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Corelogic Reports Third Quarter 2015 Financial Results

The following excerpt is from the company's SEC filing.

Strong Operating Performance Highlighted by Revenue Growth, Cost Efficiency

Focus, Record Free Cash Flow and Successful Execution of Strategic Reinvestment Program

Revenues up

$386.4 million

- growth in property, insurance

international and underwriting solutions more than offset foreign currency translation impacts and lower project

related volumes.

Operating income from continuing operations of

$65.9 million

- down

as revenue growth and cost management program benefits were offset by the effect of a $13.9 million gain related to a pri or period asset sale and increased investment in technology, compliance and process enhancements

Net income from continuing operations of

$28.3 million

reflecting lower operating income and higher provisions for taxes. Diluted EPS totaled

. Adjusted EPS rose

Adjusted EBITDA up

$116.4 million

; adjusted EBITDA margin of

, in line with prior

year and prior

quarter levels.

Company launches expanded data-driven property valuation solutions group and completes purchase of LandSafe Appraisal Services, Inc. on September 30, 2015.


1.0 million

common shares (

2.5 million



(NYSE:CLGX), a leading global property information, analytics and data-enabled services provider, today reported financial results for the quarter ended September 30, 2015.

“CoreLogic delivered another strong operating performance in the third quarter despite currency headwinds and challenging market dynamics. Revenues were up

in constant currency terms as we delivered gains in many of our core underwriting and risk management operations. We continued to build share in the mid and mass market while expanding and deepening relationships with our existing blue-chip client base," said Anand Nallathambi, President and Chief Executive Officer of CoreLogic. “We are excited about the launch of our data-driven property valuation solutions group which we expect to provide additional future growth opportunities. We believe we possess unique data, analytics and data-enabled services that, collectively, will enable our clients to more accurately

estimate the value of properties and evaluate important factors that may influence that value - now and in the future.”

“Our strong third-quarter financial performance reflects the continuing shift in our business mix toward scaled platforms that provide unique data-driven insights with higher levels of subscription-based revenues. The durability of our business model allows us to continue to invest in our products and services, technology leadership and operational improvements and, at the same time, return significant amounts of capital to our shareholders and manage our debt,” added Frank Martell, Chief Operating and Financial Officer of CoreLogic. “Importantly, we delivered adjusted EBITDA margins above

in the third quarter despite significant reinvestment in the business. As we move forward, we expect these investments to contribute to higher top-line growth and margin expansion.”

Third-Quarter Financial Highlights

Third quarter revenues totaled

compared with

$367.5 million

in the same 2014 period and $386.0 million in the second quarter of 2015. The year-over-year increase of

on a constant-currency basis) was driven primarily by growth in property, insurance, international and underwriting solutions which was partially offset by adverse foreign currency translation impacts and lower project-related volumes. TPS revenues increased

year-over-year to

$218.3 million

driven primarily by increased market share in the Company’s underwriting solutions units. D&A revenues aggregated

$170.5 million

in 2015, down


on a constant-currency basis) from the prior year as higher insurance, spatial solutions and international revenues were more than offset by the impact of unfavorable currency translation (

$7.8 million

) and lower core property and capital markets revenues attributable to the termination of several data supply and reseller agreements and the exit of a number of capital markets clients from the residential mortgage backed security (RMBS) market.

Operating income from continuing operations totaled

for the third quarter compared with

$77.8 million

for the third quarter of 2014 and $60.7 million for the second quarter of 2015. Third quarter 2014 operating income included $13.9 million attributable to a non-recurring gain on sale of real estate assets. Operating income increased approximately

excluding the impact of the 2014 gain. Improved operating income performance resulted primarily from revenue growth and the benefits of cost management programs which were partially offset by increased investment levels in technology, compliance and process enhancements and currency translation impacts. Third quarter 2015 operating income margin was

, up from 16% in the second quarter of 2015 and down from

(380 basis points attributable to the gain discussed previously) in 2014.

Third quarter net income from continuing operations totaled

$49.7 million

in 2014. The

$21.4 million

year-over-year decrease was driven primarily by increased tax provisions, non-recurring gains recognized in the third quarter of 2014 which had no 2015 counterpart and currency translation impacts. Diluted EPS from continuing operations totaled

for the third quarter of 2015 compared with

in the third quarter of 2014. Adjusted diluted EPS totaled

reflecting the positive impacts of revenue growth, cost containment and share repurchases.

Adjusted EBITDA totaled

in third quarter 2015 compared with

$113.4 million

in the same prior year period and $117.8 million for the second quarter of 2015. Third quarter 2015 adjusted EBITDA margin was

line with 2014 levels. The

increase (

on a constant-currency basis) in adjusted EBITDA was principally the result of revenue growth, operating leverage in our underwriting solutions businesses and the benefit of cost containment programs. TPS adjusted EBITDA increased

$72.3 million

as operating leverage and cost management benefits drove improved results. D&A adjusted EBITDA declined

$53.5 million

as improved results from insurance and spatial solutions businesses were more than offset by unfavorable currency translation ($2.6 million) and previously-announced investments in product and service development, technology platforms, compliance infrastructure, and data monetization initiatives.

Cost Management and Technology Excellence

In line with the Company's demonstrated commitment to operational excellence and progressive growth in profit margins, during the first quarter of 2015, CoreLogic announced an expanded three-year productivity and cost management program which is expected to reduce expense, on an annual run-rate basis, by approximately $60 million by 2018. Savings are expected to be realized through the reduction of selling, general and administrative (SG&A) costs, outsourcing certain business process functions, consolidation of facilities and other operational improvements. This program will incorporate expected savings from the completion of Phase I of the Company’s previously announced TTI. TTI Phase I, completed during the second quarter of 2015, focused principally on the transition of the Company's existing technology...