![]() Encore Capital Group, Inc. Q4 2013 EARNINGS CALL Exhibit 99.1 |
![]() 2 CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS PROPRIETARY The statements in this presentation that are not historical facts, including, most importantly, those statements preceded by, or that include, the words “will,” “may,” “believe,” “projects,” “expects,” “anticipates” or the negation thereof, or similar expressions, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). These statements may include, but are not limited to, statements regarding our future operating results, earnings per share, and growth. For all “forward-looking statements,” the Company claims the protection of the safe harbor for forward-looking statements contained in the Reform Act. Such forward-looking statements involve risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company and its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and other factors are discussed in the reports filed by the Company with the Securities and Exchange Commission, including its most recent report on Form 10-K, and its subsequent reports on form 10-Q, each as it may be amended from time to time. The Company disclaims any intent or obligation to update these forward-looking statements. |
![]() 3 ENCORE DELIVERED RECORD QUARTERLY EARNINGS * From continuing operations attributable to Encore ** Please refer to Appendix for reconciliation of Economic EPS, Adjusted EBITDA, and Economic Net Income to GAAP *** Cost to Collect is Adjusted Operating Cost / Dollars collected. See Appendix for reconciliation of Adjusted Operating Cost to GAAP Note: All figures include Cabot Credit Management UK results unless otherwise indicated PROPRIETARY GAAP EPS* Economic EPS** GAAP Net Income* Economic Net Income** Collections Adjusted EBITDA** Cost to Collect*** Estimated Remaining Collections of $4.0 billion $0.87 $1.05 $24 million $28 million $351 million $206 million 42.1% |
![]() 4 …AND RECORD FULL-YEAR 2013 RESULTS * From continuing operations attributable to Encore ** Please refer to Appendix for reconciliation of Economic EPS, Adjusted EBITDA, and Economic Net Income to GAAP *** Cost to Collect is Adjusted Operating Cost / Dollars collected. See Appendix for reconciliation of Adjusted Operating Cost to GAAP Note: All figures include Cabot Credit Management UK results unless otherwise indicated PROPRIETARY GAAP EPS* $2.94 GAAP Net Income* $77 million Economic EPS** $99 Economic Net Income** $3.86 Collections $784 million Adjusted EBITDA** $1.28 billion Cost to Collect*** 39.1% million |
![]() WE CONTINUE TO MAKE STRATEGIC ACQUISITIONS TO DRIVE GROWTH AND INCREASE OPTIONALITY Refinancia Leader in Colombian and Peruvian NPL markets Purchased 51% ownership in December 2013 Capital deployment opportunities of ~$40M+ annually; platform for Latin American expansion Marlin Financial Services Provides litigation capabilities to Cabot Credit Management Creates uplift for current and future portfolios Accelerates Cabot’s entry into secondary and tertiary markets Grove Capital Management Market leader in bankruptcy market individual voluntary arrangements (“IVA”) Potential deployments of $50M+ annually Strong servicing platform 5 PROPRIETARY |
![]() 6 WE REMAIN FOCUSED ON DELIVERING TOP QUARTILE RETURNS Management Team • Learning Organization • Principled Intent Growth, Margin Expansion, Free Cash Flow, PE Multiple Expansion Top Quartile Total Shareholder Return Specialized call centers Efficient international operations Internal legal platform Operational Scale & Cost Leadership 2 Sustained success at raising capital Low cost of debt Sustainable borrowing capacity and cash flow generation Prudent capital deployment Strong Capital Stewardship 3 Consumer intelligence Data driven, predictive modeling Portfolio valuation at consumer level Consumer Credit Research Institute Superior Analytics 1 Uniquely scalable platform Strategic investment opportunities in geographic and asset adjacencies Extendable Business Model 4 PROPRIETARY |
