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PRA Reports Fourth Quarter and Full Year 2012 Results

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NORFOLK, Va., Feb. 13, 2013 (GLOBE NEWSWIRE) -- Portfolio Recovery Associates, Inc. (PRA), a financial and business services company, today reported its fourth quarter and full year 2012 results.

Fourth Quarter Highlights

  • Cash collections of $229.2 million, up 27% from the fourth quarter of 2011.
  • Revenues of $154.3 million, up 31%.
  • Net income of $35.8 million, up 35%.
  • Diluted EPS of $2.10, compared with $1.54 a year ago.
  • Annualized return on average equity of 20.6%.
  • $199.1 million of portfolio purchases, up from $88.9 million in the fourth quarter of 2011.

For the full year 2012, net income was $126.6 million, compared with $100.8 million in 2011, an increase of 26%. Diluted earnings per share increased from $5.85 in 2011 to $7.39 in 2012. Revenues increased from $458.9 million in 2011 to $592.8 million in 2012.

"PRA again reported record operating results in the fourth quarter and for full year 2012, continuing a trend of strong year-over-year growth," said Steve Fredrickson, chairman, president and chief executive officer, PRA.

"Our financial results were led by increases in cash collections from our receivables portfolios. Cash collections were $908.7 million in 2012, up 29% over 2011. In 2012, we received a record 8 million payments on our debt portfolios. This includes growth in the number of recurring payment plans from customers to eliminate their debt, which provides a low-cost, recurring revenue stream for PRA. This record level of payments places PRA in an excellent position to continue to prosper in 2013 and beyond," Fredrickson said.

FINANCIAL AND OPERATING REVIEW – FOURTH QUARTER 2012

Revenues

  • Revenues were $154.3 million for the quarter, up 31% from a year ago. This was driven by cash receipts of $245.4 million, up 25% from $195.7 million in Q4 2011. PRA defines cash receipts as the total of cash collections and fee income.

Finance Receivables Income and Cash Collections

  • Finance receivables income, driven by cash collections from finance receivables, increased 34% to $138.1 million in Q4 2012 from $102.7 million in the year-ago period. Cash collections from finance receivables advanced 27% over Q4 2011, led by increases in core portfolio legal collections. These legal collections increased 49% in Q4 2012 from a year ago, due in part to PRA's expanded focus on collections from customers with an ability to pay back their debt, but who refuse attempts to collect. Bankruptcy portfolio collections and call center collections increased 21% and 19%, respectively.

Cash Collection Source ($ in thousands) Q42012 Q32012 Q22012 Q12012 Q42011
Call Center & Other Collections $ 72,624 $ 72,394 $ 73,582 $ 79,805 $ 61,227
External Legal Collections 41,521 39,913 41,464 34,852 26,316
Internal Legal Collections 23,968 25,650 25,361 23,345 17,615
Purchased Bankruptcy Collections 91,098 91,095 92,018 79,994 75,166
Total Cash Collections $ 229,211 $ 229,052 $ 232,425 $ 217,996 $ 180,324

  • In Q4 2012, principal amortization of finance receivables was $91.1 million, or 39.8% of cash collections. This compares with $77.6 million, or 43.0% of cash collections, recorded in the year-earlier quarter. Principal amortization includes net allowance charges of $2.3 million against certain pools of finance receivables accounts recorded in the quarter, compared with $3.1 million recorded in Q4 2011.

Fee Income

  • PRA's fee-based businesses generated Q4 2012 fee income of $16.2 million, compared with $15.3 million in the same period a year ago, which accounted for 10% of PRA's total revenues in Q4 2012 compared with 13% a year ago. Fee income from PRA's UK business acquired in January 2012 more than offset a decrease in fee income from PRA's US fee-based businesses, which continued to be impacted by the economic downturn. The company anticipates that its U.S. subsidiary, Claims Compensation Bureau, may generate substantially higher fee income during 2013, with a single, large case expected to provide $4 million to $6 million in fees during the first half of the year.

