NCO Group, the largest collection agency based on revenue, reported an $84.2 million loss for the year ended Dec. 30, 2009 in a filing with the Securities and Exchange Commission.
Despite the loss, the results actually are an improvement from a year ago when the Horsham, Pa. firm reported a $337.1 million loss. In early 2008, NCO bought rival OSI.
Revenue at NCO improved in 2009 to $1.56 billion from $1.51 billion in 2008. NCO’s ARM unit accounted for 79.7% of revenue in the year, compared to 80.6% in 2008, bringing in $1.25 billion in 2009 compared to $1.22 billion in 2008.
The company’s debt purchasing unit – Portfolio Management – accounted for 3.1% of revenue in 2009, up from 1.2% in 2008. NCO reported spending $56.6 million on debt portfolio purchases in 2009 compared to $126.5 million spent in 2008.The company also took a $21.5 million impairment charge on purchased portfolios in 2009.
The company's Customer Relationship Management business accounted for 21.4% of revenue.
NCO said that the increase in ARM’s revenue was mostly related to increased volume from clients in both first-party (early-stage) and contingency collections as well as a full year of revenue from the OSI purchase.
The increase was offset, however, by the weaker collection environment in 2009 and a $22.3 million decrease in fees from collection services.