NCO Group Reports Loss in First Quarter on Increase in Revenue

http://www.insidearm.com/news/00038497-nco-group-reports-loss-in-first-quarter-o/

NCO Group, Inc., one of the largest accounts receivable management firms in the world and a leader in customer relationship management and BPO services, said late Thursday that its net loss widened in the first quarter of 2010, but that the company – particularly the ARM unit – performed above expectations.

Horsham, Pa.-based NCO reported a net loss attributable to the company of $15.3 million for the first three months of 2010, compared to a net loss of $2.1 million in the first quarter of 2009. Adjusted EBITDA in Q1 2010 slipped 23 percent to $39 million.

Company-wide revenues were up, however, increasing three percent to $413.1 million in the first quarter of 2010. The ARM unit – which includes traditional first and third party debt collection operations and other ARM services – accounted for $335 million in revenues in the quarter, up 7.3 percent from the same period last year. Revenues in the company’s Customer Relationship Management (CRM) division fell 13 percent to $76.5 million, while revenues from the debt purchasing arm – Portfolio Management – declined 25 percent to $15.3 million.

NCO CEO Michael Barrist noted that the decline in performance in the Portfolio Management unit was expected.

"NCO entered 2010 with a focus on broadening our service offerings and the decision to minimize our future investment in purchased portfolios,” said Barrist in a press release. “These decisions took into consideration the current economic and regulatory climate, and were based on our analysis of how we should position our company to best help our clients operate in the new economy.”

Barrist also noted that the company’s core ARM unit performed well in the quarter and that the CRM unit also did well given certain developments.

“We are very pleased with our first quarter results as our ARM business was able to exceed its EBITDA plan and our CRM business operated very close to its EBITDA plan despite client volume challenges,” said Barrist.

The company said that it would be hosting an investor conference call Monday, May 17 at 10am Eastern to discuss the results of its first quarter 2010.