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Actionable news in ASPS: Altisource Portfolio Solutions S.A.,

Quarterly report [Sections 13 or 15(d)]

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Page
PART I — Financial Information
Item 1 Interim Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Operations and Comprehensive Income 4
Condensed Consolidated Statements of Equity 5
Condensed Consolidated Statements of Cash Flows 6
Notes to Condensed Consolidated Financial Statements 7
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations 26
Item 3 Quantitative and Qualitative Disclosures about Market Risk 44
Item 4 Controls and Procedures 44
PART II — Other Information
Item 1 Legal Proceedings 45
Item 1A Risk Factors 46
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 46
Item 6 Exhibits 47
SIGNATURES 48
March 31,
2016
December 31,
2015
ASSETS
Current assets:
Cash and cash equivalents $ 159,705
$ 179,327
Available for sale securities 30,417

Accounts receivable, net 97,645
105,023
Prepaid expenses and other current assets 26,721
21,751
Total current assets 314,488
306,101
Premises and equipment, net 116,937
119,121
Goodwill 82,801
82,801
Intangible assets, net 184,792
197,003
Deferred tax assets, net 3,330
3,619
Other assets 13,246
13,153
Total assets $ 715,594
$ 721,798
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 80,768
$ 91,871
Current portion of long-term debt 5,945
5,945
Deferred revenue 12,634
15,060
Other current liabilities 18,276
16,266
Total current liabilities 117,623
129,142
Long-term debt, less current portion 521,185
522,233
Other non-current liabilities 14,821
18,153
Commitments, contingencies and regulatory matters (Note 22)



Equity:
Common stock ($1.00 par value; 25,413 shares authorized and issued and 18,603 outstanding as of March 31, 2016; 25,413 shares authorized and issued and 19,021 outstanding as of December 31, 2015) 25,413
25,413
Additional paid-in capital 98,198
96,321
Retained earnings 385,452
369,270
Accumulated other comprehensive income 699

Treasury stock, at cost (6,810 shares as of March 31, 2016 and 6,392 shares as of December 31, 2015) (449,039 ) (440,026 )
Altisource equity 60,723
50,978
Non-controlling interests 1,242
1,292
Total equity 61,965
52,270
Total liabilities and equity $ 715,594
$ 721,798
Three months ended
March 31,
2016 2015
Revenue $ 250,132
$ 240,482
Cost of revenue 168,863
172,826
Gross profit 81,269
67,656
Selling, general and administrative expenses 53,616
52,406
Income from operations 27,653
15,250
Other income (expense), net:
Interest expense (6,541 ) (7,160 )
Other than temporary impairment loss on securities
(3,285 )
Other income (expense), net (27 ) 3
Total other income (expense), net (6,568 ) (10,442 )
Income before income taxes and non-controlling interests 21,085
4,808
Income tax provision (2,193 ) (400 )
Net income 18,892
4,408
Net income attributable to non-controlling interests (398 ) (710 )
Net income attributable to Altisource $ 18,494
$ 3,698
Earnings per share:
Basic $ 0.98
$ 0.18
Diluted $ 0.92
$ 0.18
Weighted average shares outstanding:
Basic 18,855
20,172
Diluted 20,040
20,995
Comprehensive income:
Net income $ 18,892
$ 4,408
Other comprehensive income, net of tax:
Unrealized gain on securities, net of income tax expense of $289 and $0 699

Comprehensive income, net of tax 19,591
4,408
Comprehensive income attributable to non-controlling interests (398 ) (710 )
Comprehensive income attributable to Altisource $ 19,193
$ 3,698
Altisource Equity Non-controlling interests
Common stock Additional paid-in capital Retained earnings Accumulated other comprehensive income Treasury stock, at cost Total
Shares
Balance, December 31, 2014 25,413
$ 25,413
$ 91,509
$ 367,967
$
$ (444,495 ) $ 1,049
$ 41,443
Comprehensive income:
Net income


3,698


710
4,408
Other comprehensive income, net of tax







Distributions to non-controlling interest holders





(657 ) (657 )
Share-based compensation expense

443




443
Exercise of stock options


(1,701 )
1,904

203
Repurchase of shares




(3,959 )
(3,959 )
Balance, March 31, 2015 25,413
$ 25,413
$ 91,952
$ 369,964
$
$ (446,550 ) $ 1,102
$ 41,881
Balance, December 31, 2015 25,413
$ 25,413
$ 96,321
$ 369,270
$
$ (440,026 ) $ 1,292
$ 52,270
Comprehensive income:
Net income


