EX-99.1 2 v122943_ex99-1.htm Unassociated Document

Exhibit 99.1
asta
Nasdaq: ASFI
 
FOR IMMEDIATE RELEASE
 
CONTACT:
 
   
Stephen D. Axelrod, CFA
 
Alisa D. Steinberg (Media)
Asta Funding, Inc.
  
Wolfe Axelrod Weinberger Assoc. LLC
(201) 567-5648
  
(212) 370-4500; (212) 370-4505 (Fax)
   
steve@wolfeaxelrod.com
   
alisa@wolfeaxelrod.com
 
ASTA FUNDING REPORTS THIRD QUARTER AND
NINE MONTHS FISCAL 2008 RESULTS

ENGLEWOOD CLIFFS, NJ, August 11, 2008 -- Asta Funding, Inc., (NASDAQ: ASFI), a consumer receivable asset management and liquidation company, today reported results for the three and nine months ended June 30, 2008.

Finance income for the three months ended June 30, 2008, was $23.6 million, a decrease of 39% compared to finance income of $38.8 million a year ago. Net income for the three months ended June 30, 2008 was $2.4 million, or $0.17 per diluted share, compared to $15.3 million, or $1.03 per diluted share, in the same prior year period. Finance income for the nine months ended June 30, 2008 was $91.6 million, a decrease of 5% compared to finance income for the nine months ended June 30, 2007 of $96.1 million. Net income for the nine months ended June 30, 2008 was $8.0 million, or $0.55 per diluted share, compared to $39.2 million, or $2.67 per diluted share, for the same period a year earlier.

During the quarter ended June 30, 2008, the Company transferred the $300 million portfolio purchase acquired in March 2007 (the ”Portfolio Purchase”) to the cost recovery method of accounting from the interest method. As a result, Asta’s finance income was reduced by approximately $7.3 million in the third quarter and the company will recognize income only after it has recovered its carrying value, which as of June 30, 2008, was $219 million. This also resulted in a decrease in net income per diluted share of approximately $0.30, net of taxes, in the quarter ended June 30, 2008.

Net cash collections from consumer receivables acquired for liquidation and net cash collections represented by account sales, totaled $49.0 million for the quarter ended June 30, 2008, versus $73.0 million for the same period a year ago, exclusive of accounts returned to a seller of $5.5 million. Net cash collections represented by account sales of consumer receivables acquired for liquidation was $2.8 million or 5.7% of net cash collections in the quarter, down from $9.8 million, or 13.4% of net cash collections in the third quarter of fiscal 2007.
 
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210 Sylvan Avenue, Englewood Cliffs, NJ 07632
(201) 567-5648, (201) 567-2203 fax
 
 
General and administrative expenses increased $3.1 million, or 17.8%, to $20.5 million from $17.4 million for the nine months ended June 30, 2008 as compared to same period of 2007 and increased $1.1 million or 16.9% to $7.6 million, for the quarter ended June 30, 2008, from $6.5 million for the comparable quarter ended June 30, 2007. The increase was primarily due to skiptracing and consulting fees incurred from the Portfolio Purchase, coupled with increases in professional fees, and settlement costs as a result of the increased size of our debtor base. Additionally, for the quarter ended June 30, 2008, we recorded net impairment charges of $8.2 million based on lower than expected cash collections on certain portfolios, and reduced forward expectations, as a result of the difficult economic environment. No impairment charge was recorded on the Portfolio Purchase during the third quarter ended June 30, 2008.

Mr. Gary Stern, President and Chief Executive Officer of Asta Funding, said, “While our finance income has contracted due to the transfer of our large portfolio purchase in March of 2007 to cost recovery and our slower than usual buying, we continue to seek strategic and disciplined opportunities in our portfolio purchases while we focus on reducing our debt in this difficult economic environment. We have been very conservative with regards to new purchases, investing only $7.6 million for $289.2 million of face value of charged-off consumer receivables during the third quarter. Total debt as of June 30, 2008 was approximately $260.2 million, which included $8.3 million in subordinated debt, sequentially down from $293.9 million as of March 31, 2008 and down from $344.7 million at June 30, 2007. As of today our outstanding debt is $240.0. Despite the slow economic environment, stockholders’ equity ended the quarter at $17.38 per share at the end of the third quarter, a modest sequential increase from $17.19 at the end of the second quarter.”


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 may be "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’s expectations. Factors that could contribute to such differences include those identified in Asta’s Form 10-K and Form 10-K/A for the fiscal year ended September 30, 2007, Form 10-Q and 10-Q/A for the quarter ended March 31, 2008 and those described from time to time in Asta’s other filings with the Securities and Exchange Commission, news releases and other communications. Asta’s reports with the Securities and Exchange Commission are available free of charge through its website at http://www.astafunding.com.

- Financial Tables Follow -

 
ASTA FUNDING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS-DATA
(UNAUDITED) 
 
   
Three Months
Ended
June 30, 2008
  
Three Months
Ended
June 30, 2007
  
Nine Months
Ended
June 30, 2008
  
Nine Months
Ended
June 30, 2007
  
Revenues:
  
 
  
 
  
 
  
 
  
Finance income, net
  
$
23,560,000
  
$
38,845,000
  
$
91,573,000
  
$
96,139,000
  
Other income
    
12,000
    
43,000
    
156,000
    
502,000
  
 
                          
 
    
23,572,000
    
38,888,000
    
91,729,000
    
96,641,000
  
Expenses:
                  
General and administrative
    
7,615,000
    
6,510,000
    
20,544,000
    
17,388,000
  
Interest
    
3,643,000
    
6,651,000
    
14,295,000
    
11,949,000
  
Impairments
    
8,153,000
    
—
    
43,153,000
    
2,412,000
  
 
                  
 
    
19,411,000
    
13,161,000
    
77,992,000
    
31,749,000
  
 
                  
Income before equity in (loss) earnings in venture and income taxes
    
4,161,000
    
25,727,000
    
13,737,000
    
64,892,000
  
Equity in (loss) earnings of venture
    
(59,000
)
  
50,000
    
(137,000
)
  
1,025,000
  
Income tax expense
    
1,662,000
    
10,469,000
    
5,553000
    
26,731,000
  
 
                  
Net income
  
$
2,440,000
  
$
15,308,000
  
$
8,047,000
  
$
39,186,000
  
 
                  
Net income per share:
                  
Basic
  
$
0.17
  
$
1.10
  
$
0.57
  
$
2.84
  
 
                  
Diluted
  
$
0.17
  
$
1.03
  
$
0.55
  
$
2.67
  
 
                  
Weighted average number of shares outstanding:
                  
Basic
    
14,276,158
    
13,907,554
    
14,111,954
    
13,794,877
  
 
                  
Diluted
    
14,535,548
    
14,819,926
    
14,642,467
    
14,677,258
  

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CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ASTA FUNDING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS-DATA 
 
   
June 30,
2008
  
September 30,
2007
  
   
(Unaudited)
  
(Unaudited)
  
ASSETS
  
 
  
 
  
 
  
 
  
 
  
Cash
  
$
2,817,000
  
$
4,525,000
  
Restricted cash
    
3,776,000
    
5,694,000
  
Consumer receivables acquired for liquidation, (at net realizable value)
    
487,004,000
    
545,623,000
  
Due from third party collection agencies and attorneys
    
5,106,000
    
4,909,000
  
Investment in venture
    
663,000
    
2,040,000
  
Furniture and equipment, net
    
823,000
    
793,000
  
Deferred income taxes
    
12,238,000
    
12,349,000
  
Other assets and other investments
    
4,111,000
    
4,323,000
  
Total assets
  
$
516,538,000
  
$
580,256,000
  
 
          
LIABILITIES AND STOCKHOLDERS’ EQUITY
          
Liabilities
          
Debt
  
$
251,958,000
  
$
326,466,000
  
Subordinated debt - related party
    
8,270,000
    
—
  
Other liabilities
    
4,346,000
    
7,537,000
  
Dividends payable
    
571,000
    
557,000
  
Income taxes payable
    
3,206,000
    
8,161,000
  
Total liabilities
    
268,351,000
    
342,721,000
  
 
          
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 — 14,276,158 at June 30, 2008 and 13,918,158 at September 30, 2007
    
143,000
    
139,000
  
Additional paid-in capital
    
68,723,000
    
65,030,000
  
Retained earnings
    
178,714,000
    
172,366,000
  
Accumulated other comprehensive income
    
607,000
    
—
  
Total stockholders’ equity
    
248,187,000
    
237,535,000
  
Total liabilities and stockholders’ equity
  
$
516,538,000
  
$
580,256,000
  
 
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