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| 8-K - FORM 8-K - ASTA FUNDING INC | c16904e8vk.htm |
Exhibit 99.1
Nasdaq: ASFI
FOR IMMEDIATE RELEASE
CONTACT:
CONTACT:
Robert J. Michel, CFO
Asta Funding, Inc.
(201) 567-5648
Asta Funding, Inc.
(201) 567-5648
Asta
Funding, Inc. Announces Financial Results for Second Quarter and
First Six Months of Fiscal 2011
First Six Months of Fiscal 2011
· Net Income of $2.9 Million, or $0.19 Per Diluted Share for Second Quarter
· Strong Balance Sheet, Strong Liquidity Position Continues
· $91.8 Million Cash & Cash Equivalents as of March 31, 2011
· Approximately $97 Million Cash & Cash Equivalents as of May 10, 2011
· Strong Balance Sheet, Strong Liquidity Position Continues
· $91.8 Million Cash & Cash Equivalents as of March 31, 2011
· Approximately $97 Million Cash & Cash Equivalents as of May 10, 2011
ENGLEWOOD CLIFFS, N.J., May 10, 2011 — Asta Funding, Inc. (NASDAQ: ASFI) (the “Company”), a
consumer receivable asset management and liquidation company, today announced results for the
second quarter and first six months of its 2011 fiscal year, the period ended March 31, 2011.
The Company reported net income of $2,855,000 for the three month period ended March 31, 2011, or
$0.19 per diluted share as compared to net income of $2,875,000 for the three months ended March
31, 2010, or $0.20 per diluted share. Total revenues for the three month period ended March 31,
2011 were $11,234,000 as compared to $11,200,000 for the three month period ended March 31, 2010.
Net income for the six months ended March 31, 2011 was $5,521,000, or $0.37 per diluted share as
compared to net income of $5,350,000, or $0.37 per diluted share for the six months ended March 31,
2010. Revenues for the six months ended March 31, 2011 were $22,072,000 as compared to $22,253,000
for the same period in the prior year.
Net cash collections of consumer receivables acquired for liquidation, including net cash
collections represented by account sales were $21,899,000 for the second quarter of fiscal year
2011, as compared to $25,660,000 in the second quarter of fiscal year 2010, a 14.7% decrease from
the prior year. Net cash collections of consumer receivables acquired for liquidation, including
net cash collections represented by account sales were $43,004,000 for the six months ended March
31, 2011, compared to $55,090,000 in the six month period ended March 31, 2010, a 21.9% decrease
from the prior year. Net cash collections represented by account sales were $88,000 and $243,000
for the three and six month periods ended March 31, 2011, respectively, as compared to $147,000 and
$2,744,000 in the three and six month periods ended March 31, 2010, respectively.
Income from fully amortized portfolios (zero basis revenue) was $9,054,000 for the three month
period ended March 31, 2011, compared to $8,307,000 for the three month period ended March 31,
2010, an increase of 9.0% over the same period of the prior year. Income from fully amortized
portfolios was $17,848,000 for the six month period ended March 31, 2011, compared to $16,415,000
for the six month period ended March 31, 2010, an increase of 8.7% over the same period of fiscal
year 2010. Net cash collections on the Great Seneca portfolio were $3,331,000 in the second quarter
of fiscal year 2011 as
compared to $4,062,000 in the second quarter of fiscal year 2010. Net collections on Great Seneca
were $6,882,000 during the six months ended March 31, 2011 as compared $8,972,000 for the six
months ended March 31, 2010. The carrying value of the Great Seneca portfolio at March 31, 2011 was
$84,392,000, as compared to $100,252,000 at March 31, 2010.
Investments in new portfolios totaled $2,120,000 during the second quarter of fiscal year 2011, as
compared to $971,000 in the second quarter of fiscal year 2010. Investments in new portfolios
during the first six months of fiscal year 2011 were $5,003,000 as compared to $3,271,000 during
the six months ended March 31, 2010. The portfolios acquired during the first six months of fiscal
year 2011 include semi-performing litigation-related medical accounts receivable portfolios whereby
the Company is assigned the revenue stream. As a portion of the accounts are performing, the cost
of the portfolio is higher than the traditional charged off non-performing assets.