![]() ![]() OUR FOCUS ON TSR DRIVES OUR GROWTH STRATEGY Domestic core business EAF - 2012 AACC – 2013 Propel TX competitor - 2013 Cabot Marlin – 2014 Refinancia Grow our core business and our subsidiaries Cabot - 2013 - and Marlin - 2014 (UK) Grove (UK) - 2014 Refinancia (Latin America) - 2013 Geographic expansion Propel - 2012 Refinancia (Credit cards, point- of-purchase guarantees) - 2013 Grove (IVA) - 2014 Diversify into new asset classes This strategy allows us to deploy capital wherever we see the highest returns and continue to achieve our earnings growth rates 7 |
![]() IN LATE Q4, WE CLOSED THE ACQUISITION OF A 51% INTEREST IN REFINANCIA, EXPANDING OUR PRESENCE TO COLOMBIA AND PERU Refinancia’s drivers 8 Data-driven Decision-making Commitment To Consumer Rights Extendable Business Model Refinancia has deep relationships with leading banks in the region * All buyers ** Refinancia estimates PROPRIETARY New Market Opportunities Higher Returns Platform for Latin American expansion Investment Benefits With 1,000 employees, Refinancia is a leading buyer of non-performing loans in: $100 million 39% 2013 Capital Deployed* 2013 Refinancia Market Share** 2013 Capital Deployed* 2013 Refinancia Market Share** $13 million 64% |
![]() REFINANCIA IS ENCORE’S ENTRY INTO THE LATIN AMERICAN MARKETS Market Niche Opportunities Business Description 9 Improvements in call center operations technology Process reengineering Advances in Decision Science Improved monitoring and strategies around legal collections PROPRIETARY Individuals with default in their credit history NPL portfolio purchase, servicing, and collections (Colombia, Peru) NPL portfolio servicing and collections for banks Consumers with limited credit options at the point of purchase Guarantee payment plans offered by merchants, check guarantee, servicing, and collections Factoring of merchant payment plans (liquidity generation for merchants) Credit risk is taken by partner bank Banked clients with risk of credit default First subprime credit card offered in Colombia Credit risk is taken by partner bank Market to customer base at Refinancia and partner bank |
![]() WE HAVE AGREED TO ACQUIRE A 68% INTEREST IN GROVE CAPITAL Grove specializes in the purchasing and servicing of insolvencies, consisting primarily of individual voluntary arrangements (“IVAs”) and bankruptcy receivables in the UK IVAs Roughly equivalent to a chapter 13 bankruptcy in the U.S. Constitutes a formal repayment proposal presented to a debtor’s creditors 10 PROPRIETARY An asset manager supplying business development, account level portfolio analytics, bidding management and master servicing Successfully deployed ~£100 million in over 50 transactions in the U.K. insolvency market since its formation Investment will facilitate Encore’s capital deployment strategy in the IVA asset class with an annual target of more than $50 million Grove Capital Deployment Strategy Further opportunities as Grove expands in Spain and other European countries |
![]() EARLIER THIS MONTH CABOT ACQUIRED MARLIN FINANCIAL GROUP Marlin Financial Group is a UK debt buyer with a focus on litigation 11 PROPRIETARY Company Portfolio Transaction Rationale Financing Status To date, portfolio purchases have totaled £264 million with a total face value of approx. £2.2 billion and an average account balance of £4,800 As of September 30, 2013, Marlin had ERC of £352 million Expected ERC lift attributed to Cabot’s back book from utilizing Marlin’s litigation platform for non-paying accounts Valuable talent pool Cabot + Marlin can leverage full extent of UK market growth with complementary niches Fully financed by Cabot based on the combined companies’ balance sheets No additional investment is required from Encore Cabot just closed the transaction and integration has begun |
![]() MARLIN MEANINGFULLY ENHANCES ENCORE’S UK MARKET POSITION 12 Creates the ability to optimize account scoring and collection channel across both operations Operational efficiencies and economies of scale Enhanced, sustainable profitability Increases Encore's exposure to the high-growth UK market Strong relationships with key vendor banks make Cabot+Marlin well-placed to increasingly become the purchaser of choice Creates the UK market leader by ERC Cabot+Marlin can leverage the full extent of UK market growth with complementary niches Ability to sustain IRRs on future purchases in the face of increasing competition through incremental litigation collections Strong growth profile Valuable additional talent pool with deep industry experience Deep management bench strength PROPRIETARY |
