PRAA - Earnings call transcript Q1 2018

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Operator

Good afternoon, and welcome to the PRA Group earnings conference call. [Operator Instructions].

As a reminder, this conference call is being recorded. I would now like to turn the conference over to Ms. Darby Schoenfeld, Vice President of Investor Relations for PRA Group. ahead. go Please

Darby Schoenfeld

Chief afternoon, With Good Chief thank for President you Officer; Thank today everyone, are us. and Vice Executive me Pete and Officer. Kevin joining and you. Graham, and Financial Stevenson, Executive President

to to release SEC these call, expectations. for that detailed and We factors. on earnings website on during and are a cause The assumptions be the found Investor listeners these and presentation management's during subject be call today's Please are the results will caution based our forward-looking We and could at slide which statements will our Relations filings www.pragroup.com. differ our can of expectations. discussion to statements our SEC webcast and make that forward-looking refer earnings materially the from of current risks, release, press we actual filings using the uncertainties section

will and earnings to shortly of to QX Additionally, available noted. Officer. over after QX be of replay All XXXX release. our to press is Stevenson, and Executive conclusion, its will President listen unless like the mentioned and turn comparisons this be a I'd otherwise XXXX, Kevin today call between needed information in call of Chief the now the

Kevin Stevenson

we Well, level ago, portfolios the a our recognized and for not to that first drive owned. thank you let collector Almost good was on workforce years you, we Darby, joining matched quarter call. we us afternoon, Thank everyone. two XXXX our that conference to attrition

collector reached believe X,XXX the of the U.S.-based XXXX. almost performance, we quarter which this of increasing workforce in appropriate at our core, improve the is signs first year, compounded issue. of see to capacity increasing of end To we we And in collectors. June started what an supply we Additionally, by began U.S.

full-time use As a employees, collectors pool a when our we of convention. equivalent we number or reminder,

so we've shown outreach centers, over over addition the X,XXX our we time. and and enthusiasm regulatory during we've experienced Globally, to has the this launched I've years an by updated has call letter new strategy opened growth and been also digital significantly the and teamwork, company campaign, In employees. platform impressed changes hiring enhance process. X now the X this and accommodate PRA the to last dedication that aggressive

cash result, a in and time great off quarter, this record during call achieved million Core, and in billion. and which $XXX XX% is Portfolio Core U.S. in As record $X.X estimated XX% during the increase to by collections XXXX. global record XX% an increased In quarter, was a collections versus Europe a investment cash million increase XXXX QX a was row to This of the start, a center quarter, we XX%. invested remaining Americas driven collections. or cash quarter of helping collections, to ERC, second we by increase a primarily $XXX another

continue to of supply year. the the We see that volumes optimistic throughout I'm will in we U.S., and see increased levels higher

needed. if ramp balance quickly the operational proven, call the We capacity, have we've our sheet expertise as to up and centers

secured. analysis, portfolio. Recall for going QX volumes market, secured We analysis, transacting our lower. appear the at the that able returns not sense. that levels which the we chapter QX to and competitive and portfolios make including almost investment Core investment insolvency new a I was for forward, relatively us, of remain XXXX quarter first disciplined, XXXX, us, acquired channel trade be a softer of Europe to we're an solid obviously were seasonally the points large at investing and XX quarter, purchase insolvency were $XX the XX remain of we in our XXXX. we'll mid-single-digit but remains first optimistic don't some be sales that or Our stress, XX% chapter million portfolio and cultivating simply successful on Based of than lower still ideal we amount during seeing in price

environment We our purchase cannot forever. last competitive continue and portfolios criteria to believe this that meet

We committed forward in to we patient to note Operationally, XXXX first similar Americas will quarter, in running end approached $XXX we amounts Europe, at terms portfolio is A to investment globally how U.S. XXXX time the very Core million. in the well. investments on be continue the the final of frame flows of of had maximum

U.S.-based both seasonally collectors and had and opened, really well prepared months, strong letter XX of X the Given staffed result, platform a past the for first enhanced as appropriately. We the couldn't system were the I quarter. sites over the our happier progress. we've digital we've place, we number be We hired with in are

They processes and moments culture, create our almost our opportunity effort with retain since and March improve tenure are drove changes is valuable leadership. call a employees positively gain daily to tools and directly This who that ones these need XX% of U.S. the and positive also X,XXX basis, and insight the compliance. they impacts My motivational. customers this promote of of have and since goal us increase All helps respectful customers collections. planning We've one to for collaborative, and me number spoken corporate made for truth them to into a cash our interact we positive and center productivity the to in to a on PRA. that's strive collectors of help give for I customers, XXXX.

Protection the SEC's encouraged DC recent to Telephone ACH interpretation On in were the Consumer the ruling court's front, circuit TCPA. of favor or of regulatory see we of Act, the challenge the

automated what dialing ATDS overturned unfortunately, an what FCC stopped telephone determined or the ATDS, it exactly an have of short previously specifying as qualified system, is. ruling the While

groups, Chamber in some for in clarification declaratory of that last us form technology our will future. near Just petition using generator number sequential that or random order an dial answer FCC. this number in hopeful as the We're to give to a equipment phone to asks including petition begin ruling enough Commerce, The other for week, of or the numbers. trade utilize to a in a filed direction petition with of fact, U.S. ATDS, qualify must, the the confirmation

As response, debt time my evidenced CMS. buying the principles the management has a built an for is industry some system, PRA In operating of what been regulatory now. TCPA, and collecting created the on environment on commentary landscape I by our believe best-in-class compliance ever-changing and foundation or for the

on annual my compliance importance understand read we the you If and place you'll experience. customer letter, the

improve industry held of goals is One regulators the perception our and our the public. to sellers, of debt customers, by

and to guidelines something accounts provide best banks. mirror and to on should believe in large sell based is established regulatory that's at and that banks are treatment customer CMS money-center driven deliver. ethical Our published entities We those and compliant we practices designed a manner, to

adopted three lines a that have model of defense. We has

internal policies first to, has of The is line frontline to procedures. our a all and of, properly the set compliance, and and compliance implement adherence Operations developed operations their controls, usage regime.

department compliance that and a and line suite risks adequacy controls. Our PRA of within training. this of separate comprehensive procedures defense the our and internal policies, actively and alerts of department. has And this defense second speech management, of line resides. monitors our effectiveness It It our is and it ensures the is complaints identifies line compliance

which defense and procedures. with peace that that to mind management applicable respect. line to our also gives with coverage is PRA and in will amount independent ethically regulations to third also audit internal gives effort complies the services, matters. our established important team corporate audit believe resources place laws of of treated of having and policies of significant assurance It's The adheres understand provide This compliance infrastructure CMS. sellers global and experience and that goes I customers know their into this and be

the quarter a versus In a the XXXX. row, increasing approach. second Europe, markets collections from most analytics continued our quarter Operationally, record-breaking to to our on first in XX% cash cash Moving well, Europe. perform mature of had core collections benefiting

launched Pay Pay digital our U.S., roll site with PRA in digital is in largely PRA the plan it also excited aligned more channel. This our to we're to site U.K. to our be and expanding and site countries. out the We

of generation less Our deliver we to prefer interaction and direct self-service, and that convenience. newest customers more intend

over I'd to to Pete? like our results. things financial to turn Pete through Now go

Peter Graham

then overview was first quarter I'll collections Kevin. $XXX $XXX on total quick million, GAAP Operating over revenues net our and per results generating XXXX. with diluted to the Cash income share. were were $XXX $X.XX move operations. were a increases cash and and Thanks, of start percentage million, of expenses in earnings $XX double-digit both million, million,

million. vintages Global were made $XXX collections XXXX. and a gain decrease years included Significant to the partially us of services cash a confidence level quarter the continue an to quarter included the cash on increase channel in collections of and XXXX This after-tax driven of last U.S. improvements the record increase net The to newer we were XXXX a to in from approximately million. XXXX newer in This U.S. on contribute growth. portfolio performance the Americas Total a record new our increase U.S. increased by million As record in was the collections there government level. collections we million. few in million of million, cash an Insolvency cash $XX buying cash ERC sale perform, of gave portfolio increase $XX were million, large $XX purchases the Core $XX significant level a an by in collections sustained increase $XXX of of legal collections the $XX for of have variable. cash the of million made can over an as million, of $X Core a million, Europe business. and vintages. primarily be and in and Brazil technology collections Core, $XXX this yields continue operations, purchases first $XXX offset during reminder,

million. charges always reversals address level saw $XXX,XXX As of we've collector low. vintages, of allowance Core for unusually increased to continued some adequately quarter of overall, although, newer offset the and times $X.X be by a XXXX was $XXX,XXX and reversal and to level more be said some charges Europe the quarter. will We XXXX capacity of the allowance record net in the XXXX additional largely Net yield vintages. allowance pressured, our cash had to Americas older the net The us allowed raises. as present, due in charges historic many in in Core XXXX were charges allowance allowance resulted has portfolios. vintages this The collections before,

government $X for receipts Fee a and of was quarter The larger of other partially million due primarily income, is first quarter. the sale component PLS by services in CCB. offset the to which declined, fee year, cash last income

unlevered sale $XX compensation largely to calling gain return pretax did due internal year. generated collection gross net increase drove services, XXXX the -- the of the first expenses government have of the and of Compensation million Operating of legal government first reminder, more costs. call to were accounts, With an a collectors previous after-tax million of communication approximately employee we from XXXX and XX%. cash $XX year. than higher. new expenses of and quarter anticipated a collectors, employee more having and in centers quarter of X,XXX $XXX the excess rate as communication This X is services As additional increased $XX in and due million, prior and expenses costs in services million, increasing in new letters

eligible and we for to in channel, to mentioned we cash in of we an in As costs started legal -- XXXX, the see collections. were we mentioned as to we invest collection third as started see future uptick quarter legal expected, accounts more began the as legal first that in the

the see corresponding legal increase in we'll in reminder, followed future cash the by collections costs a quarters. As collections first,

maintain Our consistent continued cash in the efficient quarter, was Even the and efficiency be ratio which this investments the years. despite in the we've in increase to expenses, workforce growth made. and last metric remains the few XX.X% with with we've

higher partially investment income costs year strong of quarter supporting We on levels and expect collection seasonally existing Estimated our offset rate by with of cash the million by increased borrowing in offset by a first XX% the quarter ERC XX% a Below in million. currency driven seeing by XXXX, billion, higher purchases collections remaining interest costs positive is we're to well. interest $X.X in the $XX Net million. totaled since of legal sequentially the around on quarter, effective U.S., was interest to value collections line, higher million, $X.X change be portfolios record and fair expense Europe. in this partially overall in were swap with slightly interest favorable portfolio investments, $X.X noncash for increased U.S. as cash due translation, quarter. quarter XX% agreements the operating a These in expense remaining and the increases estimated rate. and metric increased in the in our collections a borrowing, $X.X variability collections full some

base in the in quarter. level first of million. a through the of amortized million ready have a the On updated base total which $XXX.X $XXX charges portfolios addition not from go-forward difference In combination substantial vintages. accounted revenue model quarter, questions. that provided that we basis, $XX that fully revenue a collected to Europe, we're we to the of pools for for million, generates $XXX Americas the yield owned Last the capital the Actual was tables press estimate estimate in the cash in in was quarter in a $X NFR The million. NFR currently expect million. for is the of now million can the see million million of the we flow wouldn't deviation $XXX.X of revenue $XXX of reversals model us From cash the release, portfolio was a revenue $X The and increases. of of the a difference experienced quarter on have you remainder of on difference allowance for business, purchased for second of available by $XXX.X revenue portfolio almost in I was in worldwide. quarter. model, the Operator, purchases grouping million a There and and produced generated

Operator

Instructions]. [Operator

Our JMP Scharf of David first question comes from Securities.

David Scharf

go I curve environment do -- integrating an very, all that. cash but wondering, wanted it headwinds I'm seemed increase new about particular it some the in the see seemed quarter higher, could to accompanies quarter. a you've be had to a seasonally, mean, Learning like imagine guidance always headcount productive because turnover. ask in XX% related ratio, would tremendous that like from I efficiency really and obviously would in productive and despite I what you And which is training strong, QX just these very bodies.

a a give longer-term that you if for maybe what little us So around ceiling can XX% color be. think might you

Kevin Stevenson

for Stevenson. I'll the question, current crack it, CEO, Thanks Kevin first the at David. take ex-CFO and

I We last layering -- XXX-ish last were it's was range about -- kind of think people that XX% a -- put I reps. we watching of ratios hired, in -- kind increase great I a what, question expense I and along, inverse year, hovering was now, X,XXX in XX.X% thought the expense range, for We XX.X%, on XX%, the of all operating that. because We in all year. on people. XX.XX% on QX. And that watching and the all QX.

pace So excess said to it in I up in them to calls, of want and that I other out came general. quickly, really I guess The give trained collectors conference a what hired everybody -- far to and expected. shout the people in the just really folks I've

don't I pencil is going Pete that can quarter, to number same talked it. for a and I There an point. in that, you it going we XX% The for about can We give to talk the pressure guys be think but year, feeling to about I I this everything think to know that go-forward up. could should full impressive from you we're a number. do yes, -- you by changes in So were variability at that basis number. I if

David Scharf

so employment there's And fair. with that a market, an probably collection quid that's attractive full tight the got it's labor there. to -- is for believe too, a ceiling environment no, I quo No, pro

Kevin Stevenson

about things one concept of think I about tenuring think of talked is, of the to also collector we've this the workforce.

more As hired experienced they the last productive. seasoned, that get will more over those months become naturally XX we've folks more and begin to

with a on we're they've hour too retention. passionate ago, position of on just ways And working about call on very so kind improve just the company my bog will to that in not what I'm met a guidance down three-day my about any improve that I'm collectors precise that much top this been workshop on screen. radar in means expectation productivity ratio. is really But efficiency the and really overall our an don't I so it. over want and here cap. address to our for retention. on passionate issue. to of in terms increases I a just Know it's that give in time, high

David Scharf

Fair the enough, results. no so certainly complaints in

a get Just housekeeping I'll queue. things. back in couple

lot Europe, Act, quarter. of tax effective of know unusually XXs the thinking after a How high of low guidance in and the think be I I we balance last the with quarter moving about a the was Tax in the should was there's normalized year kind pieces it it rate this rate?

Kevin Stevenson

a well about ask new was that's When complex, law made that monumental might that. think good time I very a tax the provisions somebody the the game-changing queue. Act, and our would to be did of we period first year-end guy point. of We on the a implement around that, and short figured so very sort effort, Tax as

call view, tax big couple tax other additional making combination to authorities reaction we or which well that's the or states more at We've of as digest XXs. communities, so guidance had tweaks taxing to our coming from foreign that. lawyers new are got that that accounting a in law. months firms as time, things told the us and it, and statements made And had We as to color best high commentary, opposed I'd some

more overall you when there's rate, as on of -- best for the time bit time that's is our to had now our So full you'll see Q. out we've right The XX% our read of there. view but the little our We've done year operation. guidance with digest a best elapsation and impact

coming We that we'll the react expect as to there's later and appropriate. guidance year, going to be in the

David Scharf

Got it, to got sounds like XXs clear, the down the it it. XX. But view is just from to high coming be

Peter Graham

that's the the the to change our the comes rules that think Currency for at of our as in margins jurisdictions. again, view Yes, portion component. mix the in, states as going swing mix on could different we the in the the best that full Obviously, state XX's on caveating different be. a rate's our XX, tax amongst right works. provisioning where effects year now based well as of earnings way what of can -- U.S.

David Scharf

I hearing in Got portfolios And a it once question. clarify Throughout the materially months? just fourth sudden, sort we're to volumes. even ramp that that supposed things to interpret price last on year just before in challenging, one like the final it. to very how or then be changed very has guess, of was was a a and all on X, competitive. Kevin, of we seemed unique a couple that, Europe. last commentary again But you quarter, now. gave of X attractive maybe it Was hearing And what's we're going QX just it's just in big environment in -- now, one-off not it was

Kevin Stevenson

take have good on again. can going I'm a to online. Tiku he He it question I some necessary. feels as it. a add color That's Patel do crack to

first let's look at QX. So

either that or here is makes kind X of I very and of make point, a just QX, left and answer way. like lumpy basis And is to there it points something quarter my basis out look full look a like back and large Europe I I handful listen transactions, look quarter QX and

in probably So happened to that's That's what happened largely, what QX. QX. related in think, I

our about said there you're they a think, at soft you're reiterate we do -- on to I'm I'll talk significant And people we the finally or differ these a these trying I based finally I see that possible look lower this returns. though, But at what be and seeing, deals over as generally trading is percentage QX other on analysis, in just of mid-single-digit will IRRs. era. call, how humble hearing on as Although because competitors Europe. seemingly what on still

it. see to starting You're

some going to seeing we're and here remain You're and there, so failures patient.

like So you'd you Tiku, add have do that? anything to to

Tikendra Patel

You to it. little add of of actually bit most covered I it. a color Maybe would just

of market. very like, -- say, market. difficult our is Generally, some the portfolios terms going books so are Kevin, investment As sell are we selling strategy that some know have precise clear to strength to supply. And a or of the will particularly earlier, brought lumpy terms it's levels you that strong contact we of to market sellers remain their the changing the And be that as to sellers generally their still with the of to what are a of manner have back out. in some our still indeed, consequence, predict a the know and in -- in market

spread. a still can remain And than X, were geographic many market more X are basis said, is it have have or does so years as Kevin There few win a However, points deal. you there we each ago. competitive. What lose in we buyers

have doing And the still don't have that's it's will opportunities our for trustworthiness continue over a We been know little raised long term. good And done consequently, operations find proposition in. continue consistent plan. great and up, to but end reliability been based great on good markets we've we based we compliance how to a we as that's be to years. customer year. consistent And we X on And expect, and last lumpy. and what And to We experience it of invest have the bit many that, over pricing in. on

Operator

comes Our of Mark SunTrust. next question from Hughes

Mark Hughes

a Any pools you accrual? closer can the non-accrual on where getting to little update those put on

Kevin Stevenson

key a our of larger we've we've A on forecast in. the Again, are some up is working shoring of areas the newer cash been of ability that had those couple the where flows of markets accurately I sort reiterate determinant. operations to the kind

process, really have we for and threshold legal Italy. improvement a there teams the for in in still terms teams coming job but building degree making I -- process are of high out forecast think happen, that's when But off the the going threshold can't of of so particular, of the exactly I progress. a to in done great is certainty, terms to kind you yield in pretty good

Mark Hughes

Swap levels, if persistent quarters? adjustment onetime current gain rates interest sort Or if that to the is to follow in the the levels, you me? stay a prevailing subsequent quarter, that is at of

Peter Graham

Yes. No, business, amount line variability in our certain applying to we market date, that bank accounting, flow through do of European have the have in requires will some not we're because that -- we you hedging. covenants in we in rates to a And interest that lines. have hedge been so we got our needed to facility expense the mark for movement just

was called interest rate been to out for favorable we've periods, can we of get it normal expense. unfavorable. And time. run In more other so tried So a it's that this

Mark Hughes

the Is than this Yes. $XX higher rate little then run normal million? a something

Peter Graham

Yes. XX-Q Again, in of we've our disclosure the given all noncash items. of interest-related

out So fee. you of the sort non-recurring stripping I you help use that, if with should that think

Mark Hughes

pricing. market, Kevin, on the then U.S. commented if don't And I know in you've specifically

supply think I said up. you've is

You will maybe be little pricing purchasing buoyant have X level expect domestic might Any or was competition in it X the but year-over-year, purchasing? up, of quarters. or a that less commentary you regarding up that -- core influenced -- than your last was but

Kevin Stevenson

guys Chris exposure and done actually, have a this join as I, Sure. give well us we again little Graves like and you afternoon in introduction the past. asked to

I I'll in -- year, or jump of do the significant rest but optimistic As throughout let Chris about comments, talk flow I we and said volume about of the am QX. in prepared my

Christopher Graves

on active seeing [ph] new rate signs bullish what what's stream. we remain terms trends in volume to continue seasoning charge-off coming I books that a savoring and Yes. of into inevitable charge-off and of of I'm the the market

ever on seeing back our into based we're capacity. our underwriting what we've competitive our I share and And operating that think we're gain of I -- from as positioned steps straight goes better performance good market. to been than in

strength our up positioned trends say seen see, think pretty any that I place we're and competitive [indiscernible] of pick performance material market from can we've volumes. I which operating we're to good -- what cost liking seeing, So changes. well and But to the the we're -- I our efficient is The and share. I wouldn't we're that our continue

Operator

question next Brian Our Blair. of comes from William Hogan

Brian Hogan

guess. on it's levels. you I said question quarter, you in Do was full. need more, your half and of maybe add mean, to added more? about quarter, staffing facility capacity you A Can appropriate your Burlington, your completely XXX you talk the last full the like staffing continue levels? North It I kind Carolina sounds now, on

Kevin Stevenson

you It's right down that for Thank fairway. question. the

So math is your good.

are a you're going largely during difficult I parking. and to hour, come to staffing visit Our centers invite us would peak anyone very find full. time

So what prepared place I'll a said where in we tell good you, as we're comments, think I in feel my we about.

at for that we're our least I we I like feel people, foreseeable our good volume, existing think for X,XXX volume, think in a spot thereabouts. this with

what what where I our but at delivers us like, feel good staffing quarter number about to and looks we're see next we'll today. So

very a again, work people, you plastered I about I'm said, and learn age it's wall-to-wall passionate said, a at difficult And great retention. that to as very with company when manage young you're a Now it's not environment.

us attrition quarter, see people needing add to to It place want of some probably it's packed point you center hotfooted, way in unforeseen be happens. estate's rapid close hopefully, get the mentioned seats your in good last breathing and I and something gives which another opened, to do give something for as get centers number is of room. not call caught having in question. and think us. in to a put pretty lot trick could the a and the there, I open of newer them people a case out -- center, not I you flexibility some of So them, then a people let Real cheap sit

through brain So now. that's what's going right my

Operator

experienced some [Operator just difficulties. We technical Instructions].

Kevin Stevenson

two callers this public, not has had Well, queue. before. to happened I in extra being me of years know folks, we XX

Thank I call to them off-line, Difficulty]. with the them popping this wait. figured out, answer we guess, gone questions -- us, got up So going We're Folks, in. but unfortunately, we'll end goodness. oh, again. looks [Technical pick us. unless bear No, they're have like We've can get you and here. And for people

Operator

Mr. question. Hogan, you may proceed with your

Brian Hogan

of question And and have next -- guess, rate do related as productivity it ramp? I was staffing to retention it at still target the And my to you levels? was due your now, the churn. and What's

Kevin Stevenson

didn't XX% added I of I I my a this quarter, -- of provide quarter months chart time XX head, provided chart. we about have call didn't It materially last it short the And in so don't because over, it top From perspective on. a and it, pie so the off Yes, me. again, was many people. it's period of change. my front tenure

in up frame. than the got back the even in or range higher we're think higher. that time XX% We I might XXXX

and -- of productivity rep that a say, like XX-month Xx, is or believe also X-month versus Xx? a Five from So memory yes. rep the I

in they're because So I addition that, dealing in also to used and compliant am -- more this to environment. they're significantly

just trying So people's when dedicated tell them. out out I and is am, to from to regulators course, reproductive the that's tenure ways again, I when to ways happen to -- what this win and hear because record, let I'm everybody, increasing broken a job company, customers of our -- have for the call. to them investors to let folks this talk a figure they be and and I and figuring lives -- and be and

historical So I be at would meet or to say peaks. target least exceed my would

Brian Hogan

the what you timing your the as I then guess, start to you investments? when is come it the collections of later? in -- And collections? mean, quarters X the I does from lag to investments, from -- lag What's clarify seeing your All legal right. legal on legal can

Peter Graham

is general probably benchmark mean, I obviously, X of to a But in investments. good X return it those on to varies, months anticipate Yes, sort case-by-case. terms,

Brian Hogan

XQ, if XQ investing XQ to seeing here in to And start maybe up? you that so should we start ramp in started or

Peter Graham

Yes.

Brian Hogan

All change you right. have And any me the I But mean, then types of supply, paper? you seen more supply but sell of in up, behaviors said sort mean, different have last seen one behavior, with change anybody you the any at I is moment. sellers? for of U.S. in

Christopher Graves

business risk industry the of we doing the really sure that accounts and the quality the they've sellers a careful about and continue land they're I lot awarding law the to our advantage think as has so. And resonate say recently and our But hands in quality Brian, to regulatory of seeing in this too. how we've we they and Chris. who over more structure. talk sellers to operating profile differentiation do we're about to of obeying are generally this think where operators, where think, accounts will they environment sell to of and I to. been continue played about think sell. go And ever companies in which in the good and terms become terms our sellers is their make that, And our I business materialize that that of I'll selective as the seen that about data more the also time,

expect again, do trend strengthen that but So nothing the I over we think that's time. to

Operator

KBW. Our next Hagan Eric question comes from of

Eric Hagen

one. on good follow-up I think last question is a that my actually

some the be see issuers guess, the on one-offs we to Or seemed in you question summer I there bringing headlines as were just is for summer, that. those about charge-off view? opportunity to your last Maybe some attention increasing. in could in-house. think that was reemerge last headlines just I an ask expectations collections continue rates this whether is those your opinion, to focused

Kevin Stevenson

talk up. been we that year. working U.S. pop XXth XXnd is as its PRA the I that's XX We're specifically on provide talk we years. -- long aggregators. million for are we together. comment always heard when Yes, buy I'll we've doing that, always I important celebrate it I'll to headline our nearly how that summer value is to that never lost anniversary. think Again, probably we've best -- was Yes, maybe We've the can. been It's celebrating always track to got, flag this and and I that. we about proposition us. It close say, Fredrickson past in a who The mid-last been headlines, from. I and Steve I possible accounts for XX as that never about -- for down has We what,

again, our I collectors. the collectors. efficient also And would in competitors are, are super-efficient We I think very U.S. say

will may to and these value choose are out, and market we seller a We have greater portfolios all a sellers. drive test I what know and -- a hopefully, We our their that that's probably competitors solutions. prove them, NPV And we the certainly, worth, not think for competitive other a for drive will that than will that terrible States, prove idea we United but better here. great

Eric Hagen

much can just pricing in fresh on and can Yes. Q, of secondary the you be would Yes, each tertiary you as paper you generally opposed -- and maybe just purchased kind see to light some shine on buckets also guess, how of Maybe helpful. we'll those but great. the I that's

Kevin Stevenson

don't trends off Yes. will towards over paper. the probably XX out. exactly Q have my months, I be But fresher the last the year head. been fresher The and the have top of to number

I think in of of north U.S. that's where is fresh with And relatively component portion the consistent fourth quarter the of first that quarter. a probably we think for as were the XX%. I Core probably

So a I about, expect stay we'll that, level time. expect at of that that's for based probably on that everything we that some talked we've period

Eric Hagen

pricing? wide between the sort just fresh is difference the there relative two to this And secondary other? narrowed a point, each at mean, variety of or have and I

Christopher Graves

but difference is there's that a this things pretty stable two good average and I pretty a would have on Yes, those standpoint. think vintages, Chris. from placement levels I pricing been between generally, say

Operator

question comes of Dodd James. from Raymond Our next Robert

Robert Dodd

it Obviously, the make decision progressing up started process should front step-up process? the But year. incremental legal whether are ramping the on seeing a not other? for some legal yet. the that or to What's Obviously, necessarily how review can. last Just we to in collections, through if you're timing cash things going way you to QX coming one expense, on the in core the investments? an what's we And decide when review expect in back

Peter Graham

on Yes, legal quarter based the is an models. I the output scoring investment really of within individual as think the decision

criteria of into sort go accounts strategy. legal some the And channel meet will apply are and the in going pre-litigation the so into for worked, those that we as separate group that works that

made Brian's does as made quarter, around that return investment the in in more investment. any what's the gets individual is investment's particular account and said believe, I to roughly frame of kind it's earlier, X related a investments. see to cash question month in start coming I was to time it that we'll to, So on X how of collections that those Once score really response when

Robert Dodd

Okay.

are ramp-up, is of mean, speak, so accounts, mix what from -- has of continuing following Sort mean quarter, you I I saw? that. you third to the to leveled -- out you qualifying. to it see qualifying up started or to that more accounts continue in given

Peter Graham

it's will, portfolio No, the to are accounts -- pre-litigation their the working we're way and continuing bought Yes. if back of the through to build. that over you to build. see starting of that mix year we The half start process,

Kevin Stevenson

And Robert, is Kevin. this

back to they of the started qualify talking sake know was it what at the a people of other channel. tend buy legal when For half the they buying It accounts. 'XX, was -- accounts. you're in not as just were balanced smaller don't we balance phone, we about. time There And in in case larger was the easily to

source that's the question. So of Robert's

Robert Dodd

ago, at or too XX%. at economic can, much quarters maybe I differences, you portfolios competition half I If said were is -- Europe? this. transacted I European being those I'm into too getting reading now remember Am levels, on much in a actually If of couple X either of reading into maybe worse

Kevin Stevenson

probably in it. this color on wrong, Tiku, you Tiku do you're jump too So if say reading But any much that? let have into I I'll other but

Tikendra Patel

think I too just than more much that. reading into Nothing

comment you moment. think the got think just That's at it competitive slightly or it -- all. you I you've worse we if can don't got just I better. given, statistics that different I kind have of. think it's just

Operator

SunTrust. question next Our comes of from Mark Hughes

Mark Hughes

rate? think representative all quarter, kind fairly seems you that a run income is fee kind it's in the and do of Does normal average. I know but it's of volatile right? about this that, The of

Peter Graham

year, in of PLS for a CCB, remains service the which is what them. I my Yes. quarter really pretty kind bulk government indicated last thereafter sizable that selling had and script of they

take run basis. a it I go-forward what we it and higher little one So yes, rate was run-rate wouldn't expect on but basis, this would a a on than

Mark Hughes

generally the auto -- thoughts Any I the for Kevin, any updated you dialers ratio? if that then, know spoken about cellphones. you've what And operationally could able mean -- to efficiency thoughts on collections to the Okay. or use updated were

Kevin Stevenson

have good dialers portfolio. they're to on. hopefully remember the they've penetrating just day, since data. Obviously, anxious updated to It's on. It No. been in as don't I said, turn back a -- It's been hard we're But I any should breadbox. the really long doing we're the even job so be but

dialer use excited in that's I ruling request And I hear has read today, them great collectors or the I really And think were the excited. fact them that. reps random for FCC, to actually declaratory and script asking a to you I said to define our to I read earlier, for are called like to that of that actually think top I dialing. they about sequential part the the -- talked

And there we'll well. in let press watch goes. see yourselves know, how we'll it So as you to be the and you'll able

Operator

Our Hogan. next Brian question comes from

Brian Hogan

have the but... in release, method for on in press I NFR was follow-ups. of Q, handy? but be the thought couple A collections the recovery cost you It'll that know 'XX Yes. -- the do I

Peter Graham

the at NFR the million. $XXX.X the period, Yes, end of

Brian Hogan

step-down a from And your... so nice

Peter Graham

Yes, cash $XX.X pools million was collections those in the on quarter.

Brian Hogan

could Great. back is balance Yes, portfolios? left you. income come to so the what the Italy And a lot of on

Peter Graham

I of Yes, I it disclosure given out don't that think so before, top my have head. on we've don't

Brian Hogan

you're to seeing now as you -- those have much staffed How perfectly the I multiples, going fine. be And what you a -- and you're that have of yields come confidence And the materially That's starting are time? you much seeing and you. over one little the quarter, yield. in. said will the purchase How have guess, collections confidence in bit in one, this last improve that movement to

Peter Graham

in terms for the in quarter, we quarter a super U.S. Core think yield increases of I business. the had obviously

in of portfolios 'XX, Roughly 'XX in the You owned allowed focused increase And the the remaining from on increase the significantly cash supplemental tables 'XX, was can our was And in, so increasing us concentration the yields that in the that's U.S. quarter. a during vintages. estimated there in quarter. collections we the disclosures did on let that the quarter to of the what portfolio see for newer half some

cash expect I but of expectation overall prepared remarks, in what's deviation basis, go-forward performance of a level of against as again, is on sort I sustained revenue us that yields our raise give confidence to -- wouldn't performance base Now collections estimate, again. said is my to going from

Operator

time, Officer, like to this Stevenson, ahead. call concludes Kevin Chief closing President I'd for Executive Q&A This session. turn remarks. back our and At go to the Please

Kevin Stevenson

again call Operator, Well, you and disconnect. to may our thank look you to you, afternoon, everyone, forward we quarter. this for speaking next listening to

Operator

ladies today's and This conference. program. you, gentlemen, for the attending concludes Thank

disconnect. all Good day. may You

PRA (PRAA) 9 May 182018 Q1 Earnings call transcript