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News   Press Releases

PRA Reports Second Quarter 2013 Results

PRAA | July 30, 2013

NORFOLK, Va., July 30, 2013 (GLOBE NEWSWIRE) -- Portfolio Recovery Associates, Inc. (PRA), a financial and business services company operating in the U.S. and U.K, today reported its second quarter 2013 financial results.

Second Quarter Highlights

  • Cash collections of $296 million, up 28% from the second quarter of 2012.
  • Revenues of $183.0 million, up 24%.
  • Net income attributable to PRA of $43.6 million, up 36%.
  • $2.56 diluted EPS, compared with $1.87 a year ago, up 37%, 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.
  • 22.5% return on average equity, annualized.
  • $200 million of portfolio purchases.

Net income attributable to PRA for the first six months of 2013 was $82.2 million, or $4.81 per diluted share, compared with $57.5 million, or $3.34 per diluted share for the first six months of 2012. On June 10, 2013, the company's board of directors declared a three-for-one stock split by means of a stock dividend. The new shares are expected to be distributed on or around August 1, 2013. On a post-stock split basis, diluted earnings per share would have been $1.60 for the first half of 2013 compared with $1.11 for the first half of 2012.

Year-to-date 2013 revenues were $352.5 million, compared with $288.0 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," Fredrickson said.

REVENUES

  • Revenues were $183.0 million for the quarter, up 24% from a year ago, and were comprised of $168.6 million in net finance receivables income and $14.4 million in fee income.

Finance Receivables Income and Cash Collections

  • Net finance receivables income increased 27% to $168.6 million in Q2 2013 from $132.6 million in the year-ago period.
     
  • Cash collections from finance receivables increased 28% over Q2 2012 to $296 million, and 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.
           
Cash Collection Source ($ in thousands) Q22013 Q12013 Q42012 Q32012 Q22012
Call Center & Other Collections  $ 90,229  $ 89,037  $ 72,624  $ 72,394  $ 73,582
External Legal Collections  50,131  47,910  41,521  39,913  41,464
Internal Legal Collections  30,365  29,283  23,968  25,650  25,361
Bankruptcy Court Trustee Collections  125,672  109,233  91,098  91,095  92,018
Total Cash Collections  $ 296,397  $ 275,463  $ 229,211  $ 229,052  $ 232,425
           
  • In Q2 2013, principal amortization of finance receivables was $127.8 million, or 43.1% of cash collections. This compares with $99.8 million, or 43.0% of cash collections, recorded in the year-earlier quarter. Principal amortization includes net allowance reversals of $1.2 million recorded against certain pools of finance receivables in the quarter, compared with a net allowance charge of $2.2 million recorded in Q2 2012.

Fee Income

  • PRA's fee-based businesses generated $14.4 million in fee income in Q2 2013, compared with $15.3 million a year ago.

OPERATING EXPENSES AND OPERATING INCOME

  • Q2 2013 operating expenses were $109.1 million, up $15.8 million or 17% from the year-earlier quarter. 
     
  • Q2 2013 operating income was $73.8 million, compared with $54.6 million in Q2 2012, an increase of 35%. The operating margin increased from 36.9% to 40.4%.

PORTFOLIO PURCHASING

  • 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.
           
Finance Receivables Portfolio
Acquisitions ($ in thousands)
Q22013
Q12013
Q42012
Q32012
Q22012
Core Customer Debt  $ 118,195  $ 128,338  $ 88,107  $ 61,684  $ 71,599
Bankruptcy Court Claims, U.S.  82,273  86,595  111,001  41,277  53,460
Total Portfolio Acquisitions  $ 200,468  $ 214,933  $ 199,108  $ 102,961  $ 125,059
 
           
  • Core customer purchases were comprised of $113.3 million of U.S. core customer accounts and $4.9 million of U.K. core customer accounts. 

BALANCE SHEET

  • Cash balances were $43.5 million at June 30, 2013, compared with $42.6 million a year ago. 
     