18,494


398
18,892
Other comprehensive income, net of tax



699


699
Distributions to non-controlling interest holders





(448 ) (448 )
Share-based compensation expense

1,877




1,877
Exercise of stock options


(2,312 )
2,678

366
Repurchase of shares




(11,691 )
(11,691 )
Balance, March 31, 2016 25,413
$ 25,413
$ 98,198
$ 385,452
$ 699
$ (449,039 ) $ 1,242
$ 61,965
Three months ended
March 31,
2016 2015
Cash flows from operating activities:

Net income $ 18,892
$ 4,408
Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization 9,208
8,826
Amortization of intangible assets 12,211
8,891
Other than temporary impairment loss on HLSS securities
3,285
Change in the fair value of acquisition related contingent consideration 96
148
Share-based compensation expense 1,877
443
Bad debt expense 876
607
Amortization of debt discount 116
127
Amortization of debt issuance costs 322
351
Deferred income taxes
(24 )
Gain on disposal of fixed assets (10 ) (19 )
Changes in operating assets and liabilities:

Accounts receivable 6,502
(15,140 )
Prepaid expenses and other current assets (4,970 ) 2,413
Other assets (109 ) 127
Accounts payable and accrued expenses (12,133 ) (27,559 )
Other current and non-current liabilities (3,844 ) (2,822 )
Net cash provided by (used in) operating activities 29,034
(15,938 )
Cash flows from investing activities:

Additions to premises and equipment (5,984 ) (3,931 )
Purchase of available for sale securities (29,429 ) (29,966 )
Other investing activities 16
(4 )
Net cash used in investing activities (35,397 ) (33,901 )
Cash flows from financing activities:

Repayment of long-term debt (1,486 ) (1,486 )
Proceeds from stock option exercises 366
203
Purchase of treasury stock (11,691 ) (3,959 )
Distributions to non-controlling interests (448 ) (657 )
Net cash used in financing activities (13,259 ) (5,899 )
Net decrease in cash and cash equivalents (19,622 ) (55,738 )
Cash and cash equivalents at the beginning of the period 179,327
161,361
Cash and cash equivalents at the end of the period $ 159,705
$ 105,623
Supplemental cash flow information:

Interest paid $ 6,104
$ 6,655
Income taxes paid, net 3,830
1,520
Non-cash investing and financing activities:

