Velocity Asset Management Notches Strong Year, Looks to Grow

Velocity Asset Management, Inc., a purchaser and collector of consumer debt, reported broad gains Tuesday for the year and quarter ended Dec. 31, 2007. 

Wall, N.J.-based Velocity (AMEX: JVI) reported net income for the year of $2.6 million, a 95 percent increase 2006. Revenues for the year were up 49 percent to $15.3 million.

The net income figure is the total that is attributable to all shareholders. Velocity trades two stocks on the American Stock Exchange: common stock under the ticker symbol JVI and preferred shares under JVI.PR. Net income attributable to common shareholders is calculated after the preferred dividend is paid. For 2007, the preferred dividend was $1.38 million, making net income attributable to common shares $1.2 million.

For the fourth quarter, Velocity said it increased revenues 37 percent to $4.6 million and had net income of $1 million, up 65 percent from the fourth quarter 2006.

“Velocity’s record Q4 and full-year results highlight our receivable underwriting discipline and the strength and operating leverage provided by our collections model,” commented Velocity President and CEO Jack Kleinert in a press release. “Focusing on disciplined purchases and utilizing our litigation-based collections approach continue to deliver attractive results for our shareholders, even in a challenging consumer economic environment.”

Velocity also echoed recent comments in the ARM industry related to dropping portfolio prices. “Pricing of new pools of distressed consumer receivables continues to be under pressure, creating a very favorable trend for us. We believe the pricing reductions should more than offset any anticipated deterioration in collections over the next few years,” said Kleinert.

To support increased purchasing, the company announced an increase in its senior credit facility with Wells Fargo Foothill, Inc. to $22.5 million from $17.5 million, and its maturity was extended two years to January 31, 2011.

Kleinart also said that Velocity would be divesting various operations in the company to concentrate solely on debt purchasing and collection. Velocity uses an outsourced litigation model to collect on its portfolios.