Asset Acceptance Capital Corp. (NASDAQ: AACC), a leading purchaser and collector of charged-off consumer debt, today reported results for the quarter and fiscal year ended December 31, 2012.
In a separate press release, the Company also announced today that it had entered into an agreement in which Encore Capital Group, Inc. will acquire Asset Acceptance for $6.50 per share for a total equity value of approximately $200 million.
Fourth Quarter 2012 Financial Highlights
Cash collections for the fourth quarter of 2012 increased 4.3% compared to the same period of the prior year, to $85.7 million.Fourth quarter revenues were $51.7 million, a decrease of 8.3% from the prior year period. The Company reported net impairments on purchased receivables of $0.9 million, which decreased revenues for the quarter, versus net impairment reversals of $2.6 million in the prior year period. Rion Needs, President and CEO of Asset Acceptance Capital Corp, commented: “During the fourth quarter we continued to focus on our key initiatives, specifically, growing legal channel collections as well as identifying and implementing initiatives to improve our cost structure and productivity. Mr. Needs continued, “We continued to show progress in key performance metrics and have ambitious goals to further improve efficiency. While industry dynamics remained challenging, particularly the supply and pricing of charged-off receivables, we believe we remain well positioned to reach our operational and profitability goals in 2013 and beyond.” Operating expenses were $46.8 million, an increase of $1.6 million compared to the prior year period. Results reflected a continued strategic investment in the Company’s legal channel and an increase in the related up-front costs ahead of associated collections. Legal investments increased to $9.4 million during the quarter compared to $7.2 million in the prior year period. Operating expenses also included restructuring charges in the fourth quarter of 2012 and 2011 of $0.4 million and $0.1 million, respectively. The restructuring charges were related to actions taken to close the Tempe, AZ and San Antonio, TX collection offices. Cost to collect for the quarter was 54.7%, an improvement of 40 basis points from the fourth quarter of 2011.