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CoreLogic Reports Record Full-Year and Fourth Quarter 2020 Revenue, Operating Income, Profit Margins and Cash Flow

CoreLogic (NYSE: CLGX), a leading global provider of property information, insight, analytics and data-enabled solutions, today reported financial results for the full-year and fourth quarter ended December 31, 2020.

Full-Year and Fourth Quarter Financial(1) and Business Highlights

Growth Focus – Share Gains, Mega Wins and Pricing Drive Organic Growth Rates

  • Full-year revenues totaled $1.642 billion, up 14%. Revenues were up approximately 20%, normalizing for $69 million of revenues attributable to non-core default technology units sold and the AMC transformation, which have no 2020 counterpart, and impacts attributable to COVID-19 of approximately $19 million.
  • Fourth quarter revenues of $468 million were up 33% over the prior year. PIRM segment organic growth totaled 7%, benefiting from double-digit growth in property insights and international. UWS revenues grew 51% on strong market volumes and market outperformance in tax and flood zone solutions, credit solutions and valuations platforms.
  • Strong share gains, including mega wins in both segments, drove 2020 full-year organic revenue growth to approximately 8%.
  • During 2020, secured two mega wins in insurance and spatial solutions including a significant strategic win of a top 5 U.S. insurance carrier for CoreLogic’s next-generation integrated insurance solution.
  • Core mortgage market outperformance in tax and flood zone solutions and double-digit growth in credit solutions and valuations platforms. During 2020, secured two mega wins in tax payment processing and collateral valuations which were successfully onboarded in second half 2020.

Profitability – Operating Leverage, Favorable Mix and Productivity Fuel Expanded Profit and Margins

  • Full-year Highlights
    • Operating income of $331 million, up by $209 million
    • Operating leverage and productivity demonstrated by reduction in run-rate operating expenses on significantly higher revenues
    • Net income from continuing operations of $264 million, up by $230 million
    • Diluted EPS from continuing operations of $3.28; Adjusted EPS of $4.26, up 77%
    • Adjusted EBITDA of $638 million, up 45%
    • Adjusted EBITDA margin of 39%, up 830 basis points
  • Fourth Quarter Highlights
    • Operating income of $120 million, up by $70 million
    • Net income from continuing operations of $86 million, up by $61 million
    • Diluted EPS from continuing operations of $1.10; Adjusted EPS of $1.51, up 113%
    • Adjusted EBITDA of $203 million, up 69%
    • Adjusted EBITDA margin of 43%, up 930 basis points

Liquidity and Capital Return – Record Cash Flow Generation

  • Net operating cash provided by continuing operations for the 12 months ended December 31, 2020 was $491 million. Free cash flow ("FCF") for the 12 months ended December 31, 2020 totaled $392 million or 61% of adjusted EBITDA
  • Debt outstanding on December 31, 2020 of $1.89 billion compared with $1.69 billion on December 31, 2019
  • $450.0 million available on revolving credit facility; covenant debt leverage at 2.7 times
  • Repurchased $500 million of our common shares in the fourth quarter, 2020 full-year repurchases totaled $509 million
  • Dividends paid to shareholders totaled $86 million for full year 2020

(1) The Company’s financial results presented in this release reflect continuing operations. Reseller operations held for sale are presented as discontinued operations for all periods presented.

Discontinued Operations

Consistent with our previously announced intentions, the Company has exited its multi-family tenant screening operations and intends to exit its mortgage credit and borrower verification operations. Although market leaders in their respective business areas, these reseller businesses are not compatible with the Company’s long-term strategic imperatives. The divestiture of these operations is expected to improve the Company’s revenue growth trends, revenue mix, and significantly enhance profit margins. These reseller operations have been classified as discontinued operations and prior period results have been presented on a comparable basis.

In October 2020, we consummated the sale of a component of our multi-family tenant screening business for $9 million of proceeds. In February 2021, we sold the remainder of our multi-family tenant screening business for proceeds of $51 million.

###

CLGX-F

About CoreLogic

CoreLogic (NYSE: CLGX), the leading provider of property insights and solutions, promotes a healthy housing market and thriving communities. Through its enhanced property data solutions, services and technologies, CoreLogic enables real estate professionals, financial institutions, insurance carriers, government agencies and other housing market participants to help millions of people find, buy, and protect their homes. For more information, please visit www.corelogic.com.