![]() St Cloud, MN Phoenix, AZ New Delhi, India Call Center / Technology Site Call Center Site Call Center Site San Diego, CA Headquarters / Call Center Site Call Center Site Costa Rica San Antonio, TX Propel Cabot HQ / Call Center Sites West Malling, UK Stratford-upon-Avon, UK Call Center Site Tampa, FL Call Center Site Warren, MI Call Center Site Colombia Refinancia Peru Refinancia Marlin Dublin, Ireland Worthing, UK WITH OUR GROWTH HAS COME SIGNIFICANT GEOGRAPHIC DIVERSIFICATION 13 PROPRIETARY |
![]() WE ARE CONFIDENT IN OUR ABILITY TO EXECUTE ON THE TRANSACTIONS BECAUSE OF OUR STRONG PERFORMANCE ON OUR RECENT ACQUISITIONS 14 Initial Expectations PROPRIETARY Asset Acceptance Performance HR Integration Payroll Integration Support Function Rationalization & Technology Integration IL Acct Placement and Conversion Call Center Rationalization Q4 2013 Q1 2014 Q2 2014 Q3 2014 $200 $180 $160 $140 $120 $100 $80 $60 $40 $20 $0 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 |
![]() * Please refer to Appendix for reconciliation of Adjusted EBITDA to GAAP ** Cost to Collect is Adjusted Operating Cost / Dollar collected. See Appendix for reconciliation of Adjusted Operating Cost to GAAP WE ARE CONFIDENT IN OUR ABILITY TO EXECUTE ON THE TRANSACTIONS BECAUSE OF OUR STRONG PERFORMANCE ON OUR RECENT ACQUISITIONS (CONT’D) 15 Cumulative (July – December 2013) Adjusted EBITDA* $100.4 million Portfolio purchases $621 million Collections $134.3 million Revenues $95.5 million ERC $1.5 billion Cost to collect** 27.0% CABOT INDIA OPERATIONS LAUNCH 12/15 1/1 1/15 2/1 2/15 Overall IT infrastructure and data security readiness User Testing Pilot team ‘Go-Live’ @ India Inventory identification Legal & statutory compliance Cabot & Encore teams to develop pricing models 20 Jan’14 calling Day One On the job training PROPRIETARY th Cabot |
![]() Comments due 2/28/14 Summer 2014 Late 2014 – Mid 2015 30 days – 1 year Spring – Summer 2014 CFPB RULEMAKING OVERVIEW 16 PROPRIETARY Advance Notice of Proposed Rulemaking (ANPR) Notice of Proposed Rulemaking (NPR) Final Rulemaking Effective Date Small Business Regulatory Enforcement Fairness Act (SBREFA) Panel Standardization of data/documents needed for collections Robust validation notices Comprehensive disclosures on interest, statute of limitations & credit reporting No reinstatement of expired debt upon payment Fostering consumer communications using modern technologies Encore’s ANPR response will show thought leadership in advocating for higher industry standards |
![]() 17 Detailed Financial Discussion |
![]() 18 GROWTH IN DEPLOYMENTS WAS LED BY CABOT CREDIT MANAGEMENT AND ASSET ACCEPTANCE PROPEL DEPLOYMENTS 11 9 21 27 61 12 CABOT DEPLOYMENTS* RECEIVABLE PORTFOLIO DEPLOYMENTS 45** REFINANCIA DEPLOYMENTS* *Includes deployments on behalf of others as well for own account PROPRIETARY $M 700 130 231 47 700 600 500 400 300 200 100 0 154 59 40 59 423 618 105 Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013 $M 80 60 40 20 0 Texas Other states Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q2 2012 70 60 50 40 30 10 0 20 30 20 10 0 3 8 47 41 29 54 18 23 1 1 19 3 8 1 8 £M $M **Includes $29 million related to the acquisition of a competitor |
![]() 19 THE AACC AND CABOT ACQUISITIONS ACCELERATED 2013 COLLECTIONS Core Collections 2012: $948 2013: $1,280 PROPRIETARY $M 400 350 300 250 200 150 100 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 11 14 18 13 21 27 67 67 110 115 111 113 122 134 154 155 40 26 110 112 117 104 127 117 119 103 231 241 246 230 270 278 380 351 - Collection Sites - Collection Agencies - Legal Collections - Cabot $M 400 300 200 100 0 |
