IMGCAP(1)]
Despite a lackluster third quarter adversely affected by the economy, debt buyer Asset Acceptance Capital Corp. says it is poised to improve operational efficiency and liquidation rates.
The Warren, Mich.-based company yesterday reported a net loss of $1.6 million for the third quarter ended Sept. 30, compared with net income of $3 million in the same period a year ago. Total revenues decreased 18.3% to $47.7 million in the quarter, compared with revenues of $58.4 million in the third quarter of 2008.
Asset Acceptance is the fourth-largest debt buyer in the United States with more than $234 million in revenue from purchased debt in 2008, according to research conducted by Collections & Credit Risk and CCR Newsline.
The company, which primarily purchases credit card accounts, bought $1.6 billion in face-value charged-off consumer receivable portfolios for $37.2 million in the third quarter. During the same quarter last year, the company spent $35.6 million to buy debt with a face value of $718.8 million.
"Our cash collections during the quarter, particularly on older-vintage portfolios, were unfavorably impacted by the ongoing macroeconomic landscape that continues to hinder consumers' ability to repay their obligations," said Rion Needs, president and CEO.
The company reported cash collections of $77.8 million for the third quarter, a 14.3% decrease from $90.8 million in the third quarter of last year.
"While the current macro backdrop remains challenging, we are in a position to increase both our operational efficiency, as well as our capacity to positively impact liquidation rates going forward," Needs said. "In the coming months we will be unveiling new technology that will automate several of the key functions of our call center representatives, increasing their efficiency substantially and allowing them to focus their time on accounts that they are most likely to liquidate."
Needs also announced that the company has made progress in achieving its goal of increasing account representative headcount, and that it has signed a third-party agreement with an offshore company on a per-seat basis to expand capacity by 20% by the end of the year.
"While the last several quarters have been difficult, we have implemented a number of initiatives and strategies to make us more successful as market conditions improve," Needs said.
