Debt Purchasing

Portfolio Recovery Associates Wins Award for Business Excellence and Community Involvement

2010-11-09T08:14:01-07:00

NORFOLK, VA -- Portfolio Recovery Associates, Inc. (NASDAQ: PRAA), a company that purchases and manages portfolios of defaulted consumer receivables and provides a broad range of receivables management and payments processing services, today announced that it was honored with the Inside Business Roaring 20 Award for business excellence and community involvement.

The award was presented to Kevin Stevenson, chief financial and administrative officer, during a ceremony at the Lesner Inn, Virginia Beach, Va. on Nov. 4.

The Roaring 20 Award recognizes the fastest-growing companies in Hampton Roads, Virginia that make significant contributions to the local economy. The selection of winners is based on reviews by a panel from award co-sponsor Cherry, Bekaert & Holland, a certified public accounting and consulting firm, who assessed financial statements, as well as data on employment, community giving, economic development, and capital expenditures.

Portfolio Recovery Associates (PRA) was selected based upon its revenue and percentage rate of growth over the company's three most recent fiscal years. Other factors contributing to the company's selection included its ability to overcome challenges and future outlook of long-term sustainability.

"Our ultimate goal is to run a successful business that contributes to the communities we serve," said Steve D. Fredrickson, president, chief executive officer, and chairman of PRA. "We're very honored to receive this top award and most proud of the fact that we're able to balance the bottom line with our commitment to corporate responsibility."

In business since 1996, PRA has earned many awards for its approach to sustainable business growth, community involvement and philanthropic giving. Forbes recently recognized PRA as one of America's 100 Best Small Companies. The company is also consistently recognized on the "hot growth" rankings lists of other premier financial publications.

About Portfolio Recovery Associates, Inc.
Portfolio Recovery Associates, Inc. (PRA) is the parent of companies whose business revolves around the detection, collection, and processing of both unpaid and normal-course receivables originally owed to credit grantors, governments, retailers and others. PRA'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. PRA also provides fee-based services, including collateral-location services for credit originators via its IGS subsidiary, revenue administration, audit and debt discovery/recovery services for government entities through both its RDS and MuniServices businesses and class action claims recovery services and related payment processing through its CCB subsidiary.

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Mecox Bay Financial Expands Debt Buyer Finance Program

2010-11-08T07:46:28-07:00

Mecox Bay Financial, a private finance company based in New York, announced today that it is committed to expanding its finance program to small and mid-sized non-performing consumer debt buyers across the United States. Mecox closed its first transaction earlier this year, and has actively expanded its pipeline of debt buyers over the past few months.

Mecox has found that the problem for many small debt buyers is that their access to capital is still limited. Many banks are no longer extending credit lines to small debt buyers. These banks do not understand how to price portfolio purchases and therefore cannot get comfortable with the risk.

The partners of Mecox however have extensive experience in the non-performing consumer debt industry. They understand the sector, and realize the current opportunity in the industry.

Mecox announced that it is committed to working with debt buyers to expand their business, and will provide flexible financing solutions (from $5 to $20 million) to companies that need capital for new portfolio purchases, acquisitions, or refinancing.

Mecox will work with companies throughout the United States that have experienced management teams and successful track records, with the goal of developing long-term relationships and helping clients to build their financial strength.

For more information, please email jchin@mecoxbayfinancial.com.

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Portfolio Recovery Named to Forbes 2010 List "100 Best Small Companies in America"

2010-11-05T08:23:05-07:00

NORFOLK, VA -- For the fourth consecutive year, Portfolio Recovery Associates, Inc. (NASDAQ: PRAA) is named among the 100 Best Small Companies in America, according to the prestigious annual rankings list sponsored by global business magazine, Forbes.

Portfolio Recovery Associates (PRA) is ranked 56 among the top 100 small businesses listed in the Nov. 8, 2010 edition of the publication. PRA was also named to the list in 2009, 2008 and 2007.

"We're thrilled to be recognized by Forbes magazine as one of the 100 Best Small Companies in America for the fourth year running," said Steve Fredrickson, chairman, president and chief executive officer of PRA. "This designation by one of the best, global business publications says that PRA is a company to be noted for its continued success."

The methodology Forbes uses for consideration includes: candidates that have been publicly traded for at least one year and generate annual revenue between $5 million and $1 billion, with a stock price minimum of $5 per share. Rankings are based on earnings growth, sales growth and return on equity in the past 12 months and over five years.

About Portfolio Recovery Associates, Inc.