Increase (decrease) in payables for purchases of premises and equipment $ 1,030
$ (3,638 )
2016 2015
Mortgage Services 60 % 63 %
Financial Services 14 % 25 %
Technology Services 45 % 47 %
Consolidated revenue 56 % 59 %
(in thousands)
Cash $ 3
Accounts receivable, net 245
Premises and equipment, net 1,206
Other assets 199
Software 1,265
Trademarks and trade names 1,205
Databases/other 910
Non-compete agreements 330
Customer relationships 255
Goodwill 19,565
25,183
Accounts payable and accrued expenses (391 )
Purchase price $ 24,792
(in thousands)
Cash $ 1,088
Accounts receivable, net 510
Prepaid expenses 66
Restricted cash 2,501
Non-compete agreements 1,105
Databases/other 465
Customer relationships 395
Trademarks and trade names 150
Goodwill 28,125
34,405
Accounts payable and accrued expenses (875 )
Deferred revenue (87 )
Purchase price $ 33,443
(in thousands) March 31,
2016
December 31,
2015
Billed $ 63,950
$ 67,021
Unbilled 53,026
56,458
116,976
123,479
Less: allowance for doubtful accounts (19,331 ) (18,456 )
Total $ 97,645
$ 105,023
(in thousands) March 31,
2016
December 31,
2015
Maintenance agreements, current portion $ 8,230
$ 7,000
Income taxes receivable 1,942
633
Prepaid expenses 7,768
7,873
Other current assets 8,781
6,245
Total $ 26,721
$ 21,751
(in thousands) March 31,
2016
December 31,
2015
Computer hardware and software $ 180,405
$ 177,010
Office equipment and other 23,374
21,720
Furniture and fixtures 14,780
14,443
Leasehold improvements 36,362
35,503
254,921
248,676
Less: accumulated depreciation and amortization (137,984 ) (129,555 )
Total $ 116,937
$ 119,121
(in thousands) Mortgage Services Financial Services Technology Services Total
Balance as of March 31, 2016 and December 31, 2015 $ 80,423
$ 2,378
$
$ 82,801
Weighted
average
estimated useful life (in years)
Gross carrying amount Accumulated amortization Net book value
(in thousands) March 31,
2016
December 31,
2015
March 31,
2016
December 31,
2015
March 31,
2016
December 31,
2015
Definite lived intangible assets:
Trademarks and trade names 13 $ 15,244
$ 15,244
$ (6,822 ) $ (6,491 ) $ 8,422
$ 8,753
Customer related intangible assets 10 274,428
274,428
(124,881 ) (113,725 ) 149,547
160,703
Operating agreement 20 35,000
35,000
(10,792 ) (10,354 ) 24,208
24,646
Non-compete agreements 4 1,435
1,435
(219 ) (115 ) 1,216
1,320
Intellectual property 10 300
300
(63 ) (55 ) 237
245
Other intangible assets 5 1,375
1,375
(213 ) (39 ) 1,162
1,336
Total $ 327,782
$ 327,782
$ (142,990 ) $ (130,779 ) $ 184,792
$ 197,003
(in thousands) March 31,
2016
December 31,
2015
Security deposits $ 5,561
$ 5,341
Maintenance agreements, non-current portion 1,713
1,570
Restricted cash 4,780
4,801
Other 1,192
1,441
Total $ 13,246
$ 13,153
(in thousands) March 31,
2016
December 31,
2015
Accounts payable $ 16,961
$ 11,644
Accrued expenses - general 28,623
30,347
Accrued salaries and benefits 30,792
46,564
Income taxes payable 4,392
3,316
Total $ 80,768
$ 91,871
(in thousands) March 31,
2016
December 31,
2015
Unfunded cash account balances $ 6,533
$ 6,395
Other 11,743
9,871
Total $ 18,276
$ 16,266
(in thousands) March 31,
2016
December 31,
2015
Senior secured term loan $ 535,112
$ 536,598
Less: debt issuance costs, net (5,862 ) (6,184 )
Less: unamortized discount, net (2,120 ) (2,236 )
Net long-term debt 527,130
528,178
Less: current portion (5,945 ) (5,945 )
Long-term debt, less current portion $ 521,185
$ 522,233
(in thousands) March 31,
2016
December 31,
2015
Acquisition related contingent consideration $ 882
$ 3,932
Other non-current liabilities 13,939
14,221
Total $ 14,821
$ 18,153
March 31, 2016 December 31, 2015
(in thousands) Carrying amount Fair value Carrying amount Fair value
Level 1 Level 2 Level 1 Level 2
Cash and cash equivalents $ 159,705
$ 159,705
$
$ 179,327
$ 179,327
$
Restricted cash 4,780
4,780

4,801
4,801

Long-term debt 535,112

476,250
536,598

469,523
Three months ended
March 31, 2016
Three months ended
March 31, 2015
Black-Scholes Binomial Black-Scholes Binomial
Risk-free interest rate (%) 1.25% - 1.89%
0.23% - 1.97%
1.67 % 0.02% - 2.01%
Expected stock price volatility (%) 59.75% - 62.14%
59.76% - 62.14%
55.06 % 55.06 %
Expected dividend yield



Expected option life (in years) 6.25
4.55 - 4.88
6.25
4.45 - 4.92
Fair value $11.15 - $16.30 $11.06 - $15.73 $11.69 $10.68 - $11.93
Three months ended March 31,
(in thousands, except per share amounts) 2016 2015
Weighted average grant date fair value of stock options granted per share $ 15.77
$ 11.56
Intrinsic value of options exercised 601
176
Grant date fair value of stock options that vested 187
264
Number of options Weighted average exercise price Weighted average contractual term (in years ) Aggregate intrinsic value ( in thousands)
Outstanding at December 31, 2015 3,163,125
$ 20.13
4.94 $ 35,842
Granted 66,000
27.48
Exercised (40,000 ) 9.14