Safe Harbor / Forward Looking Statements

Certain statements made in this press release are forward-looking statements within the meaning of the federal securities laws, including but not limited to those statements related to (i) projections and trends regarding financial performance and operating results, including with respect to revenue growth, margin gains, contract wins, market share gains, new products, and long-term stockholder value, and (ii) our intention to exit our reseller operations. Risks and uncertainties exist that may cause the results to differ materially from those set forth in these forward-looking statements. Factors that could cause the anticipated results to differ from those described in the forward-looking statements include the risks and uncertainties set forth in Part I, Item 1A of our most recent Annual Report on Form 10-K and in Part II, Item 1A of our subsequent Quarterly Reports on Form 10-Q, as such risk factors may be amended, supplemented, or superseded from time to time by other reports we file with the Securities and Exchange Commission. These risks and uncertainties include but are not limited to: the potential impact of, and any potential developments related to, the proposed acquisition of the Company by Stone Point Capital and Insight Partners, as well as the competing proposed acquisition of the Company by CoStar Group, Inc.; the potential impact of, and any potential developments related to, activist shareholder activity; compromises in the security or stability of our data and systems, including from cyber-based attacks, the unauthorized transmission of confidential information or systems interruptions, which could impair the delivery of our products and services; changes in applicable government legislation, regulations and the level of regulatory scrutiny affecting our clients or us, including with respect to consumer financial services and the use of public records and consumer data; reliance on our top ten clients for a significant portion of our revenue and profit; intense competition in the market against third parties and the in-house capabilities of our clients; risks related to the outsourcing of services and international operations; potential impairment of our substantial goodwill and other intangible assets; the potential impact that the COVID-19 pandemic, or the perception of its effects, may have on our business; our ability to protect proprietary technology rights and avoid infringement of others’ proprietary technology rights; the level of our indebtedness, our ability to service our indebtedness and the restrictions in our various debt agreements; our ability to realize the anticipated benefits of certain acquisitions and the timing thereof; the impact of our adoption of a shareholder rights plan; difficult or uncertain conditions in the mortgage and consumer lending industries and the economy generally; and our ability to attract and retain qualified personnel.. The forward-looking statements speak only as of the date they are made. CoreLogic does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

Use of Non-GAAP (Generally Accepted Accounting Principles) Financial Measures

This press release contains certain non-GAAP financial measures, including adjusted EBITDA, adjusted EPS and FCF, which are provided only as supplemental information. Investors should consider these non-GAAP financial measures only in conjunction with their most directly comparable GAAP financial measures. These non-GAAP measures are not in accordance with, or a substitute for, U.S. GAAP. A reconciliation of non-GAAP measures for historical periods to the most directly comparable GAAP financial measures is included in this press release. CoreLogic believes that its presentation of these non-GAAP measures provides useful supplemental information to investors and management regarding CoreLogic's financial condition and results of operations. Adjusted EBITDA is defined as net income from continuing operations adjusted for interest, taxes, depreciation and amortization, share-based compensation, non-operating gains/losses, and other adjustments. Adjusted EPS is defined as diluted income from continuing operations, net of tax per share, adjusted for share-based compensation, amortization of acquisition-related intangibles, non-operating gains/losses, and other adjustments; and assumes an effective tax rate of 26% for 2020 and 25% for 2019. FCF is defined as net cash provided by continuing operating activities, less capital expenditures for purchases of property and equipment, capitalized data, and other intangible assets. Other firms may calculate non-GAAP measures differently than the Company, which limits comparability between companies. Non-GAAP measures are not in accordance with, or a substitute for, U.S. GAAP. Because the non-GAAP measures for future periods included herein are forward-looking, CoreLogic is not able to provide a reconciliation, without unreasonable efforts, of such forward-looking guidance to the most directly comparable GAAP financial measure due to the unknown effect, timing, and potential significance of special charges or gains that are material to the comparable GAAP financial measure.

