2009-10-29 21:10:04 -
NORFOLK, VA -- (Marketwire) -- 10/29/09 -- Portfolio Recovery Associates, Inc. (NASDAQ: PRAA), a company that purchases, collects and manages portfolios of defaulted consumer receivables and provides a broad range of accounts receivable management services, today reported net income of $10.1 million, or $0.65 per diluted share, for the quarter ended September 30, 2009.
The Company's third-quarter 2009 profit represents a 12% decrease from net income of $11.5 million, or $0.75 per diluted share, in the same period a year earlier.
Total revenue in the third quarter of 2009 was unchanged from the year-earlier period at $68.6 million. Total revenue consists of cash collections reduced by amounts applied to principal on the Company's owned debt portfolios, plus commissions earned from its fee-for-service businesses. During the third quarter of 2009, the Company applied 41.2% of cash collections to reduce the carrying basis of its owned debt portfolios, compared with 36.5% in the third quarter of 2008. The third quarter 2009 amortization rate included an $8.0 million net allowance charge, equivalent to approximately $4.8 million after tax, or 31 cents per diluted share, against certain pools of finance receivables accounts. During the third quarter of 2009, the Company recorded ongoing non-cash equity-based compensation expense of $589,000, equivalent to approximately $350,000 after tax, or 2 cents per diluted share.
"Portfolio Recovery Associates continued to perform solidly in the third quarter of 2009, despite an economy still struggling to recover from recession. Not only did the Company produce strong results operationally, but we continued to build for the future -- further refining our best-in-class platform and taking advantage of our access to capital to make significant portfolio acquisitions. An $8 million net allowance charge, equivalent to 31 cents a share, did undermine earnings growth.
Nevertheless, Portfolio Recovery Associates is well-positioned to emerge from this economic downturn a stronger and more efficient competitor," said Steven D. Fredrickson, Chairman, President and Chief Executive Officer.
Based on the quantity and quality of portfolios purchased over the past 18 months, continued advances in collections efficiency, and the level of expertise and scale achieved in the bankruptcy business, Portfolio Recovery Associates is budgeting internally for substantial revenue and earnings growth in 2010.
Financial and Operating Highlights
-- Cash collections rose 11% to a record $92.4 million in the third
quarter of 2009, up from $83.0 million in the year-ago period. Call center
and other collections increased 11%, external legal collections decreased
29%, internal legal collections grew 194%, and purchased bankruptcy
collections gained 45% when compared with the year-earlier period.
The table below displays our cash collections by source, by quarter for the past five quarters:
Cash Collection Source ($ in
thousands) Q32009 Q22009 Q12009 Q42008 Q32008
-------- -------- -------- -------- --------
Call Center & Other
Collections $ 48,590 $ 50,052 $ 50,914 $ 41,268 $ 43,949
External Legal Collections 15,330 16,527 17,790 18,424 21,590
Internal Legal Collections 6,196 4,263 3,539 2,652 2,106
Purchased Bankruptcy 22,251 19,637 17,628 16,904 15,362
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"Portfolio Recovery Associates turned in a strong third-quarter operating performance overall, highlighted by record cash collections of $92.4 million, year-over-year productivity improvements at all call centers, and portfolio acquisitions totaling $76.7 million even in a tight credit environment. The weak economy did impact our fee-for-service businesses, particularly in the government services area, and contributed to an $8 million net allowance charge. However, we remain extremely confident in our strategy of developing Portfolio Recovery Associates' businesses for the long term and look forward to emerging from this recession a stronger competitor than ever," said Kevin P. Stevenson, Chief Financial and Administrative Officer.
For the first nine months of 2009, the Company's earnings totaled $31.9 million, or $2.07 per diluted share, compared with $34.8 million, or $2.27 per diluted share, for the first nine months of 2008. Year-to-date 2009 revenue was $207.9 million, compared with $196.3 million in the first nine months of 2008.
Conference Call Information
The Company will hold a conference call with investors tonight, Thursday, October 29, 2009, at 5:30 p.m. EDT to discuss its third quarter results.
Investors can access the call live by dialing 888-713-4209 for domestic callers or 617-213-4863 for international callers using the pass code 60750066.
In addition, investors may listen to the call via a taped replay, which will be available for seven days, by dialing 888-286-8010 for domestic callers and 617-801-6888 for international callers using the pass code 10218295. The replay will be available approximately two hours after today's conference call ends. Investors may also listen via webcast, both live and archived, at the Company's website, www.portfoliorecovery.com :
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About Portfolio Recovery Associates, Inc.
Portfolio Recovery Associates is a full-service provider of outsourced receivables management and related services. The Company's primary business is the purchase, collection and management of portfolios of defaulted consumer receivables. These are the unpaid obligations of individuals to credit originators, which include banks, credit unions, consumer and auto finance companies, and retail merchants. Portfolio Recovery Associates also provides a broad range of collection services, including revenue administration for government entities through its RDS and MuniServices businesses, and collateral-location services for credit originators via its IGS subsidiary.
Statements herein which are not historical, including Portfolio Recovery Associates' or management's intentions, hopes, beliefs, expectations, representations, projections, plans or predictions of the future, including future revenue and earnings growth, statements with respect to future contributions of IGS, RDS and MuniServices to earnings and future portfolio-purchase opportunities, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements include references to Portfolio Recovery Associates' presentations and web casts. The forward-looking statements in this press release are based upon management's beliefs, assumptions and expectations of the Company's future operations and economic performance, taking into account currently available information. These statements are not statements of historical fact. Forward-looking statements involve risks and uncertainties, some of which are not currently known to us.
Actual events or results may differ from those expressed or implied in any such forward-looking statements as a result of various factors, including the risk factors and other risks that are described from time to time in the Company's filings with the Securities and Exchange Commission including but not limited to its annual reports on Form 10-K, its quarterly reports on Form 10-Q and its current reports on Form 8-K, filed with the Securities and Exchange Commission and available through the Company's website, which contain a more detailed discussion of the Company's business, including risks and uncertainties that may affect future results. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof.
Information in this press release may be superseded by more recent information or statements, which may be disclosed in later press releases, subsequent filings with the Securities and Exchange Commission or otherwise. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or to reflect any change in events, conditions or circumstances on which any such forward-looking statements are based, in whole or in part.
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Contact:
Investor Relations
757-519-9300 ext. 13010
info@portfoliorecovery.com :
