Portfolio Recovery Associates Reports Fourth Quarter and Full Year 2006 Results

Portfolio Recovery Associates, Inc., a company that purchases and manages portfolios of defaulted consumer receivables and provides a broad range of accounts receivable management services, today reported net income of $11.4 million, or $0.71 per diluted share, for the quarter ended December 31, 2006.

The Company’s fourth-quarter 2006 earnings represent growth of 21% from net income of $9.4 million, or $0.58 per diluted share, in the same period a year earlier.

Total revenue increased 25% to $49.0 million in the fourth quarter of 2006, up from $39.3 million in the year-earlier period. Total revenue consists of cash collections reduced by amounts applied to the Company’s owned debt portfolios plus commissions from its fee-for-service businesses. During the fourth quarter of 2006, the Company applied 28.8% of cash collections to reduce the carrying basis of its owned debt portfolios. This included a $450,000 allowance charge against various pools of accounts.

"Portfolio Recovery Associates had yet another fine year in 2006 with a combination of strong financial performance, robust portfolio buying and the addition of new facilities and staff to position us for future growth. In the fourth quarter, we executed well across the board, operating with great efficiency even as our workforce expansion moved forward. This would not have been possible without the talent and great dedication of our staff in all areas of the Company. Fee-for-service revenue set new records and cash collections remained solid, even with the seasonal headwinds we typically see in the fourth quarter, as portfolio buying remained strong," said Steven D. Fredrickson, Chairman, President and Chief Executive Officer.

The Company’s earnings for full-year 2006 totaled $44.5 million, or $2.77 per diluted share, compared with $36.8 million, or $2.28 per diluted share, for the full year 2005. Revenue for full-year 2006 was $188.3 million, compared with $148.5 million in full-year 2005.

"Portfolio Recovery Associates’ strong 2006 performance, even in the face of a challenging pricing environment, speaks directly to our overall approach to this business. We have always strived to continuously improve operating efficiency, acquire and manage our portfolios with an eye toward long-term investment results, invest in good people and new skills, and manage the Company to maximize net income. With net earnings up 21% in 2006 together with increasing productivity and strong portfolio acquisitions, we are moving forward into 2007 with great confidence and enthusiasm," said Kevin P. Stevenson, Chief Financial and Administrative Officer.