-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SHOw6LFNj0mQ6vpC33WQaXeKBfVjb0U8uYdGUpMqWyJpxJA5xJ8JY3Zub69O29Fs we22Dd4mMW+WtyeH5gy/vg== 0001125282-05-002435.txt : 20050510 0001125282-05-002435.hdr.sgml : 20050510 20050510172510 ACCESSION NUMBER: 0001125282-05-002435 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20050510 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050510 DATE AS OF CHANGE: 20050510 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASTA FUNDING INC CENTRAL INDEX KEY: 0001001258 STANDARD INDUSTRIAL CLASSIFICATION: SHORT-TERM BUSINESS CREDIT INSTITUTIONS [6153] IRS NUMBER: 223388607 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-26906 FILM NUMBER: 05818040 BUSINESS ADDRESS: STREET 1: 210 SYLVAN AVE CITY: ENGLEWOOD CLIFFS STATE: NJ ZIP: 07632 BUSINESS PHONE: 2015675648 MAIL ADDRESS: STREET 1: 210 SYLVAN AVE CITY: ENGLEWOOD CLIFFS STATE: NJ ZIP: 07632 8-K 1 b406621_8k.txt CURRENT REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) May 10, 2005 ASTA FUNDING, INC. ------------------ (Exact name of registrant as specified in its charter) Delaware -------- (State or other jurisdiction of incorporation) 0-26906 22-3388607 - ----------------------- --------------------------------- (Commission File Number) (IRS Employer Identification No.) 210 Sylvan Avenue, Englewood Cliffs, New Jersey 07632 ------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 201-567-5648 Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below): N/A |_| Written communications pursuant to Rule 425 under the Securities Act |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On May 9, 2005, Asta Funding, Inc. (the "Company") issued a press release regarding results for the three months and six months ended March 31, 2005. The Company also on May 9, 2005 issued a press release regarding the increase in its credit facility. A copy of these press releases are being furnished as Exhibit 99.1 and 99.2 to this Current Report on Form 8-K. A webcast discussing those results was held later that day. A copy of the transcript of that webcast is being furnished as Exhibit 99.3 to this Current Report on Form 8-K. In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibits 99.1, 99.2 and 99.3, shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing. Item 9.01 Financial Statements and Exhibits. (c) Exhibits 99.1 Press release dated May 9, 2005. 99.2 Press release dated May 9, 2005. 99.3 Transcript of May 9, 2005 webcast. SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ASTA FUNDING, INC. Date: May 10, 2005 By: /s/ Mitchell Cohen ----------------------- Mitchell Cohen Chief Financial Officer EX-99.1 2 b406621_ex99-1.txt PRESS RELEASE DATED MAY 9, 2005 [Asta Funding, Inc. Logo] NASDAQ: ASFI Exhibit 99.1 FOR IMMEDIATE RELEASE CONTACT: Stephen D. Axelrod, CFA Mitchell Cohen, CFO Andria Arena (Media) ASTA FUNDING, INC. WOLFE AXELROD WEINBERGER ASSOC. LLC (201) 567-5648 (212) 370-4500; (212) 370-4505 (Fax) steve@wolfeaxelrod.com ASTA FUNDING REPORTS RECORD SECOND QUARTER AND SIX MONTHS FISCAL 2005 RESULTS -Record Second Quarter Net Income and Fully Diluted EPS Increase 34% on Revenue Increase of 30% - ENGLEWOOD CLIFFS, NJ, MAY 9, 2005 -- ASTA FUNDING, INC., (NASDAQ: ASFI), a leading consumer receivable asset management and liquidation company, today reported results for the three and six months ended March 31, 2005. Net income for the three months ended March 31, 2005 increased 34% to $7,281,000, or $0.51 per diluted share (based on 14.4 million shares), compared to $5,433,000, or $0.38 per diluted share (based on 14.3 million shares), in the same prior year period. Revenues for the three months ended March 31, 2005, were $16,662,000, an increase of 30% compared to revenues of $12,864,000 a year ago. Net income for the six months ended March 31, 2005 increased 33% to $13,456,000, or $0.94 per diluted share (based on 14.4 million shares), from $10,121,000, or $0.71 per diluted share (based on 14.2 million shares), for the same period a year earlier. Revenues for the six months ended March 31, 2005 were $30,492,000, an increase of 25% compared to revenues for the six months ended March 31, 2004 of $24,319,000. Gary Stern, President and Chief Executive Officer, said, "The second quarter was very rewarding. We showed stellar growth on the top and bottom lines, made significant portfolio purchases with a face value of $800 million at a cost of approximately $36.8 million, and expanded our credit facility from $60 million to $80 million for future growth opportunities that may arise. We continue to adhere to the time-tested business strategies and disciplines that have proven to be successful in growing shareholder value." - MORE - - -------------------------------------------------------------------------------- 210 Sylvan Avenue, Englewood Cliffs, NJ 07632 (201) 567-5648, (201) 567-2203 fax ---------------------------------------- Asta Funding will conduct a teleconference today at 10:30 a.m. Eastern time. To participate please dial USA (877) 511-5818, International (706) 634-1462 about 5 - -10 minutes prior to 10:30 am EDT. Please refer to the Asta Funding earnings teleconference ID 6059128. A recording of the conference call will be available from 12:00 noon EDT May 9th through May 16th, by dialing USA/ Canada (800) 642-1687, International (706) 645-9291, conference ID 6059128. ----------------------------------- Asta Funding, Inc. 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 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 for the fiscal year ended September 30, 2004, 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, including that Asta may not be able to purchase consumer receivable portfolios at favorable prices or on sufficiently favorable terms or at all. Asta Funding, Inc.'s reports with the Securities and Exchange Commission are available free of charge through its website at www.astafunding.com. - FINANCIAL TABLE FOLLOWS - ASTA FUNDING, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS DATA (UNAUDITED)