  • Borrowings totaled $413.8 million at June 30, 2013, and consisted of $197.8 million in long-term debt and $216.0 million in revolving credit. Total borrowings were $292.8 million at June 30, 2012. 
     
  • Net deferred tax liabilities were $187.7 million at June 30, 2013, compared with $190.6 million a year ago. 
     
  • Stockholders' equity increased in Q2 2013 to $791.9 million from $751.0 million at March 31, 2013. Stockholders' equity was $633.4 million at June 30, 2012. 

Conference Call Information

PRA will hold a conference call today with investors at 5:30 p.m. ET to discuss its Q2 2013 results. Investors may access the call by calling 888-695-7639 in the U.S. or 970-315-0482 outside the U.S. The conference ID is 16240403. A replay will be available approximately one hour after the call ends and will remain available until August 6, 2013.  Investors may access the replay of the call by calling 855-859-2056 in the U.S. or 404-537-3406 outside the U.S. To access the replay, use the conference ID 16240403. Investors also may listen to the conference call via webcast, both live and archived, at http://ir.PortfolioRecovery.com/events.cfm.

About PRA

As a leader in the U.S. debt buying industry, Portfolio Recovery Associates, Inc. (Nasdaq:PRAA) returns capital to banks and other creditors that helps expand financial services for consumers. PRA collaborates with its customers to create affordable, realistic debt repayment plans. The company also provides a broad range of fee-based services to local governments and law enforcement, U.S. businesses, institutional investors, global hedge funds, and U.K. banks and creditors. 

PRA has been annually ranked as one of Forbes' 100 Best Small Companies in America since 2007, advancing to the Top 25 in 2012. The company also was recognized last year as one of Fortune's 100 Fastest-Growing Companies in the U.S.  For more information, visit www.PortfolioRecovery.com.

About Forward-Looking Statements

Statements herein which are not historical, including PRA's or its management's intentions, hopes, beliefs, expectations, representations, projections, plans or predictions of the future, including future revenue and earnings growth, statements with respect to future contributions of its subsidiaries to earnings and future portfolio-purchase opportunities, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include references to PRA's presentations and web casts. The forward-looking statements in this press release are based upon management's beliefs, assumptions and expectations of PRA's future operations and economic performance, taking into account currently available information. These statements are not statements of historical fact. Forward-looking statements involve risks and uncertainties, some of which are not currently known to us.  Actual events or results may differ from those expressed or implied in any such forward-looking statements as a result of various factors, including the risk factors and other risks that are described from time to time in PRA's filings with the Securities and Exchange Commission (SEC) including but not limited to its annual reports on Form 10-K, its quarterly reports on Form 10-Q and its current reports on Form 8-K, filed with the SEC and available through PRA's website, which contain a more detailed discussion of PRA's business, including risks and uncertainties that may affect future results. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. Information in this press release may be superseded by more recent information or statements, which may be disclosed in later press releases, subsequent filings with the SEC or otherwise. Except as required by law, PRA assumes no obligation to publicly update or revise its forward-looking statements contained herein to reflect any change in PRA's expectations with regard thereto or to reflect any change in events, conditions or circumstances on which any such forward-looking statements are based, in whole or in part.

         
Portfolio Recovery Associates, Inc.
Unaudited Consolidated Income Statements
(in thousands, except per share amounts)
         
  Three Months Three Months Six Months Six Months
  Ended Ended Ended Ended
  June 30, June 30, June 30, June 30,
  2013 2012 2013 2012
         
Revenues:        
Income recognized on finance receivables, net $ 168,570 $ 132,587 $ 323,362 $ 256,812
Fee income 14,391 15,298 29,158 31,218
         
