Productivity Programs
As previously announced, the Company intends to incur cash and non-cash charges of approximately $15 million over the course of 2018 relating to its expansion of certain efficiency programs and infrastructure enhancements. These charges will be reflected in the Company’s GAAP financial results and will be excluded from Adjusted EBITDA and Adjusted EPS metrics which are non-GAAP measures. This program is expected to increase overall margins in line with long term strategic targets by improving operating efficiency and accelerating the transformation of certain technology and data platforms. In addition, the Company expects to further consolidate its real estate footprint, reduce SG&A costs and automate and/or outsource certain business activities.
Liquidity and Capital Resources
As of June 30, 2018, the Company had cash and cash equivalents of $85 million compared with $119 million at December 31, 2017. Total debt as of June 30, 2018 was $1,830 million versus $1,777 million as of December 31, 2017. As of June 30, 2018, the Company had available capacity on its revolving credit facility of $580 million.
Net operating cash provided by continuing operations for the twelve months ended June 30, 2018 was $392 million. Free cash flow (FCF) for the twelve months ended June 30, 2018 totaled $314 million, which represented 61% of adjusted EBITDA. FCF is defined as net cash provided by continuing operating activities less capital expenditures for purchases of property and equipment, capitalized data and other intangible assets.
In April 2018, the Company acquired ALM for $120 million which was funded through available capacity on its revolving credit facility. ALM is headquartered in Oklahoma City and provides subscription based software solutions to more than 40,000 appraiser professionals across the United States.
In the second quarter of 2018, the Company repurchased 872,000 of its common shares for $45 million.
Updated Financial Guidance and Assumptions
Based on the actual first half financial results and currently available projections of market conditions including U.S. origination market volumes for the second half of 2018, the Company is providing the following updates to its 2018 full year guidance:
| ($ in millions except adjusted EPS) |
January 31, 2018
|
July 25, 2018
|
||||||||
| Revenue | $1,825 - $1,875 | $1,825 - $1,875 | ||||||||
| Adjusted EBITDA(1) | $455 - $485 | $480 - $500 | ||||||||
| Adjusted EPS (1) | $2.45 - $2.65 | $2.70 - $2.85 |
