Lender Processing Services Reports Third Quarter 2013 Earnings

Adjusted EPS of $0.51

Oct 22, 2013, 08:30 ET from Lender Processing Services, Inc.

JACKSONVILLE, Fla., Oct. 22, 2013 /PRNewswire/ -- Lender Processing Services, Inc. (NYSE: LPS), a leading provider of integrated technology, data and services to the mortgage and real estate industries, today announced third quarter 2013 GAAP net earnings of $35.5 million, or $0.41 per diluted share, compared to $58.3 million, or $0.69 per diluted share, in the prior year quarter. 

(Logo: http://photos.prnewswire.com/prnh/20120802/FL50731LOGO)

Third Quarter Highlights

  • GAAP EPS of $0.41 reflects a charge totaling $0.09 per diluted share for severance costs, merger related costs, and legal and regulatory contingencies
  • Adjusted EPS of $0.51, excluding charge and reflecting add-back for purchase accounting amortization
  • Adjusted EBITDA margin of 24%
  • Adjusted free cash flow of $56 million, or $0.65 per diluted share

"LPS continues to successfully execute our technology-driven strategy recently signing a five year commitment with a major mortgage servicer to convert a minimum of 500,000 loans to the MSP servicing system.  In addition, we are beginning to benefit from investments in our origination technology platforms as we recently signed a top ten mortgage lender," said Hugh Harris, president and chief executive officer of LPS.  "Our unique combination of scale, expertise and innovation continues to define LPS as a leader in technology-driven solutions for the evolving mortgage industry."

"We also continue to adjust to changing market dynamics including lower mortgage refinance volumes, declining foreclosure activity, and the cost of implementing new mortgage industry regulations," added Harris.

Chief Financial Officer Tom Schilling commented, "LPS delivered solid third quarter adjusted earnings of $44 million or $0.51 per share and strong adjusted free cash flow of $56 million, while continuing to invest in our core technology and data platforms.  We are rigorously managing expenses to mitigate the impact of the sharp decline in Origination and Default Services transaction volumes as we have in prior market cycles."  

Third quarter 2013 revenue was $419.0 million, a decrease of 15.8% from $497.5 million in the prior year quarter primarily due to lower contributions from Origination and Default Services.  Third quarter 2013 GAAP operating income was $63.4 million, a decrease of 43.3% from $111.9 million in the prior year quarter.  Adjusted operating income was $76.2 million, a decrease of 31.9% from the prior year quarter, primarily due to a decline in contributions from Origination and Default Services.   During the third quarter, the Company lowered its effective tax rate to reflect the realization of various tax planning initiatives.  Third quarter 2013 adjusted net earnings were $44.0 million, or $0.51 per diluted share, compared to $60.0 million, or $0.71 per diluted share in the prior year quarter. 

Adjusted results from continuing operations in the third quarter 2013 exclude a pre-tax charge of $12.8 million, or $0.09 per diluted share after-tax, including $0.06 per share for severance costs, $0.02 for estimated legal and regulatory contingencies, and $0.01 for costs related to the pending merger with Fidelity National Financial, Inc. 

Net cash provided by operating activities for the third quarter of 2013 was $101.1 million, while adjusted free cash flow was $56.0 million, a decrease from $69.2 million in the prior year period primarily due to lower earnings.  Adjusted free cash flow is defined as net cash provided by operating activities minus certain non-recurring expenses and additions to property, equipment and computer software.   

The company ended the third quarter 2013 with cash of $203.2 million and credit facility availability of $398.1 million.  The legal and regulatory accrual was $86.6 million at the end of the third quarter 2013.

