NCO Group Posts $84 million Loss in 2009

http://www.insidearm.com/news/00040161-nco-group-posts-84-million-loss-in-2009/

Accounts receivable management and BPO giant NCO Group reported an $84.2 million loss for the year ended Dec. 30, 2009 in a filing with the Securities and Exchange Commission Wednesday.

NCO Group, Inc., based in Horsham, Pa., is the largest ARM company in the world, and a major player in the business process outsourcing and customer relationship management industry.

The firm’s $84.2 million loss attributable to NCO Group, Inc. in 2009 marked a significant improvement from the $337.1 million loss it reported for 2008, a year which saw it buy large ARM rival OSI. In 2009, NCO said it posted income from operations (before other expenses) of $1.6 million.

Revenue was up in 2009 to $1.56 billion from $1.51 billion in 2008. NCO’s ARM unit accounted for 79.7 percent of revenue in the year, compared to 80.6 percent in 2008, bringing in $1.25 billion in 2009 compared to $1.22 billion in 2008. The CRM unit accounted for 21.4 percent of revenue in 2009 while the company’s debt purchasing unit – Portfolio Management – accounted for 3.1 percent, up from 1.2 percent in 2008. The company took a $21.5 million impairment charge on purchased portfolios in 2009.

NCO said that the increase in ARM’s revenue was primarily attributable to increased volume from new and existing clients in both first-party (early stage) and contingent collections as well as a full year of revenue from the OSI acquisition completed on February 29, 2008. This increase was offset in part by the weaker collection environment during 2009 and a $22.3 million decrease in fees from collection services performed for Portfolio Management.

The company said that $1.43 billion of its total revenue in 2009 came from operations in the U.S., up from $1.37 billion in 2008. Operations in Canada accounted for the second-most revenue ($44.5 million), followed by Panama, Australia, the UK, and Mexico.

NCO said that it spent $56.6 million on debt portfolio purchases in 2009 compared to $126.5 million spent in 2008.