Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2014 | Jun. 25, 2015 | Mar. 31, 2014 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Sep. 30, 2014 | ||
Document Fiscal Year Focus | 2,014 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | ASFI | ||
Entity Registrant Name | ASTA FUNDING INC | ||
Entity Central Index Key | 1,001,258 | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | No | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 13,060,839 | ||
Entity Public Float | $ 72,888,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | ||||
ASSETS | |||||||||
Cash and cash equivalents | $ 28,710,000 | $ 35,179,000 | [1] | $ 4,953,000 | [1] | $ 84,347,000 | [1] | ||
Available-for-sale investments | 66,799,000 | 58,035,000 | [1] | ||||||
Restricted cash | [1] | 968,000 | |||||||
Consumer receivables acquired for liquidation (at net realizable value) | 29,444,000 | 64,254,000 | [1] | ||||||
Structured settlements | 42,079,000 | $ 30,436,000 | 0 | [1] | |||||
Investment in personal injury claims, net | 32,352,000 | 35,758,000 | [1] | ||||||
Due from third party collection agencies and attorneys | 1,026,000 | 1,169,000 | [1] | ||||||
Prepaid and income taxes receivable | 430,000 | 1,496,000 | [1] | ||||||
Furniture and equipment (net of accumulated depreciation of $4,499,000 at September 30, 2014 and $4,136,000 at September 30, 2013) | 756,000 | 1,106,000 | [1] | ||||||
Deferred income taxes | 6,786,000 | 7,772,000 | [1] | ||||||
Goodwill | 2,770,000 | 1,410,000 | [1] | 1,410,000 | |||||
Other assets | 5,986,000 | 4,383,000 | [1] | ||||||
Total assets | 217,138,000 | 211,530,000 | [1] | 237,600,000 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
Non-recourse debt - Bank of Montreal | [1] | 35,760,000 | |||||||
Other debt - CBC (includes non-recourse notes payable amounting to $12.7 million at September 30, 2014) | 32,295,000 | 0 | [1] | ||||||
Other liabilities | 3,587,000 | 2,486,000 | [1] | ||||||
Total liabilities | $ 35,882,000 | $ 38,246,000 | [1] | ||||||
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 - 12,985,839 at September 30, 2014 and 14,917,977 at September 30, 2013; and outstanding - 12,985,839 at September 30, 2014 and 12,974,239 at September 30, 2013 | $ 130,000 | $ 149,000 | [1] | ||||||
Additional paid-in capital | 63,102,000 | 79,104,000 | [1] | ||||||
Retained earnings | 118,595,000 | 112,694,000 | [1] | ||||||
Accumulated other comprehensive income (loss), net of income taxes | 142,000 | (674,000) | [1] | ||||||
Treasury stock (at cost), 0 shares at September 30, 2014 and 1,943,738 shares at September 30, 2013 | [1] | (17,805,000) | |||||||
Non-controlling interests | (713,000) | (184,000) | [1] | ||||||
Total stockholders' equity | 181,256,000 | 173,284,000 | [1] | $ 172,933,000 | [1] | $ 177,477,000 | |||
Total liabilities and stockholders' equity | $ 217,138,000 | $ 211,530,000 | [1] | ||||||
[1] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | [1] | Sep. 30, 2012 | Sep. 30, 2011 |
Furniture and equipment, accumulated depreciation | $ 4,499,000 | $ 4,136,000 | ||||
Other debt, non-recourse notes payable | $ 12,700,000 | $ 13,800,000 | ||||
Preferred stock, par value | $ 0.01 | $ 0.01 | ||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | ||||
Preferred stock, shares issued | 0 | 0 | ||||
Preferred stock, shares outstanding | 0 | 0 | ||||
Common stock, par value | $ 0.01 | $ 0.01 | ||||
Common stock, shares authorized | 30,000,000 | 30,000,000 | ||||
Common stock, shares issued | 12,985,839 | 14,917,977 | ||||
Common stock, shares outstanding | 12,985,839 | 12,974,239 | ||||
Treasury stock, shares | 0 | 1,943,738 | 1,772,038 | 8,900 | ||
[1] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
Consolidated Statements of Inco
Consolidated Statements of Income - Entity [Domain] - USD ($) | 12 Months Ended | |||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | ||||
Revenues: | ||||||
Finance income, net | $ 19,865,000 | $ 31,762,000 | [1] | $ 40,803,000 | ||
Personal injury claims income | 7,134,000 | 6,438,000 | 1,647,000 | |||
Unrealized gain on structured settlements | 2,840,000 | 0 | 0 | |||
Interest income on structured settlements | 2,368,000 | 0 | 0 | |||
Total revenues | 32,207,000 | [2] | 38,200,000 | 42,450,000 | ||
Forgiveness of non-recourse debt | 26,101,000 | 0 | [3] | 0 | [3] | |
Other income (includes ($143,000), ($252,000), and $339,000 during the years ended September 30, 2014, 2013 and 2012, respectively, of accumulated other comprehensive income reclassifications for unrealized net (losses) / gains on available for sale securities). | 1,777,000 | 1,611,000 | 2,256,000 | |||
Revenue | 60,085,000 | 39,811,000 | 44,706,000 | |||
Expenses: | ||||||
General and administrative expenses | 28,192,000 | 24,212,000 | 23,640,000 | |||
Interest expense | 1,260,000 | 1,300,000 | 2,539,000 | |||
Impairments of consumer receivables acquired for liquidation | 19,591,000 | 10,990,000 | [3] | 1,771,000 | [3] | |
Total expenses | 49,043,000 | 36,502,000 | 27,950,000 | |||
Income before income tax | 11,042,000 | [2] | 3,309,000 | 16,756,000 | ||
Income tax expense (includes tax benefit / taxes of $59,000, ($100,000) and $137,000 during the years ended September 30, 2014, 2013 and 2012, respectively, of accumulated other comprehensive income reclassifications for unrealized net (losses) / gains on available for sales securities) | 4,613,000 | 894,000 | 6,797,000 | |||
Net income | 6,429,000 | 2,415,000 | [3] | 9,959,000 | [3] | |
Less: net income attributable to non-controlling interests | 528,000 | 406,000 | 31,000 | |||
Net income attributable to Asta Funding, Inc. | $ 5,901,000 | [2] | $ 2,009,000 | $ 9,928,000 | ||
Net income per share attributable to Asta Funding, Inc.: | ||||||
Basic | $ 0.45 | [2] | $ 0.16 | $ 0.71 | ||
Diluted | $ 0.45 | [2] | $ 0.15 | $ 0.69 | ||
Weighted average number of common shares outstanding: | ||||||
Basic | 12,981,076 | 12,952,150 | 14,077,650 | |||
Diluted | 13,205,933 | 13,216,051 | 14,321,381 | |||
[1] | Includes $25.7 million derived from fully amortized portfolios. Finance income recognized from account sales amounted to $1.8 million. | |||||
[2] | The first three quarters of fiscal year 2014 has been restated. | |||||
[3] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
Consolidated Statements of Inc5
Consolidated Statements of Income (Parenthetical) - USD ($) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Reclassifications for unrealized net (losses) / gains on available for sale securities | $ (143,000) | $ (252,000) | $ 339,000 |
Income tax expense, tax benefit / (expense) | $ 59,000 | $ (100,000) | $ 137,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) | 12 Months Ended | ||||
Sep. 30, 2014 | Sep. 30, 2013 | [1] | Sep. 30, 2012 | [1] | |
Net income | $ 6,429,000 | $ 2,415,000 | $ 9,959,000 | ||
Net unrealized securities gain / (loss), net of tax (expense) / benefit of ($599,000), $705,000 and ($495,000), during the years ended September 30, 2014, 2013 and 2012, respectively. | 900,000 | (1,067,000) | 733,000 | ||
Reclassification adjustments for securities sold, net of tax benefit / (expense) of $59,000, ($100,000) and $137,000, during years ended September 30, 2014, 2013 and 2012, respectively. | (84,000) | 152,000 | (202,000) | ||
Other comprehensive income (loss) | 816,000 | (915,000) | 531,000 | ||
Total comprehensive income | $ 7,245,000 | $ 1,500,000 | $ 10,490,000 | ||
[1] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
Consolidated Statements of Com7
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) | 12 Months Ended | ||||
Sep. 30, 2014 | Sep. 30, 2013 | [1] | Sep. 30, 2012 | [1] | |
Unrealized securities gain / (loss), (expense) / tax benefit | $ (599,000) | $ 705,000 | $ (495,000) | ||
Reclassification adjustments for securities sold, tax benefit / (expense) | $ 59,000 | $ (100,000) | $ 137,000 | ||
[1] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | [1] | Non- Controlling Interests | |
Beginning balance (in shares) (As Reported) at Sep. 30, 2011 | 14,639,456 | ||||||||
Beginning balance (in shares) at Sep. 30, 2011 | 14,639,456 | ||||||||
Beginning balance (As Reported) at Sep. 30, 2011 | $ 172,956,000 | $ 146,000 | $ 74,793,000 | $ 98,377,000 | $ (290,000) | $ (70,000) | |||
Beginning balance at Sep. 30, 2011 | $ 177,477,000 | $ 146,000 | 74,793,000 | 102,898,000 | (290,000) | (70,000) | |||
Exercise of options (in shares) | 139,500 | 139,500 | |||||||
Exercise of options | $ 610,000 | $ 2,000 | 608,000 | ||||||
Stock based compensation expense | 1,623,000 | 1,623,000 | |||||||
Dividends | (1,111,000) | (1,111,000) | |||||||
Purchase of treasury stock | (16,156,000) | (16,156,000) | |||||||
Net income | As Reported | 10,068,000 | ||||||||
Net income | [2] | 9,959,000 | 9,928,000 | $ 31,000 | |||||
Unrealized gain (loss) on marketable securities | 531,000 | 531,000 | |||||||
Ending balance (in shares) at Sep. 30, 2012 | [2] | 14,778,956 | |||||||
Ending balance at Sep. 30, 2012 | [2] | 172,933,000 | $ 148,000 | 77,024,000 | 111,715,000 | 241,000 | (16,226,000) | 31,000 | |
Cumulative impact of prior period revisions | $ 4,521,000 | 4,521,000 | |||||||
Exercise of options (in shares) | 36,700 | 36,700 | |||||||
Exercise of options | $ 125,000 | 125,000 | |||||||
Stock based compensation expense | 1,956,000 | 1,956,000 | |||||||
Dividends | (1,030,000) | (1,030,000) | |||||||
Purchase of treasury stock | (1,579,000) | (1,579,000) | |||||||
Net income | As Reported | 3,144,000 | ||||||||
Net income | [2] | 2,415,000 | 2,009,000 | 406,000 | |||||
Unrealized gain (loss) on marketable securities | (915,000) | (915,000) | |||||||
Ending balance (in shares) at Sep. 30, 2013 | [2] | 14,917,977 | |||||||
Ending balance (As Reported) at Sep. 30, 2013 | 169,601,000 | ||||||||
Ending balance at Sep. 30, 2013 | [2] | 173,284,000 | $ 149,000 | 79,104,000 | 112,694,000 | (674,000) | (17,805,000) | (184,000) | |
Restricted stock (in shares) | 102,321 | ||||||||
Restricted stock | $ 1,000 | (1,000) | |||||||
Distributions to non-controlling interest | $ (621,000) | (621,000) | |||||||
Retirement of treasury stock (in shares) | (1,943,738) | ||||||||
Exercise of options (in shares) | 11,600 | 11,600 | |||||||
Exercise of options | $ 40,000 | 40,000 | |||||||
Stock based compensation expense | 1,744,000 | 1,744,000 | |||||||
Net income | 6,429,000 | 5,901,000 | 528,000 | ||||||
Unrealized gain (loss) on marketable securities | 816,000 | 816,000 | |||||||
Ending balance at Sep. 30, 2014 | 181,256,000 | $ 130,000 | 63,102,000 | $ 118,595,000 | $ 142,000 | (713,000) | |||
Distributions to non-controlling interest | $ (1,057,000) | $ (1,057,000) | |||||||
Retirement of treasury stock (in shares) | (1,943,738) | ||||||||
Retirement of treasury stock | $ (19,000) | $ (17,786,000) | $ 17,805,000 | ||||||
Ending balance (in shares) at Sep. 30, 2014 | 12,985,839 | ||||||||
[1] | Treasury shares are as follows: September 30, 2011, 8,900; Purchase of treasury stock, 1,763,138; September 30, 2012, 1,772,038. September 30, 2012, 1,772,038; Purchase of treasury stock, 171,700; September 30, 2013, 1,943,738. September 30, 2013, 1,943,738; Retirement of treasury stock, (1,943,738); September 30, 2014, 0. | ||||||||
[2] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
Consolidated Statements of Sto9
Consolidated Statements of Stockholders' Equity (Parenthetical) - shares | 1 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2012 | Jun. 30, 2011 | Sep. 30, 2013 | Mar. 11, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | Sep. 30, 2014 | ||
Treasury stock, shares | 1,943,738 | [1] | 1,772,038 | 8,900 | 0 | |||
Purchase of treasury stock (in shares) | 1,000,000 | 59,000 | 885,000 | 171,700 | 1,763,138 | |||
Retirement of treasury stock (in shares) | 1,943,738 | |||||||
[1] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | ||||
Cash flows from operating activities: | ||||||
Net income | $ 6,429,000 | $ 2,415,000 | [1] | $ 9,959,000 | [1] | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization | 363,000 | 440,000 | [1] | 380,000 | [1] | |
Deferred income taxes | 446,000 | 57,000 | [1] | 3,318,000 | [1] | |
Impairments of consumer receivables acquired for liquidation | 19,591,000 | 10,990,000 | [1] | 1,771,000 | [1] | |
Stock based compensation | 1,744,000 | 1,956,000 | [1] | 1,623,000 | [1] | |
Loss (gain) on sale of available-for-sale securities | 143,000 | 252,000 | [1] | (339,000) | [1] | |
Structured settlements - accrued interest | (2,282,000) | 0 | [1] | 0 | [1] | |
Structured settlements - gains | (2,840,000) | 0 | [1] | 0 | [1] | |
Forgiveness of non-recourse debt | (26,101,000) | 0 | [1] | 0 | [1] | |
Changes in: | ||||||
Prepaid and income tax receivable | 1,066,000 | 561,000 | [1] | 1,281,000 | [1] | |
Due from third party collection agencies and attorneys | 143,000 | 873,000 | [1] | 42,000 | [1] | |
Other assets | (1,592,000) | (631,000) | [1] | (190,000) | [1] | |
Other liabilities | 745,000 | (434,000) | [1] | (247,000) | [1] | |
Net cash (used in) provided by operating activities | (2,145,000) | 16,479,000 | [1] | 17,598,000 | [1] | |
Cash flows from investing activities: | ||||||
Purchase of consumer receivables acquired for liquidation | (5,079,000) | (3,340,000) | [1] | (2,495,000) | [1] | |
Principal collected on consumer receivables acquired for liquidation | 20,272,000 | 21,902,000 | [1] | 29,149,000 | [1] | |
Principal collected on consume receivable accounts represented by account sales | 26,000 | 433,000 | [1] | 67,000 | [1] | |
Purchase of available-for-sale securities | (20,111,000) | (34,171,000) | [1] | (66,625,000) | [1] | |
Proceeds from sales of available-for-sale securities | $ 12,560,000 | 33,076,000 | [1] | 22,656,000 | [1] | |
Purchase of certificates of deposit | (45,121,000) | [1] | ||||