General & administrative expenses were $5,651,000 for the three month period ended March 31, 2011
as compared to $5,274,000 for the three month period ended March 31, 2010. Interest expense was
$739,000 for the three month period ended March 31, 2011 as compared to $1,087,000 for the three
month period ended March 31, 2010. An impairment of $49,000 was recorded during the second quarter
of fiscal year 2011. No impairments were recorded in the three and six month periods ended March
31, 2010. General & administrative expenses were $11,132,000 for the six month period ended March
31, 2011 as compared to $10,903,000 for the six month period ended March 31, 2011. Interest expense
was $1,618,000 for the six month period ended March 31, 2011 as compared to $2,346,000 for the same
period of the prior fiscal year.
The Company had no senior debt as of March 31, 2011 and September 30, 2010. The balance of the
subordinated debt was $4,386,000 as of September 30, 2010. This loan was paid in full by December
31, 2010. In addition, the balance of the non-recourse debt to the Bank of Montreal was $76,860,000
at March 31, 2011 down from $90,483,000 at September 30, 2010.
“We are pleased with the results of the second quarter and six month period ended March 31, 2011 as
we continue to generate strong cash flow and improve our liquidity position.” commented Gary Stern,
Chairman and CEO of the Company. Mr. Stern continued, “We are also pleased with the quality of the
legacy portfolio as we reported an increase in zero basis revenue of 8.7% to $17.8 million in the
first six months of fiscal year 2011 from $16.4 million during the same period of the prior year.
Also, exclusive of the non-recourse debt, we are funding our business through our cash flow from
operations without the need for borrowing. As of today, our current cash and cash equivalents
balance is approximately $97 million, or approximately $6.50 per diluted share. In addition, we are
actively seeking investments in, or acquisitions of, companies in the financial services industry.”
A conference call to discuss the results of the second quarter and first six months of fiscal year
2011 will be held on Tuesday, May 10, 2011 at 4:00PM, EDT
Toll-free dial in number (US and Canada):
(800) 668-4132
(800) 668-4132
International dial-in number:
(224) 357-2196
(224) 357-2196
Conference ID: 65231649
Based in Englewood Cliffs, NJ, Asta Funding, Inc., is a leading consumer receivable asset
management company that specializes in the purchase, management and liquidation of performing and
non-performing consumer receivables. For additional information, please visit our website at
http://www.astafunding.com.
All statements in this news release other than statements of historical facts, including
without limitation, statements regarding our future financial position, business strategy, budgets,
projected revenues, projected costs, and plans and objective of management for future operations,
are forward-looking statements within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements generally can be identified by the use of forward-looking
terminology such as “may,” “will,” “expects,” “intends,” “plans,” “projects,” “estimates,”
“anticipates,” or “believes” or the negative thereof, or any variation thereon, or similar
terminology or expressions. We have based these forward-looking statements on our current
expectations and projections about future events. These forward-looking statements are not
guarantees and are subject to known and unknown risks, uncertainties and assumptions about us that
may cause our actual results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or achievements expressed or
implied by such forward-looking statements. Important factors which could materially affect our
results and our future performance include, without limitation, our ability to purchase defaulted
consumer receivables at appropriate prices, changes in government regulations that affect our
ability to collect sufficient amounts on our defaulted consumer receivables, our ability to employ
and retain qualified employees, changes in the credit or capital markets, changes in interest
rates, deterioration in economic conditions, negative press regarding the debt collection industry
which may have a negative impact on a debtor’s willingness to pay the debt we acquire, and
statements of assumption underlying any of the foregoing, as well as other factors set forth under
“Item 1A. Risk Factors” in our annual report on Form 10-K for the year ended September 30, 2010 and
other filings with the Securities and Exchange Commission. All subsequent written and oral
forward-looking statements attributable to us, or persons acting on our behalf, are expressly
qualified in their entirety by the foregoing. Except as required by law, we assume no duty to
update or revise any forward-looking statements. Our reports filed with the Securities and
Exchange Commission are available free of charge through our website at http://www.astafunding.com.
