(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Exhibit Number | Description | ||||
Press release dated May 3, 2023 | |||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
ENCORE CAPITAL GROUP, INC. | ||||||||
Date: | May 3, 2023 | /s/ Jonathan C. Clark | ||||||
Jonathan C. Clark | ||||||||
Executive Vice President, Chief Financial Officer and Treasurer |
Exhibit Number | Description | ||||
Press release dated May 3, 2023 | |||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Three Months Ended March 31, | |||||||||||||||||
(in thousands, except percentages and earnings per share) | 2023 | 2022 | Change | ||||||||||||||
Collections | $ | 462,356 | $ | 519,414 | (11)% | ||||||||||||
Revenues | $ | 312,630 | $ | 499,682 | (37)% | ||||||||||||
Portfolio purchases(1) | $ | 276,431 | $ | 169,505 | 63% | ||||||||||||
Estimated Remaining Collections (ERC) | $ | 7,789,980 | $ | 7,799,940 | 0% | ||||||||||||
Operating expenses | $ | 242,492 | $ | 234,668 | 3% | ||||||||||||
GAAP net income | $ | 18,626 | $ | 175,749 | (89)% | ||||||||||||
GAAP earnings per share | $ | 0.75 | $ | 6.40 | (88)% |
March 31, 2023 | December 31, 2022 | ||||||||||
Assets | |||||||||||
Cash and cash equivalents | $ | 158,774 | $ | 143,912 | |||||||
Investment in receivable portfolios, net | 3,214,792 | 3,088,261 | |||||||||
Property and equipment, net | 110,184 | 113,900 | |||||||||
Other assets | 368,041 | 341,073 | |||||||||
Goodwill | 834,174 | 821,214 | |||||||||
Total assets | $ | 4,685,965 | $ | 4,508,360 | |||||||
Liabilities and Equity | |||||||||||
Liabilities: | |||||||||||
Accounts payable and accrued liabilities | $ | 179,971 | $ | 198,217 | |||||||
Borrowings | 3,081,786 | 2,898,821 | |||||||||
Other liabilities | 240,052 | 231,695 | |||||||||
Total liabilities | 3,501,809 | 3,328,733 | |||||||||
Commitments and Contingencies | |||||||||||
Equity: | |||||||||||
Convertible preferred stock, $0.01 par value, 5,000 shares authorized, no shares issued and outstanding | — | — | |||||||||
Common stock, $0.01 par value, 75,000 shares authorized, 23,482 and 23,323 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively | 235 | 233 | |||||||||
Additional paid-in capital | — | — | |||||||||
Accumulated earnings | 1,274,289 | 1,278,210 | |||||||||
Accumulated other comprehensive loss | (90,368) | (98,816) | |||||||||
Total stockholders’ equity | 1,184,156 | 1,179,627 | |||||||||
Total liabilities and stockholders’ equity | $ | 4,685,965 | $ | 4,508,360 |
March 31, 2023 | December 31, 2022 | ||||||||||
Assets | |||||||||||
Cash and cash equivalents | $ | 1,642 | $ | 1,344 | |||||||
Investment in receivable portfolios, net | 459,974 | 431,350 | |||||||||
Other assets | 3,813 | 3,627 | |||||||||
Liabilities | |||||||||||
Accounts payable and accrued liabilities | 496 | 150 | |||||||||
Borrowings | 431,919 | 423,522 | |||||||||
Other liabilities | 105 | 105 |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Revenues | |||||||||||
Revenue from receivable portfolios | $ | 295,674 | $ | 304,105 | |||||||
Changes in recoveries | (9,501) | 167,223 | |||||||||
Total debt purchasing revenue | 286,173 | 471,328 | |||||||||
Servicing revenue | 22,585 | 26,146 | |||||||||
Other revenues | 3,872 | 2,208 | |||||||||
Total revenues | 312,630 | 499,682 | |||||||||
Operating expenses | |||||||||||
Salaries and employee benefits | 103,850 | 96,956 | |||||||||
Cost of legal collections | 54,101 | 55,717 | |||||||||
General and administrative expenses | 37,965 | 33,534 | |||||||||
Other operating expenses | 27,556 | 27,027 | |||||||||
Collection agency commissions | 8,150 | 9,605 | |||||||||
Depreciation and amortization | 10,870 | 11,829 | |||||||||
Total operating expenses | 242,492 | 234,668 | |||||||||
Income from operations | 70,138 | 265,014 | |||||||||
