Receivable Acquisition Profits Rise as it Buys $5.8 Million Portfolio

Debt purchaser Receivable Acquisition and Management Corp. (OTC: RCVA) yesterday reported net income of $78,657 during the fourth quarter of 2007, compared with a loss of $72,404 during the quarter ended December 31, 2006. Revenues in the fourth quarter rose a whopping 92 percent to $224,524, from $117,142 during the quarter ended December 31, 2006.

Receivable Acquisition saw its income from its Finance side rise to $161,378, up 124 percent. Servicing income declined 64 percent to $16,202. In the fourth quarter, the company acquired one portfolio with a face value of $5,779,237 for $201,982 versus $1,215,436 for $55,663 during the same period a year ago. Excluding proceeds from the sale of portfolios, the company collected $199,409 during the fourth quarter, down from $225,873.

Receivable Acquisition outsources all its recovery activities to debt collection agencies and network of collection attorneys. It is currently using 11 collection agencies and several law firms in the U.S. and United Kingdom. Contingency fees averaged 25% during the quarter.

As of the end of 2007, the company had working capital of $211,965 versus $133,396 a year ago, driven up primarily by the sale of several portfolios. In the fourth quarter, the company sold several portfolios for $224,488 with a total face value of $6,450,300. Total operating expenses declined by about 26 % to $140,543 in the fourth quarter, as the company reduced staff and collection expenses.

Receivable Acquisition reported that the debt prices “have started to come down due to tighter credit environment and declining quality of consumer credit. Any pronounced correction will force many too sell their remaining portfolios and exit the market considering the payback periods have been stretched due to high prices paid.”