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07.08.2014 22:05
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Encore Capital Group Announces Second Quarter 2014 Financial Results; Strong Collections Drive Record Quarter
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PR Newswire
SAN DIEGO, Aug. 7, 2014
SAN DIEGO, Aug. 7, 2014 /PRNewswire/ -- Encore Capital Group, Inc. (NASDAQ: ECPG), an international specialty finance company providing debt recovery solutions for consumers and property owners across a broad range of assets, today reported consolidated financial results for the second quarter ended June 30, 2014.
"Encore delivered record performance in the second quarter," said Kenneth A. Vecchione, President and Chief Executive Officer. "Our strong growth in collections, which were up nearly 50 percent to over $400 million, drove record earnings per share. At the same time, our strategic capital investments enabled us to grow our Estimated Remaining Collections to $4.9 billion.
"Our results this quarter clearly show that our strategy of growing the core business, diversifying into new geographies and expanding into new asset classes is returning significant value to the business," Vecchione said. "The acquisition of Atlantic Credit & Finance enhances our core business's capabilities to collect on fresh, higher-balance accounts. Our geographic expansion continued to drive strong results this quarter, with nearly one fourth of our collections coming from the U.K. We also made great progress in the tax lien industry, with significant capital deployments following Propel's previously announced acquisition of a nationwide tax lien portfolio and servicing platform. Together, these strategic moves have positioned Encore to thrive in a time of continued industry change and consolidation."
In April, Encore successfully closed the acquisition of a controlling interest in Grove Holdings, the parent company of Grove Capital Management. Grove will provide Encore with a leadership position in the purchasing and servicing of individual voluntary arrangements, or IVAs, in the U.K.
In early May, Encore's Propel Financial Services subsidiary completed the first securitization of its tax lien portfolio in Texas, diversifying liquidity sources and lowering its costs of funds. Also in the second quarter, Propel acquired a nationwide tax lien portfolio and servicing platform from a national acquirer of tax liens. The acquisition strengthens Propel's established servicing platform and expands Propel's reach to 22 states across the country.
This week, Encore acquired the servicing platform and portfolio of Atlantic Credit & Finance. Atlantic specializes in higher-balance, fresh paper collections, a new market segment for Encore. For further detail, please refer to the separate press release announcing this transaction issued by Encore at the close of the market today. Last week, Encore amended its revolving credit facility in the U.S., principally to facilitate the acquisition of Atlantic Credit & Finance, and to provide additional flexibility to invest in its subsidiaries.
Today Encore announced the appointment of Michael Monaco to its Board of Directors, effective August 6. Monaco is a Senior Managing Director at CDG Group, LLC, and his past experience includes his service as Chairman and Chief Executive Officer of Accelerator, LLC, and as Executive Vice President and Chief Financial Officer of the American Express Company. For further detail, please refer to the separate press release announcing this appointment issued by Encore at the close of the market today.
Financial Highlights for the Second Quarter of 2014:
- Gross collections from the portfolio purchasing and recovery business grew 47% to $409.3 million, compared to $278.4 million in the same period of the prior year.
- Investment in receivable portfolios in the portfolio purchasing and recovery business was $225.8 million, to purchase $3.1 billion in face value of debt, compared to $423.1 million, to purchase $68.9 billion in face value of debt in the same period of the prior year. Much of the debt purchase in the second quarter of 2013 was associated with Encore's acquisition of Asset Acceptance Capital Corporation in its entirety.
- Available capacity under Encore's revolving credit facility, subject to borrowing base and applicable debt covenants, was $419 million as of June 30, 2014, not including the $250 million additional capacity provided by the facility's accordion feature. Total debt was $2.7 billion as of June 30, 2014, compared to $1.9 billion as of December 31, 2013.
- Total revenues increased 72% to $269.2 million, compared to $156.1 million in the same period of the prior year.