Total revenues 182,961 147,885 352,520 288,030
         
Operating expenses:        
Compensation and employee services 48,202 42,479 93,199 82,173
Legal collection fees 10,609 8,988 21,138 16,606
Legal collection costs 22,717 18,227 43,218 41,895
Agent fees 1,280 1,323 2,889 2,951
Outside fees and services 8,634 5,584 16,081 11,444
Communications 7,560 7,007 16,521 15,260
Rent and occupancy 1,824 1,656 3,511 3,268
Depreciation and amortization 3,534 3,555 6,900 7,210
Other operating expenses 4,775 4,470 9,350 8,206
         
Total operating expenses 109,135 93,289 212,807 189,013
         
Income from operations 73,826 54,596 139,713 99,017
         
Other income and (expense):        
Interest income -- 7 -- 8
Interest expense (2,923) (2,381) (5,612) (5,034)
         
Income before income taxes 70,903 52,222 134,101 93,991
         
Provision for income taxes 27,489 20,171 52,170 36,751
         
Net income $ 43,414 $ 32,051 $ 81,931 $ 57,240
         
Adjustment for (loss)/income attributable to redeemable noncontrolling interest (185) 36 (268) (237)
         
Net income attributable to Portfolio Recovery Associates, Inc. $ 43,599 $ 32,015 $ 82,199 $ 57,477
         
Net income per common share attributable to Portfolio Recovery Associates, Inc.:    
Basic  $ 2.58  $ 1.88  $ 4.86  $ 3.36
Diluted  $ 2.56  $ 1.87  $ 4.81  $ 3.34
         
Weighted average number of shares outstanding:      
Basic 16,917 17,027 16,927 17,111
Diluted 17,061 17,133 17,076 17,200
         
As adjusted for the three-for-one stock split by means of a stock dividend:    
Net income per common share attributable to Portfolio Recovery Associates, Inc.:    
Basic  $ 0.86  $ 0.63  $ 1.62  $ 1.12
Diluted  $ 0.85  $ 0.62  $ 1.60  $ 1.11
         
Weighted average number of shares outstanding:      
Basic 50,751 51,081 50,781 51,333
Diluted 51,183 51,399 51,228 51,600
         
     
Portfolio Recovery Associates, Inc.
Unaudited Consolidated Balance Sheets
(in thousands, except per share amounts)
     
  June 30, December 31,
ASSETS 2013 2012
     
Cash and cash equivalents $ 43,459 $ 32,687
Finance receivables, net 1,236,859 1,078,951
Accounts receivable, net 10,421 10,486
Income taxes receivable 2,487 --
Property and equipment, net 27,278 25,312
Goodwill 106,953 109,488
Intangible assets, net 17,396 20,364
Other assets 12,393 11,668
     
Total assets $ 1,457,246 $ 1,288,956
     
LIABILITIES AND EQUITY    
     
Liabilities:    
Accounts payable $ 9,356 $ 12,155
Accrued expenses and other liabilities 29,600 18,953
Income taxes payable -- 3,125
Accrued payroll and bonuses 14,552 12,804
Net deferred tax liability 187,730 185,277
Line of credit 216,000 127,000
Long-term debt 197,774 200,542
     
Total liabilities 655,012 559,856
     
Redeemable noncontrolling Interest 10,336 20,673
     
Stockholders' equity:    
Preferred stock, par value $0.01, authorized shares, 2,000, issued and outstanding shares - 0 -- --
Common stock, par value $0.01, 60,000 authorized shares, 16,910 issued and outstanding shares at June 30, 2013, and 16,909 issued and outstanding shares at December 31, 2012 or 50,730 and 50,727 issued and outstanding shares at June 30, 2013 and December 31, 2012, respectively as adjusted for the 3-for-1 stock split by means of a stock dividend payable on August 1, 2013 169 169
Additional paid-in capital 156,912 151,216
Retained earnings 636,390 554,191
Accumulated other comprehensive (loss)/income (1,573) 2,851
Total stockholders' equity 791,898 708,427
     
Total liabilities and equity $ 1,457,246 $ 1,288,956
     
     
Portfolio Recovery Associates, Inc.
Unaudited Consolidated Statements of Cash Flows
(in thousands)
     
