Full Year 2017
Black Knight, Inc. (NYSE:BKI), a leading provider of software, data
and analytics solutions to the mortgage and consumer loan, real
estate and capital markets verticals, today announced unaudited
financial results for the fourth quarter and year ended
December 31, 2017.
Revenues for the fourth quarter of 2017
increased 2% to $267.5 million from $261.5 million in the prior
year quarter. Net earnings attributable to Black Knight for the
fourth quarter of 2017 were $147.2 million, or $0.97 per diluted
share, compared to $11.8 million, or $0.17 per diluted share, in
the prior year quarter. The results for the fourth quarter of 2017
include an income tax benefit of $110.9 million related to the
revaluation of our net deferred income tax liability as a result of
the Tax Cuts and Jobs Act of 2017 (the "Tax Reform Act").
Adjusted Revenues for the fourth quarter of 2017
increased 2% to $268.4 million from $263.0 million in the prior
year quarter. Excluding the effect of the Property Insight
realignment, Adjusted Revenues growth for the fourth quarter of
2017 was 5%. Adjusted Net Earnings for the fourth quarter of 2017
increased 25% to $56.6 million, or $0.37 per diluted share,
compared to $45.2 million, or $0.30 per diluted share, in the prior
year quarter.
Adjusted EBITDA for the fourth quarter of 2017
increased 13% to $131.9 million from $116.7 million in the prior
year quarter. Adjusted EBITDA Margin was 49.1% compared to 44.4% in
the prior year quarter.
Black Knight Executive Chairman Bill Foley said,
“2017 was another successful year for Black Knight as we continued
to execute against our long-term strategic initiatives to drive
organic growth. In particular, we expanded and extended our
relationships with several key existing clients through cross-sell
and contract renewals, won new clients in existing markets and
delivered innovative new solutions. In addition, we completed
several key implementations, made investments that will pave the
way for future growth and returned capital to our shareholders. As
we look towards 2018, we are excited and optimistic about our
opportunities to continue to drive Black Knight forward and deliver
value for our shareholders.”
Black Knight Chief Executive Officer Tom Sanzone
added, “We are pleased with our results in the fourth quarter and
for the full year, both of which included Adjusted Revenues growth
of 2%, or 5% excluding the effect of the Property Insight
realignment. For the fourth quarter, Adjusted EBITDA increased
by 13%, which drove margin expansion of 470 basis points to 49.1%.
For the year, Adjusted EBITDA increased by 9%, which drove margin
expansion of 310 basis points to 47.9%. As we begin 2018, we are
very excited about Black Knight’s strong business momentum across
the enterprise, and we remain focused on converting our significant
and growing implementation pipeline.”
Revenues for the year ended December 31, 2017
increased 2% to $1,051.6 million from $1,026.0 million in 2016. Net
earnings attributable to Black Knight for the year ended December
31, 2017 were $182.3 million, or $1.47 per diluted share, compared
to $45.8 million, or $0.67 per diluted share, in 2016. The results
for the year ended December 31, 2017 include the benefit related to
the revaluation of our net deferred income tax liability, partially
offset by expenses associated with the debt refinancing, Term Loan
B repricing and the spin-off of Black Knight from Fidelity National
Financial, Inc. ("FNF") (the "Distribution").
Adjusted Revenues for the year ended December
31, 2017 increased 2% to $1,056.1 million from $1,033.3 million in
2016. Excluding the effect of the Property Insight realignment,
Adjusted Revenues growth for the year ended December 31, 2017 was
5%. Adjusted Net Earnings for the year ended December 31, 2017
increased 19% to $209.6 million, or $1.38 per diluted share,
compared to Adjusted Net Earnings of $175.4 million, or $1.15 per
diluted share, in 2016.
Adjusted EBITDA for the year ended December 31,
2017 increased 9% to $505.8 million from $463.1 million in 2016.
Adjusted EBITDA Margin was 47.9% compared to 44.8% in 2016.
Definitions of non-GAAP financial measures and
the reconciliations to related GAAP measures are provided in
subsequent sections of the press release narrative and supplemental
schedules. Black Knight has not provided a reconciliation of
forward-looking Adjusted Net Earnings Per Share and Adjusted EBITDA
to the most directly comparable GAAP financial measures, due
primarily to variability and difficulty in making accurate
forecasts and projections of non-operating matters that may arise,
as not all of the information necessary for a quantitative
reconciliation is available to Black Knight without unreasonable
effort.
Segment Information
Software Solutions (formerly Technology)
Adjusted Revenues for the fourth quarter of 2017
increased 4% to $228.2 million from $219.2 million in the prior
year quarter. Our servicing software business had Adjusted Revenues
growth of 9%, primarily driven by higher loan volumes on our core
servicing software solution and price increases. In our origination
software business, Adjusted Revenues declined 17%, primarily driven
by lower volumes as a result of the 42% decline in refinancing
originations as reported by the Mortgage Bankers Association on
January 20, 2018. Adjusted EBITDA increased 9% to $135.1 million
from $124.4 million, with an Adjusted EBITDA Margin of 59.2%, an
increase of 240 basis points compared to the prior year
quarter.