Three Months Ended Six Months Ended 3/31/05 3/31/04 3/31/05 3/31/04 ------- ------- ------- ------- Revenues: Finance income $16,662,000 $12,864,000 $30,492,000 $24,319,000 ----------- ----------- ----------- ----------- Expenses: General and administrative 3,925,000 2,981,000 6,969,000 5,524,000 Interest 496,000 285,000 903,000 456,000 Third party servicing 0 454,000 0 1,316,000 ----------- ----------- ----------- ----------- 4,421,000 3,720,000 7,872,000 7,296,000 ----------- ----------- ----------- ----------- Income before income taxes 12,241,000 9,144,000 22,620,000 17,023,000 Income tax expense 4,960,000 3,711,000 9,164,000 6,902,000 ----------- ----------- ----------- ----------- Net income $7,281,000 $5,433,000 $13,456,000 $10,121,000 ----------- ----------- ----------- ----------- Net income per share: Basic $0.54 $0.41 $1.00 $0.76 ----------- ----------- ----------- ----------- Diluted $0.51 $0.38 $0.94 $0.71 ----------- ----------- ----------- ----------- Weighted average number of shares outstanding: Basic 13,553,000 13,347,000 13,512,000 13,276,000 ----------- ----------- ----------- ----------- Diluted 14,405,000 14,304,000 14,352,000 14,229,000 ----------- ----------- ----------- -----------
### EX-99.2 3 b406621_ex99-2.txt PRESS RELEASE DATED MAY 9, 2005 [Asta Funding, Inc. Logo] NASDAQ: ASFI Exhibit 99.2 FOR IMMEDIATE RELEASE CONTACT: Stephen D. Axelrod, CFA Mitchell Cohen, CFO Andria Arena (Media) ASTA FUNDING, INC. WOLFE AXELROD WEINBERGER ASSOC. LLC (201) 567-5648 (212) 370-4500; (212) 370-4505 (Fax) steve@wolfeaxelrod.com ASTA FUNDING ANNOUNCES EXPANDED CREDIT FACILITY - CREDIT LINE INCREASED TO $80 MILLION - ENGLEWOOD CLIFFS, NJ, MAY 9, 2005 -- ASTA FUNDING, INC., (NASDAQ: ASFI), A LEADING CONSUMER RECEIVABLE ASSET MANAGEMENT AND LIQUIDATION COMPANY, today announced that it had arranged an expanded credit facility through a consortium of leading financial institutions. The new credit facility expands the existing $60 million borrowing line to $80 million, on a revolving basis. Over the past year, the credit facility has more than doubled the $35 million line that existed in May 2004. Gary Stern, president and chief executive officer, noted, "We are proud of the continued confidence shown by our group of lenders in increasing the availability under our existing facility. Asta's rapid growth has been funded primarily by operating cash flow and by drawing on the credit facility that we previously established. The increased line, funded at attractive rates by a strong consortium of outstanding lenders, will give Asta additional flexibility to purchase larger portfolios as they become available at prices that meet Asta's financial discipline and to take advantage of opportunities as they may arise." ----------------------------------- Asta Funding, Inc. 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 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 for the fiscal year ended September 30, 2003, 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, including that Asta may not be able to purchase consumer receivable portfolios at favorable prices or on sufficiently favorable terms or at all. Asta Funding, Inc.'s reports with the Securities and Exchange Commission are available free of charge through its website at www.astafunding.com. ### - -------------------------------------------------------------------------------- 210 Sylvan Avenue, Englewood Cliffs, NJ 07632 (201) 567-5648, (201) 567-2203 fax EX-99.3 4 b406621_ex99-3.txt TRANSCRIPT OF MAY 9, 2005 WEBCAST ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 1 Exhibit 99.3 ASTA FUNDING INCORPORATED MODERATOR: STEVE AXELROD MAY 9, 2005 9:30 AM CT Operator: Good morning. My name is (April) and I will be your conference facilitator today. At this time I would like to welcome everyone to the Asta Funding Incorporated second quarter and six month results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks there will be a question and answer period. If you would like to ask a question during this time simply press star then the number one on your telephone keypad. If you would like to withdraw your question press the pound key. Thank you. Mr. Axelrod you may begin your conference. Steve Axelrod: Thank you very much (April). Good morning everybody and thank you all for joining us for Asta Funding's quarterly conference call to discuss the results for the second quarter and six months ended March 31, 2005. By now of course all of you should have had the opportunity to review the press release discussing the financial results. But if you have not please call Wolfe Axelrod Weinberger Associates at 212-370-4500 and we will immediately send it to you either by fax or by email. ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 2 Before I ask our host, Gary Stern, CEO of Asta Funding to discuss the current results, let me take a few minutes to read the forward-looking statements. Except for historical information contained herein the matters set forth in this conference call are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Although Asta Funding, Incorporated 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 Incorporated's expectations. Factors that could contribute to such differences include those identified in Asta Funding Incorporated's Form 10K for the fiscal year ended September 30, 2004 and those described from time to time in Asta Funding Incorporated's other filings with the Securities and Exchange Commission, news releases and other communications including that Asta may not be able to purchase consumer receivable portfolios at favorable prices for our sufficiently favorable terms or at all and may not be able to continue it's quarterly dividend program. Asta Funding Incorporated's reports with the Securities and Exchange Commission are available free of charge through its Website at www.astafunding.com. ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 3 Having dispensed with that let me now turn the discussion over to Gary Stern, President and Chief Executive Officer of Asta Funding. Gary. Gary Stern: Thank you Steve. Good morning everyone and thank you for joining Asta's second quarter conference call. The second quarter was a busy and a highly rewarding one for Asta. I am pleased to report another quarter with record results. Asta's revenue and net income showed excellent growth for its second quarter of fiscal 2005 growing 30% and 35% respectively. This growth was fueled by our portfolio purchases and the effective and efficient management of those portfolios. During the second quarter ended March 31, 2005 we purchased receivable portfolios with the aggregate charge off balances or face value of approximately $800 million at an aggregate cost of $36.8 million. For the six month period we purchased a face value of approximately $1.8 billion for a purchase price of $73.3 million which was financed primarily through cash flows from operating expenses and our credit facility. We are very pleased with the level of portfolio purchases during the second quarter which included $197 million from the acquisition of Option Card, LLC. Option Card has been smoothly integrated into Asta Funding and we have already begun to reap rewards from this acquisition. We will continue to seek opportunities to make additional acquisitions that fit our criteria. With that said I'd like to briefly comment on how we view the current state of the debt buying marketplace as it relates to Asta Funding. ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 4 It is our belief that pricing has already begun to level off from what we consider to be high levels. Even as prices were considered to be high we were still able to purchase approximately $800 million worth of paper in the second quarter and approximately $1.8 billion for the first six months of our fiscal year at very attractive prices. This is a testament to our excellent reputation and excellent relationships in the industry. We continue to adhere to our philosophy whereby the price we are willing to pay for receivables is strictly driven by our desired rate of returns. Asta's acquisitions going forward will be based on portfolio availability and our financial resources. We believe that the pipeline of available paper remains strong as seen by our purchases during the quarter. We will continue to cultivate our sourcing capabilities and strengthen our financial wherewithal. Although credit card debt remains the bulk of our business we will not shy away from new opportunities that fit into our disciplined purchasing criteria. Our balance sheet continues to be strong. At the end of the second quarter our capital structure remained very sound with $128.2 million in shareholder's equity. In addition, we just expanded our credit facility to $80 million from $60 million which will leave Asta with the necessary resources and flexibility to move swiftly and opportunistically as may be necessary. Before I turn the call over to Mitchell Cohen, our CFO, to review Asta's financials I would just like to take a moment to comment on the recent enactment of the Bankruptcy Abuse Prevention law. ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 5 As many of you know, this new law will increase Chapter 13 filings where debts can get paid rapid over - can get repaid over three to five year period versus Chapter 7 bankruptcies which allows filers to virtually eliminate all unsecured debt. We definitely view this law as a positive for Asta and we anticipate more charge off receivables will become available for sale in the future. And now Mitchell Cohen, our CFO will take you through our Asta's financial report. Mitchell Cohen: Thank you Gary. I am very pleased to announce that Asta Funding has continued its outstanding performance through its fiscal second quarter reporting record revenues and earnings for the quarter ended March 31, 2005. Asta's - Asta reported record revenues for the quarter of $16.6 million, a 29.5% increase over revenues of $12.9 million for the second quarter of 2000 - fiscal 2004. This was driven by extremely strong past collections of $42.2 million in the quarter and an increase of 38.8% from the prior year quarter of $30.4 million. Revenues for the six months increased 25.5% to $30.5 million from $24.3 million. Cash collections during the six months ended March 31, 2005 were up $79 million up 33.2% from $59.3 million in the prior period. Total expenses including interest increased to $3.9 million up $3 million in the same quarter one year ago. This did not include $454 - $455,000, I'm sorry, for our third party servicing, an expense which is now asked in the current quarter. ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 6 Asta continues to have tight controls as most expenses remain relatively fixed; another benefit to our outsourcing a majority of our collections. Although expenses in the second quarter rose to about $1.3 million per month we don't expect these levels to climb during the second half of fiscal 2005. A majority of the increased costs were from collection expenses, printing, postage and delivery costs, data processing costs, salaries, payroll taxes and benefits, professional fees, telephone charges and anticipated overhead from our Option Card acquisition. Interest expense increased $211,000 to $496,000 during the quarter as compared to the same period in the prior year. That was due to an increase in average outstanding borrowings by Asta under its line of credit which included $52 million at the end of the quarter and was $39.2 million at the end of - at May 6, 2005 last Friday. As a result of excellent revenue (unintelligible) and continued expense control Asta's pretax income reached $12.2 million in the quarter up 34% from prior year results of $9.1 million. Asta's tax rate in the quarter was approximately 41%. These rates were in line with our expectations and we believe those rates will continue during the remainder of fiscal 2005. Net income was $7.3 million during the quarter increasing 35.2% compared to $5.4 million in the second quarter of fiscal 2004. We reported fully diluted earnings per share of 51% a 31 - 33.1% increase over the prior year's quarter of 38 cents per share. As Gary mentioned Asta's balance sheet continues to be strong. At quarter end shareholder's equity totaled $128.2 million up from $102 million point - $102.8 million one year ago. Tangible book value per share was 9.45 or $9.45 at the end of the second quarter; an increase sequentially from $8.95 per share at the end of the first quarter of fiscal 2005 and up from approximately seven point - $7.68 per share at the end of second quarter fiscal 2004. ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 7 That concludes my formal remarks and now I'd like to return it back to Gary. Gary Stern: Thank you Mitchell. As most of you know, Asta's unique business model whereby we outsourced 95% of our receivables enables us to maintain a streamlined infrastructure that is extremely scalable affording us tremendous operating leverage and flexibility as we continue to grow. We also recognize that we need to have the highest quality infrastructure and sufficient resources to support future growth while maximizing returns. During the second quarter we have continued to build our book of business and I am also proud of the great strides we have made over this period by producing record revenues and earnings, purchasing $800 million of face value of receivables, expanding our resources and relationships to the new sources of business as proven with our acquisition of Option Card. Committees have the best possible management information and operational systems in the industry and expanding our credit facility