Portfolio Recovery Associates, Inc. (PRA) is the parent of companies whose business revolves around the detection, collection, and processing of both unpaid and normal-course receivables originally owed to credit grantors, governments, retailers and others. PRA'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. Subsidiaries of PRA also provide fee-based services, including collateral-location services for credit originators via its IGS subsidiary, revenue administration, audit and debt discovery/recovery services for government entities through both its RDS and MuniServices businesses and class action claims recovery services and related payment processing through its CCB subsidiary.

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FirstCity Financial Will Host its Third Quarter 2010 Conference Call on November 9

2010-11-04T07:29:48-07:00

WACO, Texas -- In conjunction with FirstCity Financial Corporation’s (NASDAQ: FCFC) Third Quarter 2010 earnings release, before market open on November 9, 2010, the company will host a conference call later that morning at 9:00 a.m. Central Time.

During the call, FirstCity management will discuss Third Quarter 2010 results. A question and answer session will follow the prepared remarks.

Event: FirstCity Financial Corporation 3rd Quarter 2010 Conference Call
Date: November 9, 2010
Time: 9:00 a.m. Central Time
Host: James T. Sartain, FirstCity’s President and CEO

Web Access:
FirstCity’s web page: http://www.fcfc.com
CCBN’s Investor websites: http://www.streetevents.com; www.earnings.com

Dial In Access:
Domestic: 800-510-0219
International: 617-614-3451
Passcode: 29177691

FirstCity Financial Corporation is a diversified financial services company with operations dedicated primarily to distressed asset acquisitions and special situations investments. FirstCity has offices in the U.S. and affiliate organizations in Europe and Latin America. FirstCity common stock is listed on the NASDAQ Global Select Market (NASDAQ: FCFC).

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Asset Acceptance Sees Gains in Collections, Revenue, Income in Q3; Debt Buying Up

2010-11-03T07:32:47-07:00

WARREN, Mich. -- Asset Acceptance Capital Corp. (Nasdaq: AACC), a leading purchaser and collector of charged-off consumer debt, today reported results for the quarter ended September 30, 2010.

Financial highlights from the third quarter 2010 included:

Cash collections of $78.9 million; Revenues of $48.5 million; Operating expenses of $48.0 million, or 60.9% percent of cash collections; Net income of $4.2 million, or $0.14 per diluted share; Impact of the previously announced exit of healthcare collection activities conducted by our Premium Asset Recovery Corporation ("PARC") subsidiary as follows: Gain on sale of healthcare receivables of $0.5 million or $0.02 per diluted share before income taxes; Restructuring charges related to the closing of the Deerfield Beach, FL office housing PARC of $1.3 million or ($0.04) per diluted share before income taxes; Tax benefit of $5.5 million or $0.18 per diluted share.

The Company's operational highlights included:

Acquired $41.3 million (net of buybacks) in charged-off consumer receivable portfolios with an aggregate value of $1,177.0 million, or 3.51% of face value; Closed the Deerfield Beach, FL office, an action that is expected to yield an annualized savings of $2.5 million; Acquisition of substantially all of the assets of BSI eSolutions, LLC, the Company's collections platform software partner for $0.8 million; and On October 4th, announced closure of our Chicago office, which is expected to yield annual savings of $2.0 million.

Rion Needs, President and CEO of Asset Acceptance Capital Corp, commented: "We maintained momentum during the third quarter, advancing on a number of our previously stated strategic initiatives. Specifically, we continued to drive collections, achieving the first year-over-year growth in roughly two years. While we have made significant progress, in terms of increasing purchasing, eliminating underperforming assets, and focusing on operating efficiencies, there is more work to be done. Looking ahead, we remain focused on the actions and initiatives that will favorably impact long-term profitability and productivity without sacrificing top-line collections."

Third Quarter 2010 Financial Highlights

Please refer to Supplemental Financial Data beginning on page six for additional information about the Company's financial results for the three and nine months ended September 30, 2010 and comparable prior year periods. In addition, please see a reconciliation of net income according to Generally Accepted Accounting Principles ("GAAP") to Adjusted EBITDA on page 13.

Asset Acceptance reported cash collections of $78.9 million in the quarter ended September 30, 2010, an increase of 1.3% compared to cash collections of $77.8 million in the year-ago period. Excluding healthcare collections, growth was 3.3% for the quarter.

Total revenues were $48.5 million in the third quarter of 2010, an increase of 1.7% compared to total revenues of $47.7 million in the third quarter of 2009. Amortization of purchased receivables in the third quarter of 2010 was 40.0% of total cash collections versus 39.0% of total cash collections in the third quarter of 2009. The Company reported a net impairment reversal of $0.7 million on purchased receivables in the third quarter, versus a net impairment charge of $6.8 million in the prior year quarter.