Operating Expenses and Income

  • Q4 2012 operating expenses were $94.3 million, up $22.1 million or 31% from the year-earlier quarter. The increase was due in large part to costs associated with business growth, including a $9.1 million increase in personnel-related expenses, an $8.1 million increase in legal costs and fees related to PRA's expanded focus on legal collections, and the inclusion of operating expenses of PRA's U.K. business acquired in January 2012.
  • Q4 2012 operating income was $60.0 million, compared with $46.0 million in Q4 2011, an increase of 31%. The operating margin was 38.9% in both quarterly periods.

Balance Sheet and Purchasing

  • During the fourth quarter of 2012, PRA invested $199.1 million in portfolio purchases, compared with $88.9 million in the fourth quarter of 2011. Fourth quarter 2012 domestic purchasing volume was $196.5 million, and was comprised of $111.0 million in bankruptcy portfolio purchases and $85.5 million in core portfolio purchases. Fourth quarter 2012 bankruptcy portfolio investment included the acquisition of portfolios from National Capital Management, LLC announced on December 21, 2012. Domestic receivables purchased during the quarter were acquired in 94 portfolios from 15 different sellers.
  • Cash balances were $32.7 million as of December 31, 2012.
  • As of December 31, 2012, long-term debt was $200.5 million and revolving debt was $127.0 million. Remaining borrowing availability, subject to normal borrowing and collateral provisions, under PRA's credit facility was $273.0 million.

Conference Call Information

PRA will hold a conference call today with investors at 6:15 p.m. ET to discuss its Q4 2012 results. Investors may access the call by calling 888-695-7639 in the U.S. or 970-315-0482 outside the U.S. The conference ID is 92957383. A replay will be available approximately one hour after the call ends and will remain available until February 20, 2013. Investors may access the replay of the call by calling 855-859-2056 in the U.S. or 404-537-3406 outside the U.S. To access the replay, use the conference ID 92957383. Investors also may listen to the conference call via webcast, both live and archived, at http://ir.PortfolioRecovery.com/events.cfm.

About PRA

Portfolio Recovery Associates, Inc. (Nasdaq:PRAA) is a financial and business services company operating in the U.S. and the U.K. As a leader in the U.S. debt buying industry, PRA returns capital to banks and other creditors that helps expand financial services for consumers. PRA collaborates with its customers to create affordable, realistic debt repayment plans in compliance with consumer protection laws. The company also provides a broad range of fee-based services to local governments and law enforcement, U.S. businesses, institutional investors, global hedge funds, and U.K. banks and creditors.

PRA was recognized as one of Fortune's 100 Fastest Growing Companies in 2012. The company also was named to Forbes' Top 25 Best Small Companies in America in 2012, and has been annually ranked as one of Forbes' 100 Best Small Companies since 2007. For more information, visit www.PortfolioRecovery.com.

The Portfolio Recovery Associates logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=13727

About Forward-Looking Statements

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.

