Item 5. Market for Registrant’s Common Equity
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock is listed on the NASDAQ Global Select Market under the symbol “ASPS.”
The number of holders of record of our common stock as of March 5, 2021 was 336. We believe the number of beneficial shareholders is substantially greater than the number of holders as a large portion of our common stock is held through brokerage firms.
Dividends
We have not historically declared or paid cash dividends on our common stock, but may declare dividends in the future. Under Luxembourg law, shareholders need to approve certain dividends. Such approval typically occurs during a company’s annual meeting of shareholders. Luxembourg law imposes limits on our ability to pay dividends based on annual net income and net income carried forward, less any amounts placed in reserve. The provisions of our senior secured term loan agreement, as amended, also limit our ability to pay dividends.
Stock Performance Graph
The graph below compares the cumulative total stockholder return on our common stock with the cumulative total return on the S&P 500 Index and the NASDAQ Composite Index for the five year period ending on December 31, 2020. The graph assumes an investment of $100 at the beginning of this period. The comparisons in the graph below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our common stock.
12/31/15 6/30/16 12/31/16 6/30/17 12/31/17 6/30/18 12/31/18 6/30/19 12/31/19 6/30/20 12/31/20
Altisource $ 100.00 $ 100.11 $ 95.61 $ 78.46 $ 100.68 $ 104.89 $ 80.87 $ 70.69 $ 69.51 $ 53.00 $ 46.31
S&P 500 Index 100.00 102.69 109.54 118.57 130.81 133.00 122.65 143.93 158.07 151.68 183.77
NASDAQ Composite Index 100.00 96.71 107.50 122.63 137.86 149.98 132.51 159.89 179.19 200.88 257.38
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Securities Authorized for Issuance under Equity Compensation Plans
The information required by this item is incorporated herein by reference to our definitive proxy statement in connection with our 2021 annual meeting of shareholders to be filed pursuant to Regulation 14A under the Exchange Act.
Issuer Purchases of Equity Securities
On May 15, 2018, our shareholders approved the renewal and replacement of the share repurchase program previously approved by the shareholders on May 17, 2017. Under the program, we are authorized to purchase up to 4.3 million shares of our common stock, based on a limit of 25% of the outstanding shares of common stock on the date of approval, at a minimum price of $1.00 per share and a maximum price of $500.00 per share, for a period of five years from the date of approval. As of December 31, 2020, approximately 2.4 million shares of common stock remain available for repurchase under the program. There were no purchases of shares of common stock during the year ended December 31, 2020. We purchased 1.0 million shares at an average price of $20.33 per share during the year ended December 31, 2019 and 1.6 million shares at an average price of $25.53 per share during the year ended December 31, 2018. Luxembourg law limits share repurchases to the balance of Altisource Portfolio Solutions S.A. (unconsolidated parent company) retained earnings, less the value of shares repurchased. As of December 31, 2020, we can repurchase up to approximately $91 million of our common stock under Luxembourg law. Our Credit Agreement also limits the amount we can spend on share repurchases, which limit was approximately $430 million as of December 31, 2020, and may prevent repurchases in certain circumstances, including if our leverage ratio exceeds 3.50 to 1.00. Our leverage ratio exceeded 3.50 to 1.00 during the year ended December 31, 2020.
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ITEM 6. SELECTED FINANCIAL DATA
The selected financial data as of and for the years ended December 31, 2020, 2019, 2018, 2017 and 2016 has been derived from our audited consolidated financial statements. The historical results may not be indicative of our future performance.
The selected consolidated financial data should be read in conjunction with the information contained in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and notes thereto in Item 8 of Part II, “Financial Statements and Supplementary Data.”