Total operating expenses of $48.0 million for the third quarter were $0.1 million lower than the 2009 third quarter. For the 2010 third quarter, Asset Acceptance reported operating expenses of 60.9% of cash collections, down from 61.8% of cash collections in the prior year quarter. Excluding restructuring and impairment charges of $1.3 million and $1.2 million in third quarter 2010 and third quarter 2009, respectively, operating expenses were 59.3% of cash collections compared to 60.3% in third quarter 2009.

Net income for the quarter was $4.2 million, or $0.14 per fully diluted share, compared to a loss of $1.6 million, or $0.05 per fully diluted share, in the third quarter of 2009. For the third quarter 2010, the Company recorded restructuring charges related to the closing of the Deerfield Beach office housing the PARC subsidiary and a gain on the sale of healthcare receivables, which resulted in a combined impact of $(0.02) per fully diluted share before income taxes. The Company also recorded a tax benefit as part of the PARC transaction of $0.18 per fully diluted share.

Earnings Before Interest, Taxes, Depreciation and Amortization, including purchased receivables amortization ("Adjusted EBITDA"), was $33.9 million in the third quarter of 2010, up 4.0% compared to the year-ago period.

During the third quarter of 2010, the Company invested $41.3 million to purchase charged-off consumer debt portfolios with a face value of $1,177.0 million, for a blended rate of 3.51%. This compares to the prior-year third quarter, when the Company invested $36.9 million to purchase consumer debt portfolios with a face value of $1,585.6 million, representing a blended rate of 2.33% of face value. All purchase data is adjusted for buybacks.

First Nine Months 2010 Financial Highlights

For the nine-month period ended September 30, 2010, the Company reported cash collections of $252.3 million compared to cash collections of $259.2 million in the first nine months of 2009, a decline of 2.7%. Excluding healthcare, total collections declined 2.2% for the first nine months of 2010.

Total revenues in the first nine months of 2010 were $150.9 million versus $153.7 million in the first nine months of 2009. For the first nine months of 2010, amortization of purchased receivables was 40.9% of total cash collections versus 41.0% of total cash collections in the same period of last year. Net impairment reversals for the first nine months of 2010 totaled $1.6 million versus net impairments of $17.1 million for the first nine months of 2009.

Total operating expenses in the first nine months of 2010 increased 2.1% to $143.1 million, from $140.2 million in the first nine months of 2009. For the first nine months of 2010, Asset Acceptance reported operating expenses of 56.7% of cash collections, up from 54.1% of cash collections in the prior year period.

Net income for the first three quarters of 2010 was $5.4 million, or $0.17 per fully diluted share, compared to net income of $3.8 million, or $0.12 per fully diluted share, in the same period of 2009. In the third quarter 2010, the Company recorded restructuring charges related to the PARC exit and a gain on the sale of healthcare receivables, which resulted in a combined impact of $(0.02) per fully diluted share before income taxes. The Company also recorded a tax benefit as part of the PARC transaction of $0.18 per fully diluted share.

For the nine-month period ended September 30, 2010, Adjusted EBITDA declined to $115.9 million, a decrease of 7.3% when compared to the same nine-month period in 2009.

During the first nine months of 2010, the Company invested $119.6 million to purchase charged-off consumer debt portfolios with a face value of $3.5 billion, for a blended rate of 3.42% of face value. This compares to the prior-year nine month period, when the Company invested $78.3 million to purchase consumer debt portfolios with a face value of $3.0 billion, representing a blended rate of 2.58%. All purchase data is adjusted for buybacks.

Reid Simpson, Senior Vice President and CFO commented: "Our third quarter performance showed meaningful progress on a number of fronts, including year-over-year improvement in cash collections, operating expenses, Adjusted EBITDA and purchasing. We are beginning to see the impact, in terms of collections, from our ramp up in purchasing, and remain on-track to reach our purchasing goals for the remainder of 2010."

Third Quarter 2010 Earnings Conference Call

Asset Acceptance Capital Corp. will host a conference call at 4:30 p.m. Eastern today to discuss these results and current business trends. To listen to a live webcast of the call and access the presentation, please go to the investor section of the Company's web site at www.AssetAcceptance.com. A replay of the webcast will be available until November 2, 2011.

About Asset Acceptance Capital Corp.
For more than 45 years, Asset Acceptance has provided credit originators, such as credit card issuers, consumer finance companies, retail merchants, utilities and others an efficient alternative in recovering defaulted consumer debt. For more information, please visit www.AssetAcceptance.com.