  Six Months Six Months
  Ended Ended
  June 30, June 30,
  2013 2012
Cash flows from operating activities:  
Net income $ 81,931 $ 57,240
Adjustments to reconcile net income to net cash provided by operating activities:    
Amortization of share-based compensation 6,651 5,576
Depreciation and amortization 6,900 7,210
Deferred tax expense/(benefit) 2,488 (3,244)
Changes in operating assets and liabilities:  
Other assets (1,284) (121)
Accounts receivable (46) 1,320
Accounts payable (2,633) (432)
Income taxes (5,748) (5,850)
Accrued expenses 7,313 (3,016)
Accrued payroll and bonuses 1,757 (4,447)
     
Net cash provided by operating activities 97,329 54,236
     
Cash flows from investing activities:  
Purchases of property and equipment (6,639) (2,952)
Acquisition of finance receivables, net of buybacks (407,347) (229,388)
Collections applied to principal on finance receivables 248,498 193,608
Business acquisition, net of cash acquired -- (48,653)
     
Net cash used in investing activities (165,488) (87,385)
     
Cash flows from financing activities:  
Income tax benefit from share-based compensation 2,659 1,435
Proceeds from line of credit 217,000 151,000
Principal payments on line of credit (128,000) (79,000)
Repurchases of common stock (8,506) (22,726)
Cash paid for purchase of portion of noncontrolling interest (1,150) --
Distributions paid to noncontrolling interest (51) --
Principal payments on long-term debt (2,768) (397)
     
Net cash provided by financing activities 79,184 50,312
     
Effect of exchange rate on cash (253) (1,239)
     
Net increase in cash and cash equivalents 10,772 15,924
     
Cash and cash equivalents, beginning of year 32,687 26,697
     
Cash and cash equivalents, end of period $ 43,459 $ 42,621
     
Supplemental disclosure of cash flow information:  
Cash paid for interest $ 5,581 $ 5,312
Cash paid for income taxes  52,809  44,509
     
Noncash investing and financing activities:  
Adjustment of the noncontrolling interest measurement amount $ (245) $ (2,048)
Purchase of noncontrolling interest  9,162  -- 
Distributions payable relating to noncontrolling interest  2  261
Employee stock relinquished for payment of taxes  (4,025)  (2,077)
     
             
Purchase Price Multiples at June 30, 2013, Entire Domestic Portfolio
($ in thousands)
        Actual Cash    
    Total Net Finance Collections Estimated Total Estimated
Purchase Purchase Estimated Receivables Including Cash Remaining  Collections to
Period Price Collections Balance Sales Collections Purchase Price
1996  $ 3,080  $ 10,229  $ --   $ 10,194  $ 35 332%
1997  7,685  25,567  --   25,465  102 333%
1998  11,089  37,679  --   37,279  400 340%
1999  18,898  69,973  --   69,162  811 370%
2000  25,020  118,136  --   116,114  2,022 472%
2001  33,481  178,285  --   174,875  3,410 532%
2002  42,325  202,244  --   197,028  5,216 478%
2003  61,448  273,133  --   262,911  10,222 444%
2004  59,177  206,029  --   196,376  9,653 348%
2005  143,169  317,167  6,150  306,869  10,298 222%
2006  107,673  216,007  6,355  204,867  11,140 201%
2007  258,394  510,832  23,193  466,671  44,161 198%
2008  275,170  524,225  37,427  456,847  67,378 191%
2009  281,455  876,990  51,114  677,819  199,171 312%
2010  358,114  992,860  104,951  649,082  343,778 277%
2011  394,100  933,696  201,449  442,739  490,957 237%
2012  512,678  952,915  406,473  217,979  734,936 186%
2013  406,883  730,475  386,003  44,681  685,794 180%
Total  $ 2,999,839  $ 7,176,442  $ 1,223,115  $ 4,556,958  $ 2,619,484 239%
             
