NCO Group Announces Third Quarter Results of $0.29 Per Share and Investor Guidance for the Fourth Quarter of 2002

NCO Group, Inc. (“NCO”) (Nasdaq:NCOG), a leading provider of accounts receivable management and collection services, announced today that during the third quarter it achieved net income of $0.29 per share, on a diluted basis. Revenue in the third quarter of 2002 was $170.5 million, a decrease of 2.2%, or $3.8 million, from revenue of $174.3 million in the third quarter of the previous year. Net income was $7.7 million, or $0.29 per share, on a diluted basis, as compared to pro forma net income of $11.1 million, or $0.40 per share, on a diluted basis, in the third quarter a year ago, adjusted to eliminate the amortization of goodwill and to exclude $11.2 million of pre-tax one-time charges. Actual net income for the third quarter of 2001 was $952,000, or $0.04 per share, on a diluted basis.

NCO’s operations are currently organized into market specific divisions that include: U.S. Operations, Portfolio Management and International Operations. These divisions accounted for $154.0 million, $16.3 million and $11.9 million of the revenue for the third quarter of 2002, respectively. Included in U.S. Operations’ revenue was $8.9 million from Portfolio Management and included in International Operations’ revenue was $2.8 million from U.S. Operations. In the third quarter of 2001, these divisions accounted for $157.3 million, $16.2 million and $9.7 million of the revenue, respectively, before intercompany eliminations of $7.3 million included in U.S. Operations and $1.6 million included in International Operations.

NCO’s payroll and related expenses as a percentage of revenue decreased, and its selling, general and administrative expenses as a percentage of revenue increased for the third quarter of 2002 as compared to the pro forma results for the same period in the prior year. The decrease in payroll and related expenses was attributable to the rapid adjustment of staffing levels to the changing business volumes. The increase in NCO’s selling, general and administrative expenses related to the incremental costs associated with continuing efforts to maximize collections for clients in a difficult economic environment and spreading the fixed portion of the cost structure over a smaller revenue base.

Commenting on the quarter, Michael J. Barrist, Chairman and Chief Executive Officer, stated, “During the quarter NCO continued to operate in a difficult environment. We have made further changes to our operating model and expense structure in order to stabilize and improve our near-term profitability. Additionally, we are rolling out a new tactical sales and business development plan that will better allow us to take advantage of rapid changes in our operating environment. We firmly believe that this plan, in conjunction with our strong performance against our peers and our strong financial position, will allow NCO to increase shareholder value by growing our business in the current environment and will position us to be able to harness all the benefits of an improving economy.”

NCO also announced that it expects earnings per share, on a diluted basis, to be approximately $0.28 to $0.33 per share for the fourth quarter of 2002. These expectations are in line with the third quarter results despite the seasonal decline typically experienced in the fourth quarter.

NCO will host an investor conference call on Wednesday, November 6, 2002 at 11:30 a.m., ET, to discuss the items discussed in this press release in more detail and to allow the investment community an opportunity to ask questions. Interested parties can access the conference call by dialing (888) 209-7450 (domestic callers) or (706) 643-7734 (international callers). A taped replay of the conference call will be made available for seven days and can be accessed by interested parties by dialing (800) 642-1687 (domestic callers) or (706) 645-9291 (international callers) and providing the pass code 6396668.

NCO Group, Inc. is the largest provider of accounts receivable collection services in the world. NCO provides services to clients in the financial services, healthcare, retail and commercial, utilities, education, telecommunications, and government sectors.

Certain statements in this press release, including, without limitation, statements concerning projections, statements as to the economy and its effects on NCO’s business, statements as to the NCO’s tactical sales and business development plan, statements as to trends, statements as to NCO’s or management’s beliefs, expectations or opinions, and all other statements in this press release, other than historical facts, are forward-looking statements, as such term is defined in the Securities Exchange Act of 1934, which are intended to be covered by the safe harbors created thereby. Forward- looking statements are subject to risks and uncertainties, are subject to change at any time and may be affected by various factors that may cause actual results to differ materially from the expected or planned results. In addition to the factors discussed above, certain other factors, including without limitation, the risk that NCO will not be able to implement its five- year strategy as and when planned, risks related to the expected settlement of the environmental liability, risks related to past and possible future terrorists attacks, risks related to the economy, the risk that NCO will not be able to improve margins, risks relating to growth and future acquisitions, risks related to fluctuations in quarterly operating results, risks related to the timing of contracts, risks related to international operations, and other risks detailed from time to time in NCO’s filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K, filed on March 19, 2002, can cause actual results and developments to be materially different from those expressed or implied by such forward-looking statements.

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