(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 February 22, 2023 | |||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
ENCORE CAPITAL GROUP, INC. | ||||||||
Date: | February 22, 2023 | /s/ Jonathan C. Clark | ||||||
Jonathan C. Clark | ||||||||
Executive Vice President, Chief Financial Officer and Treasurer |
Exhibit Number | Description | ||||
Press release dated February 22, 2023 | |||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
![]() | Exhibit 99.1 |
Year Ended December 31, | |||||||||||||||||
(in thousands, except percentages and earnings per share) | 2022 | 2021 | Change | ||||||||||||||
Collections | $ | 1,911,537 | $ | 2,307,359 | (17)% | ||||||||||||
Revenues | $ | 1,398,347 | $ | 1,614,499 | (13)% | ||||||||||||
Portfolio purchases(1) | $ | 800,507 | $ | 664,529 | 20% | ||||||||||||
Estimated Remaining Collections (ERC) | $ | 7,555,003 | $ | 7,749,954 | (3)% | ||||||||||||
Operating expenses | $ | 936,173 | $ | 981,227 | (5)% | ||||||||||||
Effective tax rate | 37.4 | % | 19.5 | % | +1790bps | ||||||||||||
GAAP net income attributable to Encore | $ | 194,564 | $ | 350,782 | (45)% | ||||||||||||
GAAP earnings per share | $ | 7.46 | $ | 11.26 | (34)% |
Three Months Ended December 31, | |||||||||||||||||
(in thousands, except percentages and earnings per share) | 2022 | 2021 | Change | ||||||||||||||
Collections | $ | 436,156 | $ | 521,781 | (16)% | ||||||||||||
Revenues | $ | 233,996 | $ | 357,303 | (35)% | ||||||||||||
Portfolio purchases(1) | $ | 225,343 | $ | 183,435 | 23% | ||||||||||||
Operating expenses | $ | 236,301 | $ | 233,279 | 1% | ||||||||||||
Effective tax rate | (59.3) | % | 10.6 | % | N/A | ||||||||||||
GAAP net (loss) income | $ | (73,118) | $ | 76,083 | (196)% | ||||||||||||
GAAP (loss) income per share | $ | (3.11) | $ | 2.53 | (223)% | ||||||||||||
December 31, 2022 | December 31, 2021 | ||||||||||
Assets | |||||||||||
Cash and cash equivalents | $ | 143,912 | $ | 189,645 | |||||||
Investment in receivable portfolios, net | 3,088,261 | 3,065,553 | |||||||||
Property and equipment, net | 113,900 | 119,857 | |||||||||
Other assets | 341,073 | 335,275 | |||||||||
Goodwill | 821,214 | 897,795 | |||||||||
Total assets | $ | 4,508,360 | $ | 4,608,125 | |||||||
Liabilities and Equity | |||||||||||
Liabilities: | |||||||||||
Accounts payable and accrued liabilities | $ | 198,217 | $ | 229,586 | |||||||
Borrowings | 2,898,821 | 2,997,331 | |||||||||
Other liabilities | 231,695 | 195,947 | |||||||||
Total liabilities | 3,328,733 | 3,422,864 | |||||||||
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, 23,323 shares and 24,541 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively | 233 | 245 | |||||||||
Additional paid-in capital | — | — | |||||||||
Accumulated earnings | 1,278,210 | 1,238,564 | |||||||||
Accumulated other comprehensive loss | (98,816) | (53,548) | |||||||||
Total stockholders’ equity | 1,179,627 | 1,185,261 | |||||||||
Total liabilities and stockholders’ equity | $ | 4,508,360 | $ | 4,608,125 |
December 31, 2022 | December 31, 2021 | ||||||||||
Assets | |||||||||||
Cash and cash equivalents | $ | 1,344 | $ | 1,927 | |||||||
Investment in receivable portfolios, net | 431,350 | 498,507 | |||||||||
Other assets | 3,627 | 3,452 | |||||||||
Liabilities | |||||||||||
Accounts payable and accrued liabilities | 150 | 105 | |||||||||
Borrowings | 423,522 | 473,443 | |||||||||
Other liabilities | 105 | 10 |
(Unaudited) Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Revenues | |||||||||||||||||||||||
Revenue from receivable portfolios | $ | 294,755 | $ | 305,337 | $ | 1,202,361 | $ | 1,287,730 | |||||||||||||||
Changes in recoveries | (86,148) | 22,508 | 93,145 | 199,136 | |||||||||||||||||||
Total debt purchasing revenue | 208,607 | 327,845 | 1,295,506 | 1,486,866 | |||||||||||||||||||
