Business Wire | May 7, 2021 09:00AM EDT

CoreLogic Reports Record First Quarter 2021 Revenue, Operating Income, Profit Margins and Cash Flow

May 07, 2021

IRVINE, Calif.--(BUSINESS WIRE)--May 07, 2021--CoreLogic (NYSE: CLGX), a leading global provider of property information, insight, analytics and data-enabled solutions, today reported financial results for the first quarter ended March 31, 2021.

"Capitalizing on momentum from record 2020 performance, CoreLogic delivered strong double-digit revenue and profit growth and expanded profit margins during the first three months of 2021. Free cash flow conversion rates enabled the return of $24 million in capital to our stockholders and paydown of $100 million in debt," said Frank Martell, President and Chief Executive Officer. "Looking ahead, share gains, pricing and the launch of new innovative solutions in insurance, geospatial and core mortgage should position us well to continue to accelerate our positive operating and financial trends well into the future. CoreLogic is firing on all cylinders and we have started 2021 with strong momentum and believe we are well positioned to capitalize on our many value-creation opportunities over the balance of this year and beyond," Martell added.

First Quarter Financial(1) and Business Highlights

Growth Focus -Share Gains, Mega Wins and Pricing Drive Sustained, High Organic Growth Rates

* Revenues of $423 million were up 20% over the prior year. PIRM segment growth totaled 8%, benefiting from robust growth in property insights and international. UWS revenues grew 28% on strong market volumes and market outperformance across the segment as a whole. * Core mortgage market outperformance in UWS and continued strong organic growth in the PIRM segment demonstrate the durable and positive impacts of mega wins and share gains achieved in 2020 and continued momentum into 2021.

Profitability - Operating Leverage, Favorable Mix and Productivity Fuel Expanded Profit and Margins

* Operating income of $85 million, up by $30 million * Net income from continuing operations of $55 million, up by $31 million * Diluted EPS from continuing operations of $0.73 and adjusted EPS of $1.20; up 143% and 85%, respectively * Adjusted EBITDA of $160 million, up 39% * Adjusted EBITDA margin of 38%, up 530 basis points

Liquidity and Capital Return - Record Cash Flow Generation

* Net operating cash provided by continuing operations for the 12 months ended March 31, 2021 was $574 million. Free cash flow ("FCF") for the 12 months ended March 31, 2021 totaled $475 million or 70% of adjusted EBITDA * Debt outstanding on March 31, 2021 of $1.79 billion compared with $1.89 billion on December 31, 2020 * $450 million available on revolving credit facility; covenant debt leverage at 2.4 times * Dividends paid to shareholders totaled $24 million in the first quarter

(1) The Company's financial results presented in this release reflect continuing operations. Reseller operations held for sale are presented as discontinued operations for all periods presented.

Discontinued Operations

Consistent with our previously announced intentions, the Company has exited its multi-family tenant screening operations and intends to exit its mortgage credit and borrower verification operations. 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. These reseller operations have been classified as discontinued operations and prior period results have been presented on a comparable basis.

In October 2020, we consummated the sale of a component of our multi-family tenant screening for $9.0 million of proceeds. In February 2021, we sold the remainder of our multi-family tenant screening business for proceeds of $51.2 million.

CLGX-F

About CoreLogic

CoreLogic (NYSE: CLGX), the leading provider of property insights and solutions, promotes a healthy housing market and thriving communities. Through its enhanced property data solutions, services and technologies, CoreLogic enables real estate professionals, financial institutions, insurance carriers, government agencies and other housing market participants to help millions of people find, buy, and protect their homes. For more information, please visit www.corelogic.com.

