Asset Acceptance Capital Corp. Announces Second Quarter 2009 Results

Reports Cash Collections of $87.3 Million, Operating Expenses of 51.6% of Cash
Collections

WARREN, Mich., July 30 /PRNewswire-FirstCall/ -- Asset Acceptance Capital
Corp. (Nasdaq: AACC), a leading purchaser and collector of charged-off
consumer debt, today announced results for the second quarter of 2009. The
Company's second-quarter results included cash collections of $87.3 million
and operating expenses of 51.6% of cash collections. The Company reported
earnings of $0.03 per fully diluted share for the period.

Asset Acceptance reported cash collections of $87.3 million in the second
quarter ended June 30, 2009, versus cash collections of $95.2 million in the
year-ago period. For the six-month period ended June 30, 2009, the Company
reported cash collections of $181.4 million compared to cash collections of
$195.5 million in the first six months of 2008.

Total revenues were $49.1 million in the second quarter of 2009, compared to
total revenues of $56.5 million in the second quarter of 2008. Total revenues
in the first half of 2009 were $106.1 million versus $120.8 million in the
first six months of 2008. Amortization of purchased receivables in the second
quarter of 2009 was 44.1% of total cash collections versus 41.0% of total cash
collections in the second quarter of 2008. For the first six months of 2009,
amortization of purchased receivables was 41.8% of total cash collections
versus 38.6% of total cash collections in the same period of last year. The
Company reported a second quarter of 2009 net impairment charge of $6.8
million, versus a net impairment charge of $5.0 million in the prior year
quarter. Net impairments for the first six months of 2009 totaled $10.3
million, versus $5.4 million for the first six months of 2008.

Net income for the quarter was $0.8 million, or $0.03 per fully diluted share,
compared to net income of $2.1 million, or $0.07 per fully diluted share, in
the second quarter of 2008. Net income for the first two quarters of 2009 was
$5.4 million, or $0.18 per fully diluted share, compared to net income of $8.9
million, or $0.29 per fully diluted share, in the same period of 2008.
Earnings Before Interest, Taxes, Depreciation and Amortization, including
purchased receivable amortization ("Adjusted EBITDA"), decreased to $43.5
million in the second quarter of 2009, down 7.0% compared to the year-ago
period. For the six-month period ended June 30, 2009, Adjusted EBITDA
declined to $91.7 million, a decrease of 7.2% when compared to the same
six-month period in 2008. Please refer to the table on page 3, which
reconciles net income according to Generally Accepted Accounting Principles
("GAAP") to Adjusted EBITDA.

During the second quarter of 2009, the Company invested $20.0 million to
purchase charged-off consumer debt portfolios with a face value of $727.9
million, for a blended rate of 2.74% of face value. This compares to the
prior-year second quarter, when the Company invested $64.8 million to purchase
consumer debt portfolios with a face value of $1.9 billion, representing a
blended rate of 3.38% of face value. The Company invested $42.0 million to
purchase charged-off consumer debt portfolios with a face value of $1.5
billion, for a blended rate of 2.85% during the first six months of 2009,
compared to $86.7 million with a face value of $2.5 billion, for a blended
rate of 3.53% in the same period of 2008. All purchase data is adjusted for
buybacks.

Rion Needs, President and CEO, commented: "The collections environment
continues to be challenging in the current economic climate. As unemployment
continues to increase we are seeing a negative impact on our liquidation
rates, especially in the older vintages where there is decreased collection
leverage due to the age of the accounts. However, we believe we will have
strong returns on our investments in paper purchased in recent quarters
because of our stated strategy of carefully controlling our levels of
purchasing in order to save dry powder for the second half of 2009 and full
year 2010, which has allowed us to be selective in the portfolios we have
acquired."

Needs continued, "We continue to build increased levels of operational
sophistication and data analysis into our daily activities that will serve to
maximize collections on our portfolios over the long run. We are particularly
focused on our call centers, where we are aggressively increasing our capacity
by expanding our collection account representative headcount to achieve better
penetration of our inventory. We expect a net increase in collection account
representative headcount of 20% by year end and are ahead of plan. We
continue to enhance the segmentation of our accounts in order to focus our
efforts on those most likely to liquidate, as well as complete our system
conversion that will give our workforce the tools they need to maximize every
collection opportunity. We believe these efforts will increase our
liquidation rates going forward."

In addition to lower cash collections in the quarter, the Company reported
lower operating expenses compared to the prior year. Total operating expenses
in the quarter were reduced 9.3% to $45.1 million, from $49.7 million in the
second quarter of 2008. For the 2009 second quarter, Asset Acceptance
reported operating expenses of 51.6% of cash collections, down from 52.2% of
cash collections in the prior year quarter.

