NCO Group, Inc., the largest accounts receivable management company in the world, reported financial results Monday for the first quarter of 2011 marked by drops in revenue, income, and EBITDA.
The Horsham, Pa.-based provider of debt collection and other BPO services reported a net loss of $41.2 million for the first three months of 2011, compared to a net loss of $15.3 million in the same period a year ago. NCO reported adjusted EBITDA of $37.8 million for Q1 2011, down slightly from the $39 million in Q1 2010.
Adjusted EDBITDA excludes certain accounting expenses, such as one-time charges. NCO said that EBITDA for the first quarter of 2011 did not include the impact of an $18.6 million write-down on the sale of a debt portfolio and $12.2 million of restructuring charges. In the first quarter of 2010, the restructuring charges were only $1.4 million.
The company said that it sold a portion of its purchased receivables portfolio in April 2011 and recorded the $18.6 million write-down in the first quarter in conjunction with that sale. NCO noted that it may sell more of its portfolio in the future, resulting in further write-downs. In March, the company announced that it was seeking to amend its credit facility to allow the sale of its debt portfolio.
Total revenue for the first quarter fell 11.5 percent to $374.7 million. But revenues in its accounts receivable management (ARM) unit fell just 6 percent to $324.1 million. Total revenues included the portfolio write-down.
Commenting on the results, Ronald A. Rittenmeyer, President and Chief Executive Officer, stated, “I am very pleased with our operating results that exceeded our overall revenue and profitability targets during the first quarter. The continued stabilization in our business will allow us to focus on the development and implementation of our strategic growth initiatives.”
NCO will host an investor conference call on Tuesday, May 17, 2011, at 11:00 a.m., ET. Interested parties can access the conference call by dialing (866) 388-2676 (domestic callers) or (706) 679-3487 (international callers) and providing the pass code 66562382. A taped replay of the conference call will be made available for seven days and can be accessed by interested parties by dialing (800) 642-1687 (domestic callers) or (706) 645-9291 (international callers) and providing the pass code 66562382.