Technology, Data and Analytics (TD&A)

Revenue for the third quarter 2013 was $183.4 million, a decrease of 3.0% from $189.0 million in the prior year quarter.  Revenue from Servicing Technology increased 1.8% from the prior year quarter due to higher loan counts and professional services and decreased 3.1% sequentially primarily due to lower transactional usage volume on the platform.  Origination Technology revenue decreased 8.3% from the prior year quarter due to lower refinance transaction volume on the Loan Quality Gateway platform.  Default Technology revenue decreased 14.5% from the prior year quarter due to lower foreclosure referral volumes.  Data and Analytics revenue decreased 1.4% primarily due to lower transactional volumes.  Adjusted operating income was $49.4 million, a 15.2% decrease from $58.3 million in the prior year quarter primarily due to lower revenue and increased operating expenses driven by continued investment in technology and data platforms. 

Transaction Services  

Revenue for the third quarter 2013 was $235.5 million, a decrease of 23.6% from $308.5 million in the prior year period.  Origination Services revenue was $120.9 million, a decrease of 21.5% from the prior year period due to a decline in mortgage refinance volumes resulting in lower title, escrow and appraisal revenue.  Default Services revenue was $114.6 million, a decrease of 25.8% from the prior year period due to lower foreclosure activity, which reflects the decline in seriously delinquent mortgages as the U.S. economy and housing market strengthened, as well as from strategic actions to align risk and return resulting in the non-renewal of certain contracts.  Adjusted operating income was $37.1 million, a decrease of 43.6% from $65.7 million in the prior year period due to lower revenue.

Corporate and Other

Adjusted net corporate expenses in the third quarter 2013 were $10.3 million, a decrease of 14.9% from $12.1 million in the prior year period.          

Merger Agreement

On May 28, 2013, LPS and Fidelity National Financial, Inc. (NYSE: FNF) executed an Agreement and Plan of Merger pursuant to which LPS would be acquired by FNF. The agreement was approved by the Board of Directors and is subject to customary closing conditions. Those conditions include the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, the approval of LPS and FNF stockholders and approvals from applicable federal and state regulators.

Conference Call

Due to the pending acquisition by Fidelity National Financial, Inc., LPS will not host a conference call.

About Lender Processing Services

LPS (NYSE: LPS) delivers comprehensive technology solutions and services, as well as powerful data and analytics, to the nation's top mortgage lenders, servicers and investors. As a proven and trusted partner with deep client relationships, LPS offers the only end-to-end suite of solutions that provides major U.S. banks and many federal government agencies the technology and data needed to support mortgage lending and servicing operations, meet unique regulatory and compliance requirements and mitigate risk. 

These integrated solutions support origination, servicing, portfolio retention and default servicing. LPS' servicing solutions include MSP, the industry's leading loan-servicing platform, which is used to service approximately 50 percent of all U.S. mortgages by dollar volume. The company also provides proprietary data and analytics for the mortgage, real estate and capital markets industries. Lender Processing Services is a Fortune 1000 company headquartered in Jacksonville, Fla.  For more information, please visit www.lpsvcs.com.

Use of Non-GAAP Financial Information

U.S. Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting and reporting.  GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactions, and in the preparation of financial statements.  In addition to reporting financial results in accordance with GAAP, LPS reports several non-GAAP measures, including "EBITDA" (GAAP operating income plus depreciation and amortization); "EBITDA, as adjusted" (EBITDA adjusted for the impact of certain non-recurring adjustments, if applicable); "adjusted operating income" (GAAP operating income adjusted for the impact of certain non-recurring adjustments, if applicable); "adjusted net earnings" (GAAP net earnings adjusted for the impact of certain non-recurring adjustments, if applicable, plus the after-tax purchase price amortization of intangible assets added through acquisitions); "adjusted net earnings per diluted share" or "adjusted EPS per diluted share" (adjusted net earnings divided by diluted weighted average shares); and "adjusted free cash flow" (net cash provided by operating activities less additions to property, equipment and computer software, as well as non-recurring adjustments, if applicable). LPS provides these measures because it believes that they are helpful to investors in comparing year-over-year performance in light of certain non-recurring and other charges, and to better understand our financial performance, competitive position and future prospects.  Non-GAAP measures should be considered in conjunction with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP measures.  A reconciliation of these non-GAAP measures to related GAAP measures is included in the attachments to this release.