- Total operating expenses increased 51% to $190.7 million, compared to $126.2 million in the same period of the prior year. Adjusted Operating Expenses (defined as operating expenses excluding stock-based compensation expense, expenses related to non-portfolio purchasing and recovery business, one-time charges, and acquisition and integration related expenses) per dollar collected for the portfolio purchasing and recovery business increased to 37.9%, compared to 37.8% in the same period of the prior year.
- Adjusted EBITDA (defined as net income before interest, taxes, depreciation and amortization, stock-based compensation expenses, portfolio amortization, one-time charges, and acquisition and integration related expenses), increased 48% to $255.8 million, compared to $172.5 million in the same period of the prior year.
- Total interest expense increased to $43.2 million, as compared to $7.5 million in the same period of the prior year, reflecting the financing of Encore's recent acquisitions.
- Net income attributable to Encore was $23.6 million, or $0.86 per fully diluted share, compared to net income attributable to Encore of $11.0 million, or $0.44 per fully diluted share, in the same period of the prior year.
- Adjusted Income Attributable to Encore (defined as net income attributable to Encore excluding the noncontrolling interest, non-cash interest and issuance cost amortization, one-time charges, and acquisition and integration related expenses, all net of tax) increased to $29.1 million, compared to Adjusted Income Attributable to Encore of $21.2 million in the same period of the prior year.
- Adjusted Income Attributable to Encore per Share (also referred to as Economic EPS) grew 29% to $1.10, compared to $0.85 in the same period of the prior year. In the second quarter, Economic EPS adjusts for approximately 1.0 million shares associated with convertible notes that will not be issued but are reflected in the fully diluted share count for accounting purposes.
Conference Call and Webcast
The Company will hold a conference call today at 2:00 p.m. Pacific time / 5:00 p.m. Eastern time to discuss second quarter financial results.
Members of the public are invited to listen to the event via a listen-only telephone conference call line or the Internet. To access the live telephone conference call, please dial (877) 670-9781 or (631) 456-4378. The Conference ID is 76367232. To access the live webcast via the Internet, log on to the Investors page of the Company's website at www.encorecapital.com.
Non-GAAP Financial Measures
This news release includes certain financial measures that exclude the impact of certain items and therefore have not been calculated in accordance with U.S. generally accepted accounting principles ("GAAP"). The Company has included Adjusted Income Attributable to Encore and Adjusted Income Attributable to Encore per Share (also referred to as Economic EPS when adjusted for certain shares associated with our convertible notes that will not be issued but are reflected in the fully diluted share count for accounting purposes) because management uses this measure to assess operating performance, in order to highlight trends in the Company's business that may not otherwise be apparent when relying on financial measures calculated in accordance with GAAP. The Company has included information concerning Adjusted EBITDA because management utilizes this information, which is materially similar to a financial measure contained in covenants used in the Company's revolving credit facility, in the evaluation of its operations and believes that this measure is a useful indicator of the Company's ability to generate cash collections in excess of operating expenses through the liquidation of its receivable portfolios. The Company has included information concerning Adjusted Operating Expenses in order to facilitate a comparison of approximate cash costs to cash collections for the portfolio purchasing and recovery business in the periods presented. Adjusted Income Attributable to Encore, Adjusted Income Attributable to Encore per Share/Economic EPS, Adjusted EBITDA, and Adjusted Operating Expenses have not been prepared in accordance with GAAP. These non-GAAP financial measures should not be considered as alternatives to, or more meaningful than, net income, net income per share, and total operating expenses as indicators of the Company's operating performance. Further, these non-GAAP financial measures, as presented by the Company, may not be comparable to similarly titled measures reported by other companies. The Company has attached to this news release a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures.
About Encore Capital Group, Inc.
