Analytics Provider Sees Jump in Earnings

Clayton Holdings, a provider of analytics, consulting and outsourced services for capital market firms, lenders, loan servicers and investors, said net income totaled $7.9 million on record revenue of $239.2 million for the full year of 2006. The net income figure was an increase of 58% from the 2005 level. Net revenue was up 15.3%.

The company said its gross profit, at $84.3 million, was up 17% from one year earlier. However, diluted earnings per share came in at $0.41, unchanged from a year earlier.

Frank Filipps, chairman and CEO of Clayton, touted the company's fourth-quarter results, saying that Clayton ended its first year as a public company "on a strong note.

"For the quarter and the full year, Clayton registered significant growth in revenues and profits and improvements in margins. This was a year when total originations declined by 14% and MBS issuance declined by 4%," he noted in the company's earnings release.

He said the company migrated its due-diligence business to its centralized underwriting platform during the year.

"Our results also benefited from the excellent growth in our non-due-diligence businesses - surveillance, conduit, staffing, special servicing and consulting - which registered year-over-year revenue growth of 55% and accounted for 45% of fourth-quarter revenues," he added.

At the end of last year, Clayton's credit risk management and surveillance business was monitoring $419 billion in assets for investment banks and institutional investors in mortgage-related securities. That was a 36% increase from one year earlier.

The company reported revenue from special servicing totaling $3.7 million in the fourth quarter, accounting for about 6% of Clayton's revenue. For the full year, special servicing brought in $13 million of revenue, 5.5% of the company's total.

Snapshot: Clayton's Non-Due-Diligence Revenue Drivers

Service/Business '06 Full Year Revenue

Surveillance Services $34.9 Million

Conduit Support $26.9 Million

Professional Staffing $16.2 Million

Special Servicing $13.1 Million

Other $13.0 Million

Source: Clayton Holdings (c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com

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