(all amounts are expressed in U.S. dollars, excluding per share amounts
and unless otherwise stated)
TORONTO--(BUSINESS WIRE)--
Real Matters Inc. (TSX: REAL) (“Real Matters” or “the Company”), a
leading network management services platform for the mortgage and
insurance industries, today announced its financial results for the
second quarter of fiscal 2019.
“We were pleased with the performance of our U.S. Appraisal business in
the second quarter. While U.S. Appraisal revenues were up modestly, we
recorded market adjusted volume growth of 15.2% against an estimated 15%
decline in U.S. mortgage origination market activity, we continued to
expand Net Revenue(A) margins and nearly doubled Adjusted
EBITDA(A) in this segment compared to the same quarter in
fiscal 2018. We also passed an important milestone with the launch of
our last Tier 1 lender in our U.S. Appraisal segment and we are now live
with all six of the Tier 1 lenders,” said Real Matters Chief Executive
Officer Jason Smith. “Year-over-year weakness in the U.S. mortgage
refinance market dampened our U.S. Title results. While revenues were
down 9.2% in our U.S. Title business, we reported market adjusted volume
growth of 11.2% in the second quarter of fiscal 2019. Looking ahead, we
continue to focus on the things we can control like operational
performance and building scale to drive continued market share growth.
With U.S. mortgage market headwinds behind us, the third quarter should
provide an easier comparable period.”
Q2 2019 Summary Information
-
Consolidated revenues down 4.2% from Q2 2018
-
Consolidated net loss of $6.8 million in Q2 2019 compared to
consolidated net income of $3.0 million in Q2 2018, due to stronger
operating performance offset by higher non-cash expenses
-
Consolidated Net Revenue(A) of $20.1 million in Q2 2019
compared with $20.5 million in Q2 2018, consolidated Net Revenue(A)
margins of 31.7% up from 31.0% in Q2 2018
-
U.S. Appraisal: revenues increased 0.5%, market adjusted volume growth
of 15.2%, Net Revenue(A) margins up 280 basis points from
Q2 2018, Adjusted EBITDA(A) of $4.8 million up 90% from Q2
2018
-
U.S. Title: revenues declined 9.2%, market adjusted volume growth of
11.2%, Net Revenue(A) margins down 340 basis points from Q2
2018, Adjusted EBITDA(A) of $0.8 million compared with $1.1
million in Q2 2018
-
Estimated market decline of 15%
-
Went live with sixth Tier 1 lender and two new Top 100 lenders in U.S.
Appraisal
-
Went live with one new Top 100 lender in U.S. Title
-
Repurchased 1.4 million shares at a cost of $4.7 million in Q2 2019
Fiscal 2019 Year-to-Date Summary Information
-
Consolidated revenues down 11.5% from the six month period ended March
31, 2018
-
Consolidated net loss of $2.3 million compared to a consolidated net
loss of $2.4 million in the six month period ended March 31, 2018, due
to stronger operating performance partially offset by higher non-cash
expenses
-
Consolidated Net Revenue(A) of $38.9 million compared with
$43.0 million in the six month period ended March 31, 2018,
consolidated Net Revenue(A) margins of 31.4% up from 30.7%
in the six month period ended March 31, 2018
-
U.S. Appraisal: revenues declined 8.0%, market adjusted volume growth
of 15.5%, Net Revenue(A) margins up 340 basis points from
the six month period ended March 31, 2018, Adjusted EBITDA(A)
of $8.2 million up 74% from the six month period ended March 31, 2018
-
U.S. Title: revenues declined 16.5%, market adjusted volume decline of
5.5%, Net Revenue(A) margins down 410 basis points from the
six month period ended March 31, 2018, Adjusted EBITDA(A)
of $1.8 million compared with $4.3 million in the six month period
ended March 31, 2018
-
Estimated market decline of 19%
-
Repurchased 2.4 million shares at a cost of $7.6 million in the six
month period ended March 31, 2019
|
(millions of dollars)
|
|
|
|
Three months ended March 31
|
|
|
|
|
|
|
2019
|
|
|
|
|
2018
|
|
|
|
$ Change
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Appraisal
|
|
|
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$
|
43.2
|
|
|
|
$
|
43.0
|
|
|
|
$
|
0.2
|
|
|
|
0.5
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%
|
|
U.S. Title
|
|
|
|
