Portfolio Recovery Associates Reports Fourth Quarter and Full Year 2011 Results
(firmenpresse) - NORFOLK, VA -- (Marketwire) -- 02/16/12 -- Portfolio Recovery Associates, Inc. (NASDAQ: PRAA), a specialized financial and business services company and market leader in the consumer debt purchase and collection industry, today reported its fourth quarter and full year 2011 results.
Fourth Quarter Highlights
Record net income of $26.6 million, an increase of 29% over the fourth quarter of 2010
Record diluted EPS of $1.54, compared with $1.20 in the fourth quarter of 2010
Record revenue of $118.1 million, up 17% from the year-earlier quarter
Cash collections of $180.3 million, up 25% from the fourth quarter of 2010
Annualized return on average equity of 18.2% for the quarter
The Company's earnings for the full year 2011 totaled $100.8 million, or $5.85 per diluted share, compared with $73.5 million, or $4.35 per diluted share, for the full year 2010. Full year 2011 revenues were $458.9 million, compared to $372.7 million for the full year 2010.
"In 2011, PRA again experienced significant growth in revenues and net income, as well as improved operating efficiencies and a strengthened capital structure," said Steven D. Fredrickson, chairman, president and chief executive officer. "Our steadfast adherence to our core principles, our ability to evaluate and purchase high-value portfolios and our unwavering commitment to best practices for our industry helped to drive net income crossing the $100 million threshold for the first time in our history. We believe PRA has never been better positioned for long-term growth, and we intend to continue investing in our future through organic growth and select merger and acquisition opportunities. This is best illustrated through our acquisition of Mackenzie Hall in January 2012."
Total revenues were $118.1 million for the quarter, up 17% when compared with the same period a year ago. This was driven by cash receipts of $195.7 million in the fourth quarter, up 22% from $160.3 million a year earlier. The Company defines cash receipts as the total of cash collections and fee income.
Finance Receivable Income
Cash collections from finance receivables rose 25% to $180.3 million in the fourth quarter of 2011 from $144.4 million in the year-ago period. Cash collections reflected the seasonal weakness typically experienced in the fourth quarter. The table below displays cash collections by source, by quarter for the past five quarters:
Internal legal collections, in which the Company uses its own staff attorneys, continue to represent an important, developing collections channel. Internal legal collections increased to $17.6 million in the fourth quarter of 2011 from $12.8 million in the year-ago quarter.
During the quarter, the Company applied 43.0% of cash collections to reduce the carrying value of its owned debt portfolios, up from 41.3% in the fourth quarter of 2010. The fourth quarter 2011 principal amortization rate included $3.1 million in net allowance charges against certain pools of finance receivables accounts.
Cash collections produced income on finance receivables of $102.7 million in the fourth quarter of 2011, net of allowance charges of $3.1 million. Income on finance receivables, net of allowance charges, increased 21% from the fourth quarter of 2010.
For the fourth quarter of 2011, Core portfolio income was $63.9 million, net of allowance charges of $2.1 million. Net Core portfolio income increased 21% over the fourth quarter of 2010. Net Bankruptcy portfolio revenue for the fourth quarter of 2011 was $38.9 million, net of allowance charges of $1.0 million. Net Bankruptcy portfolio income increased 22% over the fourth quarter of 2010.
The Company purchased $1.21 billion of face-value finance receivables during the fourth quarter of 2011 for $88.9 million. These receivables were acquired in 83 portfolios from 12 different sellers.
Fee Income
The Company's fee-for-service businesses generated revenue of $15.3 million in the fourth quarter of 2011, a decline of 4% from the same period a year ago due largely to a decrease in revenues generated by PRA Location Services. Together, the fee-for-service businesses accounted for 13% of the Company's overall revenues in the fourth quarter of 2011, down from 16% in the fourth quarter of 2010. Compared with the third quarter of 2011, fee income increased by $3.9 million or 35%, due primarily to seasonal increases in the Government Services business along with an increase in fee income generated by CCB.
Operating income was $46.0 million in the fourth quarter of 2011, compared with $36.3 million in the fourth quarter of 2010, representing an increase of 27%. The operating margin increased from 36.0% in the year-earlier quarter, to 38.9% in the recently completed quarter.
The Company measures finance receivable collections productivity in a variety of ways, due to the varying nature of the Company's collections channels. All measurements of collections productivity improved over the fourth quarter of 2010, and are presented in the accompanying Financial Highlights.
Cash balances were $26.7 million as of December 31, 2011.
During the fourth quarter of 2011, the Company had net repayments of $40 million on its line of credit, which had a balance outstanding of $220 million at year-end. Remaining borrowing availability, subject to normal borrowing and collateral provisions, under the line was $187.5 million as of December 31, 2011.
On January 16, 2012, the Company announced the acquisition of Mackenzie Hall Holdings Limited, a leading UK debt collection and purchase group.
Under the terms of the transaction, PRA purchased 100% of the equity interest in Mackenzie Hall, for approximately GBP 33.1 million (approximately $51 million) in cash. PRA anticipates the acquisition will be immediately accretive to earnings.
Based in Kilmarnock, Scotland, Mackenzie Hall offers outsourced and contingent consumer debt recovery on behalf of banks, credit providers and debt purchasers, as well as distressed and dormant niche portfolio purchasing. Mackenzie Hall employs approximately 170 people at its headquarters and contact center in Kilmarnock.
The Board of Directors has authorized a share repurchase program of up to $100 million of the Company's outstanding shares of common stock. The program will be administered by a special committee of the Board. Repurchases would depend on prevailing market conditions and other factors. The repurchase program may be suspended or discontinued at any time.
The Company will hold a conference call with investors this evening at 5:30 p.m. EST, Thursday, February 16, 2012, to discuss its fourth-quarter and full year results. Investors can access the call by dialing 888-713-4211 for domestic callers or 617-213-4864 for international callers using the pass code 25454734. A replay will be available approximately one hour after the call ends and will remain available for seven days. Investors can access the replay of the call by dialing 888-286-8010 for domestic callers or 617-801-6888 for international callers using the pass code 35636577.
Investors also may listen to the conference call via webcast, both live and archived, at the company's website, at the Investor Relations main page.
Portfolio Recovery Associates, Inc. (PRA) is a specialized financial and business services company. A market leader in the consumer debt purchase and collection industry, PRA also provides a broad range of fee-based services, including revenue enhancement for local governments; vehicle location, skip-tracing and collateral recovery for auto lenders, governments, and law enforcement; contingent consumer debt recovery on behalf of banks, credit providers, and debt purchasers; and filing of class action claims on behalf of institutional investors, manufacturers, and retailers. PRA has a longstanding culture of compliance, engaging collaboratively with its customers to create realistic, affordable repayment plans. The Company has more than 2,800 employees in 10 U.S. states and the United Kingdom.
PRA has been named to the Forbes 100 Best Small Companies in America annual rankings list for five consecutive years (2007 - 2011). It was ranked as one of BusinessWeek's 100 Hot Growth Companies in 2003, 2005 and 2007, and was recognized by Fortune as one of America's Top Small Businesses in 2006 and 2007. The Company's shares are publicly traded on the NASDAQ Global Select Market under the symbol "PRAA." Additional information about Portfolio Recovery Associates is available at .
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 its subsidiaries 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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Datum: 16.02.2012 - 21:00 Uhr
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News-ID 115787
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