For the years ended December 31,
(in thousands, except per share data) 2020 2019 2018 2017 2016
Revenue $ 365,547 $ 648,651 $ 838,202 $ 942,213 $ 997,303
Cost of revenue 305,194 493,256 622,165 699,865 690,045
Gross profit 60,353 155,395 216,037 242,348 307,258
Operating expenses (income):
Selling, general and administrative expenses 92,736 141,076 175,670 192,642 214,155
Gain on sale of businesses — (17,814) (13,688) — —
Restructuring charges 11,972 14,080 11,560 — —
Litigation settlement loss, net of $4,000 insurance recovery — — — — 28,000
(Loss) income from operations (44,355) 18,053 42,495 49,706 65,103
Other income (expense), net:
Interest expense (17,730) (21,393) (26,254) (22,253) (24,412)
Unrealized gain (loss) on investment in equity securities (1)
4,004 14,431 (12,972) — —
Other income (expense), net 375 1,348 (1,870) 7,922 3,630
Total other income (expense), net (13,351) (5,614) (41,096) (14,331) (20,782)
(Loss) income before income taxes and non-controlling interests (57,706) 12,439 1,399 35,375 44,321
Income tax (provision) benefit (8,609) (318,296) (4,098) 276,256 (12,935)
Net (loss) income (66,315) (305,857) (2,699) 311,631 31,386
Net income attributable to non-controlling interests (841) (2,112) (2,683) (2,740) (2,693)
Net (loss) income attributable to Altisource $ (67,156) $ (307,969) $ (5,382) $ 308,891 $ 28,693
(Loss) income per share:
Basic $ (4.31) $ (19.26) $ (0.32) $ 16.99 $ 1.53
Diluted $ (4.31) $ (19.26) $ (0.32) $ 16.53 $ 1.46
Weighted average shares outstanding:
Basic 15,598 15,991 17,073 18,183 18,696
Diluted 15,598 15,991 17,073 18,692 19,612
Outstanding shares (at December 31) 15,664 15,454 16,276 17,418 18,774
Non-GAAP Financial Measures (2)
Adjusted net (loss) income attributable to Altisource $ (29,121) $ 21,802 $ 42,609 $ 55,617 $ 94,884
Adjusted diluted (loss) earnings per share $ (1.87) $ 1.34 $ 2.43 $ 2.98 $ 4.84
Adjusted EBITDA $ 10,243 $ 70,800 $ 118,279 $ 130,687 $ 184,501
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December 31,
(in thousands) 2020 2019 2018 2017 2016
Cash and cash equivalents $ 58,263 $ 82,741 $ 58,294 $ 105,006 $ 149,294
Investment in equity securities — 42,618 36,181 49,153 45,754
Accounts receivable, net 22,413 43,615 36,466 52,740 87,821
Short-term investments in real estate — — 39,873 29,405 13,025
Premises and equipment, net 11,894 24,526 45,631 73,273 103,473
Goodwill 73,849 73,849 81,387 86,283 86,283
Intangible assets, net 46,326 61,046 91,653 120,065 155,432
Total assets 265,685 394,256 741,700 865,164 689,212
Long-term debt (including current portion) 242,656 287,882 331,476 409,281 473,545
Total liabilities 348,241 415,613 445,032 525,179 627,018
Net debt less investment in equity securities (2)
188,941 168,467 244,347 259,422 284,605
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(1) Effective January 1, 2018, mark-to-market adjustments of our investment in equity securities are reflected in our results of operations in connection with the adoption of a new accounting principle (previously reflected in comprehensive income).
(2) These are non-GAAP measures that are defined and reconciled to the corresponding GAAP measures on pages 28 to 33.
Significant events affecting our historical earnings trends from 2018 through 2020, are described in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
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NON-GAAP MEASURES
Adjusted net (loss) income attributable to Altisource, adjusted diluted (loss) earnings per share, adjusted earnings before interest, taxes depreciation and amortization (“Adjusted EBITDA”) and net debt less investment in equity securities, which are presented elsewhere in this Annual Report on Form 10-K, are non-GAAP measures used by management, existing shareholders, potential shareholders and other users of our financial information to measure Altisource’s performance. These measures do not purport to be alternatives to net (loss) income attributable to Altisource, diluted (loss) earnings per share and long-term debt, including current portion, as measures of Altisource’s 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 expense and/or depreciation expense, financing expense and income taxes, as well as the effect of more significant non-operational items from earnings 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 management’s 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 management’s intent to provide non-GAAP financial information to enhance the understanding of Altisource’s 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 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 gain (loss) on investment in equity securities (net of tax), third quarter 2020 cost saving initiatives (net of tax), loss on BRS portfolio sale (net of tax), gain on sale of businesses (net of tax), sales tax net accrual (reimbursements) (net of tax), goodwill and intangible and other assets write-off from business exits (net of tax), write-off of net discount and debt issuance costs from debt refinancing (net of tax), litigation settlement loss, net of insurance recovery (net of tax) and certain income tax related items relating to adjustments to foreign income tax reserves, the Luxembourg deferred tax asset from the Luxembourg subsidiary merger in 2017 and increase in the valuation allowance in 2019 and income tax rate changes in Luxembourg, India and the United States from net (loss) income attributable to Altisource. Adjusted diluted (loss) earnings per share is calculated by dividing net (loss) income 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 gain (loss) on investment in equity securities (net of tax), third quarter 2020 cost saving initiatives (net of tax), loss on BRS portfolio sale (net of tax), gain on sale of businesses (net of tax), sales tax net accrual (reimbursements) (net of tax), goodwill and intangible and other assets write-off from business exits (net of tax), write-off of net discount and debt issuance costs from debt refinancing (net of tax), litigation settlement loss, net of insurance recovery (net of tax) and certain income tax related items described above by the weighted average number of diluted shares. Adjusted EBITDA is calculated by removing the income tax (provision) benefit, interest expense (net of interest income), depreciation and amortization, intangible asset amortization expense, share-based compensation expense, restructuring charges, Pointillist losses, unrealized gain (loss) on investment in equity securities, third quarter 2020 cost savings initiatives, loss on BRS portfolio sale, sales tax net accrual (reimbursements), goodwill and intangible and other assets write-off from business exits, write-off of net discount and debt issuance costs from debt refinancing, and litigation settlement loss, net of insurance recovery from net (loss) income attributable to Altisource. Net debt less investment in equity securities is calculated as long-term debt, including current portion, less cash and cash equivalents and investment in equity securities.