Other expense | |||||||||||
Interest expense | (46,835) | (34,633) | |||||||||
Other income, net | 1,732 | 392 | |||||||||
Total other expense | (45,103) | (34,241) | |||||||||
Income before income taxes | 25,035 | 230,773 | |||||||||
Provision for income taxes | (6,409) | (55,024) | |||||||||
Net income | $ | 18,626 | $ | 175,749 | |||||||
Earnings per share: | |||||||||||
Basic | $ | 0.79 | $ | 7.11 | |||||||
Diluted | $ | 0.75 | $ | 6.40 | |||||||
Weighted average shares outstanding: | |||||||||||
Basic | 23,548 | 24,722 | |||||||||
Diluted | 24,942 | 27,482 |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Operating activities: | |||||||||||
Net income | $ | 18,626 | $ | 175,749 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 10,870 | 11,829 | |||||||||
Other non-cash interest expense, net | 4,594 | 4,196 | |||||||||
Stock-based compensation expense | 4,052 | 3,921 | |||||||||
Deferred income taxes | 1,369 | 2,806 | |||||||||
Changes in recoveries | 9,501 | (167,223) | |||||||||
Other, net | (1,843) | 4,787 | |||||||||
Changes in operating assets and liabilities | |||||||||||
Other assets | (3,139) | 27,299 | |||||||||
Accounts payable, accrued liabilities and other liabilities | (8,117) | (8,834) | |||||||||
Net cash provided by operating activities | 35,913 | 54,530 | |||||||||
Investing activities: | |||||||||||
Purchases of receivable portfolios, net of put-backs | (274,625) | (166,298) | |||||||||
Collections applied to investment in receivable portfolios | 166,682 | 215,309 | |||||||||
Purchases of asset held for sale | (22,596) | (12,388) | |||||||||
Purchases of property and equipment | (4,885) | (7,079) | |||||||||
Other, net | 4,709 | 7,684 | |||||||||
Net cash (used in) provided by investing activities | (130,715) | 37,228 | |||||||||
Financing activities: | |||||||||||
Payment of loan and debt refinancing costs | (5,850) | (1,455) | |||||||||
Proceeds from credit facilities | 229,128 | 328,273 | |||||||||
Repayment of credit facilities | (140,043) | (180,614) | |||||||||
Repayment of senior secured notes | (9,770) | (9,770) | |||||||||
Proceeds from issuance of convertible senior notes | 230,000 | — | |||||||||
Repayment of convertible and exchangeable senior notes | (192,457) | (221,152) | |||||||||
Proceeds from convertible hedge instruments, net | 10,050 | — | |||||||||
Repurchase and retirement of common stock | — | (25,692) | |||||||||
Other, net | (10,684) | (7,606) | |||||||||
Net cash provided by (used in) financing activities | 110,374 | (118,016) | |||||||||
Net increase (decrease) in cash and cash equivalents | 15,572 | (26,258) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | (710) | (3,170) | |||||||||
Cash and cash equivalents, beginning of period | 143,912 | 189,645 | |||||||||
Cash and cash equivalents, end of period | $ | 158,774 | $ | 160,217 | |||||||
Supplemental disclosure of cash information: | |||||||||||
Cash paid for interest | $ | 38,072 | $ | 31,771 | |||||||
Cash paid for taxes, net of refunds | $ | 908 | $ | 949 |
Three Months Ended March 31, | |||||||||||
(in thousands, unaudited) | 2023 | 2022 | |||||||||
GAAP net income, as reported | $ | 18,626 | $ | 175,749 | |||||||
Adjustments: | |||||||||||
Interest expense | 46,835 | 34,633 | |||||||||
Interest income | (944) | (437) | |||||||||
Provision for income taxes | 6,409 | 55,024 | |||||||||
Depreciation and amortization | 10,870 | 11,829 | |||||||||
Stock-based compensation expense | 4,052 | 3,921 | |||||||||
Acquisition, integration and restructuring related expenses(1) | 5,526 | 679 | |||||||||
Adjusted EBITDA | $ | 91,374 | $ | 281,398 | |||||||
Collections applied to principal balance(2) | $ | 182,981 | $ | 53,567 |
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