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PRA Reports Second Quarter 2013 Results

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NORFOLK, Va., July 30, 2013 (GLOBE NEWSWIRE) -- Portfolio Recovery Associates, Inc. (PRA), a financial and business services company operating in the U.S. and U.K, today reported its second quarter 2013 financial results.

Second Quarter Highlights

  • Cash collections of $296 million, up 28% from the second quarter of 2012.
  • Revenues of $183.0 million, up 24%.
  • Net income attributable to PRA of $43.6 million, up 36%.
  • $2.56 diluted EPS, compared with $1.87 a year ago, up 37%, or $0.85 compared with $0.62, adjusted for a 3:1 stock split by means of a stock dividend payable on August 1, 2013.
  • 22.5% return on average equity, annualized.
  • $200 million of portfolio purchases.

Net income attributable to PRA for the first six months of 2013 was $82.2 million, or $4.81 per diluted share, compared with $57.5 million, or $3.34 per diluted share for the first six months of 2012. On June 10, 2013, the company's board of directors declared a three-for-one stock split by means of a stock dividend. The new shares are expected to be distributed on or around August 1, 2013. On a post-stock split basis, diluted earnings per share would have been $1.60 for the first half of 2013 compared with $1.11 for the first half of 2012.

Year-to-date 2013 revenues were $352.5 million, compared with $288.0 million for the first six months of 2012. Cash collections were $571.9 million for the first six months of 2013, compared with $450.4 million for the first half of 2012.

"PRA's very strong Q2 results are exceptional by any measure, with significant new investment of $200 million, record revenue and record profitability," said Steve Fredrickson, chairman, president and chief executive officer, PRA.

"The company continues to succeed by pressing its considerable competitive advantages, including our underwriting capabilities across multiple asset classes and account dispositions, our ample access to low cost funding, and our operational excellence driven by best in class application of analytics and activity-based ROI discipline," Fredrickson said.

REVENUES

  • Revenues were $183.0 million for the quarter, up 24% from a year ago, and were comprised of $168.6 million in net finance receivables income and $14.4 million in fee income.

Finance Receivables Income and Cash Collections

  • Net finance receivables income increased 27% to $168.6 million in Q2 2013 from $132.6 million in the year-ago period.
  • Cash collections from finance receivables increased 28% over Q2 2012 to $296 million, and were comprised of bankruptcy court trustee payments of $125.7 million, $90.2 million in call center and other collections, and $80.5 million in legal collections from customers with an ability to pay their debt, but who refuse attempts to collect.

Cash Collection Source ($ in thousands) Q22013 Q12013 Q42012 Q32012 Q22012
Call Center & Other Collections $ 90,229 $ 89,037 $ 72,624 $ 72,394 $ 73,582
External Legal Collections 50,131 47,910 41,521 39,913 41,464
Internal Legal Collections 30,365 29,283 23,968 25,650 25,361
Bankruptcy Court Trustee Collections 125,672 109,233 91,098 91,095 92,018
Total Cash Collections $ 296,397 $ 275,463 $ 229,211 $ 229,052 $ 232,425

  • In Q2 2013, principal amortization of finance receivables was $127.8 million, or 43.1% of cash collections. This compares with $99.8 million, or 43.0% of cash collections, recorded in the year-earlier quarter. Principal amortization includes net allowance reversals of $1.2 million recorded against certain pools of finance receivables in the quarter, compared with a net allowance charge of $2.2 million recorded in Q2 2012.

Fee Income

  • PRA's fee-based businesses generated $14.4 million in fee income in Q2 2013, compared with $15.3 million a year ago.

OPERATING EXPENSES AND OPERATING INCOME

  • Q2 2013 operating expenses were $109.1 million, up $15.8 million or 17% from the year-earlier quarter.
  • Q2 2013 operating income was $73.8 million, compared with $54.6 million in Q2 2012, an increase of 35%. The operating margin increased from 36.9% to 40.4%.

PORTFOLIO PURCHASING

  • In Q2 2013, PRA invested $200 million in portfolio purchases from U.S and U.K. creditors, compared with $125 million in Q2 2012. Receivables purchased during the recently completed quarter were acquired in 94 portfolios from 14 different sellers. The company has invested $717 million in portfolio purchases over the trailing twelve months.