 
Purchase Price Multiples at June 30, 2013, Purchased Bankruptcy Portfolio - Domestic
($ in thousands)
        Actual Cash    
    Total Net Finance Collections Estimated Total Estimated
Purchase Purchase Estimated Receivables Including Cash Remaining  Collections to
Period Price Collections Balance Sales Collections Purchase Price
1996-2003  $ --   $ --   $ --   $ --   $ --  0%
2004  7,468  14,586  --   14,461  125 195%
2005  29,301  43,670  46  43,579  91 149%
2006  17,630  31,699  63  31,391  308 180%
2007  78,542  105,019  214  103,654  1,365 134%
2008  108,602  170,078  7,293  160,701  9,377 157%
2009  156,049  457,691  28,950  358,923  98,768 293%
2010  209,212  500,121  65,248  332,601  167,520 239%
2011  182,101  295,727  115,416  122,328  173,399 162%
2012  253,658  344,392  211,472  69,681  274,711 136%
2013  166,165  218,701  153,147  19,142  199,559 132%
Total  $ 1,208,728  $ 2,181,684  $ 581,849  $ 1,256,461  $ 925,223 180%
             
             
Purchase Price Multiples at June 30, 2013, Core Portfolio - Domestic
($ in thousands)
        Actual Cash    
    Total Net Finance Collections Estimated Total Estimated
Purchase Purchase Estimated Receivables Including Cash Remaining  Collections to
Period Price Collections Balance Sales Collections Purchase Price
1996  $ 3,080  $ 10,229  $ --   $ 10,194  $ 35 332%
1997  7,685  25,567  --   25,465  102 333%
1998  11,089  37,679  --   37,279  400 340%
1999  18,898  69,973  --   69,162  811 370%
2000  25,020  118,136  --   116,114  2,022 472%
2001  33,481  178,285  --   174,875  3,410 532%
2002  42,325  202,244  --   197,028  5,216 478%
2003  61,448  273,133  --   262,911  10,222 444%
2004  51,709  191,443  --   181,915  9,528 370%
2005  113,868  273,497  6,104  263,290  10,207 240%
2006  90,043  184,308  6,292  173,476  10,832 205%
2007  179,852  405,813  22,979  363,017  42,796 226%
2008  166,568  354,147  30,134  296,146  58,001 213%
2009  125,406  419,299  22,164  318,896  100,403 334%
2010  148,902  492,739  39,703  316,481  176,258 331%
2011  211,999  637,969  86,033  320,411  317,558 301%
2012  259,020  608,523  195,001  148,298  460,225 235%
2013  240,718  511,774  232,856  25,539  486,235 213%
Total  $ 1,791,111  $ 4,994,758  $ 641,266  $ 3,300,497  $ 1,694,261 279%
             
             
FINANCIAL HIGHLIGHTS
  Three Months Ended   Six Months Ended  
  June 30, % June 30, %
  2013 2012 Change 2013 2012 Change
EARNINGS (in thousands)            
Income recognized on finance receivables, net  $ 168,570  $ 132,587 27%  $ 323,362  $ 256,812 26%
Fee income  14,391  15,298 -6%  29,158  31,218 -7%
Total revenues  182,961  147,885 24%  352,520  288,030 22%
Operating expenses  109,135  93,289 17%  212,807  189,013 13%
Income from operations  73,826  54,596 35%  139,713  99,017 41%
Net interest expense  2,923  2,374 23%  5,612  5,026 12%
Net income  43,414  32,051 35%  81,931  57,240 43%
Net income attributable to Portfolio Recovery Associates, Inc.  43,599  32,015 36%  82,199  57,477 43%
             