Proceeds from maturities of certificates of deposit | 42,682,000 | [1] | 11,499,000 | [1] | ||
Cash paid for acquisition (net of cash acquired) | $ (5,588,000) | |||||
Investments in personal injury claims - advances | (22,218,000) | (30,963,000) | [1] | (22,549,000) | [1] | |
Investments in personal injury claims - receipts | 25,624,000 | 13,801,000 | [1] | 3,953,000 | [1] | |
Investments in structured settlements - advances | (9,808,000) | 0 | [1] | 0 | [1] | |
Investments in structured settlements - receipts | 3,287,000 | 0 | [1] | 0 | [1] | |
Capital expenditures | (13,000) | (725,000) | [1] | (638,000) | [1] | |
Net cash (used in) provided by investing activities | (1,048,000) | 42,695,000 | [1] | (70,104,000) | [1] | |
Cash flows from financing activities: | ||||||
Proceeds from exercise of stock options | 40,000 | 125,000 | [1] | 610,000 | [1] | |
Purchase of treasury stock | [1] | (1,579,000) | (16,156,000) | |||
Change in restricted cash | 968,000 | 120,000 | [1] | (57,000) | [1] | |
Dividends paid | [1] | (1,290,000) | (1,144,000) | |||
Distributions to non-controlling interest | (1,057,000) | (621,000) | [1] | |||
Repayments of non-recourse debt - Bank of Montreal, net | (9,659,000) | (25,703,000) | [1] | (10,141,000) | [1] | |
Borrowings of other debt - CBC | 9,903,000 | 0 | [1] | 0 | [1] | |
Repayments of other debt - CBC | (3,471,000) | 0 | [1] | 0 | [1] | |
Net cash used in financing activities | (3,276,000) | (28,948,000) | [1] | (26,888,000) | [1] | |
Net (decrease) increase in cash and cash equivalents | (6,469,000) | 30,226,000 | [1] | (79,394,000) | [1] | |
Cash and cash equivalents at beginning of year | [1] | 35,179,000 | 4,953,000 | 84,347,000 | ||
Cash and cash equivalents at end of year | 28,710,000 | 35,179,000 | [1] | 4,953,000 | [1] | |
Cash paid for: | ||||||
Interest | 1,004,000 | 1,822,000 | [1] | 2,570,000 | [1] | |
Income taxes | 3,100,000 | 2,002,000 | [1] | |||
Supplemental disclosures of non-cash investing and financing activities: | ||||||
Structured settlements | 30,436,000 | 0 | [1] | 0 | [1] | |
Other debt - CBC | 23,363,000 | 0 | [1] | 0 | [1] | |
Retirement of treasury stock | $ 17,505,000 | $ 0 | [1] | $ 0 | [1] | |
[1] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
The Company and its Significant
The Company and its Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2014 | |
The Company and its Significant Accounting Policies | N OTE HE OMPANY AND ITS IGNIFICANT CCOUNTING OLICIES [1] The Company: Asta Funding, Inc., together with its wholly owned significant operating subsidiaries Palisades Collection LLC, Palisades Acquisition XVI, LLC (“Palisades XVI”), VATIV Recovery Solutions LLC (“VATIV”), ASFI Pegasus Holdings, LLC (“APH”), Fund Pegasus, LLC (“Fund Pegasus”), GAR Disability Advocates, LLC (“GAR Disability Advocates”) and other subsidiaries, not all wholly owned (collectively, the “Company”), has been engaged in the business of purchasing, managing for its own account and servicing distressed consumer receivables, including charged-off receivables, and semi-performing receivables, since 1994, as well as more recent business segments discussed below. The primary charged-off receivables are accounts that have been written-off by the originators and may have been previously serviced by collection agencies. Semi-performing receivables are accounts where the debtor is currently making partial or irregular monthly payments, but the accounts may have been written-off by the originators. Distressed consumer receivables are the unpaid debts of individuals to banks, finance companies and other credit providers. A large portion of the Company’s distressed consumer receivables are MasterCard ® ® The Company owns 80% of Pegasus Funding, LLC (“Pegasus”), which invests in funding personal injury claims and 80% of CBC Settlement Funding, LLC (“CBC”), which invests in structured settlements (see Note D: Acquisition of CBC). Pegasus provides funding for individuals in need of short term funds pending insurance settlements of their personal injury claims. The funds will be recouped when the underlying insurance settlements are paid. The long periods of time taken by insurance companies to settle and pay such claims resulting from lengthy litigation and the court process is fueling the demand for such funding. CBC provides liquidity to consumers by purchasing certain deferred payment streams including, but not limited to, structured settlements and annuities. CBC generates business from direct marketing as well as through wholesale purchases from brokers or other third parties. CBC has its principal office in Conshohocken, Pennsylvania. CBC primarily warehouses the receivables it originates and periodically resells or securitizes those assets on a pooled basis. The structured settlement marketplace is regulated by federal and state law, requiring that each transaction is reviewed and approved by court order. GAR Disability Advocates is a social security disability advocacy group, which obtains and represents individuals in their claims for social security disability and supplemental security income benefits from the Social Security Administration. The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and industry practices. [2] Revision of Prior Period Financial Statements: Our previously reported results for the first three quarters in fiscal year 2014 reported finance income on the interest method in accordance with FASB Accounting Standards Codification (“ASC”) 310-30, Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality We identified pre-tax errors in prior annual periods related to the application of the interest method for consumer receivables acquired for liquidation and accounted for under ASC 310-30. During those prior annual periods, the Company had determined the effective yield for its distressed consumer receivable portfolios by analyzing actual cash flows versus the amount of cash flows expected to be collected over the life of the loan as opposed to performing this analysis using the current cash flow variations (i.e., actual versus estimated cash flows within a particular quarter). As disclosed in the detail that follows, this misstatement resulted in an increase in finance receivables of approximately $6.4 million, with a decrease in deferred taxes of approximately $2.7 million and a resulting increase to retained earnings of approximately $3.7 million in this Form 10-K as of September 30, 2013. The effect on the fiscal year ended September 30, 2013 was a reduction of finance income of approximately $2.6 million with an associated tax benefit of approximately $0.3 million which resulted in net income attributable to Asta Funding, Inc. of $2.0 million or $0.15 per diluted share from $2.7 million or $0.21 per diluted share. The effect on the fiscal year ended September 30, 2012 was an increase of $0.2 million in finance income with an associated tax benefit of $0.1 million which resulted in net income attributable to Asta Funding, Inc. of $9.9 million or $0.69 per diluted share from $10.0 million or $0.70 per diluted share. The impact of the misstatements in the prior years’ financial statements was not material to any of those years, however, the cumulative effect of correcting all of the prior period misstatements in the current year would be material to our fiscal year 2014 consolidated financial statements. As such, consistent with the guidance in ASC Topic 250, we have accounted for these errors as a revision of prior period financial statements. In evaluating whether the previously issued financial statements were materially misstated, the Company applied SEC Staff Accounting Bulletin (SAB) No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements Under SAB No. 108, prior-year misstatements which, if corrected in the current year would be material, must be corrected by adjusting prior year financial statements, even though such correction previously was and continues to be immaterial to the prior-year financial statements. Correcting prior-year financial statements for such “immaterial misstatements” does not require previously filed reports to be amended. In accordance with accounting guidance presented in ASC 250-10 (SEC Staff Accounting Bulletin No. 99, Materiality), the Company assessed the materiality of the misstatements and concluded that they were not material to any of the Company’s previously issued annual financial statements. Due to the immaterial nature of the misstatement corrections, the cumulative adjustments required to correct the misstatements in the financial statements are reflected in the revised stockholders’ equity as an adjustment to the beginning balance of retained earnings. The cumulative effect of those adjustments increased previously reported retained earnings by approximately $4.5 million. These adjustments also cumulatively impacted the following balance sheet line items as of September 30, 2013: Consolidated Balance Sheet September 30, 2013 As Reported Adjustments As Revised ASSETS Cash and cash equivalents $ 35,179,000 $ — $ 35,179,000 Investments — available-for-sale 58,035,000 — 58,035,000 Restricted cash 968,000 — 968,000 Consumer receivables acquired for liquidation (at net realizable value) 57,900,000 6,354,000 64,254,000 Other investments, net 35,758,000 — 35,758,000 Due from third party collection agencies and attorneys 1,169,000 — 1,169,000 Prepaid and income taxes receivable 1,496,000 — 1,496,000 Furniture and equipment, net (net of accumulated depreciation of $4,136,000) 1,106,000 — 1,106,000 Deferred income taxes 10,443,000 (2,671,000 ) 7,772,000 Goodwill 1,410,000 — 1,410,000 Other assets 4,383,000 — 4,383,000 Total assets $ 207,847,000 $ 3,683,000 $ 211,530,000 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities Non-recourse debt $ 35,760,000 $ — $ 35,760,000 Other liabilities 2,486,000 — 2,486,000 Total liabilities 38,246,000 — 38,246,000 Commitments and contingencies STOCKHOLDERS’ EQUITY Preferred stock, $0.01 par value; authorized 5,000,000; issued and outstanding — none — — — Common stock, $.01 par value, authorized 30,000,000 shares; issued, 14,917,977, and outstanding, 12,974,239 149,000 — 149,000 Additional paid in capital 79,104,000 — 79,104,000 Retained earnings 109,011,000 3,683,000 112,694,000 Accumulated other comprehensive loss, net of income taxes (674,000 ) — (674,000 ) Treasury stock (at cost), 1,943,738 shares (17,805,000 ) — (17,805,000 ) Non-controlling interest (184,000 ) — (184,000 ) Total stockholders’ equity 169,601,000 3,683,000 173,284,000 Total liabilities and stockholders’ equity $ 207,847,000 $ 3,683,000 $ 211,530,000 Consolidated Statements of Income Year Ended September 30, 2013 As Reported Adjustments As Revised Revenues: Finance income, net $ 34,363,000 $ (2,601,000 ) $ 31,762,000 Personal injury claims income 6,438,000 — 6,438,000 Total revenues 40,801,000 (2,601,000 ) 38,200,000 Other income (includes $252,000 accumulated other comprehensive income reclassifications for unrealized net loss on available for sale securities). 1,611,000 — 1,611,000 42,412,000 (2,601,000 ) 39,811,000 Expenses: General and administrative expenses 24,212,000 — 24,212,000 Interest expense 1,300,000 — 1,300,000 Impairments of consumer receivables acquired for liquidation 12,592,000 (1,602,000 ) 10,990,000 38,104,000 (1,602,000 ) 36,502,000 Income before income tax 4,308,000 (999,000 ) 3,309,000 Income tax expense (includes tax benefit $100,000 of accumulated other comprehensive income reclassifications for unrealized net loss on available for sales securities) 1,164,000 (270,000 ) 894,000 Net income 3,144,000 (729,000 ) 2,415,000 Less: net income attributable to non-controlling interests 406,000 — 406,000 Net income attributable to Asta Funding, Inc. $ 2,738,000 $ (729,000 ) $ 2,009,000 Net income per share attributable to Asta Funding, Inc.: Basic $ 0.21 $ (0.05 ) $ 0.16 Diluted $ 0.21 $ (0.06 ) $ 0.15 Weighted average number of common shares outstanding: Basic 12,952,150 12,952,150 Diluted 13,216,051 — 13,216,051 Consolidated Statements of Income Year Ended September 30, 2012 As Reported Adjustments As Revised Revenues: Finance income, net $ 40,599,000 $ 204,000 $ 40,803,000 Personal injury claims income 1,647,000 — 1,647,000 Total revenues 42,246,000 204,000 42,450,000 Other income (includes $339,000 of accumulated other comprehensive income reclassifications for unrealized net gain on available for sale securities). 