Finance Receivables Portfolio
Acquisitions ($ in thousands)

Q22013

Q12013

Q42012

Q32012

Q22012
Core Customer Debt $ 118,195 $ 128,338 $ 88,107 $ 61,684 $ 71,599
Bankruptcy Court Claims, U.S. 82,273 86,595 111,001 41,277 53,460
Total Portfolio Acquisitions $ 200,468 $ 214,933 $ 199,108 $ 102,961 $ 125,059

  • Core customer purchases were comprised of $113.3 million of U.S. core customer accounts and $4.9 million of U.K. core customer accounts.

BALANCE SHEET

  • Cash balances were $43.5 million at June 30, 2013, compared with $42.6 million a year ago.
  • Borrowings totaled $413.8 million at June 30, 2013, and consisted of $197.8 million in long-term debt and $216.0 million in revolving credit. Total borrowings were $292.8 million at June 30, 2012.
  • Net deferred tax liabilities were $187.7 million at June 30, 2013, compared with $190.6 million a year ago.
  • Stockholders' equity increased in Q2 2013 to $791.9 million from $751.0 million at March 31, 2013. Stockholders' equity was $633.4 million at June 30, 2012.

Conference Call Information

PRA will hold a conference call today with investors at 5:30 p.m. ET to discuss its Q2 2013 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 16240403. A replay will be available approximately one hour after the call ends and will remain available until August 6, 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 16240403. Investors also may listen to the conference call via webcast, both live and archived, at http://ir.PortfolioRecovery.com/events.cfm.

About PRA

As a leader in the U.S. debt buying industry, Portfolio Recovery Associates, Inc. (Nasdaq:PRAA) 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. 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 has been annually ranked as one of Forbes' 100 Best Small Companies in America since 2007, advancing to the Top 25 in 2012. The company also was recognized last year as one of Fortune's 100 Fastest-Growing Companies in the U.S. For more information, visit www.PortfolioRecovery.com.