Adjusted Revenues for the year ended December
31, 2017 increased 4% to $893.8 million from $855.8 million in
2016. Adjusted EBITDA increased 7% to $523.0 million from $487.8
million, with an Adjusted EBITDA Margin of 58.5%, an increase of
150 basis points compared to 2016.
Data and Analytics
Adjusted Revenues for the fourth quarter of 2017
were $40.2 million compared to $43.8 million in the prior year
quarter. Excluding the effect of the Property Insight realignment,
Adjusted Revenues increased $3.2 million, or 9%, compared to the
prior year quarter driven by growth in our property data and
multiple listing service businesses. Adjusted EBITDA was $9.0
million compared to $4.5 million in the prior year quarter, with an
Adjusted EBITDA Margin of 22.4%, an increase of 1,210 basis points
compared to the prior year quarter.
Adjusted Revenues for the year ended December
31, 2017 were $162.3 million compared to $177.5 million in 2016.
Excluding the effect of the Property Insight realignment, Adjusted
Revenues increased $14.9 million, or 10%, compared to 2016.
Adjusted EBITDA increased 20% to $31.9 million from $26.5 million
in 2016, with an Adjusted EBITDA Margin of 19.7%, an increase of
480 basis points compared to 2016.
Realignment of Property
Insight
Effective January 1, 2017, Property Insight, LLC
("Property Insight"), an indirect Black Knight subsidiary that
provides information used by title insurance underwriters, title
agents and closing attorneys to source and underwrite title
insurance for real property sales and transfer, realigned its
commercial relationship with FNF. In connection with the
realignment, Property Insight employees responsible for title plant
posting and maintenance were transferred to FNF. Under the new
commercial arrangement, Black Knight continues to own the title
plant technology and retains sales responsibility for third
parties, other than FNF. As a result of the realignment, Black
Knight no longer recognizes revenues or expenses related to title
plant posting and maintenance, but charges FNF a license fee for
use of the technology to access and maintain the title plant data.
Had the realignment taken place on January 1, 2016, Black Knight
revenues and expenses for 2016 would have been lower by
approximately $30 million with essentially no effect to Adjusted
EBITDA.
Share Repurchase Program
During the fourth quarter ended December 31,
2017, Black Knight repurchased 2.0 million shares of its common
stock for $90.1 million, or at a price of $45.065 per share. As of
December 31, 2017, Black Knight had approximately 6.8 million
shares remaining under its share repurchase authorization.
Segment Realignment
On January 1, 2018, we realigned the composition
of our two reportable segments. Certain enterprise business
intelligence offerings in our Data and Analytics segment were moved
to our Software Solutions segment. This change aligns with our
go-to-market strategy and with the internal management of our
business operations, including the allocation of resources and
assessment of performance.
Balance Sheet
As of December 31, 2017, Black Knight had
cash and cash equivalents of $16.2 million and debt of $1,434.1
million. As of December 31, 2017, Black Knight had available
capacity of $445.0 million on its revolving credit facility.
Business Outlook
The following forward-looking statements reflect
Black Knight’s expectations as of today's date. Given the number of
risk factors, uncertainties and assumptions discussed below, actual
results may differ materially. Black Knight does not intend to
update its forward-looking statements until its next quarterly
results announcement, other than in publicly available
statements.
Black Knight’s full year 2018 outlook is as
follows:
- Revenues are expected to be in the range of $1,102 million to
$1,122 million.
- Adjusted Revenues are expected to be in the range of $1,105
million to $1,125 million.
- Adjusted Net Earnings Per Share is expected to be in the range
of $1.73 to $1.81.
- Adjusted EBITDA is expected to be in the range of $530 million
to $545 million.
Earnings Conference Call and Audio
Webcast
Black Knight will host a conference call to
discuss the fourth quarter and full year 2017 financial results on
February 7, 2018, at 5:00 p.m. ET. The conference call can be
accessed live over the phone by dialing (877) 407-4018, or for
international callers (201) 689-8471. A replay will be available
from 8:00 p.m. ET on February 7, 2018 through
February 14, 2018, and can be accessed by dialing (844)
512-2921, or for international callers (412) 317-6671, and entering
replay passcode 13674141.
The call will also be webcast live from Black
Knight's investor relations website at http://investor.bkfs.com.
Following completion of the call, a recorded replay of the webcast
will be available on the website.
About Black Knight
Black Knight (NYSE:BKI) is a leading provider of
integrated software, data and analytics solutions that facilitate
and automate many of the business processes across the
homeownership lifecycle.
Black Knight is committed to being a premier
business partner that clients rely on to achieve their
strategic goals, realize greater success and better serve their
customers by delivering best-in-class software, services and
insights with a relentless commitment to excellence, innovation,
integrity and leadership. For more information on Black Knight,
please visit www.blackknightinc.com.