Mark Redman, Senior Vice President and CFO of Asset Acceptance Capital Corp.,
commented: "We have continued to aggressively manage our cost structure in
this difficult collections environment as evidenced by our 51.6% cost to
collect ratio during the second quarter. Additionally, as a result of
reducing our purchasing activity during the second quarter we paid down the
revolving line of credit balance to zero and built our cash position, which
stood at $12.9 million at the end of June. We are prepared to increase our
level of purchasing in the second half of the year to capitalize on the
growing supply of charge-offs resulting from the downturn in the economy."

Reconciliation of GAAP Net Income to Adjusted EBITDA (Unaudited)

The Company provided the following table which reconciles GAAP net income, as
reported, to Adjusted EBITDA. The Company indicated that the measure
"Adjusted EBITDA" is the basis for its management bonus program and a similar
computation is used in its credit agreement's financial covenants. The
Company believes that Adjusted EBITDA, which is generally cash collections
less operating expenses (other than non-cash operating expenses, such as
depreciation and amortization), represents the Company's cash generation which
can be used to purchase receivables, pay down debt, pay income taxes, return
to shareholders and for other uses. Adjusted EBITDA, which is a non-GAAP
financial measure, should not be considered an alternative to, or more
meaningful than, net income prepared on a GAAP basis. Additionally, Adjusted
EBITDA as computed by the Company may not be comparable to similar metrics
used by others in the industry.

Three months ended June 30, Six months ended June 30,
--------------------------- -------------------------
2009 2008 2009 2008
---- ---- ---- ----
Net income $842,287 $2,124,158 $5,444,431 $8,901,982
Add: interest income and
expense (net), income
taxes, depreciation and
amortization 4,070,520 5,600,322 10,415,500 14,120,691
Add (subtract): (gain)
loss on disposal of
assets 5,137 (2,035) 6,541 (155,557)
Add: impairment of
intangible assets - - - 445,651
Add (subtract): other
(income) expense 67,963 1,650 (3,814) (16,333)
------ ----- ------- --------
Subtotal 4,985,907 7,724,095 15,862,658 23,296,434

Change to balance of
purchased receivables 38,486,861 39,152,564 75,896,934 75,841,926

Non-cash revenue (12,627) (168,500) (45,442) (316,269)
-------- --------- -------- ---------
Adjusted EBITDA $43,460,141 $46,708,159 $91,714,150 $98,822,091
=========== =========== =========== ===========

Cash collections $87,293,577 $95,192,743 $181,410,514 $195,457,024
Other revenues, net 262,610 264,885 514,129 737,822
Operating expenses (45,060,679) (49,675,339) (92,062,348) (99,777,663)
Depreciation and
amortization 959,496 921,970 1,845,314 1,949,774
Impairment of
intangible assets - - - 445,651
Loss on disposal of
equipment 5,137 3,900 6,541 9,483
----- ----- ----- -----
Adjusted EBITDA $43,460,141 $46,708,159 $91,714,150 $98,822,091
=========== =========== =========== ===========

Second Quarter 2009 Earnings Conference Call

Asset Acceptance Capital Corp. will host a conference call at 11 a.m. Eastern
today to discuss these results and current business trends. To listen to a
live webcast of the call, please go to the investor section of the Company's
web site at www.AssetAcceptance.com. A replay of the webcast will be
available until July 30, 2010.

About Asset Acceptance Capital Corp.

For more than 45 years, Asset Acceptance has provided credit originators, such
as credit card issuers, consumer finance companies, retail merchants,
utilities and others an efficient alternative in recovering defaulted consumer
debt. For more information, please visit www.AssetAcceptance.com.