Portfolio Recovery Associates, Inc.
Unaudited Consolidated Income Statements
(in thousands, except per share amounts)
Three Months Three Months Year Year
Ended Ended Ended Ended
December 31, December 31, December 31, December 31,
2012 2011 2012 2011
Revenues:
Income recognized on finance receivables, net $ 138,068 $ 102,743 $ 530,635 $ 401,895
Fee income 16,183 15,344 62,166 57,040
Total revenues 154,251 118,087 592,801 458,935
Operating expenses:
Compensation and employee services 44,849 35,759 168,356 138,202
Legal collection fees 9,153 5,940 34,393 23,621
Legal collection costs 14,619 9,710 72,325 38,659
Agent fees 1,411 1,647 5,906 7,653
Outside fees and services 7,292 5,607 28,867 19,310
Communications 7,073 5,487 29,110 23,372
Rent and occupancy 1,728 1,539 6,781 5,891
Depreciation and amortization 3,681 3,188 14,515 12,943
Other operating expenses 4,456 3,255 16,484 12,416
Total operating expenses 94,262 72,132 376,737 282,067
Gain on sale of property -- -- -- 1,157
Income from operations 59,989 45,955 216,064 178,025
Other income and (expense):
Interest income 2 -- 10 7
Interest expense (1,818) (2,512) (9,041) (10,569)
Income before income taxes 58,173 43,443 207,033 167,463
Provision for income taxes 22,441 16,776 80,934 66,319
Net income $ 35,732 $ 26,667 $ 126,099 $ 101,144
Adjustment for (loss)/income attributable to redeemable noncontrolling interest (70) 77 (494) 353
Net income attributable to Portfolio Recovery Associates, Inc. $ 35,802 $ 26,590 $ 126,593 $ 100,791
Net income per common share attributable to Portfolio Recovery Associates, Inc.:
Basic $ 2.12 $ 1.55 $ 7.45 $ 5.89
Diluted $ 2.10 $ 1.54 $ 7.39 $ 5.85
Weighted average number of shares outstanding:
Basic 16,883 17,121 16,997 17,110
Diluted 17,072 17,269 17,123 17,230
Portfolio Recovery Associates, Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands, except per share amounts)
December 31, December 31,
ASSETS 2012 2011
Cash and cash equivalents $ 32,687 $ 26,697
Finance receivables, net 1,078,951 926,734
Accounts receivable, net 10,486 7,862
Property and equipment, net 25,312 25,727
Goodwill 114,688 61,678
Intangible assets, net 20,364 14,596
Other assets 11,668 7,829
Total assets $ 1,294,156 $ 1,071,123
LIABILITIES AND EQUITY
Liabilities:
Accounts payable and accrued liabilities $ 52,237 $ 42,660
Net deferred tax liability 185,277 193,898
Line of credit 127,000 220,000
Long-term debt 200,542 1,246
Total liabilities 565,056 457,804
Redeemable noncontrolling Interest 20,673 17,831
Stockholders' equity:
Preferred stock, par value $0.01, authorized shares, 2,000, issued and outstanding shares - 0 -- --
Common stock, par value $0.01, 60,000 authorized shares, 16,909 issued and outstanding shares at December 31, 2012, and 17,134 issued and outstanding shares at December 31, 2011 169 171
Additional paid-in capital 151,216 167,719
Retained earnings 554,191 427,598
Accumulated other comprehensive income 2,851 --
Total stockholders' equity 708,427 595,488
Total liabilities and equity $ 1,294,156 $ 1,071,123
Portfolio Recovery Associates, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
Year Year
Ended Ended
December 31, December 31,
2012 2011
Cash flows from operating activities:
Net income $ 126,099 $ 101,144
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of share-based compensation 11,282 7,759
Depreciation and amortization 14,515 12,943
Deferred tax (benefit)/expense (8,634) 28,927