Forward-Looking Statements

This press release contains forward-looking statements that involve a number of risks and uncertainties. Those forward-looking statements include all statements that are not historical facts, including statements about our beliefs and expectations. Forward-looking statements are based on management's beliefs, as well as assumptions made by and information currently available to management. Because such statements are based on expectations as to future economic performance and are not statements of historical fact, actual results may differ materially from those projected. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements are the following: the ability to consummate the proposed transaction with Fidelity National Financial, Inc. ("FNF"); the ability to obtain requisite regulatory and stockholder approval and the satisfaction of other conditions to the consummation of the proposed transaction with FNF; the ability of FNF to successfully integrate LPS' operations and employees and realize anticipated synergies and cost savings; the potential impact of the announcement or consummation of the proposed transaction on relationships, including with employees, suppliers, customers and competitors; FNF and  LPS are subject to intense competition and increased competition is expected in the future; LPS' ability to adapt its services to changes in technology or the marketplace; the impact of changes in the level of real estate activity (including, among others, loan originations, and refinancings in particular, and foreclosures) on demand for certain of LPS' services; LPS' ability to maintain and grow its relationship with its customers; the effects of LPS' substantial leverage on its ability to make acquisitions and invest in its business; the level of scrutiny being placed on participants in the foreclosure business; risks associated with federal and state enforcement proceedings, inquiries and examinations currently underway or that may be commenced in the future with respect to LPS' default management operations, and with civil litigation relating to these matters; changes to the laws, rules and regulations that regulate LPS' businesses as a result of the current economic and financial environment; changes in general economic, business and political conditions, including changes in the financial markets; the impact of any potential defects, development delays, installation difficulties or system failures on LPS' business and reputation; and risks associated with protecting information security and privacy. Additional information concerning these and other factors can be found in LPS' filings with the Securities and Exchange Commission ("SEC"), including its most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.  LPS assumes no obligation to update the information in this communication, except as otherwise required by law.  Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof and LPS undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

 

Exhibit A

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Earnings

(Unaudited)

Three months ended September 30,

Nine months ended September 30,

2013

2012

2013

2012

(In thousands, except per share data)

Revenues

$        418,981

$         497,451

$       1,359,522

$       1,496,622

Expenses:

Operating expenses

316,923

361,351

1,006,923

1,099,538

Depreciation and amortization

25,870

24,241

78,596

71,608

Legal and regulatory charges

2,445

-

54,011

144,476

Exit costs, impairments and other charges

10,334

-

12,035

-

Total expenses

355,572

385,592

1,151,565

1,315,622

Operating income

63,409

111,859

207,957

181,000

Other income (expense):

Interest income

554

463

1,698

1,365

Interest expense

(13,014)

(16,112)

(39,611)

(48,969)

Other income (expense), net

(79)

14

212

173

Total other income (expense)

(12,539)

(15,635)

(37,701)

(47,431)

Earnings from continuing operations before income taxes

50,870

96,224

170,256

133,569

Provision for income taxes

15,421

35,892

59,589

59,860

Net earnings from continuing operations

35,449

60,332

110,667

73,709

Earnings (loss) from discontinued operations, net of tax

31

(2,028)

(2,173)

(6,164)

Net earnings

$          35,480

$           58,304

$         108,494

$           67,545

Net earnings per share - diluted from continuing operations

$              0.41

$               0.71

$               1.29

$               0.87

Net loss per share - diluted from discontinued operations

-

(0.02)

(0.02)

(0.07)

Net earnings per share - diluted

$              0.41

$               0.69

$               1.27

$               0.80

Weighted average shares outstanding - diluted

85,984

84,948

85,569

84,774

 

Exhibit B

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

September 30,

December 31,

2013

2012

(In thousands)

Assets

Current assets:

Cash and cash equivalents

$        203,207

$      236,241

Trade receivables, net of allowance for doubtful accounts

233,322

274,783

Other receivables

6,344

3,800

Prepaid expenses and other current assets

37,216

41,541

Deferred income taxes

88,090

127,742

Total current assets

568,179

684,107

Property and equipment, net

121,542

126,633

Computer software, net

272,714

245,271

Other intangible assets, net

18,978

23,670

Goodwill

1,109,304

1,109,304

Other non-current assets

281,808

256,849

Total assets

$     2,372,525

$   2,445,834

Liabilities and Stockholders' Equity

Current liabilities:

Current portion of long-term debt

$         40,125

$               -

Trade accounts payable

39,658

38,901

Accrued salaries and benefits

72,848

107,984

Legal and regulatory accrual

86,563

223,149

Other accrued liabilities

152,766

169,458

Deferred revenues

58,270

58,868

Total current liabilities

450,230

598,360

Deferred revenues

27,382

24,987

Deferred income taxes, net

189,825

174,303

Long-term debt, net of current portion

1,028,000

1,068,125

Other non-current liabilities

32,909

37,163

Total liabilities

1,728,346

1,902,938

Stockholders' equity:

Preferred stock $0.0001 par value; 50 million shares authorized, none issued

at September 30, 2013 and December 31, 2012

-

-

Common stock $0.0001 par value; 500 million shares authorized, 97.4 million

shares issued at September 30, 2013 and December 31, 2012

10

10

Additional paid-in capital

249,145

250,016

Retained earnings

776,654

694,148

Accumulated other comprehensive loss

(3,106)

(3,079)

Treasury stock at cost; 12.1 million and 12.5 million shares at September 30, 2013 and 

December 31, 2012, respectively

(378,524)

(398,199)

Total stockholders' equity

644,179

542,896

Total liabilities and stockholders' equity

$     2,372,525

$   2,445,834

 

 

Exhibit C

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

Nine months ended September 30,

2013

2012

(In thousands)

Cash flows from operating activities:

Net earnings

$        108,494

$          67,545

Adjustments to reconcile net earnings to net 

cash provided by operating activities:

Depreciation and amortization

78,580

73,407

Amortization of debt issuance costs

3,141

3,317

Asset impairment charges

785

3,812

Gain on sale of discontinued operations

-

(6,688)

Deferred income taxes, net

54,630

776

Stock-based compensation cost

20,777

19,520

Income tax effect of equity compensation

(917)

(494)

Changes in assets and liabilities, net of effects of acquisitions:

Trade receivables

41,304

27,543

Other receivables

(2,544)

(1,748)

Prepaid expenses and other assets

(11,162)

(18,512)

Deferred revenues

1,798

10,605

Accounts payable, accrued liabilities and other liabilities

(187,281)

124,487

Net cash provided by operating activities

107,605

303,570

Cash flows from investing activities:

Additions to property and equipment

(20,208)

(16,109)

Additions to capitalized software

(65,909)

(56,088)

Purchases of investments, net of proceeds from sales

(8,094)

(17,604)

Acquisition of title plants and property records data

(18,484)

(33,600)

Acquisitions, net of cash acquired

-

(12,250)

Proceeds from sales of discontinued operations, net of cash distributed

-

16,206

Net cash used in investing activities

(112,695)

(119,445)

Cash flows from financing activities:

Debt service payments

-

(72,082)

Exercise of stock options and restricted stock vesting

(2,186)

(1,792)

Income tax effect of equity compensation

917

494

Dividends paid

(25,723)

(25,384)

Payment of contingent consideration related to acquisitions

(952)

(2,000)

Net cash used in financing activities

(27,944)

(100,764)

Net (decrease) increase in cash and cash equivalents

(33,034)

83,361

Cash and cash equivalents, beginning of period

236,241

77,355

Cash and cash equivalents, end of period

$        203,207

$        160,716

Supplemental disclosures of cash flow information:

Cash paid for interest

$          30,398

$          54,774

Cash paid for taxes

$            6,956

$          46,853

 

 

Exhibit D

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL INFORMATION - UNAUDITED

(In thousands)

YEAR-TO-DATE

QUARTER

YEAR ENDED

Q3-2013

Q3-2012

Q3-2013

Q2-2013

Q1-2013

Q4-2012

Q3-2012

Q2-2012

Q1-2012

12/31/2012

1.