Safe Harbor / Forward Looking Statements

Certain statements made in this press release are forward-looking statements within the meaning of the federal securities laws, including but not limited to those statements related to (i) projections and trends regarding financial performance and operating results, including with respect to revenue growth, margin gains, contract wins, pricing optimization, technological innovation, market share gains, new products, and long-term stockholder value, and (ii) our intention to exit our reseller operations. Risks and uncertainties exist that may cause the results to differ materially from those set forth in these forward-looking statements. Factors that could cause the anticipated results to differ from those described in the forward-looking statements include the risks and uncertainties set forth in Part I, Item 1A of our most recent Annual Report on Form 10-K, as such risk factors may be amended, supplemented, or superseded from time to time by other reports we file with the Securities and Exchange Commission. These risks and uncertainties include but are not limited to: our ability to satisfy the remaining conditions to close the acquisition of the Company by Stone Point Capital and Insight Partners (the "Merger") in a timely manner, or at all; the potential impact of, and any potential developments related to, the proposed Merger; the potential impact of, and any potential developments related to, activist shareholder activity; compromises in the security or stability of our data and systems, including from cyber-based attacks, the unauthorized transmission of confidential information or systems interruptions, which could impair the delivery of our products and services; changes in applicable government legislation, regulations and the level of regulatory scrutiny affecting our clients or us, including with respect to consumer financial services and the use of public records and consumer data; reliance on our top ten clients for a significant portion of our revenue and profit; intense competition in the market against third parties and the in-house capabilities of our clients; risks related to the outsourcing of services and international operations; potential impairment of our substantial goodwill and other intangible assets; the potential impact that the COVID-19 pandemic, or the perception of its effects, may have on our business; our ability to protect proprietary technology rights and avoid infringement of others' proprietary technology rights; the level of our indebtedness, our ability to service our indebtedness and the restrictions in our various debt agreements; our ability to realize the anticipated benefits of certain acquisitions and the timing thereof; the impact of our adoption of a shareholder rights plan; difficult or uncertain conditions in the mortgage and consumer lending industries and the economy generally; and our ability to attract and retain qualified personnel. [delete extra period] The forward-looking statements speak only as of the date they are made. CoreLogic does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

Use of Non-GAAP (Generally Accepted Accounting Principles) Financial Measures

This press release contains certain non-GAAP financial measures, including adjusted EBITDA, adjusted EPS and FCF, which are provided only as supplemental information. Investors should consider these non-GAAP financial measures only in conjunction with their most directly comparable GAAP financial measures. These non-GAAP measures are not in accordance with, or a substitute for, U.S. GAAP. A reconciliation of non-GAAP measures for historical periods to the most directly comparable GAAP financial measures is included in this press release. CoreLogic believes that its presentation of these non-GAAP measures provides useful supplemental information to investors and management regarding CoreLogic's financial condition and results of operations. Adjusted EBITDA is defined as net income from continuing operations adjusted for interest, taxes, depreciation and amortization, share-based compensation, non-operating gains/losses, and other adjustments. Adjusted EPS is defined as diluted net income from continuing operations , net of tax per share, adjusted for share-based compensation, amortization of acquisition-related intangibles, non-operating gains/losses, and other adjustments; and assumes an effective tax rate of 26% for 2021 and 26% for 2020. 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. Other firms may calculate non-GAAP measures differently than the Company, which limits comparability between companies. Non-GAAP measures are not in accordance with, or a substitute for, U.S. GAAP. Because the non-GAAP measures for future periods included herein are forward-looking, CoreLogic is not able to provide a reconciliation, without unreasonable efforts, of such forward-looking guidance to the most directly comparable GAAP financial measure due to the unknown effect, timing, and potential significance of special charges or gains that are material to the comparable GAAP financial measure.

CoreLogic, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

For the Three Months Ended March 31,

(in thousands, except per share amounts) 2021 2020

Operating revenues $ 422,785 $ 352,920

Cost of services (excluding depreciation and 162,559 144,525 amortization shown below)

Selling, general and administrative expenses 130,008 109,624

Depreciation and amortization 44,781 43,578

Total operating expenses 337,348 297,727

Operating income 85,437 55,193

Interest expense:

Interest income 98 414

Interest expense 16,401 18,193

Total interest expense, net (16,303 ) (17,779 )

Loss on investments and other, net (502 ) (3,857 )

Income from continuing operations before equity 68,632 33,557 in earnings of affiliates and income taxes

Provision for income taxes 13,689 9,785

Income from continuing operations before equity 54,943 23,772 in earnings of affiliates

Equity in earnings of affiliates, net of tax - 512

Net income from continuing operations 54,943 24,284

Income from discontinued operations, net of tax 3,907 9,535

Loss from sale of discontinued operations, net of (5,288 ) - tax

Net income $ 53,562 $ 33,819



Basic income per share:

Net income from continuing operations $ 0.75 $ 0.31

Income from discontinued operations, net of tax 0.05 0.12

Loss from sale of discontinued operations, net of (0.07 ) - tax

Net income $ 0.73 $ 0.43

Diluted income per share:

Net income from continuing operations $ 0.73 $ 0.30

Income from discontinued operations, net of tax 0.05 0.12

Loss from sale of discontinued operations, net of (0.07 ) - tax

Net income $ 0.71 $ 0.42

Weighted-average common shares outstanding:

Basic 73,228 79,028

Diluted 75,135 80,525

Please refer to the full Form 10-Q filing for the complete financial statements and related notes that are an integral part of the financial statements.

