NCO Group Reports a Net Loss of $17.5 million for Q4 2006

NCO Group, Inc., a leading provider of business process outsourcing services, announced today that during the fourth quarter of 2006, it reported a net loss of $17.5 million. These results, which were in line with the company's expectations, included approximately $26.9 million of charges, net of taxes, related to the going-private transaction and, to a lesser extent, the company's restructuring and integration plans. The charges included transaction related charges of $11.0 million, purchase accounting related adjustments of $4.1 million, restructuring charges of $1.8 million and integration charges of $783,000. The charges also included $6.3 million of incremental interest expense and $2.9 million of incremental amortization relating to the intangible assets.

On November 15, 2006, NCO was acquired by and became a wholly owned subsidiary of Collect Holdings, Inc., an entity controlled by One Equity Partners and its affiliates (OEP), a private equity investment fund, with participation by Michael J. Barrist, Chairman, President and Chief Executive Officer of NCO, certain other members of executive management and other co- investors. Under the terms of the merger agreement, NCO shareholders received $27.50 in cash, without interest, for each share of NCO common stock that they held.

The accompanying unaudited selected financial data are presented for two periods, Predecessor and Successor, which relate to the period of operations preceding the transaction and the period of operations succeeding the transaction, respectively. Collect Holdings, Inc. was formed on July 13, 2006 and had no operations from date of inception until the transaction on November 15, 2006.

The following discussion of the company's results of operations has been prepared by comparing the mathematical combination, without making any pro forma adjustments, of the Successor and Predecessor periods in the quarter ended December 31, 2006 to the quarter ended December 31, 2005. This presentation does not comply with generally accepted accounting principles in the U.S.; however, the Company believes it provides the most meaningful comparison of its results. The combined operating results have not been presented on a pro forma basis, and do not reflect the actual results that would have been achieved if the transaction had not occurred and may not be predictive of future results of operations.

NCO is organized into three operating divisions: Accounts Receivable Management (ARM), Customer Relationship Management (CRM) and Portfolio Management.

Overall revenue in the fourth quarter of 2006 was $280.6 million, a decrease of 3.4%, or $9.7 million, from revenue of $290.3 million in the fourth quarter of 2005. The decrease was primarily attributable to a $7.1 million reduction from purchase accounting related adjustments.

For the fourth quarter of 2006, ARM's revenue was $200.6 million as compared to $216.8 million in the fourth quarter of 2005. The decrease was attributable to a more difficult operating environment within consumer collections and a $6.8 million decrease in inter-company revenue from Portfolio Management, due to a more challenging portfolio purchase environment during 2006. Revenue within this operating division related to portfolio collections is eliminated in consolidation.