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Reconciliations of the non-GAAP measures to the corresponding GAAP measures are set forth in the following tables:
For the years ended December 31,
(in thousands, except per share data) 2020 2019 2018 2017 2016
Net (loss) income attributable to Altisource $ (67,156) $ (307,969) $ (5,382) $ 308,891 $ 28,693
Intangible asset amortization expense, net of tax
14,650 14,277 19,905 27,523 36,819
Share-based compensation expense, net of tax
6,939 8,913 7,141 3,311 4,789
Restructuring charges, net of tax
10,586 10,666 8,966 — —
Pointillist losses, net of tax 8,914 — — — —
Unrealized (gain) loss on investment in equity securities, net of tax
(4,004) (10,832) 9,598 — —
Third quarter 2020 cost savings initiatives, net of tax 565 — — — —
Loss on BRS portfolio sale, net of tax
— 1,405 — — —
Gain on sale of businesses, net of tax — (10,642) (9,341) — —
Sales tax net accrual (reimbursement), net of tax (2,677) 233 4,608 — —
Goodwill and intangible and other assets write-off from business exits, net of tax — 4,578 1,953 — —
Write-off of net discount and debt issuance costs from debt refinancing, net of tax
— — 3,232 — —
Certain income tax related items, net
3,062 311,173 1,588 (284,108) —
Net litigation settlement loss, net of tax — — 341 — 24,583
Adjusted net (loss) income attributable to Altisource $ (29,121) $ 21,802 $ 42,609 $ 55,617 $ 94,884
Diluted (loss) earnings per share $ (4.31) $ (19.26) $ (0.32) $ 16.53 $ 1.46
Impact of using diluted share count instead of basic share count for a loss per share — 0.34 0.01 — —
Intangible asset amortization expense, net of tax, per diluted share
0.94 0.88 1.14 1.47 1.88
Share-based compensation expense, net of tax, per diluted share
0.44 0.55 0.41 0.18 0.24
Restructuring charges, net of tax, per diluted share
0.68 0.66 0.51 — —
Pointillist losses, net of tax, per diluted share 0.57 — — — —
Unrealized (gain) loss on investment in equity securities, net of tax, per diluted share
(0.26) (0.67) 0.55 — —
Third quarter 2020 cost savings initiatives, net of tax, per diluted share 0.04 — — — —
Loss on BRS portfolio sale, net of tax, per diluted share
— 0.09 — — —
Gain on sale of businesses, net of tax, per diluted share — (0.65) (0.53) — —
Sales tax net accrual (reimbursement) net of tax, per diluted share (0.17) 0.01 0.26 — —
Goodwill and intangible and other assets write-off from business exits, net of tax, per diluted share
— 0.28 0.11 — —
Write-off of net discount and debt issuance costs from debt refinancing, net of tax, per diluted share
— — 0.18 — —
Certain income tax related items, net, per diluted share
0.20 19.12 0.09 (15.20) —
Net litigation settlement loss, net of tax, per diluted share — — 0.02 — 1.25
Adjusted diluted (loss) earnings per share $ (1.87) $ 1.34 $ 2.43 $ 2.98 $ 4.84
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For the years ended December 31,
(in thousands, except per share data) 2020 2019 2018 2017 2016
Calculation of the impact of intangible asset amortization expense, net of tax
Intangible asset amortization expense $ 14,720 $ 19,021 $ 28,412 $ 35,367 $ 47,576
Tax benefit from intangible asset amortization (70) (4,744) (8,507) (7,844) (10,757)
Intangible asset amortization expense, net of tax
14,650 14,277 19,905 27,523 36,819
Diluted share count 15,598 16,277 17,523 18,692 19,612
Intangible asset amortization expense, net of tax, per diluted share
$ 0.94 $ 0.88 $ 1.14 $ 1.47 $ 1.88
Calculation of the impact of share-based compensation expense, net of tax
Share-based compensation expense $ 7,804 $ 11,874 $ 10,192 $ 4,255 $ 6,188