About Forward-Looking Statements

Statements herein which are not historical, including PRA's or its 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 PRA's presentations and web casts. The forward-looking statements in this press release are based upon management's beliefs, assumptions and expectations of PRA'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 PRA's filings with the Securities and Exchange Commission (SEC) 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 SEC and available through PRA's website, which contain a more detailed discussion of PRA'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 SEC or otherwise. Except as required by law, PRA assumes no obligation to publicly update or revise its forward-looking statements contained herein to reflect any change in PRA'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 Six Months Six Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2013 2012 2013 2012
Revenues:
Income recognized on finance receivables, net $ 168,570 $ 132,587 $ 323,362 $ 256,812
Fee income 14,391 15,298 29,158 31,218
Total revenues 182,961 147,885 352,520 288,030
Operating expenses:
Compensation and employee services 48,202 42,479 93,199 82,173
Legal collection fees 10,609 8,988 21,138 16,606
Legal collection costs 22,717 18,227 43,218 41,895
Agent fees 1,280 1,323 2,889 2,951
Outside fees and services 8,634 5,584 16,081 11,444
Communications 7,560 7,007 16,521 15,260
Rent and occupancy 1,824 1,656 3,511 3,268
Depreciation and amortization 3,534 3,555 6,900 7,210
Other operating expenses 4,775 4,470 9,350 8,206
Total operating expenses 109,135 93,289 212,807 189,013
Income from operations 73,826 54,596 139,713 99,017
Other income and (expense):
Interest income -- 7 -- 8
Interest expense (2,923) (2,381) (5,612) (5,034)
Income before income taxes 70,903 52,222 134,101 93,991
Provision for income taxes 27,489 20,171 52,170 36,751
Net income $ 43,414 $ 32,051 $ 81,931 $ 57,240
Adjustment for (loss)/income attributable to redeemable noncontrolling interest (185) 36 (268) (237)
Net income attributable to Portfolio Recovery Associates, Inc. $ 43,599 $ 32,015 $ 82,199 $ 57,477
Net income per common share attributable to Portfolio Recovery Associates, Inc.:
Basic $ 2.58 $ 1.88 $ 4.86 $ 3.36
Diluted $ 2.56 $ 1.87 $ 4.81 $ 3.34
Weighted average number of shares outstanding:
Basic 16,917 17,027 16,927 17,111
Diluted 17,061 17,133 17,076 17,200
As adjusted for the three-for-one stock split by means of a stock dividend:
Net income per common share attributable to Portfolio Recovery Associates, Inc.:
Basic $ 0.86 $ 0.63 $ 1.62 $ 1.12
Diluted $ 0.85 $ 0.62 $ 1.60 $ 1.11
Weighted average number of shares outstanding:
Basic 50,751 51,081 50,781 51,333
Diluted 51,183 51,399 51,228 51,600
Portfolio Recovery Associates, Inc.
Unaudited Consolidated Balance Sheets
(in thousands, except per share amounts)
June 30, December 31,
ASSETS 2013 2012
Cash and cash equivalents $ 43,459 $ 32,687
Finance receivables, net 1,236,859 1,078,951
Accounts receivable, net 10,421 10,486
Income taxes receivable 2,487 --
Property and equipment, net 27,278 25,312
Goodwill 106,953 109,488
Intangible assets, net 17,396 20,364
Other assets 12,393 11,668
Total assets $ 1,457,246 $ 1,288,956
LIABILITIES AND EQUITY
Liabilities:
Accounts payable $ 9,356 $ 12,155
Accrued expenses and other liabilities 29,600 18,953
Income taxes payable -- 3,125
Accrued payroll and bonuses 14,552 12,804
Net deferred tax liability 187,730 185,277
Line of credit 216,000 127,000
Long-term debt 197,774 200,542
Total liabilities 655,012 559,856
Redeemable noncontrolling Interest 10,336 20,673
