Portfolio Recovery Associates Inc. (PRAA, Financial) filed Quarterly Report for the period ended 2010-03-31.
Portfolio Recovery Associates Inc. has a market cap of $935.24 million; its shares were traded at around $60.26 with a P/E ratio of 19.31 and P/S ratio of 3.33. Portfolio Recovery Associates Inc. had an annual average earning growth of 24.8% over the past 10 years.PRAA is in the portfolios of RS Investment Management, Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates.
Compensation and employee services expenses were $29.6 million for the three months ended March 31, 2010, an increase of $2.9 million or 10.9% compared to compensation and employee services expenses of $26.7 million for the three months ended March 31, 2009. This increase is mainly due to an overall increase in our owned portfolio collection staff as well as the hiring of non-collection personnel mainly due to the expansion of our information technology department. Compensation and employee services expenses increased as total employees grew 12.8% to 2,329 as of March 31, 2010 from 2,065 as of March 31, 2009. Compensation and employee services expenses as a percentage of cash receipts decreased to 22.0% for the three months ended March 31, 2010 from 25.0% of cash receipts for the same period in 2009.
Legal and agency fees and costs expenses were $13.3 million for the three months ended March 31, 2010, an increase of $1.2 million or 9.9% compared to legal and agency fees and costs of $12.1 million for the three months ended March 31, 2009. Of the $1.2 million increase, $2.0 million was attributable to an increase in legal fees and costs incurred resulting from accounts referred to both our in-house attorneys and outside independent contingent fee attorneys. This was offset by a $0.8 million decrease mainly attributable to a decrease in agency fees incurred by our IGS subsidiary. Total outside legal expenses paid to independent contingent fee attorneys for the three months ended March 31, 2010 were 42.3% of legal cash collections generated by independent contingent fee attorneys compared to 37.6% for the three months ended March 31, 2009. Outside legal fees and costs paid to independent contingent fee attorneys increased from $6.7 million for the three months ended March 31, 2009 to $8.8 million, an increase of $2.1 million or 31.3%, for the three months ended March 31, 2010. Additionally, as disclosed previously, we also effectuate legal collections using our own in-house attorneys. Total legal expenses incurred by our in-house attorneys for the three months ended March 31, 2010 were 8.3% of legal cash collections generated by our in-house attorneys compared to 26.7% for the three months ended March 31, 2009. Legal fees and costs incurred by our in-house attorneys were $0.9 million for the three months ended March 31, 2010 and 2009.
Outside fees and services expenses were $2.8 million for the three months ended March 31, 2010, an increase of $0.7 million or 33.3% compared to outside legal and other fees and services expenses of $2.1 million for the three months ended March 31, 2009. The $0.7 million increase was attributable to an increase in other outside fees and services and corporate legal expense.
Communications expenses were $5.1 million for the three months ended March 31, 2010, an increase of $1.6 million or 45.7% compared to communications expenses of $3.5 million for the three months ended March 31, 2009. The increase was mainly due to a growth in mailings due to an increase in special letter campaigns which increased by $1.6 million for the three months ended March 31, 2010 when compared to the year ago period.
Depreciation and amortization expenses were $2.6 million for the three months ended March 31, 2010, an increase of $0.3 million or 13.0% compared to depreciation and amortization expenses of $2.3 million for the three months ended March 31, 2009. The increase is mainly due to additional amortization expense incurred relating to the intangible assets of our newly acquired CCB subsidiary as well as continued capital expenditures on equipment, software, and computers related to our growth and systems upgrades.
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Portfolio Recovery Associates Inc. has a market cap of $935.24 million; its shares were traded at around $60.26 with a P/E ratio of 19.31 and P/S ratio of 3.33. Portfolio Recovery Associates Inc. had an annual average earning growth of 24.8% over the past 10 years.PRAA is in the portfolios of RS Investment Management, Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates.
