Portfolio Recovery Associates Reports Third Quarter 2011 Results
(firmenpresse) - NORFOLK, VA -- (Marketwire) -- 10/27/11 -- Portfolio Recovery Associates, Inc. (NASDAQ: PRAA), a specialized financial services company and market leader in the consumer debt purchase and collection industry, today reported results for the quarter ended September 30, 2011.
Third Quarter Highlights
Revenue increased 20% to $114.3 million as cash collections grew 33% to a record $182.2 million
Net income of $25.5 million, an increase of 38% over the comparable year-ago period
EPS totaled $1.48 in the quarter, compared with EPS of $1.08 in the third quarter of 2010
Portfolio acquisitions totaled $122.1 million
"Our third quarter results are indicative of our efforts to drive the top line, identify and improve operational efficiencies and maintain a strong and flexible capital structure," said Steven D. Fredrickson, chairman, president and chief executive officer. "The key drivers of our results continue to be strong cash collections from both bankruptcy and core portfolios, supported by an impressive performance at our call centers. We were able to deliver these results despite a weak and volatile economy. Looking ahead, we will continue to focus on strengthening our core business, reducing costs and allocating the necessary resources to support continued growth in our fee-for-service businesses."
Total revenues for the third quarter of 2011 grew 20% from the year-earlier period to $114.3 million. Total revenues consist of cash collections reduced by amounts applied to principal on the Company's owned debt portfolios, plus fee income earned from our fee-for-service businesses. During the third quarter of 2011, the Company applied 43.5% of cash collections to reduce the carrying value of its owned debt portfolios, up from 41.8% in the third quarter of 2010. The third quarter 2011 principal amortization rate included a $741,000 net allowance charge against certain pools of finance receivables accounts.
Financial and Operating Review
Kevin P. Stevenson, chief financial and administrative officer, said: "The earnings power of our debt purchase business was evident during Q3, as our strong results from both bankrupt and core portfolios more than overcame soft performance at our fee-for-service businesses."
Cash collections rose 33% to a record $182.2 million in the third quarter of 2011, up from $137.4 million in the year-ago period. Call center and other collections increased 24%, external legal collections increased 35%, internal legal collections grew 36%, and purchased bankruptcy collections gained 40% when compared with the year-earlier period. The table below displays cash collections by source, by quarter for the past five quarters:
Internal legal collections grew to $16.4 million in the third quarter of 2011 from $12.1 million in the year-ago quarter. Internal legal collections, in which the Company uses its own staff, represent an important, developing collections channel.
Productivity rose to a record $245 per collector hour paid for the first nine months of 2011 from $194 for all of 2010. Productivity, the Company's key measure of collector performance, is measured by cash collections per collector hour paid. Excluding the impact of trustee remittances on purchased bankrupt accounts, the comparison is $156 for the first three quarters of 2011, compared to $129 for all of 2010. Excluding trustee remittances on purchased bankrupt accounts and external legal collections, the comparison is $118 for the first nine months of 2011 and $100 for all of 2010.
In the third quarter of 2011, total revenues were $114.3 million, up 20% compared with the same period a year ago. This was driven by record cash receipts of $193.6 million in the third quarter, up 27% from $152.9 million a year earlier. Cash receipts are comprised of both cash collections and revenues from the Company's fee-for-service businesses.
The Company's net allowance charge totaled $0.7 million in the third quarter of 2011, representing 0.08% of net finance receivables at period-end and 0.41% of cash collections.
The Company purchased $5.68 billion of face-value debt during the third quarter of 2011 for $122.1 million. This was acquired in 95 portfolios from 12 different sellers.
The Company's fee-for-service businesses generated revenues of $11.4 million in the third quarter of 2011, a decline of 27% 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 10% of the Company's overall revenues in the third quarter of 2011, down from 16% in the third quarter of 2010.
Cash balances were $30.0 million as of September 30, 2011, down from $41.1 million as of December 31, 2010. During the third quarter of 2011, the Company had net borrowings of $10 million on its line of credit, leaving it with $260 million in outstanding borrowings at quarter end. Remaining borrowing availability under the line was $147.5 million as of September 30, 2011.
The Company's earnings for the first nine months of 2011 totaled $74.2 million, or $4.31 per diluted share, compared with $52.8 million, or $3.15 per diluted share, for the first nine months of 2010. Year-to-date 2011 revenues were $340.8 million, compared to $272.0 million in the first nine months of 2010.
The Company will hold a conference call with investors this evening at 5:30 p.m. EDT, Thursday, October 27, 2011, to discuss its third-quarter results. Investors can access the call by dialing 888-679-8034 for domestic callers or 617-213-4847 for international callers using the pass code 49267189. The 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 68599056.
Investors may also 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. (NASDAQ: PRAA), a specialized financial services company, is a market leader in the consumer debt purchase and collection industry. The Company, which has purchased more than $63 billion of face value defaulted consumer debt since its inception, has operations in 10 states, more than 27 million customer accounts and more than 2,500 employees. Portfolio Recovery Associates also provides a broad range of fee-based services through its subsidiaries: PRA Government Services, LLC; MuniServices, LLC; PRA Location Services, LLC; and Claims Compensation Bureau, LLC. Working every day with people in financial distress, the Company seeks to engage collaboratively with its customers to create realistic, affordable repayment plans. Portfolio Recovery Associates has a longstanding culture of compliance, and for five consecutive years has been named to the Forbes 100 Best Small Companies in America annual rankings list (2007 - 2011). 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: 27.10.2011 - 20:00 Uhr
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News-ID 81240
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