Portfolio Recovery Associates' Collections, Revenue and Earnings Soar in Q2

Debt buyer Portfolio Recovery Associates, Inc. (NASDAQ: PRAA) Tuesday reported financial results for the second quarter 2013 marked by significant increases in cash collections, revenue, and net income.

For Q2 2013, net income attributable to the company was $43.6 million, up 36 percent from the same period in 2012. Earnings amounted to $2.56 per share, up 37 percent from last year, 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.

PRA reported total revenues of $183 million, an increase of 24 percent from Q2 2012. Cash collections totalled $296 million, up 28 percent from the second quarter of 2012. Cash collections 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.

Year-to-date 2013 revenues were $352.5 million, compared with $288 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.”

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.

The company said that during the second quarter of 2013 it averaged 3,362 full-time equivalent employees, up 11 percent from the same period a year ago. Of that total, 2,190 were collectors, a 12 percent increase from 2012.