Tax benefit from share-based compensation expense (865) (2,961) (3,051) (944) (1,399)
Share-based compensation expense, net of tax
6,939 8,913 7,141 3,311 4,789
Diluted share count 15,598 16,277 17,523 18,692 19,612
Share-based compensation expense, net of tax, per diluted share
$ 0.44 $ 0.55 $ 0.41 $ 0.18 $ 0.24
Calculation of the impact of restructuring charges, net of tax
Restructuring charges $ 11,972 $ 14,080 $ 11,560 $ — $ —
Tax benefit from restructuring charges (1,386) (3,414) (2,594) — —
Restructuring charges, net of tax
10,586 10,666 8,966 — —
Diluted share count 15,598 16,277 17,523 18,692 19,612
Restructuring charges, net of tax, per diluted share
$ 0.68 $ 0.66 $ 0.51 $ — $ —
Calculation of the impact of Pointillist losses, net of tax
Pointillist losses $ 7,999 $ — $ — $ — $ —
Tax provision from Pointillist losses 915 — — — —
Pointillist losses, net of tax 8,914 — — — —
Diluted share count 15,598 16,277 17,523 18,692 19,612
Pointillist losses, net of tax, per diluted share $ 0.57 $ — $ — $ — $ —
Calculation of the impact of the unrealized (gain) loss on investment in equity securities, net of tax
Unrealized (gain) loss on investment in equity securities $ (4,004) $ (14,431) $ 12,972 $ — $ —
Tax provision (benefit) from the unrealized (gain) loss on investment in equity securities — 3,599 (3,374) — —
Unrealized (gain) loss on investment in equity securities, net of tax
(4,004) (10,832) 9,598 — —
Diluted share count 15,598 16,277 17,523 18,692 19,612
Unrealized (gain) loss on investment in equity securities, net of tax, per diluted share
$ (0.26) $ (0.67) $ 0.55 $ — $ —
Calculation of the impact of third quarter 2020 cost savings initiatives, net of tax
Third quarter 2020 cost savings initiatives $ 697 $ — $ — $ — $ —
Tax benefit from third quarter 2020 cost savings initiatives (132) — — — —
Third quarter 2020 cost savings initiatives, net of tax 565 — — — —
Diluted share count 15,598 16,277 17,523 18,692 19,612
Third quarter 2020 cost savings initiatives, net of tax, per diluted share $ 0.04 $ — $ — $ — $ —
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For the years ended December 31,
(in thousands, except per share data) 2020 2019 2018 2017 2016
Calculation of the impact of loss on BRS portfolio sale, net of tax
Loss on BRS portfolio sale $ — $ 1,770 $ — $ — $ —
Tax benefit from loss on BRS portfolio sale — (365) — — —
Loss on BRS portfolio sale, net of tax
— 1,405 — — —
Diluted share count 15,598 16,277 17,523 18,692 19,612
Loss on BRS portfolio sale, net of tax, per diluted share
$ — $ 0.09 $ — $ — $ —
Calculation of the impact of gain on sale of businesses, net of tax
Gain on sale of businesses $ — $ (17,814) $ (13,688) $ — $ —
Tax provision from gain on sale of businesses — 7,172 4,347 — —
Gain on sale of businesses, net of tax — (10,642) (9,341) — —
Diluted share count 15,598 16,277 17,523 18,692 19,612
Gain on sale of businesses, net of tax, per diluted share $ — $ (0.65) $ (0.53) $ — $ —
Calculation of the impact of sales tax net accrual (reimbursement), net of tax
Sales tax net accrual (reimbursement) $ (2,677) $ 311 $ 6,228 $ — $ —
Tax benefit from sales tax net accrual (reimbursement) — (78) (1,620) — —
Sales tax net accrual (reimbursement), net of tax (2,677) 233 4,608 — —
Diluted share count 15,598 16,277 17,523 18,692 19,612
Sales tax net accrual (reimbursement) net of tax, per diluted share $ (0.17) $ 0.01 $ 0.26 $ — $ —
Calculation of the impact of goodwill and intangible and other assets write-off from business exits, net of tax
Goodwill and intangible and other assets write-off from business exits
$ — $ 6,102 $ 2,640 $ — $ —