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, 16,910 issued and outstanding shares at June 30, 2013, and 16,909 issued and outstanding shares at December 31, 2012 or 50,730 and 50,727 issued and outstanding shares at June 30, 2013 and December 31, 2012, respectively as adjusted for the 3-for-1 stock split by means of a stock dividend payable on August 1, 2013 169 169
Additional paid-in capital 156,912 151,216
Retained earnings 636,390 554,191
Accumulated other comprehensive (loss)/income (1,573) 2,851
Total stockholders' equity 791,898 708,427
Total liabilities and equity $ 1,457,246 $ 1,288,956
Portfolio Recovery Associates, Inc.
Unaudited Consolidated Statements of Cash Flows
(in thousands)
Six Months Six Months
Ended Ended
June 30, June 30,
2013 2012
Cash flows from operating activities:
Net income $ 81,931 $ 57,240
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of share-based compensation 6,651 5,576
Depreciation and amortization 6,900 7,210
Deferred tax expense/(benefit) 2,488 (3,244)
Changes in operating assets and liabilities:
Other assets (1,284) (121)
Accounts receivable (46) 1,320
Accounts payable (2,633) (432)
Income taxes (5,748) (5,850)
Accrued expenses 7,313 (3,016)
Accrued payroll and bonuses 1,757 (4,447)
Net cash provided by operating activities 97,329 54,236
Cash flows from investing activities:
Purchases of property and equipment (6,639) (2,952)
Acquisition of finance receivables, net of buybacks (407,347) (229,388)
Collections applied to principal on finance receivables 248,498 193,608
Business acquisition, net of cash acquired -- (48,653)
Net cash used in investing activities (165,488) (87,385)
Cash flows from financing activities:
Income tax benefit from share-based compensation 2,659 1,435
Proceeds from line of credit 217,000 151,000
Principal payments on line of credit (128,000) (79,000)
Repurchases of common stock (8,506) (22,726)
Cash paid for purchase of portion of noncontrolling interest (1,150) --
Distributions paid to noncontrolling interest (51) --
Principal payments on long-term debt (2,768) (397)
Net cash provided by financing activities 79,184 50,312
Effect of exchange rate on cash (253) (1,239)
Net increase in cash and cash equivalents 10,772 15,924
Cash and cash equivalents, beginning of year 32,687 26,697
Cash and cash equivalents, end of period $ 43,459 $ 42,621
Supplemental disclosure of cash flow information:
Cash paid for interest $ 5,581 $ 5,312
Cash paid for income taxes 52,809 44,509
Noncash investing and financing activities:
Adjustment of the noncontrolling interest measurement amount $ (245) $ (2,048)
Purchase of noncontrolling interest 9,162 --
Distributions payable relating to noncontrolling interest 2 261
Employee stock relinquished for payment of taxes (4,025) (2,077)
Purchase Price Multiples at June 30, 2013, 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 $ 10,229 $ -- $ 10,194 $ 35 332%
1997 7,685 25,567 -- 25,465 102 333%
1998 11,089 37,679 -- 37,279 400 340%
1999 18,898 69,973 -- 69,162 811 370%
2000 25,020 118,136 -- 116,114 2,022 472%
2001 33,481 178,285 -- 174,875 3,410 532%
2002 42,325 202,244 -- 197,028 5,216 478%
2003 61,448 273,133 -- 262,911 10,222 444%
2004 59,177 206,029 -- 196,376 9,653 348%
2005 143,169 317,167 6,150 306,869 10,298 222%
2006 107,673 216,007 6,355 204,867 11,140 201%
2007 258,394 510,832 23,193 466,671 44,161 198%
2008 275,170 524,225 37,427 456,847 67,378 191%
2009 281,455 876,990 51,114 677,819 199,171 312%
2010 358,114 992,860 104,951 649,082 343,778 277%
2011 394,100 933,696 201,449 442,739 490,957 237%
2012 512,678 952,915 406,473 217,979 734,936 186%
2013 406,883 730,475 386,003 44,681 685,794 180%
Total $ 2,999,839 $ 7,176,442 $ 1,223,115 $ 4,556,958 $ 2,619,484 239%
Purchase Price Multiples at June 30, 2013, Purchased Bankruptcy Portfolio - Domestic
