Encore Capital Group Announces Fourth Quarter and Full-Year 2020 Financial Results

February 24, 2021
  • Encore delivers records for collections, revenues and earnings for the year
  • GAAP net income of $212 million in 2020, up 26%
  • GAAP EPS of $6.68 in 2020, up 25%
  • New global funding structure already delivering benefits, including lower cost of funds
  • Leverage reduction continues, down to 2.4x at year-end from 2.7x a year ago

SAN DIEGO, Feb. 24, 2021 (GLOBE NEWSWIRE) — Encore Capital Group, Inc. (NASDAQ: ECPG), an international specialty finance company, today reported consolidated financial results for the fourth quarter and full year ended December 31, 2020.

“We continued to execute on our strategy in 2020, delivering strong results and accomplishing a number of key initiatives despite the global COVID-19 pandemic,” said Ashish Masih, Encore’s President and Chief Executive Officer. “After adjusting to the realities of a changing world, we delivered strong returns while achieving new highs for collections, revenues and earnings. We also made significant progress on each of our key strategic pillars, which include concentrating on our most valuable markets with the highest risk-adjusted returns, innovating to continually enhance our competitive advantages and continuing to optimize our balance sheet. In particular, we successfully implemented our global funding structure in September and are now financed by one of the best, most flexible balance sheets in our industry.”

“In the U.S., we improved our operating leverage by growing collections to a record level while reducing our costs through our operational innovation, increased productivity and by driving a higher proportion of collections through our cost-efficient call center and digital channel. At the same time, we deployed capital at the highest purchase multiples we have seen in years.”

“In Europe, our focus on operating efficiency and expense management in 2020 enabled us to deliver continued solid profitability despite the pressure on European economies caused by the pandemic. After enduring a challenging first half of the year, our collections performance in Europe improved substantially through the remainder of 2020.”

“Overall, in the fourth quarter we continued to deliver strong earnings and operating results while leveraging our new funding structure to reduce our cost of capital. We refinanced $840 million of our bonds at significantly better pricing, saving millions of dollars of interest expense and lengthening our debt maturity profile.”

“We are off to a good start as we begin 2021 and we remain very optimistic about our future. In the new year, we expect to continue to deliver strong earnings and also what we believe are the highest returns in our industry. As a result of years of focused effort and our accomplishments in 2020, we are well positioned financially and operationally for the opportunities that lie ahead,” said Masih.

Financial Highlights for the Full Year of 2020:

Year Ended December 31,
(in thousands, except percentages, earnings per share and leverage ratio) 2020 2019 Change
Total collections $ 2,111,848 $ 2,026,928 4 %
Total revenues $ 1,501,400 $ 1,397,681 7 %
Portfolio purchases(1) $ 659,872 $ 999,858 (34) %
Estimated Remaining Collections (ERC) $ 8,525,984 $ 7,825,474 9 %
Total operating expenses $ 967,838 $ 951,336 2 %
GAAP net income attributable to Encore(2) $ 211,848 $ 167,869 26 %
GAAP earnings per share(2) $ 6.68 $ 5.33 25 %
Adjusted net income(2) $ 245,795 $ 187,288 31 %
Economic earnings per share(2) $ 7.75 $ 5.95 30 %
Leverage Ratio(3) 2.4x 2.7x -0.3x


(1)   Includes U.S. purchases of $543.0 million and $681.8 million, Europe purchases of $116.9 million and $306.5 million, and other geography purchases of $0 and $11.6 million in 2020 and 2019, respectively.

(2)   Negatively impacted by $50.5 million of expenses ($40.0 million after tax), or $1.26 per share, related to establishing the company’s global funding structure as well as refinancing transactions in 2020.

(3)   Leverage ratio is the ratio of Net Debt to (Adjusted EBITDA + collections applied to principal balance), the industry standard for leverage.

Financial Highlights for the Fourth Quarter of 2020:

Three Months Ended December 31,
(in thousands, except percentages and earnings per share) 2020 2019 Change
Total collections $ 536,606 $ 498,799 8 %
Total revenues $ 382,610 $ 347,794 10 %
Portfolio purchases(1) $ 127,689 $ 234,916 (46) %
Total operating expenses $ 258,397 $ 234,584 10 %
GAAP net income attributable to Encore(2) $ 37,320 $ 43,085 (13) %
GAAP earnings per share(2) $ 1.17 $ 1.36 (14) %
Adjusted net income(2) $ 41,305 $ 49,233 (16) %
Economic earnings per share(2) $ 1.30 $ 1.56 (17) %


(1)   Includes U.S. purchases of $91.8 million and $154.5 million, and Europe purchases of $35.9 million and $80.5 million in Q4 2020 and Q4 2019, respectively.