![]() STRONG COLLECTIONS LED TO SOLID REVENUE GROWTH Revenue From Receivable Portfolio Collections $M 20 2012: $545 2013: $745 PROPRIETARY 126 139 141 140 141 152 225 227 250 200 150 100 50 0 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 |
![]() ENCORE’S COST TO COLLECT FULLY REFLECTS AACC’S AND CABOT’S OPERATIONS 21 * Cost to Collect is Adjusted Operating Cost / Dollar collected. See Appendix for reconciliation of Adjusted Operating Cost to GAAP. PROPRIETARY Channel Q4 2013 CTC Q4 2012 CTC Cabot 26.7% 24.8% Legal 36.8% 43.2% Core sites 8.9% 7.3% 38% 39% 40% 43% 36% 38% 40% 42% 30% 40% 50% Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Overall Cost to Collect* |
![]() AFTER SEVERAL QUARTERS OF INVESTMENT, COST TO COLLECT IN INTERNAL LEGAL IS DECLINING 22 Legal Outsourcing Cost to Collect Legal Outsourcing Collections $M $M Internal Legal Cost to Collect 2012: $430 2013: $469 2012: $19 2013: $96 PROPRIETARY 0% 10% 20% 30% 40% 50% Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 150% 300% 450% 0% 50% 100% Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 80 100 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 120 0 15 30 45 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Internal Legal Collections |
![]() PROPRIETARY COLLECTIONS GROWTH AND COST IMPROVEMENTS LED TO IMPROVED CASH FLOWS 23 * Please refer to Appendix for reconciliation of Adjusted EBITDA to GAAP Adjusted EBITDA* $M 2012: $577 2013: $784 144 148 151 135 173 174 231 206 0 50 100 150 200 250 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 |
![]() Estimated Remaining Collections $M 24 THE CABOT AND AACC TRANSACTIONS RESULTED IN STRONG GROWTH IN ERC Encore ERC Asset Acceptance ERC 2,741 4,022 Cabot ERC 1,724 1,983 1,890 1,967 1,911 1,780 2,519 3,990 961 1,503 0 1,000 2,000 3,000 4,000 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 PROPRIETARY |
![]() CABOT CONTRIBUTED $0.36 TO ENCORE’S 2013 ECONOMIC EPS 25 PROPRIETARY In 000’s except per share amounts Janus Encore Europe Holdings EEH Consolidated Revenue / other income $95,491 - $95,491 Total Expenses (48,890) - (48,890) EBITDA 46,601 - 46,601 Non-PEC Interest Expense (26,265) - (26,265) PEC Interest Expense (21,616) 10,235 (11,381) Other Income 98 - 98 Earnings Before Income Tax (1,182) 10,235 9,053 Income tax (1,574) - (1,574) Net (loss) / profit before minority interest (2,756) 10,235 7,479 JCF / Mgmt non-controlling interest 392 1,167 1,559 Net (loss) / profit attributable to Encore $(2,364) $11,402 $9,038 |
![]() PROPEL CONTINUES TO GROW AND CONTRIBUTE TO ENCORE Capital Deployed Total Revenue Operating Income 26 Over $145 million of capital deployed in 2013 Now operating in 10 states $35M competitor acquisition $M $M $M PROPRIETARY 0 2 4 6 Q1 Q2 Q3 Q4 0 10 20 30 40 50 60 70 Q1 Q2 Q3 Q4* 0 1 2 Q1 Q2 Q3 Q4 *Includes $29 million related to the acquisition of a competitor |
![]() ENCORE’S Q4 ADJUSTED EPS SET A RECORD OF $1.05 PER FULLY DILUTED SHARE 27 * Please refer to Appendix for reconciliation of Adjusted EPS measurements to GAAP PROPRIETARY $0.87 $1.01 $1.05 $0.04 $0.10 Net income per diluted share from continuing operations attributable to Encore Net non -cash interest and issuance cost amortization, net of tax Acquisition related fees, net of tax Adjusted net income from continuing operations per diluted share attributable to Encore - (Accounting) Adjusted net income from continuing operations attributable to Encore - (Economic)* |
![]() ENCORE’S 2013 ADJUSTED EPS SET A RECORD OF $3.86 PER FULLY DILUTED ECONOMIC SHARE 28 * Please refer to Appendix for reconciliation of Adjusted EPS measurements to GAAP PROPRIETARY $2.94 $3.77 $3.86 $0.12 $0.71 Net income per diluted share from continuing operations attributable to Encore Net non-cash interest and issuance cost amortization, net of tax Acquisition related fees, net of tax Adjusted net income from continuing operations per diluted share attributable to Encore - (Accounting) Adjusted net income from continuing operations attributable to Encore - (Economic)* |