PERIOD-END BALANCES (in thousands)            
Cash and cash equivalents  $ 43,459  $ 42,621 2%  $ 43,459  $ 42,621 2%
Finance receivables, net  1,236,859  966,508 28%  1,236,859  966,508 28%
Goodwill and intangible assets, net  124,349  121,748 2%  124,349  121,748 2%
Total assets  1,457,246  1,173,738 24%  1,457,246  1,173,738 24%
Line of credit and long-term debt  413,774  292,849 41%  413,774  292,849 41%
Total liabilities  655,012  520,911 26%  655,012  520,911 26%
Total equity  791,898  633,446 25%  791,898  633,446 25%
             
FINANCE RECEIVABLE COLLECTIONS (dollars in thousands)            
Cash collections  $ 296,397  $ 232,425 28%  $ 571,860  $ 450,420 27%
Principal amortization without allowance charges  129,012  97,634 32%  247,510  190,910 30%
Principal amortization with allowance charges  127,827  99,838 28%  248,498  193,608 28%
Principal amortization w/ allowance charges as % of cash collections:            
 Including fully amortized pools 43.1% 43.0% 0% 43.5% 43.0% 1%
 Excluding fully amortized pools 44.7% 44.4% 1% 44.8% 44.6% 0%
             
ALLOWANCE FOR FINANCE RECEIVABLES (dollars in thousands)            
Balance at period-end  $ 94,111  $ 89,269 5%  $ 94,111  $ 89,269 5%
Allowance (reversal)/charge  (1,185)  2,204 -154%  988  2,698 -63%
Allowance (reversal)/charge to period-end net finance receivables -0.1% 0.2% -142% 0.1% 0.3% -71%
Allowance (reversal)/charge to net finance receivable income -0.7% 1.7% -142% 0.3% 1.1% -71%
Allowance (reversal)/charge to cash collections -0.4% 0.9% -142% 0.2% 0.6% -71%
             
PURCHASES OF FINANCE RECEIVABLES (dollars in thousands)            
Purchase price - core  $ 113,314  $ 69,512 63%  $ 240,265  $ 121,616 98%
Face value - core  1,178,229  1,033,331 14%  2,577,189  2,005,599 28%
Purchase price - bankruptcy  82,273  53,460 54%  168,868  110,352 53%
Face value - bankruptcy  1,926,515  448,244 330%  2,363,023  816,691 189%
Purchase price - UK  4,881  2,087 134%  6,268  4,508 39%
Face value - UK  81,852  44,779 83%  100,422  160,130 -37%
Purchase price - total  200,468  125,059 60%  415,401  236,476 76%
Face value - total  3,186,596  1,526,354 109%  5,040,634  2,982,420 69%
Number of portfolios - total 94 114 -18% 185 205 -10%
ESTIMATED REMAINING COLLECTIONS (in thousands)            
Estimated remaining collections - core  $ 1,711,006  $ 1,315,809 30%  $ 1,711,006  $ 1,315,809 30%
Estimated remaining collections - bankruptcy  925,223  802,353 15%  925,223  802,353 15%
Estimated remaining collections - total  2,636,229  2,118,162 24%  2,636,229  2,118,162 24%
             
SHARE DATA (share amounts in thousands)            
Net income per common share - diluted  $ 2.56  $ 1.87 37%  $ 4.81  $ 3.34 44%
Weighted average number of shares outstanding - diluted  17,061  17,133 0%  17,076  17,200 -1%
Shares repurchased  55  301 -82%  71  331 -79%
Average price paid per share repurchased (including acquisitions costs)  $ 119.45  $ 68.62 74%  $ 119.13  $ 68.56 74%
Closing market price  $ 153.63  $ 91.26 68%  $ 153.63  $ 91.26 68%
             
SHARE DATA-ADJUSTED (7) (share amounts in thousands)            
Net income per common share - diluted  $ 0.85  $ 0.62 37%  $ 1.60  $ 1.11 44%
Weighted average number of shares outstanding - diluted  51,183  51,399 0%  51,228  51,600 -1%
Shares repurchased  166  903 -82%  214  994 -79%
Average price paid per share repurchased (including acquisitions costs)  $ 39.82  $ 22.87 74%  $ 39.71  $ 22.85 74%
Closing market price  $ 51.21  $ 30.42 68%  $ 51.21  $ 30.42 68%
             