2,256,000 — 2,256,000 44,502,000 204,000 44,706,000 Expenses: General and administrative expenses 23,640,000 — 23,640,000 Interest expense 2,539,000 — 2,539,000 Impairments of consumer receivables acquired for liquidation 1,383,000 388,000 1,771,000 27,562,000 388,000 27,950,000 Income before income tax 16,940,000 (184,000 ) 16,756,000 Income tax expense (includes taxes $137,000 of accumulated other comprehensive income reclassifications for unrealized net gain on available for sales securities) 6,872,000 (75,000 ) 6,797,000 Net income 10,068,000 (109,000 ) 9,959,000 Less: net income attributable to non-controlling interests 31,000 — 31,000 Net income attributable to Asta Funding, Inc. $ 10,037,000 $ (109,000 ) $ 9,928,000 Net income per share attributable to Asta Funding, Inc.: Basic $ 0.71 $ 0.00 $ 0.71 Diluted $ 0.70 $ (0.01 ) $ 0.69 Weighted average number of common shares outstanding: Basic 14,077,650 — 14,077,650 Diluted 14,321,381 — 14,321,381 Consolidated Statements of Cash Flows Year Ended September 30, 2013 As Reported Adjustments As Revised Cash flows from operating activities: Net income $ 3,144,000 $ (729,000 ) $ 2,415,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 440,000 — 440,000 Deferred income taxes 326,000 (269,000 ) 57,000 Impairments of consumer receivables acquired for liquidation 12,592,000 (1,602,000 ) 10,990,000 Stock based compensation 1,956,000 — 1,956,000 Loss (gain) on sale of available-for-sale securities 252,000 — 252,000 Changes in: — Prepaid and income tax receivable 561,000 — 561,000 Due from third party collection agencies and attorneys 873,000 — 873,000 Other assets (631,000 ) — (631,000 ) Other liabilities (434,000 ) — (434,000 ) Net cash provided by operating activities 19,079,000 (2,600,000 ) 16,479,000 Cash flows from investing activities: Purchase of consumer receivables acquired for liquidation (3,340,000 ) — (3,340,000 ) Principal collected on consumer receivables acquired for liquidation 19,302,000 2,600,000 21,902,000 Principal collected on consume receivable accounts represented by account sales 433,000 — 433,000 Purchase of available-for-sale securities (34,171,000 ) — (34,171,000 ) Proceeds from sales of available-for-sale securities 33,076,000 — 33,076,000 Proceeds from maturities of certificates of deposit 42,682,000 — 42,682,000 Investments in personal injury claims — advances (30,963,000 ) — (30,963,000 ) Investments in personal injury claims — receipts 13,801,000 — 13,801,000 Capital expenditures (725,000 ) — (725,000 ) Net cash (used in) provided by investing activities 40,095,000 2,600,000 42,695,000 Cash flows from financing activities: Proceeds from exercise of stock options 125,000 — 125,000 Purchase of treasury stock (1,579,000 ) — (1,579,000 ) Change in restricted cash 120,000 — 120,000 Dividends paid (1,290,000 ) — (1,290,000 ) Distributions to non-controlling interest (621,000 ) — (621,000 ) Repayments of non-recourse debt — Bank of Montreal, net (25,703,000 ) — (25,703,000 ) Net cash used in financing activities (28,948,000 ) — (28,948,000 ) Net increase in cash and cash equivalents 30,226,000 — 30,226,000 Cash and cash equivalents at beginning of year 4,953,000 — 4,953,000 Cash and cash equivalents at end of year $ 35,179,000 $ — $ 35,179,000 Supplemental disclosure of cash flow information: Cash paid for: Interest $ 1,822,000 $ — $ 1,822,000 Consolidated Statements of Cash Flows Year Ended September 30, 2012 As Reported Adjustments As Revised Cash flows from operating activities: Net income $ 10,068,000 $ (109,000 ) $ 9,959,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 380,000 — 380,000 Deferred income taxes 3,393,000 (75,000 ) 3,318,000 Impairments of consumer receivables acquired for liquidation 1,383,000 388,000 1,771,000 Stock based compensation 1,623,000 — 1,623,000 Loss (gain) on sale of available-for-sale securities (339,000 ) — (339,000 ) Changes in: Prepaid and income tax receivable 1,281,000 — 1,281,000 Due from third party collection agencies and attorneys 42,000 — 42,000 Other assets (190,000 ) — (190,000 ) Other liabilities (247,000 ) — (247,000 ) Net cash provided by operating activities 17,394,000 204,000 17,598,000 Cash flows from investing activities: Purchase of consumer receivables acquired for liquidation (2,495,000 ) — (2,495,000 ) Principal collected on consumer receivables acquired for liquidation 29,353,000 (204,000 ) 29,149,000 Principal collected on consume receivable accounts represented by account sales 67,000 — 67,000 Purchase of available-for-sale securities (66,625,000 ) — (66,625,000 ) Proceeds from sales of available-for-sale securities 22,656,000 — 22,656,000 Purchase of certificates of deposit (45,121,000 ) — (45,121,000 ) Proceeds from maturities of certificates of deposit 11,499,000 — 11,499,000 Investments in personal injury claims — advances (22,549,000 ) — (22,549,000 ) Investments in personal injury claims — receipts 3,953,000 — 3,953,000 Capital expenditures (638,000 ) — (638,000 ) Net cash (used in) provided by investing activities (69,900,000 ) (204,000 ) (70,104,000 ) Cash flows from financing activities: Proceeds from exercise of stock options 610,000 — 610,000 Purchase of treasury stock (16,156,000 ) — (16,156,000 ) Change in restricted cash (57,000 ) — (57,000 ) Dividends paid (1,144,000 ) — (1,144,000 ) Repayments of non-recourse debt — Bank of Montreal, net (10,141,000 ) — (10,141,000 ) Net cash used in financing activities (26,888,000 ) — (26,888,000 ) Net (decrease) increase in cash and cash equivalents (79,394,000 ) — (79,394,000 ) Cash and cash equivalents at beginning of year 84,347,000 — 84,347,000 Cash and cash equivalents at end of year $ 4,953,000 $ — $ 4,953,000 Supplemental disclosure of cash flow information: Cash paid for: Interest $ 2,570,000 $ — $ 2,570,000 Income taxes $ 2,002,000 $ — $ 2,002,000 [3] Liquidity: The Company’s cash requirements have been and will continue to be significant. In the past, we have depended upon external financing to acquire consumer receivables, fund operating expenses, interest and income taxes. If approved, the payment of dividends is also a significant use of cash. We have depended solely on operating cash flow to fund the acquisition of portfolios, pay operating expenses, dividends, and taxes. Net collections decreased $13.9 million or 25.8% from $54.1 million in fiscal year 2013 to $40.2 million in fiscal year 2014. Although the Company’s collections decreased from the prior year, the Company believes its net cash collections over the next twelve months, coupled with its current liquid cash balances, will be sufficient to cover its operating expenses. [4] Principles of consolidation: The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Palisades XVI is a variable interest entity (“VIE”). Asta Funding, Inc. is considered the primary beneficiary because it has the power to direct the significant activities of the VIE via its ownership and service contract. Palisades XVI holds the Great Seneca portfolio of $19.3 million as of September 30, 2014. See Note I — Debt, Non-Recourse Debt — Bank of Montreal Blue Bell Receivables I, LLC, Blue Bells Receivables II, LLC and Blue Bell Receivables III, LLC (the “Blue Bell Entities”) are VIEs. CBC is considered the primary beneficiary because it has the power to direct the significant activities of the VIEs via its ownership and service contract. It also has the rights to receive benefits from the collections that exceed the payments to the note holders. The Blue Bell Entities held structured settlements of $19.6 million and non-recourse notes payable of $12.7 million as of September 30, 2014. On November 26, 2014, CBC announced the completion of its fourth private placement, BBR IV, LLC, backed by structured settlement and fixed annuity payments (see Note V — Subsequent Events). [5] Concentration of Credit Risk — Cash: The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. Cash balances are maintained at various depository institutions and are insured by the Federal Deposit Insurance Corporation (“FDIC”). The Company had cash balances with eight banks that exceeded the balance insured by the FDIC by approximately $25.3 million at September 30, 2014. The Company does not believe it is exposed to any significant credit risk for cash. [6] Available-for-Sale Investments: Investments that the Company intends to hold for an indefinite period of time, but not necessarily to maturity, are classified as available-for-sale and are carried at fair value. Unrealized gains and losses on available-for-sale securities are determined using the specific-identification method. Declines in the fair value of individual available-for-sale securities below their respective costs that are other than temporary will result in write-downs of the individual securities to their fair value. Factors affecting the determination of whether an other-than-temporary impairment has occurred include: a downgrading of the security by a rating agency, a significant deterioration in the financial condition of the issuer, or that management would not have the ability to hold a security for a period of time sufficient to allow for any anticipated recovery in fair value. [7] Income recognition, Impairments and Accretable yield adjustments: Income Recognition The Company accounts for its investment in consumer receivables acquired for liquidation using the interest method under the guidance of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 310, Receivables — Loans and Debt Securities Acquired with Deteriorated Credit Quality Once a static pool is established for a quarter, individual receivable accounts are not added to the pool (unless replaced by the seller) or removed from the pool (unless sold or returned to the seller). ASC 310 requires that the excess of the contractual cash flows over expected cash flows not be recognized as an adjustment of revenue or expense or on the balance sheet. ASC 310 initially freezes the internal rate of return (“IRR”), estimated when the accounts receivable are purchased, as the basis for subsequent impairment testing. Significant increases in actual, or expected future cash flows are recognized prospectively through an upward adjustment of the IRR over a portfolio’s remaining life. Any increase to the IRR then becomes the new benchmark for impairment testing. Under ASC 310, rather than lowering the estimated IRR if the collection estimates are not received or projected to be received, the carrying value of a pool would be written down to maintain the then current IRR. The Company switched to the cost recovery method of accounting as of October 1, 2013. See Note A(2) for more information. Finance income is recognized on cost recovery portfolios after the carrying value has been fully recovered through collections or amounts written down. The Company accounts for its investments in personal injury claims at an agreed upon interest rate, in anticipation of a future settlement. The interest purchased by Pegasus in each claim will consist of the right to receive from such claimant part of the proceeds or recoveries which such claimant receives by reason of a settlement, judgment or reward with respect to such claimant’s claim. Open case revenue is estimated, recognized and accrued at a rate based on the expected realization and underwriting guidelines and facts and circumstances for each individual case. These personal injury claims are non-recourse. When a case is closed and the cash is received for the advance provided to a claimant, revenue is recognized based upon the contractually agreed upon interest rate, and, if applicable, adjusted for any changes due to a settled amount and fees charged to the claimant. The funding of matrimonial actions is on a non-recourse basis. Revenue from matrimonial actions is recognized under the cost recovery method. CBC purchases periodic payments under structured settlements and annuity policies from individuals in exchange for a lump sum payment. The Company elected to carry structured settlements at fair value. Unearned income on structured settlements is recognized as interest income using the effective interest method over the life of the related settlement. Changes in fair value are recorded in unrealized gain (loss) in structured settlements in our statements of income. The Company recognizes revenue for GAR Disability Advocates when cases close and fees are collected. Impairments and accretable yield adjustments The Company accounts for its impairments in accordance with ASC 310, which provides guidance on how to account for differences between contractual and expected cash flows from an investor’s initial investment in loans or debt securities acquired in a transfer if those differences are attributable, at least in part, to credit quality. Increases in expected cash flows are recognized prospectively through an adjustment of the internal rate of return while decreases in expected cash flows are recognized as impairments. Impairments of approximately $19.5 million were recorded in the fiscal year ended September 30, 2014. An impairment of approximately $11.0 million was recorded in the fiscal year ended September 30, 2013 and approximately $1.8 million was recorded in fiscal year 2012. Finance income is not recognized on cost recovery method portfolios until the cost of the portfolio is fully recovered. Collection projections are performed on both interest method and cost recovery method portfolios. With regard to the cost recovery portfolios, if collection projections indicate the carrying value will not be recovered, an impairment is required. As the Company switched to the cost recovery method on its current inventory of consumer receivable portfolios, there were no accretable yield adjustments recorded in the fiscal year ended September 30, 2014. Accretable adjustments were $0.6 million in fiscal year 2013 and not material in fiscal year 2012. The recognition of income under ASC 310 is dependent on the Company having the ability to develop reasonable expectations of both the timing and amount of cash flows to be collected. In the event the Company cannot develop a reasonable expectation as to both the timing and amount of cash flows expected to be collected, ASC 310 permits the change to the cost recovery method. The Company will recognize income only after it has recovered its carrying value, The Company’s analysis of the timing and amount of cash flows to be generated by its portfolio purchases and investments are based on the following attributes: • the type of receivable, the location of the debtor and the number of collection agencies previously attempting to collect the receivables in the portfolio. The Company has found that there are better states to try to collect receivables and the Company factors in both better and worse states when establishing their initial cash flow expectations; • the average balance of the receivables influences our analysis in that lower average balance portfolios tend to be more collectible in the short-term and higher