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Portfolio Recovery Associates Reports Big Jumps in Collections, Revenue and Profit in Q3

2010-10-28T08:16:19-07:00

NORFOLK, VA -- Portfolio Recovery Associates, Inc. (NASDAQ: PRAA), a company that purchases, collects and manages portfolios of defaulted consumer receivables and provides a broad range of receivables management and payments processing services, today reported net income of $18.5 million for the quarter ended September 30, 2010. Net income increased 83% from $10.1 million in the same period a year earlier. Earnings were $1.08 per diluted share for the third quarter of 2010 compared with $0.65 in the third quarter of 2009, representing an increase of 66%.

In the third quarter of 2010, total revenue was up 39% from the year-earlier period to a record $95.5 million. Total revenue consists of cash collections reduced by amounts applied to principal on the Company's owned debt portfolios, plus fee income earned from its fee-for-service businesses. During the third quarter of 2010, the Company applied 41.8% of cash collections to reduce the carrying basis of its owned debt portfolios, compared with 41.2% in the third quarter of 2009. The third quarter 2010 amortization rate included a $6.5 million net allowance charge, equivalent to approximately $4.0 million after tax, or 23 cents per diluted share, against certain pools of finance receivables accounts.

"Portfolio Recovery Associates has had a very strong year thus far, even in the face of a continued weakened economy," said Steven D. Fredrickson, chairman, president and chief executive officer. "In the third quarter, we produced record cash collections, record cash receipts and record revenue. At the same time, net income and earnings per share both demonstrated strong growth. This fine performance was due to long-term initiatives in a number of areas, including the continued success of our bankruptcy business, our ongoing search for greater operational efficiencies, the expansion of our internal legal collections channel, and the continued contributions of our fee-based businesses."

Fredrickson continued: "I am extremely pleased with PRA's performance across all of our businesses. The credit, of course, goes to our staff, which has continued to work smarter and more efficiently than ever."

Financial and Operating Highlights

-- Cash collections increased 49% to a record $137.4 million in the third quarter of 2010, up from $92.4 million in the year-ago period. Call center and other collections increased 6%, external legal collections increased 32%, internal legal collections grew 96%, and purchased bankruptcy collections gained 140% when compared with the year-earlier period.

-- Up 96% from the prior year, internal legal collections grew to $12.1 million in the third quarter of 2010. Internal legal collections, in which the Company uses its own staff attorneys or in select cases, third-party attorneys working on a fixed price basis, represent an important, emerging collections channel the Company has been developing over the past four years.

-- Productivity finished at a record $190 for the first nine months of 2010 vs. $145 for all of 2009. Productivity is measured by cash collections per hour paid, the Company's key measure of collector performance. Excluding the impact of trustee remittances from purchased bankrupt accounts, the comparison is $129 for the first nine months of 2010, compared with $113 for all of 2009. Excluding trustee remittances on purchased bankrupt accounts and external legal collections, the comparison is $101 for the first nine months of 2010 and $87 for all of 2009.

-- In the third quarter, revenue was a record $95.5 million, up 39% when compared with the same period a year ago, driven by record cash receipts of $152.9 million, up 43.4% from $106.6 million a year earlier. Cash receipts are comprised of both cash collections and revenue from the Company's fee-based businesses.

-- The Company's net allowance charge totaled $6.5 million in the third quarter, representing 0.81% of net finance receivables at period-end and 4.75% of cash collections.

Acquired in 68 portfolios from nine different sellers, the Company purchased $1.38 billion of face-value debt during the third quarter of 2010 for $92.5 million.

-- The Company's fee-for-service businesses generated revenue of $15.5 million in the third quarter of 2010, up 9% from $14.2 million in the same period a year ago, due primarily to the acquisition of CCB earlier this year. These businesses accounted for 16.2% of the Company's overall revenue in the third quarter of 2010, down from 20.8% in Q3 2009.

-- During the third quarter of 2010, the Company recorded ongoing non-cash equity-based compensation expense of $1.0 million, equivalent to approximately $612,000 after tax, or 4 cents per diluted share.

-- The Company's cash balances were $20.3 million as of Sept. 30, 2010. During the third quarter, the Company made net repayments of $1.0 million on its line of credit, leaving it with $288.5 million in outstanding borrowings at quarter's end. Remaining borrowing availability under the line was $76.5 million at Sept. 30, 2010.