RATIOS AND OTHER DATA (dollars in thousands)            
Return on average equity (1) 22.5% 20.3% 11% 21.8% 18.5% 18%
Return on revenue (2) 23.7% 21.7% 9% 23.2% 19.9% 17%
Return on average assets (3) 12.1% 11.1% 9% 11.7% 10.0% 17%
Operating margin (4) 40.4% 36.9% 9% 39.6% 34.4% 15%
Operating expense to cash receipts (5) 35.1% 37.7% -7% 35.4% 39.2% -10%
Debt to equity (6) 52.3% 46.2% 13% 52.3% 46.2% 13%
Number of collectors 2,190 1,952 12% 2,190 1,952 12%
Number of full-time equivalent employees 3,362 3,032 11% 3,362 3,032 11%
Cash receipts (5)  $ 310,788  $ 247,723 25%  $ 601,018  $ 481,639 25%
Line of credit - unused portion at period end  184,000  166,450 11%  184,000  166,450 11%
             
           
FINANCIAL HIGHLIGHTS
  For the Quarter Ended
  June 30 March 31 December 31 September 30 June 30
  2013 2013 2012 2012 2012
EARNINGS (in thousands)          
Income recognized on finance receivables, net  $ 168,570  $ 154,792  $ 138,068  $ 135,754  $ 132,587
Fee income  14,391  14,767  16,183  14,765  15,298
Total revenues  182,961  169,559  154,251  150,519  147,885
Operating expenses  109,135  103,672  94,262  93,461  93,289
Income from operations  73,826  65,887  59,989  57,058  54,596
Net interest expense  2,923  2,689  1,816  2,189  2,374
Net income  43,414  38,517  35,732  33,127  32,051
Net income attributable to Portfolio Recovery Associates, Inc.  43,599  38,600  35,802  33,314  32,015
           
PERIOD-END BALANCES (in thousands)          
Cash and cash equivalents  $ 43,459  $ 39,111  $ 32,687  $ 31,488  $ 42,621
Finance receivables, net  1,236,859  1,169,747  1,078,951  973,594  966,508
Goodwill and intangible assets, net  124,349  125,462  129,852  121,623  121,748
Total assets  1,457,246  1,382,739  1,288,956  1,169,698  1,173,738
Line of credit and long-term debt  413,774  371,159  327,542  250,674  292,849
Total liabilities  655,012  621,413  559,856  479,211  520,911
Total equity  791,898  750,990  708,427  670,489  633,446
           
FINANCE RECEIVABLE COLLECTIONS (dollars in thousands)          
Cash collections  $ 296,397  $ 275,463  $ 229,211  $ 229,052  $ 232,425
Principal amortization without allowance charges  129,012  118,498  88,851  91,736  97,634
Principal amortization with allowance charges  127,827  120,671  91,142  93,298  99,838
Principal amortization w/ allowance charges as % of cash collections:          
 Including fully amortized pools 43.1% 43.8% 39.8% 40.7% 43.0%
 Excluding fully amortized pools 44.7% 44.8% 40.9% 42.0% 44.4%
           
ALLOWANCE FOR FINANCE RECEIVABLES (dollars in thousands)          
Balance at period-end  $ 94,111  $ 95,296  $ 93,123  $ 90,832  $ 89,269
Allowance (reversal)/charge  (1,185)  2,173  2,291  1,563  2,204
Allowance (reversal)/charge to period-end net finance receivables -0.10% 0.19% 0.21% 0.16% 0.23%
Allowance (reversal)/charge to net finance receivable income -0.70% 1.40% 1.66% 1.15% 1.66%
Allowance (reversal)/charge to cash collections -0.40% 0.79% 1.00% 0.68% 0.95%
           
