Encore Capital Group Inc. today reported fourth-quarter net income of $8.4 million compared to a net loss of $2.1 million in the same period a year ago. For the full year 2009, the company reported net income of $33 million, up from $13.8 million in 2008.
Total revenue for the year was $316.4 million, a 24% increase over $255.9 million in revenue reported for full-year 2008.
Encore Capital is the third-largest debt buyer in the U.S. with more than $240 million in revenue from purchased debt in 2008, according to research conducted by Collections & Credit Risk.
In the filing, company officials stated that in 2009, "We invested $256.6 million for portfolios with face values aggregating $6.5 billion for an average purchase price of 4% of face value. This is a $26.4 million increase, or 11.4%, in the amount invested, compared with the $230.3 million invested [in] 2008, to acquire portfolios with a face value aggregating $6.6 billion for an average purchase price of 3.5% of face value."
Encore Capital reported gross collections of $487.8 million for 2009, up 22% from 2008. Encore Capital has four liquidation channels used to collect revenue: portfolio sales, legal collections, owned collection call center sites and external collection agency outsourcing. For the full year 2009, legal collections accounted for 47.7% of gross collections, collection sites accounted for 38%, collection agency outsourcing: 12.8%, and portfolio sales brought in 1.4% of the total.
Revenue from receivable portfolios totaled $77 million, a 61% jump over $47.9 million in the year-ago period. The company attributed that increase to the differences in net impairment provisions recorded in each period - $5 million in Q4 2009 versus $25.4 million a year earlier. Excluding those provisions, revenue from receivable portfolios increased 12%.
The company paid $41 million during the quarter to purchase bad-debt portfolios with a face value of $1 billion, according to the company's 10-K filing with the U.S. Securities and Exchange Commission. In Q4 2008, Encore Capital Paid $63.8 million to buy $1.7 billion in face value of debt. The company paid $77.7 million during Q3 2009 to buy portfolios with a face value of $2.2 billion, according to the filing.