Revenues - Continuing Operations

Technology, Data and Analytics:

Technology

$   523,286

$   503,790

$  168,596

$  177,265

$  177,425

$  174,110

$  173,985

$  168,515

$161,290

$     677,900

Servicing Technology

346,552

331,207

113,621

117,264

115,667

114,818

111,572

111,284

108,351

446,025

Default Technology

100,959

101,790

30,911

33,425

36,623

34,762

36,163

34,051

31,576

136,552

Origination Technology

75,775

70,793

24,064

26,576

25,135

24,530

26,250

23,180

21,363

95,323

Data and Analytics

47,735

43,803

14,795

16,735

16,205

15,202

15,009

14,767

14,027

59,005

Total

571,021

547,593

183,391

194,000

193,630

189,312

188,994

183,282

175,317

736,905

Transaction Services:

Origination Services

442,785

451,548

120,927

157,433

164,425

173,934

154,057

150,741

146,750

625,482

Default Services

345,585

499,473

114,597

117,427

113,561

137,783

154,394

179,618

165,461

637,256

Total

788,370

951,021

235,524

274,860

277,986

311,717

308,451

330,359

312,211

1,262,738

Corporate

131

(1,992)

66

20

45

-

6

(264)

(1,734)

(1,992)

Total Revenue

$1,359,522

$1,496,622

$  418,981

$  468,880

$  471,661

$  501,029

$  497,451

$  513,377

$485,794

$  1,997,651

Revenue Growth from Prior Year Period

Technology, Data and Analytics:

Technology

3.9%

9.4%

-3.1%

5.2%

10.0%

8.0%

11.2%

10.4%

6.6%

9.1%

Servicing Technology

4.6%

5.4%

1.8%

5.4%

6.8%

7.2%

4.0%

7.3%

4.9%

5.9%

Default Technology

-0.8%

17.6%

-14.5%

-1.8%

16.0%

3.0%

28.3%

16.6%

8.3%

13.5%

Origination Technology

7.0%

18.9%

-8.3%

14.7%

17.7%

20.3%

25.3%

17.1%

13.7%

19.2%

Data and Analytics

9.0%

0.2%

-1.4%

13.3%

15.5%

6.3%

7.8%

-2.6%

-4.2%

1.7%

Total

4.3%

8.6%

-3.0%

5.8%

10.4%

7.8%

11.0%

9.2%

5.7%

8.4%

Transaction Services:

Origination Services

-1.9%

22.7%

-21.5%

4.4%

12.0%

14.8%

15.7%

42.4%

13.8%

20.4%

Default Services

-30.8%

-17.3%

-25.8%

-34.6%

-31.4%

-26.0%

-19.9%

-9.4%

-22.4%

-19.4%

Total

-17.1%

-2.2%

-23.6%

-16.8%

-11.0%

-7.7%

-5.3%

8.6%

-8.8%

-3.6%

Corporate

n/m

n/m

n/m

n/m

n/m

n/m

n/m

n/m

n/m

n/m

Total Revenue

-9.2%

1.7%

-15.8%

-8.7%

-2.9%

-2.1%

0.6%

9.1%

-4.1%

0.7%

Revenue Growth from Sequential Period

Technology, Data and Analytics:

Technology

3.9%

9.4%

-4.9%

-0.1%

1.9%

0.1%

3.2%

4.5%

0.0%

9.1%

Servicing Technology

4.6%

5.4%

-3.1%

1.4%

0.7%

2.9%

0.3%

2.7%

1.2%

5.9%

Default Technology

-0.8%

17.6%

-7.5%

-8.7%

5.4%

-3.9%

6.2%

7.8%

-6.4%

13.5%

Origination Technology

7.0%

18.9%

-9.5%

5.7%

2.5%

-6.6%

13.2%

8.5%

4.7%

19.2%

Data and Analytics

9.0%

0.2%

-11.6%

3.3%

6.6%

1.3%

1.6%

5.3%

-1.9%

1.7%

Total

4.3%

8.6%

-5.5%

0.2%

2.3%

0.2%

3.1%

4.5%

-0.1%

8.4%

Transaction Services:

Origination Services

-1.9%

22.7%

-23.2%

-4.3%

-5.5%

12.9%

2.2%

2.7%

-3.2%

20.4%

Default Services

-30.8%

-17.3%

-2.4%

3.4%

-17.6%

-10.8%

-14.0%

8.6%

-11.2%

-19.4%

Total

-17.1%

-2.2%

-14.3%

-1.1%

-10.8%

1.1%

-6.6%

5.8%

-7.6%

-3.6%

Corporate

n/m

n/m

n/m

n/m

n/m

n/m

n/m

n/m

n/m

n/m

Total Revenue

-9.2%

1.7%

-10.6%

-0.6%

-5.9%

0.7%

-3.1%

5.7%

-5.1%

0.7%

 

 

Exhibit E

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

NON-GAAP FINANCIAL INFORMATION - UNAUDITED

(In thousands, except per share data)

YEAR-TO-DATE

QUARTER

YEAR ENDED

Q3-2013

Q3-2012

Q3-2013

Q2-2013

Q1-2013

Q4-2012

Q3-2012

Q2-2012

Q1-2012

12/31/2012

1.

Operating Results - Continuing Operations

Consolidated

Revenues

$    1,359,522

$ 1,496,622

$      418,981

$      468,880

$      471,661

$    501,029

$      497,451

$      513,377

$      485,794

$   1,997,651

Operating Income (Loss), as reported

207,957

181,000

63,409

45,120

99,428

51,935

111,859

(24,065)

93,206

232,935

Adjustments:

Legal, Regulatory and Other Charges (1)

66,046

144,476

12,779

53,267

-

58,401

-

144,476

-

202,877

Operating Income, as adjusted

274,003

325,476

76,188

98,387

99,428

110,336

111,859

120,411

93,206

435,812

Depreciation and Amortization

78,596

71,608

25,870

26,652

26,074

25,136

24,241

23,453

23,914

96,744

EBITDA, as adjusted

$       352,599

$    397,084

$      102,058

$      125,039

$      125,502

$    135,472

$      136,100

$      143,864

$      117,120

$      532,556

Operating Margin, as adjusted

20.2%

21.7%

18.2%

21.0%

21.1%

22.0%

22.5%

23.5%

19.2%

21.8%

EBITDA Margin, as adjusted

25.9%

26.5%

24.4%

26.7%

26.6%

27.0%

27.4%

28.0%

24.1%

26.7%

Technology, Data and Analytics

Revenues

$       571,021

$    547,593

$      183,391

$      194,000

$      193,630

$    189,312

$      188,994

$      183,282

$      175,317

$      736,905

Operating Income, as reported

168,768

166,396

49,058

59,506

60,204

51,971

58,318

56,003

52,075

218,367

Adjustments:

Legal, Regulatory and Other Charges (1)

