Markets
BUSINESS NEWS
- Market News
- Earnings
- Recalls
- Recession Watch
- Tech News
- Financial Crisis
- Madoff Scandal
- BloggingStocks
- Luxist
- Money Videos
INVESTING
- Stock Quotes
- Stock Charts
- Stock Ticker
- Currencies
- Portfolio
- Stock Screener
- Broker Center
- Mutual Fund Center
- ETF Center
- Money
- 24/7 Wall St.
- Financial Glossary
PERSONAL FINANCE AT WALLETPOP
- Bargains
- Banking
- Budget
- Calculators
- College Finance
- Community
- Credit
- Deals
- Debt
- Economizer
- Food
- Home
- Fraud
- Insurance
- Interest Rates
- Loans
- Mortgages
- Real Estate
- Recalls
- Recession
- Retirement
- Saving
- Simplification
- Specials
- Taxes
SMALL BUSINESS
Asta Funding, Inc. Reports Third Quarter and Nine Month Fiscal 2009 Results
ENGLEWOOD CLIFFS, N.J., Aug. 4 /PRNewswire-FirstCall/ -- Asta Funding, Inc. (Nasdaq: ASFI) (the "Company"), a consumer receivable asset management and liquidation firm, today reported financial results for the third quarter and nine months ended June 30, 2009.
Financial Results
For the third quarter of fiscal year 2009, the Company reported net income of $1,478,000, or $0.10 per diluted share, as compared to net income of $2,440,000, or $0.17 per diluted share for the same period in fiscal year 2008. Although net income is lower than the prior year, the Company returned to profitability after two quarters of reported losses. The Company reported revenues of $17,238,000 for the quarter, a 26.9% decrease as compared to revenues of $23,572,000 for the third quarter of fiscal year 2008.
For the nine months ended June 30, 2009 the Company reported a net loss of $11,527,000, or $0.81 per share, as compared to a net profit of $8,047,000, or $0.55 per diluted share in the comparable period a year ago. Revenues for the nine months were $53,812,000, a decrease of 41.3% as compared to $91,729,000 for the nine months ended June 30, 2008. The Company recorded non-cash impairments of $6,364,000 in the third quarter of fiscal year 2009, as compared to $18,429,000 for the second quarter of 2009, and $8,153,000 for the third quarter of fiscal year 2008. The impairments in the current quarter were limited to five additional portfolios, and were related to lower cash collections during this challenging economic period. The impairments are non-cash valuation adjustments designed to align collection projections made under stronger economic conditions at the time of the portfolio purchase to current collection projections.
Net cash collections of consumer receivables acquired for liquidation, including net cash collections represented by account sales were $37.6 million for the third quarter of fiscal year 2009, as compared to $49.0 million in the third quarter of fiscal year 2008. This represents a 23.2% decrease from the prior year, and a slight increase over the $36.9 million reported in the second quarter of fiscal year 2009. For the nine months ended June 30, 2009, net cash collections were $116.6 million, compared to $156.7 million for the nine month period ended June 30, 2008, a 25.6% decrease. Net cash collections represented by account sales was $1.2 million, or 3.2% of net cash collections in the quarter, compared to $2.8 million, or 5.8% in the third quarter of fiscal 2008. During the nine month period ended June 30, 2009 net cash collections represented by account sales were $7.8 million or 6.7% of net cash collections, compared to $15.5 million, or 9.9% in the same comparative period in the prior year.
Income from fully amortized portfolios (zero basis revenue) was $10.5 million for the third quarter ended June 30, 2009, compared to $10.4 million for the comparable period a year ago. For the nine month period ended June 30, 2009 income from fully amortized portfolios was $31.1 million, compared to $34.2 million for the nine month period ended June 30, 2008.
The Company completed $13.8 million of portfolio acquisitions with a face value of $335.6 million during the third quarter, compared to $2.7 million of acquisitions during the first six months of fiscal year 2009. The Company will continue its disciplined approach in its portfolio acquisition strategy.
Credit Facilities
The Company announced on July 10, 2009 that it had secured an amendment to its revolving line of credit, provided by a consortium of lenders for which IDB Bank serves as agent, extending the facility through December 31, 2009. The Company is continuing to negotiate a long-term facility while making steady progress in debt repayment. The Company's total senior debt level was approximately $144.9 million as of June 30, 2009, including $35.5 million under the revolving line of credit, and $109.4 million due to the Bank of Montreal under the borrowing facility for its Palisades XVI subsidiary. The Company's total senior debt level has decreased approximately $68.6 million, or 32% from $213.5 million as of September 30, 2008, and approximately $107 million, or 42% from $252 million as of June 30, 2008. The current balance outstanding on the revolving line of credit is $29.2 million and $107.6 million is due to Bank of Montreal.
CEO Perspective
"Achieving profitability this quarter is an important milestone that reflects our continued cautious approach in the face of the ongoing challenges in today's economic environment," said Gary Stern, Chairman and Chief Executive Officer. "Effective implementation against several strategic objectives led to this positive progress. We have aggressively lowered our debt obligations, and are engaged in productive, continuing discussions with our lenders to secure an ongoing, longer-term credit facility.