Gain on sale of property -- (1,157)
Changes in operating assets and liabilities:
Other assets 2,073 (54)
Accounts receivable (474) 1,070
Accounts payable and accrued liabilities (13,444) 22,393
Net cash provided by operating activities 131,417 173,025
Cash flows from investing activities:
Purchases of property and equipment (7,115) (9,634)
Proceeds from sale of property -- 1,267
Acquisition of finance receivables, net of buybacks (457,068) (398,999)
Collections applied to principal on finance receivables 378,049 303,595
Business acquisitions, net of cash acquired (148,995) (985)
Proceeds from due from seller 29,548 --
Net cash used in investing activities (205,581) (104,756)
Cash flows from financing activities:
Proceeds from exercise of options -- 150
Income tax benefit from share-based compensation 2,138 641
Proceeds from line of credit 294,000 32,000
Principal payments on line of credit (187,000) (112,000)
Repurchases of common stock (22,735) --
Payments of line of credit origination costs and fees (4,994) --
Distributions paid to noncontrolling interest -- (2,307)
Principal payments on long-term debt (704) (1,150)
Net cash provided by/(used in) financing activities 80,705 (82,666)
Effect of exchange rate on cash (551) --
Net increase/(decrease) in cash and cash equivalents 5,990 (14,397)
Cash and cash equivalents, beginning of year 26,697 41,094
Cash and cash equivalents, end of year $ 32,687 $ 26,697
Supplemental disclosure of cash flow information:
Cash paid for interest $ 9,566 $ 10,280
Cash paid for income taxes 98,738 23,641
Noncash investing and financing activities:
Adjustment of the noncontrolling interest measurement amount $ (3,597) $ (4,112)
Distributions payable relating to noncontrolling interest 261 67
Employee stock relinquished for payment of taxes (3,593) (257)
Conversion of revolving line of credit to long-term debt 200,000 --
Purchase Price Multiples at December 31, 2012, Entire Domestic Portfolio
($ in thousands)
Actual Cash
Total Net Finance Collections Estimated Total Estimated
Purchase Purchase Estimated Receivables Including Cash Remaining Collections to
Period Price Collections Balance Sales Collections Purchase Price
1996 $ 3,080 $ 10,222 $ -- $ 10,183 $ 39 332%
1997 7,685 25,590 -- 25,422 168 333%
1998 11,089 37,582 -- 37,178 404 339%
1999 18,898 69,947 -- 68,872 1,075 370%
2000 25,020 117,808 -- 115,316 2,492 471%
2001 33,481 177,086 -- 173,568 3,518 529%
2002 42,325 201,365 -- 195,044 6,321 476%
2003 61,448 272,359 -- 259,874 12,485 443%
2004 59,176 205,011 -- 193,754 11,257 346%
2005 143,168 315,867 8,298 301,186 14,681 221%
2006 107,674 214,994 9,170 199,716 15,278 200%
2007 258,397 507,936 33,314 449,362 58,574 197%
2008 275,165 522,112 55,112 430,738 91,374 190%
2009 281,456 851,686 73,461 599,137 252,549 303%
2010 358,143 942,234 137,577 539,508 402,726 263%
2011 394,198 874,241 255,488 318,030 556,211 222%
2012 518,333 937,983 492,013 74,289 863,694 181%
Total $ 2,598,736 $ 6,284,023 $ 1,064,433 $ 3,991,177 $ 2,292,846 242%
Purchase Price Multiples at December 31, 2012, Purchased Bankruptcy Portfolio
($ in thousands)
Actual Cash
Total Net Finance Collections Estimated Total Estimated
Purchase Purchase Estimated Receivables Including Cash Remaining Collections to
Period Price Collections Balance Sales Collections Purchase Price
1996-2003 $ -- $ -- $ -- $ -- $ -- 0%
2004 7,468 14,501 -- 14,402 99 194%
2005 29,301 43,569 56 43,472 97 149%