Asset Acceptance Capital Corp. Safe Harbor Statement

This press release contains certain statements, including the Company's plans
and expectations regarding its operating strategies, charged-off receivables
and costs, which are forward-looking statements and are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Forward-looking statements include reference to the Company's
presentations and webcasts. These forward-looking statements reflect the
Company's views, expectations and beliefs at the time such statements were
made with respect to such matters, as well as the Company's future plans,
objectives, events, portfolio purchases and pricing, collections and financial
results such as revenues, expenses, income, earnings per share, capital
expenditures, operating margins, financial position, expected results of
operations and other financial items. Forward-looking statements are not
guarantees of future performance and involve certain risks, uncertainties and
assumptions ("Risk Factors") that make the timing, extent, likelihood and
degree of occurrence of these matters difficult to predict. Words such as
"anticipates," "believes," "estimates," "expects," "intends," "should,"
"could," "will," variations of such words and similar expressions are intended
to identify forward-looking statements. There are a number of factors, many of
which are beyond the Company's control, which could cause actual results and
outcomes to differ materially from those described in the forward-looking
statements. Risk Factors include, among others: ability to purchase
charged-off consumer receivables at appropriate prices, ability to continue to
acquire charged-off receivables in sufficient amounts to operate efficiently
and profitably, employee turnover, ability to compete in the marketplace and
acquiring charged-off receivables in industries that the Company has little or
no experience. These Risk Factors also include, among others, the Risk
Factors discussed under "Item 1A Risk Factors" in the Company's most recently
filed Annual Report on Form 10-K and in other SEC filings, in each case under
a section titled "Risk Factors" or similar headings and those discussions
regarding risk factors as well as the discussion of forward-looking statements
in such sections are incorporated herein by reference. Other Risk Factors
exist, and new Risk Factors emerge from time to time that may cause actual
results to differ materially from those contained in any forward-looking
statements. Given these risks and uncertainties, investors should not place
undue reliance on forward-looking statements as a prediction of actual
results. Furthermore, the Company expressly disclaims any obligation to
update, amend or clarify forward-looking statements.

Supplemental Financial Data

(Unaudited, Dollars in Q2 '09 Q1 '09 Q4 '08 Q3 '08 Q2 '08
Millions, except
collections per account
representative)

Total revenues $49.1 $57.0 $55.0 $58.4 $56.5
Cash collections $87.3 $94.1 $83.3 $90.8 $95.2
Operating expenses to cash
collections 51.6% 50.0% 55.2% 55.2% 52.2%
Traditional call center
collections $36.1 $41.0 $35.1 $38.4 $42.2
Legal collections $38.5 $38.7 $34.9 $38.1 $39.9
Other collections $12.7 $14.4 $13.3 $14.3 $13.1
Amortization rate 44.1% 39.7% 34.2% 36.0% 41.0%
Collections on fully
amortized portfolios $15.8 $18.3 $17.7 $18.4 $20.3
Core amortization rate
(Note 1) 53.9% 49.3% 43.4% 45.1% 52.1%
Investment in purchased
receivables (Note 2) $20.0 $22.1 $32.0 $35.6 $64.8
Face value of purchased
receivables (Note 2) $727.9 $746.9 $632.0 $719.2 $1,918.6
Average cost of purchased
receivables (Note 2) 2.74% 2.95% 5.06% 4.96% 3.38%
Number of purchased
receivable portfolios 22 31 23 42 52
Collections per account
representative FTE $38,858 $42,940 $34,994 $39,866 $45,538
Average account
representative FTE's 929 955 1,003 966 939

Note 1: Core amortization rate is amortization divided by collections on
non-fully amortized portfolios.
Note 2: All purchase data is adjusted for buybacks.

The Company provided the following details regarding purchased receivable
revenues:

Three months ended June 30, 2009
--------------------------------
Year of Amortization Monthly Net Zero Basis
Purchase Collections Revenue Rate(1) Yield(2) Impairments Collections
-------- ----------- ------- ------- -------- ----------- -----------
2003 and
prior $14,882,021 $13,402,082 N/M% N/M% $489,000 $12,484,108
2004 5,633,013 2,475,410 56.1 4.96 1,941,000 901,949
2005 6,103,487 864,320 85.8 1.23 2,488,000 34,537
2006 14,512,193 9,086,793 37.4 5.11 1,701,000 1,610,591
2007 18,191,261 9,907,523 45.5 3.67 - 706,439
2008 22,974,091 9,838,611 57.2 2.85 227,000 88,705
2009 4,997,511 3,244,604 35.1 3.90 - 6,250
--------- --------- - -----
Totals $87,293,577 $48,819,343 44.1 4.83 $6,846,000 $15,832,579
=========== =========== ========== ===========

Three months ended June 30, 2008
--------------------------------
Year of Amortization Monthly Net Zero Basis
Purchase Collections Revenue Rate(1) Yield(2) Impairments Collections
-------- ----------- ------- ------- -------- ----------- -----------
2002 and
prior $12,784,399 $12,101,312 N/M% N/M% $- $11,609,421
2003 10,546,373 9,274,480 12.1 34.90 (537,150) 5,902,566
2004 8,920,506 6,239,920 30.0 7.47 637,317 819,045
2005 10,082,486 2,547,583 74.7 2.02 2,513,000 7,892
2006 21,342,389 11,672,311 45.3 4.72 2,356,000 1,898,018
2007 24,315,224 11,120,941 54.3 2.80 - 35,260
2008 7,201,366 3,252,132 54.8 2.64 - 27,779
--------- --------- - ------
Totals $95,192,743 $56,208,679 41.0 5.58 $4,969,167 $20,299,981
=========== =========== ========== ===========

