Encore Capital Group(US:ECPG)2021-11-02 16:00Financial Performance - Total revenues for the three months ended September 30, 2021, were $412,624, an increase from $403,676 in the same period of 2020, representing a growth of 0.2%[9] - Net income attributable to Encore Capital Group, Inc. stockholders for the three months ended September 30, 2021, was $83,566, compared to $55,107 for the same period in 2020, reflecting a year-over-year increase of 51.7%[10] - Earnings per share attributable to Encore Capital Group, Inc. for the three months ended September 30, 2021, were $2.76 (basic) and $2.66 (diluted), compared to $1.74 (basic) and $1.72 (diluted) in the prior year[9] - Comprehensive income for the three months ended September 30, 2021, was $82,979, compared to $86,214 in the same period of 2020, reflecting a decrease of 3.0%[10] - Net income for the three months ended September 30, 2021, was $83,566, compared to $54,650 for the same period in 2020, representing a year-over-year increase of 52.7%[12][13] - Total revenues for the nine months ended September 30, 2021, reached $1.257 billion, up 12.4% from $1.119 billion in the same period of 2020[75] - The company reported a significant increase in collections from 2020 to 2021, with a rise of $65.91 million in changes in recoveries[106] Assets and Liabilities - Total assets decreased to $4,549,966 as of September 30, 2021, from $4,864,523 as of December 31, 2020, indicating a decline of 6.4%[6] - Borrowings as of September 30, 2021, were $2,796,224, down from $3,281,634 as of December 31, 2020, a reduction of 14.7%[6] - As of September 30, 2021, total equity reached $1,398,820, a decrease from $1,420,076 as of June 30, 2021[12] - The Company’s total liabilities included convertible notes and exchangeable notes with a balance of $583.5 million as of December 31, 2020, adjusted for the new accounting standard[28] - The carrying amount of investment in receivable portfolios was $3,083.3 million with an estimated fair value of $3,439.5 million as of September 30, 2021, compared to a carrying amount of $3,291.9 million and estimated fair value of $3,705.7 million as of December 31, 2020[39] Operating Expenses - Operating expenses for the three months ended September 30, 2021, totaled $245,977, a decrease from $261,221 in the same period of 2020, representing a decline of 5.8%[9] - The total cost of legal collections for the three months ended September 30, 2021, was $64,170, an increase of $3,787, or 6.3%, compared to $60,383 for the same period in 2020[1] - General and administrative expenses for the three months ended September 30, 2021, decreased by $17,640, or 33.0%, compared to the same period in 2020, primarily due to a $15.0 million charge related to a settlement recognized in 2020[1] - Total interest expense for the three months ended September 30, 2021, decreased by $12,100, or 22.8%, to $40,874 compared to $52,974 for the same period in 2020[1] Cash Flow - The company reported a net cash provided by operating activities of $211,990 for the nine months ended September 30, 2021, down from $249,982 in the same period of 2020[18] - Cash and cash equivalents at the end of the period were $158,243, down from $189,184 at the beginning of the period[18] - The company reported net cash used in financing activities of $564.7 million for the nine months ended September 30, 2021, compared to $267.9 million in 2020[151] Shareholder Actions - The company repurchased common stock totaling $88,119 during the nine months ended September 30, 2021[18] - The Company repurchased 854,002 shares for approximately $40.7 million during the three months ended September 30, 2021, and a total of 1,976,857 shares for approximately $88.1 million during the nine months ended September 30, 2021[31] Market and Economic Conditions - The company is actively monitoring the impact of COVID-19 on its business and financial recovery estimates[22] - The company has observed a decrease in supply in both the U.S. and Europe due to a decrease in charge-off rates as a result of the COVID-19 pandemic[84] - The company expects actual purchases under forward flow purchase agreements to be significantly greater than the estimated minimum aggregate purchase price[73] Revenue Sources - The total debt purchasing revenue for the three months ended September 30, 2021, was $382,138, compared to $372,940 in the same period of 2020, showing an increase of 2.0%[9] - Revenue from receivable portfolios includes the accretion of the discount on the negative allowance and changes in recoveries, which are based on actual cash collected versus expected cash recoveries[49] - The company reported recoveries above forecast of $77,064 thousand for the three months ended September 30, 2021, compared to $78,268 thousand for the same period in 2020[53] Future Outlook - The company plans to expand its market presence in Europe and other geographies, targeting a revenue increase of 10% annually[140] - A strategic acquisition is anticipated to enhance the company’s competitive edge in the market, with details to be disclosed in the upcoming quarters[140] - The company has set a performance guidance of $1.25 billion for the next fiscal year, aiming for continued growth[140]