Lender Processing Services, Inc. (LPS)
Q4 2011 Earnings Call
February 01, 2012 5:00 PM ET
Nancy Murphy – Vice President, Investor Relations
Hugh Harris – President and CEO
Thomas L. Schilling – EVP and CFO
Julio Quinteros – Goldman Sachs
Carter Malloy – Stephens Inc.
Glenn Greene – Oppenheimer & Co.
Kevin McVeigh – Macquarie
John Kraft – D.A. Davidson
DeForest Hinman – Walthausen & Company
Geoffrey Dunn – Dowling & Partners
Donald Destino – Harvest Capital
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At this time, I will like to turn the conference over to Nancy Murphy, Vice President of Investor Relations. Please go ahead.
Good afternoon and thank you for joining our call. With us today are Hugh Harris, President and CEO; and Tom Schilling, CFO to review fourth quarter and full year 2011 results and answer your questions.
Before we get started, I'd like to remind you that our earnings release and the slide presentation we will use to facilitate today's discussions are available on the Investor Relations section of our website.
In addition I would like to remind you that we may make forward-looking statements during today's call and those statements are subject to various risks and uncertainties. Factors that may cause actual results to differ materially from expectations are detailed in our SEC filings, including our 10-K and our earnings release. We expressly disclaim any duty to update or revise those forward-looking statements, including quarterly guidance.
In addition our discussion today will contain references to non-GAAP results in an attempt to provide a more meaningful presentation and comparison to prior periods. Reconciliations between GAAP and non-GAAP results have been provided in the earnings release.
Now I'll turn the call over to Hugh Harris, President and CEO.
Thank you, Nancy, and good afternoon, everyone. I appreciate you joining us today to discuss Lender Processing Services' financial results for the fourth quarter and full year 2011.
I'm going to start the call today by giving an overview of our progress, then Tom Schilling, our CFO will walk through the company's financials. Finally, we will open the call up to questions. As you know, I joined LPS a little over four months ago. In that short time we made a lot of progress moving LPS forward. We began 2012 as a different and improved company. I'm excited about the company's future. We have a new management team in place. We have embraced the regulatory changes that are being made, and we have an employee base of 8,000 people who are committed to exceeding the needs of our customers.
2011 was a challenging environment in the mortgage industry, a year defined by changing regulations, declining origination volume, and delays in the foreclosure process. However, our team remained focused on meeting the needs of our customers, and as a result, we were able to expand relationships with many of the largest lenders in the industry.
Our financial results for the fiscal year demonstrate that we have a sound business model, which allowed us to outpace overall market growth in both the origination and foreclosure businesses, while maintaining consistent growth in our Technology, Data and Analytics segment. Our fourth quarter revenue, adjusted earnings per share, and cash flow were all ahead of our guidance.
For the full year of 2011, we generated revenue of $2.1 billion and adjusted EBITDA of $516 million. On our third quarter earnings call, I said that my objective was for LPS to start 2012 with a clear vision and the right resources to execute that vision. At that time, I set several key priorities. These included conducting a full review of the business, making sure the right people were in the right positions, to execute our business objectives, ensuring that what LPS does and the value LPS delivers to our clients is being shared with all of our stakeholders, and focusing on resolving our regulatory and legal challenges so that the Company can move forward and focus on the future. We have aggressively pursued this agenda and during the fourth quarter, LPS implemented many key business and operational initiatives.
As I mentioned, we recently completed a full strategic review of our business operations. This review accomplished many things. First and foremost, it confirmed for me that we have some of the most talented people in the industry. Second, it confirmed that our core technology, our Transaction Services business, and our offerings are in demand from our customers and provide opportunity for growth. The review helped us indentify and make the decision to exit non-strategic and underperforming businesses and it confirmed for us that both our Default and Data and Analytics businesses are important to the future success of our Company.
The review also allow us the opportunity to evaluate the senior management team and to identify experienced, well respected and trusted executives to put in leadership positions. Today, our new senior management team has an average of over 25 years of industry experience, operates at the highest levels of integrity and accountability, and each is committed to the Company's values and goals.
For example, Bob Caruso, a well respected leader in the mortgage industry is now leading our Default businesses. Bob has worked for major banks for most of his career. He understands how to successfully manage in a regulated environment, which is an area we needed to strengthen in our senior management team.