average balance portfolios are more appropriate for the Company’s lawsuit strategy and thus yield better results over the longer term. As the Company has significant experience with both types of balances, it can factor these variables into its initial expected cash flows; • the age of the receivables, the number of days since charge-off, any payments since charge-off, and the credit guidelines of the credit originator also represent factors taken into consideration in our estimation process. For example, older receivables might be more difficult and/or require more time and effort to collect; • past history and performance of similar assets acquired. As the Company purchases portfolios of like assets, it accumulates a significant historical data base on the tendencies of debtor repayments and factor this into its initial expected cash flows; • the Company’s ability to analyze accounts and resell accounts that meet its criteria; • jobs or property of the customers found within portfolios. With our business model, this is of particular importance. Customers with jobs or property are more likely to repay their obligation through the lawsuit strategy and, conversely, customers without jobs or property are less likely to repay their obligation. The Company believes that customers with jobs or property are more likely to repay because courts have mandated the debtor must pay the debt. Ultimately, the debtor with property will pay to clear title or release a lien. The Company also believes that these customers generally might take longer to repay and that is factored into its initial expected cash flows; and • credit standards of the issuer. The Company acquires accounts that have experienced deterioration of credit quality between origination and the date of its acquisition of the accounts. The amount invested in a portfolio of accounts reflects our determination that it is probable we will be unable to collect all amounts due according to the portfolio of accounts’ contractual terms. The Company considers the expected payments and estimates the amount and timing of undiscounted expected principal, interest and other cash flows for each acquired portfolio coupled with expected cash flows from accounts available for sale. The excess of this amount over the cost of the portfolio, representing the excess of the accounts’ cash flows expected to be collected over the amount paid, is accreted into income recognized on finance receivables accounted for on the interest method over the expected remaining life of the portfolio. The Company believes it has significant experience in acquiring certain distressed consumer receivable portfolios at a significant discount to the amount actually owed by underlying customers. The Company invests in these portfolios only after both qualitative and quantitative analyses of the underlying receivables are performed and a calculated purchase price is paid so that it believes its estimated cash flow offers an adequate return on acquisition costs after servicing expenses. Additionally, when considering larger portfolio purchases of accounts, or portfolios from issuers with whom the Company has limited experience, it has the added benefit of soliciting its third party collection agencies and attorneys for their input on liquidation rates and, at times, incorporates such input into the estimates it uses for its expected cash flows. [8] Commissions and fees: Commissions and fees are the contractual commissions earned by third party collection agencies and attorneys, and direct costs associated with the collection effort- generally court costs. The Company expects to continue to purchase portfolios and utilize third party collection agencies and attorney networks. [9] Furniture, equipment and leasehold improvements: Furniture and equipment is stated at cost. Depreciation is provided using the straight-line method over the estimated useful lives of the assets (5 to 7 years). Amortization on leasehold improvements is provided by the straight line-method of the remaining life of the respective lease. An accelerated depreciation method is used for tax purposes. [10] Income taxes: Deferred federal and state taxes arise from (i) recognition of finance income collected for tax purposes, but not yet recognized for financial reporting; (ii) provision for impairments/credit losses, all resulting in timing differences between financial accounting and tax reporting; iii) amortization of leasehold improvements resulting in timing differences between financial accounting and tax reporting; iv) stock based compensation; and v) partnership investments. [11] Net income per share: Basic per share data is determined by dividing net income by the weighted average shares outstanding during the period. Diluted per share data is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued. The assumed proceeds from the exercise of dilutive options are calculated using the treasury stock method based on the average market price for the period. The following table presents the computation of basic and diluted per share data for the fiscal years ended September 30, 2014, 2013 and 2012: 2014 2013 (As Revised) 2012 (As Revised ) Net Income Weighted Per Net Income Weighted Per Net Income Weighted Per Basic $ 5,901,000 12,981,076 $ 0.45 $ 2,009,000 12,952,150 $ 0.16 $ 9,928,000 14,077,650 $ 0.71 Dilutive effect of stock options 224,857 0.00 263,901 (0.01 ) 243,731 (0.02 ) Diluted $ 5,901,000 13,205,933 $ 0.45 $ 2,009,000 13,216,051 $ 0.15 $ 9,928,000 14,321,381 $ 0.69 At September 30, 2014, 960,559 options at a weighted average exercise price of $12.12 were not included in the diluted earnings per share calculation as they were anti-dilutive. At September 30, 2013, 606,332 options at a weighted average exercise price of $8.01 were not included in the diluted earnings per share calculation as they were anti-dilutive. At September 30, 2012, 1,210,396 options at a weighted average exercise price of $12.23 were not included in the diluted earnings per share calculation as they were anti-dilutive. [12] Use of estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. With respect to income recognition the Company takes into consideration the relative credit quality of the underlying receivables constituting the portfolio acquired, the strategy involved to maximize the collections thereof, the time required to implement the collection strategy as well as other factors to estimate the anticipated cash flows. Actual results could differ from those estimates including management’s estimates |
Available-for-Sale Investments
Available-for-Sale Investments | 12 Months Ended |
Sep. 30, 2014 | |
Available-for-Sale Investments | N OTE VAILABLE FOR ALE NVESTMENTS Mutual funds investments classified as available-for-sale at September 30, 2014 and 2013 consist of the following: Amortized Unrealized Unrealized Fair Value 2014 $ 66,559,000 $ 411,000 $ (171,000 ) $ 66,799,000 2013 $ 59,151,000 $ 27,000 $ (1,143,000 ) $ 58,035,000 The available-for-sale investments did not have any contractual maturities. The Company sold five investments during the year ended September 30, 2014, with an aggregate realized loss of $143,000. Additionally, the Company received $186,000 in capital gains distributions during fiscal year 2014. The Company sold four investments in fiscal year 2013, resulting in an aggregate realized loss of approximately $252,000. The realized gains and losses are all included as part of other income. At September 30, 2014, there were six investments, four of which were in an unrealized loss position. Three of the four investments had unrealized losses existing for more than 12 months and one of the four for 12 months or less. However, the Company was in an aggregate unrealized gain position, as the unrealized gain of the remaining two investments more than offset the unrealized loss of the four investments. At September 30, 2013, there were six investments, five of which were in an unrealized loss position. All of these securities were considered to be acceptable credit risks. Based on the evaluation of the available evidence at that time, including changes in market rates and credit rating information, management believed that any decline in fair value for these instruments would be temporary. In addition, management had the ability but did not believe it would be required to sell those investment securities for a period of time sufficient to allow for an anticipated recovery or maturity. Should the impairment of any of those securities become other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period in which the other-than-temporary impairment were identified. Unrealized holding gains and losses on available-for-sale securities are included in other comprehensive income within stockholders’ equity. Realized gains (losses) on available-for-sale securities are included in other income and, when applicable, are reported as a reclassification adjustment in other comprehensive income. |
Consumer Receivables Acquired F
Consumer Receivables Acquired For Liquidation | 12 Months Ended |
Sep. 30, 2014 | |
Consumer Receivables Acquired For Liquidation | N OTE ONSUMER ECEIVABLES CQUIRED OR IQUIDATION Accounts acquired for liquidation are stated at their net estimated realizable value and consist primarily of defaulted consumer loans to individuals primarily throughout the United States. The Company may account for its investments in consumer receivable portfolios, using either: • the interest method; or • the cost recovery method. Prior to October 1, 2013 the Company accounted for certain of its investments in finance receivables using the interest method in accordance with the guidance of ASC 310-30. Under the guidance of ASC 310-30, static pools of accounts are established. These pools are aggregated based on certain common risk criteria. Each static pool is recorded at cost and is accounted for as a single unit for the recognition of income, principal payments and loss provision. Effective October 1, 2013, due to the substantial reduction of portfolios reported under the interest method, and the ability to reasonably estimate cash collections required to account for those portfolios under the interest method, the Company concluded the cost recovery method is the appropriate accounting method in the circumstances. Although the Company has switched to the cost recovery method on its current inventory of portfolios, the Company must still analyze a portfolio upon acquisition and once a static pool is established for a quarter, individual receivable accounts are not added to the pool (unless replaced by the seller) or removed from the pool (unless sold or returned to the seller). Under the interest method , ASC 310-30 requires that the excess of the contractual cash flows over expected cash flows not be recognized as an adjustment of revenue or expense or on the balance sheet. ASC 310-30 initially freezes the internal rate of return, referred to as IRR, estimated when the accounts receivable are purchased, as the basis for subsequent impairment testing. Significant increases in actual or expected future cash flows may be recognized prospectively through an upward adjustment of the IRR over a portfolio’s remaining life. Any increase to the IRR then becomes the new benchmark for impairment testing. Rather than lowering the estimated IRR if the collection estimates are not received or projected to be received, the carrying value of a pool would be impaired, or written down to maintain the then current IRR. Under the interest method, income is recognized on the effective yield method based on the actual cash collected during a period and future estimated cash flows and timing of such collections and the portfolio’s cost. Material variations of cash flow estimates are recorded in the quarter such variations are determined. The estimated future cash flows are reevaluated quarterly. Once a static pool is established for a quarter, individual receivable accounts are not added to the pool (unless replaced by the seller) or removed from the pool (unless sold or returned to the seller). ASC 310 requires that the excess of the contractual cash flows over expected cash flows not be recognized as an adjustment of revenue or expense or on the balance sheet. ASC 310 initially freezes the internal rate of return, referred to as IRR, estimated when the accounts receivable are purchased, as the basis for subsequent impairment testing. Significant increases in actual or expected future cash flows may be recognized prospectively through an upward adjustment of the IRR over a portfolio’s remaining life. Any increase to the IRR then becomes the new benchmark for impairment testing. Rather than lowering the estimated IRR if the collection estimates are not received or projected to be received, the carrying value of a pool would be impaired, or written down to maintain the then current IRR. Under the interest method, income is recognized on the effective yield method based on the actual cash collected during a period and futureestimated cash flows and timing of such collections and the portfolio’s cost. Material variations of cash flow estimates are recorded in the quarter such variations are determined. The estimated future cash flows are reevaluated quarterly. The Company uses the cost recovery method when collections on a particular pool of accounts cannot be reasonably predicted. Under the cost recovery method, no income is recognized until the cost of the portfolio has been fully recovered. A pool can become fully amortized (zero carrying balance on the balance sheet) while still generating cash collections. In this case, all cash collections are recognized as revenue when received. The