Non-GAAP Financial Measures
This earnings release presents non-GAAP
financial information, including Adjusted Revenues, Adjusted
Revenues Excluding the Effect of the Property Insight Realignment,
Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Earnings and
Adjusted Net Earnings Per Share. These are important financial
performance measures for Black Knight, but are not financial
measures as defined by generally accepted accounting principles
("GAAP"). The presentation of this financial information is not
intended to be considered in isolation of or as a substitute for,
or superior to, the financial information prepared and presented in
accordance with GAAP. Black Knight uses these non-GAAP financial
performance measures for financial and operational decision making
and as a means to evaluate period-to-period comparisons. Black
Knight believes they provide useful information about operating
results, enhance the overall understanding of past financial
performance and future prospects and allow for greater transparency
with respect to key metrics used by management in its financial and
operational decision making, including determining a portion of
executive compensation. Black Knight also presents these non-GAAP
financial performance measures because it believes investors,
analysts and rating agencies consider them useful in measuring
Black Knight’s ability to meet its debt service obligations. By
disclosing these non-GAAP financial performance measures, Black
Knight believes it creates for investors a greater understanding
of, and an enhanced level of transparency into, the means by which
the management of Black Knight operates the company. These non-GAAP
financial measures are not measures presented in accordance with
GAAP, and Black Knight’s use of these terms may vary from that of
others in Black Knight’s industry. These non-GAAP financial
measures should not be considered as an alternative to net
earnings, operating income, revenues, cash provided by operating
activities or any other measures derived in accordance with GAAP as
measures of operating performance or liquidity. Reconciliations of
these measures to the most directly comparable GAAP financial
measures are presented in the attached schedules.
Adjusted Revenues and Adjusted EBITDA for the
Software Solutions and Data and Analytics segments are presented in
conformity with Accounting Standards Codification 280, Segment
Reporting. These measures are reported to the chief operating
decision maker for purposes of making decisions about allocating
resources to the segments and assessing their performance. For
these reasons, these measures are excluded from the definition of
non-GAAP financial measures under the Securities and Exchange
Commission's ("SEC'") Regulation G and Item 10(e) of Regulation
S-K.
Adjusted Revenues - We define
Adjusted Revenues as Revenues adjusted to include the revenues that
were not recorded by Black Knight during the periods presented due
to the deferred revenue purchase accounting adjustment recorded in
accordance with GAAP. These adjustments are reflected in Corporate
and Other. This adjustment for the full year 2018 is expected to be
approximately $2.5 million.
Adjusted Revenues Excluding the Effect of the Property
Insight Realignment - We define Adjusted Revenues
excluding the effect of the Property Insight realignment as
Adjusted Revenues for the respective 2016 period determined on the
basis as if the Property Insight realignment had taken place on
January 1, 2016.
Adjusted EBITDA - We define
Adjusted EBITDA as Net earnings, with adjustments to reflect the
addition or elimination of certain income statement items
including, but not limited to:
- Depreciation and amortization;
- Interest expense;
- Income tax (benefit) expense;
- Other expense, net;
- Loss (gain) from discontinued operations, net of tax;
- deferred revenue purchase accounting adjustment recorded in
accordance with GAAP;
- equity-based compensation, including related payroll
taxes;
- costs associated with debt and/or equity offerings, including
the Distribution;
- spin-off related transition costs; and
- acquisition-related costs.
These adjustments are reflected in Corporate and
Other.
Adjusted EBITDA Margin -
Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by
Adjusted Revenues.
Adjusted Net Earnings - We
define Adjusted Net Earnings as Net earnings with adjustments to
reflect the addition or elimination of certain income statement
items including, but not limited to:
- the net incremental depreciation and amortization adjustments
associated with the application of purchase accounting;
- deferred revenue purchase accounting adjustment;
- equity-based compensation, including related payroll
taxes;
- costs associated with debt and/or equity offerings, including
the Distribution;
- spin-off related transition costs;
- acquisition-related costs;
- significant legal and regulatory matters;
- adjustment for income tax expense assuming the conversion of
all the shares of Class B common stock into shares of Class A
common stock prior to the Distribution, the tax effect of the
non-GAAP adjustments and the deferred tax revaluation adjustment as
a result of the Tax Reform Act. Our adjusted effective tax rate was
37.9% and 36.1% for the three months ended December 31, 2017 and
2016, respectively, and 37.2% and 36.7% for the years ended
December 31, 2017 and 2016, respectively.
Adjusted Net Earnings Per Share
- For the periods prior to the Distribution, we calculate per share
amounts assuming the exchange of all shares of Class B common stock
into shares of Class A common stock at the beginning of the
respective period. We also include the dilutive effect of any
unvested restricted shares of common stock.
Tax Reform Act
Our estimate of the effect of the Tax Reform Act
is based on certain assumptions and our current interpretation of
the Tax Reform Act, and may change as we refine our analysis and as
further information becomes available.
Forward-Looking Statements
This press release contains forward-looking
statements that involve a number of risks and uncertainties.
Statements that are not historical facts, including statements
regarding expectations, hopes, intentions or strategies regarding
the future are forward-looking statements. Forward-looking
statements are based on Black Knight management's beliefs, as well
as assumptions made by, and information currently available to,
them. Because such statements are based on expectations as to
future financial and operating results and are not statements of
fact, actual results may differ materially from those projected.
Black Knight undertakes no obligation to update any forward-looking
statements, whether as a result of new information, future events
or otherwise.
