PRA Group
Aug 8, 2017

PRA Group Reports Second Quarter 2017 Results

NORFOLK, Va., Aug. 08, 2017 (GLOBE NEWSWIRE) -- PRA Group (Nasdaq:PRAA), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the second quarter of 2017.  The company reported net income of $11.7 million in the second quarter, compared with $36.5 million in the prior year period.  Diluted earnings per share were $0.25 versus $0.79 in the second quarter of 2016.

Second Quarter Business Highlights

Second Quarter Financial Highlights

"We continue to be excited about volumes and the significant level of investment in both Core and Insolvency in the United States.  We are committed to working with customers to resolve their debt and helping sellers optimize the value of their charged-off inventories.  To accommodate larger purchasing volumes, we are preparing to open new call centers in the U.S.," said Kevin Stevenson, president and chief executive officer.   "During the quarter, we saw growth in currency adjusted cash collection in all segments except for Americas Insolvency, which grew sequentially for the first time in three years.  We are very encouraged by both the industry and internal trends."

CASH COLLECTIONS AND REVENUES

        
Cash Collection Source  2017  2016
($ in thousands) Q2Q1 Q4Q3Q2
Americas-Core $  217,020$  226,906 $  193,360$  210,524$  213,741
Americas-Insolvency    53,163   49,813    52,988   60,429   67,745
Europe-Core    99,121   98,081    97,429   96,028   102,972
Europe-Insolvency    5,371   5,030    4,974   4,719   2,744
Total Cash Collections $  374,675$  379,830 $  348,751$  371,700$  387,202
        
        
        
Cash Collection Source -        
Constant Currency Adjusted  2017     2016
($ in thousands) Q2    Q2
Americas-Core $  217,020    $  214,982
Americas-Insolvency    53,163       67,697
Europe-Core    99,121       96,886
Europe-Insolvency    5,371       2,571
Total Cash Collections $  374,675    $  382,136
        
        

EXPENSES

PORTFOLIO ACQUISITIONS

         
 Portfolio Purchase Source  2017  2016
 ($ in thousands) Q2Q1 Q4Q3Q2
 Americas-Core $  144,871$  115,166 $  91,800$  95,452$  130,529
 Americas-Insolvency    100,040   67,123    20,929   16,760   33,723
 Europe-Core    42,876   39,505    80,129   34,240   68,835
 Europe-Insolvency    7,860   6,020    6,943   14,803   16,410
 Total Portfolio Purchasing $  295,647$  227,814 $  199,801$  161,255$  249,497
         
       

Conference Call Information 
PRA Group will hold a conference call today at 5:00 p.m. ET to discuss results with institutional investors and stock analysts.  To listen to a webcast of the call and view the accompanying slides, visit http://ir.pragroup.com/events.cfm.   To listen by phone, call 888-695-7639 in the U.S. or 970-315-0482 outside the U.S.  The conference ID is 63045731.  To listen to a replay of the call until August 15, 2017, call 855-859-2056 in the U.S. or 404-537-3406 outside the U.S. and use conference ID 63045731.                         

About PRA Group
As a global leader in acquiring and collecting nonperforming loans, PRA Group returns capital to banks and other creditors to help expand financial services for consumers in the Americas and Europe. With more than 4,500 employees worldwide, PRA Group companies collaborate with customers to help them resolve their debt. For more information, please visit www.pragroup.com.

About Forward Looking Statements
Statements made herein which are not historical in nature, including PRA Group's or its management's intentions, hopes, beliefs, expectations, representations, projections, plans or predictions of the future, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

The forward-looking statements in this press release are based upon management's current beliefs, estimates, assumptions and expectations of PRA Group's future operations and financial and economic performance, taking into account currently available information. These statements are not statements of historical fact or guarantees of future performance, and there can be no assurance that anticipated events will transpire or that our expectations will prove to be correct. Forward-looking statements involve risks and uncertainties, some of which are not currently known to PRA Group. Actual events or results may differ materially from those expressed or implied in any such forward-looking statements as a result of various factors, including risk factors and other risks that are described from time to time in PRA Group's filings with the Securities and Exchange Commission including but not limited to PRA Group's annual reports on Form 10-K, its quarterly reports on Form 10-Q and its current reports on Form 8-K, which are available through PRA Group's website and contain a detailed discussion of PRA Group's business, including risks and uncertainties that may affect future results.

Due to such uncertainties and risks, you are cautioned not to place undue reliance on such forward-looking statements, which speak only as of today. Information in this press release may be superseded by recent information or statements, which may be disclosed in later press releases, subsequent filings with the Securities and Exchange Commission or otherwise. Except as required by law, PRA assumes no obligation to publicly update or revise its forward-looking statements contained herein to reflect any change in PRA Group's expectations with regard thereto or to reflect any change in events, conditions or circumstances on which any such forward-looking statements are based, in whole or in part.