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14.8
|
|
|
|
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16.3
|
|
|
|
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(1.5
|
)
|
|
|
-9.2
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%
|
|
Canada
|
|
|
|
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5.3
|
|
|
|
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6.8
|
|
|
|
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(1.5
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)
|
|
|
-22.1
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%
|
|
Consolidated revenues
|
|
|
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$
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63.3
|
|
|
|
$
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66.1
|
|
|
|
$
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(2.8
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)
|
|
|
-4.2
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%
|
|
Net (loss) income
|
|
|
|
$
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(6.8
|
)
|
|
|
$
|
3.0
|
|
|
|
$
|
(9.8
|
)
|
|
|
|
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Net (loss) income per diluted share
|
|
|
|
$
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(0.08
|
)
|
|
|
$
|
0.03
|
|
|
|
$
|
(0.11
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP measures
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenue(A) |
|
|
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$
|
20.1
|
|
|
|
$
|
20.5
|
|
|
|
$
|
(0.4
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)
|
|
|
-2.0
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%
|
|
Net Revenue(A) margin
|
|
|
|
|
31.7
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%
|
|
|
|
31.0
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%
|
|
|
|
0.7
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%
|
|
|
|
|
Adjusted EBITDA(A) |
|
|
|
$
|
2.8
|
|
|
|
$
|
0.3
|
|
|
|
$
|
2.5
|
|
|
|
|
|
Adjusted EBITDA(A) margin
|
|
|
|
|
13.8
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%
|
|
|
|
1.5
|
%
|
|
|
|
12.3
|
%
|
|
|
|
|
Adjusted Net Income(A) |
|
|
|
$
|
1.0
|
|
|
|
$
|
1.4
|
|
|
|
$
|
(0.4
|
)
|
|
|
|
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Adjusted Net Income (A) per diluted share
|
|
|
$
|
0.01
|
|
|
|
$
|
0.02
|
|
|
|
$
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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(millions of dollars)
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|
|
Six months ended March 31
|
|
|
|
|
|
2019
|
|
|
|
|
2018
|
|
|
|
$
|
Change
|
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Appraisal
|
|
|
$
|
82.7
|
|
|
|
$
|
89.9
|
|
|
|
$
|
(7.2
|
)
|
|
|
-8.0
|
%
|
|
U.S. Title
|
|
|
|
29.8
|
|
|
|
|
35.7
|
|
|
|
|
(5.9
|
)
|
|
|
-16.5
|
%
|
|
Canada
|
|
|
|
11.3
|
|
|
|
|
14.3
|
|
|
|
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(3.0
|
)
|
|
|
-21.0
|
%
|
|
Consolidated revenues
|
|
|
$
|
123.8
|
|
|
|
$
|
139.9
|
|
|
|
$
|
(16.1
|
)
|
|
|
-11.5
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%
|
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Net loss
|
|
|
$
|
(2.3
|
)
|
|
|
$
|
(2.4
|
)
|
|
|
$
|
0.1
|
|
|
|
|
|
Net loss per diluted share
|
|
|
$
|
(0.03
|
)
|
|
|
$
|
(0.03
|
)
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenue(A) |
|
|
$
|
38.9
|
|
|
|
$
|
43.0
|
|
|
|
$
|
(4.1
|
)
|
|
|
-9.5
|
%
|
|
Net Revenue(A) margin
|
|
|
|
31.4
|
%
|
|
|
|
30.7
|
%
|
|
|
|
0.7
|
%
|
|
|
|
|
Adjusted EBITDA(A) |
|
|
$
|
4.5
|
|
|
|
$
|
2.7
|
|
|
|
$
|
1.8
|
|
|
|
|
|
Adjusted EBITDA(A) margin
|
|
|
|
11.5
|
%
|
|
|
|
6.3
|
%
|
|
|
|
5.2
|
%
|
|
|
|
|
Adjusted Net Income(A) |
|
|
$
|
2.8
|
|
|
|
$
|
2.7
|
|
|
|
$
|
0.1
|
|
|
|
|
|
Adjusted Net Income (A) per diluted share
|
|
|
$
|
0.03
|
|
|
|
$
|
0.03
|
|
|
|
$
|
-
|
|
|
|
|
Intention to Amend Normal Course Issuer Bid (“NCIB”)
We announced today that, subject to the approval of the Toronto Stock
Exchange (“TSX”), we intend to amend our current NCIB to increase the
number of common shares that we may purchase for cancellation from 4
million common shares to 5 million common shares. Since commencement of
our NCIB, we have purchased for cancellation 3.6 million common shares.