![]() Key Factors Previous Current Facility Size $754.5M $846.3M Transaction Limit $50M (Single) / $75 (Aggregate) $75M (Single) / $150 (Aggregate) Maturity 2017 2019 Accordion $162.5M $250M Propel $300M $400M Convertibles $300M $450M Foreign Portfolios $150M $200M Stock Repurchase ($0) filled $50M Rentals $15M per year $20M per year Capital Expenditures $20M per year $30M per year Credit Facility Summary WE MADE SEVERAL KEY AMENDMENTS TO OUR CORE CREDIT FACILITY TO SUPPORT ENCORE’S GROWTH 29 PROPRIETARY |
![]() 30 ENCORE’S LONG-TERM PROSPECTS CONTINUE TO BE FAVORABLE Operating Results & Deployment A culture of constant improvement drives improved results Liquidity & Capital Access Strong liquidity and access to capital enhance our ability to take advantage of consolidating markets and new opportunities Solid Cash Flows Additional asset classes and geographies continue to enhance ERC and collections Geographic & Asset Class Diversification We are an international company in several asset classes, positioned for strong earnings growth going forward PROPRIETARY |
![]() 31 Appendix |
![]() 32 NON-GAAP FINANCIAL MEASURES This presentation 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 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. The Company has included Adjusted Income from Continuing Operations per Share because management believes that investors regularly rely on these measures to assess operating performance, in order highlight trends in the Company’s business that may not otherwise be apparent when relying on financial measures calculated in accordance with GAAP. Adjusted EBITDA, Adjusted Operating Expenses and Adjusted Income from Continuing Operations and Adjusted Income from Continuing Operations per Share 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 presentation a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures. PROPRIETARY |
![]() December 31, 2013 2012 $ Per Diluted Share – Accounting Per Diluted Share – Economic* $ Per Diluted Share – Accounting Per Diluted Share – Economic Net income from continuing operations attributable to Encore 24,385 $0.87 $0.90 20,167 $0.79 $0.79 Adjustments: Net non-cash interest and issuance cost amortization, net of tax 1,185 $0.04 $0.05 191 $0.01 $0.01 Acquisition related legal and advisory fees, net of tax 2,770 $0.10 $0.10 - - - Acquisition related integration and consulting fees, net of tax - - - - - - Acquisition related other expenses, net of tax - - - - - - Adjusted net income from continuing operations attributable to Encore 28,340 $1.01 $1.05 $20,358 $0.80 $0.80 33 RECONCILIATION OF ADJUSTED/ECONOMIC NET INCOME AND ADJUSTED/ECONOMIC EPS Reconciliation of Adjusted Net Income and Adjusted EPS to GAAP EPS (Unaudited, in thousands, except per share amounts), Three Months Ended PROPRIETARY * Excludes approximately 1,041,000 shares issuable upon the conversion of the company’s convertible senior notes due 2017 that are included for accounting purposes but will not be issued due to certain hedge and warrant transactions |
![]() 34 RECONCILIATION OF ADJUSTED/ECONOMIC NET INCOME AND ADJUSTED/ECONOMIC EPS Reconciliation of Adjusted Net Income and Adjusted EPS to GAAP EPS (Unaudited, in thousands, except per share amounts), Full Year * Excludes approximately 595,000 shares issuable upon the conversion of the company’s convertible senior notes due 2017 that are included for accounting purposes but will not be issued due to certain hedge and warrant transactions PROPRIETARY 2013 2012 $ Per Diluted Share – Accounting Per Diluted Share – Economic* $ Per Diluted Share – Accounting Per Diluted Share – Economic Net income from continuing operations attributable to Encore 77,039 $2.94 $3.01 78,571 $3.04 $3.04 Adjustments: Net non-cash interest and issuance cost amortization, net of tax 3,274 $0.12 $0.13 191 $0.01 $0.01 Acquisition related legal and advisory fees, net of tax 12,981 $0.50 $0.51 2,567 $0.10 $0.10 Acquisition related integration and consulting fees, net of tax 3,304 $0.13 $0.13 - - - Acquisition related other expenses, net of tax 2,198 $0.08 $0.08 - - - Adjusted net income from continuing operations attributable to Encore 98,796 $3.77 $3.86 $81,329 $3.15 $3.15 |