Kevin P. Stevenson, chief financial and administrative officer, said: "The third quarter of 2010 was another strong one for Portfolio Recovery Associates. A number of factors drove this performance, including the continued maturation of our sizeable investments in bankruptcy portfolios and steady improvements in call center and legal collections. Reflecting these improvements, recoveries per hour paid, our core measure of productivity, finished the first nine months of the year at a record $190. Taken together, these factors allowed us to overcome a $6.5 million allowance charge, additional significant investments in our legal pipeline, and a still-weak U.S. economy."

The Company's nine-month 2010 earnings totaled $52.8 million, or $3.15 per diluted share, compared with $31.9 million, or $2.07 per diluted share, for the first nine months of 2009. First-nine month 2010 revenue was $272.0 million, compared with $207.9 million in the first nine months of 2009.

Conference Call Information

The Company will hold a conference call with investors tonight, 5:30 p.m. EDT, Wednesday, Oct. 27, 2010, to discuss its third-quarter results. Investors can access the call live by dialing 888-713-4213 for domestic callers or 617-213-4865 for international callers using the pass code 82740845. Investors may also listen via webcast at the Company's website, www.portfoliorecovery.com.

Following the live call, 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 91118122. The replay will be available approximately two hours after today's conference call ends. There will also be an archived webcast available at the Company's website.

For the fourth consecutive year, Portfolio Recovery Associates has been named to the Forbes 100 Best Small Companies in America annual rankings list, as announced in the Nov. 8, 2010, edition of the business magazine. PRA is ranked 56 among the top 100 small businesses listed.

About Portfolio Recovery Associates, Inc.
Portfolio Recovery Associates' business revolves around the detection, collection, and processing of both unpaid and normal-course receivables originally owed to credit grantors, governments, retailers and others. 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 fee-based services, including collateral-location services for credit originators via its IGS subsidiary, revenue administration, audit and debt discovery/recovery services for government entities through both its RDS and MuniServices businesses and class action claims recovery services and related payment processing through its CCB subsidiary.

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Encore Capital Group Announces Increases in Collections, Revenue and Income in Q3

2010-10-27T07:10:22-07:00

SAN DIEGO -- Encore Capital Group, Inc. (Nasdaq: ECPG), a leading distressed consumer debt buying and recovery company, today reported consolidated financial results for the third quarter ended September 30, 2010.

For the third quarter of 2010:

Gross collections were $157.4 million, a 25% increase over the $125.7 million in the same period of the prior year.
Investment in receivable portfolios was $77.9 million, to purchase $2.6 billion in face value of debt, compared to $77.7 million, to purchase $2.2 billion in face value of debt in the same period of the prior year. Available capacity under the revolving credit facility, subject to borrowing base and applicable debt covenants, was $81.0 million as of September 30, 2010. Total debt, consisting of the revolving credit facility, senior secured notes and capital lease obligations, was $334.9 million as of September 30, 2010, an increase of 11% from $303.1 million as of December 31, 2009.
Revenue from receivable portfolios, net was $93.8 million, a 23% increase over the $76.4 million in the same period of the prior year. Revenue recognized on receivable portfolios, as a percentage of portfolio collections, excluding the effects of net portfolio allowances, remained at approximately 64%, compared to the same period of the prior year.
Revenue from bankruptcy servicing was $4.1 million, a 5% increase over the $3.9 million in the same period of the prior year.
Total operating expenses were $74.3 million, a 21% increase over the $61.5 million in the same period of the prior year. Operating expense (excluding stock-based compensation expense and bankruptcy servicing operating expenses) per dollar collected decreased to 43.9% compared to 45.4% in the same period of the prior year.
Adjusted EBITDA, defined as net income before interest, taxes, depreciation and amortization, stock-based compensation expense and portfolio amortization, was $89.7 million, a 28% increase over the $70.0 million in the same period of the prior year.
Total interest expense was $4.9 million, compared to $4.0 million in the same period of the prior year.
Net income was $12.3 million or $0.49 per fully diluted share, compared to net income of $9.0 million or $0.37 per fully diluted share in the same period of the prior year.
Tangible book value per share, computed by dividing total stockholders' equity less goodwill and identifiable intangible assets by the number of diluted shares outstanding, was $10.72 as of September 30, 2010, a 16% increase over $9.23 as of December 31, 2009.

Additional Financial Information:

Certain events affected the comparability of 2010 versus 2009 quarterly results, as outlined below. For a more detailed comparison of 2010 versus 2009 results, refer to Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2010.

In the third quarter of 2010, the Company recorded net portfolio allowances of $6.1 million, compared to $4.3 million in the same period of the prior year.
In the third quarter of 2010, the Company expensed $13.1 million in upfront court costs, compared to $9.7 million in the same period of the prior year.