($ 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 14,586 -- 14,461 125 195%
2005 29,301 43,670 46 43,579 91 149%
2006 17,630 31,699 63 31,391 308 180%
2007 78,542 105,019 214 103,654 1,365 134%
2008 108,602 170,078 7,293 160,701 9,377 157%
2009 156,049 457,691 28,950 358,923 98,768 293%
2010 209,212 500,121 65,248 332,601 167,520 239%
2011 182,101 295,727 115,416 122,328 173,399 162%
2012 253,658 344,392 211,472 69,681 274,711 136%
2013 166,165 218,701 153,147 19,142 199,559 132%
Total $ 1,208,728 $ 2,181,684 $ 581,849 $ 1,256,461 $ 925,223 180%
Purchase Price Multiples at June 30, 2013, Core Portfolio - Domestic
($ 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 $ 10,229 $ -- $ 10,194 $ 35 332%
1997 7,685 25,567 -- 25,465 102 333%
1998 11,089 37,679 -- 37,279 400 340%
1999 18,898 69,973 -- 69,162 811 370%
2000 25,020 118,136 -- 116,114 2,022 472%
2001 33,481 178,285 -- 174,875 3,410 532%
2002 42,325 202,244 -- 197,028 5,216 478%
2003 61,448 273,133 -- 262,911 10,222 444%
2004 51,709 191,443 -- 181,915 9,528 370%
2005 113,868 273,497 6,104 263,290 10,207 240%
2006 90,043 184,308 6,292 173,476 10,832 205%
2007 179,852 405,813 22,979 363,017 42,796 226%
2008 166,568 354,147 30,134 296,146 58,001 213%
2009 125,406 419,299 22,164 318,896 100,403 334%
2010 148,902 492,739 39,703 316,481 176,258 331%
2011 211,999 637,969 86,033 320,411 317,558 301%
2012 259,020 608,523 195,001 148,298 460,225 235%
2013 240,718 511,774 232,856 25,539 486,235 213%
Total $ 1,791,111 $ 4,994,758 $ 641,266 $ 3,300,497 $ 1,694,261 279%
FINANCIAL HIGHLIGHTS
Three Months Ended Six Months Ended
June 30, % June 30, %
2013 2012 Change 2013 2012 Change
EARNINGS (in thousands)
Income recognized on finance receivables, net $ 168,570 $ 132,587 27% $ 323,362 $ 256,812 26%
Fee income 14,391 15,298 -6% 29,158 31,218 -7%
Total revenues 182,961 147,885 24% 352,520 288,030 22%
Operating expenses 109,135 93,289 17% 212,807 189,013 13%
Income from operations 73,826 54,596 35% 139,713 99,017 41%
Net interest expense 2,923 2,374 23% 5,612 5,026 12%
Net income 43,414 32,051 35% 81,931 57,240 43%
Net income attributable to Portfolio Recovery Associates, Inc. 43,599 32,015 36% 82,199 57,477 43%
PERIOD-END BALANCES (in thousands)
Cash and cash equivalents $ 43,459 $ 42,621 2% $ 43,459 $ 42,621 2%
Finance receivables, net 1,236,859 966,508 28% 1,236,859 966,508 28%
Goodwill and intangible assets, net 124,349 121,748 2% 124,349 121,748 2%
Total assets 1,457,246 1,173,738 24% 1,457,246 1,173,738 24%
Line of credit and long-term debt 413,774 292,849 41% 413,774 292,849 41%
Total liabilities 655,012 520,911 26% 655,012 520,911 26%
Total equity 791,898 633,446 25% 791,898 633,446 25%
FINANCE RECEIVABLE COLLECTIONS (dollars in thousands)
Cash collections $ 296,397 $ 232,425 28% $ 571,860 $ 450,420 27%
Principal amortization without allowance charges 129,012 97,634 32% 247,510 190,910 30%
Principal amortization with allowance charges 127,827 99,838 28% 248,498 193,608 28%
Principal amortization w/ allowance charges as % of cash collections:
Including fully amortized pools 43.1% 43.0% 0% 43.5% 43.0% 1%
Excluding fully amortized pools 44.7% 44.4% 1% 44.8% 44.6% 0%
ALLOWANCE FOR FINANCE RECEIVABLES (dollars in thousands)
Balance at period-end $ 94,111 $ 89,269 5% $ 94,111 $ 89,269 5%
Allowance (reversal)/charge (1,185) 2,204 -154% 988 2,698 -63%
Allowance (reversal)/charge to period-end net finance receivables -0.1% 0.2% -142% 0.1% 0.3% -71%
Allowance (reversal)/charge to net finance receivable income -0.7% 1.7% -142% 0.3% 1.1% -71%
Allowance (reversal)/charge to cash collections -0.4% 0.9% -142% 0.2% 0.6% -71%
PURCHASES OF FINANCE RECEIVABLES (dollars in thousands)
