Altisource Portfolio Solutions S.A 8-K, filed Dec 12, 2022

Altisource Portfolio Solutions S.A. (ASPS)

8-K 2022-12-12 For: 2022-12-12

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Added on April 05, 2026

About this 8-K

Altisource Portfolio Solutions S.A filed this 8-K on December 12, 2022.

Items reported

Item 8.01: Other events
Item 9.01: Financial statements and exhibits

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☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.		☐


Exhibit No.						Description
99.1						Business, Management's Discussion and Analysis of Financial Condition and Results of Operations, the Historical Consolidated Financial Statements and Notes and other Form 10-K sections of Altisource Portfolio Solutions S.A. for the year ended December 31, 2021, reflecting Altisource's new financial reporting structure, and including the Report of Independent Registered Public Accounting Firm dated March 3, 2022, except for Note 25, as to which the date is December 12, 2022
99.2						Consent of Independent Registered Public Accounting Firm (Mayer Hoffman McCann P.C.)
101						The following Historical Consolidated Financial Statements and Notes on Form 8-K of Altisource Portfolio Solutions S.A. for the year ended December 31, 2021, filed on December 9, 2022, formatted in Inline XBRL: (i) Consolidated Balance Sheets as of December 31, 2021 and December 31, 2020; (ii) Consolidated Statements of Operations and Comprehensive Income (Loss) for each of the years in the two-year period ended December 31, 2021; (iii) Consolidated Statements of Equity for each of the years in the two-year period ended December 31, 2021; (iv) Consolidated Statements of Cash Flows for each of the years in the two-year period ended December 31, 2021; and (v) Notes to Consolidated Financial Statements.
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)


			Altisource Portfolio Solutions S.A.

			By:			/s/ Michelle D. Esterman
			Name:			Michelle D. Esterman
			Title:			Chief Financial Officer


			Additions
(in thousands)	Balance at Beginning of Period		Charged to Expenses		Deductions Note (1)		Balance at End of Period

Deductions from asset accounts:

Allowance for expected credit losses:

Year 2021	$	5,581	$	1,354	$	1,638	$	5,297
Year 2020	4,472		2,229		1,120		5,581


Valuation allowance for deferred tax assets:

Year 2021	$	372,227	$	16,921	$	—	$	389,148
Year 2020	355,559		16,668		—		372,227


		Page

OVERVIEW		2

	Forward-Looking Statements	3

	Altisource Operating Segments	5

BUSINESS		5

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		12

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA		37


	United States	India	Uruguay	Luxembourg	Consolidated Altisource

Total employees	437	1,516	63	8	2,024


(in thousands, except per share data)	2021			% Increase (decrease)	2020

Service revenue
Servicer and Real Estate	$	107,790		(63)	$	291,589
Origination	58,002			11	52,337
Corporate and Others	4,821			42	3,387
Total Service revenue	170,613			(51)	347,313
Reimbursable expenses	6,555			(60)	16,285
Non-controlling interests	1,285			(34)	1,949
Total Revenue	178,453			(51)	365,547
Cost of Revenue	171,366			(44)	305,194
Gross profit	7,087			(88)	60,353
Operating expense (income):
Selling, general and administrative expenses	67,049			(28)	92,736
Gain on sale of businesses	(88,930)			N/M	—
Restructuring charges	—			(100)	11,972
Income (loss) from operations	28,968			165	(44,355)
Other income (expense), net:
Interest expense	(14,547)			(18)	(17,730)
Unrealized gain on investment in equity securities	—			(100)	4,004
Other income, net	864			130	375
Total other income (expense), net	(13,683)			(2)	(13,351)

Income (loss) before income taxes and non-controlling interests	15,285			126	(57,706)
Income tax provision	(3,232)			(62)	(8,609)

Net income (loss)	12,053			118	(66,315)
Net income attributable to non-controlling interests	(241)			(71)	(841)

Net income (loss) attributable to Altisource	$	11,812		118	$	(67,156)

Margins:
Gross profit/service revenue	4		%		17		%
Income (loss) from operations/service revenue	17		%		(13)		%

Earnings (loss) per share:
Basic	$	0.75		117	$	(4.31)
Diluted	$	0.74		117	$	(4.31)

Weighted average shares outstanding:
Basic	15,839			2	15,598
Diluted	16,063			3	15,598


	For the year ended December 31, 2021
(in thousands)	Servicer and Real Estate			Origination			Corporate and Others			Consolidated Altisource

