(State or Other Jurisdiction

of Incorporation)

(IRS Employer

Identification No.)

Exhibit

Number

Description

Date: August 8, 2007

/s/ Paul Grinberg

Description

Net loss was $0.8 million or $0.04 per fully diluted share, compared to net income of $7.5 million or $0.32 per fully diluted share in the same period of the prior year. The loss includes the one-time impact of a $6.9 million, or $0.30 per fully diluted share, after-tax charge related to the agreement reached with the Company’s previous lender to pay off all future contingent interest.

Adjusted EBITDA, defined as net income before interest, taxes, depreciation and amortization, stock-based compensation expense, and portfolio amortization, was $47.1 million, a 10% increase over the $42.8 million in the same period of the prior year.

Gross collections were $93.6 million, an 18% increase over the $79.2 million in the same period of the prior year.

Revenues from receivable portfolios were $64.0 million, a 7% increase over the $59.6 million in the same period of the prior year. Revenue recognized on receivable portfolios, as a percentage of portfolio collections, was 68%, compared to 75% in the same period of the prior year. The lower revenue recognition rate was attributable to a higher percentage of collections from more recently purchased portfolios that have lower collection multiples assigned to them, as well as a higher level of collections in the second quarter of 2007 than in the same period of the prior year.

Revenues from bankruptcy servicing were $3.2 million, compared to $6.2 million in the same period of the prior year. The decrease in revenues from bankruptcy servicing is attributable to the one-time spike in bankruptcy placements leading up to bankruptcy reform in 2005, which were recognized in revenue in the second quarter of 2006. Revenues from bankruptcy servicing for the first quarter of 2007 were also $3.2 million.

Operating expense (excluding stock-based compensation expense, bankruptcy servicing operating expenses and the final costs related to the consideration of strategic alternatives) per dollar collected increased to 50.5% compared to 49.5% in the same period of the prior year. This increase was primarily attributable to the increase in legal costs associated with the Company’s newer collection initiatives. Total operating expenses were $52.6 million, a 15% increase over the $45.7 million in the same period of the prior year.

Total interest expense was $16.0 million compared to $7.3 million in the same period of the prior year. Approximately $11.7 million of the total interest expense in the second quarter of 2007 is attributable to the agreement reached with the Company’s previous lender to pay off all future contingent interest payments.

Investments in receivable portfolios were $41.1 million to purchase $1.3 billion in face value of debt, compared to $21.3 million to purchase $594 million in face value of debt in the same period of the prior year.

Assets

Cash and cash equivalents

Restricted cash

Accounts receivable, net

Investment in receivable portfolios, net

Property and equipment, net

Prepaid income tax

Purchased servicing asset

Forward flow asset

Other assets

Goodwill

Identifiable intangible assets, net

Total assets

Liabilities and stockholders’ equity

Liabilities:

Accounts payable and accrued liabilities

Accrued profit sharing arrangement

Deferred tax liabilities, net

Deferred revenue

Purchased servicing obligation

Debt

Total liabilities

Commitments and contingencies

Stockholders’ equity:

Convertible preferred stock, $.01 par value, 5,000 shares authorized, no shares issued and outstanding

Common stock, $.01 par value, 50,000 shares authorized, 22,829 shares and 22,781 shares issued and outstanding as of June 30, 2007 and December 31, 2006, respectively

Additional paid-in capital

Accumulated earnings

Accumulated other comprehensive income

Total stockholders’ equity

Total liabilities and stockholders’ equity

Revenues

Revenue from receivable portfolios, net

Servicing fees and other related revenue

Total revenues

Operating expenses

Salaries and employee benefits

Stock-based compensation expense

Cost of legal collections

Other operating expenses

Collection agency commissions

General and administrative expenses

Depreciation and amortization

Total operating expenses

Income before other income (expense) and income taxes

Other income (expense)

Interest expense

Contingent interest expense

Pay-off of future contingent interest

Other (expense) income

Total other expense

Income before income taxes

Benefit (provision) for income taxes

Net (loss) income

Basic – (loss) earnings per share computation:

Net (loss) income available to common stockholders

Weighted average shares outstanding

(Loss) earnings per share – Basic

Diluted – (loss) earnings per share computation:

Net (loss) income available to common stockholders

Weighted average shares outstanding

Incremental shares from assumed conversion of stock options

Diluted weighted average shares outstanding

(Loss) earnings per share – Diluted

Operating activities

Gross collections

Less:

Amounts collected on behalf of third parties

Amounts applied to principal on receivable portfolios

Servicing fees

Operating expenses

Interest payments

Contingent interest payments

Other income

Decrease in restricted cash

Income taxes

Excess tax benefits from stock-based payment arrangements

Net cash (used in) provided by operating activities

Investing activities

Purchases of receivable portfolios, net of forward flow allocation

Collections applied to principal of receivable portfolios

Proceeds from put-backs of receivable portfolios

Purchases of property and equipment

Net cash (used in) provided by investing activities

Financing activities

Proceeds from notes payable and other borrowings

Repayment of notes payable and other borrowings

Proceeds from exercise of common stock options

Excess tax benefits from stock-based payment arrangements

Repayment of capital lease obligations

Net cash provided by (used in) financing activities

Net (decrease) increase in cash

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

GAAP net (loss) income, as reported

Interest expense

Contingent interest expense

Pay-off of future contingent interest

Provision (benefit) for income taxes

Depreciation and amortization

Amount applied to principal on receivable portfolios

Stock-based compensation expense

Adjusted EBITDA

GAAP total operating expenses, as reported

Stock-based compensation expense

Bankruptcy servicing operating expenses

Costs related to the consideration of strategic alternatives

Operating expenses, excluding stock-based compensation expense, bankruptcy servicing operating expenses and costs related to the consideration of strategic alternatives