Portfolio Recovery Associates, Inc. (NASDAQ: PRAA), a specialized financial services company and market leader in the consumer debt purchase and collection industry, Wednesday reported record first quarter results including net income of $23.1 million for the quarter ended March 31, 2011.

Net income for the first quarter of 2011 increased 56 percent from $14.8 million in the same period a year earlier. Earnings per diluted share were $1.34 in the first quarter of 2011, up 47 percent from $0.91 in the first quarter of 2010.

In the first quarter of 2011, total revenue rose 34 percent from the year-earlier period to a record $111.8 million. Total revenue consists of cash collections reduced by amounts applied to principal on the company’s owned debt portfolios, plus fee income earned from its fee-for-service businesses.

“Portfolio Recovery Associates kicked off 2011 with record financial results, driven by significantly higher first-quarter cash collections on our portfolios of defaulted consumer debt,” said Steven D. Fredrickson, chairman, president and chief executive officer. “This performance, building on the company’s strong results in 2010, in large part reflects the improvements we’ve continued to make in our collections operations over time. These long-term investments paid off particularly well in the first quarter, with all measurements of collector productivity up strongly from 2010.”

Cash collections increased 40 percent to a record $166.7 million in the first quarter of 2011 from $119.2 million in the year-ago period.  Call center and other collections increased 18 percent, external legal collections increased 39 percent, internal legal collections grew 46 percent, and purchased bankruptcy collections gained 76 percent when compared with the year-earlier period.

In the first quarter of 2011, PRA’s revenue was a record $111.8 million, up 34 percent compared with the same period a year ago.  This was driven by record cash receipts of $182.5 million in the first quarter, up 36 percent from $134.6 million a year earlier.  Cash receipts are comprised of both cash collections and revenue from the company’s fee-based businesses.

PRA purchased $1.49 billion of face-value debt during the first quarter of 2011 for $107.9 million.  This was acquired in 79 portfolios from nine different sellers.

The company’s fee-for-service businesses generated revenue of $15.8 million in the first quarter of 2011, an increase of 2 percent from the same period a year ago.  This increase was primarily due to the performance of Claims Compensation Bureau, LLC, or CCB.  Portfolio Recovery Associates acquired a 62 percent controlling interest in CCB, on March 15, 2010.  Together, the fee businesses accounted for 14.1 percent of the Company’s overall revenue in the first quarter of 2011, down from 18.5 percent in the first quarter of 2010.

Kevin P. Stevenson, chief financial and administrative officer, said: “Portfolio Recovery Associates turned in a strong performance across the board in the first quarter, building on record cash collections driven by the long-term investments we have made in portfolio purchases and our collections operations. In addition, we saw our fee businesses make progress in the quarter, led by strong results from our claims processing subsidiary, CCB. Our other fee businesses continued to meet their challenges head on, with a new leadership team at our government services business and with process and strategy improvements and management changes at our auto location business.”

Portfolio Recovery Associates, Inc. (NASDAQ: PRAA), a specialized financial services company, is a market leader in the consumer debt purchase and collection industry. The Company, which has purchased more than $56 billion of defaulted consumer debt since its inception, has operations in 10 states, approximately 25 million customer accounts and nearly 2,500 employees.


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