially offset by a lower tax provision excluding the Luxembourg deferred tax adjustment discussed above.

Second quarter 2020 loss per diluted share of $(2.25) compared to $(0.36) for the second quarter 2019, primarily due to higher net loss attributable to Altisource discussed above, partially offset by fewer diluted shares outstanding from share repurchases during 2019.

Second quarter 2020 adjusted loss per share(1) of $(0.76) compared to $0.36 earnings per share for the second quarter 2019, primarily due to lower adjusted net income attributable to Altisource(1) discussed above, partially offset by fewer diluted shares outstanding from share repurchases during 2019.

Second Quarter and Year-to-Date June 30, 2020 Results Compared to the Second Quarter and Year-to-Date June 30, 2019:

(in thousands, Second Second % Year-to-Date Year-to-Date %except per Quarter Quarter 2019 Change June 30, June 30, Changeshare data) 2020 2020 2019Service revenue $ 91,008 $ 190,520 (52 ) $ 204,184 $ 355,519 (43 )(Loss) income (17,756 ) 5,406 N/M (21,911 ) 4,780 N/M from operationsAdjustedoperating (4,769 ) 15,451 (131 ) 3,732 32,770 (89 )(loss) income^(1)(Loss) incomebefore incometaxes and (33,747 ) 11,909 (383 ) (42,871 ) 7,943 N/M non-controllinginterestsPretax (loss)income (33,944 ) 10,669 N/M (43,173 ) 6,263 N/M attributable toAltisource^(1)Adjusted pretax(loss) income (10,033 ) 8,927 (212 ) (5,598 ) 20,228 (128 )attributable toAltisource^(1)Adjusted EBITDA (2,068 ) 19,514 (111 ) 11,095 42,247 (74 )^(1)Net lossattributable to (35,061 ) (5,844 ) N/M (46,711 ) (9,028 ) N/M AltisourceAdjusted net(loss) income (11,779 ) 5,850 (301 ) (9,127 ) 15,213 (160 )attributable toAltisource^(1)Diluted loss (2.25 ) (0.36 ) N/M (3.00 ) (0.56 ) N/M per shareAdjusteddiluted (loss) (0.76 ) 0.36 (311 ) (0.59 ) 0.92 (164 )earnings pershare^(1)Cash flows(used in)provided by (9,568 ) 39,811 (124 ) (11,216 ) 33,156 (134 )operatingactivitiesAdjusted cashflows used inoperatingactivities less (10,523 ) (193 ) N/M (12,682 ) (379 ) N/M additions topremises andequipment^(1)

N/M - not meaningful.

-- Second quarter 2020 and 2019 (loss) income from operations include $5.8 million and $1.9 million, respectively ($8.7 million and $6.3 million for year-to-date June 30, 2020 and 2019, respectively) of restructuring charges related to Project Catalyst. Second quarter and year-to-date June 30, 2020 loss from operations include Pointillist losses of $2.4 million and $5.1 million, respectively (no comparable amounts in 2019). Second quarter and year-to-date June 30, 2019 income from operations include a loss on the BRS portfolio sale of $1.8 million (no comparable amounts in 2020). Year-to-date June 30, 2019 income from operations includes a sales tax accrual of $2.1 million and an other asset write-off from a business exit of $0.2 million (no comparable amounts in 2020). -- Second quarter 2020 and 2019 pretax (loss) income attributable to Altisource(1) include $(11.2) million and $11.8 million, respectively ($(12.6) million and $14.0 million for year-to-date June 30, 2020 and 2019, respectively) of unrealized mark-to-market (losses) gains on our equity investment in RESI. -- Second quarter 2020 and 2019 net loss attributable to Altisource include $0.5 million and $13.2 million, respectively ($2.4 million and $13.2 million for year-to-date June 30, 2020 and 2019, respectively) of certain income tax items related to adjustments to foreign income tax reserves, the impact of a decrease in the India and Luxembourg income tax rates on deferred tax assets and an India restructuring from net loss attributable to Altisource.

________________________

(1) This is a non-GAAP measure that is defined and reconciled to the corresponding GAAP measure herein.(2) Applies to 2020 unless otherwise indicated.