Six months ended June 30, 2009
------------------------------
Year of Amortization Monthly Net Zero Basis
Purchase Collections Revenue Rate(1) Yield(2) Impairments Collections
-------- ----------- ------- ------- -------- ----------- -----------
2003 and
prior $32,115,952 $29,595,638 N/M% N/M% $412,700 $26,617,497
2004 12,509,541 5,799,086 53.6 5.23 3,958,600 1,934,285
2005 13,541,643 4,641,864 65.7 2.97 2,745,000 77,042
2006 30,784,791 20,327,073 34.0 5.44 2,497,000 3,608,141
2007 39,310,080 21,131,396 46.2 3.70 - 1,664,748
2008 47,118,967 20,260,841 57.0 2.76 682,000 178,177
2009 6,029,540 3,803,124 36.9 3.82 - 6,250
--------- --------- - -----
Totals $181,410,514 $105,559,022 41.8 5.08 $10,295,300 $34,086,140
============ ============ =========== ===========

Six months ended June 30, 2008
------------------------------
Year of Amortization Monthly Net Zero Basis
Purchase Collections Revenue Rate(1) Yield(2) Impairments Collections
-------- ----------- ------- ------- -------- ----------- -----------
2002 and
prior $27,359,596 $26,288,995 N/M% N/M% $(550,000) $24,688,531
2003 22,443,394 19,419,777 13.5 33.26 (1,018,200) 12,099,253
2004 18,514,737 12,819,248 30.8 7.28 1,687,664 1,794,244
2005 20,694,464 8,307,417 59.9 3.04 2,605,986 44,299
2006 46,230,295 27,206,224 41.2 5.17 2,448,000 3,856,965
2007 51,663,171 22,322,914 56.8 2.64 180,000 35,260
2008 8,551,367 3,566,792 58.3 2.58 - 27,779
--------- --------- - ------
Totals $195,457,024 $119,931,367 38.6 5.92 $5,353,450 $42,546,331
============ ============ ========== ===========

(1) "N/M" indicates that the calculated percentage for aggregated vintage
years is not meaningful.
(2) The monthly yield is the weighted-average yield determined by dividing
purchased receivable revenues recognized in the period by the average
of the beginning monthly carrying values of the purchased receivables
for the period presented.

Asset Acceptance Capital Corp.
Consolidated Statements of Operations
(Unaudited)

Three months ended June 30, Six months ended June 30,
--------------------------- -------------------------
2009 2008 2009 2008
---- ---- ---- ----
Revenues
Purchased receivable
revenues, net $48,819,343 $56,208,679 $105,559,022 $119,931,367
Gain on sale of
purchased receivables - 5,935 - 165,040
Other revenues, net 262,610 264,885 514,129 737,822
------- ------- ------- -------
Total revenues 49,081,953 56,479,499 106,073,151 120,834,229
---------- ---------- ----------- -----------
Expenses
Salaries and benefits 18,367,377 20,831,373 38,213,894 42,903,346
Collections expense 21,640,610 23,038,448 43,767,293 44,994,121
Occupancy 1,859,381 1,928,829 3,670,242 3,856,317
Administrative 2,228,678 2,950,819 4,559,064 5,618,971
Depreciation and
amortization 959,496 921,970 1,845,314 1,949,774
Impairment of assets - - - 445,651
Loss on disposal of
equipment and other
assets 5,137 3,900 6,541 9,483
----- ----- ----- -----
Total operating
expenses 45,060,679 49,675,339 92,062,348 99,777,663
---------- ---------- ---------- ----------
Income from operations 4,021,274 6,804,160 14,010,803 21,056,566
Other income (expense)
Interest income 3,731 6,778 4,692 30,029
Interest expense (2,471,838) (3,250,063) (5,113,964) (6,594,660)
Other (67,963) (1,650) 3,814 16,333
-------- ------- ----- ------
Income before income
taxes 1,485,204 3,559,225 8,905,345 14,508,268
Income taxes 642,917 1,435,067 3,460,914 5,606,286
------- --------- --------- ---------
Net income $842,287 $2,124,158 $5,444,431 $8,901,982
======== ========== ========== ==========

Weighted-average number
of shares:
Basic 30,623,320 30,561,421 30,617,189 30,557,220
Diluted 30,711,491 30,606,807 30,668,037 30,586,249
Earnings per common
share outstanding:
Basic $0.03 $0.07 $0.18 $0.29
Diluted $0.03 $0.07 $0.18 $0.29