to be properly positioned for additional purchases that arrives. Again, I am very pleased with the results to date and would now like to open the discussion to anybody who has any questions. Thank you. Operator: At this time I would like to remind everyone if you would like to ask a question press star then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 8 And your first question comes from the line of Steve Delaney with Ryan Beck. Steve Delaney: Good morning gentlemen, excellent quarter. Gary Stern: Good morning. Steve Delaney: The cash collections were dramatically, you know, higher not only from the fourth quarter which, you know, we know is the lightest quarter of the year but just looking back to, you know, the September quarter, et cetera. And I'm just curious are, you know, one, a specific question how much of the $42.2 million would have come from zero basis portfolios and, you know, is there anything in there that, you know, might be any onetime type of item? Or do you see that, you know, $42 million range as being something that you would generally expect going forward on the level of portfolios that you now own? Mitchell Cohen: Steve you know we don't like to give any forward-looking statements. Steve Delaney: I understand that. Mitchell Cohen: On the zero basis pools there were about $2 million for this quarter. Steve Delaney: And refresh me Mitch I mean how does that compare to the last quarter or two? Mitchell Cohen: Well actually the last quarter the fiscal, you know, the first quarter. Steve Delaney: Yeah. ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 9 Mitchell Cohen: The zero base was actually much higher about $5 million. Steve Delaney: Okay. Mitchell Cohen: So there wasn't anything special in the zero base pools. Some pools have switched now from - you have extracted the cost out of some of our pools now. The zero base pools I should say. Steve Delaney: Meaning in the - are you suggesting that in the quarter you've had additional pools obviously that have - that became fully amortized. Mitchell Cohen: Correct. Steve Delaney: Okay. All right and then Gary could you - you were in talking about sort of the purchase market some of your competitors have been reporting in the last week or two, you know, a pretty significant shift from traditional to non-traditional. We know the Option Card purchase was a card portfolio so I guess if you take that away that you had about $600 million of face value purchases excluding Option Card. Can you give us a feel for of that amount those portfolios what percentage were traditional and what percentage would be telecom or something else. Gary Stern: Fifty fifty. Steve Delaney: About 50/50? Gary Stern: Yes. ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 10 Steve Delaney: Okay. Gary Stern: Fifty fifty. Mitchell Cohen: And Steve I can add a little bit to that by saying that about - of our portfolios that remain portfolios on the balance sheet right now approximately 69. - about almost 70% of them are credit card. Steve Delaney: Seventy percent of what you have now are still card. Mitchell Cohen: Yeah. Gary Stern: Yeah. Steve Delaney: Okay. Mitchell Cohen: And we are - we are, you know, buying quite a bit of telecom paper and we're buying our share of credit card paper. But we're, you know, we have very good relationships with several groups and we are seeing a (unintelligible) off of pricing which should help us in the future. Steve Delaney: Right. I'm glad you mentioned pricing. I mean pricing has as you say it is stabilized. If we, you know, if we look back over a year or so I mean it's - while every portfolio is different the trend quarterly you can see - you can definitely see an uptrend in terms of average prices paid. And I guess I would just ask now that you - we've had three or four or five quarters of this higher pricing environment are you comfortable, are you seeing that the sort of the cash to cost - cash received to cost multiple are these higher these portfolios that are, you know, being where you're paying 4% or higher. Are you seeing the type of cash return multiple that you would have seen in the past if you'd pay 3%? ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 11 Mitchell Cohen: Yeah absolutely. What we're seeing is and we - as I think I've mentioned in the past conference calls we're finding more assets up front. Basically because of having more sophisticated systems now than we did years ago and possibly the economy is improving, you know, we may be - that may attribute factors as well. But we are up front locating more assets and many times no up front within more assets when we bid on these portfolios. And I might add that some of the portfolios that we're buying we've already had experience so we might have paid 3.5 or 3.75 and maybe we're paying, you know, 10% more than that in a specific portfolio. We already have the experience for several years knowing how these are going to perform and that combined with the added fact that we know up front that there are more assets to go after gives us the comfort level to bid higher. And going back to your question about the collections building I think what we're seeing now is the beginning of an increase in collections because the legal strategy will be kicking in. So we - as we mentioned in the past we shifted from more of a legal strategy than an agency strategy, although with telecom there's more of an agency strategy. So there's a longer term to collect on legal strategy but it's been evolving for the last quarter and we hope that it fills and that may be one reason why you're seeing higher collections. ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 12 Steve Delaney: Okay well thanks for taking the questions. I'll yield the floor to somebody else. Thank you. Operator: Your next question comes from the line of Joe Chumbler with Stephens Incorporated. Joe Chumbler: Hey great quarter guys. Mitchell Cohen: Thank you. Hi Joe how are you? Gary Stern: Good morning. Joe Chumbler: I might have missed it did you give your ending balance finance receivable for the quarter? Mitchell Cohen: Our ending finance receivable - what do you want to know our balance sheet receivable Joe? Joe Chumbler: Yeah the finance receivable. Mitchell Cohen: $171 million purchase price. Joe Chumbler: Okay. And on the deal flow in the quarter you know you said you bought about $800 million face and that includes Option Card. I'm wondering how much did you pass on or how much did you miss in the quarter just to give us an idea of how much activity was out there. Gary Stern: We passed on many portfolios. We pass, you know, we passed on quite a few and we didn't bid on quite a few and we missed our fair share. There's a decent amount of deal flow we're just very disciplined, we're very careful and we're going to go in to buy what we want to buy at our price or we're just not - we're not shaping deals and I don't think you need to. We certainly don't. ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 13 Mitchell Cohen: The deal flow is definitely there Joe, it's definitely out there for us to buy or not buy depending on the price. It's all strictly driven by price. Joe Chumbler: Okay. And then I know you guys occasionally will resell paper. I'm just wondering how is the resale market in terms of number of bidders and the prices that you're able to get. Is the market still firm? Mitchell Cohen: Absolutely. We expect that to be firm for quite awhile. Joe Chumbler: Has the number of, you know, bidders increased? Like are you seeing more new entrants coming in and trying to buy paper? Mitchell Cohen: I don't think - I really don't think so. I don't think it's increased much and are you talking about buying paper in the market or buy paper from us? Joe Chumbler: From you. Mitchell Cohen: Oh we limit who we sell to. There are many people that want to buy from us. We limit the people that we let - we don't sell to, you know, we don't put out these mass bids. We sell to people that we know for many, many years. We don't just send out bid packages to 100 people. We could but we just do business with people that we're comfortable with and we know. They come back to buy on a regular basis that have a good experience with us and we've had a good experience with them. Joe Chumbler: Okay and then looking at the balance sheet what metric do you use to assess the appropriate level of debt on your balance sheet and what is that level? ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 14 Mitchell Cohen: Well I'm not sure that it's exactly as scientific as you make it out to be. You know, we know that the cash flow from these pools pay down our debt relatively quickly. You know, we went from $50 plus million at the end of the quarter to $38 million as of la - as of Friday night. So we're more focused on looking for the purchase because we know they're going to spin off the cash to pay themselves off. So again I don't think there's any scientific metrics here. Joe Chumbler: Okay so and you could... Mitchell Cohen: It's more of a feel. Joe Chumbler: As long as the cash flows are coming in you could continue to ramp up your revolver. Mitchell Cohen: Absolutely. Joe Chumbler: Okay and then finally on the bankruptcy law a couple things I've heard that are interesting maybe you'll see lenders get a little more lenient on their lending practices to certain demographics. Is that something you might be anticipating? Gary Stern: I don't think so. I mean my personal opinion is no. I think lenders are going to stay with what they have. I don't think so. Joe Chumbler: What about maybe originators are less likely to sell since the Chapter 7 option is tougher to get. ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 15 Gary Stern: Let me go into that in detail. I'm glad you asked that. When we buy portfolios we scrub the portfolios immediately to see if there are any 7's and - or 13's. We have put back rights and what we have done in the past and will continue to do is put back the 7's and the 13's and we get paid immediately on those. Depending on the price we pay some of the 13's we keep if we feel they're going to over three to five year period collect out more than we pay for which is most of the time by the way. Historically if you want to look at the statistics I would say one can recover and this is just a general average if you look at all the 13's. One would recover approximately 20% to 25% over a five year period on unsecured Chapter 13's. So many times we keep the 13's and put the 7's back for repurchase. Then as why I believe strongly that this will be a positive for Asta is because as we - first of all our book of bus - there'll be less Chapter 7's filed and 13's for the present book of business we have and the bankruptcies are not a material part of our portfolio. I don't want anyone on the phone to get the wrong impression. Bankruptcies are not a major risk in our portfolio. Now with that being said and done then less people will file 7's and more 13's because of the new law. And I don't know if everybody is aware but based on the new law anyone that wants to - anyone contemplating bankruptcy will be required to go through Consumer Credit Counseling at their cost which alone will be a deterrent for people to file bankruptcy. But we feel we will benefit by less people filing bankruptcy because they don't want to pay for Consumer Credit Counseling. And if they do file bankruptcy there will be more 13's than 7's and according to the American Bankruptcy Institute presently 70% of the individuals that file bankruptcy file 7 versus 30% for 13's. We definitely feel that ratio will switch and shift the other way. ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 16 So we feel that it's a win win for us. We're just going to have less people file in our portfolio, more will be 13's and then going forward as we buy paper if people want to file they'll file a 13 rather than 7. And as far as more charge offs being available, as people, you know, don't pay their bills as well as they normally would and they cannot file a 7 will opt not to file a 13 they're probably going to charge off eventually because they're going to become contractually delinquent and they'll charge off for that time. When we buy portfolios there may be customers in there that paid $100 a month or two ago or three months ago but still had a charge off because they didn't meet their minimum monthly payment in the six months contractually. So that's why I believe that there will be more charge offs available. Joe Chumbler: That's helpful thanks. Operator: Your next question comes from the line of James O'Brien with Brean Murray. James O'Brien: Yes good morning guys. Gary I was wondering maybe you can talk a little bit more say qualitatively when you say that see that pricing maybe has finally leveled off or plateaued. I was wondering if you can give us just a sense like I said kind of from 35,000 if you see why that's the case. Gary Stern: Why that's the case? I believe my opinion is that companies that were paying high prices than they should have realized or are beginning to realize that they can't do that and earn money or earn margins that they like to earn. And we matter of fact have seen some purchasers now offering large portfolios for sale and we're looking at those and we don't what that means. ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 17 We're investigating, we don't know if that means that they are under financial duress and they need to sell very large blocks, unusually large blocks of assets because they're in trouble. Or because they're lenders are, you know, just pushing them to get out. And we don't know what prices they want. We have - we've just been, you know, discussing these pages with several companies. However, we feel it's a good sign because its highly unusual for companies that bought paper aggressively I might add, all of a sudden now try to resell a lot of that paper. Now I may be misreading this into them thinking that they could get high prices for the paper that they have paid high prices for. We have to see how that evolves but I - we just have a good feeling and a great feeling that this market is starting to turn the other way. And with that being said and done I will tell you unequivocally the $1.8 billion that we purchased, we purchased at extremely attractive prices. We have certain relationships that continue, we have been in this business for many, many years and it is not always price that dictates portfolios success. If you have relationships with people within reason one can buy paper at attractive prices and then extremely happy and pleased at the $1.8 billion that we purchased at these prices. James O'Brien: Okay that's very helpful. Turning to the legal collections can you give us what the percentage of legal collections is to total collections? Do you have that available? Gary Stern: You know, unfortunately we don't have that handy but we can call you later. I apologize. ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 18 James O'Brien: Oh that no, no apologies necessary. Gary Stern: The legal is building up and our strategy is working. And I just want to remind everybody that this legal strategy takes time to build up and it builds up over years. There is a longer tail on legal than there is on the collection agencies. James O'Brien: Right okay and then one last quick question. You did mention some maybe some new, you know, exploring new businesses or new business opportunities I should say. Could we see more say M&A domestically or maybe looking into foreign markets or are we talking maybe looking at different types of paper that perhaps you haven't tapped into before. I was kind of wondering if you can give your views on that as well. Gary Stern: Absolutely. We think there's going to be a consolidation. I think last quarter I mentioned it could be, you know, 12 18 months and we think that this, you know, could happen in the next, you know, 12 months, nine months, 18 months, we don't know exactly or even sooner than that so that's certainly a possibility. And as far as new asset classes we are looking at other assets but we prefer not to divulge that on the phone because of competitive reasons but if we buy other asset classes I can assure everyone on the phone that we are not going to spend a lot of money unless we have an extremely good comfort level on what liquidation rate. ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 19 And one way we might spend a good amount of money would be is if we have relationships with other groups that have purchased - not purchased, I apologize, has collected on this paper so we can look at the liquidation rates. But there are other asset classes that we are beginning to look at. James O'Brien: Great thanks a lot. Gary Stern: You're welcome and by the way I want to mention something to you. If we do not buy these other asset classes based on our past portfolio purchase and we're comfortable and we are continuing to buy paper. So we don't need to do this but we think it's a good idea to take a look at other classes. James O'Brien: Right understood thank you. Operator: Your next question comes from the line of Audrey Snell, Think Equity Partners. Audrey Snell: Good morning gentlemen nice quarter. Gary Stern: Good morning how are you? Audrey Snell: I had to disconnect for a minute, forgive me if this has been asked but what did you purchase in the quarter besides telecom and credit card paper? Gary Stern: That's all. Mitchell Cohen: That's it; it was just about a 50/50 split Audrey. Audrey Snell: And was it both wire line and wireless telecom? ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 20 Gary Stern: Wireless but it's a 50/50 excluding option costs. Audrey Snell: Okay. Why did you say that pricing has begun to level off? Gary Stern: We think that it's our opinion that companies that have paid higher prices may be under some duress and realizing that it just doesn't work. That they may be overpaid and we think there's a lot of supply and we also think that their, you know, I think people are realizing that they just can't sustain prices the way they were and we think pricing is coming down. Audrey Snell: How are you monitoring that Gary? Gary Stern: We're seeing portfolios that are offered by resellers with being, you know, that I don't think the competition is as fierce as it was although we're not privy to every single, you know, bidder. But I just think the general climate is better. Audrey Snell: Okay and how much of what you purchased in the quarter was performing versus non-performing? Gary Stern: It was all charge offs, all non-performing. Audrey Snell: All non-performing okay. And it was a mixture of ages? Gary Stern: Yes yeah there was some fresh and the usual mixture. Audrey Snell: Okay. Could you elaborate a little bit on your legal strategy and how that kicked in in the quarter and what you forecast for the remainder of the year? ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 21 Gary Stern: Well we're not, you know, we're not forecasting for the year but what has happening is it's kicked in before we have taken this legal strategy to a very high degree and its beginning to bear, you know, the fruits of this strategy. So this should evolve over time and, you know, strategy - well we've always had a legal strategy but I think we really implemented this greatly in the last six or seven months or eight months really stepped it up quite a bit. And so it's beginning to, you know, to really build up. And the tail on these portfolios could be, you know, six, seven, eight, nine years, ten years is as one gets a judgment for instance a lien on a house, judgments can be in some states can be (unintelligible) 20 years, others ten, others six or seven years. So this is a long term play as far as we're concerned and we're extremely pleased with it. Audrey Snell: When you describe the portfolio as being as you stepped up the legal strategy are you sending it out to legal earlier in the process? Gary Stern: Yes yes. Audrey Snell: And are you using more lawyers or different network of lawyers? Gary Stern: We're using some other lawyers but we have excess capacity. We fortunately because of the 20 some odd years that we have been doing this have an excellent relationship with many law firms and legal networks. And its really, you know, we have because there's many other - the answer is we've added a few lawyers, we might add a few others but we basically always have the champion challenger and monitor them very closely but we - we're in great shape. We could buy a lot more paper without doing too much to add to the legal network. ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 22 Audrey Snell: Okay. What was the ending cash balance Mitchell? Mitchell Cohen: Two point six million. Audrey Snell: Two point six okay. Mitchell Cohen: And all of our cash goes to paying our line. Audrey Snell: Okay and speaking as a line what is the interest rate on the new line? Is it LIBOR plus something? Mitchell Cohen: It's the smaller of LIBOR plus or prime. Audrey Snell: And one last thing that I missed, what is the outstanding balance on that line right now? Mitchell Cohen: Thirty eight point two million as of Friday. Audrey Snell: Okay thanks a lot. Mitchell Cohen: You're welcome. Operator: Your next question comes from the line of Jed Gore with Sunova Capital. Jed Gore: Hey thanks for taking my question, good morning. Mitchell Cohen: Good morning hi Jed. ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 23 Jed Gore: A couple questions; do you think the bankruptcy law has left any spike in the amount of debt that the card issuers are selling? Gary Stern: No. Jed Gore: Okay. Gary Stern: I don't think so. I think there will be eventually more sales. I haven't seen a spike yet. Jed Gore: You haven't seen anything recently. And I don't know if this was asked earlier in the call. I'm been jumping on and off I apologize but the G&A expense sequentially up $900,000? Gary Stern: Yes. Jed Gore: Was that related to Sarbanes-Oxley, was that part of the legal strategy flowing through or what's behind the increase in expenses sequentially? Mitchell Cohen: Actually it's all of what you just said. Jed Gore: Okay. Mitchell Cohen: And plus a little bit of additional overhead from our Option Card purchase. Jed Gore: Okay. Mitchell Cohen: Certainly a lot was spent on shipping and mailing for collection agency (unintelligible) telecom paper. ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 24 Jed Gore: Okay. Mitch what do you think the Sarb-ox, you know, sequential jump would be meaning I'm just trying to get a sense of what a good run rate is for G&A and I know you don't want to give me forward-looking statements so maybe backwards looking if you could just say what Sarb-ox was. Mitchell Cohen: Oh I think that these levels are pretty much where they should be. Jed Gore: Okay. Mitchell Cohen: I don't think they'll go higher from here but I, you know. Jed Gore: Okay. You seem to be focusing a little bit on fresher net charge offs. I mean is that a fair statement? I think you mentioned that your mix was the usual mixture but I'm not sure you'd had some fresh previously that I recall. Mitchell Cohen: Well we've bought fresh paper in the past. Jed Gore: Okay. Mitchell Cohen: You know, not a lot of them. I don't believe we purchased a lot of (unintelligible). Jed Gore: Okay. Mitchell Cohen: But purchase- we're all purchasing some of the (unintelligible). Jed Gore: So you think your mix this quarter was - is pretty indicative of pretty much similar to what you've had previous quarters. ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 25 Mitchell Cohen: Some say indicative to what we purchased in the past. You know, I just want to reiterate I don't know if you want (unintelligible) but we did not purchase any performing assets this quarter. Jed Gore: Yeah I heard you say that. Mitchell Cohen: You know, on occasion we will purchase performing assets. Jed Gore: Okay. And can you kind of qualitatively discuss, you know, the amount of bids you're getting - the amount of packages that are coming across your desk these days versus say six months ago or a year ago? Gary Stern: We have more but when you say bids, you know, we get emails from brokers, we - there are many portfolios we don't even bother looking at. We may ask for a disk and we pass on it, we just don't like what we see. So I think there's an increase. We're just very focused on what we know works and basically that's all I have to comment. Do you have any other comments? Mitchell Cohen: No we are seeing a lot more, you know, we definitely are seeing a lot more but like Gary said we're still concentrating on our usual sellers. Jed Gore: Okay I'm just trying to get a sense of whether, you know, that part of your success here is the expansion of the market broadly speaking so I'm just trying to quantify that even if it extend - where you say okay we're getting more packages coming through. Mitchell Cohen: I mean I could - I'll just say that we did add a new major financial institution this quarter for purchasing. It's not a big purchase but it's a start and that could lead to something that we know - I don't know if it will but it could lead to something larger. You know, we got our foot in the door so to speak. ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 26 Gary Stern: Yeah we're working on that for quite awhile. Jed Gore: Got you okay thank you. Gary Stern: Thank you. Operator: As a reminder if you would like to ask a question press star the number one on your telephone keypad. Your next question comes from the line of Raul Guzman. (Dan Tilman): It's actually (Dan Tilman) here at Goldman Sachs. Quick question for you guys on the legal channel. Are you guys capitalizing or expensing legal advances? And then the second question is what are your expectations for counter suits in the future where you have debtors that are countersuing you guys for wrongly engaging that channel? Gary Stern: Well I'll answer the countersuing part we, you know, we have had as normally with any business, some captures do - most it's (deminimus). We have - we are not real - we are very, very careful and have always been careful what we're doing. You're always going to have some lawyers that are going to find some reason to try and find some reason to, you know, counter sue you. It doesn't happen often, it's very rare and they're resolved fairly quickly usually without merit or they walk away and usually it's not because we did anything wrong. So we don't expect any kind of increase. We have law firms that have been around for 30 years that are very careful in who they sue and how they handle responses. We would rather walk away from a lawsuit than, you know, buck heads with somebody and we're very, very careful. ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 27 As a matter of fact, one of the key (unintelligible) and I want to reiterate this and I don't think we've ever mentioned this before we're very careful on the interest rates we charge. So we don't take charge offs internally here and start adding interest and tell a customer they owe, you know, $9,000 because they owe four or five years of interest where their interest rate doubled from 4.5, you know, their interest is equal to whatever they owe. And then when we send it to lawyers we make sure that they follow the state law for compliance which is significantly lower than the credit card one. Now one could take a position that we're too conservative. However, to be really careful and to make sure that your 100% in compliance we firmly believe that we should follow state law which is lower. And we continue to do that so we keep ourselves out of trouble. I forgot what the other question is. (Dan Tilman): Capital (unintelligible) expensing (unintelligible). Gary Stern: Well Mitch can comment on that but, you know, we report our collections net of all expenses. So when you see a collection, the collection before the $2 million that net of core costs, net of attorney's fees, net of, you know, net of all costs. And the same way as our revenue line is net. Net so you don't see a grossed up number. (Dan Tilman): Thank you. ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 28 Gary Stern: You're welcome. Operator: Your next question comes from the line of James Leonard with the Leonard Management Group. James Leonard: Great quarter guys. Mitchell Cohen: Thank you very much. Gary Stern: Thank you how are you? James Leonard: Very well thank you. I just had a couple questions. I want to not to beat this G&A thing to death but I want to make sure I understand it. Do you - are you suggesting that your expenses are going to run around the $4 million level per quarter for the rest of the year or are - did you say that they're going to be stable relative to revenues? Mitchell Cohen: I don't think I made even a statement but I think that the - this quarter is a good indication of what our run rate should be. James Leonard: On an absolute basis or a relative revenue basis? Mitchell Cohen: No on an absolute basis. James Leonard: Okay that's what I wanted to know. Mitchell Cohen: All right. ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 29 James Leonard: Secondly, as you - as your model leans more and more towards litigation is that's going to change your amortization rates on your portfolios as you put them into - as you buy them or as you put them into the collection process? Gary Stern: I don't think so but I want to just reiterate that we amortize over five year periods and we know that for the legal strategy especially these assets collect over more than a five year period. But we're going to stick and be consistent with this five year amortization. With the, you know, still at the same - with the bulk of probably collections coming in with I think between 18 to 24 months maybe even further stretched out now because of that. James Leonard: Okay thank you. Gary Stern: You're welcome. Operator: You have a follow up question from the line of Audrey Snell with Bank Equity Partners. Audrey Snell: Actually two follow ups if you'll indulge me. We've seen pretty positive surprise last week on job growth in the economy. Are you seeing from liquidation trends any correlation between additional job growth and what's coming in the door in terms of cash collections and liquidation rates? Gary Stern: What we are seeing Audrey is we are seeing an increase in the number of jobs we are able to locate and have seen that for several months. Part of that is because of the increase of the job rate and part of that is because of our more sophisticated ability to find and then locate jobs. That has started to result in more collections but what - especially as we obtain more and more judgments it will be helpful. ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 30 Audrey Snell: Okay so the combination of sophisticated technology, more judgments in the legal channel and perhaps a better economy should lead to a healthy pickup in cash flows throughout the year you would think? Gary Stern: Well we're not - we don't - let me just say something. We're very careful in forward-looking projections. We are going into summer months so I'm not - I don't want to give anyone any negative connotations but the legal process is working. So as more and more people get sued (unintelligible) so we would hope, I'm not going to say we will, we will hope that collections pick up. And as the more - and one thing we pride ourselves is, is knowing who to go after as far as collecting up front and who to sue and who not to sue. So with the more locatable jobs, more homeowners, more assets, we are con, you know, we're confident that over the long run it makes a whole lot of sense. We have many more assets today, accounts with assets today than we did a year ago. So over time that should amass an equation where it should evolve into a higher collection, we hope it does. Audrey Snell: Okay one other follow up, what - Mitchell what was your current IRR on the collections this quarter? Mitchell Cohen: I'll have to check that for you Audrey but we really don't like to give it out but I'll give it to you. I'll give - I'll get back to you. Audrey Snell: Thank you. Operator: At this time there are no further questions. ASTA FUNDING INCORPORATED Moderator: Steve Axelrod 05-09-05/9:30 am CT Confirmation #6059128 Page 31 Gary Stern: Thank you for participating in our second quarter conference call. As always, should you have any additional questions please feel free to call Mitchell Cohen or myself. We look forward to speaking with all of you again next quarter to discuss Asta's third quarter results. Have a pleasant day. Thank you. Operator: This concludes today's conference call. You may now disconnect. END -----END PRIVACY-ENHANCED MESSAGE-----