The risks and uncertainties that forward-looking
statements are subject to include, but are not limited to:
- security breaches against our information systems;
- our ability to maintain and grow our relationships with our
customers;
- changes to the laws, rules and regulations that affect our and
our customers’ businesses;
- our ability to adapt our services to changes in technology or
the marketplace;
- the effect of any potential defects, development delays,
installation difficulties or system failures on our business and
reputation;
- changes in general economic, business, regulatory and political
conditions, particularly as they affect the mortgage industry;
- risks associated with the availability of data;
- the effects of our existing leverage on our ability to make
acquisitions and invest in our business;
- our ability to successfully integrate strategic
acquisitions;
- risks associated with our spin-off from FNF, including
limitations on our strategic and operating flexibility as a result
of the tax-free nature of the spin-off; and
- other risks and uncertainties detailed in the “Statement
Regarding Forward-Looking Information,” “Risk Factors” and other
sections of our Annual Report on Form 10-K and other filings with
the SEC.
|
SCHEDULE I |
BLACK KNIGHT, INC. |
Condensed Consolidated Balance
Sheets |
(Unaudited) |
(In millions) |
|
|
|
December 31, |
|
2017 |
|
2016 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
16.2 |
|
|
$ |
133.9 |
|
Trade
receivables, net |
201.8 |
|
|
155.8 |
|
Prepaid
expenses and other current assets |
44.6 |
|
|
45.4 |
|
Receivables from related parties |
18.1 |
|
|
4.1 |
|
Total
current assets |
280.7 |
|
|
339.2 |
|
Property
and equipment, net |
179.9 |
|
|
173.0 |
|
Computer
software, net |
416.8 |
|
|
450.0 |
|
Other
intangible assets, net |
231.6 |
|
|
299.5 |
|
Goodwill |
2,306.8 |
|
|
2,303.8 |
|
Other
non-current assets |
240.1 |
|
|
196.5 |
|
Total
assets |
$ |
3,655.9 |
|
|
$ |
3,762.0 |
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Trade
accounts payable and other accrued liabilities |
$ |
65.0 |
|
|
$ |
55.2 |
|
Accrued
compensation and benefits |
51.9 |
|
|
61.1 |
|
Current
portion of long-term debt |
55.1 |
|
|
63.4 |
|
Deferred
revenues |
59.6 |
|
|
47.4 |
|
Total
current liabilities |
231.6 |
|
|
227.1 |
|
Deferred revenues |
100.7 |
|
|
77.3 |
|
Deferred income taxes,
net |
224.6 |
|
|
7.9 |
|
Long-term debt, net of
current portion |
1,379.0 |
|
|
1,506.8 |
|
Other non-current
liabilities |
11.2 |
|
|
3.5 |
|
Total
liabilities |
1,947.1 |
|
|
1,822.6 |
|
|
|
|
|
Equity: |
|
|
|
Additional paid-in capital |
1,593.6 |
|
|
810.8 |
|
Retained
earnings |
201.4 |
|
|
65.7 |
|
Accumulated other comprehensive earnings (loss) |
3.9 |
|
|
(0.8 |
) |
Treasury
stock, at cost |
(90.1 |
) |
|
— |
|
Total
shareholders' equity |
1,708.8 |
|
|
875.7 |
|
Noncontrolling
interests |
— |
|
|
1,063.7 |
|
Total
equity |
1,708.8 |
|
|
1,939.4 |
|
Total
liabilities and equity |
$ |
3,655.9 |
|
|
$ |
3,762.0 |
|
|
|
|
|
|
|
|
|
|
SCHEDULE II |
BLACK KNIGHT, INC. |
Condensed Consolidated Statements of
Earnings |
(Unaudited) |
(In millions, except per share
data) |
|
|
|
|
|
Three months ended December 31, |
|
Year ended December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Revenues |
$ |
267.5 |
|
|
$ |
261.5 |
|
|
$ |
1,051.6 |
|
|
$ |
1,026.0 |
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
Operating
expenses |
141.3 |
|
|
149.2 |
|
|
569.5 |
|
|
582.6 |
|
Depreciation and amortization |
52.3 |
|
|
54.1 |
|
|
206.5 |
|
|
208.3 |
|
Transition and integration costs |
4.6 |
|
|
0.1 |
|
|
13.1 |
|
|
2.3 |
|
Total
expenses |
198.2 |
|
|
203.4 |
|
|
789.1 |
|
|
793.2 |
|
Operating income |
69.3 |
|
|
58.1 |
|
|
262.5 |
|
|
232.8 |
|
Other income and
expense: |
|
|
|
|
|
|
|
Interest
expense |
(12.7 |
) |
|
(17.0 |
) |
|
(57.5 |
) |
|
(67.6 |
) |
Other
income (expense), net |
4.5 |
|
|
(0.2 |
) |
|
(12.6 |
) |
|
(6.4 |
) |
Total
other expense, net |
(8.2 |
) |
|
(17.2 |
) |
|
(70.1 |
) |
|
(74.0 |
) |
Earnings before income
