Asset Acceptance Capital Corp. (NASDAQ: AACC), a leading purchaser and collector of charged-off consumer debt, today reported results for the quarter ended March 31, 2011.
First Quarter 2011 Financial Highlights:
Cash collections for the first quarter of 2011 increased 2.3% compared to the prior year period to $91.3 million. Excluding collections on healthcare portfolios, which were sold in the third quarter of 2010, collections increased 4.4%.
First quarter revenues were $50.4 million, a decline of $1.2 million compared to the prior year period. Revenue on purchased receivables was $50.0 million during the quarter, a decline of $1.0 million from the prior year. The Company reported net impairments of $1.1 million on purchased receivables versus net impairments of $0.1 million in the prior year period.Operating expenses were $45.9 million or 50.3% of cash collections, a decline of $2.5 million or 5.1% and an improvement of 390 basis points as a percentage of cash collections when compared to the year earlier period. The Company reported net income of $1.1 million, or $0.04 per fully diluted share, during the first quarter of 2011, compared to net income of $0.4 million, or $0.01 per fully diluted share, in the first quarter of 2010. Adjusted Earnings Before Interest Taxes Depreciation and Amortization (“Adjusted EBITDA”) was $47.2 million, a 10.9% increase from $42.5 million in the first quarter of 2010. During the first quarter of 2011, the Company invested $46.4 million to purchase charged-off consumer debt portfolios with a face value of $1,228.7 million, for a blended rate of 3.78%. This compares to the prior-year first quarter, when the Company invested $29.6 million to purchase consumer debt portfolios with a face value of $818.6 million, representing a blended rate of 3.62% of face value. All purchase data is adjusted for buybacks. Rion Needs, President and CEO of Asset Acceptance Capital Corp, commented: “We continue to see improving trends in our business, as we were able to sustain the positive momentum we generated at the end of 2010. The initiatives we implemented during 2010 to streamline our cost structure, improve our analytics, and enhance our business model have clearly gained traction during the first quarter and favorably impacted our results. We are increasingly more confident in the near- and long-term prospects for our business and look forward to further capitalizing on our initiatives to drive long-term growth.” Please refer to Supplemental Financial Data beginning on page four for additional information about the Company’s financial results for the three months ended March 31, 2011 and prior year quarters. In addition, please see a reconciliation of net income according to Generally Accepted Accounting Principles (“GAAP”) to Adjusted EBITDA on page ten.