Forward-Looking Statements

This press release 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 managements beliefs and expectations. These statements may be identified by words such as anticipate, intend, expect, may, could, should, would, plan, estimate, seek, believe, potential and similar expressions. Forward-looking statements are based on managements beliefs as well as assumptions made by and information currently available to management. Because such statements are based on expectations as to the future and are not statements of historical fact, actual results may differ materially from what is contemplated by the forward-looking statements. Altisource does not undertake, and expressly disclaims, any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise. The risks and uncertainties to which forward-looking statements are subject include, but are not limited to, the risks and uncertainties related to pandemics, epidemics or other force majeure events, including the COVID-19 pandemic, and associated impacts to the economy, supply chain, transportation, movement of people, availability of vendors, demand for our products or services, 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; our ability to retain existing customers and attract new customers and the potential for changes in our customer relationships, including the timing and extent of Ocwen or NRZ directing referrals of services to providers other than Altisource; various risks relating to our ability to effectively manage our regulatory and contractual obligations; the adequacy of our financial resources, including our sources of liquidity and ability to repay borrowings and comply with our Credit Agreement, including the financial and other covenants contained therein; as well as Altisources ability to retain key executives or employees, general economic and market conditions, behavior of customers, suppliers and/or competitors, technological developments, governmental regulations, taxes and policies, and other risks and uncertainties detailed in the Forward-Looking Statements, Risk Factors and other sections of Altisources Form 10-K, March 31, 2020 Form 10-Q and other filings with the Securities and Exchange Commission.

Webcast

Altisource will host a webcast at 8:30 a.m. EDT today to discuss our second quarter. A link to the live audio webcast will be available on Altisources website in the Investor Relations section. Those who want to listen to the call should go to the website at least fifteen minutes prior to the call to register, download and install any necessary audio software. A replay of the conference call will be available via the website approximately two hours after the conclusion of the call and will remain available for approximately 30 days.

About Altisource

Altisource Portfolio Solutions S.A. is an integrated service provider and marketplace for the real estate and mortgage industries. Combining operational excellence with a suite of innovative services and technologies, Altisource helps solve the demands of the ever-changing markets we serve. Additional information is available at www.Altisource.com.

FOR FURTHER INFORMATION CONTACT:

Michelle D. EstermanChief Financial OfficerT: (770) 612-7007E: Michelle.Esterman@altisource.com

ALTISOURCE PORTFOLIO SOLUTIONS S.A.CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(in thousands, except per share data)(unaudited)

Three months ended Six months ended June 30, June 30, 2020 2019 2020 2019 Service revenue $ 91,008 $ 190,520 $ 204,184 $ 355,519 Reimbursable 3,840 4,775 11,685 9,271 expensesNon-controlling 494 1,240 917 1,680 interestsTotal revenue 95,342 196,535 216,786 366,470 Cost of revenue 78,788 147,939 165,524 267,658 Reimbursable 3,840 4,775 11,685 9,271 expensesGross profit 12,714 43,821 39,577 89,541 Operating expenses:Selling,general and 24,701 36,516 52,794 78,442 administrativeexpensesRestructuring 5,769 1,899 8,694 6,319 charges (Loss) income (17,756 ) 5,406 (21,911 ) 4,780 from operationsOther income (expense), netInterest (4,446 ) (5,812 ) (9,162 ) (11,764 )expenseUnrealized(loss) gain oninvestment in (11,224 ) 11,787 (12,571 ) 14,025 equitysecuritiesOther (expense) (321 ) 528 773 902 income, netTotal otherincome (15,991 ) 6,503 (20,960 ) 3,163 (expense), net (Loss) incomebefore incometaxes and (33,747 ) 11,909 (42,871 ) 7,943 non-controllinginterestsIncome tax (1,117 ) (16,513 ) (3,538 ) (15,291 )provision Net loss (34,864 ) (4,604 ) (46,409 ) (7,348 )Net incomeattributable to (197 ) (1,240 ) (302 ) (1,680 )non-controllinginterests Net lossattributable to $ (35,061 ) $ (5,844 ) $ (46,711 ) $ (9,028 )Altisource Loss per share: Basic $ (2.25 ) $ (0.36 ) $ (3.00 ) $ (0.56 )Diluted $ (2.25 ) $ (0.36 ) $ (3.00 ) $ (0.56 ) Weightedaverage shares outstanding:Basic 15,601 16,214 15,549 16,253 Diluted 15,601 16,214 15,549 16,253 Comprehensive loss: Comprehensiveloss, net of $ (34,864 ) $ (4,604 ) $ (46,409 ) $ (7,348 )taxComprehensiveincomeattributable to (197 ) (1,240 ) (302 ) (1,680 )non-controllinginterests Comprehensiveloss $ (35,061 ) $ (5,844 ) $ (46,711 ) $ (9,028 )attributable toAltisource