Conference Call and Webcast

The Company will hold a conference call today at 2:00 p.m. Pacific time / 5:00 p.m. Eastern time to discuss third quarter results. Members of the public are invited to listen to the live conference call via the Internet.

To hear the presentation, log on at the Investor Relations page of the Company's website at www.encorecapitalgroup.com.For those who cannot listen to the live broadcast, a replay of the conference call will be available shortly after the call at the same location.

Non-GAAP Financial Measures

The Company has included information concerning Adjusted EBITDA because management utilizes this information, which is materially similar to a financial measure contained in covenants used in the Company's credit agreement, in the evaluation of its operations and believes that this measure is a useful indicator of the Company's ability to generate cash collections in excess of operating expenses through the liquidation of its receivable portfolios. The Company has included information concerning total operating expenses excluding stock-based compensation expense and bankruptcy servicing operating expenses in order to facilitate a comparison of approximate cash costs to cash collections for the debt purchasing business in the periods presented. The Company has included information concerning tangible book value per share because management believes that this metric is a meaningful measure of the equity deployed in the business. Adjusted EBITDA, operating expenses excluding stock-based compensation expense and bankruptcy servicing operating expenses, and tangible book value per share have not been prepared in accordance with generally accepted accounting principles (GAAP). These non-GAAP financial measures should not be considered as alternatives to, or more meaningful than, net income and total operating expenses as indicators of Encore Capital Group's operating performance and total stockholders' equity as an indicator of Encore Capital Group's financial condition. Further, these non-GAAP financial measures, as presented by Encore Capital Group, may not be comparable to similarly titled measures reported by other companies. The Company has included a reconciliation of Adjusted EBITDA to reported earnings under GAAP, a reconciliation of operating expenses excluding stock-based compensation expense and bankruptcy servicing operating expenses to the GAAP measure total operating expenses, and a reconciliation of tangible book value per share to the GAAP measure total stockholders' equity in the attached financial tables.

About Encore Capital Group, Inc.
Encore Capital Group is a leader in consumer debt buying and recovery. We purchase portfolios of defaulted consumer receivables from banks, credit unions, consumer finance companies, commercial retailers, auto finance companies and telecommunication companies and manage them by partnering with individuals as they repay their obligations and work toward financial recovery.

Headquartered in San Diego, we are a publicly traded NASDAQ Global Select company (ticker symbol: ECPG) and a component stock in the Russell 2000 and the Wilshire 4500. Our performance derives from our sophisticated and widespread use of analytics, our investments in data and consumer intelligence, our cost leadership position (based on our enterprise-wide, account-level cost database as well as our India facility), and our commitment to see principled intent drive every consumer interaction. More information on the Company can be found at www.encorecapitalgroup.com.

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Executive Change: Portfolio Recovery Associates Appoints Elizabeth Shumadine VP, Biz Dev

2010-10-26T07:25:59-07:00

NORFOLK, VA -- Portfolio Recovery Associates, Inc., (NASDAQ: PRAA) a company that purchases and manages portfolios of defaulted consumer receivables and provides a broad range of receivables management and payments processing services, today announced the hiring of Elizabeth Shumadine as vice president, Business Development.

Shumadine was appointed to the new role at Portfolio Recovery Associates (PRA) this month. Her position involves efforts to diversify and grow PRA's base of revenues. She reports to Kent McCammon, president of Revenue Enhancement Services and Business Development.

"With the addition of Ms. Shumadine, PRA reiterates its commitment to grow through the acquisition of additional fee service businesses in the government, legal and automotive vertical markets focusing on revenue enhancement services for our clients," said McCammon. "She brings a wealth of experience and dedication to the position and will accelerate PRA's business development activity."

Prior to joining the company, Shumadine's work experience included investment banking at Morgan Stanley in New York and Merrill Lynch in San Francisco and Los Angeles; commercial banking at SunTrust Banks, Inc. in Norfolk, Va.; and financial executive education at SNL Financial in Charlottesville, Va.

Shumadine received a bachelor's degree in Economics from the University of Virginia (UVA) in Charlottesville, Va., and a Masters of Business Administration from the University of Virginia Darden School of Business.

About Portfolio Recovery Associates, Inc.