CoreLogic, Inc.
Consolidated Statements of Operations
(Unaudited)

For the Three Months Ended

For the Year Ended

December 31,

December 31,

(in thousands, except per share amounts)

2020

2019

2020

2019

Operating revenue

$

467,642

$

352,841

$

1,642,375

$

1,440,873

Cost of services (exclusive of depreciation and amortization)

157,990

145,144

597,022

632,117

Selling, general and administrative expenses

144,370

114,999

537,617

463,787

Depreciation and amortization

43,806

42,333

174,445

175,100

Impairment loss

1,081

2,309

47,834

Total operating expenses

347,247

302,476

1,311,393

1,318,838

Operating income

120,395

50,365

330,982

122,035

Interest expense:

Interest income

113

408

724

2,136

Interest expense

16,942

19,156

69,900

78,293

Total interest expense, net

(16,829)

(18,748)

(69,176)

(76,157)

Tax indemnification release

(13,394)

Gain/(loss) on investments and other, net

4,997

1,039

42,151

(1,077)

Income from continuing operations before equity in earnings of affiliates and income taxes

108,563

32,656

303,957

31,407

Provision/(benefit) for income taxes

22,133

7,169

41,566

(1,807)

Income from continuing operations before equity in earnings of affiliates

86,430

25,487

262,391

33,214

Equity in earnings of affiliates, net of tax

58

1,859

556

Net income from continuing operations

86,430

25,545

264,250

33,770

Income from discontinued operations, net of tax

6,214

4,537

34,363

15,610

Gain from sale of discontinued operations, net of tax

2,742

2,742

Net income

$

95,386

$

30,082

$

301,355

$

49,380

Basic income per share:

Net income from continuing operations

$

1.13

$

0.32

$

3.36

$

0.42

Income from discontinued operations, net of tax

0.08

0.06

0.44

0.20

Gain from sale of discontinued operations, net of tax

0.04

0.03

Net income

$

1.25

$

0.38

$

3.83

$

0.62

Diluted income per share:

Net income from continuing operations

$

1.10

$

0.32

$

3.28

$

0.42

Income from discontinued operations, net of tax

0.08

0.06

0.43

0.19

Gain from sale of discontinued operations, net of tax

0.03

0.03

Net income

$

1.21

$

0.38

$

3.74

$

0.61

Weighted-average common shares outstanding:

Basic

76,271

79,125

78,542

79,885

Diluted

78,371

80,356

80,495

81,021

Please refer to the full Form 10-K filing for the complete financial statements and related notes that are an integral part of the financial statements.

CoreLogic, Inc.
Consolidated Balance Sheets
(Unaudited)

(in thousands, except par value)

December 31,

December 31,

Assets

2020

2019

Current assets:

Cash and cash equivalents

$

167,422

$

104,162

Accounts receivable (less allowances of $9,838 and $6,937 in 2020 and 2019, respectively)

303,202

247,683

Prepaid expenses and other current assets

82,794

53,105

Assets of discontinued operations

202,417

201,986

Total current assets

755,835

606,936

Property and equipment, net

406,114

424,670

Operating lease assets

82,459

65,825

Goodwill, net

2,315,495

2,286,896

Other intangible assets, net

320,921

375,629

Capitalized data and database costs, net

321,211

308,409

Investment in affiliates, net

16,666

Other assets

81,187

74,250

Total assets

$

4,283,222

$

4,159,281

Liabilities and Equity

Current liabilities:

Accounts payable and other accrued expenses

$

177,606

$

139,511

Accrued salaries and benefits

57,499

83,418

Dividend payable

17,374

Contract liabilities, current

411,821

320,634

Current portion of long-term debt

43,230

56,022

Operating lease liabilities, current

15,566

18,058

Liabilities of discontinued operations

44,677

42,708

Total current liabilities

750,399

677,725

Long-term debt, net of current

1,828,003

1,610,538

Contract liabilities, net of current

617,318

563,190

Deferred income tax liabilities

91,853

92,783

Operating lease liabilities, net of current

99,966

85,139

Other liabilities

172,421

178,696

Total liabilities

3,559,960

3,208,071

Stockholders' Equity:

Preferred stock, $0.00001 par value; 500 shares authorized, no shares issued or outstanding

Common stock, $0.00001 par value; 180,000 shares authorized; 73,152 and 78,972 shares issued and outstanding as of December 31, 2020 and 2019, respectively

1

1

Additional paid-in capital

111,000

Retained earnings

893,404

1,006,992

Accumulated other comprehensive loss

(170,143)

(166,783)

Total stockholders' equity

723,262

951,210

Total liabilities and equity

$

4,283,222

$

4,159,281

Please refer to the full Form 10-K filing for the complete financial statements and related notes that are an integral part of the financial statements.