501

-

386

115

-

2,827

-

-

-

2,827

Operating Income, as adjusted

169,269

166,396

49,444

59,621

60,204

54,798

58,318

56,003

52,075

221,194

Depreciation and Amortization

61,665

55,269

20,453

20,880

20,332

19,730

18,726

17,997

18,546

74,999

EBITDA, as adjusted

$       230,934

$    221,665

$        69,897

$        80,501

$        80,536

$      74,528

$        77,044

$        74,000

$        70,621

$      296,193

Operating Margin, as adjusted

29.6%

30.4%

27.0%

30.7%

31.1%

28.9%

30.9%

30.6%

29.7%

30.0%

EBITDA Margin, as adjusted

40.4%

40.5%

38.1%

41.5%

41.6%

39.4%

40.8%

40.4%

40.3%

40.2%

Transaction Services

Revenues

$       788,370

$    951,021

$      235,524

$      274,860

$      277,986

$    311,717

$      308,451

$      330,359

$      312,211

$   1,262,738

Operating Income, as reported

132,598

194,504

31,565

50,516

50,517

65,892

65,651

76,603

52,250

260,396

Adjustments:

Legal, Regulatory and Other Charges (1)

6,061

-

5,486

575

-

1,531

-

-

-

1,531

Operating Income, as adjusted

138,659

194,504

37,051

51,091

50,517

67,423

65,651

76,603

52,250

261,927

Depreciation and Amortization

14,243

13,339

4,541

4,842

4,860

4,498

4,531

4,408

4,400

17,837

EBITDA, as adjusted

$       152,902

$    207,843

$        41,592

$        55,933

$        55,377

$      71,921

$        70,182

$        81,011

$        56,650

$      279,764

Operating Margin, as adjusted

17.6%

20.5%

15.7%

18.6%

18.2%

21.6%

21.3%

23.2%

16.7%

20.7%

EBITDA Margin, as adjusted

19.4%

21.9%

17.7%

20.3%

19.9%

23.1%

22.8%

24.5%

18.1%

22.2%

Corporate and Other

Revenues

$             131

$      (1,992)

$              66

$              20

$              45

$             -

$                6

$           (264)

$        (1,734)

$        (1,992)

Operating Loss, as reported

(93,409)

(179,900)

(17,214)

(64,902)

(11,293)

(65,928)

(12,110)

(156,671)

(11,119)

(245,828)

Adjustments:

Legal, Regulatory and Other Charges (1)

59,484

144,476

6,907

52,577

-

54,043

-

144,476

-

198,519

Operating Loss, as adjusted

(33,925)

(35,424)

(10,307)

(12,325)

(11,293)

(11,885)

(12,110)

(12,195)

(11,119)

(47,309)

Depreciation and Amortization

2,688

3,000

876

930

882

908

984

1,048

968

3,908

EBITDA, as adjusted

$        (31,237)

$     (32,424)

$        (9,431)

$       (11,395)

$       (10,411)

$     (10,977)

$       (11,126)

$       (11,147)

$       (10,151)

$       (43,401)

 

 

Exhibit E - Continued

LENDER PROCESSING SERVICES, INC. AND SUBSIDIARIES

NON-GAAP FINANCIAL INFORMATION - UNAUDITED

(In thousands, except per share data)

YEAR-TO-DATE

QUARTER

YEAR ENDED

Q3-2013

Q3-2012

Q3-2013

Q2-2013

Q1-2013

Q4-2012

Q3-2012

Q2-2012

Q1-2012

12/31/2012

2.

Net Earnings - Reconciliation

Net Earnings (Loss)

$       108,494

$      67,545

$        35,480

$        19,084

$        53,930

$        2,814

$        58,304

$       (37,880)

$        47,121

$        70,359

Adjustments - Continuing Operations:

Legal, Regulatory and Other Charges, net (1)

41,158

100,624

7,599

33,559

-

34,676

-

100,624

-

135,300

Total Adjustments to Continuing Operations

41,158

100,624

7,599

33,559

-

34,676

-

100,624

-

135,300

Adjustments - Discontinued Operations:

Impairment, Restructuring and Disposal Charges, net

1,079

-

-

1,079

-

2,494

-

-

-

2,494

Total Adjustments to Discontinued Operations

1,079

-

-

1,079

-

2,494

-

-

-

2,494

Adjustments - Non-operating:

Debt Refinancing Charges, net (2)

-

-

-

-

-

15,445

-

-

-

15,445

Income Tax Adjustments (3)

-

-

-

-

-

5,621

-

-

-

5,621

Total Non-operating Adjustments

-

-

-

-

-

21,066

-

-

-

21,066

Net Earnings, as adjusted

150,731

168,169

43,079

53,722

53,930

61,050

58,304

62,744

47,121

229,219

Purchase Accounting Amortization, net (4)

3,430

5,866

951

912

1,567

1,712

1,712

1,733

2,421

7,578

Adjusted Net Earnings

$       154,161

$     174,035

$        44,030

$        54,634

$        55,497

$      62,762

$        60,016

$        64,477

$        49,542

$      236,797

Adjusted EPS - Continuing Operations

$            1.82

$          2.11

$           0.51

$           0.65

$           0.66

$         0.74

$           0.72

$           0.79

$           0.60

$           2.85

Adjusted EPS - Discontinued Operations

(0.02)

(0.05)

-

(0.01)

(0.01)

-

(0.01)

(0.03)

(0.01)

(0.05)

Adjusted EPS - Consolidated

$            1.80

$          2.06

$           0.51

$           0.64

$           0.65

$         0.74

$           0.71

$           0.76

$           0.59

$           2.80

Diluted Weighted Average Shares

85,569

84,774

85,984

85,560

85,144

85,106

84,948

84,578

84,567

84,857

3.

Cash Flow - Reconciliation

Cash Flows from Operating Activities:

Net Earnings (Loss)

$       108,494

$      67,545

$        35,480

$        19,084

$        53,930

$        2,814

$        58,304

$       (37,880)

$        47,121

$        70,359

Adjustments to reconcile net earnings to

net cash provided by operating activities:

Non-cash adjustments

156,996

93,650

29,204

37,379

90,413

24,978

49,196

7,022

37,432

118,628

Working capital adjustments

(157,885)

142,375

36,445

47,554

(241,884)

103,100

(21,816)

158,693

5,498

245,475

Net cash provided by operating activities

107,605

303,570

101,129

104,017

(97,541)

130,892

85,684

127,835

90,051

434,462

Capital expenditures included in investing activities

(86,117)

(72,197)

(30,679)

(27,298)

(28,140)

(41,131)

(22,220)

(26,258)

(23,719)

(113,328)

Free Cash Flow

21,488

231,373

70,450

76,719

(125,681)

89,761

63,464

101,577

66,332

321,134

Payment of Legal, Regulatory and Other Charges, net (5)

161,678

21,434

(14,454)

947

175,185

2,491

5,746

13,335

2,353

23,925

Adjusted Free Cash Flow

$       183,166

$     252,807

$        55,996

$        77,666

$        49,504

$      92,252

$        69,210

$      114,912

$        68,685

$      345,059

Adjusted Free Cash Flow Per Diluted Share

$            2.14

$          2.99

$           0.65

$           0.91

$           0.58

$         1.08

$           0.82

$           1.36

$           0.81

$           4.07

Diluted Weighted Average Shares

85,569

84,774

85,984

85,560

85,144

85,106

84,948

84,578

84,567

84,857

Notes:

(1)

Reflects the impact of charges taken on various legal and regulatory matters, as well severance, asset impairment and facility lease impairment charges.

(2)

Charge related to the refinancing of our bonds and senior credit facilities during 2012. 

(3)

Primarily reflects the impact of non-cash adjustments related to equity forfeitures from severance and restructuring initiatives.

(4)

Purchase accounting amortization, net represents the periodic amortization of intangible assets acquired through business acquisitions primarily relating to customer lists, trademarks and non-compete agreements.

(5)

Reflects the impact of payments, less applicable taxes, for adjustments included in item 2. "Net Earnings - Reconciliation" of the GAAP to non-GAAP reconciliation.

 

SOURCE Lender Processing Services, Inc.



RELATED LINKS

http://www.lpsvcs.com