Encore Capital Group, Inc. (NASDAQ:ECPG) Q1 2018 Earnings Conference Call - Preliminary Transcript

May 08, 2018 • 05:00 pm ET


Encore Capital Group, Inc. (NASDAQ:ECPG) Q1 2018 Earnings Conference Call - Preliminary Transcript


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Good day, ladies and gentlemen and welcome to the Encore Capital Group Q1 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. (Operator Instructions) As a reminder, this call is being recorded.

I would now like to turn the conference to your introduce host, Mr. Bruce Thomas. Sir, the floor is yours.

Bruce Thomas

Thank you, operator. Good afternoon, and welcome to Encore Capital Group's first quarter 2018 earnings call. With me on the call today are Ashish Masih, our President and Chief Executive Officer; Jonathan Clark, Executive Vice President and Chief Financial Officer; and Paul Grinberg, President of Encore's International Business. Ashish and Jon will make prepared remarks today, and then we'll be happy to take your questions.

Before we begin, we have a few housekeeping items. Unless otherwise noted, comparisons made on this conference call will be between the first quarter of 2018 and the first quarter of 2017. Today's discussion will include forward-looking statements subject to risks and uncertainties. Actual results could differ materially from these forward-looking statements. Please refer to our SEC filings for a detailed discussion of potential risks and uncertainties.

During this call, we will use rounding and abbreviations for the sake of brevity. We will also be discussing non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are included in our earnings presentation which was filed on Form 8-K earlier today. As a reminder, this conference call will also be made available for replay on the Investors section of our website, where we will also post our prepared remarks following the conclusion of this call.

With that, let me turn the call over to Ashish Masih, our President and Chief Executive Officer.

Ashish Masih

Thanks, Bruce, and good afternoon everyone. Thank you for joining our conference call. Today, we are excited to announce that we have agreed to acquire the remaining portion of Cabot Credit Management. This transaction brings significant strategic benefits to both companies and is financially very compelling for Encore, as it will be accretive to our earnings per share and will increase our expected earnings growth rate. In addition, the expected IRR on this transaction is very attractive.

On today's call, we plan to review the acquisition, provide a summary of our first quarter 2018 performance, and update the earnings growth outlook we provided in February, which will improve due to the impact of the transaction. To begin, the transaction solidifies our position as a global leader in our sector. Strategically, this transaction is a natural continuation of the path we embarked upon when we originally acquired a stake in Cabot in 2013, and reflects the successful expansion of Cabot's business over the past five years. We view Cabot as the best platform for long-term leadership and growth in Europe, and this transaction cements the strategic benefits of this partnership. While we remain highly focused on the US market, the large and growing European NPL market continues to provide significant attractive opportunities for us to deploy capital.