 

PRA Group, Inc.
Unaudited Consolidated Income Statements
(in thousands, except per share amounts)
              
       Three Months Ended Six Months Ended
       June 30, June 30,
        2017   2016   2017   2016 
              
Revenues:       
 Income recognized on finance receivables, net$190,843  $204,008  $385,378  $  410,515 
 Fee income 6,344   22,347   16,202   38,613 
 Other revenue 3,145   2,101   5,310   4,210 
    Total revenues 200,332   228,456   406,890   453,338 
              
Operating expenses:       
 Compensation and employee services 66,771   64,793   135,239   131,558 
 Legal collection expenses 31,202   33,897   62,930   64,029 
 Agency fees 9,254   11,309   20,054   22,193 
 Outside fees and services 18,061   15,876   31,346   31,684 
 Communication 7,254   8,423   16,391   18,305 
 Rent and occupancy 3,387   4,038   7,170   7,834 
 Depreciation and amortization 5,041   6,085   10,256   12,155 
 Other operating expenses 11,046   11,279   21,931   21,930 
    Total operating expenses 152,016   155,700   305,317   309,688 
    Income from operations 48,316   72,756   101,573   143,650 
              
Other income and (expense):       
 Gain on sale of subsidiaries 1,322   -   48,167   - 
 Interest expense (22,506)  (20,569)  (43,763)  (40,528)
 Foreign exchange (loss)/gain (2,516)  2,029   (337)  179 
    Income before income taxes 24,616   54,216   105,640   103,301 
              
    Provision for income taxes 10,766   17,348   42,175   33,580 
    Net income$  13,850  $  36,868  $  63,465  $  69,721 
     Adjustment for net income attributable to noncontrolling interests 2,177   412   3,625   1,282 
    Net income attributable to PRA Group, Inc.$  11,673  $  36,456  $  59,840  $  68,439 
              
Net income per common share attributable to PRA Group, Inc.:       
 Basic  $  0.25  $  0.79  $  1.30  $  1.48 
 Diluted $  0.25  $  0.79  $  1.29  $  1.48 
              
Weighted average number of shares outstanding:       
 Basic   45,941   46,333   46,173   46,288 
 Diluted  46,060   46,402   46,344   46,387 
              

 

PRA Group, Inc. 
Consolidated Balance Sheets 
(in thousands) 
       (unaudited)   
       June 30, December 31, 
ASSETS 2017   2016  
           
Cash and cash equivalents$  92,756  $  94,287  
Investments 76,438   68,543  
Finance receivables, net 2,520,883   2,307,969  
Other receivables, net 11,306   11,650  
Income taxes receivable 2,865   9,427  
Net deferred tax asset 37,299   28,482  
Property and equipment, net 36,532   38,744  
Goodwill   516,165   499,911  
Intangible assets, net 25,878   27,935  
Other assets 40,489   33,808  
Assets held for sale -   43,243  
           
     Total assets$  3,360,611  $  3,163,999  
           
LIABILITIES AND EQUITY    
           
Liabilities:     
 Accounts payable$  3,694  $  2,459  
 Accrued expenses 77,869   82,699  
 Income taxes payable 19,793   19,631  
 Net deferred tax liability 250,821   258,344  
 Interest-bearing deposits 92,479   76,113  
 Borrowings 1,899,148   1,784,101  
 Other liabilities 3,094   10,821  
 Liabilities held for sale -   4,220  
           
     Total liabilities 2,346,898   2,238,388  
           
Redeemable noncontrolling interest 8,860   8,448  
           
Equity:      
  Preferred stock, par value $0.01, authorized shares, 2,000,    
   issued and outstanding shares, 0 -   -  
  Common stock, par value $0.01, authorized shares, 100,000, issued    
   and outstanding shares, 45,166 at June 30, 2017; 100,000 authorized    
   shares, 46,356 issued and outstanding shares at December 31, 2016 452   464  
  Additional paid-in capital 49,928   66,414  
  Retained earnings 1,109,207   1,049,367  
  Accumulated other comprehensive loss (204,213)  (251,944) 
   Total stockholders' equity - PRA Group, Inc. 955,374   864,301  
    Noncontrolling interest 49,479   52,862  
    Total equity 1,004,853   917,163  
     Total liabilities and equity$  3,360,611  $  3,163,999  
           

 

Investor Contact:
Darby Schoenfeld
Vice President, Investor Relations
(757) 431-7913
Darby.Schoenfeld@PRAGroup.com

News Media Contact:
Nancy Porter
Vice President, Corporate Marketing
(757) 431-7950
Nancy.Porter@PRAGroup.com