Tax benefit from goodwill and intangible and other assets write-off from business exits — (1,524) (687) — —
Goodwill and intangible and other assets write-off from business exits, net of tax — 4,578 1,953 — —
Diluted share count 15,598 16,277 17,523 18,692 19,612
Goodwill and intangible and other assets write-off from business exits, net of tax, per diluted share
$ — $ 0.28 $ 0.11 $ — $ —
Calculation of the impact of the write-off of net discount and debt issuance costs from debt refinancing, net of tax
Write-off of net discount and debt issuance costs from debt refinancing
$ — $ — $ 4,434 $ — $ —
Tax benefit from the write-off of net discount and debt issuance costs from debt refinancing — — (1,202) — —
Write-off of net discount and debt issuance costs from debt refinancing, net of tax
— — 3,232 — —
Diluted share count 15,598 16,277 17,523 18,692 19,612
Write-off of net discount and debt issuance costs from debt refinancing, net of tax, per diluted share
$ — $ — $ 0.18 $ — $ —
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For the years ended December 31,
(in thousands, except per share data) 2020 2019 2018 2017 2016
Certain income tax related items resulting from:
Luxembourg deferred tax valuation allowance and Luxembourg subsidiaries merger, net $ — $ 291,484 $ — $ (300,908) $ —
Income tax rate changes 1,384 14,040 — 6,270 —
Foreign income tax reserves 1,678 5,649 1,588 10,530 —
Certain income tax related items, net
3,062 311,173 1,588 (284,108) —
Diluted share count 15,598 16,277 17,523 18,692 19,612
Certain income tax related items, net, per diluted share
$ 0.20 $ 19.12 $ 0.09 $ (15.20) $ —
Calculation of the impact of net litigation settlement loss, net of tax
Net litigation settlement loss $ — $ — $ 500 $ — $ 28,000
Tax benefit from net litigation settlement loss — — (159) — (3,417)
Net litigation settlement loss, net of tax — — 341 — 24,583
Diluted share count 15,598 16,277 17,523 18,692 19,612
Net litigation settlement loss, net of tax, per diluted share $ — $ — $ 0.02 $ — $ 1.25
Net (loss) income attributable to Altisource $ (67,156) $ (307,969) $ (5,382) $ 308,891 $ 28,693
Income tax provision (benefit) 8,609 318,296 4,098 (276,256) 12,935
Interest expense (net of interest income)
17,616 21,051 25,514 21,983 24,321
Depreciation and amortization 14,890 18,509 30,799 36,447 36,788
Intangible asset amortization expense 14,720 19,021 28,412 35,367 47,576
Share-based compensation expense 7,804 11,874 10,192 4,255 6,188
Restructuring charges 11,972 14,080 11,560 — —
Pointillist losses 7,772 — — — —
Unrealized (gain) loss on investment in equity securities (4,004) (14,431) 12,972 — —
Third quarter 2020 cost savings initiatives 697 — — — —
Loss on BRS portfolio sale — 1,770 — — —
Gain on sale of businesses — (17,814) (13,688) — —
Sales tax net accrual (reimbursement) (2,677) 311 6,228 — —
Goodwill and intangible and other assets write-off from business exits
— 6,102 2,640 — —
Write-off of net discount and debt issuance costs from debt refinancing
— — 4,434 — —
Net litigation settlement loss — — 500 — 28,000
Adjusted EBITDA $ 10,243 $ 70,800 $ 118,279 $ 130,687 $ 184,501
December 31,
2020 2019 2018 2017 2016
Senior secured term loan $ 247,204 $ 293,826 $ 338,822 $ 413,581 $ 479,653
Less: Cash and cash equivalents
(58,263) (82,741) (58,294) (105,006) (149,294)
Less: Investment in equity securities
— (42,618) (36,181) (49,153) (45,754)
Net debt less investment in equity securities
$ 188,941 $ 168,467 $ 244,347 $ 259,422 $ 284,605
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Note: Amounts may not add to the total due to rounding.
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