SAN DIEGO, Sept. 8 /PRNewswire/ -- Encore Capital Group, Inc.
(Nasdaq: ECPG), a leading accounts receivable management firm, today announced
its entrance into the healthcare debt collection market with the establishment
of a Medical debt business. Encore has launched its Medical business by
purchasing $274 million in face value of self-pay debt from a major healthcare
provider for $4.27 million and hiring an industry leader to manage this
business.
As part of the development of its new Medical business, Encore has formed
a servicing relationship with Receivables Management Bureau, a Knoxville,
Tennessee based collection company with 12 years of specialized healthcare
collections experience. Collections generated by Receivables Management
Bureau will flow through Encore's contingent agency outsourcing channel.
"Over a year ago, we identified the healthcare debt collection market as
an attractive opportunity to diversify into a complementary area of consumer
debt that has solid margins and can serve as an additional growth vehicle for
the Company," said Brandon Black, President and COO of Encore Capital Group.
"According to industry estimates, there are approximately $15-20 billion in
annual charge-offs of self-pay receivables in the healthcare industry, which
represents a huge opportunity for us. We believe the steps we have taken in
the development of our Medical business will help position Encore as the
preferred purchaser of healthcare debt, as well as making this business
immediately productive. We believe our initial portfolio acquisition is the
largest reported transaction of this nature in the healthcare industry and our
servicing partnership with Receivables Management Bureau provides us with the
expertise to maximize collections."
To lead this effort, Encore hired Fritz Heirich on August 1, 2005 to serve
as Senior Vice President and General Manager of the new Medical business.
Prior to joining Encore, Mr. Heirich was Chief Financial Officer and Treasurer
for Premier Insurance Management Services, Inc. (PIMS), a subsidiary of
Premier, Inc., the nation's leading alliance of non-profit hospital and
healthcare organizations headquartered in San Diego with more than 1,400
member hospitals. As the CFO and Treasurer of PIMS, Mr. Heirich was
responsible for the financial management of three industry leading
policy-holder owned insurance companies providing medical malpractice, excess
and umbrella liability, and directors and officers' liability insurance to
member hospitals. Mr. Heirich was part of the initial management team that
launched PIMS and held a number of senior management positions over his
14-year career with the company. Mr. Heirich's responsibilities included
owner/customer relationship management, strategy development and product
design, new member recruitment, reinsurance contract negotiation and rating
agency management.
Mr. Heirich has an MBA from University of California, Irvine and a
Bachelor of Science degree in Mathematics from Pepperdine University.
"We are very excited about the addition of Fritz Heirich to manage our new
Medical business," said Mr. Black. "He is an accomplished executive in the
healthcare industry who provides us with instant credibility and established
relationships with many hospital and healthcare CFOs that we believe will
ultimately open up additional purchasing opportunities for us to grow the
Medical business."
"My experience in the healthcare industry has provided a deep
understanding of the level of discipline and compliance required for
participating and succeeding in this market," said Mr. Heirich. "We have an
approach to healthcare debt that we believe will distinguish Encore as having
the most attractive model for balancing economics and fairness to the
consumers. Over time, we believe that healthcare providers will view us as
their valued business partner due to our ability to utilize consumer-level
analytics to accurately value their debt and make the appropriate decision on
how to proceed with collection efforts in a manner that is respectful to all
parties concerned. As we execute on our growth strategies, we believe we can
grow the Medical business into a significant contributor to Encore's revenue,
profits and cash flow over the next few years."
About Encore Capital Group, Inc.
Encore Capital Group, Inc. is a systems-driven purchaser and manager of
charged-off consumer receivables portfolios. More information on the company
can be found at www.encorecapitalgroup.com.
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 "may," "believes," "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, projections of revenues, cash flows and earnings relating to the Medical
business, the size of the market for delinquent consumer healthcare debt, and
the exploitation of new opportunities in the healthcare debt market, as well
as assumptions relating to those matters. 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 our
subsidiaries to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements.
Factors that could affect the Company's results and cause them to materially
differ from those contained in the forward-looking statements include: failure
to develop and exploit growth opportunities in the healthcare debt market; the
Company's ability to purchase receivables portfolios on acceptable terms and
in sufficient quantities; the Company's ability to acquire and collect on
portfolios consisting of healthcare receivables; the Company's ability to
recover sufficient amounts on or with respect to receivables to fund
operations; the effectiveness of collection efforts of Receivables Management
Bureau; the Company's ability to hire and retain qualified personnel to
recover on its receivables efficiently; changes in, or failure to comply with,
government regulations; the costs, uncertainties and other effects of legal
and administrative proceedings; and risk factors and cautionary statements
made in the Company's Annual Report on Form 10-K as of and for the year ended
December 31, 2004. Forward-looking statements speak only as of the date the
statement was made. They are inherently subject to risks and uncertainties,
some of which the Company cannot predict or quantify. Future events and
actual results could differ materially from the forward-looking statements.
The Company will not undertake and specifically declines any obligation to
publicly release the result of any revisions to any forward-looking statements
to reflect events or circumstances after the date of such statements or to
reflect the occurrence of anticipated or unanticipated events, whether as the
result of new information, future events or for any other reason. In
addition, it is the Company's policy generally not to make any specific
projections as to future earnings, and the Company does not endorse any
projections regarding future performance that may be made by third parties.
SOURCE Encore Capital Group, Inc.
09/08/2005
CONTACT: shareholders/analysts, Carl C. Gregory, III, +1-858-309-6961
carl.gregory@encorecapitalgroup.com, or J. Brandon Black, +1-858-309-6963
brandon.black@encorecapitalgroup.com, both of Encore Capital Group, Inc.; or
media/investors, Tony Rossi of Financial Relations Board, +1-310-854-8317
trossi@financialrelationsboard.com, for Encore Capital Group, Inc.
