- GAAP EPS from continuing operations increases 11% to $1.12
- Non-GAAP Economic EPS from continuing operations increases 13% to $1.31
SAN DIEGO, May 10, 2016 (GLOBE NEWSWIRE) — Encore Capital Group, Inc. (NASDAQ:ECPG), an international specialty finance company providing debt recovery solutions for consumers and property owners across a broad range of assets, today reported consolidated financial results for the first quarter ended March 31, 2016.
“Encore had a solid purchasing quarter, deploying $257 million globally, including $142 million in the United States. Returns in our U.S. core business are higher than last year, and year-to-date domestic purchases and commitments now total nearly $330 million,” said Kenneth A. Vecchione, President and Chief Executive Officer.
“For the quarter, our ROIC and adjusted operating income rose as Economic EPS grew 13%, to $1.31 per share. Collections and revenue growth helped move earnings higher, while strategic cost management and favorable tax settlements also provided benefit.
“In addition, we completed the divestiture of Propel Financial Services, allowing us to deploy capital in opportunities with higher returns. This transaction also reduced our debt and increased our liquidity.”
Financial Highlights for the First Quarter of 2016:
- Estimated Remaining Collections (ERC) grew 12% to $5.7 billion, compared to $5.1 billion at March 31, 2015.
- Gross collections grew 5% to $448 million, compared to $425 million in the same period of the prior year.
- Investment in receivable portfolios was $257 million, compared to $125 million in the same period of the prior year.
- Total revenues increased 4% to $289 million, compared to $278 million in the same period of the prior year.
- Total operating expenses increased 5% to $206 million, compared to $195 million in the same period of the prior year. Adjusted operating expenses increased 3% to $169 million, compared to $165 million in the same period of the prior year. Adjusted operating expenses per dollar collected for the portfolio purchasing and recovery business decreased to 37.7%, compared to 38.8% in the same period of the prior year.
- Adjusted EBITDA increased 9% to $287 million, compared to $263 million in the same period of the prior year.
- Total interest expense increased to $50.7 million, as compared to $42.3 million in the same period of the prior year, reflecting the financing of recent acquisitions and portfolio purchases in Europe.
- GAAP income from continuing operations attributable to Encore was $28.9 million, or $1.12 per fully diluted share, as compared to $27.5 million, or $1.01 per fully diluted share in the same period of the prior year.
- Adjusted income from continuing operations attributable to Encore increased 11% to $33.9 million, compared to $30.6 million in the same period of the prior year.
- Adjusted income from continuing operations attributable to Encore per share (also referred to as Economic EPS) grew 13% to $1.31, compared to $1.16 in the same period of the prior year. In the first quarter of 2016, Economic EPS was not adjusted for shares associated with Encore’s convertible notes. In calculating Economic EPS for the first quarter of 2015, 0.9 million shares associated with convertible notes that will not be issued but are reflected in the fully diluted share count were excluded for accounting purposes.
- Available capacity under Encore’s revolving credit facility, subject to borrowing base and applicable debt covenants, was $228 million as of March 31, 2016, and total debt was $2.9 billion.
Conference Call and Webcast
Members of the public are invited to access the live webcast via the Internet by logging on at the Investor Relations page of Encore’s website at www.encorecapital.com. To access the live, listen-only telephone conference portion, please dial (855) 541-0982 or (704) 288-0606.
For those who cannot listen to the live broadcast, a telephonic replay will be available for seven days by dialing (800) 585-8367 or (404) 537-3406 and entering the conference number 99266441. A replay of the webcast will also be available shortly after the call on the Company’s website.
Non-GAAP Financial Measures
This news release includes certain financial measures that exclude the impact of certain items and therefore have not been calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company has included adjusted income attributable to Encore and adjusted income attributable to Encore per share (also referred to as economic EPS when adjusted for certain shares associated with our convertible notes that will not be issued but are reflected in the fully diluted share count for accounting purposes) because management uses this measure to assess operating performance, in order to highlight trends in the Company’s business that may not otherwise be apparent when relying on financial measures calculated in accordance with GAAP. The Company has included information concerning adjusted EBITDA because management utilizes this information, which is materially similar to a financial measure contained in covenants used in the Company’s revolving credit facility, in the evaluation of its operations and believes that this measure is a useful indicator of the Company’s ability to generate cash collections in excess of operating expenses through the liquidation of its receivable portfolios. The Company has included information concerning adjusted operating expenses in order to facilitate a comparison of approximate cash costs to cash collections for the portfolio purchasing and recovery business in the periods presented. Adjusted income attributable to Encore, adjusted income attributable to Encore per share/economic EPS, adjusted EBITDA, and adjusted operating expenses have not been prepared in accordance with GAAP. These non-GAAP financial measures should not be considered as alternatives to, or more meaningful than, net income, net income per share, and total operating expenses as indicators of the Company’s operating performance. Further, these non-GAAP financial measures, as presented by the Company, may not be comparable to similarly titled measures reported by other companies. The Company has attached to this news release a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures.
About Encore Capital Group, Inc.
Encore Capital Group is an international specialty finance company that provides debt recovery solutions for consumers and property owners across a broad range of assets. Through its subsidiaries, Encore purchases portfolios of consumer receivables from major banks, credit unions and utility providers.
Encore partners with individuals as they repay their obligations, helping them on the road to financial recovery and ultimately improving their economic well-being. Encore is the first and only company of its kind to operate with a Consumer Bill of Rights that provides industry-leading commitments to consumers. Headquartered in San Diego, the company is a publicly traded NASDAQ Global Select company (ticker symbol: ECPG) and a component stock of the Russell 2000, the S&P Small Cap 600 and the Wilshire 4500. More information about Encore can be found at http://www.encorecapital.com. More information about the Company’s Cabot Credit Management subsidiary can be found at http://www.cabotcm.com. Information found on the Company’s website or Cabot’s website is not incorporated by reference.