![]() Reconciliation of Adjusted EBITDA to GAAP Net Income (Unaudited, In Thousands) Three Months Ended 6/30/08 9/30/08 12/31/08 3/31/09 6/30/09 9/30/09 12/31/09 3/31/10 6/30/10 9/30/10 12/31/10 3/31/11 GAAP net income, as reported 6,162 3,028 (2,095) 8,997 6,641 9,004 8,405 10,861 11,730 12,290 14,171 13,679 (Gain) loss from discontinued operations, net of tax (89) 46 (483) (457) (365) (410) (901) (687) (684) (315) 28 (397) Interest expense 4,831 5,140 5,401 4,273 3,958 3,970 3,959 4,538 4,880 4,928 5,003 5,593 Provision for income taxes 4,161 2,429 (1,781) 5,670 3,936 5,676 4,078 6,080 6,356 6,474 9,057 8,349 Depreciation and amortization 482 396 391 410 402 443 516 522 591 650 789 904 Amount applied to principal on receivable portfolios 35,785 35,140 46,364 42,851 48,303 49,188 47,384 58,265 64,901 63,507 53,427 85,709 Stock-based compensation expense 1,288 860 382 1,080 994 1,261 1,049 1,761 1,446 1,549 1,254 1,765 Adjusted EBITDA 52,560 47,039 48,179 62,824 63,869 69,132 64,490 81,340 89,220 89,083 83,729 115,602 35 6/30/11 9/30/11 12/31/11 3/31/12 6/30/12 9/30/12 12/31/12 3/31/13 6/30/13 9/30/13 12/31/13 GAAP net income, as reported 14,775 15,370 17,134 11,406 16,596 21,308 20,167 19,448 11,012 21,064 22,216 (Gain) loss from discontinued operations, net of tax (9) (60) 101 6,702 2,392 - - - - 308 1,432 Interest expense 5,369 5,175 4,979 5,515 6,497 7,012 6,540 6,854 7,482 29,186 29,747 Provision for income taxes 9,475 9,834 10,418 11,660 12,846 13,887 13,361 12,571 7,267 10,272 15,278 Depreciation and amortization 958 1,054 1,165 1,240 1,420 1,533 1,647 1,846 2,158 4,523 5,020 Amount applied to principal on receivable portfolios 83,939 73,187 69,462 104,603 101,813 105,283 90,895 128,481 127,370 154,283 124,520 Severance and Stock-based compensation expense 1,810 2,405 1,729 2,266 2,539 1,905 2,084 3,001 5,364 3,983 3,486 Acquisition related expense - - - 489 3,774 - - 1,276 12,848 7,752 4,260 Adjusted EBITDA 116,317 106,965 104,988 143,881 147,877 150,928 134,694 173,477 173,501 231,371 205,959 RECONCILIATION OF ADJUSTED EBITDA PROPRIETARY Note: The periods 6/30/08 through 12/31/08 have been adjusted to reflect the retrospective application of ASC 470-20. All periods have been adjusted to show discontinued ACG operations. |
![]() Reconciliation of Adjusted Operating Cost to GAAP Operating Cost (Unaudited, In Thousands) Three Months Ended 36 RECONCILIATION OF ADJUSTED OPERATING COST PROPRIETARY 3/31/12 6/30/12 9/30/12 12/31/12 3/31/13 6/30/13 9/30/13 12/31/13 GAAP total operating expenses, as reported 91,394 102,809 103,621 103,872 105,872 126,238 174,429 168,466 Adjustments: Stock-based compensation expense (2,266) (2,539) (1,905) (2,084) (3,001) (2,179) (3,983) (3,486) Operating expense related to other operating segments (331) (2,815) (3,053) (3,092) (5,274) (6,367) (12,115) (12,755) Acquisition related integration and consulting fees and severance costs - - - - - (5,455) - Acquisition related legal and advisory fees (489) (3,774) - - (1,276) (6,948) (7,752) (4,260) Adjusted operating expenses for the portfolio purchasing and recovery business 88,308 93,681 98,663 98,696 96,321 105,289 150,579 147,965 |
![]() December 31, 2013 GAAP net income attributable to Encore Europe Holdings s.a.r.l. 9,038 Loss from noncontrolling interest (1,559) GAAP net income 7,479 Adjustments: Interest expense 37,646 Provision for income taxes 1,573 Depreciation and amortization 3,096 Amount applied to principal on receivable portfolios 48,849 Acquisition related legal and advisory fees 800 Adjusted EBITDA 100,443 Reconciliation of Adjusted EBITDA to GAAP Net Income (Unaudited, In Thousands) Six Months Ended 37 RECONCILIATION OF ADJUSTED EBITDA - CABOT PROPRIETARY |
![]() Reconciliation of Adjusted Operating Cost to GAAP Operating Cost (Unaudited, In Thousands) Six Months Ended 38 RECONCILIATION OF ADJUSTED OPERATING COST - CABOT PROPRIETARY December 31, 2013 GAAP total operating expenses, as reported $48,890 Adjustments: Operating expense related to other operating segments (11,876) Acquisition related legal and advisory fees (800) Adjusted operating expenses for the portfolio purchasing and recovery business $36,214 |
![]() Encore Capital Group, Inc. Q4 2013 EARNINGS CALL |