What changed in this filing

/stocks — the workspaceLOADING

Item 5. Market for Registrant’s Common Equity

2021-03-11 compared with 2020-03-05 · 123 added, 87 removed, 155 unchanged (58% of the section changed)

2 unchanged sentences

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 February 28, 2020 was 94 .

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.

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.

We have not historically declared or paid cash dividends on our common stock, but may declare dividends in the future.

7 unchanged sentences

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

6 unchanged sentences

As of December 31, 2020, approximately 2.4 million shares of common stock remain available for repurchase under the program.

We purchased 1.0 million shares of common stock at an average price of $20.33 per share during the year ended December 31, 2019 , 1.6 million shares at an average price of $25.53 per share during the year ended December 31, 2018 and 1.6 million shares at an average price of $23.84 per share during the year ended December 31, 2017 .

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.

1 unchanged sentence

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 $463 million as of December 31, 2019 , and may prevent repurchases in certain circumstances.

The following table presents information related to the repurchases of our equity securities during the three months ended December 31, 2019 :

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:

October 1 – 31, 2019

November 1 – 30, 2019

December 1 – 31, 2019

______________________________________

In addition to the repurchases included in the table above, 9,526 common shares were withheld from employees to satisfy tax withholding obligations that arose from the vesting of restricted shares and restricted share units.

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 in the open market, subject to certain parameters, for a period of five years from the date of approval.

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.

SELECTED FINANCIAL DATA

4 unchanged sentences

(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):

3 unchanged sentences

Litigation settlement loss, net of $4,000 insurance recovery — — — — 28,000

Impairment losses

Change in the fair value of Equator Earn Out

Income from operations

(Loss) income from operations (44,355) 18,053 42,495 49,706 65,103

Other income (expense), net:

1 unchanged sentence

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)

Income before income taxes and non-controlling interests

(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)

2 unchanged sentences

Net (loss) income attributable to Altisource $ (67,156) $ (307,969) $ (5,382) $ 308,891 $ 28,693

(Loss) earnings per share:

(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 income attributable to Altisource

Adjusted diluted earnings per share

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

5 unchanged sentences

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

2 unchanged sentences

188,941 168,467 244,347 259,422 284,605

_________________________

(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 unchanged sentences

NON-GAAP MEASURES

Adjusted net income attributable to Altisource, adjusted diluted 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.

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.

6 unchanged sentences

The non-GAAP financial information should not be unduly relied upon.

Adjusted net income attributable to Altisource is calculated by removing intangible asset amortization expense (net of tax), share-based compensation expense (net of tax), loss on BRS portfolio sale (net of tax), gain on sale of businesses (net of tax), sales tax accrual, net of reimbursement (net of tax), restructuring charges (net of tax), write-off of net discount and debt issuance costs from debt refinancing (net of tax), goodwill and intangible and other assets write-off from business exits (net of tax), unrealized gain (loss) on investment in equity securities (net of tax), litigation settlement loss, net of insurance recovery (net of tax), impairment loss (net of tax), certain income tax related items relating to the Luxembourg deferred tax asset from the Luxembourg subsidiary merger in 2017 and increase in the valuation allowance in 2019, income tax rate changes in Luxembourg and the United States and increases in foreign income tax reserves (and related interest) and a gain associated with a reduction of the Equator, LLC (“Equator”) related contingent consideration (“Equator Earn Out”) (net of tax) from net (loss) income attributable to Altisource.

Adjusted diluted 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), loss on BRS portfolio sale (net of tax), gain on sale of businesses (net of tax), sales tax accrual, net of reimbursement (net of tax), restructuring charges (net of tax), write-off of net discount and debt issuance costs from debt refinancing (net of tax), goodwill and intangible and other assets write-off from business exits (net of tax), unrealized gain (loss) on investment in equity securities (net of tax), litigation settlement loss, net of insurance recovery (net of tax), impairment loss (net of tax), certain income tax related items described above and gain on Equator Earn Out (net of tax) 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, loss on BRS portfolio sale, unrealized gain (loss) on investment in equity securities, sales tax accrual, net of reimbursement, write-off of net discount and debt issuance costs from debt refinancing, restructuring charges, goodwill and intangible and other assets write-off from business exits, gain on sale of businesses, litigation settlement loss, net of insurance recovery, impairment loss and gain on Equator Earn Out from net (loss) income attributable to Altisource.

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.