"Collections remain a significant challenge for the industry as well as for Asta Funding, in part due to the softness in the employment and housing markets with a decline in re-financings and fewer home sales," Mr. Stern added. "We have taken prudent actions in cost management and debt reduction, while at the same time retaining the flexibility to complete select purchases of new portfolios where we find an attractive blend of pricing and risk-return characteristics. We believe Asta Funding is well-positioned to continue to benefit from a cautious outlook that is appropriate to today's environment together with an opportunistic approach to growth."
Asta Funding, Inc.'s senior executives will hold a conference call for investors on Tuesday, August 4, 2009, at 2:00pm EDT to discuss the company's financial results. To participate in the call please use the following dial-in information:
Domestic dial-in number: 877-236-4088
International dial-in number: 706-758-6550
Conference id number: 23275720
A telephone replay of the call will be available for replay two hours after the call's completion. To access the recording - dial: 1-800-642-1687 or 706-645-9291. The recording will be available from August 4, 2009 through August 11, 2009.
Two attachments accompany this announcement: Asta Funding Inc.'s balance sheet and profit and loss statement for the third quarter and nine month fiscal 2009 reporting period.
About Asta Funding:
Based in Englewood Cliffs, NJ, Asta Funding, Inc., is a 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.
Except for historical information contained herein, the matters set forth in this news release are "forward-looking" statements (as defined in the Private Securities Litigation Reform Act of 1995.) Although Asta Funding, Inc. believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, there can be no assurance that its expectations will be realized. Forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from Asta Funding, Inc.'s expectations. Factors that could contribute to such differences include those identified in Asta Funding, Inc.'s Form 10-K and Form 10-K/A for the fiscal year ended September 30, 2008, Form 10-Q for the quarters ended December 31, 2008 and March 31, 2009 and those described from time to time in Asta Funding, Inc.'s other filings with the Securities and Exchange Commission, news releases and other communications. Asta Funding, Inc.'s reports with the Securities and Exchange Commission are available free of charge through its website at http://www.astafunding.com
ASTA FUNDING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2009 2008 2009 2008
Revenues:
Finance income, net $17,202,000 $23,560,000 $53,722,000 $91,573,000
Other income 36,000 12,000 90,000 156,000
17,238,000 23,572,000 53,812,000 1,729,000
---------- ---------- ---------- ----------
Expenses:
General and
administrative 6,634,000 7,615,000 20,006,000 0,544,000
Interest 1,783,000 3,643,000 6,907,000 4,295,000
Impairments of consumer
receivables acquired
for liquidation 6,364,000 8,153,000 46,208,000 3,153,000
14,781,000 19,411,000 73,121,000 7,992,000
---------- ---------- ---------- ---------
Income (loss) before
equity in (loss)
earnings in venture
and income taxes 2,457,000 4,161,000 (19,309,000) 13,737,000
Equity in (loss)
earnings of venture 34,000 (59,000) (21,000) (137,000)
Income (loss) before
income tax (benefit) 2,491,000 4,102,000 (19,330,000) 13,600,000
Income tax expense
(benefit) 1,013,000 1,662,000 (7,803,000) 5,553,000
Net income (loss) $1,478,000 $2,440,000 $(11,527,000) $8,047,000
========== ========== ============ ==========
Net income (loss) per
share:
Basic $0.10 $0.17 $(0.81) $0.57
Diluted $0.10 $0.17 $(0.81) $0.55
Weighted average number
of shares outstanding:
Basic 14,271,946 14,276,158 14,271,931 14,111,954
Diluted 14,445,572 14,535,548 14,271,931 14,642,467
ASTA FUNDING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, September 30,
2009 2008
----------- -------------
(Unaudited)
ASSETS
Cash and cash equivalents $3,223,000 $3,623,000
Restricted cash 2,256,000 3,047,000
Consumer receivables acquired for
liquidation, (at net realizable value) 356,264,000 449,012,000
Due from third party collection
agencies and attorneys 3,516,000 5,070,000
Income taxes receivable 807,000 -
Investment in venture 119,000 555,000
Furniture and equipment, net 511,000 762,000
Deferred income taxes 22,593,000 15,567,000
Other assets 2,877,000 3,500,000
Total assets $392,166,000 $481,136,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Debt $144,888,000 $213,485,000
Subordinated debt - related party 8,246,000 8,246,000
Other liabilities 1,980,000 4,618,000
Dividends payable 285,000 571,000
Income taxes payable 357,000 6,315,000
Total liabilities 155,756,000 233,235,000
Commitments and contingencies
Stockholders' Equity
Preferred stock, $.01 par value;
authorized 5,000,000; issued and
outstanding - none - -
Common stock, $.01 par value; authorized
30,000,000 shares; issued and
outstanding - 14,271,924 at June 30,
2009 and 14,276,158 at
September 30, 2008 143,000 143,000
Additional paid-in capital 70,069,000 69,130,000
Accumulated other comprehensive loss (344,000) (297,000)
Retained earnings 166,542,000 178,925,000
Total stockholders' equity 236,410,000 247,901,000
Total liabilities and stockholders' equity $392,166,000 $481,136,000
SOURCE Asta Funding, Inc.