Rough Quarter for Receivable Acquisition

Receivable Acquisition and Management Corp. (OTC BB: RCVA) reported this week a net loss in the second quarter of $107,889, compared with a profit of $137,018 in the same period a year ago. Revenues fell 81 percent to $63,018 in the second quarter compared with $336,100 a year ago.

Net collections fell nearly 21 percent to $239,311 in the second quarter. Finance income fell nearly 40 percent from $85,613 a year ago to $51,464 this year, according to the company’s quarterly filing with the U.S. Securities and Exchange Commission.

Servicing income fell 84 percent from $70,230 to $11,554. The firm did not realize a gain from a portfolio sale during the second quarter of 2007, compared with an $180,257 gain a year ago. The company did not acquire any portfolios during the quarter. Receivables Acquisition buys debt and outsources collection to agencies. It was working with four agencies on a contingency basis with fees averaging 25.5 percent during the quarter.

Jersey City, N.J.-based Receivables Acquisition reported that the market for charged off receivables “remains quite challenging and it has become harder to buy portfolios at rational prices.” The company believes that new entrants to the market with a less disciplined business model “will not generate the returns they anticipated…and potentially may require them to sell their remaining portfolios and exit the market.”