Servicing revenue | 22,996 | 26,877 | 94,922 | 120,778 | |||||||||||||||||||
Other revenues | 2,393 | 2,581 | 7,919 | 6,855 | |||||||||||||||||||
Total revenues | 233,996 | 357,303 | 1,398,347 | 1,614,499 | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Salaries and employee benefits | 90,058 | 96,286 | 375,135 | 385,178 | |||||||||||||||||||
Cost of legal collections | 54,188 | 56,068 | 217,944 | 254,280 | |||||||||||||||||||
General and administrative expenses | 40,023 | 34,905 | 145,798 | 137,695 | |||||||||||||||||||
Other operating expenses | 28,516 | 25,043 | 111,234 | 106,938 | |||||||||||||||||||
Collection agency commissions | 8,156 | 8,592 | 35,568 | 47,057 | |||||||||||||||||||
Depreciation and amortization | 15,360 | 12,385 | 50,494 | 50,079 | |||||||||||||||||||
Total operating expenses | 236,301 | 233,279 | 936,173 | 981,227 | |||||||||||||||||||
(Loss) income from operations | (2,305) | 124,024 | 462,174 | 633,272 | |||||||||||||||||||
Other expense | |||||||||||||||||||||||
Interest expense | (42,313) | (38,088) | (153,308) | (169,647) | |||||||||||||||||||
Loss on extinguishment of debt | — | — | — | (9,300) | |||||||||||||||||||
Other (expense) income | (1,269) | (791) | 2,123 | (17,784) | |||||||||||||||||||
Total other expense | (43,582) | (38,879) | (151,185) | (196,731) | |||||||||||||||||||
(Loss) income before income taxes | (45,887) | 85,145 | 310,989 | 436,541 | |||||||||||||||||||
Provision for income taxes | (27,231) | (9,062) | (116,425) | (85,340) | |||||||||||||||||||
Net (loss) income | (73,118) | 76,083 | 194,564 | 351,201 | |||||||||||||||||||
Net income attributable to noncontrolling interest | — | — | — | (419) | |||||||||||||||||||
Net (loss) income attributable to Encore Capital Group, Inc. stockholders | $ | (73,118) | $ | 76,083 | $ | 194,564 | $ | 350,782 | |||||||||||||||
(Loss) income per share attributable to Encore Capital Group, Inc.: | |||||||||||||||||||||||
Basic | $ | (3.11) | $ | 2.72 | $ | 8.06 | $ | 11.64 | |||||||||||||||
Diluted | $ | (3.11) | $ | 2.53 | $ | 7.46 | $ | 11.26 | |||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||
Basic | 23,544 | 27,950 | 24,142 | 30,129 | |||||||||||||||||||
Diluted | 23,544 | 30,040 | 26,092 | 31,153 |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Operating activities: | |||||||||||||||||
Net income | $ | 194,564 | $ | 351,201 | $ | 212,524 | |||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
Depreciation and amortization | 50,494 | 50,079 | 42,780 | ||||||||||||||
Expense related to financing | — | 9,300 | 51,117 | ||||||||||||||
Other non-cash interest expense, net | 15,875 | 17,785 | 23,639 | ||||||||||||||
Stock-based compensation expense | 15,402 | 18,330 | 16,560 | ||||||||||||||
Deferred income taxes | 46,410 | 35,371 | 8,549 | ||||||||||||||
Changes in recoveries | (93,145) | (199,136) | (7,246) | ||||||||||||||
Other, net | 18,798 | 17,130 | 16,260 | ||||||||||||||
Changes in operating assets and liabilities | |||||||||||||||||
Other assets | (6,722) | 38,941 | (33,663) | ||||||||||||||
Accounts payable, accrued liabilities and other liabilities | (30,995) | (35,948) | (17,656) | ||||||||||||||
Net cash provided by operating activities | 210,681 | 303,053 | 312,864 | ||||||||||||||
Investing activities: | |||||||||||||||||
Purchases of receivable portfolios, net of put-backs | (790,569) | (657,280) | (644,048) | ||||||||||||||
Collections applied to investment in receivable portfolios, net | 709,176 | 1,019,629 | 737,131 | ||||||||||||||
Purchases of assets held for sale | (39,340) | (17,090) | (1,502) | ||||||||||||||
Purchases of property and equipment | (37,224) | (33,372) | (34,600) | ||||||||||||||
Other, net | 27,722 | 28,009 | 25,845 | ||||||||||||||
