Portfolio Recovery Associates Inc., an accounts receivable management company and debt buyer, reported net income of $18.5 million for the quarter ended September 30, an 83% increase from $10.1 million in the same period a year earlier.
Total revenue was up 39% from the year-earlier period to a record $95.5 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.
During the quarter, the Norfolk, Va.-based company applied 41.8% of cash collections to reduce the carrying basis of its owned debt portfolios, compared with 41.2% in the third quarter of 2009. The amortization rate for the quarter included a $6.5 million net allowance charge, equivalent to approximately $4 million after tax, or 23 cents per diluted share, against certain pools of finance receivables accounts.
"Portfolio Recovery Associates has had a very strong year thus far, even in the face of a continued weakened economy," said Steven D. Fredrickson, chairman, president and chief executive officer. "In the third quarter, we produced record cash collections, record cash receipts and record revenue. At the same time, net income and earnings per share both demonstrated strong growth.
"This fine performance was due to long-term initiatives in a number of areas, including the continued success of our bankruptcy business, our ongoing search for greater operational efficiencies, the expansion of our internal legal collections channel and the continued contributions of our fee-based businesses," he said.