ALTISOURCE PORTFOLIO SOLUTIONS S.A.CONSOLIDATED BALANCE SHEETS(in thousands, except for per share data)(unaudited)

June 30, December 31, 2020 2019ASSETSCurrent 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 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 LIABILITIES AND EQUITYCurrent 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 Commitments, contingencies and regulatory matters Equity (deficit): Common stock ($1.00 par value; 100,000 sharesauthorized, 25,413 issued and 15,629 outstanding 25,413 25,413 as of June 30, 2020; 15,454 outstanding as ofDecember31, 2019)Additional paid-in capital 138,493 133,669 Retained earnings 213,023 272,026 Treasury stock, at cost (9,784 shares as of June30, 2020 and 9,959 shares as of (443,059 ) (453,934 )December 31, 2019)Altisource deficit (66,130 ) (22,826 ) Non-controlling interests 1,280 1,469 Total deficit (64,850 ) (21,357 ) Total liabilities and deficit $ 328,349 $ 385,119

ALTISOURCE PORTFOLIO SOLUTIONS S.A.CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)(unaudited)

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 5,474 6,793 leasesAmortization of intangible assets 7,049 12,191 Unrealized loss (gain) on investment in equity 12,571 (14,025 )securitiesShare-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 (1,417 ) (1,298 )share units and restricted sharesNet cash used in financing activities (1,908 ) (14,711 ) Net (decrease) increase in cash, cash equivalents and (14,590 ) 25,074 restricted cashCash, cash equivalents and restricted cash at the 86,583 64,046 beginning of the period Cash, cash equivalents and restricted cash at the end $ 71,993 $ 89,120 of the period Supplemental cash flow information: Interest paid $ 8,463 $ 11,279 Income taxes received, net (944 ) (27 )Acquisition of right-of-use assets with operating 958 6,200 lease liabilitiesReduction of right-of-use assets from operating lease (1,715 ) (3,409 )modifications or reassessments Non-cash investing and financing activities: Net increase (decrease) in payables for purchases of $ 469 $ (25 )premises and equipment

ALTISOURCE PORTFOLIO SOLUTIONS S.A.NON-GAAP MEASURES(in thousands, except per share data)(unaudited)

Adjusted operating (loss) income, pretax (loss) income attributable to Altisource, adjusted pretax (loss) income attributable to Altisource, adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA), adjusted net (loss) income attributable to Altisource, adjusted diluted (loss) earnings per share, adjusted cash flows used in operating activities less additions to premises and equipment and net debt less investment in equity securities, which are presented elsewhere in this earnings release, are non-GAAP measures used by management, existing shareholders, potential shareholders and other users of our financial information to measure Altisources performance and do not purport to be alternatives to (loss) income from operations, (loss) income before income taxes and non-controlling interests, net loss attributable to Altisource, diluted loss per share, cash flows used in operating activities and long-term debt, including current portion, as measures of Altisources performance. We believe these measures are useful to management, existing shareholders, potential shareholders and other users of our financial information in evaluating operating profitability and cash flow generation more on the basis of continuing cost and cash flows as they exclude amortization expense related to acquisitions that occurred in prior periods and non-cash share-based compensation, as well as the effect of more significant non-operational items from earnings, cash flows from operating activities and long-term debt net of cash on-hand and investment in equity securities. We believe these measures are also useful in evaluating the effectiveness of our operations and underlying business trends in a manner that is consistent with managements evaluation of business performance. Furthermore, we believe the exclusion of more significant non-operational items enables comparability to prior period performance and trend analysis.

It is managements intent to provide non-GAAP financial information to enhance the understanding of Altisources GAAP financial information, and it should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP. Each non-GAAP financial measure is presented along with the corresponding GAAP measure so as not to imply that more emphasis should be placed on the non-GAAP measure. The non-GAAP financial information presented may be determined or calculated differently by other companies. The non-GAAP financial information should not be unduly relied upon.