Company’s extensive liquidating experience is in the field of distressed credit card receivables, telecommunication receivables, consumer loan receivables, retail installment contracts, consumer receivables, and auto deficiency receivables. The Company aggregates portfolios of receivables acquired sharing specific common characteristics which were acquired within a given quarter. The Company considers for aggregation portfolios of accounts, purchased within the same fiscal quarter, that generally meet the following characteristics: • Same issuer/originator; • Same underlying credit quality; • similar geographic distribution of the accounts; • similar age of the receivable; and • Same type of asset class (credit cards, telecommunication, etc.). The Company uses a variety of qualitative and quantitative factors to estimate collections and the timing thereof. This analysis includes the following variables: • the number of collection agencies previously attempting to collect the receivables in the portfolio; • the average balance of the receivables, as higher balances might be more difficult to collect while low balances might not be cost effective to collect; • the age of the receivables, as older receivables might be more difficult to collect or might be less cost effective. On the other hand, the passage of time, in certain circumstances, might result in higher collections due to changing life events of some individual customers; • past history of performance of similar assets; • time since charge-off; • payments made since charge-off; • the credit originator and its credit guidelines; • the Company’s ability to analyze accounts and resell accounts that meet our criteria for resale; • the locations of the customers, as there are better states to attempt to collect in and ultimately the Company has better predictability of the liquidations and the expected cash flows. Conversely, there are also states where the liquidation rates are not as favorable and that is factored into our cash flow analysis; • jobs or property of the customers found within portfolios. In the Company’s business model, this is of particular importance. Customers with jobs or property are more likely to repay their obligation and conversely, customers without jobs or property are less likely to repay their obligation; and • the ability to obtain timely customer statements from the original issuer. The Company obtains and utilizes, as appropriate, input, including but not limited to monthly collection projections and liquidation rates, from third party collection agencies and attorneys, as further evidentiary matter, to assist in evaluating and developing collection strategies and in evaluating and modeling the expected cash flows for a given portfolio. The following tables summarize the changes in the balance sheet account of consumer receivables acquired for liquidation during the following periods For the Year Ended September 30, 2014 Interest Method Cost Recovery Method Total Balance, beginning of period $ 8,071,000 $ 49,829,000 $ 57,900,000 Balance transferred to cost recovery — prior period adjustment (1,304,000 ) 1,304,000 — Adjustment for misapplication of the interest method to prior periods 6,354,000 — 6,354,000 Balance beginning of period, as restated 13,121,000 51,133,000 64,254,000 Reclassification of interest method portfolios to cost recovery method (13,121,000 ) 13,121,000 — Acquisition of receivable portfolios — 5,078,000 5,078,000 Net cash collections from collection of consumer receivables acquired for liquidation — (40,048,000 ) (40,048,000 ) Net cash collections represented by account sales of consumer receivables acquired for liquidation — (114,000 ) (114,000 ) Impairment — (19,591,000 ) (19,591,000 ) Finance income recognized — 19,865,000 19,865,000 Balance, end of period $ — $ 29,444,000 $ 29,444,000 Finance income as a percentage of collections 0 % 49.5 % 49.5 % For the Year Ended September 30, 2013 (As Revised) Interest Method Cost Recovery Method Total Balance, beginning of period $ 12,326,000 $ 74,561,000 $ 86,887,000 Balance transferred to cost recovery — prior period adjustment (2,692,000 ) 2,692,000 — Adjustment for misapplication of the interest method to prior periods 5,852,000 1,500,000 7,352,000 Balance beginning of period, as revised 15,486,000 78,753,000 94,239,000 Acquisition of receivable portfolios — 3,340,000 3,340,000 Net cash collections from collection of consumer receivables acquired for liquidation (27,860,000 ) (23,790,000 ) (51,650,000 ) Net cash collections represented by account sales of consumer receivables acquired for liquidation (979,000 ) (1,468,000 ) (2,447,000 ) Impairment (840,000 ) (10,150,000 ) (10,990,000 ) Finance income recognized(1) 27,314,000 4,448,000 31,762,000 Balance, end of period $ 13,121,000 $ 51,133,000 $ 64,254,000 Finance income as a percentage of collections 94.7 % 17.6 % 58.7 % (1) Includes $25.7 million derived from fully amortized portfolios. Finance income recognized from account sales amounted to $1.8 million. Accretable yield represents the amount of income the Company can expect to generate over the remaining amortizable life of its existing portfolios based on estimated future net cash flows as of September 30, 2014. The Company adjusts the accretable yield upward when it believes, based on available evidence, that portfolio collections will exceed amounts previously estimated. There were no accretable yield adjustments in fiscal years 2014 and 2013. As the Company transferred the then remaining $5.5 million of interest method portfolios to the cost recovery method, there is no remaining projected accretable finance income. The accretable yield schedules for the fiscal years ended September 30, 2014 and 2013 are as follows: Year Ended Balance at beginning of period, October 1, 2013 $ 7,679,000 Transfer to cost recovery (7,679,000 ) Balance at end of period, September 30, 2014 $ 0 Year Ended Balance at beginning of period, October 1, 2012 $ 13,508,000 Income recognized on finance receivables, net (27,314,000 ) Reclassifications from non-accretable difference(1) 21,485,000 Balance at end of period, September 30, 2013 $ 7,679,000 (1) Includes portfolios that became zero based during the period, removal of zero basis portfolios from the accretable yield calculation and, other immaterial impairments and accretions based on the extension of certain collection curves. During the year ended September 30, 2014, the Company purchased $478.9 million in face value receivables at a cost of $5.1 million. During the year ended September 30, 2013, the Company purchased $53.5 million in face value receivables at cost of $3.3 million. The following table summarizes collections received by the Company’s third-party collection agencies and attorneys, less commissions and direct costs for the years ended September 30, 2014, 2013 and 2012, respectively. For the Years Ended September 30, 2014 2013 2012 Gross collections(1) $ 67,913,000 $ 85,512,000 $ 108,487,000 Less: commissions and fees(2) 27,751,000 31,415,000 38,468,000 Net collections $ 40,162,000 $ 54,097,000 $ 70,019,000 (1) Gross collections include collections from third-party collection agencies and attorneys, collections from in-house efforts and collections represented by account sales. (2) Commissions and fees are the contractual commissions earned by third party collection agencies and attorneys, and direct costs associated with the collection effort, generally court costs. Includes a 3% fee charged by a servicer on gross collections in connection with the Portfolio Purchase. Such arrangement was consummated in December 2007. The fee is charged for asset location, skip tracing and ultimately suing debtors in connection with this portfolio purchase. Finance income recognized on net collections represented by account sales was $0.1 million, $1.8 million and $0.1 million for the fiscal years ended September 30, 2014, 2013 and 2012, respectively. |
Acquisition of CBC
Acquisition of CBC | 12 Months Ended |
Sep. 30, 2014 | |
Acquisition of CBC | N OTE CQUISITION OF S EVISED On December 31, 2013, the Company acquired 80% ownership of CBC and its affiliate, CBC Management Services, LLC, for approximately $5.9 million. In addition, the Company will provide financing to CBC of up to $5 million. The 20% non-controlling interests are held by two of the original owners of CBC. The fair value of non-controlling interests at the acquisition date was determined to be immaterial. The non-controlling interests will not be entitled to any distributions from CBC until the Company receives distributions of $2,337,190. The non-controlling interests are entitled to two of the five seats of CBC’s Board of Managers and have the right to approve certain material transactions of CBC. The non-controlling interest owners are employed by CBC. If the employment is terminated, other than for cause, CBC could be required to purchase their membership interest in CBC. If the employment is terminated for any other reason, CBC has the right to purchase their non-controlling interests. The purchase price would be determined by a third party appraiser and is payable over a period of time. The fair value of the put right was determined to be $0 at December 31, 2013. No re-measurement is required at September 30, 2014 as it is not probable that the put option will become redeemable. The acquisition provides the Company with the opportunity to further diversify its portfolio. CBC purchases periodic structured settlements and annuity policies from individuals in exchange for a lump sum payment. The Company accounted for this purchase in accordance with ASC Topic 805 “Business Combinations”. Under this guidance, an entity is required to recognize the assets acquired and liabilities assumed and the consideration given at their fair value on the acquisition date. The following table summarizes the fair value of the assets acquired and the liabilities assumed as of the December 31, 2013 acquisition date: Cash $ 351,000 Structured settlements 30,436,000 Other assets 11,000 Other liabilities (356,000 ) Other debt (see Note J: Other debt — CBC (including non-recourse notes payable amounting to $13.8 million) (25,863,000 ) Total identifiable net assets acquired 4,579,000 Goodwill (see Note H: Goodwill) 1,360,000 Purchase Price $ 5,939,000 As the transaction was consummated on December 31, 2013, there were no actual operational results that were attributable to the Company in the first quarter of fiscal year 2014 and the comparable period of fiscal years 2013 and 2012. Total revenues, as reported, for the fiscal year ended September 30, 2014, were $32,207,000. On a pro forma basis, total revenues for the fiscal year ended September 30, 2014 would have been $33,842,000. Net income attributable to Asta Funding, Inc., as reported, for the fiscal year ended September 30, 2014, was $5,901,000. On a pro forma basis, net income attributable to Asta Funding, Inc. for the fiscal year ended September 30, 2014 would have been $5,943,000. Total revenues, as reported, for the fiscal years ended September 30, 2013 and 2012, were $38,200,000 and $42,450,000, respectively. On a pro forma basis, total revenues for the same prior year periods would have been $42,544,000 and $47,098,000, respectively. Net income attributable to Asta Funding, Inc., as reported, for the fiscal years ended September 30, 2013 and 2012 was $2,009,000 and $9,928,000, respectively. On a pro forma basis, net income attributable to Asta Funding, Inc. would have been $2,378,000 and $11,114,000, respectively, for the same prior year period. The Company, through CBC, earned $5.2 million in settlement income during the fiscal year ended September 30, 2014. The Company had a net invested balance of $42.1 million in structured settlements as of September 30, 2014. The results of CBC yielded income attributable to non-controlling interest of $70,000 for the nine month period ended September 30, 2014, the period in which CBC was part of the results of the Company. |
Structured Settlements
Structured Settlements | 12 Months Ended |
Sep. 30, 2014 | |
Structured Settlements | N OTE TRUCTURED ETTLEMENTS CBC purchases periodic payments under structured settlements and annuity policies from individuals in exchange for a lump sum payment. The Company elected to carry the structured settlements at fair value. Unearned income on structured settlements is recognized as interest income using the effective interest method over the life of the related structured settlement. Changes in fair value are recorded in unrealized gain (loss) on structured settlements in the Company’s statements of income. Structured settlements consist of the following as of September 30, 2014: Maturity value $ 64,852,000 Unearned income (22,773,000 ) Net carrying value $ 42,079,000 Encumbrances on structured settlements as of September 30, 2014 are: Notes payable secured by settlement receivables with principal and interest outstanding payable until June 2025(1) $ 2,521,000 Notes payable secured by settlement receivables with principal and interest outstanding payable until August 2026(1) 5,363,000 Notes payable secured by settlement receivables with principal and interest outstanding payable until April 2032(1) 4,828,000 $22,000,000 revolving line of credit(1) 19,583,000 Encumbered structured settlements 32,295,000 Structured settlements not encumbered 9,784,000 Total structured settlements $ 42,079,000 (1) See Note J — Other Debt — CBC At September 30, 2014, the expected cash flows of structured settlements based on maturity value are as follows: September 30, 2015 $ 4,703,000 September 30, 2016 4,989,000 September 30, 2017 4,688,000 September 30, 2018 3,835,000 September 30, 2019 3,956,000 Thereafter 42,681,000 Total $ 64,852,000 |
