Portfolio Recovery Associates, Inc. - Debt Collection - Category Directory

888-772-7326
120 Corporate Boulevard
Norfolk, ViA 23502
www.portfoliorecovery.com

Sales

$85 million

Business Description

Portfolio Recovery Associates is a full-service provider of debt collection and outsourced receivables management services. The Company purchases, collects and manages portfolios of defaulted consumer receivables. Defaulted consumer receivables are the unpaid obligations of individuals to credit originators, including banks, credit unions, consumer and auto finance companies, retail merchants and other providers of goods and services. The defaulted consumer receivables the Company collects are generally either purchased from sellers of defaulted consumer debt (“Debt Sellers”) or are collected on behalf of debt owners on a commission fee basis.

The Company specializes in receivables that have been charged-off by the credit originator. Since the debt seller has unsuccessfully attempted to collect these receivables, the Company is able to purchase them at a substantial discount to their face value. From its 1996 inception through December 31, 2003, the Company acquired 417 portfolios with a face value of $7.78 billion for $204.6 million, or 2.63% of face value, representing more than 4.1 million customer accounts. The success of the Company depends on its ability to purchase portfolios of defaulted consumer receivables at appropriate valuations and to collect on those receivables effectively and efficiently. To date, the Company has consistently been able to collect at a rate of 2.5 to 3.0 times its purchase price for defaulted consumer receivables portfolios, as measured over a five to seven year period, which has enabled the Company to generate increasing profits and positive cash flow.

The Company has achieved strong financial results since its formation, with cash collections growing from $10.9 million in 1998 to $117.1 million in 2003. Total revenue has grown from $6.8 million in 1998 to $84.9 million in 2003, a compound annual growth rate of 66%. Similarly, pro forma net income has grown from $402,000 in 1998 to net income of $20.7 million in 2003. Excluding the impact of proceeds from occasional portfolio sales, cash collections have increased every quarter since the Company’s formation.

Debt Collection Agencies in the Company Directory: Asta Funding NCO Group Outsourcing Solutions Inc. Portfolio Recovery Associates