Adjusted operating (loss) income is calculated by removing intangible asset amortization expense, share-based compensation expense, restructuring charges, Pointillist losses, loss on BRS portfolio sale, sales tax accrual and other asset write-off from business exit from (loss) income from operations. Pretax (loss) income attributable to Altisource is calculated by removing non-controlling interests from (loss) income before income taxes and non-controlling interests. Adjusted pretax (loss) income attributable to Altisource is calculated by removing non-controlling interests, intangible asset amortization expense, share-based compensation expense, restructuring charges, Pointillist losses, unrealized (loss) gain on investment in equity securities, loss on BRS portfolio sale, sales tax accrual and other asset write-off from business exit from (loss) income before income taxes and non-controlling interests. Adjusted EBITDA is calculated by removing the income tax provision, interest expense (net of interest income), depreciation and amortization, intangible asset amortization, share-based compensation expense, restructuring charges, Pointillist losses, unrealized (loss) gain on investment in equity securities, loss on BRS portfolio sale, sales tax accrual and other asset write-off from business exit from net loss attributable to Altisource. Adjusted net (loss) income attributable to Altisource is calculated by removing intangible asset amortization expense (net of tax), share-based compensation expense (net of tax), restructuring charges (net of tax), Pointillist losses (net of tax), unrealized (loss) gain on investment in equity securities (net of tax), loss on BRS portfolio sale (net of tax), sales tax accrual (net of tax), other asset write-off from business exit (net of tax) and certain income tax items related to adjustments to foreign income tax reserves, the impact of a decrease in the India and Luxembourg income tax rates on deferred tax assets and an India restructuring from net loss attributable to Altisource. Adjusted diluted (loss) earnings per share is calculated by dividing net loss attributable to Altisource after removing intangible asset amortization expense (net of tax), share-based compensation expense (net of tax), restructuring charges (net of tax), Pointillist losses (net of tax), unrealized (loss) gain on investment in equity securities (net of tax), loss on BRS portfolio sale (net of tax), sales tax accrual (net of tax), other asset write-off from business exit (net of tax) and certain income tax related items by the weighted average number of diluted shares. Adjusted cash flows used in operating activities less additions to premises and equipment is calculated by removing the decrease in short-term investments in real estate, payment of sales tax accrual and additions to premises and equipment from cash flows (used in) provided by operating activities. Net debt less investment in equity securities is calculated as long-term debt, including current portion, minus cash and cash equivalents and investment in equity securities.

Reconciliations of the non-GAAP measures to the corresponding GAAP measures are as follows:

Three months ended Six months ended June 30, June 30, 2020 2019 2020 2019 (Loss) income from $ (17,756 ) $ 5,406 $ (21,911 ) $ 4,780 operations Intangible asset 2,840 3,544 7,049 12,191 amortization expenseShare-based 1,930 2,832 4,824 5,453 compensation expenseRestructuring charges 5,769 1,899 8,694 6,319 Pointillist losses 2,448 ? 5,076 ? Loss on BRS portfolio ? 1,770 ? 1,770 saleSales tax accrual ? ? ? 2,053 Other asset write-off ? ? ? 204 from business exit Adjusted operating $ (4,769 ) $ 15,451 $ 3,732 $ 32,770 (loss) income (Loss) income beforeincome taxes and $ (33,747 ) $ 11,909 $ (42,871 ) $ 7,943 non-controllinginterests Non-controlling (197 ) (1,240 ) (302 ) (1,680 )interestsPretax (loss) incomeattributable to (33,944 ) 10,669 (43,173 ) 6,263 AltisourceIntangible asset 2,840 3,544 7,049 12,191 amortization expenseShare-based 1,930 2,832 4,824 5,453 compensation expenseRestructuring charges 5,769 1,899 8,694 6,319 Pointillist losses 2,148 ? 4,437 ? Unrealized loss (gain)on investment in equity 11,224 (11,787 ) 12,571 (14,025 )securitiesLoss on BRS portfolio ? 1,770 ? 1,770 saleSales tax accrual ? ? ? 2,053 Other asset write-off ? ? ? 204 from business exit Adjusted pretax (loss)income attributable to $ (10,033 ) $ 8,927 $ (5,598 ) $ 20,228 Altisource Net loss attributable $ (35,061 ) $ (5,844 ) $ (46,711 ) $ (9,028 )to Altisource Income tax provision 1,117 16,513 3,538 15,291 Interest expense (net 4,440 5,696 9,082 11,497 of interest income)Depreciation and 6,424 8,435 14,750 22,713 amortizationShare-based 1,930 2,832 4,824 5,453 compensationRestructuring charges 5,769 1,899 8,694 6,319 Pointillist losses 2,089 ? 4,347 ? Unrealized loss (gain)on investment in equity 11,224 (11,787 ) 12,571 (14,025 )securitiesLoss on BRS portfoliosale ? 1,770 ? 1,770

