(State or Other Jurisdiction

of Incorporation)

(Commission File

Number)

(IRS Employer

Identification No.)

Exhibit

Number

Description

Executive Vice President and Chief Financial

Officer

Exhibit
Number

Description

Gross collections were $104.4 million, a 15% increase over the $90.5 million in the same period of the prior year.

Investments in receivable portfolios were $47.9 million, to purchase $1.2 billion in face value of debt, compared to $45.4 million, to purchase $2.5 billion in face value of debt in the same period of the prior year.

Revenues from receivable portfolios were $64.1 million, a 3% increase over the $62.2 million in the same period of the prior year. Revenue recognized on receivable portfolios, as a percentage of portfolio collections, excluding the effects of impairment provisions, was 67%, compared to 69% in the same period of the prior year.

Revenues from bankruptcy servicing were $3.4 million, compared to $3.2 million in the same period of the prior year.

Total operating expenses were $51.1 million, a 3% increase over the $49.8 million in the same period of the prior year. Operating expense (excluding stock-based compensation expense, bankruptcy servicing operating expenses and costs related to the consideration of strategic alternatives) per dollar collected decreased to 45.3% compared to 49.4% in the same period of the prior year.

Adjusted EBITDA, defined as net income before interest, taxes, depreciation and amortization, stock-based compensation expense and portfolio amortization, was $58.5 million, a 28% increase over the $45.6 million in the same period of the prior year.

Total interest expense was $3.9 million, compared to $6.2 million in the same period of the prior year.

Net income was $7.5 million or $0.32 per fully diluted share, compared to net income of $5.7 million or $0.24 per fully diluted share in the same period of the prior year.

In the first quarter of 2008, the Company recorded a net impairment provision of $5.3 million, compared to an impairment reversal of $0.2 million in the same period of the prior year.

Effective January 1, 2008, the Company increased its collection forecasts from 72 months to 84 months. This resulted in an increase in the aggregate total estimated remaining collections for the receivable portfolios by $67.3 million, or 7.5%, as of March 31, 2008. For the quarter ended March 31, 2008, the impact of the change resulted in an increase in revenue of $0.1 million, a reduction in the net impairment provision of $3.1 million, an increase in net income of $1.9 million and an increase in fully diluted earnings per share of $0.08.

Assets

Cash and cash equivalents

Restricted cash

Accounts receivable, net

Investment in receivable portfolios, net

Deferred court costs

Property and equipment, net

Prepaid income tax

Forward flow asset

Other assets

Goodwill

Identifiable intangible assets, net

Total assets

Liabilities and stockholders’ equity

Liabilities:

Accounts payable and accrued liabilities

Deferred tax liabilities, net

Deferred revenue and purchased servicing obligation

Debt

Other liabilities

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, 22,994 shares and 22,992 shares issued and outstanding as of March 31, 2008, and December 31, 2007, respectively

Additional paid-in capital

Accumulated earnings

Accumulated other comprehensive loss

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 (excluding stock-based compensation expense)

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 (expense) income and income taxes

Other (expense) income

Interest expense

Contingent interest expense

Other income

Total other expense

Income before income taxes

Provision for income taxes

Net income

Weighted average shares outstanding:

Basic

Diluted

Earnings per share:

Basic

Diluted

Operating activities

Gross collections

Amounts collected on behalf of third parties

Amounts applied to principal on receivable portfolios

Provision for impairment (reversal)

Servicing fees

Operating expenses

Interest payments

Contingent interest payments

Other income

Decrease in restricted cash

Income tax refund (payments)

Excess tax benefits from stock-based payment arrangements

Net cash provided by operating activities

Investing activities

Purchases of receivable portfolios, net of forward flow allocation

Collections applied to investment in receivable portfolios

Proceeds from put-backs of receivable portfolios

Purchases of property and equipment

Net cash used in investing activities

Financing activities

Proceeds from notes payable and other borrowings

Repayment of notes payable and other borrowings

Proceeds from exercise of stock options

Excess tax benefits from stock-based payment arrangements

Repayment of capital lease obligations

Net cash (used in) provided by financing activities

Net increase (decrease) in cash

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

GAAP net income, as reported

Interest expense

Contingent interest expense

Provision 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