Exhibit 99.1
Nasdaq: ASFI
FOR IMMEDIATE RELEASE
CONTACT:
| | | |
| | | Stephen D. Axelrod, CFA |
| Mitchell Cohen, CFO | | 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 SECOND QUARTER AND
SIX MONTHS FISCAL 2008 RESULTS
ENGLEWOOD CLIFFS, NJ, May 19, 2008 — Asta Funding, Inc., (NASDAQ: ASFI),a consumer receivable asset management and liquidation company, today reported results for the three and six months ended March 31, 2008.
Revenues for the three months ended March 31, 2008, were $33,882,000, an increase of 4% compared to revenues of $32,608,000 a year ago. The Company reported a net loss for the three months ended March 31, 2008 of $7,707,000, or $0.54 per diluted share, compared to net income of $12,552,000, or $0.85 per diluted share, in the same prior year period.
Revenues for the six months ended March 31, 2008 were $68,157,000, an increase of 18% compared to revenues for the six months ended March 31, 2007 of $57,753,000. Net income for the six months ended March 31, 2008 was $5,607,000 or $0.38 per diluted share, versus $23,878,000, or $1.63 per diluted share, for the same period a year earlier.
Net cash collections from collection of consumer receivables acquired for liquidation was $44.9 million for the second quarter, versus $62.2 million in the prior year’s quarter. Net cash collections from collection of consumer receivables acquired for liquidation was $95.0 million for the six months ended March 31, 2008, compared to $104.1 million in the prior year’s period. Net cash collections represented by account sales of consumer receivables acquired for liquidation was $4.9 million or 9.8% of net cash collections in the quarter, compared to 18.3% in the second quarter of fiscal 2007.
Gary Stern, President and Chief Executive Officer, said, “With regard to our large portfolio purchase, consummated a little over a year ago, our actual collections were slower than our original expectations and we incurred a significant impairment of
approximately $30.3 million. This is a result of a variety of factors, including the effects of the economic downturn.”
Mr. Stern added, “Our total bank debt was approximately $293.9 million at March 31, 2008 and as of today stands at approximately $269.0 million. Our business structure remains solid with stockholders’ equity at $17.21 per share at the end of the second quarter and we will work diligently to improve shareholder value.”
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210 Sylvan Avenue, Englewood Cliffs, NJ 07632
(201) 567-5648, (201) 567-2203 fax
Mr. Stern concluded, “We plan on having an investor day and hope to announce a date and details in the near future.”
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.
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, 2007, Form 10-Q for the quarter ended December 31, 2007 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 the portfolio purchase described in this press release may not be consistent with Asta’s initial valuation analysis, that the terms of the new financing obtained, or the anticipated benefits of the portfolio purchase may not meet Asta’s expectations, that Asta may experience operational difficulties in acquiring a portfolio of this size, that Asta received only limited representations and warranties with respect to the quality, quantity and characteristics of the portfolio and that there are other risks associated with the portfolio. Asta Funding, Inc.’s reports with the Securities and Exchange Commission are available free of charge through its website at http://www.astafunding.com.