Other Investments
Other Investments | 12 Months Ended |
Sep. 30, 2014 | |
Other Investments | N OTE THER NVESTMENTS Personal Injury Claims On December 28, 2011, the Company entered into a joint venture with Pegasus Legal Funding, LLC (“PLF”) in the operating subsidiary of Pegasus. Pegasus purchases interests in claims from claimants who are a party to personal injury litigation. Pegasus advances, to each claimant, funds, on a non-recourse basis at an agreed upon interest rate, in anticipation of a future settlement. The interest in each claim purchased by Pegasus consists of the right to receive, from such claimant, part of the proceeds or recoveries which such claimant receives by reason of a settlement, judgment or award with respect to such claimant’s claims. The Company, through Pegasus, earned $7.1 million in interest and fees during fiscal year 2014 compared to $6.4 million and $1.6 during fiscal years 2013 and 2012, respectively. The Company had a net invested balance in personal injury claims of $32.4 million and $35.8 million on September 30, 2014 and 2013, respectively. The results of Pegasus yielded income attributable to non-controlling interest of $458,000 for the year-ended September 30, 2014 compared to $406,000 and $31,000 for the years ended September 30, 2013 and 2012, respectively. Pegasus records reserves for bad debts, which, at September 30, 2014, amounted to $2.5 million, as follows: Year Ended September 30, Balance at beginning of period $ 2,248,000 Provisions for losses 1,707,000 Write offs (1,481,000 ) Balance at end of period $ 2,474,000 Matrimonial Claims On May 18, 2012, the Company formed BP Case Management, LLC (“BPCM”), a joint venture with California-based Balance Point Divorce Funding, LLC (“BP Divorce Funding”). BPCM provides non-recourse funding to a spouse in a matrimonial action. The Company provided a $1.0 million revolving line of credit to partially fund BPCM’s operations, with such loan bearing interest at the prevailing prime rate, with an initial term of twenty-four months. In September 2014, the agreement was revised to extend the term of the loan to August 2016, increase the credit line to $1.5 million and include a personal guarantee of the principal of BP Divorce Funding. The loan balance at September 30, 2014 was approximately $1.5 million. The revolving line of credit is collateralized by BP Divorce Funding’s profits share in BPCM and other assets. As of September 30, 2014, the Company’s investment in cases through BPCM was approximately $2.4 million. The Company recognized no income during fiscal year 2014 compared to $34,000 and $165,000 during fiscal years 2013 and 2012, respectively. |
Furniture and Equipment
Furniture and Equipment | 12 Months Ended |
Sep. 30, 2014 | |
Furniture and Equipment | N OTE URNITURE AND QUIPMENT Furniture and equipment as of September 30, 2014 and 2013 consist of the following: 2014 2013 Furniture $ 323,000 $ 310,000 Equipment 3,622,000 3,622,000 Software 1,211,000 1,211,000 Leasehold improvements 99,000 99,000 5,255,000 5,242,000 Less accumulated depreciation 4,499,000 4,136,000 $ 756,000 $ 1,106,000 Depreciation expense for the years ended September 30, 2014, 2013 and 2012 aggregated $363,000, $440,000 and $380,000, respectively. |
Goodwill
Goodwill | 12 Months Ended |
Sep. 30, 2014 | |
Goodwill | N OTE OODWILL Goodwill represents the excess of the purchase price of an acquired business over the fair value of amounts assigned to assets acquired and liabilities assumed. Goodwill is reviewed for impairment if events or circumstances indicate that impairment may be present. Any excess in carrying value over the estimated fair value is recorded as impairment loss and charged to results of operations in the period such determination is made. For each of the fiscal years ended September 30, 2014 and 2013, management has determined that there was no impairment loss required to be recognized in the carrying value of goodwill. The goodwill balances at September 30, 2014 and 2013 are as follows: 2014 2013 Balance at beginning of period $ 1,410,000 $ 1,410,000 Goodwill from acquisition (see Note D: Acquisition of CBC) 1,360,000 — Balance at end of period $ 2,770,000 $ 1,410,000 |
Non Recourse Debt
Non Recourse Debt | 12 Months Ended |
Sep. 30, 2014 | |
Non Recourse Debt | N OTE ON ECOURSE EBT Non-Recourse Debt — Bank of Montreal (“BMO”) In March 2007, Palisades XVI borrowed approximately $227 million under the Receivables Financing Agreement (“RFA”), as amended in July 2007, December 2007, May 2008, February 2009, October 2010 and August 2013 from BMO, in order to finance a $300 million portfolio purchase in March 2007 (the “Portfolio Purchase”). The original term of the agreement was three years. This term was extended by each of the Second, Third, Fourth and Fifth Amendments and the most recent agreement signed in August 2013. On August 7, 2013, Palisades XVI, a 100% owned bankruptcy remote subsidiary, entered into a Settlement Agreement and Omnibus Amendment (the “Settlement Agreement”) with BMO as an amendment to the RFA. In consideration for a $15 million prepayment funded by the Company, BMO agreed to significantly reduce minimum monthly collection requirements and the interest rate. If and when BMO receives the next $15 million of collections from the Portfolio Purchase or from voluntary prepayments by Asta Funding, Inc., less certain credits for payments made prior to the consummation of the Settlement Agreement (the “Remaining Amount”), Palisades XVI and its affiliates would be automatically released from liability in connection with the RFA (subject to customary exceptions). A condition to the release was Palisade XVI’s agreement to grant BMO, as of the time of the payment of the Remaining Amount, the right to receive 30% of net collections from the Portfolio Purchase once Palisades XVI has received from future net collections, the sum of $15 million plus voluntary prepayments included in the payment of the Remaining Amount (the “Income Interest”). The Company estimated the Income Interest to be between $0 and $1.4 million. However, the Company believes that no amount would be incurred because of the continued deterioration of collections from the Portfolio Purchase. On June 3, 2014, Palisades XVI paid the Remaining Amount. The final principal payment of $2,901,199 included a voluntary prepayment of $1,866,036 provided from funds of the Company. Accordingly, Palisades XVI will be entitled to receive $16.9 million of future collections from the Portfolio Purchase before BMO is entitled to receive any payments with respect to its Income Interest. With the payment of the Remaining Amount and upon completion of the documents granting the Palisades XVI Income Interest, including a written confirmation from BMO that the obligation has been paid in full, Palisades XVI has been released from further debt obligations from the RFA. The Company has recorded as other income, forgiveness of non-recourse debt, in the amount of approximately $26.1 million, pre-tax in the third quarter of fiscal year 2014. Bank Hapoalim B.M. (“Bank Hapoalim”) Line of Credit On May 2, 2014, the Company obtained a $20 million line of credit facility from Bank Hapoalim, pursuant to a Loan Agreement (the “Loan Agreement”) among the Company and its subsidiary, Palisades Collection, LLC, as borrowers (“the Borrowers”), and Bank Hapoalim, as agent and lender. The Loan Agreement provides for a $20.0 million committed line of credit and an accordion feature providing an increase in the line of credit of up to $30 million, at the discretion of the lenders. The facility is for a term of three years at an interest rate of either LIBOR plus 275 basis points or prime, at the Company’s option. The Loan Agreement includes covenants that require the Company to maintain a minimum net worth of $150 million and pay an unused line fee. The facility is secured pursuant to a Security Agreement (“Security Agreement”) among the parties to the Loan Agreement, with property of the Borrowers serving as collateral. Through the period ended September 30, 2014, the Company did not use this facility. |
Other Debt - CBC
Other Debt - CBC | 12 Months Ended |
Sep. 30, 2014 | |
Other Debt - CBC | N OTE THER EBT The Company assumed $25.9 million of debt related to the CBC acquisition (see Note D — Acquisition of CBC) on December 31, 2013. On the same date, the Company paid down $2.5 million of the debt. On March 27, 2014, CBC entered into the Sixth Amendment whereby it increased its revolving line of credit from $12.5 million to $15.0 million, the interest rate floor was reduced from 5.5% to 4.75% and the commitment was extended to February 28, 2015. The amendment also included changes in carrier concentration ratios and removal of the personal guarantees of the general managers and non-controlling interest partners. On July 15, 2014, CBC entered into the Seventh Amendment, extending the revolving line of credit to $20 million. On September 29, 2014, CBC entered into the Eighth Amendment, further extending the credit line to $22 million. The expiration date remains at February 28, 2015. As of September 30, 2014, the debt amounted to $32.3 million, which consists of a $19.6 million drawdown from a line of credit ($2.4 million available) from an institutional source and $12.7 million notes issued by entities 100%-owned and consolidated by CBC. These entities are bankruptcy-remote entities created to issue notes secured by structured settlements. On November 26, 2014, CBC announced completion of its fourth private placement. On March 11, 2015, CBC entered into the Ninth Amendment, extending the maturity date and the revolving line of credit maximum revolver amount (see Note V — Subsequent Events for additional information). The following table details the other debt at September 30, 2014: Interest Rate Balance Notes payable with varying monthly installments: Notes payable secured by settlement receivables with principal and interest outstanding payable until June 2025 8.75 % $ 2,521,000 Notes payable secured by settlement receivables with principal and interest outstanding payable until August 2026 7.25 % 5,363,000 Notes payable secured by settlement receivables with principal and interest outstanding payable until April 2032 7.125 % 4,828,000 Subtotal notes payable 12,712,000 $25,000,000 revolving line of credit expiring on March 1, 2017 4.75 % 19,583,000 Total debt — CBC $ 32,295,000 |
Other Liabilities
Other Liabilities | 12 Months Ended |
Sep. 30, 2014 | |
Other Liabilities | N OTE THER IABILITIES Other liabilities as of September 30, 2014 and 2013 are as follows: 2014 2013 Accounts payable and accrued expenses $ 3,126,000 $ 2,274,000 Other 461,000 212,000 Total other liabilities $ 3,587,000 $ 2,486,000 |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2014 | |
Income Taxes | N OTE NCOME AXES The components of the provision for income taxes for the years ended September 30, 2014, 2013 and 2012 are as follows: 2014 2013 (As Revised) 2012 (As Revised) Current: Federal $ 4,148,000 $ 561,000 $ 3,437,000 Federal true up 18,000 — 42,000 4,166,000 561,000 3,479,000 Deferred: Federal (1,620,000 ) 212,000 1,738,000 State 2,067,000 121,000 1,580,000 447,000 333,000 3,318,000 Provision for income taxes $ 4,613,000 $ 894,000 $ 6,797,000 The difference between the statutory federal income tax rate on the Company’s pre-tax income and the Company’s effective income tax rate is summarized for the years ended September 30, 2014, 2013 and 2012 as follows: 2013 2012 2014 (As Revised) (As Revised) Statutory federal income tax rate 34.0 % 34.0 % 34.0 % State income tax, net of federal benefit 4.5 6.1 6.1 State tax rate change 8.4 — — Permanent difference in municipal interest (3.3 ) (7.5 ) — Permanent difference other 0.2 (0.7 ) — Federal prior year provision to return difference 0.2 (2.1 ) 0.2 Other (2.2 ) (2.8 ) 0.3 Effective income tax rate 41.8 % 27.0 % 40.6 % The Company recognized a net deferred tax asset of $6,786,000 and $7,772,000 as of September 30, 2014 and 2013, respectively. The components are as follows: September 30, September 30, 2014 2013 Deferred and accrued revenue $ 7,000 $ (414,000 ) Impairments/bad debt reserves/Prior period adjustments 915,000 2,570,000 State tax net operating loss carryforward 9,958,000 9,524,000 Stock based compensation 2,814,000 2,133,000 Unrealized gain on structured settlements (930,000 ) — Depreciation, amortization and other (249,000 ) (312,000 ) Deferred income taxes 12,515,000 13,501,000 Deferred tax valuation allowance (5,729,000 ) (5,729,000 ) Deferred income taxes $ 6,786,000 $ 7,772,000 The Company files consolidated Federal and state income tax returns. Substantially all of the Company’s subsidiaries are single member limited liability companies and, therefore, do not file separate tax returns. Majority and minority owned subsidiaries file separate partnership tax returns. The expiration date for state net operating loss (“NOL”) carryforwards (from September 30, 2009) is September 30, 2029. The New Jersey NOL carryforward balance as of September 30, 2014 is approximately $110.6 million. There are no federal NOL carryforwards. The Company accounts for income taxes using the asset and liability method which requires the recognition of deferred tax assets and, if applicable, deferred tax liabilities, for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and, if applicable, liabilities. Additionally, the Company would adjust deferred taxes to reflect estimated tax rate changes, if applicable. The Company conducts periodic evaluations to determine whether it is more likely than not that some or all of its deferred tax assets will not be realized. Among