Sales tax accrual ? ? ? 2,053 Other asset write-off ? ? ? 204 from business exit Adjusted EBITDA $ (2,068 ) $ 19,514 $ 11,095 $ 42,247 Net loss attributable $ (35,061 ) $ (5,844 ) $ (46,711 ) $ (9,028 )to Altisource Intangible assetamortization expense, 2,814 2,471 6,997 9,400 net of taxShare-basedcompensation expense, 1,727 1,975 4,370 4,205 net of taxRestructuring charges, 5,352 1,458 7,849 4,856 net of taxPointillist losses, net 1,648 ? 3,405 ? of taxUnrealized loss (gain)on investment in equity 11,224 (8,847 ) 12,571 (10,527 )securities, net of taxLoss on BRS portfolio ? 1,405 ? 1,405 sale, net of taxSales tax accrual, net ? ? ? 1,519 of taxOther asset write-offfrom business exit, net ? ? ? 151 of taxCertain income tax 517 13,232 2,392 13,232 related items Adjusted net (loss)income attributable to $ (11,779 ) $ 5,850 $ (9,127 ) $ 15,213 Altisource Diluted loss per share $ (2.25 ) $ (0.36 ) $ (3.00 ) $ (0.56 ) Impact of using dilutedshare count instead of ? 0.01 ? 0.01 basic share count for aloss per shareIntangible assetamortization expense, 0.18 0.15 0.45 0.57 net of tax, per dilutedshareShare-basedcompensation expense, 0.11 0.12 0.28 0.25 net of tax, per dilutedshareRestructuring charges,net of tax, per diluted 0.34 0.09 0.50 0.29 sharePointillist losses, netof tax, per diluted 0.11 ? 0.22 ? shareUnrealized loss (gain)on investment in equity 0.72 (0.54 ) 0.81 (0.64 )securities, net of tax,per diluted shareLoss on BRS portfoliosale, net of tax, per ? 0.09 ? 0.08 diluted shareSales tax accrual, netof tax, per diluted ? ? ? 0.09 shareOther asset write-offfrom business exit, net ? ? ? 0.01 of tax, per dilutedshareCertain income taxrelated items per 0.03 0.80 0.15 0.80 diluted share Adjusted diluted (loss) $ (0.76 ) $ 0.36 $ (0.59 ) $ 0.92 earnings per share Calculation of theimpact of intangible asset amortizationexpense, net of taxIntangible asset $ 2,840 $ 3,544 $ 7,049 $ 12,191 amortization expenseTax benefit fromintangible asset (26 ) (1,073 ) (52 ) (2,791 )amortizationIntangible assetamortization expense, 2,814 2,471 6,997 9,400 net of taxDiluted share count 15,601 16,477 15,549 16,557 Intangible assetamortization expense, $ 0.18 $ 0.15 $ 0.45 $ 0.57 net of tax, per dilutedshare Calculation of theimpact of share-based compensation expense,net of taxShare-based $ 1,930 $ 2,832 $ 4,824 $ 5,453 compensation expenseTax benefit fromshare-based (203 ) (857 ) (454 ) (1,248 )compensation expenseShare-basedcompensation expense, 1,727 1,975 4,370 4,205 net of taxDiluted share count 15,601 16,477 15,549 16,557 Share-basedcompensation expense, $ 0.11 $ 0.12 $ 0.28 $ 0.25 net of tax, per dilutedshare Calculation of theimpact of restructuring charges, net of taxRestructuring charges $ 5,769 $ 1,899 $ 8,694 $ 6,319 Tax benefit from (417 ) (441 ) (845 ) (1,463 )restructuring chargesRestructuring charges, 5,352 1,458 7,849 4,856 net of taxDiluted share count 15,601 16,477 15,549 16,557 Restructuring charges,net of tax, per diluted $ 0.34 $ 0.09 $ 0.50 $ 0.29 share Calculation of theimpact of Pointillist losses, net of taxPointillist losses $ 2,148 $ ? $ 4,437 $ ? Tax benefit from (500 ) ? (1,032 ) ? Pointillist lossesPointillist losses, net 1,648 ? 