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ASTA FUNDING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS — DATA
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three Months | | | Three Months | | | Six Months | | | Six Months | |
| | | Ended | | | Ended | | | Ended | | | Ended | |
| | | March 31, 2008 | | | March 31, 2007 | | | March 31, 2008 | | | March 31, 2007 | |
| Revenues: | | | | | | | | | | | | | | | | |
| Finance income, net | | $ | 33,878,000 | | | $ | 32,353,000 | | | $ | 68,013,000 | | | $ | 57,294,000 | |
| Other income | | | 4,000 | | | | 255,000 | | | | 144,000 | | | | 459,000 | |
| | | | | | | | | | | | | |
| | | | 33,882,000 | | | | 32,608,000 | | | | 68,157,000 | | | | 57,753,000 | |
| Expenses: | | | | | | | | | | | | | | | | |
| General and administrative | | | 7,124,000 | | | | 5,790,000 | | | | 12,929,000 | | | | 10,878,000 | |
| Interest | | | 4,711,000 | | | | 3,779,000 | | | | 10,652,000 | | | | 5,298,000 | |
| Impairments | | | 35,000,000 | | | | 2,412,000 | | | | 35,000,000 | | | | 2,412,000 | |
| | | | | | | | | | | | | |
| | | | 46,835,000 | | | | 11,981,000 | | | | 58,581,000 | | | | 18,588,000 | |
| | | | | | | | | | | | | | | | | |
| Income before equity (loss) in earnings of venture and income tax | | | (12,953,000 | ) | | | 20,627,000 | | | | 9,576,000 | | | | 39,165,000 | |
| | | | | | | | | | | | | | | | | |
| Equity in (loss) earnings of venture | | | (1,000 | ) | | | 475,000 | | | | (78,000 | ) | | | 975,000 | |
| |
| Income tax (benefit) expense | | | (5,247,000 | ) | | | 8,550,000 | | | | 3,891,000 | | | | 16,262,000 | |
| | | | | | | | | | | | | |
| Net(loss) Income | | | ($7,707,000 | ) | | $ | 12,552,000 | | | $ | 5,607,000 | | | $ | 23,878,000 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net(loss) income per share: | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Basic | | | ($0.54 | ) | | $ | 0.91 | | | $ | 0.40 | | | $ | 1.73 | |
| Diluted | | | ($0.54 | ) | | $ | 0.85 | | | $ | 0.38 | | | $ | 1.63 | |
| | | | | | | | | | | | | | | | | |
| Weighted average number of common shares outstanding: | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Basic | | | 14,201,674 | | | | 13,848,194 | | | | 14,059,142 | | | | 13,772,538 | |
| Diluted | | | 14,201,674 | | | | 14,744,499 | | | | 14,742,549 | | | | 14,647,556 | |
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ASTA FUNDING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS — DATA
| | | | | | | | | |
| | | March 31, | | | September 30, | |
| | | 2008 | | | 2007 | |
| | | (Unaudited) | | | | | |
ASSETS | | | | | | | | |
| Cash | | $ | 3,589,000 | | | $ | 4,525,000 | |
| Restricted cash | | | 5,048,000 | | | | 5,694,000 | |
| Consumer receivables acquired for liquidation (at net realizable value) | | | 512,256,000 | | | | 545,623,000 | |
| Due from third party collection agencies and attorneys | | | 5,211,000 | | | | 4,909,000 | |
| Investment in venture | | | 1,162,000 | | | | 2,040,000 | |
| Furniture and equipment, net | | | 797,000 | | | | 793,000 | |
| Deferred income taxes | | | 22,465,000 | | | | 12,349,000 | |
| Other assets and investments | | | 4,285,000 | | | | 4,323,000 | |
| | | | | | | |
| | | | | | | | | |
| Total assets | | $ | 554,813,000 | | | $ | 580,256,000 | |
| | | | | | | |
LIABILITIES ANDStockholders’ Equity | | | | | | | | |
| | | | | | | | | |
| Liabilities | | | | | | | | |
| Debt | | $ | 293,857,000 | | | $ | 326,466,000 | |
| Other liabilities | | | 3,558,000 | | | | 7,537,000 | |
| Dividends payable | | | 571,000 | | | | 557,000 | |
| Income taxes payable | | | 11,397,000 | | | | 8,161,000 | |
| | | | | | | |
| | | | | | | | | |
| Total liabilities | | | 309,383,000 | | | | 342,721,000 | |
| | | | | | | |
| | | | | | | | | |
| 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 — 14,276,158 at March 31, 2008 and 13,918,158 at September 30, 2007 | | | 143,000 | | | | 139,000 | |
| Additional paid-in capital | | | 68,442,000 | | | | 65,030,000 | |
| Retained earnings | | | 176,845,000 | | | | 172,366,000 | |
| | | | | | | |
| | | | | | | | | |
| Total stockholders’ equity | | | 245,637,000 | | | | 237,535,000 | |
| | | | | | | |
| | | | | | | | | |
| Total liabilities and stockholders’ equity | | $ | 554,813,000 | | | $ | 580,256,000 | |
| | | | | | | |
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