Forfeited (24,968 ) 24.25

Outstanding at March 31, 2016 3,164,157
20.40
4.57 26,028
Exercisable at March 31, 2016 2,181,083
14.70
2.70 24,063
Number of restricted shares
Outstanding at December 31, 2015 272,326
Issued (5,600 )
Forfeited (2,500 )
Outstanding at March 31, 2016 264,226
Consumer Analytics Document Solutions Marketplace Solutions
Outstanding at December 31, 2015 and March 31, 2016 5.6 % 5.6 % 5.3 %
(in thousands) 2016 2015
Service revenue $ 234,280
$ 207,816
Reimbursable expenses 15,454
31,956
Non-controlling interests 398
710
Total $ 250,132
$ 240,482
(in thousands) 2016 2015
Compensation and benefits $ 65,063
$ 69,326
Outside fees and services 71,803
53,247
Reimbursable expenses 15,454
31,956
Technology and telecommunications 9,940
11,893
Depreciation and amortization 6,603
6,404
Total $ 168,863
$ 172,826
(in thousands) 2016 2015
Compensation and benefits $ 13,991
$ 12,763
Occupancy related costs 9,083
10,654
Amortization of intangible assets 12,211
8,891
Professional services 6,740
7,990
Marketing costs 6,492
5,353
Depreciation and amortization 2,605
2,422
Other 2,494
4,333
Total $ 53,616
$ 52,406
(in thousands) 2016 2015
Interest income $ 11
$ 31
Other, net (38 ) (28 )
Total $ (27 ) $ 3
(in thousands, except per share data) 2016 2015
Net income attributable to Altisource $ 18,494
$ 3,698
Weighted average common shares outstanding, basic 18,855
20,172
Dilutive effect of stock options and restricted shares 1,185
823
Weighted average common shares outstanding, diluted 20,040
20,995
Earnings per share:
Basic $ 0.98
$ 0.18
Diluted $ 0.92
$ 0.18
The contractual relationship between Ocwen and Altisource changes significantly or there are significant changes to our pricing to Ocwen for services from which we generate material revenue
Three months ended March 31, 2016
(in thousands) Mortgage
Services
Financial
Services
Technology
Services
Corporate
Items and
Eliminations
Consolidated
Altisource
Revenue $ 198,986
$ 20,104
$ 40,647
$ (9,605 ) $ 250,132
Cost of revenue 121,518
14,258
41,893
(8,806 ) 168,863
Gross profit (loss) 77,468
5,846
(1,246 ) (799 ) 81,269
Selling, general and administrative expenses 26,969
4,309
6,558
15,780
53,616
Income (loss) from operations 50,499
1,537
(7,804 ) (16,579 ) 27,653
Other income (expense), net 14
13
7
(6,602 ) (6,568 )
Income (loss) before income taxes and non-controlling interests $ 50,513
$ 1,550
$ (7,797 ) $ (23,181 ) $ 21,085
Three months ended March 31, 2015
(in thousands) Mortgage
Services
Financial
Services
Technology
Services
Corporate
Items and
Eliminations
Consolidated
Altisource
Revenue $ 177,006
$ 22,354
$ 51,970
$ (10,848 ) $ 240,482
Cost of revenue 114,804
15,103
52,723
(9,804 ) 172,826
Gross profit (loss) 62,202
7,251
(753 ) (1,044 ) 67,656
Selling, general and administrative expenses 20,561
4,715
7,315
19,815
52,406
Income (loss) from operations 41,641
2,536
(8,068 ) (20,859 ) 15,250
Other income (expense), net (4 ) (12 ) 1
(10,427 ) (10,442 )
Income (loss) before income taxes and non-controlling interests $ 41,637
$ 2,524
$ (8,067 ) $ (31,286 ) $ 4,808
(in thousands) Mortgage Services Financial Services Technology Services Corporate
Items and Eliminations
Consolidated Altisource
Total assets:




March 31, 2016 $ 307,913
$ 48,492
$ 206,167
$ 153,022
$ 715,594
December 31, 2015 325,461
53,757
165,778
176,802
721,798
(in thousands) March 31,
2016
December 31,
2015
United States $ 84,107
$ 85,021
India 19,287
21,187
Luxembourg 10,842
9,944
Philippines 2,424
2,664
Uruguay 277
305
Total $ 116,937
$ 119,121
if, as a result of difficulties faced by Ocwen Financial Corporation and its subsidiaries (“Ocwen”), we were to lose Ocwen as a customer or there is a significant reduction in the volume of services they purchase from us;
1. Continue to grow our Servicer Solutions business (the products, services and technologies typically used or licensed by loan servicers): We are focused on expanding services purchased by our existing customer base and attracting new customers. Even as delinquencies return to historical norms, we believe there is a very large addressable market for the services we provide, as well as a strong and increasing customer focus on regulatory compliance and operational quality. We are one of only a few service providers with a comprehensive offering of services and technologies on a national scale. We believe we are well positioned to gain market share as customers consolidate to larger, full-service vendors and continue to outsource services that have historically been performed in-house.
2. Continue to grow our Origination Solutions business (the products, services and technologies typically used or licensed by participants in the loan origination market): We are focused on building an industry leading, integrated origination services platform that provides end-to-end solutions (products, services and technology) to our customers, expand our product offerings to our existing client base and actively add new customers. We are leveraging our enterprise wide sales organization to offer our origination services to larger bank and non-bank originators and correspondents and plan to expand our middle market sales organization to address other prospects. We believe we are well positioned to gain market share as customers consolidate to larger full-service vendors and by offering our existing customers (e.g., the members of Lenders One, the customers of Mortgage Builder and CastleLine and our preferred vendors and partners) an attractive suite of products and services that meet their growing needs.
3. Continue to grow our Consumer Real Estate Solutions business (the products, services and technologies typically used by self-directed home buyers and sellers) primarily through Owners.com: Owners.com provides self-directed home buyers and sellers with a full suite of real estate services from which to choose. We are focused on growing Owners.com by building brand awareness, driving customer engagement and increasing consumer adoption of our buy side and sell side brokerage services. With a growing segment of the population demonstrating a desire to engage in self-directed transactions, we believe Owners.com is well positioned to become a market leader.
4. Continue to grow our Real Estate Investor Solutions business (the products, services and technologies typically used by participants in residential real estate investments): We are focused on supporting the growth of our existing customers, expanding services purchased by our existing customer base and attracting new customers. With our real estate brokerage operation, vendor network, property management and renovation footprint, existing customer base and growing suite of technologies (e.g., Investability and RentRange), we believe we are well positioned to grow.
The average number of loans serviced by Ocwen on REALServicing was 1.5 million for the three months ended March 31, 2016 compared to 2.4 million for the three months ended March 31, 2015 . The average number of delinquent non-GSE loans serviced by Ocwen on REALServicing was 238 thousand for the three months ended March 31, 2016 compared to 310 thousand for the three months ended March 31, 2015 ;
On October 9, 2015, we acquired GoldenGator, LLC (doing business as RentRange) (“RentRange”), REIsmart, LLC (doing business as Investability) (“Investability”) and Onit Solutions, LLC, a support company for RentRange and Investability (collectively, “RentRange and Investability”) for $24.8 million , composed of $17.5 million in cash and 247 thousand shares of restricted common stock of the Company with a value of $7.3 million as of the closing date;
On July 17, 2015, we acquired CastleLine Holdings, LLC and its subsidiaries (“CastleLine”) for $33.4 million . The purchase consideration was composed of $12.3 million of cash at closing, $10.5 million of cash payable over four years from the acquisition date and 495 thousand shares of restricted common stock of the Company with a value of $14.4 million as of the closing date. Of the cash payable following acquisition, $3.8 million is contingent on certain future employment conditions of certain of the sellers, and therefore excluded from the purchase price;
For the three months ended March 31, 2015 , we recognized a $3.3 million impairment loss on our investment in HLSS equity securities; and
(in thousands, except per share data) 2016 2015 % Increase (decrease)
Service revenue


Mortgage Services $ 183,162
$ 144,381
27
Financial Services 20,076
22,313
(10 )
Technology Services 40,647
51,970
(22 )
Eliminations (9,605 ) (10,848 ) (11 )
Total service revenue 234,280
207,816
13
Reimbursable expenses 15,454
31,956
(52 )
Non-controlling interests 398
710
(44 )
Total revenue 250,132
240,482
4
Cost of revenue 168,863
172,826
(2 )
Gross profit 81,269
67,656
20
Selling, general and administrative expenses 53,616
52,406
2
Income from operations 27,653
15,250
81
Other income (expense), net:
Interest expense (6,541 ) (7,160 ) (9 )
Other than temporary impairment loss on securities
(3,285 ) (100 )
Other income (expense), net (27 ) 3
N/M
Total other income (expense), net (6,568 ) (10,442 ) (37 )
Income before income taxes and non-controlling interests 21,085
4,808
N/M
Income tax provision (2,193 ) (400 ) N/M
Net income 18,892
4,408
N/M
Net income attributable to non-controlling interests (398 ) (710 ) (44 )
Net income attributable to Altisource $ 18,494
$ 3,698
N/M
Margins:


Gross profit/service revenue 35 % 33 %
Income from operations/service revenue 12 % 7 %
Earnings per share:
Basic $ 0.98
$ 0.18
N/M
Diluted $ 0.92
$ 0.18
N/M
Three months ended March 31, 2016
(in thousands) Mortgage
Services
Financial
Services
Technology
Services
Corporate
Items and
Eliminations
Consolidated
Altisource
Revenue



Service revenue $ 183,162
$ 20,076
$ 40,647
$ (9,605 ) $ 234,280
Reimbursable expenses 15,426
28


15,454
Non-controlling interests 398



398
198,986
20,104
40,647
(9,605 ) 250,132
Cost of revenue 121,518
14,258
41,893
(8,806 ) 168,863
Gross profit (loss) 77,468
5,846
(1,246 ) (799 ) 81,269
Selling, general and administrative expenses 26,969
4,309
6,558
15,780
53,616
Income (loss) from operations 50,499
1,537
(7,804 ) (16,579 ) 27,653
Other income (expense), net 14
13
7
(6,602 ) (6,568 )
Income (loss) before income taxes and non-controlling interests $ 50,513
$ 1,550
$ (7,797 ) $ (23,181 ) $ 21,085
Margins:
Gross profit/service revenue 42 % 29 % (3 )% N/M
35 %
Income (loss) from operations/service revenue 28 % 8 % (19 )% N/M
12 %
Three months ended March 31, 2015
(in thousands) Mortgage
Services
Financial
Services
Technology
Services
Corporate
Items and
Eliminations
Consolidated
Altisource
Revenue




Service revenue $ 144,381
$ 22,313
$ 51,970
$ (10,848 ) $ 207,816
Reimbursable expenses 31,915
41


31,956
Non-controlling interests 710



710
177,006
22,354
51,970
(10,848 ) 240,482
Cost of revenue 114,804
15,103
52,723
(9,804 ) 172,826
Gross profit (loss) 62,202
7,251
(753 ) (1,044 ) 67,656
Selling, general and administrative expenses 20,561
4,715
7,315
19,815
52,406
Income (loss) from operations 41,641
2,536
(8,068 ) (20,859 ) 15,250
Other income (expense), net (4 ) (12 ) 1
(10,427 ) (10,442 )
Income (loss) before income taxes and non-controlling interests $ 41,637
$ 2,524
$ (8,067 ) $ (31,286 ) $ 4,808
Margins:




Gross profit/service revenue 43 % 32 % (1 )% N/M
33 %
Income (loss) from operations/service revenue 29 % 11 % (16 )% N/M
7 %
(in thousands) 2016 2015 % Increase (decrease)
Service revenue:

Asset management services $ 132,976
$ 89,584
48
Insurance services 22,677
23,642
(4 )
Residential property valuation 17,533
19,447
(10 )
Default management services 5,423
6,694
(19 )
Origination management services 4,553
5,014
(9 )
Total service revenue 183,162
144,381
27
Reimbursable expenses:
Asset management services 12,063
30,003
(60 )
Insurance services 2,567
1,349
90
Default management services 752
541
39
Origination management services 44
22
100
Total reimbursable expenses 15,426
31,915
(52 )
Non-controlling interests 398
710
(44 )
Total revenue $ 198,986
$ 177,006
12
(in thousands) 2016 2015 % Increase (decrease)
Compensation and benefits $ 25,625
$ 20,805
23
Outside fees and services 71,089
52,593
35
Reimbursable expenses 15,426
31,915
(52 )
Technology and telecommunications 8,414
8,674
(3 )
Depreciation and amortization 964
817
18
Cost of revenue $ 121,518
$ 114,804
6
(in thousands) 2016 2015 % Increase
(decrease)
Compensation and benefits $ 3,070
$ 538
N/M
Professional services 3,702
4,542
(18 )
Occupancy related costs 3,192
2,600
23
Amortization of intangible assets 10,512
6,439
63
Depreciation and amortization 704
554
27
Marketing costs 5,879
3,934
49
Other (90 ) 1,954
(105 )
Selling, general and administrative expenses $ 26,969
$ 20,561
31
(in thousands) 2016 2015 % Increase
(decrease)
Service revenue:
Customer relationship management $ 10,901
$ 11,396
(4 )
Asset recovery management 9,175
10,917
(16 )
Total service revenue 20,076
22,313
(10 )
Reimbursable expenses:
Asset recovery management 28
41
(32 )
Total reimbursable expenses 28
41
(32 )
Total revenue $ 20,104
$ 22,354
(10 )
(in thousands) 2016 2015 % Increase
(decrease)
Compensation and benefits $ 10,870
$ 10,987
(1 )
Outside fees and services 737
697
6
Reimbursable expenses 28
41
(32 )
Technology and telecommunications 2,180
2,907
(25 )
Depreciation and amortization 443
471
(6 )
Cost of revenue $ 14,258
$ 15,103
(6 )
(in thousands) 2016 2015 % Increase (decrease)
Compensation and benefits $ 179
$ 13
N/M
Professional services 368
211
74
Occupancy related costs 1,690
1,895
(11 )
Amortization of intangible assets 763
1,127
(32 )
Depreciation and amortization 610
579
5
Other 699
890
(21 )
Selling, general and administrative expenses $ 4,309
$ 4,715
(9 )
(in thousands) 2016 2015 % Increase (decrease)
Service revenue:

Software services $ 29,335
$ 32,624
(10 )
IT infrastructure services 11,312
19,346
(42 )
Total revenue $ 40,647
$ 51,970
(22 )
(in thousands) 2016 2015 % Increase (decrease)
Compensation and benefits $ 28,568
$ 37,534
(24 )
Outside fees and services 10

N/M
Technology and telecommunications 8,119
10,073
(19 )
Depreciation and amortization 5,196
5,116
2
Cost of revenue $ 41,893
$ 52,723
(21 )
(in thousands) 2016 2015 % Increase (decrease)
Compensation and benefits $ 564
$ 878
(36 )
Professional services 342
184
86
Occupancy related costs 2,750
3,779
(27 )
Amortization of intangible assets 936
1,325
(29 )
Depreciation and amortization 747
311
140
Other 1,219
838
45
Selling, general and administrative expenses $ 6,558
$ 7,315
(10 )
(in thousands) 2016 2015 % Increase (decrease)
Compensation and benefits $ 10,178
$ 11,334
(10)
Professional services 2,328
3,053
(24)
Occupancy related costs 1,451
2,380
(39)
Depreciation and amortization 544
978
(44)
Marketing costs 395
1,302
(70)
Other 884
768
15
Selling, general and administrative expenses 15,780
19,815
(20)
Other expense, net 6,602
10,427
(37)
Total corporate costs $ 22,382
$ 30,242
(26)
(in thousands) 2016 2015 % Increase (decrease)
Net income adjusted for non-cash items $ 43,588
$ 27,043
61
Changes in operating assets and liabilities (14,554 ) (42,981 ) 66
Net cash flows provided by (used in) operating activities 29,034
(15,938 ) N/M
Net cash flows used in investing activities (35,397 ) (33,901 ) (4 )
Net cash flows used in financing activities (13,259 ) (5,899 ) (125 )
Net decrease in cash and cash equivalents (19,622 ) (55,738 ) 65
Cash and cash equivalents at the beginning of the period 179,327
161,361
11
Cash and cash equivalents at the end of the period $ 159,705
$ 105,623
51
Period Total number of shares purchased (1) Weighted average price paid per share Total number of shares purchased as part of publicly announced plans or programs (2) Maximum number of shares that may yet be purchased under the plans or programs (2)
Common stock:



January 1 — 31, 2016 181,296
$ 27.58
181,296
1,250,284
February 1 — 29, 2016


1,250,284
March 1 — 31, 2016 282,642
23.62
282,642
967,642
463,938
$ 25.17
463,938
967,642
* 31.1 Section 302 Certification of the Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a)
* 31.2 Section 302 Certification of the Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a)
* 32.1 Certification by the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
* 101 Pursuant to Rule 405 of Regulation S-T, the following financial information from the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2016 is formatted in XBRL interactive data files: (i) Condensed Consolidated Balance Sheets at March 31, 2016 and December 31, 2015; (ii) Condensed Consolidated Statements of Operations and Comprehensive Income for the three months ended March 31, 2016 and 2015; (iii) Condensed Consolidated Statements of Equity for the three months ended March 31, 2016 and 2015; (iv) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2016 and 2015; and (v) Notes to Condensed Consolidated Financial Statements.
* Filed herewith
Date: April 28, 2016 By: /s/ Michelle D. Esterman
Michelle D. Esterman
Chief Financial Officer
(On behalf of the Registrant and as its Principal Financial Officer)

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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