3,405 ? of taxDiluted share count 15,601 16,477 15,549 16,557 Pointillist losses, netof tax, per diluted $ 0.11 $ ? $ 0.22 $ ? share Calculation of theimpact of theunrealized loss (gain) on investment in equitysecurities, net of taxUnrealized loss (gain)on investment in equity $ 11,224 $ (11,787 ) $ 12,571 $ (14,025 )securitiesTax provision from theunrealized loss (gain) ? 2,940 ? 3,498 on investment in equitysecuritiesUnrealized loss (gain)on investment in equity 11,224 (8,847 ) 12,571 (10,527 )securities, net of taxDiluted share count 15,601 16,477 15,549 16,557 Unrealized loss (gain)on investment in equity $ 0.72 $ (0.54 ) $ 0.81 $ (0.64 )securities, net of tax,per diluted share Calculation of theimpact of loss on BRS portfolio sale, net oftaxLoss on BRS portfolio $ ? $ 1,770 $ ? $ 1,770 saleTax benefit from loss ? (365 ) ? (365 )on BRS portfolio saleLoss on BRS portfolio ? 1,405 ? 1,405 sale, net of taxDiluted share count 15,601 16,477 15,549 16,557 Loss on BRS portfoliosale, net of tax, per $ ? $ 0.09 $ ? $ 0.08 diluted share Calculation of theimpact of sales tax accrual, net of taxSales tax accrual $ ? $ ? $ ? $ 2,053 Tax benefit from sales ? ? ? (534 )tax accrualSales tax accrual, net ? ? ? 1,519 of taxDiluted share count 15,601 16,477 15,549 16,557 Sales tax accrual, netof tax, per diluted $ ? $ ? $ ? $ 0.09 share Calculation of theimpact of other asset write-off from businessexit, net of taxOther asset write-off $ ? $ ? $ ? $ 204 from business exitTax benefit from otherasset write-off from ? ? ? (53 )business exitOther asset write-offfrom business exit, net ? ? ? 151 of taxDiluted share count 15,601 16,477 15,549 16,557 Other asset write-offfrom business exit, net $ ? $ ? $ ? $ 0.01 of tax, per dilutedshare Certain income taxrelated items resulting from:Foreign income tax $ 517 $ ? $ 1,008 $ ? reserves/otherIndia income tax rate ? ? 1,384 ? changesDeferred tax adjustment(Luxembourg tax rate ? 12,323 ? 12,323 change)India restructuring ? 909 ? 909 Certain income tax 517 13,232 2,392 13,232 related itemsDiluted share count 15,601 16,477 15,549 16,557 Certain income taxrelated items per $ 0.03 $ 0.80 $ 0.15 $ 0.80 diluted share Cash flows (used in)provided by operating $ (9,568 ) $ 39,811 $ (11,216 ) $ 33,156 activitiesDecrease in short-terminvestments in real ? (39,860 ) ? (39,459 )estatePayment of sales tax ? ? ? 6,858 accrualAdjusted cash flowsused in operating (9,568 ) (49 ) (11,216 ) 555 activitiesLess: additions to (955 ) (144 ) (1,466 ) (934 )premises and equipment Adjusted cash flowsused in operatingactivities less $ (10,523 ) $ (193 ) $ (12,682 ) $ (379 )additionsto premises andequipment

June 30, June 30, 2019 2020 Senior secured term loan $ 293,826 $ 333,012 Less: Cash and cash equivalents (68,177 ) (85,379 )Less: Investment in equity securities (30,047 ) (43,730 ) Net debt less investment in equity securities $ 195,602 $ 203,903

________________________

Note: Amounts may not add to the total due to rounding.