Portfolio Recovery Associates Reports First Quarter 2012 Results
(firmenpresse) - NORFOLK, VA -- (Marketwire) -- 05/07/12 -- 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 first quarter 2012 results.
First Quarter Highlights
Cash collections of $218.0 million, including Mackenzie Hall collections, up 31% from the first quarter of 2011.
First quarter revenue of $140.1 million, including Mackenzie Hall revenue of $4.6 million, up 25% from the year-earlier quarter.
First quarter net income of $25.5 million, an increase of 10% over the first quarter of 2011.
First quarter diluted EPS of $1.47, compared with $1.34 in the first quarter of 2011.
Annualized return on average equity of 16.7% for the quarter.
"The first quarter of 2012 exhibited significant growth for PRA and continued the momentum we generated in 2011, culminating in strong financial results," said Steve Fredrickson, chairman, president and chief executive officer.
"Our expanded focus beginning this quarter on legal collections from those who can, but won't, pay back their debt, performed better than we anticipated. Legal collection costs of $23.7 million were on target, with legal cash collections increasing 42% over first quarter 2011. Total cash collections increased 31% year-over-year, as we added new consumer debt and bankrupt customer portfolios of $111.4 million this quarter," Fredrickson said.
"Revenue from our fee-for-service businesses slightly improved year-over-year, largely due to the inclusion of Mackenzie Hall. We look forward to the growth and diversification opportunities that Mackenzie Hall provides us," Fredrickson said. "Our focus on enhancing shareholder value -- driven in part through our share repurchase program -- has set the stage for sustained growth and success in 2012. We continue to identify opportunities to invest in our growth and improve our operational performance as PRA strives to be the standard by which all other firms in our industry are measured."
Total revenues were $140.1 million for the quarter, up 25% when compared with the same period a year ago. This was driven by cash receipts of $233.9 million in the first quarter, up 28% from $182.5 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 31% to $218.0 million in the first quarter of 2012 from $166.7 million in the year-ago period. Cash collections reflected the seasonal strength typically experienced in the first quarter, coupled with improvements made in the Company's collections operations. The table below displays cash collections by source, by quarter for the past five quarters. Mackenzie Hall collections are included only in Q12012:
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 $23.3 million in the first quarter of 2012 from $15.6 million in the year-ago quarter. Total legal collections advanced 42% over the first quarter of 2011. Strong future growth in legal collections is expected as a result of an expanded focus on legal collections activities.
During the quarter, the Company applied 43.0% of cash collections to reduce the carrying value of its owned debt portfolios, up from 42.4% in the first quarter of 2011. The first quarter 2012 principal amortization rate included $0.5 million in net allowance charges against certain pools of finance receivables accounts.
Cash collections produced income on finance receivables of $124.2 million in the first quarter of 2012, net of allowance charges. Income on finance receivables, net of allowance charges, increased 29% from the first quarter of 2011.
For the first quarter of 2012, domestic Core portfolio income was $83.7 million, including net allowance reversals of $0.5 million. Net domestic Core portfolio income increased 31% over the first quarter of 2011. Net Bankruptcy portfolio income for the first quarter of 2012 was $39.5 million, net of allowance charges of $1.0 million. Net Bankruptcy portfolio income increased 23% over the first quarter of 2011.
The Company purchased $1.46 billion of face-value finance receivables during the first quarter of 2012 for $111.4 million. These receivables were acquired in 91 defaulted debt portfolios from 16 different sellers.
Fee Income
The Company's fee-for-service businesses generated revenue of $15.9 million in the first quarter of 2012, stable with revenue of $15.8 million reported in the same period a year ago. The inclusion of Mackenzie Hall plus year-over-year growth in fee income generated by PRA Government Services helped to offset a year-over-year decline in fee income from PRA Location Services and Claims Compensation Bureau. Together, the fee-for-service businesses accounted for 11% of the Company's overall revenues in the first quarter of 2012.
Operating income was $44.4 million in the first quarter of 2012, compared with $42.7 million in the first quarter of 2011, representing an increase of 4%. The operating margin decreased from 38.2% in the year-earlier quarter to 31.7% in the recently completed quarter. The decline can be attributed, in large part, to the increased legal collection expenses associated with the Company's focus on driving net incremental cash flow from this portion of the business.
Cash balances were $28.1 million as of March 31, 2012.
During the first quarter of 2012, the Company had net borrowings of $45.0 million under its line of credit, resulting in an outstanding balance of $265 million at quarter-end. Remaining borrowing availability, subject to normal borrowing and collateral provisions, under the line was $142.5 million as of March 31, 2012. Subsequent to quarter-end, the Company's line of credit was amended to increase the credit limit by $51 million.
As previously announced, the Board of Directors has authorized a share repurchase program of up to $100 million of the Company's outstanding shares of common stock. As of May 3, 2012, the Company had repurchased approximately 100,000 shares at an average purchase price of approximately $68 per share. Repurchases 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 at 5:30 p.m. ET, Monday, May 7, 2012, to discuss its first quarter results. Investors may access the call by dialing 888-679-8040 for domestic callers or 617-213-4851 for international callers using the pass code 40970062. A replay will be available approximately one hour after the call ends and will remain available for seven days. Investors may 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 99187654.
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 3,000 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: 07.05.2012 - 20:00 Uhr
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