taxes |
61.1 |
|
|
40.9 |
|
|
192.4 |
|
|
158.8 |
|
Income tax (benefit)
expense |
(86.1 |
) |
|
6.6 |
|
|
(61.8 |
) |
|
25.8 |
|
Net
earnings |
147.2 |
|
|
34.3 |
|
|
254.2 |
|
|
133.0 |
|
Less: Net earnings
attributable to noncontrolling interests |
— |
|
|
22.5 |
|
|
71.9 |
|
|
87.2 |
|
Net earnings
attributable to Black Knight |
$ |
147.2 |
|
|
$ |
11.8 |
|
|
$ |
182.3 |
|
|
$ |
45.8 |
|
|
|
|
|
|
|
|
|
|
Three months ended December 31, |
|
Year ended December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Earnings per
share: |
|
|
|
|
|
|
|
Net earnings per share
attributable to Black Knight common shareholders: |
|
|
|
|
|
|
|
Basic |
$ |
0.98 |
|
|
$ |
0.18 |
|
|
$ |
2.06 |
|
|
$ |
0.69 |
|
Diluted(1) |
$ |
0.97 |
|
|
$ |
0.17 |
|
|
$ |
1.47 |
|
|
$ |
0.67 |
|
Weighted average shares
of common stock outstanding: |
|
|
|
|
|
|
|
Basic |
150.9 |
|
|
66.1 |
|
|
88.7 |
|
|
65.9 |
|
Diluted(1) |
151.6 |
|
|
68.1 |
|
|
152.4 |
|
|
67.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
______________(1) For the periods presented,
potentially dilutive securities include unvested restricted stock
awards and the shares of Class B common stock prior to the
Distribution. The shares of Class B common stock did not share in
the earnings or losses of Black Knight and were, therefore, not
participating securities. Accordingly, basic and diluted net
earnings per share of Class B common stock have not been presented.
The numerator in the diluted net earnings per share calculation is
adjusted to reflect our income tax expense at an expected effective
tax rate assuming the conversion of the shares of Class B common
stock into shares of Class A common stock on a one-for-one basis,
prior to the Distribution, for the year ended December 31, 2017.
The effective tax rate for the year ended December 31, 2017
was (16.7)%, including the effect of the benefit related to the
revaluation of our net deferred income tax liability and certain
other discrete items recorded during the year. The denominator
includes approximately 63.1 million shares of Class B common stock
outstanding for the year ended December 31, 2017. However, the
approximately 84.8 million shares of Class B common stock for the
three months and year ended December 31, 2016 have been excluded in
computing diluted net earnings per share because including them on
an "if-converted" basis would have an anti-dilutive effect. The
denominator also includes the dilutive effect of approximately 0.7
million and 0.6 million shares of unvested restricted shares of
common stock for the three months and year ended December 31, 2017,
respectively, and approximately 2.0 million shares for the three
months and year ended December 31, 2016.
|
|
|
|
|
Year ended December 31, 2017 |
Earnings before income
taxes |
|
$ |
192.4 |
|
Income tax benefit
excluding the effect of noncontrolling interests |
|
(32.2 |
) |
Net earnings |
|
$ |
224.6 |
|
Diluted shares |
|
152.4 |
|
Diluted net earnings
per share |
|
$ |
1.47 |
|
|
|
|
|
|
|
SCHEDULE III |
BLACK KNIGHT, INC. |
Condensed Consolidated Statements of Cash
Flows |
(Unaudited) |
(In millions) |
|
|
|
Year ended December 31, |
|
2017 |
|
2016 |
Cash flows from
operating activities: |
|
|
|
Net
earnings |
$ |
254.2 |
|
|
$ |
133.0 |
|
Adjustments to reconcile net earnings to net cash provided by
operating activities: |
|
|
|
Depreciation and amortization |
206.5 |
|
|
208.3 |
|
Amortization of debt issuance costs, bond premium and original
issue discount |
3.5 |
|
|
2.7 |
|
Loss on
extinguishment of debt, net |
12.6 |
|
|
— |
|
Deferred
income taxes, net |
(78.4 |
) |
|
3.2 |
|
Equity-based compensation |
18.9 |
|
|
12.4 |
|
Changes
in assets and liabilities: |
|
|
|
Trade and
other receivables, including receivables from related parties |
(52.5 |
) |
|
(6.4 |
) |
Prepaid
expenses and other assets |
1.7 |
|
|
(11.2 |
) |
Deferred
contract costs |
(48.5 |
) |
|
(51.9 |
) |
Deferred
revenues |
35.6 |
|
|
26.2 |
|
Trade
accounts payable and other accrued liabilities |
(2.5 |
) |
|
9.4 |
|
Net cash