Our current NCIB commenced on June 11, 2018 and will continue until June
10, 2019, or such earlier date as we have acquired the maximum number of
common shares permitted under the NCIB. Purchases will continue to be
made through the facilities of the TSX and alternative Canadian trading
systems at the prevailing market price at the time of acquisition. All
purchased shares will be cancelled.
Conference Call and Webcast
A conference call to review the results will take place at 11:00 a.m.
(ET) on Thursday, May 2, 2019, hosted by Chief Executive Officer Jason
Smith and Chief Financial Officer Bill Herman. An accompanying slide
presentation will be posted to the Investor Relations section of our
website shortly before the call.
To access the call:
-
Participant Toll Free Dial-In Number: (833) 247-5856
-
Participant International Dial-In Number: (647) 689-4232
-
Conference ID: 1987047
To listen to the live webcast of the call:
The webcast will be archived and a transcript of the call will be
available in the Investor Relations section of our website following the
call.
(A)
Non-GAAP Measures
The non-GAAP measures used in this Press Release, including Net Revenue,
Adjusted EBITDA and Adjusted Net Income or Loss do not have a
standardized meaning prescribed by International Financial Reporting
Standards and are therefore unlikely to be comparable to similar
measures presented by other issuers. These non-GAAP measures are more
fully defined and discussed in the Company’s MD&A for the three and six
months ended March 31, 2019, available on SEDAR at www.sedar.com.
Full reports for Real Matters financial results for the three and six
months ended March 31, 2019 are outlined in the unaudited condensed
consolidated financial statements and the related MD&A of the Company,
which are available on SEDAR at www.sedar.com.
In addition, supplemental information is available on our website at www.realmatters.com.
Forward-Looking Information
This Press Release contains “forward-looking information” within the
meaning of applicable Canadian securities laws. Words such as “could”,
“forecast”, “target”, “may”, “will”, “would”, “expect”, “anticipate”,
“estimate”, “intend”, “plan”, “seek”, “believe”, “likely” and “predict”
and variations of such words and similar expressions are intended to
identify such forward-looking information, although not all
forward-looking information contains these identifying words.
The forward-looking information in this Press Release includes
statements which reflect the current expectations of management with
respect to our business and the industry in which we operate and is
based on management’s experience and perception of historical trends,
current conditions and expected future developments, as well as other
factors that management believes appropriate and reasonable in the
circumstances. The forward-looking information reflects management’s
beliefs based on information currently available to management,
including information obtained from third party sources, and should not
be read as a guarantee of the occurrence or timing of any future events,
performance or results.
The forward-looking information in this Press Release is subject to
risks, uncertainties and other factors that are difficult to predict and
that could cause actual results to differ materially from historical
results or results anticipated by the forward-looking information. A
comprehensive discussion of the factors which could cause results or
events to differ from current expectations can be found in the “Risk
Factors” section of our Annual Information Form for the year ended
September 30, 2018 and under the heading “Important Factors Affecting
Results from Operations” in our MD&A for the three and six months ended
March 31, 2019, each of which is available on SEDAR at www.sedar.com.
Readers are cautioned not to place undue reliance on the forward-looking
information, which reflect our expectations only as of the date of this
Press Release. Except as required by law, we do not undertake to update
or revise any forward-looking information, whether as a result of new
information, future events or otherwise.
About Real Matters
Real Matters is a leading network management services provider for the
mortgage lending and insurance industries. Real Matters’ platform
combines its proprietary technology and network management capabilities
with tens of thousands of independent qualified field professionals to
create an efficient marketplace for the provision of mortgage lending
and insurance industry services. Our clients include approximately 60 of
the top 100 mortgage lenders in the U.S. and some of the largest
insurance companies in North America. We are a leading independent
provider of residential real estate appraisals to the mortgage market
and a leading independent provider of title and mortgage closing
services in the U.S. Established in 2004, Real Matters has offices in
Buffalo (NY), Denver (CO), Middletown (RI), and Markham (ON). Real
Matters is listed on the Toronto Stock Exchange under the symbol REAL.
For more information, visit www.realmatters.com.
View source version on businesswire.com:
https://www.businesswire.com/news/home/20190502005268/en/
Lyne Fisher
Vice President, Investor Relations and Marketing
Real
Matters
lfisher@realmatters.com
289.843.3383
Source: Real Matters Inc.