Portfolio Recovery Associates Inc., a Norfolk, Va. debt buyer, today reported cash collections rose 20% to a record $95.3 million in the fourth quarter ended Dec. 31, up from $79.2 million in the year-ago period.
The company's net income increased 17% to $12.4 million for the fourth quarter, compared with $10.6 million in the same period a year ago. Total revenue in Q4 reached a record $73.2 million, up 9.3% from a year earlier.
Call center and other collections increased 10%, external legal collections decreased 16%, internal legal collections grew 185% and purchased bankruptcy collections gained 59% when compared with the fourth quarter.
The company purchased $2 billion of face-value debt in the quarter, paying $75.1 million. The accounts were acquired from 13 different sellers in 101 portfolios. In 2009, the company acquired $8.1 billion of face-value debt for $289 million. For a recent review of the debt-buying industry forecast, see Industry Outlook: Biding Time In The Bad-Debt Market, Jan. 14.
Steven D. Fredrickson, chairman, president and CEO, stated in an 8K-filing released today, that the company ended a "very challenging 2009 on a high note ... this was achieved in the face of a tepid economic recovery, seasonal weakness in consumer collections and a $9.5 million allowance charge recorded in the fourth quarter. Importantly, the company was able to build for the future during the quarter, making ... portfolio acquisitions [and] further improving collector productivity."
Productivity, a measure of collector performance that review cash collections per hour paid, finished at $145.44 for full year 2009 compared with $131.29 for all of 2008.
Portfolio Recovery Associates is the sixth-largest debt buyer in the U.S. with more than $206 million in revenue from purchased debt in 2008, according to research conducted by Collections & Credit Risk.