provided by operating activities |
351.1 |
|
|
325.7 |
|
Cash flows from
investing activities: |
|
|
|
Additions
to property and equipment |
(27.4 |
) |
|
(38.1 |
) |
Additions
to computer software |
(53.3 |
) |
|
(41.9 |
) |
Business
acquisitions, net of cash acquired |
— |
|
|
(150.2 |
) |
Other
investing activities |
(4.0 |
) |
|
— |
|
Net cash
used in investing activities |
(84.7 |
) |
|
(230.2 |
) |
Cash flows from
financing activities: |
|
|
|
Borrowings |
480.0 |
|
|
55.0 |
|
Senior
Notes redemption |
(390.0 |
) |
|
— |
|
Senior
Notes redemption fee |
(18.8 |
) |
|
— |
|
Debt
service payments |
(214.8 |
) |
|
(149.0 |
) |
Distributions to members |
(75.3 |
) |
|
(48.6 |
) |
Purchases
of treasury stock |
(136.7 |
) |
|
— |
|
Capital
lease payments |
(13.8 |
) |
|
(5.0 |
) |
Tax
withholding payments for restricted share vesting |
(6.1 |
) |
|
— |
|
Debt
issuance costs |
(8.6 |
) |
|
— |
|
Net cash
used in financing activities |
(384.1 |
) |
|
(147.6 |
) |
Net
decrease in cash and cash equivalents |
(117.7 |
) |
|
(52.1 |
) |
Cash and
cash equivalents, beginning of period |
133.9 |
|
|
186.0 |
|
Cash and
cash equivalents, end of period |
$ |
16.2 |
|
|
$ |
133.9 |
|
Supplemental cash flow
information: |
|
|
|
Interest
paid |
$ |
(56.7 |
) |
|
$ |
(60.2 |
) |
Income
taxes paid, net |
$ |
(15.7 |
) |
|
$ |
(21.9 |
) |
|
|
|
|
|
|
|
|
|
SCHEDULE IV |
BLACK KNIGHT, INC. |
Segment Information |
(Unaudited) |
(In millions) |
|
|
|
|
|
Three months ended December 31,
2017 |
|
|
Software Solutions |
|
Data and Analytics |
|
Corporateand
Other |
|
Total |
Revenues |
|
$ |
228.2 |
|
|
$ |
40.2 |
|
|
$ |
(0.9 |
) |
(1) |
$ |
267.5 |
|
Expenses: |
|
|
|
|
|
|
|
|
Operating
expenses |
|
93.1 |
|
|
31.2 |
|
|
17.0 |
|
|
141.3 |
|
Transition and integration costs |
|
— |
|
|
— |
|
|
4.6 |
|
|
4.6 |
|
EBITDA |
|
135.1 |
|
|
9.0 |
|
|
(22.5 |
) |
|
121.6 |
|
Depreciation and
amortization |
|
24.0 |
|
|
4.1 |
|
|
24.2 |
|
(2) |
52.3 |
|
Operating income
(loss) |
|
111.1 |
|
|
4.9 |
|
|
(46.7 |
) |
|
69.3 |
|
Interest expense |
|
|
|
|
|
|
|
(12.7 |
) |
Other income, net |
|
|
|
|
|
|
|
4.5 |
|
Earnings before income
taxes |
|
|
|
|
|
|
|
61.1 |
|
Income tax benefit |
|
|
|
|
|
|
|
(86.1 |
) |
Net earnings |
|
|
|
|
|
|
|
$ |
147.2 |
|
|
|
|
|
|
|
|
|
|
|
|
________________________Note: The Software Solutions segment was
formerly known as the Technology segment.(1) Revenues for Corporate
and Other represent deferred revenue purchase accounting
adjustments recorded in accordance with GAAP.(2) Depreciation and
amortization for Corporate and Other primarily represents net
incremental depreciation and amortization adjustments associated
with the application of purchase accounting recorded in accordance
with GAAP.
|
|
|
|
|
Three months ended December 31,
2016 |
|
|
Software Solutions |
|
Data and Analytics |
|
Corporateand
Other |
|
Total |
Revenues |
|
$ |
219.2 |
|
|
$ |
43.8 |
|
|
$ |
(1.5 |
) |
(1) |
$ |
261.5 |
|
Expenses: |
|
|
|
|
|
|
|
|
Operating
expenses |
|
94.8 |
|
|
39.3 |
|
|
15.1 |
|
|
149.2 |
|
Transition and integration costs |
|
— |
|
|
— |
|
|
0.1 |
|
|
0.1 |
|
EBITDA |
|
124.4 |
|
|
4.5 |
|
|
(16.7 |
) |
|
112.2 |
|
Depreciation and
amortization |
|
26.0 |
|
|
2.3 |
|
|
25.8 |
|
(2) |
54.1 |
|
Operating income
(loss) |
|
98.4 |
|
|
2.2 |
|
|
(42.5 |
) |
|
58.1 |
|
Interest expense |
|
|
|
|
|
|
|
(17.0 |
) |
Other expense, net |
|
|
|
|
|
|
|
(0.2 |
) |
Earnings before income
taxes |
|
|
|
|
|
|
|
40.9 |
|
Income tax expense |
|
|
|
|
|
|
|
6.6 |
|
Net earnings |
|
|
|
|
|
|
|
$ |
34.3 |
|
|
|
|
|
|
|
|
|
|
|
|
________________________Note: The Software Solutions segment was
formerly known as the Technology segment.(1) Revenues for Corporate
and Other represent deferred revenue purchase accounting
adjustments recorded in accordance with GAAP.(2) Depreciation and
amortization for Corporate and Other primarily represents net
incremental depreciation and amortization adjustments associated
with the application of purchase accounting recorded in accordance
with GAAP.