Revenue
Service revenue	$	107,790		$	58,002		$	4,821		$	170,613
Reimbursable expenses	5,846			709			—			6,555
Non-controlling interests	—			1,285			—			1,285
	113,636			59,996			4,821			178,453
Cost of revenue	87,427			49,012			34,927			171,366
Gross profit (loss)	26,209			10,984			(30,106)			7,087
Gain on sale of businesses	—			—			(88,930)			(88,930)
Restructuring charges	—			—			—			—
Selling, general and administrative expenses	12,557			5,702			48,790			67,049
Income from operations	13,652			5,282			10,034			28,968
Total other income (expense), net	8			—			(13,691)			(13,683)

Income before income taxes and non-controlling interests	$	13,660		$	5,282		$	(3,657)		$	15,285

Margins:
Gross profit (loss) /service revenue	24		%	19		%	N/M			4		%
Income from operations/service revenue	13		%	9		%	208		%	17		%


	For the year ended December 31, 2020
(in thousands)	Servicer and Real Estate			Origination			Corporate and Others		Consolidated Altisource

Revenue
Service revenue	$	291,589		$	52,337		$	3,387	$	347,313
Reimbursable expenses	16,138			147			—		16,285
Non-controlling interests	—			1,949			—		1,949
	307,727			54,433			3,387		365,547
Cost of revenue	206,501			42,839			55,854		305,194
Gross profit (loss)	101,226			11,594			(52,467)		60,353
Selling, general and administrative expenses	26,026			5,823			60,887		92,736
Gain on sale of businesses	—			—			—		—
Restructuring charges	1,347			351			10,274		11,972
Income (loss) from operations	73,853			5,420			(123,628)		(44,355)
Total other income (expense), net	8			—			(13,359)		(13,351)

Income (loss) before income taxes and non-controlling interests	$	73,861		$	5,420		$	(136,987)	$	(57,706)

Margins:
Gross profit (loss) /service revenue	35		%	22		%	N/M		17		%
Income (loss) from operations/service revenue	25		%	10		%	N/M		(13)		%


			Page

Reports of Independent Registered Public Accounting Firm (PCAOB ID 199)			38

Consolidated Balance Sheets as of December 31, 2021 and 2020			42

Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2021 and 2020			43

Consolidated Statements of Equity for the years ended December 31, 2021 and 2020			44

Consolidated Statements of Cash Flows for the years ended December 31, 2021 and 2020			45

Notes to Consolidated Financial Statements			46


	December 31,
	2021		2020
ASSETS
Current assets:
Cash and cash equivalents	$	98,132	$	58,263
Accounts receivable, net	18,008		22,413
Prepaid expenses and other current assets	21,864		19,479

Total current assets	138,004		100,155

Premises and equipment, net	6,873		11,894
Right-of-use assets under operating leases	7,594		18,213
Goodwill	55,960		73,849
Intangible assets, net	36,859		46,326
Deferred tax assets, net	6,386		5,398
Other assets	6,132		9,850

Total assets	$	257,808	$	265,685

LIABILITIES AND EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses	$	46,535	$	56,779

Deferred revenue	4,342		5,461
Other current liabilities	3,870		9,305
Total current liabilities	54,747		71,545

Long-term debt	243,637		242,656
Deferred tax liabilities, net	9,028		8,801

Other non-current liabilities	19,266		25,239

Commitments, contingencies and regulatory matters (Note 24)

Equity (deficit):
Common stock ($1.00 par value; 100,000 shares authorized, 25,413 issued and 15,911 outstanding as of December 31, 2021; 15,664 outstanding as of December 31, 2020)	25,413		25,413
Additional paid-in capital	144,298		141,473
Retained earnings	186,592		190,383
Treasury stock, at cost (9,502 shares as of December 31, 2021 and 9,749 shares as of December 31, 2020)	(426,445)		(441,034)
Altisource deficit	(70,142)		(83,765)

Non-controlling interests	1,272		1,209
Total deficit	(68,870)		(82,556)

Total liabilities and deficit	$	257,808	$	265,685


	For the years ended December 31,
	2021		2020

Revenue	$	178,453	$	365,547
Cost of revenue	171,366		305,194

Gross profit	7,087		60,353
Operating expense (income):
Selling, general and administrative expenses	67,049		92,736
Gain on sale of businesses	(88,930)		—
Restructuring charges	—		11,972

Income (loss) from operations	28,968		(44,355)
Other income (expense), net:
Interest expense	(14,547)		(17,730)
Unrealized gain on investment in equity securities	—		4,004
Other income, net	864		375
Total other income (expense), net	(13,683)		(13,351)

Income (loss) before income taxes and non-controlling interests	15,285		(57,706)
Income tax provision	(3,232)		(8,609)

Net income (loss)	12,053		(66,315)
Net income attributable to non-controlling interests	(241)		(841)

Net income (loss) attributable to Altisource	$	11,812	$	(67,156)

