Debt buyer Portfolio Recovery Associates, Inc. (NASDAQ: PRAA) late Tuesday reported results for the third quarter of 2012 marked by large increases in cash collections, revenue, and net income.
The Norfolk, Va.-based ARM firm said that net income in the quarter ended September 30, 2012 increased 31 percent to $33 million. On a per-share basis, earnings were $1.96 compared to $1.48 in the previous year.
Total revenues for Q3 2012 were $151 million, up 32 percent from Q3 2011. The revenue increase was driven largely by a 26 percent increase in cash collections, which were $229 million for the quarter.
PRA’s businesses services units generated fee-for-service income of $14.8 million, compared with $11.4 million in the same period a year ago. This increase was due primarily to income generated from the company’s UK business, acquired in January 2012. Together, the fee-based businesses accounted for 10 percent of PRA’s total revenues this quarter and in Q3 2011.
“As the US economy slowly recovers, more and more consumers are paying down their debt, resulting in strong, year-over-year growth in cash collections, as well as record revenue and net income for PRA,” said Steve Fredrickson, chairman, president and chief executive officer. “Our business model of diversified purchases and cash collections from both bankrupt and non-bankrupt portfolios of debt, combined with domestic-led call centers and fees earned from our business services, continued to drive our record results.”
PRA purchased $1 billion of domestic portfolio face-value finance receivables in Q3 2012 for $94 million. The receivables were acquired in 95 defaulted portfolios from 12 different sellers. The amount the company spent on bankrupt account purchases declined 36 percent from the same period a year ago.
The company counted 3,103 employees at the end of the third quarter 2012, up 24 percent from the same period a year ago. Among those, 1,992 are classified as debt collectors, up 31 percent from 2011.