Purchase price - core $ 113,314 $ 69,512 63% $ 240,265 $ 121,616 98%
Face value - core 1,178,229 1,033,331 14% 2,577,189 2,005,599 28%
Purchase price - bankruptcy 82,273 53,460 54% 168,868 110,352 53%
Face value - bankruptcy 1,926,515 448,244 330% 2,363,023 816,691 189%
Purchase price - UK 4,881 2,087 134% 6,268 4,508 39%
Face value - UK 81,852 44,779 83% 100,422 160,130 -37%
Purchase price - total 200,468 125,059 60% 415,401 236,476 76%
Face value - total 3,186,596 1,526,354 109% 5,040,634 2,982,420 69%
Number of portfolios - total 94 114 -18% 185 205 -10%
ESTIMATED REMAINING COLLECTIONS (in thousands)
Estimated remaining collections - core $ 1,711,006 $ 1,315,809 30% $ 1,711,006 $ 1,315,809 30%
Estimated remaining collections - bankruptcy 925,223 802,353 15% 925,223 802,353 15%
Estimated remaining collections - total 2,636,229 2,118,162 24% 2,636,229 2,118,162 24%
SHARE DATA (share amounts in thousands)
Net income per common share - diluted $ 2.56 $ 1.87 37% $ 4.81 $ 3.34 44%
Weighted average number of shares outstanding - diluted 17,061 17,133 0% 17,076 17,200 -1%
Shares repurchased 55 301 -82% 71 331 -79%
Average price paid per share repurchased (including acquisitions costs) $ 119.45 $ 68.62 74% $ 119.13 $ 68.56 74%
Closing market price $ 153.63 $ 91.26 68% $ 153.63 $ 91.26 68%
SHARE DATA-ADJUSTED (7) (share amounts in thousands)
Net income per common share - diluted $ 0.85 $ 0.62 37% $ 1.60 $ 1.11 44%
Weighted average number of shares outstanding - diluted 51,183 51,399 0% 51,228 51,600 -1%
Shares repurchased 166 903 -82% 214 994 -79%
Average price paid per share repurchased (including acquisitions costs) $ 39.82 $ 22.87 74% $ 39.71 $ 22.85 74%
Closing market price $ 51.21 $ 30.42 68% $ 51.21 $ 30.42 68%
RATIOS AND OTHER DATA (dollars in thousands)
Return on average equity (1) 22.5% 20.3% 11% 21.8% 18.5% 18%
Return on revenue (2) 23.7% 21.7% 9% 23.2% 19.9% 17%
Return on average assets (3) 12.1% 11.1% 9% 11.7% 10.0% 17%
Operating margin (4) 40.4% 36.9% 9% 39.6% 34.4% 15%
Operating expense to cash receipts (5) 35.1% 37.7% -7% 35.4% 39.2% -10%
Debt to equity (6) 52.3% 46.2% 13% 52.3% 46.2% 13%
Number of collectors 2,190 1,952 12% 2,190 1,952 12%
Number of full-time equivalent employees 3,362 3,032 11% 3,362 3,032 11%
Cash receipts (5) $ 310,788 $ 247,723 25% $ 601,018 $ 481,639 25%
Line of credit - unused portion at period end 184,000 166,450 11% 184,000 166,450 11%
FINANCIAL HIGHLIGHTS
For the Quarter Ended
June 30 March 31 December 31 September 30 June 30
2013 2013 2012 2012 2012
EARNINGS (in thousands)
Income recognized on finance receivables, net $ 168,570 $ 154,792 $ 138,068 $ 135,754 $ 132,587
Fee income 14,391 14,767 16,183 14,765 15,298
Total revenues 182,961 169,559 154,251 150,519 147,885
Operating expenses 109,135 103,672 94,262 93,461 93,289
Income from operations 73,826 65,887 59,989 57,058 54,596
Net interest expense 2,923 2,689 1,816 2,189 2,374
Net income 43,414 38,517 35,732 33,127 32,051
Net income attributable to Portfolio Recovery Associates, Inc. 43,599 38,600 35,802 33,314 32,015
PERIOD-END BALANCES (in thousands)
Cash and cash equivalents $ 43,459 $ 39,111 $ 32,687 $ 31,488 $ 42,621
Finance receivables, net 1,236,859 1,169,747 1,078,951 973,594 966,508
Goodwill and intangible assets, net 124,349 125,462 129,852 121,623 121,748
Total assets 1,457,246 1,382,739 1,288,956 1,169,698 1,173,738
Line of credit and long-term debt 413,774 371,159 327,542 250,674 292,849
Total liabilities 655,012 621,413 559,856 479,211 520,911
Total equity 791,898 750,990 708,427 670,489 633,446
FINANCE RECEIVABLE COLLECTIONS (dollars in thousands)
Cash collections $ 296,397 $ 275,463 $ 229,211 $ 229,052 $ 232,425
Principal amortization without allowance charges 129,012 118,498 88,851 91,736 97,634
