Debt Purchaser Portfolio Recovery Posts Record Financial Results to End 2010

Accounts receivable management firm Portfolio Recovery Associates, Inc. late Tuesday reported record net income, revenue, and cash collections in the fourth quarter of 2010.

Norfolk, Va.-based Portfolio Recovery (Nasdaq: PRAA) posted net income of $12.4 million, or $1.20 per share, in the fourth quarter of 2010, an increase of 66 percent from the same period in 2009. Total revenue rose 38 percent from the year-earlier period to a record $100.8 million.

Wall Street analysts on average expected a profit of $1.12 a share, on revenue of $107.95 million, according to Thomson Reuters.

For full year 2010, net income rose 66 percent to $73.5 million, or $4.35 per diluted share. Revenue for 2010 was $372.7 million, up 33 percent from 2009.

“Portfolio Recovery Associates concluded 2010 with record financial results, demonstrating exceptional performance across our debt purchasing business despite the still-weakened economy,” said Steven D. Fredrickson, chairman, president and chief executive officer, in a statement. “Our disciplined approach to underwriting together with our consistent and continued efforts to improve the efficiency of our collections operations helped drive record results in cash collections, cash receipts, revenue and earnings both in the fourth quarter and for the full year.”

Cash collections increased 52 percent to a record $144.4 million in the fourth quarter of 2010 from.

In Q4, call center and other collections increased 19 percent to $53.8 million, external legal collections increased 38 percent to $21.4 million, internal legal collections grew 70 percent to $12.8 million, and purchased bankruptcy collections gained 110 percent to $56.3 million. The fourth quarter of 2010 marked the second straight quarter that PRA’s leading collection channel was purchased bankruptcy.

The company purchased $1.87 billion of face-value debt during the fourth quarter for $85.5 million, acquired in 75 portfolios from 11 different sellers. For the full year 2010, the company purchased face-value debt totaling $6.80 billion for $367.4 million, a record level of investment.

Total employee count at the end of 2010 was 2,473, an increase of 11.7 percent from the end of 2009 and up 2 percent from the end of the third quarter of 2010.