PURCHASES OF FINANCE RECEIVABLES (dollars in thousands)          
Purchase price - core  $ 113,314  $ 126,951  $ 85,476  $ 52,703  $ 69,512
Face value - core  1,178,229  1,398,960  901,512  674,135  1,033,331
Purchase price - bankruptcy  82,273  86,595  111,001  41,277  53,460
Face value - bankruptcy  1,926,515  436,508  946,927  341,359  448,244
Purchase price - UK  4,881  1,387  2,631  8,981  2,087
Face value - UK  81,852  18,570  59,953  248,667  44,779
Purchase price - total  200,468  214,933  199,108  102,961  125,059
Face value - total  3,186,596  1,854,038  1,908,392  1,264,161  1,526,354
Number of portfolios - total 94 91 104 107 114
ESTIMATED REMAINING COLLECTIONS (in thousands)          
Estimated remaining collections - core  $ 1,711,006  $ 1,562,383  $ 1,410,053  $ 1,346,562  $ 1,315,809
Estimated remaining collections - bankruptcy  925,223  924,520  905,136  791,018  802,353
Estimated remaining collections - total  2,636,229  2,486,903  2,315,189  2,137,580  2,118,162
           
SHARE DATA (share amounts in thousands)          
Net income per common share - diluted  $ 2.56  $ 2.26  $ 2.10  $ 1.96  $ 1.87
Weighted average number of shares outstanding - diluted  17,061  17,091  17,072  17,022  17,133
Shares repurchased  55  16  --  --  301
Average price paid per share repurchased (including acquisitions costs)  $ 119.45  $ 118.03  $ 93.02  $ --   $ 68.62
Closing market price  $ 153.63  $ 126.92  $ 106.86  $ 104.43  $ 91.26
           
SHARE DATA-ADJUSTED (7) (share amounts in thousands)          
Net income per common share - diluted  $ 0.85  $ 0.75  $ 0.70  $ 0.65  $ 0.62
Weighted average number of shares outstanding - diluted  51,183  51,273  51,217  51,066  51,399
Shares repurchased  166  48  --  --  903
Average price paid per share repurchased (including acquisitions costs)  $ 39.82  $ 39.34  $ 31.01  $ --   $ 22.87
Closing market price  $ 51.21  $ 42.31  $ 35.62  $ 34.81  $ 30.42
           
RATIOS AND OTHER DATA (dollars in thousands)          
Return on average equity (1) 22.5% 21.1% 20.6% 20.3% 20.3%
Return on revenue (2) 23.7% 22.7% 23.2% 22.0% 21.7%
Return on average assets (3) 12.1% 11.3% 11.8% 11.4% 11.1%
Operating margin (4) 40.4% 38.9% 38.9% 37.9% 36.9%
Operating expense to cash receipts (5) 35.1% 35.7% 38.4% 38.3% 37.7%
Debt to equity (6) 52.3% 49.4% 46.2% 37.4% 46.3%
Number of collectors 2,190 2,159 2,153 1,992 1,952
Number of full-time equivalent employees 3,362 3,250 3,221 3,103 3,032
Cash receipts (5)  $ 310,788  $ 290,230  $ 245,394  $ 243,817  $ 247,723
Line of credit - unused portion at period end  184,000  228,000  273,000  214,450  166,450
(1) Calculated as annualized net income divided by average equity for the period
(2) Calculated as net income divided by total revenues
(3) Calculated as annualized net income divided by average assets for the period
(4) Calculated as income from operations divided by total revenues
(5) "Cash receipts" is defined as cash collections plus fee income
(6) For purposes of this ratio, "debt" equals the line of credit balance plus long-term debt
(7) All per share data has been adjusted to reflect the 3-for-1 stock split by means of a stock dividend which was declared on June 10, 2013 and payable August 1, 2013 to holders of record as of July 1, 2013
            
CONTACT: Rick Goulart
         Vice President, Corporate Communications
         757-961-3525
         RickGoulart@PortfolioRecovery.com

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Globe Newswire
July 30, 2013 - 4:00 PM EDT

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