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Intrum Justitia Reports Higher Earnings in Q3 on Decline in Revenue

2010-10-26T07:25:59-07:00

Intrum Justitia Interim Report, January–September 2010

Third quarter 2010

(NOTE: $1 = 6.73 SEK)

Consolidated revenues for the third quarter of 2010 amounted to SEK 922.9 M (1,023.2), a decline of 9.8 percent. Currency effects amounted to 6.3 percent. Organic growth was 2.2 percent (5.2).
Operating earnings (EBIT) amounted to SEK 211.2 M (147.2). Adjusted for currency effects and non recurring items in the United Kingdom & Ireland region in the third quarter of 2009, operating earnings rose by 11.0 percent. Revenues and operating earnings include net Purchased Debt revaluations of SEK 0.8 M (6.5).
Adjusted for revaluations of Purchased Debt portfolios, the operating margin amounted to 23.0 percent, compared with 20.2 percent for the third quarter of 2009 (adjusted for non recurring costs in 2009).
Net earnings for the third quarter amounted to SEK 144.9 M (98.7) and earnings per share before dilution amounted to SEK 1.82 (1.24).
Disbursements for investments in Purchased Debt amounted to SEK 263.1 M (179.7), an increase of 46.4 percent.

Comment by CEO and President Lars Wollung:

Intrum Justitia is developing well given the prevailing market conditions with a slow macroeconomic recovery, primarily in Southern Europe. We continue to improve the Group's operating earnings, with an increase of 11 percent in the third quarter, adjusted for currency effects and non recurring costs in 2009. The operating margin strengthened to 23 percent, compared with 20 percent for the corresponding quarter in 2009.

In the Credit Management service line, operating earnings (adjusted for currency effects) rose by 21 percent in the third quarter and the margin strengthened to 18 percent from 14 percent last year (adjusted for non-recurring costs attributable to the restructuring of operations in the United Kingdom). Over the year, we have implemented extensive personnel cutbacks throughout the Group and worked hard to enhance the efficiency of our operations and increase our market activities. This is now giving results in our Credit Management operations, which is of course pleasing.

In Purchased Debt, we are seeing a favorable trend in existing portfolios with a return of 16 percent for the quarter. The lower level of investment in 2009 has had a negative impact on revenues and earnings for the quarter. However, we are seeing increasing activity in the area and investments rose by 46 percent in the third quarter compared with last year.

In the region Sweden, Norway, Denmark, Finland, Baltics and Russia, we saw a highly favorable trend during the quarter with both increased revenues and operating earnings. Adjusted for currency effects, operating earnings rose 10 percent in the third quarter. During the quarter, the process of enhancing the efficiency of our operations while increasing sales efforts has produced the desired results, particularly in Scandinavia where we have implemented an extensive restructuring program this year. The trend in Credit Management in Sweden and Finland is positive, while we are now seeing the effects of reduced debtor fees in the Norwegian market.

In the United Kingdom & Ireland region, we are showing stable profitability and existing Purchased Debt portfolios are developing as planned. During the third quarter, we made a small number of investments in new portfolios, but a recovery in the Purchased Debt market has yet to materialize.

In the Netherlands & Belgium region Credit Management services are developing well. In local currency, the growth in revenue for the region was 6 percent adjusted for the change in accounting principles introduced in the second quarter.

In the Poland, Czech Republic, Slovakia & Hungary region, operating earnings for the third quarter improved to a loss of SEK 2 M, as an effect of the cost reduction program initiated during the year. Investments in legal measures are having an effect and revenues from early investments are now visible in earnings. However, we are continuing to increase the number of cases in the legal systems, particularly in Poland, which is increasing costs.

Although the France, Spain, Portugal & Italy region continues to be burdened by macroeconomic conditions, performance remains good. As a consequence of decreased Purchased Debt over the past year, operating earnings decreased by 15 percent adjusted for currency effects. Thanks to rigorous efforts to improve internal efficiency and intensified sales activities, a positive profitability trend can now be seen in Credit Management in most countries in the region.

We continue to work on cost efficiency and other measures to strengthen profitability in the Switzerland, Germany & Austria region. We are seeing the effects of the program of measures initiated early in the year, although progress has been slower than expected. A lower level of investment in Purchased Debt over the past year has had a negative impact on earnings and revenues.

In the third quarter, we implemented the last in a long line of measures to create a strong organization able to meet demand for value adding Credit Management services throughout Europe. By creating three larger regions, we will be able to launch new services more rapidly and derive economies of scale within the Intrum Justitia Group. The three regions new regions are

Northern Europe (Denmark, Estonia, Finland, Latvia, Lithuania, Norway, Poland and Sweden), Central Europe (Austria, Czech Republic, Germany, Hungary, Slovakia and Switzerland) and Western Europe (Belgium, France, Italy, Ireland, Netherlands, Portugal, Spain and United Kingdom)

Today, we see that demand is increasing for services combining traditional Credit Management with Purchased Debt. As a market leader, with an integrated range of services in these areas, Intrum Justitia benefits by this trend.