Highlight of Business Operations:
Income recognized on finance receivables, net was $68.0 million for the three months ended March 31, 2010, an increase of $16.7 million or 32.6% compared to income recognized on finance receivables, net of $51.3 million for the three months ended March 31, 2009. The increase was primarily due to an increase in our cash collections on our owned defaulted consumer receivables to $119.2 million for the three months ended March 31, 2010 compared to $89.9 million for the three months March 31, an increase of $29.3 million or 32.6%. During the three months ended March 31, 2010, we acquired defaulted consumer receivables portfolios with an aggregate face value amount of $1.89 billion at a cost of $102.6 million. During the three months ended March 31, 2009, we acquired defaulted consumer receivable portfolios with an aggregate face value of $960.9 million at a cost of $52.4 million. In any period, we acquire defaulted consumer receivables that can vary dramatically in their age, type and ultimate collectability. We may pay significantly different purchase rates for purchased receivables within any period as a result of this quality fluctuation. In addition, market forces can drive pricing rates up or down in any period, irrespective of other quality fluctuations. As a result, the average purchase rate paid for any given period can fluctuate dramatically based on our particular buying activity in that period. However, regardless of the average purchase price and for similar time frames, we intend to target a similar internal rate of return, after direct expenses, in pricing our portfolio acquisitions; therefore, the absolute rate paid is not necessarily relevant to estimated profitability of a periods buying.Compensation and employee services expenses were $29.6 million for the three months ended March 31, 2010, an increase of $2.9 million or 10.9% compared to compensation and employee services expenses of $26.7 million for the three months ended March 31, 2009. This increase is mainly due to an overall increase in our owned portfolio collection staff as well as the hiring of non-collection personnel mainly due to the expansion of our information technology department. Compensation and employee services expenses increased as total employees grew 12.8% to 2,329 as of March 31, 2010 from 2,065 as of March 31, 2009. Compensation and employee services expenses as a percentage of cash receipts decreased to 22.0% for the three months ended March 31, 2010 from 25.0% of cash receipts for the same period in 2009.
Legal and agency fees and costs expenses were $13.3 million for the three months ended March 31, 2010, an increase of $1.2 million or 9.9% compared to legal and agency fees and costs of $12.1 million for the three months ended March 31, 2009. Of the $1.2 million increase, $2.0 million was attributable to an increase in legal fees and costs incurred resulting from accounts referred to both our in-house attorneys and outside independent contingent fee attorneys. This was offset by a $0.8 million decrease mainly attributable to a decrease in agency fees incurred by our IGS subsidiary. Total outside legal expenses paid to independent contingent fee attorneys for the three months ended March 31, 2010 were 42.3% of legal cash collections generated by independent contingent fee attorneys compared to 37.6% for the three months ended March 31, 2009. Outside legal fees and costs paid to independent contingent fee attorneys increased from $6.7 million for the three months ended March 31, 2009 to $8.8 million, an increase of $2.1 million or 31.3%, for the three months ended March 31, 2010. Additionally, as disclosed previously, we also effectuate legal collections using our own in-house attorneys. Total legal expenses incurred by our in-house attorneys for the three months ended March 31, 2010 were 8.3% of legal cash collections generated by our in-house attorneys compared to 26.7% for the three months ended March 31, 2009. Legal fees and costs incurred by our in-house attorneys were $0.9 million for the three months ended March 31, 2010 and 2009.
Outside fees and services expenses were $2.8 million for the three months ended March 31, 2010, an increase of $0.7 million or 33.3% compared to outside legal and other fees and services expenses of $2.1 million for the three months ended March 31, 2009. The $0.7 million increase was attributable to an increase in other outside fees and services and corporate legal expense.
Communications expenses were $5.1 million for the three months ended March 31, 2010, an increase of $1.6 million or 45.7% compared to communications expenses of $3.5 million for the three months ended March 31, 2009. The increase was mainly due to a growth in mailings due to an increase in special letter campaigns which increased by $1.6 million for the three months ended March 31, 2010 when compared to the year ago period.
Depreciation and amortization expenses were $2.6 million for the three months ended March 31, 2010, an increase of $0.3 million or 13.0% compared to depreciation and amortization expenses of $2.3 million for the three months ended March 31, 2009. The increase is mainly due to additional amortization expense incurred relating to the intangible assets of our newly acquired CCB subsidiary as well as continued capital expenditures on equipment, software, and computers related to our growth and systems upgrades.
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