Outsourcing Solutions Inc. Announces Strong Second Quarter 2001 Results

Business Wire, August 22, 2001

Business Editors

ST. LOUIS--(BUSINESS WIRE)--Aug. 22, 2001

Outsourcing Solutions Inc. (OSI), announced total revenues for the quarter ending June 30, 2001 of $157.4 million, a 14.6% increase from $137.4 million in fiscal 2000. Operating earnings before nonrecurring expenses for the quarter were $16.8 million, up 47.7% from $11.4 million in 2000.

For the first six months, revenues were $309.0 million, up 14.2% from $270.6 million in 2000. Operating earnings before nonrecurring expenses for the first six months increased to $31.7 million up 42.2% from $22.3 million in 2000.

Commenting on the results, Timothy G. Beffa, President and Chief Executive Officer of OSI, said, "A combination of strong organic growth (10%) coupled with our recent acquisitions and improving operating margins has produced strong second quarter and year-to-date operating results. Internal growth is being driven primarily by continued new outsourcing projects and strong fee-based letter service revenue." Beffa continued, "In addition to the strong top-line growth, I am pleased to report the Company has continued to make progress towards our goal of improving operating margins. This margin expansion reflects the continued realization of operations improvement initiatives, industry specializations, employee initiatives, lower portfolio amortization and highly accretive acquisitions."

OSI is one of the nation's leading providers of strategic receivables management services, enhancing the financial performance of America's leading companies. With industry-specific strategies and services, OSI delivers results that improve the bottom line through accelerated cash flow, lower operating costs, reduced bad debt expense and improved customer retention. OSI provides outsourcing, collection and portfolio services to a blue chip roster of Fortune 500 clients.

Headquartered in St. Louis, OSI has approximately 8,300 employees in nearly 70 locations across 25 states plus Canada, Mexico and Puerto Rico. More information about OSI can be found by visiting http://www.osi.to.

Note: Certain matters discussed within this press release are forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although OSI believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. These uncertainties are more fully described in the Company's filings with the Securities and Exchange Commission.

                      Outsourcing Solutions Inc.
                     Earnings Information for the
                 Second Quarter and Year-to-Date Ending
                             June 30, 2001
                             (in thousands)

                     Second Quarter Ending        Year-to-Date Ending
                            June 30,                    June 30,
                        2001        2000           2001        2000

Revenue             $ 157,433   $ 137,373      $ 309,019    $270,623
Operating Expenses    127,840     109,826        249,783     217,429
Amortization and
 Depreciation          12,778      16,186         27,511      30,845
Nonrecurring expenses     741       1,186            741       1,186
Operating Costs and
 Expenses             141,359     127,198        278,035     249,460
Operating Profit
 (Loss)                16,074      10,175         30,984      21,163
Interest Expense       13,819      15,209         30,080      29,452
Income (Loss) before
 Taxes                  2,255      (5,034)           904      (8,289)
Provision for Income
 Tax                      175         169            350         294
Net Income (Loss)   $   2,080   $  (5,203)     $     554   $  (8,583)
Earnings Before Interest,
 Taxes, Depreciation
 and Amortization (EBITDA)
 before nonrecurring
 expenses           $  29,593   $  27,547      $  59,236   $  53,194

SOURCE: Outsourcing Solutions Inc.