Earnings (loss) per share:
Basic	$	0.75	$	(4.31)
Diluted	$	0.74	$	(4.31)

Weighted average shares outstanding:
Basic	15,839		15,598
Diluted	16,063		15,598

Comprehensive income (loss):




Comprehensive income (loss), net of tax	12,053		(66,315)
Comprehensive income attributable to non-controlling interests	(241)		(841)

Comprehensive income (loss) attributable to Altisource	$	11,812	$	(67,156)


	Altisource Equity (Deficit)
	Common stock			Additional paid-in capital		Retained earnings		Treasury stock, at cost		Non-controlling interests		Total
	Shares











Balance, January 1, 2020	25,413	$	25,413	$	133,669	$	272,026	$	(453,934)	$	1,469	$	(21,357)

Net loss	—	—		—		(67,156)		—		841		(66,315)
Distributions to non-controlling interest holders	—	—		—		—		—		(1,101)		(1,101)
Share-based compensation expense	—	—		7,804		—		—		—		7,804
Issuance of restricted share units and restricted shares	—	—		—		(9,548)		9,548		—		—
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances and stock option exercises	—	—		—		(4,939)		3,352		—		(1,587)


Balance, December 31, 2020	25,413	25,413		141,473		190,383		(441,034)		1,209		(82,556)

Net income	—	—		—		11,812		—		241		12,053
Non-controlling interests eliminated on deconsolidation (Note 2)	—	—		—		—		—		1,781		1,781
Distributions to non-controlling interest holders	—	—		—		—		—		(1,959)		(1,959)
Share-based compensation expense	—	—		2,825		—		—		—		2,825
Issuance of restricted share units and restricted shares	—	—		—		(11,092)		11,092		—		—
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances and stock option exercises	—	—		—		(4,511)		3,497		—		(1,014)


Balance, December 31, 2021	25,413	$	25,413	$	144,298	$	186,592	$	(426,445)	$	1,272	$	(68,870)


Furniture and fixtures			5 years
Office equipment			5 years
Computer hardware			3-5 years
Computer software			3-7 years
Leasehold improvements			Shorter of useful life, 10 years or the term of the lease


(in thousands)	2021		% Increase (decrease)	2020

Compensation and benefits	$	69,990	(26)	$	94,365
Outside fees and services	66,386		(55)	146,322
Technology and telecommunications	25,273		(30)	35,912
Reimbursable expenses	6,555		(60)	16,285
Depreciation and amortization	3,162		(74)	12,310


Total	$	171,366	(44)	$	305,194


(in thousands)	2021		% Increase (decrease)	2020

Compensation and benefits	$	28,367	(20)	$	35,521
Occupancy related costs	9,332		(52)	19,363
Amortization of intangible assets	9,467		(36)	14,720
Professional services	10,163		(11)	11,444
Marketing costs	2,157		(35)	3,325
Depreciation and amortization	1,430		(45)	2,580
Other	6,133		6	5,783

Selling, general and administrative expenses	$	67,049	(28)	$	92,736


(in thousands)	2021		2020		% Increase (decrease)

Service revenue:
Solutions	$	69,475	$	205,695	(66)
Marketplace	28,009		71,167		(61)
Technology and SaaS Products	10,306		14,727		(30)
Total service revenue	107,790		291,589		(63)

Reimbursable expenses:
Solutions	3,364		7,807		(57)
Marketplace	2,482		8,331		(70)

Total reimbursable expenses	5,846		16,138		(64)



Total revenue	$	113,636	$	307,727	(63)


(in thousands)	2021		2020		% Increase (decrease)

Compensation and benefits	$	29,573	$	43,719	(32)
Outside fees and services	41,860		127,989		(67)
Technology and telecommunications	9,066		12,888		(30)
Reimbursable expenses	5,846		16,138		(64)
Depreciation and amortization	1,082		5,767		(81)

Cost of revenue	$	87,427	$	206,501	(58)


(in thousands)	Total

Balance as of January 1, 2020 and December 31, 2020	$	73,849
Write-off (1)	(17,889)

Balance as of December 31, 2021	$	55,960


	Weighted average estimated useful life (in years)	Gross carrying amount				Accumulated amortization				Net book value
(in thousands)		2021		2020		2021		2020		2021		2020

Definite lived intangible assets:
Customer related intangible assets	9	$	214,307	$	214,973	$	(194,594)	$	(187,923)	$	19,713	$	27,050
Operating agreement	20	35,000		35,000		(20,854)		(19,126)		14,146		15,874
Trademarks and trade names	16	9,709		9,709		(6,709)		(6,307)		3,000		3,402
Non-compete agreements	—	—		1,230		—		(1,230)		—		—

