Encore Capital Group(US:ECPG)2021-08-03 16:00Financial Performance - Total revenues for the three months ended June 30, 2021, were $427,735, compared to $426,033 for the same period in 2020, reflecting a slight increase of 0.4%[8] - Net income for the three months ended June 30, 2021, was $96,787, down from $130,784 in the same period of 2020, representing a decrease of 26%[9] - Earnings per share attributable to Encore Capital Group, Inc. for the three months ended June 30, 2021, were $3.12 (basic) and $3.07 (diluted), compared to $4.15 (basic) and $4.13 (diluted) for the same period in 2020[8] - Comprehensive income for the three months ended June 30, 2021, was $102,287, compared to $131,948 for the same period in 2020, reflecting a decline of 22.6%[9] - Net income for the six months ended June 30, 2021, was $191,552, compared to $120,205 for the same period in 2020, representing a year-over-year increase of approximately 59.3%[17] - Total revenues for the six months ended June 30, 2021, were $844.572 million, compared to $715.114 million for the same period in 2020, indicating a growth of 18.1%[74] Assets and Liabilities - Total assets as of June 30, 2021, were $4,679,752, a decrease from $4,864,523 as of December 31, 2020, indicating a decline of approximately 3.8%[7] - Total liabilities as of June 30, 2021, were $3,325,402, down from $3,644,447 as of December 31, 2020, reflecting a reduction of about 8.8%[7] - Total equity as of June 30, 2021, was $1,354,350, an increase from $1,042,387 as of June 30, 2020, indicating a growth of approximately 30%[13] - The company’s accumulated earnings increased to $1,269,259 as of June 30, 2021, from $1,055,668 as of December 31, 2020, an increase of approximately 20.2%[7] Operating Expenses - Operating expenses for the three months ended June 30, 2021, totaled $253,448, compared to $206,341 for the same period in 2020, marking an increase of 22.8%[8] - The company reported stock-based compensation expense of $9,056 for the six months ended June 30, 2021, slightly down from $9,305 in the same period of 2020[17] - Total operating expenses for Q2 2021 were $253,448, up from $206,341 in Q2 2020, and for the six months ended June 30, 2021, they were $501,971 compared to $448,220 in the same period of 2020[132] Cash Flow - Net cash provided by operating activities of $148,965 for the six months ended June 30, 2021, down from $209,715 in the same period of 2020[17] - Cash and cash equivalents at the end of the period were $198,516, down from $293,800 at the end of June 30, 2020, reflecting a decrease of approximately 32.4%[17] - The company reported a net cash increase of $20,015 for the six months ended June 30, 2021, compared to an increase of $111,134 in the same period of 2020[17] Receivable Portfolios - The company’s investment in receivable portfolios, net, was $3,154,001 as of June 30, 2021, down from $3,291,918 as of December 31, 2020, a decrease of approximately 4.2%[7] - Revenue from receivable portfolios for the three months ended June 30, 2021, was $328.2 million, slightly down from $335.3 million in the same period of 2020, a decrease of approximately 2.1%[50] - The balance of the investment in receivable portfolios at the end of the period was $3.15 billion, a decrease from $3.20 billion in the previous year, reflecting a decline of approximately 1.5%[50] Debt and Interest Expense - The company incurred interest expense of $44,159 for the three months ended June 30, 2021, compared to $50,327 for the same period in 2020, showing a decrease of 12.5%[8] - Interest expense related to Convertible Notes and Exchangeable Notes was $3.972 million for the three months ended June 30, 2021, down from $8.894 million in the same period of 2020[61] - The Company recorded a loss on extinguishment of debt amounting to $9,300 for the six months ended June 30, 2021, with no such loss reported in the same period of 2020[17] Market Conditions and Strategic Outlook - The company continues to monitor the impact of COVID-19 on its business and has adjusted its estimates for expected recoveries accordingly[21] - The company has observed a decrease in supply in the U.S. and Europe due to lower charge-off rates as a result of the COVID-19 pandemic[85] - The company is closely monitoring the impacts of the COVID-19 pandemic on pricing and supply of portfolios to purchase across all markets[92] Share Repurchase - The Company repurchased 604,995 shares for approximately $27.0 million during the three months ended June 30, 2021, and 1,122,855 shares for approximately $47.4 million during the six months ended June 30, 2021[30] Foreign Currency and Derivatives - The Company entered into four cross-currency swap agreements with a total notional amount of €350.0 million (approximately $415.0 million) to manage foreign currency exchange risk[42] - The company experienced a favorable impact from foreign currency translation, particularly from a 11.2% weakening of the U.S. dollar against the British Pound during the three months ended June 30, 2021[101]