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 first quarter ended December 31, 2019.
“We reported very strong financial performance in the first quarter: on a consolidated basis, revenues increased 71.4%, Net Revenue(A) was up 87.1% and we recorded Adjusted EBITDA(A) margins of 41.2% in the first quarter compared with 9.1% in the prior year period,” said Real Matters Chief Executive Officer Jason Smith. “The U.S. mortgage market was robust in the first quarter, led by a significant year-over-year increase in refinance volumes. Our continued top performance ranking with U.S. Appraisal clients led to stronger than anticipated market share gains with some of our largest clients, which bolstered our first quarter Revenues. We were also very pleased with how our U.S. Title business performed; strong year-over-year market share gains and new client additions accounted for more than half of our revenue growth. We continued to be active in our normal course issuer bid during the first quarter, repurchasing 0.6 million shares at a cost of $5.9 million, while our cash balance increased to $80.9 million from $71.7 million at September 30, 2019.”
Q1 2020 Key Performance Indicators |
U.S. Appraisal |
U.S. Title |
Consolidated |
||||||
Market Adjusted Growth |
16.1% |
156.1% |
NA |
||||||
Revenues |
$67.4 million |
$28.7 million |
$103.8 million |
||||||
Revenue Growth |
70.2% |
91.9% |
71.4% |
||||||
Net Revenue(A) Growth |
71.2% |
112.3% |
87.1% |
||||||
Adjusted EBITDA(A) Margin |
57.2% |
45.7% |
41.2% |
Q1 2020 Highlights
- Launched into new channels with two Tier 1 lenders in U.S. Appraisal
- Went live with four new lenders in U.S. Title
- Purchased 0.6 million shares under our normal course issuer bid at a cost of $5.9 million
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 maximum aggregate purchase price of shares purchased under the NCIB from US$20 million (being approximately C$27 million) to US$46 million (being approximately C$60 million). Since the commencement of our NCIB on June 11, 2019, we have purchased for cancellation approximately 2.1 million common shares. Our NCIB will continue until June 10, 2020, 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 common shares will be cancelled.
Financial and Operational Summary
| (millions of dollars) | Three months ended December 31 |
|||||||||||||||||||||
|
2019 |
|
Margin |
|
2018 |
|
Margin |
$ Change |
|
% Change |
||||||||||||
| Revenues | ||||||||||||||||||||||
| U.S. Appraisal | $ |
67.4 |
|
$ |
39.5 |
|
$ |
27.9 |
|
70.2 |
% |
|||||||||||
| U.S. Title |
|
28.7 |
|
|
15.0 |
|
|
13.7 |
|
91.9 |
% |
|||||||||||
| Canada |
|
7.7 |
|
|
6.0 |
|
|
1.7 |
|
28.4 |
% |
|||||||||||
| Consolidated revenues | $ |
103.8 |
|
$ |
60.5 |
|
$ |
43.3 |
|
71.4 |
% |
|||||||||||
| Net Revenue(A) | ||||||||||||||||||||||
| U.S. Appraisal | $ |
15.5 |
|
23.0 |
% |
$ |
9.0 |
|
22.8 |
% |
$ |
6.5 |
|
71.2 |
% |
|||||||
| U.S. Title |
|
18.5 |
|
64.3 |
% |
|
8.7 |
|
58.2 |
% |
|
9.8 |
|
112.3 |
% |
|||||||
| Canada |
|
1.3 |
|
17.2 |
% |
|
1.1 |
|
18.4 |
% |
|
0.2 |
|
19.8 |
% |
|||||||
| Consolidated Net Revenue(A) | $ |
35.3 |
|
34.0 |
% |
$ |
18.8 |
|
31.1 |
% |
$ |
16.5 |
|
87.1 |
% |
|||||||
| Adjusted EBITDA(A) | ||||||||||||||||||||||
| U.S. Appraisal | $ |
8.8 |
|
57.2 |
% |
$ |
3.4 |
|
37.8 |
% |
$ |
5.4 |
|
159.1 |
% |
|||||||
| U.S. Title |
|
8.4 |
|
45.7 |
% |
|
1.0 |
|
11.9 |
% |
|
7.4 |
|
713.6 |
% |
|||||||
| Canada |
|
0.7 |
|
55.0 |
% |
|
0.5 |
|
42.9 |
% |
|
0.2 |
|
53.5 |
% |
|||||||
| Corporate |
|
(3.4 |
) |
|
(3.2 |
) |
|
(0.2 |
) |
-8.2 |
% |
|||||||||||
| Consolidated Adjusted EBITDA(A) | $ |
14.5 |
|
41.2 |
% |
$ |
1.7 |
|
9.1 |
% |
$ |
12.8 |
|
747.3 |
% |
|||||||
| Net income | ||||||||||||||||||||||
| Net income | $ |
5.1 |
|
$ |
4.5 |
|
$ |
0.6 |
|
|||||||||||||
| Net income per diluted share | $ |
0.06 |
|
$ |
0.05 |
|
$ |
0.01 |
|
|||||||||||||
| Adjusted Net Income(A) | ||||||||||||||||||||||
| Adjusted Net Income(A) | $ |
9.2 |
|
$ |
1.8 |
|
$ |
7.4 |
|
|||||||||||||
| Adjusted Net Income(A) per diluted share | $ |
0.10 |
|
$ |
0.02 |
|
$ |
0.08 |
|
|||||||||||||
| Market adjusted growth | ||||||||||||||||||||||
| U.S. Appraisal |
|
16.1 |
% |
|||||||||||||||||||
| U.S. Title |
|
156.1 |
% |
|||||||||||||||||||
Conference Call and Webcast
A conference call to review the results will take place at 10:00 a.m. (ET) on Thursday, January 30, 2020, 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: 6697095
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 months ended December 31, 2019, available on SEDAR at www.sedar.com.
Full reports for Real Matters financial results for the three months ended December 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, 2019 and under the heading “Important Factors Affecting our Results from Operations” in our MD&A for the three months ended December 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 the majority 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.