|
SCHEDULE IV (CONTINUED) |
BLACK KNIGHT, INC. |
Segment Information |
(Unaudited) |
(In millions) |
|
|
|
|
|
Year ended December 31, 2017 |
|
|
Software Solutions |
|
Data and Analytics |
|
Corporateand
Other |
|
Total |
Revenues |
|
$ |
893.8 |
|
|
$ |
162.3 |
|
|
$ |
(4.5 |
) |
(1) |
$ |
1,051.6 |
|
Expenses: |
|
|
|
|
|
|
|
|
Operating
expenses |
|
370.8 |
|
|
130.4 |
|
|
68.3 |
|
|
569.5 |
|
Transition and integration costs |
|
— |
|
|
— |
|
|
13.1 |
|
|
13.1 |
|
EBITDA |
|
523.0 |
|
|
31.9 |
|
|
(85.9 |
) |
|
469.0 |
|
Depreciation and
amortization |
|
98.9 |
|
|
15.1 |
|
|
92.5 |
|
(2) |
206.5 |
|
Operating income
(loss) |
|
424.1 |
|
|
16.8 |
|
|
(178.4 |
) |
|
262.5 |
|
Interest expense |
|
|
|
|
|
|
|
(57.5 |
) |
Other expense, net |
|
|
|
|
|
|
|
(12.6 |
) |
Earnings before income
taxes |
|
|
|
|
|
|
|
192.4 |
|
Income tax benefit |
|
|
|
|
|
|
|
(61.8 |
) |
Net earnings |
|
|
|
|
|
|
|
$ |
254.2 |
|
|
|
|
|
|
|
|
|
|
|
|
________________________Note: The Software Solutions segment was
formerly known as the Technology segment.(1) Revenues for Corporate
and Other represent deferred revenue purchase accounting
adjustments recorded in accordance with GAAP.(2) Depreciation and
amortization for Corporate and Other primarily represents net
incremental depreciation and amortization adjustments associated
with the application of purchase accounting recorded in accordance
with GAAP.
|
|
|
|
|
Year ended December 31, 2016 |
|
|
Software Solutions |
|
Data and Analytics |
|
Corporateand
Other |
|
Total |
Revenues |
|
$ |
855.8 |
|
|
$ |
177.5 |
|
|
$ |
(7.3 |
) |
(1) |
$ |
1,026.0 |
|
Expenses: |
|
|
|
|
|
|
|
|
Operating
expenses |
|
368.0 |
|
|
151.0 |
|
|
63.6 |
|
|
582.6 |
|
Transition and integration costs |
|
— |
|
|
— |
|
|
2.3 |
|
|
2.3 |
|
EBITDA |
|
487.8 |
|
|
26.5 |
|
|
(73.2 |
) |
|
441.1 |
|
Depreciation and
amortization |
|
106.2 |
|
|
8.8 |
|
|
93.3 |
|
(2) |
208.3 |
|
Operating income
(loss) |
|
381.6 |
|
|
17.7 |
|
|
(166.5 |
) |
|
232.8 |
|
Interest expense |
|
|
|
|
|
|
|
(67.6 |
) |
Other expense, net |
|
|
|
|
|
|
|
(6.4 |
) |
Earnings before income
taxes |
|
|
|
|
|
|
|
158.8 |
|
Income tax expense |
|
|
|
|
|
|
|
25.8 |
|
Net earnings |
|
|
|
|
|
|
|
$ |
133.0 |
|
|
|
|
|
|
|
|
|
|
|
|
________________________Note: The Software Solutions segment was
formerly known as the Technology segment.(1) Revenues for Corporate
and Other represent deferred revenue purchase accounting
adjustments recorded in accordance with GAAP.(2) Depreciation and
amortization for Corporate and Other primarily represents net
incremental depreciation and amortization adjustments associated
with the application of purchase accounting recorded in accordance
with GAAP.