CoreLogic, Inc.
Consolidated Statements of Cash Flows
(Unaudited)

For the Year Ended

December 31,

(in thousands)

2020

2019

Cash flows from operating activities:

Net income

$

301,355

$

49,380

Less: Income from discontinued operations, net of tax

34,363

15,610

Less: Gain from sale of discontinued operations, net of tax

2,742

Net income from continuing operations

264,250

33,770

Adjustments to reconcile net income from continuing operations to net cash provided by operating activities:

Depreciation and amortization

174,445

175,100

Impairment loss

2,309

47,834

Amortization of debt issuance costs

4,935

5,077

Amortization of operating lease assets

14,855

15,402

Provision for bad debts and claim losses

22,711

15,341

Share-based compensation

45,060

35,171

Equity in earnings of investee, net of taxes

(1,859)

(556)

Loss on early extinguishment of debt

1,892

Deferred income tax

23,639

2,069

Impairment loss on investment in affiliates

1,511

Tax indemnification release

13,394

Gain on investments and other, net

(42,153)

(2,329)

Change in operating assets and liabilities, net of acquisitions:

Accounts receivable

(55,829)

(33,491)

Prepaid expenses and other assets

(2,570)

(7,300)

Accounts payable and other accrued expenses

(21,095)

1,283

Contract liabilities

144,548

50,380

Income taxes

(32,397)

22,210

Dividends received from investments in affiliates

109

1,987

Other assets and other liabilities

(49,780)

(31,413)

Net cash provided by operating activities - continuing operations

491,178

347,332

Net cash provided by operating activities - discontinued operations

44,594

16,884

Total cash provided by operating activities

$

535,772

$

364,216

Cash flows from investing activities:

Purchases of property and equipment

$

(57,668)

$

(79,265)

Purchases of capitalized data and other intangible assets

(41,442)

(35,481)

Cash paid for acquisitions, net of cash acquired

(12,045)

(13,283)

Cash received from sale of business-lines

4,109

Cash received from sale of discontinued operations

7,506

Purchases of investments

(1,315)

(658)

Proceeds from investments and other

51,358

5,594

Net cash used in investing activities - continuing operations

(53,606)

(118,984)

Net cash used in investing activities - discontinued operations

(12,113)

(16,845)

Total cash used in investing activities

$

(65,719)

$

(135,829)

Cash flows from financing activities:

Proceeds from long-term debt

$

300,000

$

1,770,000

Debt issuance costs

(9,621)

Debt extinguishment premium

(425)

Repayments of long-term debt

(103,197)

(1,883,955)

Shares repurchased and retired

(509,259)

(86,675)

Proceeds from issuance of shares in connection with share-based compensation

11,256

10,149

Payment of tax withholdings related to net share settlements

(22,529)

(10,026)

Contingent consideration payments subsequent to acquisitions

(600)

Cash dividends

(85,722)

Net cash used in financing activities - continuing operations

(409,451)

(211,153)

Net cash used in financing activities - discontinued operations

(6)

(12)

Total cash used in financing activities

$

(409,457)

$

(211,165)

Effect of exchange rate on cash, cash equivalents and restricted cash

4,007

230

Net change in cash, cash equivalents and restricted cash

$

64,603

$

17,452

Cash, cash equivalents and restricted cash at beginning of year

114,678

94,679

Less: Change in cash, cash equivalents and restricted cash - discontinued operations

32,475

27

Plus: Cash swept from discontinued operations

31,027

2,574

Cash, cash equivalents and restricted cash at end of year

$

177,833

$

114,678

Please refer to the full Form 10-K filing for the complete financial statements and related notes that are an integral part of the financial statements.

CoreLogic, Inc.
Reconciliation of Adjusted EBITDA
(Unaudited)

For the Three Months Ended December 31, 2020

(in thousands)

PIRM

UWS

CORP

ELIM

CoreLogic

Net income/(loss) from continuing operations

$

27,414

$

150,156

$

(91,140)

$

$

86,430

Income taxes

22,133

22,133

Depreciation and amortization

23,807

12,035

7,964

43,806

Interest expense/(income), net

470

(33)

16,392

16,829

Share-based compensation

1,928

1,737

7,499

11,164

Non-operating (gains)/losses

(2,202)

(3,198)

(5,400)

Efficiency investments and other

(205)

251

7,496

7,542

Transaction costs

1,723

223

34

1,980

Impairment Loss

1,050

31

1,081

Unsolicited Proposal Related Costs

17,098

17,098

Adjusted EBITDA

$

52,935

$

165,419

$

(15,691)