Net cash (used in) provided by investing activities | (130,235) | 339,896 | 82,826 | ||||||||||||||
Financing activities: | |||||||||||||||||
Payment of loan and debt refinancing costs | (1,659) | (11,963) | (82,455) | ||||||||||||||
Proceeds from credit facilities | 779,513 | 821,931 | 1,820,634 | ||||||||||||||
Repayment of credit facilities | (515,703) | (896,418) | (2,290,822) | ||||||||||||||
Proceeds from senior secured notes | — | 353,747 | 1,313,385 | ||||||||||||||
Repayment of senior secured notes | (39,080) | (359,175) | (1,033,765) | ||||||||||||||
Repayment of convertible senior notes | (221,153) | (161,000) | (89,355) | ||||||||||||||
Repurchase and retirement of common stock | (87,006) | (390,606) | — | ||||||||||||||
Other, net | (22,357) | (12,208) | (40,822) | ||||||||||||||
Net cash used in financing activities | (107,445) | (655,692) | (403,200) | ||||||||||||||
Net decrease in cash and cash equivalents | (26,999) | (12,743) | (7,510) | ||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | (18,734) | 13,204 | 4,359 | ||||||||||||||
Cash and cash equivalents, beginning of period | 189,645 | 189,184 | 192,335 | ||||||||||||||
Cash and cash equivalents, end of period | $ | 143,912 | $ | 189,645 | $ | 189,184 | |||||||||||
Supplemental disclosures of cash flow information: | |||||||||||||||||
Cash paid for interest | $ | 131,391 | $ | 132,400 | $ | 169,553 | |||||||||||
Cash paid for income taxes, net of refunds | 71,276 | 42,039 | 88,816 | ||||||||||||||
Supplemental schedule of non-cash investing and financing activities: | |||||||||||||||||
Investment in receivable portfolios transferred to real estate owned | $ | 1,903 | $ | 768 | $ | 2,214 | |||||||||||
Property and equipment acquired through finance leases | 3,273 | 2,664 | 3,276 |
(in thousands, unaudited) | Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
GAAP net (loss) income, as reported | $ | (73,118) | $ | 76,083 | $ | 194,564 | $ | 351,201 | |||||||||||||||
Adjustments: | |||||||||||||||||||||||
Interest expense | 42,313 | 38,088 | 153,308 | 169,647 | |||||||||||||||||||
Loss on extinguishment of debt | — | — | — | 9,300 | |||||||||||||||||||
Interest income | — | (568) | (1,774) | (1,738) | |||||||||||||||||||
Provision for income taxes | 27,231 | 9,062 | 116,425 | 85,340 | |||||||||||||||||||
Depreciation and amortization | 15,360 | 12,385 | 50,494 | 50,079 | |||||||||||||||||||
Stock-based compensation expense | 3,171 | 5,427 | 15,402 | 18,330 | |||||||||||||||||||
Acquisition, integration and restructuring related expenses(1) | 34 | 2,609 | 1,213 | 20,559 | |||||||||||||||||||
Adjusted EBITDA | $ | 14,991 | $ | 143,086 | $ | 529,632 | $ | 702,718 | |||||||||||||||
Collections applied to principal balance(2) | $ | 232,420 | $ | 201,322 | $ | 635,262 | $ | 843,087 |
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Cover Page |
Feb. 22, 2023 |
---|---|
Cover [Abstract] | |
Entity Central Index Key | 0001084961 |
Amendment Flag | false |
Document Type | 8-K |
Document Period End Date | Feb. 22, 2023 |
Entity Registrant Name | ENCORE CAPITAL GROUP, INC. |
Entity Incorporation, State or Country Code | DE |
Entity File Number | 000-26489 |
Entity Tax Identification Number | 48-1090909 |
Entity Address, Address Line One | 350 Camino de la Reina |
Entity Address, Address Line Two | Suite 100 |
Entity Address, City or Town | San Diego |
Entity Address, State or Province | CA |
Entity Address, Postal Zip Code | 92108 |
City Area Code | 877 |
Local Phone Number | 445-4581 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Title of 12(b) Security | Common Stock, $0.01 Par Value Per Share |
Trading Symbol | ECPG |
Security Exchange Name | NASDAQ |
Entity Emerging Growth Company | false |
-8?2
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