Principal amortization with allowance charges 127,827 120,671 91,142 93,298 99,838
Principal amortization w/ allowance charges as % of cash collections:
Including fully amortized pools 43.1% 43.8% 39.8% 40.7% 43.0%
Excluding fully amortized pools 44.7% 44.8% 40.9% 42.0% 44.4%
ALLOWANCE FOR FINANCE RECEIVABLES (dollars in thousands)
Balance at period-end $ 94,111 $ 95,296 $ 93,123 $ 90,832 $ 89,269
Allowance (reversal)/charge (1,185) 2,173 2,291 1,563 2,204
Allowance (reversal)/charge to period-end net finance receivables -0.10% 0.19% 0.21% 0.16% 0.23%
Allowance (reversal)/charge to net finance receivable income -0.70% 1.40% 1.66% 1.15% 1.66%
Allowance (reversal)/charge to cash collections -0.40% 0.79% 1.00% 0.68% 0.95%
PURCHASES OF FINANCE RECEIVABLES (dollars in thousands)
Purchase price - core $ 113,314 $ 126,951 $ 85,476 $ 52,703 $ 69,512
Face value - core 1,178,229 1,398,960 901,512 674,135 1,033,331
Purchase price - bankruptcy 82,273 86,595 111,001 41,277 53,460
Face value - bankruptcy 1,926,515 436,508 946,927 341,359 448,244
Purchase price - UK 4,881 1,387 2,631 8,981 2,087
Face value - UK 81,852 18,570 59,953 248,667 44,779
Purchase price - total 200,468 214,933 199,108 102,961 125,059
Face value - total 3,186,596 1,854,038 1,908,392 1,264,161 1,526,354
Number of portfolios - total 94 91 104 107 114
ESTIMATED REMAINING COLLECTIONS (in thousands)
Estimated remaining collections - core $ 1,711,006 $ 1,562,383 $ 1,410,053 $ 1,346,562 $ 1,315,809
Estimated remaining collections - bankruptcy 925,223 924,520 905,136 791,018 802,353
Estimated remaining collections - total 2,636,229 2,486,903 2,315,189 2,137,580 2,118,162
SHARE DATA (share amounts in thousands)
Net income per common share - diluted $ 2.56 $ 2.26 $ 2.10 $ 1.96 $ 1.87
Weighted average number of shares outstanding - diluted 17,061 17,091 17,072 17,022 17,133
Shares repurchased 55 16 -- -- 301
Average price paid per share repurchased (including acquisitions costs) $ 119.45 $ 118.03 $ 93.02 $ -- $ 68.62
Closing market price $ 153.63 $ 126.92 $ 106.86 $ 104.43 $ 91.26
SHARE DATA-ADJUSTED (7) (share amounts in thousands)
Net income per common share - diluted $ 0.85 $ 0.75 $ 0.70 $ 0.65 $ 0.62
Weighted average number of shares outstanding - diluted 51,183 51,273 51,217 51,066 51,399
Shares repurchased 166 48 -- -- 903
Average price paid per share repurchased (including acquisitions costs) $ 39.82 $ 39.34 $ 31.01 $ -- $ 22.87
Closing market price $ 51.21 $ 42.31 $ 35.62 $ 34.81 $ 30.42
RATIOS AND OTHER DATA (dollars in thousands)
Return on average equity (1) 22.5% 21.1% 20.6% 20.3% 20.3%
Return on revenue (2) 23.7% 22.7% 23.2% 22.0% 21.7%
Return on average assets (3) 12.1% 11.3% 11.8% 11.4% 11.1%
Operating margin (4) 40.4% 38.9% 38.9% 37.9% 36.9%
Operating expense to cash receipts (5) 35.1% 35.7% 38.4% 38.3% 37.7%
Debt to equity (6) 52.3% 49.4% 46.2% 37.4% 46.3%
Number of collectors 2,190 2,159 2,153 1,992 1,952
Number of full-time equivalent employees 3,362 3,250 3,221 3,103 3,032
Cash receipts (5) $ 310,788 $ 290,230 $ 245,394 $ 243,817 $ 247,723
Line of credit - unused portion at period end 184,000 228,000 273,000 214,450 166,450
(1) Calculated as annualized net income divided by average equity for the period
(2) Calculated as net income divided by total revenues
(3) Calculated as annualized net income divided by average assets for the period
(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
(7) All per share data has been adjusted to reflect the 3-for-1 stock split by means of a stock dividend which was declared on June 10, 2013 and payable August 1, 2013 to holders of record as of July 1, 2013

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

Source:Portfolio Recovery Associates