Asset Acceptance Capital Corp.
Consolidated Statements of Financial Position
(Unaudited)

June 30, December 31,
2009 2008
------------- ------------
ASSETS
Cash $12,927,039 $6,042,859
Purchased receivables, net 327,095,264 361,808,502
Income taxes receivable 593,927 3,934,029
Property and equipment, net 12,664,308 12,526,817
Goodwill 14,323,071 14,323,071
Intangible assets, net 2,348,833 2,453,117
Other assets 5,561,400 7,082,721
--------- ---------
Total assets $375,513,842 $408,171,116
============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
Accounts payable $3,028,701 $3,388,320
Accrued liabilities 17,356,040 21,476,207
Income taxes payable 1,438,288 658,329
Notes payable 144,572,514 181,550,000
Deferred tax liability, net 65,113,382 64,470,002
---------- ----------
Total liabilities $231,508,925 $271,542,858
------------ ------------

Stockholders' equity:
Preferred stock, $0.01 par value,
10,000,000 shares authorized, no
shares issued and outstanding - -
Common stock, $0.01 par value,
100,000,000 shares authorized; issued
shares - 33,170,177 and 33,169,552 at
June 30, 2009 and December 31, 2008,
respectively 331,702 331,696
Additional paid in capital 147,677,015 146,915,791
Retained earnings 40,632,745 35,188,314
Accumulated other comprehensive loss,
net of tax (3,492,941) (4,664,862)
Common stock in treasury; at cost,
2,596,653 and 2,596,521 shares at
June 30, 2009 and December 31, 2008,
respectively (41,143,604) (41,142,681)
------------ ------------
Total stockholders' equity 144,004,917 136,628,258
----------- -----------
Total liabilities and stockholders' equity $375,513,842 $408,171,116
============ ============

ASSET ACCEPTANCE CAPITAL CORP.

Consolidated Statements of Cash Flows
(Unaudited)

Six months ended June 30,
-------------------------
2009 2008
---- ----
Cash flows from operating activities
Net income $5,444,431 $8,901,982
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 1,845,314 1,949,774
Amortization of deferred financing costs 263,303 272,606
Deferred income taxes 176,278 428,777
Share-based and other non-cash compensation 761,230 737,898
Net impairment of purchased receivables 10,295,300 5,353,450
Non-cash revenue (45,442) (316,269)
Loss on disposal of equipment and other assets 6,541 9,483
Gain on sale of purchased receivables - (165,040)
Impairment of intangible assets - 445,651
Changes in assets and liabilities:
(Decrease) increase in accounts payable
and other accrued liabilities (2,840,763) 2,171,191
Decrease in other assets 1,258,018 180,474
Increase in net income taxes 4,120,061 200,253
--------- -------
Net cash provided by operating activities 21,284,271 20,170,230
---------- ----------

Cash flows from investing activities
Investment in purchased receivables, net
of buy backs (41,138,254) (84,976,768)
Principal collected on purchased receivables 65,601,634 70,488,476
Proceeds from the sale of purchased receivables - 167,405
Purchases of property and equipment (1,885,272) (4,742,783)
Proceeds from sale of property and equipment 210 2,515
--- -----
Net cash provided by (used in) investing
activities 22,578,318 (19,061,155)
---------- ------------

Cash flows from financing activities
Borrowings under notes payable 17,800,000 57,000,000
Repayments of notes payable (54,777,486) (58,750,000)
Purchase of treasury shares (923) -
Payment of deferred financing costs - (660,575)
Repayments of capital lease obligations - (13,767)
- --------
Net cash used in financing activities (36,978,409) (2,424,342)
------------ -----------
Net increase (decrease) in cash 6,884,180 (1,315,267)
Cash at beginning of period 6,042,859 10,474,479
--------- ----------
Cash at end of period $12,927,039 $9,159,212
=========== ==========

Supplemental disclosure of cash flow information
Cash paid for interest, net of capitalized
interest $5,208,677 $6,502,385
Net cash (received) paid for income taxes (705,644) 4,993,390
Non-cash investing and financing activities:
Change in fair value of swap liability (1,639,023) 87,419
Change in unrealized loss on cash flow hedge 1,171,921 (57,317)

SOURCE Asset Acceptance Capital Corp.

Jeff Lambert or Jeff Tryka, both of Lambert, Edwards & Associates,
+1-616-233-0500 or aacc@lambert-edwards.com, for Asset Acceptance Capital
Corp.