Asset Acceptance Capital Corp. (NASDAQ:
), a leading purchaser and collector of charged-off consumer debt, today reported results for the quarter ended September 30, 2011.
Third Quarter 2011 Financial Highlights:
Cash collections for the third quarter of 2011 were $87.4 million, an increase of 10.9% compared to the prior year period. Excluding collections on healthcare portfolios, which were sold in the third quarter of 2010, collections increased 11.0%.
Third quarter revenues were $56.6 million, an increase of $8.1 million compared to the prior year period. Revenue on purchased receivables was $56.3 million during the quarter, an increase of $9.0 million from the prior year. The Company reported impairment reversals of $2.7 million on purchased receivables compared to net impairment reversals of $0.7 million in the prior year period.
Operating expenses were $48.5 million or 55.5% of cash collections, an increase of $0.5 million or 1.1% but an improvement of 540 basis points as a percentage of cash collections when compared to the year earlier period. Increases in operating expenses year over year were driven primarily by higher agency outsourcing fees, court costs and an increase in the accrual for the FTC matter, which were offset by lower collection salaries and legal forwarding fees.
The Company reported net income of $3.1 million, or $0.10 per fully diluted share, during the third quarter of 2011, compared to net income of $4.2 million, or $0.14 per fully diluted share, in the third quarter of 2010. Third quarter 2011 results included an incremental $1.25 million, or $0.04 per share related to an additional accrual for the FTC matter, bringing the total accrual to $2.5 million. For the third quarter 2010, the Company recorded restructuring charges related to the closing of the Deerfield Beach office housing our former Premium Asset Recovery Corporation (“PARC”) subsidiary and a gain on the sale of healthcare receivables, which resulted in a combined impact of $(0.02) per fully diluted share before income taxes. The Company also recorded a tax benefit as part of dissolving PARC of $0.18 per fully diluted share. Excluding these items impacting comparability, earnings per fully diluted share would have increased to $0.14 in the third quarter of 2011 from $(0.02) in the third quarter of 2010.