|
SCHEDULE V |
BLACK KNIGHT, INC. |
Reconciliation of GAAP to Non-GAAP Financial
Measures |
(Unaudited) |
(In millions) |
|
Reconciliation of Revenues to Adjusted
Revenues / |
Adjusted Revenues Excluding the Effect of the
Property Insight Realignment |
|
|
|
|
|
Three months ended December 31, |
|
Year ended December 31, |
Consolidated: |
2017 |
|
2016 |
|
2017 |
|
2016 |
Revenues |
$ |
267.5 |
|
|
$ |
261.5 |
|
|
$ |
1,051.6 |
|
|
$ |
1,026.0 |
|
Deferred
revenue purchase accounting adjustment |
0.9 |
|
|
1.5 |
|
|
4.5 |
|
|
7.3 |
|
Adjusted
Revenues |
268.4 |
|
|
263.0 |
|
|
1,056.1 |
|
|
1,033.3 |
|
Effect of
Property Insight realignment |
— |
|
|
(6.8 |
) |
|
— |
|
|
(30.1 |
) |
Adjusted
Revenues Excluding the Effect of the Property Insight
Realignment |
$ |
268.4 |
|
|
$ |
256.2 |
|
|
$ |
1,056.1 |
|
|
$ |
1,003.2 |
|
Adjusted
Revenues Growth Excluding the Effect of the Property Insight
Realignment |
5 |
% |
|
|
|
5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31, |
|
Year ended December 31, |
Data and
Analytics: |
2017 |
|
2016 |
|
2017 |
|
2016 |
Adjusted
Revenues |
$ |
40.2 |
|
|
$ |
43.8 |
|
|
$ |
162.3 |
|
|
$ |
177.5 |
|
Effect of
Property Insight realignment |
— |
|
|
(6.8 |
) |
|
— |
|
|
(30.1 |
) |
Adjusted
Revenues Excluding the Effect of the Property Insight
Realignment |
$ |
40.2 |
|
|
$ |
37.0 |
|
|
$ |
162.3 |
|
|
$ |
147.4 |
|
Adjusted
Revenues Growth Excluding the Effect of the Property Insight
Realignment |
9 |
% |
|
|
|
10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Earnings to Adjusted
EBITDA |
|
|
|
|
|
Three months ended December 31, |
|
Year ended December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net
earnings |
$ |
147.2 |
|
|
$ |
34.3 |
|
|
$ |
254.2 |
|
|
$ |
133.0 |
|
Depreciation and amortization |
52.3 |
|
|
54.1 |
|
|
206.5 |
|
|
208.3 |
|
Interest
expense |
12.7 |
|
|
17.0 |
|
|
57.5 |
|
|
67.6 |
|
Income
tax (benefit) expense |
(86.1 |
) |
|
6.6 |
|
|
(61.8 |
) |
|
25.8 |
|
Other
(income) expense, net |
(4.5 |
) |
|
0.2 |
|
|
12.6 |
|
|
6.4 |
|
EBITDA |
121.6 |
|
|
112.2 |
|
|
469.0 |
|
|
441.1 |
|
Deferred
revenue purchase accounting adjustment |
0.9 |
|
|
1.5 |
|
|
4.5 |
|
|
7.3 |
|
Equity-based compensation |
4.8 |
|
|
2.9 |
|
|
19.2 |
|
|
12.4 |
|
Debt
and/or equity offering expenses |
1.7 |
|
|
— |
|
|
7.5 |
|
|
0.6 |
|
Spin-off
related transition costs |
2.9 |
|
|
— |
|
|
5.6 |
|
|
— |
|
Acquisition-related costs |
— |
|
|
0.1 |
|
|
— |
|
|
1.7 |
|
Adjusted
EBITDA |
$ |
131.9 |
|
|
$ |
116.7 |
|
|
$ |
505.8 |
|
|
$ |
463.1 |
|
Adjusted
EBITDA Margin |
49.1 |
% |
|
44.4 |
% |
|
47.9 |
% |
|
44.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE V (CONTINUED) |
BLACK KNIGHT, INC. |
Reconciliation of GAAP to Non-GAAP Financial
Measures |
(Unaudited) |
(In millions, except per share
data) |
|
Reconciliation of Net Earnings to Adjusted Net
Earnings |
|
|
|
|
|
Three months ended December 31, |
|
Year ended December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net earnings |
$ |
147.2 |
|
|
$ |
34.3 |
|
|
$ |
254.2 |
|
|
$ |
133.0 |
|
Depreciation and amortization purchase accounting adjustment |
24.0 |
|
|
25.1 |
|
|
92.2 |
|
|
90.1 |
|
Deferred
revenue purchase accounting adjustment |
0.9 |
|
|
1.5 |
|
|
4.5 |
|
|
7.3 |
|
Equity-based compensation |
4.8 |
|
|
2.9 |
|
|
19.2 |
|
|
12.4 |
|
Debt
and/or equity offering expenses |
1.6 |
|
|
— |
|
|
20.1 |
|
|
0.6 |
|
Spin-off
related transition costs |
3.1 |
|
|
— |
|
|
5.8 |
|
|
— |
|
Acquisition-related costs |
— |
|
|
0.1 |
|
|
— |
|
|
1.7 |
|
Legal and
regulatory matters |
(4.3 |
) |
|
0.2 |
|
|
(0.3 |
) |
|
6.4 |
|
Income
tax expense adjustment |
(9.8 |
) |
|
(18.9 |
) |
|
(75.2 |
) |
|
(76.1 |
) |
Deferred
tax revaluation adjustment |
(110.9 |
) |
|
— |
|
|
(110.9 |
) |
|
— |
|
Adjusted Net
Earnings |
$ |
56.6 |
|
|
$ |
45.2 |
|
|
$ |
209.6 |
|
|
$ |
175.4 |
|
|
|
|
|
|
|
|
|
Adjusted Net Earnings
Per Share |
$ |
0.37 |
|
|
$ |
0.30 |
|
|
$ |
1.38 |
|
|
$ |
1.15 |
|
Weighted Average
Adjusted Shares Outstanding |
151.6 |
|
|
153.0 |
|
|
152.4 |
|
|
152.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Information for
Investors: |
|
Information for
Media: |
|
|
|
Bryan Hipsher |
|
Michelle Kersch |
Black Knight |
|
Black Knight |
904.854.3219 |
|
904.854.5043 |
bryan.hipsher@bkfs.com |
|
michelle.kersch@bkfs.com |
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