2006 17,630 31,486 110 31,146 340 179%
2007 78,544 104,796 1,531 102,925 1,871 133%
2008 108,607 175,892 18,488 152,538 23,354 162%
2009 156,053 442,700 44,090 309,083 133,617 284%
2010 209,224 471,459 87,294 269,005 202,454 225%
2011 182,175 290,933 140,044 81,597 209,336 160%
2012 258,317 351,356 251,445 17,388 333,968 136%
Total $ 1,047,319 $ 1,926,692 $ 543,058 $ 1,021,556 $ 905,136 184%
Purchase Price Multiples at December 31, 2012, Core Portfolio
($ in thousands)
Actual Cash
Total Net Finance Collections Estimated Total Estimated
Purchase Purchase Estimated Receivables Including Cash Remaining Collections to
Period Price Collections Balance Sales Collections Purchase Price
1996 $ 3,080 $ 10,222 $ -- $ 10,183 $ 39 332%
1997 7,685 25,590 -- 25,422 168 333%
1998 11,089 37,582 -- 37,178 404 339%
1999 18,898 69,947 -- 68,872 1,075 370%
2000 25,020 117,808 -- 115,316 2,492 471%
2001 33,481 177,086 -- 173,568 3,518 529%
2002 42,325 201,365 -- 195,044 6,321 476%
2003 61,448 272,359 -- 259,874 12,485 443%
2004 51,708 190,510 -- 179,352 11,158 368%
2005 113,867 272,298 8,242 257,714 14,584 239%
2006 90,044 183,508 9,060 168,570 14,938 204%
2007 179,853 403,140 31,783 346,437 56,703 224%
2008 166,558 346,220 36,624 278,200 68,020 208%
2009 125,403 408,986 29,371 290,054 118,932 326%
2010 148,919 470,775 50,283 270,503 200,272 316%
2011 212,023 583,308 115,444 236,433 346,875 275%
2012 260,016 586,627 240,568 56,901 529,726 226%
Total $ 1,551,417 $ 4,357,331 $ 521,375 $ 2,969,621 $ 1,387,710 281%
FINANCIAL HIGHLIGHTS
Three Months Ended Twelve Months Ended
December 31, % December 31, %
2012 2011 Change 2012 2011 Change
EARNINGS (in thousands)
Income recognized on finance receivables, net $ 138,068 $ 102,743 34% $ 530,635 $ 401,895 32%
Fee income 16,183 15,344 5% 62,166 57,040 9%
Total revenues 154,251 118,087 31% 592,801 458,935 29%
Operating expenses 94,262 72,134 31% 376,737 282,067 34%
Income from operations 59,989 45,953 31% 216,064 178,025 21%
Net interest expense 1,816 2,512 -28% 9,031 10,562 -15%
Net income 35,732 26,666 34% 126,099 101,144 25%
Net income attributable to Portfolio Recovery Associates, Inc. 35,802 26,590 35% 126,593 100,791 26%
PERIOD-END BALANCES (in thousands)
Cash and cash equivalents $ 32,687 $ 26,697 22% $ 32,687 $ 26,697 22%
Finance receivables, net 1,078,951 926,734 16% 1,078,951 926,734 16%
Goodwill and intangible assets, net 135,052 76,274 77% 135,052 76,274 77%
Total assets 1,294,156 1,071,123 21% 1,294,156 1,071,123 21%
Line of credit and long-term debt 327,542 221,246 48% 327,542 221,246 48%
Total liabilities 565,056 457,804 23% 565,056 457,804 23%
Total equity 708,427 595,488 19% 708,427 595,488 19%
FINANCE RECEIVABLE COLLECTIONS (dollars in thousands)
Cash collections $ 229,211 $ 180,324 27% $ 908,684 $ 705,490 29%
Principal amortization without allowance charges 88,851 74,481 19% 371,497 293,431 27%
Principal amortization with allowance charges 91,142 77,581 17% 378,049 303,595 25%
Principal amortization w/ allowance charges as % of cash collections:
Including fully amortized pools 39.8% 43.0% -8% 41.6% 43.0% -3%
Excluding fully amortized pools 40.9% 44.9% -9% 43.0% 45.4% -5%
ALLOWANCE FOR FINANCE RECEIVABLES (dollars in thousands)
Balance at period-end $ 93,123 $ 86,571 8% $ 93,123 $ 86,571 8%
Allowance charge 2,291 3,100 -26% 6,552 10,164 -36%
Allowance charge to period-end net finance receivables 0.21% 0.33% -37% 0.61% 1.10% -45%