Encore Capital Group, an international specialty finance company with operations spanning seven countries, provides debt recovery solutions for consumers and property owners across a broad range of assets. Through its subsidiaries, the Company purchases portfolios of consumer receivables from major banks, credit unions, and utility providers, and partners with individuals as they repay their obligations and work toward financial recovery. Through its Propel Financial Services subsidiary, the Company assists property owners who are delinquent on their property taxes by structuring affordable monthly payment plans and purchases delinquent tax liens directly from selected taxing authorities. Through its subsidiaries in the United Kingdom, Cabot Credit Management, Marlin Financial Services and Grove Capital Management, the Company is a market-leading acquirer and manager of consumer debt in the United Kingdom, Spain and Ireland. Through its Refinancia subsidiary, the Company services distressed consumer debt in Colombia and Peru. Encore's success and future growth are driven by its sophisticated and widespread use of analytics, its broad investments in data and behavioral science, the significant cost advantages provided by its highly efficient operating model and proven investment strategy, and the Company's demonstrated commitment to conducting business ethically and in ways that support its consumers' financial recovery.
Headquartered in San Diego, Encore is a publicly traded NASDAQ Global Select company (ticker symbol: ECPG) and a component stock of the Russell 2000, the S&P SmallCap 600, and the Wilshire 4500. More information about the Company can be found at www.encorecapital.com. More information about the Company's Cabot Credit Management subsidiary can be found at www.cabotcm.com. Information found on the Company's website or Cabot's website is not incorporated by reference.
Forward Looking Statements
The statements in this press release that are not historical facts, including, most importantly, those statements preceded by, or that include, the words "will," "may," "believe," "projects," "expects," "anticipates" or the negation thereof, or similar expressions, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act"). These statements may include, but are not limited to, statements regarding our future operating results, performance, business plans or prospects. For all "forward-looking statements," the Company claims the protection of the safe harbor for forward-looking statements contained in the Reform Act. Such forward-looking statements involve risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company and its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and other factors are discussed in the reports filed by the Company with the Securities and Exchange Commission, including the most recent reports on Forms 10-K and 10-Q, as they may be amended from time to time. The Company disclaims any intent or obligation to update these forward-looking statements.
Contact:
Encore Capital Group, Inc.
Paul Grinberg (858) 309-6904
paul.grinberg@encorecapital.com
Bruce Thomas (858) 309-6442
bruce.thomas@encorecapital.com
FINANCIAL TABLES FOLLOW
| ENCORE CAPITAL GROUP, INC. Condensed Consolidated Statements of Financial Condition (In Thousands, Except Par Value Amounts) (Unaudited) | |||||
| | |||||
| | June 30, | | December 31, | ||
| Assets | | | | ||
| Cash and cash equivalents | $ | 123,407 | | $ | 126,213 |
| Investment in receivable portfolios, net | 1,987,985 | | 1,590,249 | ||
| Deferred court costs, net | 45,577 | | 41,219 | ||
| Receivables secured by property tax liens, net | 279,608 | | 212,814 | ||
| Property and equipment, net | 58,839 | | 55,783 | ||
| Other assets | 217,471 | | 154,783 | ||
| Goodwill | 879,910 | | 504,213 | ||
| Total assets | $ | 3,592,797 | | $ | 2,685,274 |
| Liabilities and equity | | | | ||
| Liabilities: | | | | ||
| Accounts payable and accrued liabilities | $ | 163,958 | | $ | 137,272 |
| Debt | 2,715,866 | | 1,850,431 | ||
| Other liabilities | 99,209 | | 95,100 | ||
| Total liabilities | 2,979,033 | | 2,082,803 | ||
| Commitments and contingencies | | | | ||
| Redeemable noncontrolling interest | 31,730 | | 26,564 | ||
| Redeemable equity component of convertible senior notes | 10,488 | | — | ||
| Equity: | | | | ||
| Convertible preferred stock, $.01 par value, 5,000 shares authorized, no shares issued and outstanding | — | | — | ||
| Common stock, $.01 par value, 50,000 shares authorized, 25,631 shares and 25,457 shares issued and outstanding as of June 30, 2014 and December 31, 2013, respectively | 256 | | 255 | ||
| Additional paid-in capital | 116,037 | | 171,819 | ||
| Accumulated earnings | 441,369 | | 394,628 | ||
| Accumulated other comprehensive gain | 10,936 Werbung Mehr Nachrichten zur Encore Capital Group Aktie kostenlos abonnieren
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