the factors considered in this evaluation are estimates of future earnings, the future reversal of temporary differences and the impact of tax planning strategies that we can implement if warranted. The Company is required to provide a valuation allowance for any portion of our deferred tax assets that, more likely than not, will not be realized at September 30, 2014. Based on this evaluation, the Company has a deferred tax asset valuation allowance of approximately $5.7 million as of September 30, 2014. The deferred tax valuation allowance remained the same as that reported on September 30, 2013. Although the carryforward period for state income tax purposes is up to twenty years, given the economic conditions, such economic environment could limit growth over a reasonable time period to realize the deferred tax asset. The Company determined the time period allowance for carryforward is outside a reasonable period to forecast full realization of the deferred tax asset, therefore recognized the deferred tax asset valuation allowance. The Company continually monitors forecast information to ensure the valuation allowance is at the appropriate value. As required by FASB ASC 740, Income Taxes, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. Interest and penalties arising from uncertain tax positions will be presented as a component of income taxes. No amounts of interest or penalties were recognized in the Company’s consolidated financial statements for 2014 and 2013. The corporate federal income tax returns of the Company for 2008 through 2013 are subject to examination by the Internal Revenue Service (“IRS”) generally for three years after they are filed. The state income tax returns and other state filings of the Company are subject to examination by the state taxing authorities, for various periods, generally up to four years after they are filed. In April 2010, the Company received notification from the IRS that the Company’s federal income tax returns would be audited. The current IRS audit period is 2008 through 2012. This audit is currently in progress. Additional tax liabilities, penalties and interest thereon when determined could have a material impact on the Company’s financial statements. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies | N OTE OMMITMENTS AND ONTINGENCIES Leases The Company leases its facilities in (i) Englewood Cliffs, New Jersey, (ii) Houston, Texas, (iii) New York, New York and (iv) Conshohocken, Pennsylvania. The leases are operating leases, and the Company incurred related rent expense in the amounts of $617,000, $554,000 and $413,000 during the years ended September 30, 2014, 2013 and 2012, respectively. The future minimum lease payments are as follows: Year Ending September 30, 2015 $ 739,000 2016 705,000 2017 425,000 2018 180,000 2019 185,000 Thereafter 63,000 $ 2,297,000 Contingencies In the ordinary course of its business, the Company is involved in numerous legal proceedings. The Company regularly initiates collection lawsuits, using its network of third party law firms, against consumers. Also, consumers occasionally initiate litigation against the Company, in which they allege that the Company has violated a federal or state law in the process of collecting their account. The Company does not believe that these matters are material to its business and financial condition. The Company is not involved in any material litigation in which it was a defendant. The Company is fully cooperating with several state agencies in connection with subpoenas seeking information and/or documentation regarding business practices. The Company has not made any provision with respect to these matters in the financial statements because the Company does not believe that they are material to its business and financial condition. |
Concentrations
Concentrations | 12 Months Ended |
Sep. 30, 2014 | |
Concentrations | N OTE ONCENTRATIONS At September 30, 2014, approximately 37% of the Company’s portfolio face value was serviced by five collection organizations. The Company has servicing agreements in place with these five collection organizations, as well as all of the Company’s other third party collection agencies and attorneys that cover standard contingency fees and servicing of the accounts. |
Stock Option Plans
Stock Option Plans | 12 Months Ended |
Sep. 30, 2014 | |
Stock Option Plans | N OTE TOCK PTION LANS 2012 Stock Option and Performance Award Plan On February 7, 2012, the Board of Directors adopted the Company’s 2012 Stock Option and Performance Award Plan (the “2012 Plan”), which was approved by the stockholders of the Company on March 21, 2012. The 2012 Plan replaces the Equity Compensation Plan (as defined below). The 2012 Plan provides the Company with flexibility with respect to equity awards by also providing for grants of stock awards (i.e., restricted or unrestricted), stock purchase rights and stock appreciation rights, in addition to the granting of stock options. The Company authorized 2,000,000 shares of Common Stock for issuance under the 2012 Plan. As of September 30, 2014, the Company has granted 371,700 options and 102,321 shares of restricted stock since inception of the 2012 Plan. Additionally, 40,300 options have been cancelled during that time period, leaving 1,566,279 shares available as of September 30, 2014. As of September 30, 2014, approximately 53 of the Company’s employees were eligible to participate in the 2012 Plan. Equity Compensation Plan On December 1, 2005, the board of directors adopted the Company’s Equity Compensation Plan (the “Equity Compensation Plan”), which was approved by the stockholders of the Company on March 1, 2006. The Equity Compensation Plan was adopted to supplement the Company’s 2002 Stock Option Plan (as defined below). In addition to permitting the grant of stock options as are permitted under the 2002 Stock Option Plan, the Equity Compensation Plan allows the Company flexibility with respect to equity awards by also providing for grants of stock awards (i.e., restricted or unrestricted), stock purchase rights and stock appreciation rights. The Company authorized 1,000,000 shares of Common Stock for issuance under the Equity Compensation Plan. As of March 21, 2012, no more awards could be issued under this plan. 2002 Stock Option Plan On March 5, 2002, the board of directors adopted the Company’s 2002 Stock Option Plan (the “2002 Plan”), which was approved by the Company’s stockholders on May 1, 2002. The 2002 Plan was adopted in order to attract and retain qualified directors, officers and employees of, and consultants to, the Company. The 2002 Plan authorizes the granting of incentive stock options (as defined in Section 422 of the Internal Revenue Code of 1986, as amended (“the “Code”)) and non-qualified stock options to eligible employees of the Company, including officers and directors of the Company (whether or not employees) and consultants of the Company. The Company authorized 1,000,000 shares of Common Stock for issuance under the 2002 Plan. As of March 5, 2012, no more awards could be issued under this plan. Stock Based Compensation The Company accounts for stock-based employee compensation under ASC 718, Compensation — Stock Compensation In February 2014, the Compensation Committee of the Board of Directors of the Company (“Compensation Committee”) granted 5,000 stock options to a consultant of the Company. The exercise price of these was at the market price on that date. The options vested immediately. The weighted average assumptions used in the option pricing model were as follows: Risk-free interest rate 0.06 % Expected term (years) 5.9 Expected volatility 35.3 % Dividend yield 0.00 % In December 2013, the Compensation Committee of the Board of Directors of the Company (“Compensation Committee”) granted 156,700 stock options, of which 70,000 options were awarded to the Officers of the Company and the remaining 86,700 stock options were awarded to non-officer employees of the Company. The exercise price of these options, issued on December 12, 2013, was at the market price on that date. The options vest in three equal annual installments and accounted for as one graded vesting award. The weighted average assumptions used in the option pricing model were as follows: Risk-free interest rate 0.08 % Expected term (years) 6.5 Expected volatility 98.3 % Dividend yield 0.00 % In June 2013, through a previous action of the Compensation Committee of the board of directors of the Company (the “Compensation Committee”) authorizing the Chief Executive Officer of the Company the discretion to grant stock option awards to non-officer employees, the Chief Executive Officer awarded 50,000 stock options to non-officer employees. The exercise price of these options, issued on June 13, 2013, was at the market price on that date. The options vest in three equal installments, accounted for as one graded vesting award, starting on the first anniversary of the grant. The assumptions used in the option pricing model were as follows: Risk-free interest rate 0.10 % Expected term (years) 6.2 Expected volatility 99.7 % Dividend yield 0.92 % In December 2012, the Compensation Committee granted 160,000 stock options, of which 65,000 options were awarded to three officers of the Company and 20,000 options were awarded to an employee of the Company. The remaining 75,000 shares were issued to six non-employee directors of the Company. The exercise price of these options, issued on December 18, 2012, was at the market price on that date. The options vest in three equal installments, accounted for as one graded vesting award, starting on the first anniversary of the grant. The assumptions used in the option pricing model were as follows: Risk-free interest rate 0.16 % Expected term (years) 6.0 Expected volatility 101.0 % Dividend yield 1.67 % In addition, the Company granted 102,321 restricted shares to the Chief Executive Officer of the Company. The shares vest in three equal installments, starting on the first anniversary of the grant. In December 2011, the Compensation Committee granted 360,000 stock options, of which 150,000 options were awarded to the Chief Executive Officer, and 30,000 stock options were rewarded to both the Chief Financial Officer and the Senior Vice President. An aggregate of 60,000 shares were issued to five non-employee directors of the Company. The exercise price of these options, issued December 13, 2011, was at the market price on that date. The weighted average assumptions used in the option pricing model were as follows: Risk-free interest rate 0.08 % Expected term (years) 10.0 Expected volatility 103.9 % Dividend yield 1.03 % On December 22, 2011, the remaining 90,000 stock options were granted to selected non-officer employees of the Company. The exercise price of all stock options was at the market price on the date of the grant. The weighted average assumptions used in the option pricing model were as follows: Risk-free interest rate 0.08 % Expected term (years) 10.0 Expected volatility 95.7 % Dividend yield 1.03 % The following table summarizes stock option transactions under the plans: Year Ended September 30, 2014 2013 2012 Shares Weighted Shares Weighted Shares Weighted Outstanding options at the beginning of year 1,622,771 $ 11.31 1,499,471 $ 11.27 1,294,271 $ 11.41 Options granted 161,700 8.48 210,000 9.36 360,000 7.87 Options cancelled (369,612 ) 12.33 (50,000 ) 7.77 (15,300 ) 6.00 Options exercised (11,600 ) 3.46 (36,700 ) 3.41 (139,500 ) 4.36 Outstanding options at the end of year 1,403,259 $ 10.78 1,622,771 $ 11.31 1,499,471 $ 11.27 Exercisable options at the end of year 888,587 $ 12.15 1,108,271 $ 12.62 1,000,904 $ 12.93 The Company recognized $1,418,000 of compensation expense related to stock options, for fiscal year 2014. The Company recognized $1,683,000 and $1,538,000 of compensation expense related to stock options in the fiscal years ended September 30, 2013 and 2012, respectively. As of September 30, 2014, there was $1,466,000 of unrecognized compensation cost related to unvested stock options. The weighted average remaining period over which such costs are expected to be recognized is 1.6 years. The intrinsic value of the outstanding and exercisable options as of September 30, 2014 was approximately $329,000 and $241,000, respectively. The intrinsic value of the options exercised during fiscal years 2014 and 2013 was approximately $57,000 and $213,000, respectively. The fair value of the options exercised during the fiscal years ended September 30, 2014 and 2013 was approximately $97,000 and $339,000, respectively. The proceeds from the exercise of stock options during the fiscal years ended September 30, 2014 and 2013 were approximately $40,000 and $125,000, respectively. The weighted average remaining contractual life of exercisable options as of September 30, 2014 is 3.8 years. The fair value of the stock options that vested during the 2014 and 2013 fiscal years was approximately $740,000 and $1,254,000, respectively. The fair value of options granted during the fiscal years ended September 30, 2014 and 2013 was approximately $1,372,000 and $1,966,000, respectively. The following table summarizes information about the plans’ outstanding options as of September 30, 2014: Options Outstanding Options Exercisable Range of Exercise Price Number Weighted Weighted Number Weighted Exercise Price $ 2.8751 - $ 5.7500 7,200 4.6 $ 2.95 7,200 $ 2.95 $ 5.7501 - $ 8.6250 869,900 6.9 7.94 471,900 7.79 $ 8.6251 - $17.2500 175,000 8.3 9.40 58,328 9.39 $17.2501 - $20.1250 336,159 0.1 18.22 336,159 18.22 $25.8751 - $28.7500 15,000 2.2 28.75 15,000 28.75 1,403,259 5.4 $ 10.78 888,587 $ 12.15 The following table summarizes information about restricted stock transactions: Year Ended Weighted Year Ended Weighted Unvested at the beginning of period 102,321 $ 9.57 10,922 $ 7.63 Awards granted — 0.00 102,321 9.57 Vested (34,107 ) 9.57 (10,922 ) 7.63 Forfeited — 0.00 — 0.00 Unvested at the end of period 68,214 $ 9.57 102,321 $ 9.57 The Company recognized $326,000, $273,000 and $85,000 of compensation expense during the fiscal years ended September 30, 2014, 2013 and 2012, respectively, for restricted stock. As of September 30, 2014, there was a total of $397,000 of unrecognized compensation cost related to unvested restricted stock. The weighted average remaining period over which such costs are recognized is 1.2 years. There were no restricted stock awards granted during fiscal year 2014. The fair value of the restricted stock awards granted during the first quarter of fiscal year 2013 was approximately $979,000.The fair value of the restricted stock awards vested during the fiscal years ended September 30, 2014 and 2013 was approximately $326,000 and $83,000, respectively. The Company recognized an aggregate total of $1,744,000, $1,956,000 and $1,623,000 in compensation expense for the fiscal years ended September 30, 2014, 2013 and 2012, respectively, for the stock options and restricted stock grants. As of September 30, 2014, there was a total of $1,843,000 of unrecognized compensation cost related to unvested stock options and restricted stock grants. The method used to calculate stock based compensation is the straight line pro-rated method. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Sep. 30, 2014 | |