Allowance charge to net finance receivable income 1.66% 3.02% -45% 1.23% 2.53% -51%
Allowance charge to cash collections 1.00% 1.72% -42% 0.72% 1.44% -50%
PURCHASES OF FINANCE RECEIVABLES (1) (dollars in thousands)
Purchase price - core $ 85,476 $ 42,532 101% $ 259,795 $ 213,389 22%
Face value - core 901,512 829,232 9% 3,581,246 7,900,761 -55%
Purchase price - bankruptcy 111,001 46,360 139% 262,630 195,019 35%
Face value - bankruptcy 946,927 376,094 152% 2,104,977 1,891,595 11%
Purchase price - total 196,477 88,892 121% 522,425 408,408 28%
Face value - total 1,848,439 1,205,326 53% 5,686,223 9,792,356 -42%
Number of portfolios - total 94 83 13% 376 333 13%
ESTIMATED REMAINING COLLECTIONS (1) (in thousands)
Estimated remaining collections - core $ 1,387,711 $ 1,159,086 20% $ 1,387,711 $ 1,159,086 20%
Estimated remaining collections - bankruptcy 905,136 794,262 14% 905,136 794,262 14%
Estimated remaining collections - total 2,292,847 1,953,348 17% 2,292,847 1,953,348 17%
SHARE DATA (share amounts in thousands)
Net income per common share - diluted $ 2.10 $ 1.54 36% $ 7.39 $ 5.85 26%
Weighted average number of shares outstanding - diluted 17,072 17,269 -1% 17,123 17,230 -1%
Shares repurchased 0.1 -- 100% 332 -- 100%
Average price paid per share repurchased (including acquisitions costs) $ 93.02 -- 100% $ 68.57 -- 100%
Closing market price $ 106.86 $ 67.52 58% $ 106.86 $ 67.52 58%
RATIOS AND OTHER DATA (dollars in thousands)
Return on average equity (2) 20.6% 18.2% 14% 19.6% 18.5% 6%
Return on revenue (3) 23.2% 22.6% 3% 21.3% 22.0% -3%
Operating margin (4) 38.9% 38.9% 0% 36.4% 38.8% -6%
Operating expense to cash receipts (5) 38.4% 36.9% 4% 38.8% 37.0% 5%
Debt to equity (6) 46.2% 37.2% 24% 46.2% 37.2% 24%
Number of collectors 2,153 1,658 30% 2,153 1,658 30%
Number of full-time equivalent employees 3,221 2,641 22% 3,221 2,641 22%
Cash receipts (5) $ 245,394 $ 195,668 25% $ 970,850 $ 762,530 27%
Line of credit - unused portion at period end 273,000 187,500 46% 273,000 187,500 46%
(1) Domestic portfolio only
(2) Calculated as annualized net income divided by average equity for the period
(3) Calculated as net income divided by total revenues
(4) Calculated as income from operations divided by total revenues
(5) "Cash receipts" is defined as cash collections plus fee income
(6) For purposes of this ratio, "debt" equals the line of credit balance plus long-term debt
FINANCIAL HIGHLIGHTS
For the Quarter Ended
December 31, September 30, June 30, March 31, December 31,
2012 2012 2012 2012 2011
EARNINGS (in thousands)
Income recognized on finance receivables, net $ 138,068 $ 135,754 $ 132,587 $ 124,226 $ 102,743
Fee income 16,183 14,765 15,298 15,920 15,344
Total revenues 154,251 150,519 147,885 140,146 118,087
Operating expenses 94,262 93,461 93,289 95,725 72,134
Income from operations 59,989 57,058 54,596 44,421 45,953
Net interest expense 1,816 2,189 2,374 2,652 2,512
Net income 35,732 33,127 32,051 25,189 26,666
Net income attributable to Portfolio Recovery Associates, Inc. 35,802 33,314 32,015 25,462 26,590
PERIOD-END BALANCES (in thousands)
Cash and cash equivalents $ 32,687 $ 31,488 $ 42,621 $ 28,068 $ 26,697
Finance receivables, net 1,078,951 973,594 966,508 945,242 926,734
Goodwill and intangible assets, net 135,052 121,623 121,748 124,659 76,274
Total assets 1,294,156 1,169,698 1,173,738 1,142,026 1,071,123
