Asset Acceptance Reports Big Increase in Debt Buying, Flat Earnings in Q2

Debt buyer Asset Acceptance Capital Corp. (NASDAQ: AACC) reported results late Monday for the second quarter of 2012 marked by flat earnings, increased revenues, and the most active debt portfolio purchasing quarter for the company in four years.

Warren, Mich.-based Asset Acceptance reported net income in the second quarter of 2012 of $3.7 million, or $0.12 per share, essentially unchanged from the same period a year ago. But the per-share earnings measure did exceed analysts’ expectations of $0.10 per share.

Revenue in the second quarter increased 7.3 percent to $58.7 million. Cash collections grew 3 percent to $91.9 million.

Asset Acceptance said it invested $58.9 million in Q2 2012 to purchase debt portfolios with a face value of $1.99 billion, up from the $49.3 million it spent in the same quarter of 2011. The company noted that it was its most active quarter for debt buying since 2008.

“We are pleased with our overall performance in the quarter. We achieved our objective of significant increased purchasing during the quarter, which resulted in near record levels for the company,” said Rion Needs, president and CEO. “We also continued to execute incremental investments in our legal channel that, while dilutive to our near term results, will provide meaningful benefits in future liquidation and related profits.”

The company’s call center collections channel – which includes its own office, account forwarding to third party debt collection agencies, and an offshore servicer in India – accounted for $48.8 million in cash collections in the second quarter, flat from the same period in 2011. The legal collections channel brought in $43 million in the most recent period, a nearly 5 percent increase from last year.