-
Financial Tables Follow
ASTA FUNDING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months | Three Months | Six Months | Six Months | |||||||||||||
| Ended | Ended | Ended | Ended | |||||||||||||
| March 31, 2011 | March 31, 2010 | March 31, 2011 | March 31, 2010 | |||||||||||||
Revenues: |
||||||||||||||||
Finance income, net |
$ | 11,137,000 | $ | 11,181,000 | $ | 21,896,000 | $ | 22,155,000 | ||||||||
Other income |
97,000 | 19,000 | 176,000 | 98,000 | ||||||||||||
| 11,234,000 | 11,200,000 | 22,072,000 | 22,253,000 | |||||||||||||
Expenses: |
||||||||||||||||
General and administrative |
5,651,000 | 5,274,000 | 11,132,000 | 10,903,000 | ||||||||||||
Interest (Related party — Period ended March 31,
2011 — Three months, $0; Six months, $86,000;
Period ended March 31, 2010 — Three months,
$168,000; Six months, $298,000) |
739,000 | 1,087,000 | 1,618,000 | 2,346,000 | ||||||||||||
Impairments of consumer receivables acquired for
liquidation |
49,000 | — | 49,000 | — | ||||||||||||
| 6,439,000 | 6,361,000 | 12,799,000 | 13,249,000 | |||||||||||||
Income before income tax |
4,795,000 | 4,839,000 | 9,273,000 | 9,004,000 | ||||||||||||
Income tax expense |
1,940,000 | 1,964,000 | 3,752,000 | 3,654,000 | ||||||||||||
Net income |
$ | 2,855,000 | $ | 2,875,000 | $ | 5,521,000 | $ | 5,350,000 | ||||||||
Net income per share: |
||||||||||||||||
Basic |
$ | 0.20 | $ | 0.20 | $ | 0.38 | $ | 0.37 | ||||||||
Diluted |
$ | 0.19 | $ | 0.20 | $ | 0.37 | $ | 0.37 | ||||||||
Weighted average number of common shares outstanding: |
||||||||||||||||
Basic |
14,633,655 | 14,498,161 | 14,619,917 | 14,384,050 | ||||||||||||
Diluted |
14,876,437 | 14,504,398 | 14,825,060 | 14,570,901 | ||||||||||||
ASTA FUNDING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
CONDENSED CONSOLIDATED BALANCE SHEETS
| March 31, | September 30, | |||||||
| 2011 | 2010 | |||||||
| (Unaudited) | ||||||||
ASSETS |
||||||||
Cash and cash equivalents |
$ | 91,787,000 | $ | 84,235,000 | ||||
Restricted cash |
1,428,000 | 1,304,000 | ||||||
Consumer receivables acquired for liquidation (at net realizable value) |
130,904,000 | 147,031,000 | ||||||
Due from third party collection agencies and attorneys |
2,576,000 | 3,528,000 | ||||||
Prepaid and income taxes receivable |
— | 196,000 | ||||||
Furniture and equipment, net |
411,000 | 338,000 | ||||||
Deferred income taxes |
17,850,000 | 18,762,000 | ||||||
Other assets |
4,574,000 | 3,770,000 | ||||||
Total assets |
$ | 249,530,000 | $ | 259,164,000 | ||||
LIABILITIES |
||||||||
Debt |
$ | 76,860,000 | $ | 90,483,000 | ||||
Subordinated debt — related party |
— | 4,386,000 | ||||||
Other liabilities |
1,497,000 | 2,105,000 | ||||||
Dividends payable |
293,000 | 292,000 | ||||||
Income taxes payable |
2,662,000 | — | ||||||
Total liabilities |
81,312,000 | 97,266,000 | ||||||
Commitments and contingencies |
||||||||
STOCKHOLDERS’ EQUITY |
||||||||
Preferred stock, $.01 par value; authorized 5,000,000 shares;
issued and outstanding — none |
— | — | ||||||
Common stock, $.01 par value; authorized 30,000,000 shares; issued
and outstanding — 14,634,122 at March 31, 2011 and 14,600,423 at
September 30, 2010 |
146,000 | 146,000 | ||||||
Additional paid-in capital |
74,025,000 | 72,717,000 | ||||||
Retained earnings |
93,962,000 | 89,026,000 | ||||||
Accumulated other comprehensive income, net of tax |
85,000 | 9,000 | ||||||
Total stockholders’ equity |
168,218,000 | 161,898,000 | ||||||
Total liabilities and stockholders’ equity |
$ | 249,530,000 | $ | 259,164,000 | ||||