Intrum Justitia is Europe’s leading Credit Management Services (CMS) group and offers services designed to measurably improve clients’ cash flows and long-term profitability. Intrum Justitia was founded in 1923, has around 3,400 employees in 22 countries and revenues of approximately SEK 4.1 billion in 2009. Intrum Justitia AB is listed on NASDAQ OMX Stockholm since 2002. For further information, please visit www.intrum.com

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Better Business Bureau Changes Ratings Methodology, Benefiting Debt Collectors

2010-10-25T07:16:42-07:00

The Council of Better Business Bureaus has confirmed to ACA International that it has adopted and implemented a revision to its ratings methodology regarding the definition of "customer." This change, while not specific to the debt collection industry, will have a positive impact on the ratings of ACA members who are also members of their local Better Business Bureau.

One of the measures the BBB uses to rate companies is the number of complaints versus the size of a business. In the past, this was based on the number of customers the business serves—not on the number of consumers contacted. For debt collection agencies, ratings were skewed due to this definition of "customer."

Under the BBB's new definition of "consumer," debt collection agency size will now be based on the number of customers served and the number of consumers it contacts each year.

The following language is a direct citation from BBB communication with ACA:

"Customers" are those persons/entities that fall into one or more of the following categories:

Consumers who purchased a product or service from the business; or

Consumers who entered into a contractual relationship with the business; or

Consumers who directly received services from the business, or were contacted by the business with a demand for payment of money owed, ONLY IF the BBB generally accepts complaints from those consumers against this type of business.

Note: The above definition is intended to include debtors who are contacted by a collection agency if the BBB generally accepts complaints from debtors against collection agencies.

BBB has formally announced the policy change to each of its local presidents but the change cannot be automatically implemented. This new rating methodology will only go into effect when an ACA member contacts their local BBB to update their company profile. Contact your local BBB and update your profile to ensure your company size is based on the number of customers you serve and the number of consumers you contact each year.

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Intrum Justitia Welcomes Vote on Revised Late Payment Directive

2010-10-25T07:16:42-07:00

STOCKHOLM, Sweden--Intrum Justitia welcomes European Parliament vote on revised Late Payments Directive but regrets that late payment by consumers has not been addressed.

On 20 October, the European Parliament adopted a series of amendments to the EU Late Payments Directive.

Intrum Justitia, Europe’s leading Credit Management Services Company, has played an instrumental role in highlighting the gravity of late payments to EU decision makers, the media and the wider public. Intrum Justitia’s European Payment Index report has been widely used as a reference in the debate.

“Intrum Justitias mission is to be a catalyst of a sound economy. By that we mean that we should take an active role in ensuring that businesses across Europe can pursue fair and safe trades, and that sustainable credit management can help improve cash-flows. In line with this it is a vital part of our business to influence the legislators in EU, says Lars Wollung, President and CEO of Intrum Justitia.

“We welcome the revision of the Directive and the efforts to allow companies to get compensated when their clients fail to pay on time, as late payments are both costly and increase the financial risk. We also see a need to address late payments by consumers as late or no payments by other businesses and by consumers are equally harmful to businesses,” says Lars Wollung.

In the 2010 European Payment Index nearly 60% of all respondents called for national and pan-European legislation on late payments by consumers - such a move would make a significant change and in some cases help to save businesses.

Key points of the text as voted by the European Parliament:

For public-to-business payments, the standard deadline for bill payments is set at 30 days. However, the sides may expressly agree to extend the deadline for up to 60 days.

For business-to-business payments, the deadline is set at 30 days unless specified otherwise in the contract.

Member States are free to decide to set up a standard deadline for up to 60 days for public healthcare facilities.

A statutory interest rate on overdue payments of the reference rate plus at least 8%.

The creditor is entitled to a fixed sum of €40 (minimum) as a compensation for recovery costs.

“The revised Directive is a step in the right direction, and Intrum Justitia will continue working with decision makers so that the regulation of late payments by consumers as well as by businesses becomes even stronger in the future,” Lars Wollung concludes.

Intrum Justitia is Europe’s leading Credit Management Services (CMS) group and offers services designed to measurably improve clients’ cash flows and long-term profitability. Intrum Justitia was founded in 1923, has around 3,400 employees in 22 countries and revenues of approximately SEK 4.1 billion in 2009. Intrum Justitia AB is listed on NASDAQ OMX Stockholm since 2002. For further information, please visit www.intrum.com