Debt buyer Asset Acceptance Capital Corp. (Nasdaq: AACC) late Thursday reported a sharp increase in net income for the second quarter of 2011 while also reporting gains in revenue and cash collections.

The Warren, Mich.-based company reported net income of $3.7 million in the second quarter of 2011, an increase of 360 percent from the $800,000 in net income it reported in the second quarter of 2010. Per share earnings rose to $0.12 in Q2 2011 from $0.03 the year prior.

Cash collections for the second quarter of 2011 increased 5.9 percent to $89.2 million. Call center collections increased 6.4 percent in the quarter while legal collections grew 5.4 percent. Excluding collections on healthcare portfolios, which were sold in the third quarter of 2010, collections increased 7.9 percent.

Asset Acceptance announced last year that it was exiting the medical ARM space by selling off its healthcare debt portfolios to Capio Partners. The move also included the closure of its collection office in Florida that housed the medical ARM business.

Total revenue in the second quarter of 2011 was $54.7 million, up 7.5 percent from the same period in 2010.

Rion Needs, President and CEO of Asset Acceptance Capital Corp., commented: “Our successful second quarter results showcase the full benefits of our cost savings actions taken during the second half of 2010, as well as improving trends we are seeing in our business. While the second quarter is one of our seasonally strongest period of the year, we remain confident in the near-and long-term prospects for our business and look forward to further refining our business strategy to drive continued operational and financial improvement.”

During the second quarter of 2011, the company invested $49.5 million to purchase charged-off consumer debt portfolios with a face value of $1.6 billion.

Asset Acceptance said that its average collection employee headcount in Q2 2011 was 655, up slightly from the first quarter of 2011, but down 17 percent from the same period in 2010, mostly likely a reflection of the medical collection office being closed.


Next Article: Law Firm Deploys Debt Collection Solution from ...

Advertisement