$

$

202,663

For the Three Months Ended December 31, 2019

(in thousands)

PIRM

UWS

CORP

ELIM

CoreLogic

Net income/(loss) from continuing operations

$

9,377

$

72,709

$

(56,541)

$

$

25,545

Income taxes

7,189

7,189

Depreciation and amortization

22,727

11,947

7,659

42,333

Interest (income)/expense, net

(88)

67

18,769

18,748

Share-based compensation

1,707

1,564

5,882

9,153

Impairment loss

Non-operating losses

425

6,002

963

7,390

Efficiency investments and other

1,023

293

6,228

7,544

Transaction costs

1,468

359

72

1,899

Amortization of acquired intangibles included in equity in losses of affiliates

77

77

Adjusted EBITDA

$

36,716

$

92,941

$

(9,779)

$

$

119,878

For the Year Ended December 31, 2020

(in thousands)

PIRM

UWS

CORP

ELIM

CoreLogic

Net income/(loss) from continuing operations

$

129,865

$

431,873

$

(297,488)

$

$

264,250

Income taxes

42,184

42,184

Depreciation and amortization

93,640

48,126

32,679

174,445

Interest expense/(income), net

1,760

(56)

67,472

69,176

Share-based compensation

7,886

7,607

29,567

45,060

Impairment loss

2,278

31

2,309

Non-operating (gains)/losses

(35,425)

(128)

(5,464)

(41,017)

Efficiency investments

(2,286)

1,460

26,211

25,385

Transaction costs

300

905

1,533

2,738

Unsolicited Proposal Related Costs

$

53,846

53,846

Adjusted EBITDA

$

195,740

$

492,065

$

(49,429)

$

$

638,376

For the Year Ended December 31, 2019

(in thousands)

PIRM

UWS

CORP

ELIM

CoreLogic

Net income/(loss) from continuing operations

$

47,759

$

194,454

$

(208,443)

$

$

33,770

Income taxes

(1,622)

(1,622)

Depreciation and amortization

94,862

51,337

28,901

175,100

Interest expense, net

37

269

75,851

76,157

Share-based compensation

6,309

6,079

22,783

35,171

Impairment loss

47,834

47,834

Non-operating gains

6,725

6,279

13,738

26,742

Efficiency investments

3,471

6,484

29,562

39,517

Transaction costs

6,448

359

392

7,199

Amortization of acquired intangibles included in equity in earnings of affiliates

307

307

Adjusted EBITDA

$

165,918

$

313,095

$

(38,838)

$

$

440,175

CoreLogic, Inc.
Reconciliation of Adjusted EPS
(Unaudited)

For the Three Months Ended December 31,

(Diluted income per share)

2020

2019

Net income from continuing operations

$

1.10

$

0.32

Share-based compensation

0.14

0.11

Non-operating (gains)/losses

(0.07)

0.09

Efficiency investments and other

0.10

0.09

Impairment loss

0.01

Transaction costs

0.03

0.02

Depreciation and amortization of acquired software and intangibles

0.22

0.21

Unsolicited proposal related costs

0.22

Income tax effect on adjustments

(0.24)

(0.13)

Adjusted EPS

$

1.51

$

0.71

For the Year Ended December 31,

(Diluted income per share)

2020

2019

Net income from continuing operations

$

3.28

$

0.42

Share-based compensation

0.56

0.43

Non-operating (gains)/losses

(0.51)

0.33

Efficiency investments

0.32

0.49

Impairment loss

0.03

0.59

Transaction costs

0.03

0.09

Depreciation and amortization of acquired software and intangibles

0.85

0.89

Amortization of acquired intangibles included in equity in earnings of affiliates

Unsolicited proposal related costs

0.67

Income tax effect on adjustments

(0.97)

(0.83)

Adjusted EPS

$

4.26

$

2.41

CoreLogic, Inc.
Reconciliation to Free Cash Flow
(Unaudited)

(in thousands)

For the Year Ended December 31, 2020

Net cash provided by operating activities - continuing operations

$

491,178

Purchases of property and equipment

(57,668)

Purchases of capitalized data and other intangible assets

(41,442)

Free Cash Flow

$

392,068

Contacts:

Investor Contact: Dan Smith, office phone: 703-610-5410, e-mail: danlsmith@corelogic.com

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