Line of credit and long-term debt 327,542 250,675 292,850 265,936 221,246
Total liabilities 565,056 479,211 520,911 502,531 457,804
Total equity 708,427 670,489 633,446 620,712 595,488
FINANCE RECEIVABLE COLLECTIONS (dollars in thousands)
Cash collections $ 229,211 $ 229,053 $ 232,425 $ 217,996 $ 180,324
Principal amortization without allowance charges 88,851 91,736 97,634 93,276 74,481
Principal amortization with allowance charges 91,142 93,299 99,838 93,770 77,581
Principal amortization w/ allowance charges as % of cash collections:
Including fully amortized pools 39.8% 40.7% 43.0% 43.0% 43.0%
Excluding fully amortized pools 40.9% 42.0% 44.4% 44.8% 44.9%
ALLOWANCE FOR FINANCE RECEIVABLES (dollars in thousands)
Balance at period-end $ 93,123 $ 90,832 $ 89,269 $ 87,065 $ 86,571
Allowance charge 2,291 1,563 2,204 494 3,100
Allowance charge to period-end net finance receivables 0.21% 0.16% 0.23% 0.05% 0.33%
Allowance charge to net finance receivable income 1.66% 1.15% 1.66% 0.40% 3.02%
Allowance charge to cash collections 1.00% 0.68% 0.95% 0.23% 1.72%
PURCHASES OF FINANCE RECEIVABLES (1) (dollars in thousands)
Purchase price - core $ 85,476 $ 52,703 $ 69,512 $ 52,104 $ 42,532
Face value - core 901,512 674,135 1,033,331 972,268 829,232
Purchase price - bankruptcy 111,001 41,277 53,460 56,892 46,360
Face value - bankruptcy 946,927 341,359 448,244 368,447 376,094
Purchase price - total 196,477 93,980 122,972 108,996 88,892
Face value - total 1,848,439 1,015,494 1,481,575 1,340,715 1,205,326
Number of portfolios - total 94 95 105 82 83
ESTIMATED REMAINING COLLECTIONS (1) (in thousands)
Estimated remaining collections - core $ 1,387,711 $ 1,323,134 $ 1,305,641 $ 1,226,292 $ 1,159,086
Estimated remaining collections - bankruptcy 905,136 791,018 802,353 796,161 794,262
Estimated remaining collections - total 2,292,847 2,114,152 2,107,994 2,022,453 1,953,348
SHARE DATA (share amounts in thousands)
Net income per common share - diluted $ 2.10 $ 1.96 $ 1.87 $ 1.47 $ 1.54
Weighted average number of shares outstanding - diluted 17,072 17,022 17,133 17,267 17,269
Shares repurchased 0 -- 300,849 30,600 --
Average price paid per share repurchased (including acquisitions costs) $ 93.02 $ -- $ 68.62 $ 68.02 --
Closing market price $ 106.86 $ 104.43 $ 91.26 $ 71.72 $ 67.52
RATIOS AND OTHER DATA (dollars in thousands)
Return on average equity (2) 20.64% 20.29% 20.34% 16.70% 18.18%
Return on revenue (3) 23.16% 22.01% 21.67% 17.97% 22.58%
Operating margin (4) 38.89% 37.91% 36.92% 31.70% 38.91%
Operating expense to cash receipts (5) 38.41% 38.33% 37.66% 40.92% 36.87%
Debt to equity (6) 46.24% 37.39% 46.33% 42.84% 37.15%
Number of collectors 2,153 1,992 1,952 1,934 1,658
Number of full-time equivalent employees 3,221 3,103 3,032 3,014 2,641
Cash receipts (5) $ 245,394 $ 243,818 $ 247,723 $ 233,916 $ 195,668
Line of credit - unused portion at period end 273,000 214,450 166,450 142,500 187,500
(1) Domestic portfolio only
(2) Calculated as annualized net income divided by average equity for the period
(3) Calculated as net income divided by total revenues
(4) Calculated as income from operations divided by total revenues
(5) "Cash receipts" is defined as cash collections plus fee income
(6) For purposes of this ratio, "debt" equals the line of credit balance plus long-term debt

CONTACT: Rick Goulart Vice President, Corporate Communications 757-961-3525 RickGoulart@PortfolioRecovery.com

Source:Portfolio Recovery Associates