CoreLogic, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands, except par value) March 31, December 31,

Assets 2021 2020

Current assets:

Cash and Cash Equivalents $ 227,102 $ 167,422

Accounts receivable (less allowance forcredit losses of $8,636 and $9,838 as of 320,609 303,202 March 31,2021 and December 31, 2020, respectively)

Prepaid expenses and other current assets 66,148 82,794

Assets of discontinued operations 166,621 202,417

Total current assets 780,480 755,835

Property and equipment, net 401,552 406,114

Operating lease assets 80,724 82,459

Goodwill, net 2,319,411 2,315,495

Other intangible assets, net 310,226 320,921

Capitalized data and database costs, net 321,528 321,211

Other assets 114,502 81,187

Total assets $ 4,328,423 $ 4,283,222

Liabilities and Equity

Current liabilities:

Accounts payable and other accrued expenses $ 208,149 $ 177,606

Accrued salaries and benefits 57,698 57,499

Contract liabilities, current 478,074 411,821

Liabilities of discontinued operations 56,339 44,677

Current portion of long-term debt 9,003 43,230

Operating lease liabilities, current 14,833 15,566

Total current liabilities 824,096 750,399

Long-term debt, net of current 1,763,212 1,828,003

Contract liabilities, net of current 631,019 617,318

Deferred income tax liabilities 99,280 91,853

Operating lease liabilities, net of current 97,953 99,966

Other liabilities 156,778 172,421

Total liabilities 3,572,338 3,559,960



Stockholders' equity:

Preferred stock, $0.00001 par value; 500shares authorized, no shares issued or - - outstanding

Common stock, $0.00001 par value; 180,000shares authorized; 73,619 and 73,152 shares 1 1 issued and outstanding as of March 31, 2021and December 31, 2020, respectively

Additional paid-in capital - -

Retained earnings 914,622 893,404

Accumulated other comprehensive loss (158,538 ) (170,143 )

Total stockholders' equity 756,085 723,262

Total liabilities and equity $ 4,328,423 $ 4,283,222

Please refer to the full Form 10-Q filing for the complete financial statements and related notes that are an integral part of the financial statements.

CoreLogic, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

For the Three Months Ended March 31,

(in thousands) 2021 2020

Cash flows from operating activities:

Net income $ 53,562 $ 33,819

Less: Income from discontinued operations, net 3,907 9,535 of tax

Less: Loss from sale of discontinued operations, (5,288 ) - net of tax

Net income from continuing operations 54,943 24,284

Adjustments to reconcile net income fromcontinuing operations to net cash provided by operating activities:

Depreciation and amortization 44,781 43,578

Amortization of debt issuance costs 1,237 1,235

Amortization of operating lease assets 3,660 3,656

Provision for bad debt and claim losses 5,089 3,357

Share-based compensation 9,634 7,961

Equity in earnings of affiliates, net of taxes - (512 )

Deferred income tax 2,942 2,092

Loss on investments and other, net 502 3,857

Change in operating assets and liabilities, net of acquisitions:

Accounts receivable (16,570 ) 7,709

Prepaid expenses and other current assets (5,755 ) 3,538

Accounts payable and other accrued expenses 26,907 (15,459 )

Contract liabilities 79,954 24,457

Income taxes 20,749 4,930

Dividends received from investments in - 185 affiliates

Other assets and other liabilities (39,936 ) (9,808 )

Net cash provided by operating activities - 188,137 105,060 continuing operations

Net cash provided by operating activities - 1,156 7,804 discontinued operations

Total cash provided by operating activities $ 189,293 $ 112,864

Cash flows from investing activities:

Purchases of property and equipment $ (12,447 ) $ (12,344 )

Purchases of capitalized data and other (8,599 ) (8,540 ) intangible assets

Cash paid for acquisitions, net of cash acquired (8,072 ) (11,760 )

Purchases of investments - (631 )

Cash received from sale of discontinued 49,838 - operations

Proceeds from investments and other - 651

Net cash provided by/(used in) investing 20,720 (32,624 ) activities - continuing operations

Net cash used in investing activities - (1,694 ) (2,892 ) discontinued operations

Total cash provided by/(used in) investing $ 19,026 $ (35,516 ) activities

Cash flows from financing activities:

Repayment of long-term debt $ (100,708 ) $ (723 )

Proceeds from issuance of shares in connection 3,109 2,932 with share-based compensation

Payment of tax withholdings related to net share (21,417 ) (8,051 ) settlements

Shares repurchased and retired - (2,431 )

Dividends paid (24,140 ) (17,374 )

Contingent consideration payments subsequent to (6,448 ) - acquisitions

Net cash used in financing activities - (149,604 ) (25,647 ) continuing operations

Net cash used in financing activities - (41 ) - discontinued operations

Total cash used in financing activities $ (149,645 ) $ (25,647 )

Effect of exchange rate on cash, cash (561 ) (4,690 ) equivalents, and restricted cash

Net change in cash, cash equivalents, and 58,113 47,011 restricted cash

Cash, cash equivalents, and restricted cash at 177,833 114,679 beginning of period

Less: Change in cash, cash equivalents, and (579 ) 4,912 restricted cash - discontinued operations

Plus: Cash swept from discontinued operations 941 4,051

Cash, cash equivalents, and restricted cash at $ 237,466 $ 160,829 end of period

Please refer to the full Form 10-Q filing for the complete financial statements and related notes that are an integral part of the financial statements.

CoreLogic, Inc.

Reconciliation of Adjusted EBITDA

(Unaudited)

For the Three Months Ended March 31, 2021

(in thousands) PIRM UWS CORP ELIM CoreLogic

Net income/(loss)from continuing $ 18,441 $ 108,803 $ (72,301 ) $ - $ 54,943 operations

Income taxes - - 13,689 - 13,689

Depreciation and 24,059 12,241 8,481 - 44,781 amortization

Interest expense/ 410 (10 ) 15,903 - 16,303 (income), net

Share-based 1,740 1,806 6,088 - 9,634 compensation

Non-operating 1,301 - 1,346 - 2,647 (gains)/losses

Efficiencyinvestments and (679 ) (3 ) 7,076 - 6,394 other

Transaction costs 165 313 66 - 544

Unsolicited Proposal - - 11,420 - 11,420 Related Costs

Adjusted EBITDA $ 45,437 $ 123,150 $ (8,232 ) $ - $ 160,355

For the Three Months Ended March 31, 2020

(in thousands) PIRM UWS CORP ELIM CoreLogic

Net income/(loss)from continuing $ 15,267 $ 67,530 $ (58,513 ) $ - $ 24,284 operations

Income taxes - - 9,955 - 9,955

Depreciation and 23,136 12,035 8,407 - 43,578 amortization

Interest (income)/ 419 (10 ) 17,370 - 17,779 expense, net

Share-based 1,543 882 5,536 - 7,961 compensation

Non-operating 685 - 3,464 - 4,149 (gains)/losses

Efficiencyinvestments and 484 488 3,980 - 4,952 other

Transaction costs 1,348 237 889 - 2,474

Amortization ofacquired intangiblesincluded in equity - - - - inlosses of affiliates

Adjusted EBITDA $ 42,882 $ 81,162 $ (8,912 ) $ - $ 115,132

CoreLogic, Inc.

Reconciliation of Adjusted EPS

(Unaudited)

For the Three Months Ended March 31,

(Diluted income per share) 2021 2020

Net income from continuing operations $ 0.73 $ 0.30

Share-based compensation 0.13 0.10

Non-operating gains 0.04 0.05

Efficiency investments and other 0.09 0.06

Transaction costs 0.01 0.03

Depreciation and amortization of acquired 0.23 0.21 software and intangibles

Unsolicited Proposal Related Costs 0.15 -

Income tax effect on adjustments (0.18 ) (0.10 )

Adjusted EPS $ 1.20 $ 0.65

CoreLogic, Inc.

Reconciliation to Free Cash Flow

(Unaudited)

For the Twelve(in thousands) Months Ended March 31, 2021

Net cash provided by operating activities - continuing $ 574,255 operations

Purchases of property and equipment (57,771)

Purchases of capitalized data and other intangible assets (41,501)

Free cash flow $ 474,983

View source version on businesswire.com: https://www.businesswire.com/news/home/20210507005326/en/

CONTACT: Investors: Dan Smith, office phone: 703-610-5410, e-mail: danlsmith@corelogic.com

CONTACT: Media: George Sard, Sard Verbinnen & Co, office phone: 212-687-8080, e-mail: GSard@SARDVERB.com