Asset Acceptance Capital Corp. (AACC)

Asset Acceptance purchases charged-off debt from credit issuers, consumer finance companies, retail merchants, telecommunications and other utility providers and is committed to recovering the amount owed, even if it takes several years. On average, the Company has been able to collect more than three times the amount paid for a portfolio.

Organizing itself into four departments as collection, legal, bankruptcy and probate recovery it has improved its hiring and compensation strategies to increase the productivity. Cash collections were marginally up 3.5% at $80.9 million and except good collection in the first and second quarter of 2007 owing to the consumers receiving tax refunds. An investment to the tune of $27.6 million in the recent quarter had been spent to purchase debt portfolio with $23.1 and $4.5 million in traditional and non-traditional portfolio respectively.

The performance of the company was not satisfactory as total revenues were down 7.6% at $59.2 million. Purchased receivable revenues were reduced by 6.6% due to lower expected returns from purchase made since 2004 and net impairments charges. The increase in collection expenses was primarily due to legal expenses.

The recent purchasing environment remains highly competitive characterized by elevated portfolio pricing. The conservative practice of the management focusing on