(2)   Negatively impacted by $26.0 million of expenses ($21.0 million after tax), or $0.66 per share, related to refinancing transactions in Q4 2020.

Conference Call and Webcast

The Company will host a conference call and slide presentation today, February 24, 2021, at 2:00 p.m. Pacific time / 5:00 p.m. Eastern time to discuss fourth quarter and full year results.

Members of the public are invited to access the live webcast via the Internet by logging on at the Investor Relations page of Encore’s website at To access the live, listen-only telephone conference portion, please dial (855) 541-0982 or (704) 288-0606.

For those who cannot listen to the live broadcast, a telephonic replay will be available for seven days by dialing (800) 585-8367 or (404) 537-3406 and entering the conference ID number 4425965. A replay of the webcast will also be available shortly after the call on the Company’s website.

Non-GAAP Financial Measures

This news release includes certain financial measures that exclude the impact of certain items and therefore have not been calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company has included adjusted income attributable to Encore and adjusted income attributable to Encore per share (also referred to as economic EPS when adjusted for certain shares associated with our convertible notes that will not be issued but are reflected in the fully diluted share count for accounting purposes) because management uses this measure to assess operating performance, in order to highlight trends in the Company’s business that may not otherwise be apparent when relying on financial measures calculated in accordance with GAAP. The Company has included information concerning adjusted EBITDA because management utilizes this information in the evaluation of its operations and believes that this measure is a useful indicator of the Company’s ability to generate cash collections in excess of operating expenses through the liquidation of its receivable portfolios. The Company has included information concerning adjusted operating expenses in order to facilitate a comparison of approximate cash costs to cash collections for the portfolio purchasing and recovery business in the periods presented. Adjusted income attributable to Encore, adjusted income attributable to Encore per share/economic EPS, adjusted EBITDA, and adjusted operating expenses have not been prepared in accordance with GAAP. These non-GAAP financial measures should not be considered as alternatives to, or more meaningful than, net income, net income per share, and total operating expenses as indicators of the Company’s operating performance. Further, these non-GAAP financial measures, as presented by the Company, may not be comparable to similarly titled measures reported by other companies. The Company has attached to this news release a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures.

About Encore Capital Group, Inc.

Encore Capital Group is an international specialty finance company that provides debt recovery solutions and other related services for consumers across a broad range of financial assets. Through its subsidiaries around the globe, Encore purchases portfolios of consumer receivables from major banks, credit unions, and utility providers.

Encore partners with individuals as they repay their debt obligations, helping them on the road to financial recovery and ultimately improving their economic well-being. Encore is the first and only company of its kind to operate with a Consumer Bill of Rights that provides industry-leading commitments to consumers. Headquartered in San Diego, Encore is a publicly traded NASDAQ Global Select company (ticker symbol: ECPG) and a component stock of the Russell 2000, the S&P Small Cap 600 and the Wilshire 4500. More information about the company can be found at More information about the Company’s Cabot Credit Management subsidiary can be found at Information found on the company’s or Cabot’s website is not incorporated by reference.

Forward Looking Statements

The statements in this press release that are not historical facts, including, most importantly, those statements preceded by, or that include, the words “will,” “may,” “believe,” “projects,” “expects,” “anticipates” or the negation thereof, or similar expressions, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). These statements may include, but are not limited to, statements regarding our future operating results, performance, business plans or prospects. For all “forward-looking statements,” the Company claims the protection of the safe harbor for forward-looking statements contained in the Reform Act. Such forward-looking statements involve risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company and its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and other factors are discussed in the reports filed by the Company with the Securities and Exchange Commission, including the most recent reports on Forms 10-K and 10-Q, each as it may be amended from time to time. The Company disclaims any intent or obligation to update these forward-looking statements.

Bruce Thomas
Encore Capital Group, Inc.
Vice President, Global Investor Relations
(858) 309-6442

SOURCE: Encore Capital Group, Inc.