Other intangible assets	—	—		1,800		—		(1,800)		—		—

Total		$	259,016	$	262,712	$	(222,157)	$	(216,386)	$	36,859	$	46,326


	December 31, 2021								December 31, 2020
(in thousands)	Carrying amount		Fair value						Carrying amount		Fair value
			Level 1		Level 2		Level 3				Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	98,132	$	98,132	$	—	$	—	$	58,263	$	58,263	$	—	$	—
Restricted cash	4,017		4,017		—		—		3,833		3,833		—		—

Short-term receivable	3,643		—		—		3,643		—		—		—		—
Long-term receivable	—		—		—		—		2,531		—		—		2,531

Liabilities:
Senior secured term loan	247,204		—		224,956		—		247,204		—		201,472		—


	Number of options	Weighted average exercise price		Weighted average contractual term (in years)	Aggregate intrinsic value (in thousands)

Outstanding as of December 31, 2020	899,914	$	32.47	5.63	$	—


Forfeited	(212,575)	32.18

Outstanding as of December 31, 2021	687,339	27.99		4.57	—

Exercisable as of December 31, 2021	525,707	28.48		4.63	—


	Options outstanding				Options exercisable
Exercise price range (1)	Number	Weighted average remaining contractual life (in years)	Weighted average exercise price		Number	Weighted average remaining contractual life (in years)	Weighted average exercise price

$10.01 — $20.00	127,400	3.29	$	18.79	123,238	3.29	$	18.79
$20.01 — $30.00	415,710	5.13	24.87		326,338	4.95	24.84
$30.01 — $40.00	30,729	4.61	33.10		18,506	4.57	33.40


$60.01 — $70.00	58,500	0.19	60.76		43,875	0.19	60.76

$80.01 — $90.00	25,000	2.60	86.69		6,250	2.60	86.69
$90.01 — $100.00	30,000	2.75	96.87		7,500	2.75	96.87



	687,339				525,707


	Market-based options
Vesting price	Ordinary performance		Extraordinary performance


$50.01 — $60.00	7,756		4,162
$60.01 — $70.00	8,148		6,250

$80.01 — $90.00	—		3,878
$90.01 — $100.00	—		4,075







$170.01 — $180.00	12,500		—
$180.01 — $190.00	—		14,625
Over $190.00	15,000		13,750

Total	43,404		46,740

Weighted average share price	$	69.52	$	55.89


			Number of restricted shares and restricted share units

Outstanding as of December 31, 2020			878,521
Granted			368,412
Issued			(246,382)
Forfeited/canceled			(374,913)

Outstanding as of December 31, 2021			625,638


	2021		2020
	Monte Carlo	Binomial	Monte Carlo	Binomial

Risk-free interest rate (%)	0.16	—	2.47	0.09 - 0.27
Expected stock price volatility (%)	39.54	—	17.72	80.36
Expected dividend yield	—	—	—	—
Expected life (in years)	3	—	3	2
Fair value	$10.16	$—	$—	$12.58


	Twelve months ended December 31, 2021
(in thousands)	Revenue recognized when services are performed or assets are sold		Revenue related to technology platforms and professional services		Reimbursable expenses revenue		Total revenue

For the year ended December 31, 2021	$	157,855	$	14,043	$	6,555	$	178,453
For the year ended December 31, 2020	332,084		17,178		16,285		365,547


	2021		2020

Statutory tax rate	24.94	%	24.94	%
Change in valuation allowance	130.03		(29.79)
State tax expense	(3.87)		(1.25)
Tax credits	0.36		0.10
Uncertain tax positions	11.82		(2.94)

Income tax rate change	—		(2.40)
Tax rate differences on foreign earnings	6.46		(6.62)
Tax Exempt Income	(145.91)		—
Other	(2.70)		3.04

Effective tax rate	21.14	%	(14.92)	%


	2021		2020

Weighted average remaining lease term (in years)	3.30		3.18
Weighted average discount rate	5.84	%	7.01	%


(in thousands)	Operating lease obligations

2022	$	3,090
2023	2,145
2024	1,576
2025	1,109
2026	563

Total lease payments	8,483
Less: interest	(561)

Present value of lease liabilities	$	7,922


	Twelve months ended December 31, 2020
(in thousands)	Revenue recognized when services are performed or assets are sold		Revenue related to technology platforms and professional services		Reimbursable expenses revenue		Total revenue

Servicer and Real Estate	$	277,792	$	13,797	$	16,138	$	307,727
Origination	54,189		97		147		54,433
Corporate and Others	103		3,284		—		3,387
Total revenue	$	332,084	$	17,178	$	16,285	$	365,547