Encore Capital Group Inc · NASDAQ:ECPG
Encore Capital — JPMorgan Small Cap Conference 2005
22 slides from Encore Capital's conference presentation, Mar 10, 2005
Slide 1: JPMorgan Small Cap Conference March 10, 2005
JPMorgan Small Cap Conference March 10, 2005 1 NASDAQ: ECPG
Slide 2: Cautionary Note About Forward-Looking Statements
Certain Statements in This Presentation Constitute “Forward-looking Statements” Within the Meaning of the Private Securities Litigation Reform Act of 1995. Such Statements Involve Risks, Uncertainties and Other Factors Which May Cause Actual Results, Performance or Achievements of the Company and It
Slide 3: Encore Capital
50 year old purchaser and manager of consumer receivables portfolios Unique business model Excellent financial and operating results Strong drivers for growth 3 E NCORE C APITAL
Slide 4: Investment Highlights
Growth Industry No barriers to entry - high barriers to long-term success Demonstrated ability to buy right and collect well Process company focused on debt collection Innovations and analysis Multiple collection channels reduces need to acquire new portfolios & increase outbound collection staff Ne
Slide 5: Compelling Fundamentals
Source: Federal Reserve Board, February 7, 2005 for Consumer Credit Federal Reserve Board, February 23, 2005 for Charge-Off Rates $ in billions Non-mortgage consumer debt and charge-off rates Traditional consumer debt continues to grow Other types of consumer receivables are beginning to be sold Aut
Slide 6: Business Drivers
Buy Right Collect Well Manage Expenses Challenge Everything Demand Professional and Ethical Behavior 6 B USINESS D RIVERS
Slide 7: Encore's Competitive Advantages
Consumer level analytics Multiple collection strategies Proprietary and dynamic account management software 7 Encore’s C OMPETITIVE A DVANTAGES
Slide 8: Buy Right
Account level valuation provides several competitive advantages Note: All purchases since mid-2000 through 12/31/04. Provides ability to create positively selected deals Expands universe of sources to include our competition Applies to alternative paper types Increases our flexibility to buy through
Slide 9: Strong Collection Growth
* 1Q ’04 total includes $4 million sale of rewrite business 9 Strong Collection Growth
Slide 10: Collect Well - Unique Liquidation Strategies
Continuous innovation is driving our collection growth 10 C OLLECT W ELL - U NIQUE L IQUIDATION S TRATEGIES
Slide 11: Collect Well - Results
Collection innovation drives our performance improvement ($ in Thousands) (Employees) 11 C OLLECT W ELL - R ESULTS
Slide 12: Strong Financial Results & Momentum
*Excludes one-time items. 12 S TRONG F INANCIAL R ESULTS & M OMENTUM
Slide 13: Strong Financial Results & Momentum
*Pretax Income excludes one-time benefit and charges. The real earnings power not yet realized 13 S TRONG F INANCIAL R ESULTS & M OMENTUM
Slide 14: Strong Financial Results & Momentum - Balance Sheet Improvement
14 S TRONG F INANCIAL R ESULTS & M OMENTUM - B ALANCE S HEET I MPROVEMENT
Slide 15: Actual Results
Our returns are consistently strong. 36 months 24 months 12 months 6 months 106 $4.3 Billion $1.9 Billion $7.6 Billion $ 9.7 Billion Total Face Value 57 189 226 # of Portfolios 0.8x 1.4x 2.5x 3.4x 15 A CTUAL R ESULTS
Slide 16: Average Monthly Collections per Employee
Our Average Monthly Collections per Employee are very favorable. ECPG 1 Monthly Collections per Avg. Total Employees $234,676 2004 YTD Gross Collections (in thousands) 728 Average # of Total Employees 1 Data from 10-K filing for the period ending December 31, 2004 (12-month period). 16 $26,863 Key M
Slide 17: Annualized Portfolio Turnover
Strong Collections and Judicious Portfolio Buys Create Strong Turnover ECPG 1 Annualized Portfolio Turnover $234,676 Annualized Gross Collections (in thousands) $193,741 Total Inventory (in thousands) $103,374 Annualized Purchases (in thousands) $90,367 Portfolio BOY (in thousands) 1 Data from 10-K
Slide 18: We Are Amortizing Our Portfolio Quickly
$376,500 Implied Gross Collections to Realize Book Value (in thousands) $19,556 Avg. Monthly Collections 2004 (in thousands) ECPG 1 Months Remaining to Amortize Book 24% YTD Amortization Rate $90,367 Portfolio January 1, 2004 (in thousands) 1 Data from 10-K filing for the period ending December 31,
Slide 19: Recent Vintages Are Consistently Strong
Recent Vintages Are Consistently Strong Ratio of Total Collections to Purchase Price by Year of Origin 1 Data from 10-K filings for the period ending December 31, 2004 (12-month period). 19 C OMPETITIVE C OMPARISON
Slide 20: Management Team
Former CFO of Stellcom, Inc.; Former EVP and CFO of Telespectrum Worldwide Inc.; Former Partner of M&A Services at Deloitte and Touche Paul Grinberg SVP Finance Former Director of Service Strategy at Gateway, Inc. Anna Hansen SVP Collection Operations Former VP of Decision Science for Associates Hom
Slide 21: Future Prospects
Growth Opportunities Innovations and analysis Significant reduction in effective interest rate driven by new financing Continued penetration of alternative asset classes Ample liquidity for complementary acquisitions. Challenges Higher prices for purchased receivables Implementation of SOP 2003-03 M
Slide 22: JP Morgan Small Cap Conference March 10, 2005
JP Morgan Small Cap Conference March 10, 2005 22 NASDAQ: ECPG
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