4 unchanged sentences

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 accrual, net of reimbursement, net of tax

Restructuring charges, net of tax

Write-off of net discount and debt issuance costs from debt refinancing, net of tax

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 — —

Unrealized (gain) loss on investment in equity securities, net of tax

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

Impairment loss, net of tax

Gain on Equator Earn Out, net of tax

Adjusted net income attributable to Altisource

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

1 unchanged sentence

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

Gain on sale of businesses, net of tax, per diluted share — (0.65) (0.53) — —

Sales tax accrual, net of reimbursement, net of tax, per diluted share

Restructuring charges, net of tax, per diluted share

Write-off of net discount and debt issuance costs from debt refinancing, net of tax, per diluted share

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

Unrealized (gain) loss on investment in equity securities, 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

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

Impairment loss, net of tax, per diluted share

Gain on Equator Earn Out, net of tax, per diluted share

Adjusted diluted earnings per share

Adjusted diluted (loss) earnings per share $ (1.87) $ 1.34 $ 2.43 $ 2.98 $ 4.84

For the years ended December 31,

4 unchanged sentences

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

2 unchanged sentences

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 $ — $ — $ — $ —

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

2 unchanged sentences

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

4 unchanged sentences

Gain on sale of businesses, net of tax, per diluted share $ — $ (0.65) $ (0.53) $ — $ —

Calculation of the impact of sales tax accrual, net of reimbursement, net of tax

Sales tax accrual, net of reimbursement

Tax benefit from sales tax accrual, net of reimbursement

Sales tax accrual, net of reimbursement, net of tax

Diluted share count

Sales tax accrual, net of reimbursement, net of tax, per diluted share

For the years ended December 31,

(in thousands, except per share data)

Calculation of the impact of restructuring charges, net of tax

Restructuring charges

Tax benefit from restructuring charges

Restructuring charges, net of tax

Diluted share count

Restructuring charges, net of tax, per diluted share

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

Tax benefit from the write-off of net discount and debt issuance costs from debt refinancing

Write-off of net discount and debt issuance costs from debt refinancing, net of tax

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

Write-off of net discount and debt issuance costs from debt refinancing, net of tax, per diluted share

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) — —

2 unchanged sentences

Goodwill and intangible and other assets write-off from business exits, net of tax, per diluted share

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

Tax provision (benefit) from the unrealized (gain) loss on investment in equity securities

Unrealized (gain) loss on investment in equity securities, net of tax

$ — $ 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

Unrealized (gain) loss on investment in equity securities, net of tax, per diluted share

Write-off of net discount and debt issuance costs from debt refinancing, net of tax, per diluted share

$ — $ — $ 0.18 $ — $ —

For the years ended December 31,

(in thousands, except per share data) 2020 2019 2018 2017 2016

Certain income tax related items resulting from:

3 unchanged sentences

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

For the years ended December 31,

(in thousands, except per share data)

$ 0.20 $ 19.12 $ 0.09 $ (15.20) $ —

Calculation of the impact of net litigation settlement loss, net of tax

4 unchanged sentences

Net litigation settlement loss, net of tax, per diluted share $ — $ — $ 0.02 $ — $ 1.25

Calculation of the impact of impairment loss, net of tax

Impairment loss

Tax benefit from impairment loss

Impairment loss, net of tax

Diluted share count

Impairment loss, net of tax, per diluted share

Calculation of gain on Equator Earn Out, net of tax

Gain on Equator Earn Out

Tax provision from the gain on Equator Earn Out

Gain on Equator Earn Out, net of tax

Diluted share count

Gain on Equator Earn Out, net of tax, per diluted share

Net (loss) income attributable to Altisource $ (67,156) $ (307,969) $ (5,382) $ 308,891 $ 28,693

1 unchanged sentence

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

1 unchanged sentence

Share-based compensation expense 7,804 11,874 10,192 4,255 6,188

Loss on BRS portfolio sale

Unrealized (gain) loss on investment in equity securities

Sales tax accrual, net of reimbursement

Write-off of net discount and debt issuance costs from debt refinancing

Restructuring charges 11,972 14,080 11,560 — —

Goodwill and intangible and other assets write-off from business exits

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

Impairment loss

Gain on Equator Earn Out

Adjusted EBITDA $ 10,243 $ 70,800 $ 118,279 $ 130,687 $ 184,501

2020 2019 2018 2017 2016

Senior secured term loan $ 247,204 $ 293,826 $ 338,822 $ 413,581 $ 479,653

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)

Net debt less investment in equity securities

$ 188,941 $ 168,467 $ 244,347 $ 259,422 $ 284,605

____________________________________

Amounts may not add to the total due to rounding.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity