NCO Group Announces Fourth Quarter and Full Year 2010 Results
HORSHAM, PA, 03/31/2011
- NCO Group, Inc. ("NCO" or the "Company"), a leading provider of business process outsourcing services, announced today that for the year ended December 31, 2010, it reported revenues of $1.6 billion, a net loss attributable to NCO of $155.0 million, and Adjusted EBITDA of $140.1 million. The Adjusted EBITDA excludes the impact of $18.3 million of restructuring charges and a $14.3 million non-cash allowance for impairment of purchased accounts receivable portfolios. This compares to revenues of $1.6 billion, a net loss attributable to NCO of $84.2 million, and Adjusted EBITDA of $200.2 million for the year ended December 31, 2009. The Adjusted EBITDA for 2009 excludes $11.6 million of restructuring and other nonrecurring charges and a non-cash allowance for impairment of $26.5 million. The net loss attributable to NCO for 2010 and 2009 included non-cash impairments of intangible assets of $57.0 million and $30.0 million, respectively.
For the fourth quarter of 2010, NCO reported revenues of $390.3 million, a net loss attributable to NCO of $80.7 million and Adjusted EBITDA of $35.6 million. The Adjusted EBITDA for the fourth quarter of 2010 excludes non-cash allowance for impairments of $7.1 million and $4.4 million of restructuring charges. This compares to revenues of $423.4 million, a net loss attributable to NCO of $52.3 million, and Adjusted EBITDA of $47.8 million for the fourth quarter of 2009. The Adjusted EBITDA for the fourth quarter of 2009 excludes non-cash allowance for impairments of $11.4 million and $7.9 million of restructuring and other nonrecurring charges. The net loss attributable to NCO for the fourth quarters of 2010 and 2009 included non-cash impairments of intangible assets of $57.0 million and $30.0 million, respectively.
NCO is organized into three operating divisions: Accounts Receivable Management (“ARM”), Customer Relationship Management (“CRM”) and Portfolio Management (“PM”). During the fourth quarter of 2010, the ARM and CRM divisions operated below their respective revenue and profitability targets. This shortfall was primarily attributable to volume reductions due to the impact of the challenging economic environment on our clients’ businesses. The PM division operated below its revenue target, primarily due to lower than expected collection results on certain portfolios, but was in line with its profitability target.
Commenting on the results, Ronald A. Rittenmeyer, President and Chief Executive Officer, stated, “Although the results for 2010 did not meet our expectations, we have deployed a business plan for 2011 that we believe will stabilize revenue and earnings. As we execute on our plan in 2011, we will focus on leveraging our client relationships, business platform and workforce to rejuvenate the company’s growth.”
The Company also announced that it will host an investor conference call on Tuesday, April 5, 2011, at 4:00 p.m., ET, to address the items discussed above in more detail and to allow the investment community an opportunity to ask questions. Interested parties can access the conference call by dialing (866) 388-2676 (domestic callers) or (706) 679-3487 (international callers) and providing the pass code 56949002. A taped replay of the conference call will be made available for seven days and can be accessed by interested parties by dialing (800) 642-1687 (domestic callers) or (706) 645-9291 (international callers) and providing the pass code 56949002.
About NCO Group, Inc.
NCO Group, Inc. is a leading global provider of business process outsourcing services, primarily focused on accounts receivable management and customer relationship management. NCO provides services through over 100 offices throughout North America, Asia, Europe and Australia.
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NCO Investor Relations
Certain statements in this press release, including, without limitation, statements as to expected operating results, statements as to fluctuations in annual and quarterly operating results, statements as to the impact from economic conditions, statements as to future opportunities, statements as to operating efficiencies, statements about expected opportunities in our markets, statements as to trends, statements as to regulatory changes, statements as to NCO’s or management’s beliefs, expectations or opinions, and all other statements in this press release, other than historical facts, are forward-looking statements, as such term is defined in the Securities Exchange Act of 1934, which are intended to be covered by the safe harbors created thereby. Forward-looking statements are subject to risks and uncertainties, are subject to change at any time and may be affected by various factors that may cause actual results to differ materially from the expected or planned results. In addition to the factors discussed above, certain other factors, including without limitation, risks related to the economy, the risk that NCO will not be able to implement its business strategy as and when planned, the risk that NCO will not be able to realize operating efficiencies in the integration of its acquisitions, risks related to NCO’s significant level of debt, its ability to service such debt and comply with debt covenants, risks of future impairment charges to our goodwill, intangible assets and purchased accounts receivable, risks related to union organizing efforts at the Company's facilities, risks related to past and possible future terrorists attacks, the risk that NCO will not be able to improve margins, risks relating to growth and acquisitions, risks related to fluctuations in quarterly operating results, risks related to the timing of contracts, risks related to international operations, risks related to the possible loss of key clients or loss of significant volumes from key clients, risks related to regulatory changes and other risks detailed from time to time in NCO’s filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended December 31, 2010, can cause actual results and developments to be materially different from those expressed or implied by such forward-looking statements. The Company disclaims any intent or obligation to publicly update or revise any forward-looking statements, regardless of whether new information becomes available, future developments occur or otherwise.
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