Stockholders' Equity | N OTE TOCKHOLDERS QUITY In December 2012, the Board of Directors of the Company approved the payment of a special accelerated annual dividend of $0.08 per share to stockholders of record on December 24, 2012. The aggregate dividend of $1,030,000 was paid on December 28, 2012. No additional dividends were declared during fiscal year 2013. During the year ended September 30, 2012, the Company declared quarterly cash dividends aggregating $1,111,000, which includes $0.02 per share, per quarter, of which $260,000 was accrued as of September 30, 2012 and paid November 1, 2012. Dividends are at the discretion of the board of directors and will depend upon the Company’s financial condition, operating results, capital requirements and any other factors the board of directors deems relevant. In addition, agreements with the Company’s lenders may, from time to time, restrict the ability to pay dividends. As of September 30, 2014, there were no such restrictions. No dividends were declared for fiscal year 2014. On March 9, 2012, the Company adopted a Rule 10b5-1 Plan in conjunction with its share repurchase program. The Board of Directors approved the purchase of up to $20 million of the Company’s common stock, which was effective through March 11, 2013. This share repurchase authorization superseded the authorization to repurchase shares in June 2011, pursuant to which the Company repurchased approximately 59,000 shares at an aggregate cost of approximately $457,000. The Company purchased approximately 885,000 shares at an aggregate cost of approximately $7.9 million under the Rule 10b5-1 Plan. Additionally, in June 2012, the Company repurchased 1.0 million shares of its common stock for $9.4 million in a privately negotiated transaction outside of the Rule 10b5-1 Plan. No shares were repurchased in fiscal year 2014. |
Retirement Plan
Retirement Plan | 12 Months Ended |
Sep. 30, 2014 | |
Retirement Plan | N OTE ETIREMENT LAN The Company maintains a 401(k) Retirement Plan covering all of its eligible employees. Matching contributions made by the employees to the plan are made at the discretion of the board of directors each plan year. Contributions for the years ended September 30, 2014, 2013 and 2012 were $119,000, $88,000 and $108,000, respectively. |
Fair Value of Financial Measure
Fair Value of Financial Measurements and Disclosures | 12 Months Ended |
Sep. 30, 2014 | |
Fair Value of Financial Measurements and Disclosures | N OTE AIR ALUE OF INANCIAL EASUREMENTS AND ISCLOSURES Disclosures about Fair Value of Financial Instruments FASB ASC 825, Financial Instruments The estimated fair value of the Company’s financial instruments is summarized as follows: September 30, 2014 September 30, 2013 Carrying Fair Value Carrying Fair Value Financial assets Available-for-sale investments (Level 1) $ 66,799,000 $ 66,799,000 $ 58,035,000 $ 58,035,000 Consumer receivables acquired for liquidation (Level 3) 29,444,000 50,962,000 64,254,000 70,875,000 Structured settlements (Level 3) 42,079,000 42,079,000 — — Financial liabilities Non-Recourse Debt (Level 3) — — 35,760,000 27,000,000 Other debt — CBC, revolving line of credit (Level 3) 19,583,000 19,583,000 — — Other debt — CBC, non-recourse notes payable with varying installments (Level 3) 12,712,000 12,712,000 — — Disclosure of the estimated fair values of financial instruments often requires the use of estimates. The Company uses the following methods and assumptions to estimate the fair value of financial instruments: Available-for-sale investments — The available-for-sale securities consist of mutual funds that are valued based on quoted prices in active markets. Consumer receivables acquired for liquidation — The Company computed the fair value of the consumer receivables acquired for liquidation using its proprietary forecasting model. The Company’s forecasting model utilizes a discounted cash flow analysis. The Company’s cash flows are an estimate of collections for consumer receivables based on variables fully described in Note C: Consumer Receivables Acquired for Liquidation. These cash flows are discounted to determine the fair value. Structured settlements — The Company determined the fair value based on the discounted forecasted future collections of the structured settlements. Non-Recourse Debt — carries a variable rate. The fair value at September 30, 2013 was determined as a result of the forecasted future collections of the Portfolio Purchase. Other debt CBC, revolving line of credit — The Company determined the fair value based on similar instruments in the market. Other debt CBC, notes payable with varying installments — The fair value at September 30, 2014 was based on the discounted forecasted future collections of the structured settlements. Fair Value Hierarchy The Company recorded its available-for-sale investments at estimated fair value on a recurring basis. The accompanying consolidated financial statements include estimated fair value information regarding its available-for-sale investments as of September 30, 2014, as required by FASB ASC 820, Fair Value Measurements and Disclosures Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to assess at the measurement date. Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets; quoted prices in markets that are not active for identical or similar assets or liabilities; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. Level 3 — Unobservable inputs that are supported by little or no market activity and significant to the fair value of the assets or liabilities that are developed using the reporting entities’ estimates and assumptions, which reflect those that market participants would use. The Company’s available-for-sale investments are classified as Level 1 financial instruments based on the classifications described above. The Company did not have any transfers into (out of) Level 1 investments during the fiscal year ended September 30, 2014. The Company had no Level 2 or Level 3 available-for-sale investments during the fiscal year ended September 30, 2014. The following table sets forth the Company’s quantitative information about its Level 3 fair value measurements as of September 30, 2014: Fair Value Valuation Unobservable Rate Structured settlements at fair value $ 42,079,000 Discounted Discount 5.5 % The changes in structured settlements at fair value using significant unobservable inputs (Level 3) during the year ended September 30, 2014 were as follows: Balance at September 30, 2013 $ 0 Acquisition of CBC (see Note 5) 30,436,000 Total gains included in earnings 2,840,000 Purchases 9,808,000 Sales — Interest accreted 2,282,000 Payments received (3,287,000 ) Total $ 42,079,000 The amount of total gains for the year included in earnings attributable to the change in unrealized gains (losses) relating to assets held at September 30, 2014 $ 2,840,000 Realized and unrealized gains and losses included in earnings in the accompanying consolidated statements of income for the year ended September 30, 2014 are reported in the following revenue categories: Total gains (losses) included in earnings in fiscal year 2014 $ 2,840,000 Change in unrealized gains (losses) relating to assets still held at September 30, 2014 $ 2,840,000 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Sep. 30, 2014 | |
Related Party Transactions | N OTE ELATED ARTY RANSACTIONS On December 12, 2011, the Company and Piccolo Business Advisory (“Piccolo”), which is owned by Louis Piccolo, a director of the Company, entered into a Consulting Agreement, pursuant to which Piccolo provided consulting services which included, but was not limited to, analysis of proposed debt and equity transactions, due diligence and financial analysis and management consulting services (“Services”). The Consulting Agreement was for a period of two years, which ended on December 31, 2013 and Piccolo received compensation of $150,000 per annum payable monthly, a bonus of $25,000 per new transaction closed by the Company with Piccolo’s assistance (if any), and 30,000 options per year, with such options vesting in three equal annual installments on the first, second and third anniversaries of the first grant date. The Company paid Piccolo $25,000, $150,000, and $125,000 in the fiscal years ended September 30, 2014, 2013 and 2012, respectively. This agreement was not renewed, however, there are ongoing discussions for a new agreement. |
Summarized Quarterly Data (Unau
Summarized Quarterly Data (Unaudited) | 12 Months Ended |
Sep. 30, 2014 | |
Summarized Quarterly Data (Unaudited) | N OTE UMMARIZED UARTERLY ATA UNAUDITED Quarter First Second Third Quarter Fourth Full Year 2014 (As Restated)(1) Total revenue $ 7,427,000 $ 7,771,000 $ 8,259,000 $ 8,750,000 $ 32,207,000 Income before income taxes 2,194,000 126,000 7,680,000 1,042,000 11,042,000 Net income attributable to Asta Funding, Inc. 947,000 75,000 4,687,000 192,000 5,901,000 Basic net income per share attributable to Asta Funding, Inc. $ 0.07 $ 0.01 $ 0.36 $ 0.01 $ 0.45 Diluted net income per share attributable to Asta Funding, Inc. $ 0.07 $ 0.01 $ 0.35 $ 0.01 $ 0.45 2013 (As Revised) Total revenue $ 9,672,000 $ 9,030,000 $ 11,259,000 $ 8,239,000 $ 38,200,000 Income (loss) before income taxes 4,224,000 2,725,000 (5,612,000 ) 1,972,000 3,309,000 Net income (loss) attributable to Asta Funding, Inc. 2,488,000 1,599,000 (3,369,000 ) 1,291,000 2,009,000 Basic net income (loss) per share attributable to Asta Funding, Inc. $ 0.19 $ 0.12 $ (0.26 ) $ 0.10 $ 0.16 Diluted net income (loss) per share attributable to Asta Funding, Inc. $ 0.19 $ 0.12 $ (0.26 ) $ 0.10 $ 0.15 * Due to rounding the sum of quarterly totals for earnings per share may not add to the yearly total. (1) The first three quarters of fiscal year 2014 has been restated. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Sep. 30, 2014 | |
Segment Reporting | N OTE EGMENT EPORTING The Company operates through strategic business units that are aggregated into four reportable segments: Consumer receivables, Personal injury claims, structured settlements and disability advocacy. The four reportable segments consist of the following: • Consumer receivables — ® ® • Personal injury claims • Structured settlements • GAR Disability Advocates Certain non-allocated administrative costs, interest income, interest expense and various other non-operating income and expenses are reflected in Corporate. Corporate assets include cash and cash equivalents, available-for-sale securities, property and equipment, goodwill, deferred taxes and other assets. (Dollars in millions) Fiscal Consumer Personal Structured GAR Corporate Total Revenues 2014 $ 19.8 $ 7.2 $ 5.2 $ — $ — $ 32.2 2013 31.8 6.4 — — — 38.2 2012 40.8 1.6 — — — 42.4 Other income 2014 26.1 — — 0.4 1.4 27.9 2013 — — — — 1.6 1.6 2012 — — — — 2.3 2.3 Income before income taxes 2014 18.9 2.3 0.4 (2.7 ) (7.9 ) 11.0 2013 10.1 2.0 — (1.2 ) (7.6 ) 3.3 2012 23.1 0.1 — — (6.4 ) 16.8 Total assets 2014 30.5 34.0 38.5 1.0 113.1 217.1 2013 65.4 36.8 — 0.2 109.1 211.5 2012 96.3 21.5 — — 119.8 237.6 Capital expenditures 2014 — — — — — — 2013 — — — — 0.7 0.7 2012 — — — — 0.6 0.6 Depreciation 2014 — — — — 0.4 0.4 2013 — — — — 0.4 0.4 2012 — — — — 0.4 0.4 The Company does not have any intersegment revenue transaction. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Sep. 30, 2014 | |
Subsequent Events | N OTE UBSEQUENT VENTS On October 9, 2014, the Company purchased $5.0 million of shares in the Topaz MP Fixed Income Fund, a specialized fund that will invest in portfolios of small non-performing consumer loans originated in Italy. On November 26, 2014, CBC announced the completion of its fourth private placement, backed by structured settlement and fixed annuity payments. CBC issued, through its subsidiary, BBR IV, LLC, approximately $20.8 million of fixed rate asset-backed notes with a yield of 5.4% (see Note J — Other Debt — CBC). On March 11, 2015, CBC entered into the Ninth Amendment. This amendment, effective March 1, 2015, extended the maturity date from February 28, 2015 to March 1, 2017. Additionally, the credit line was increased from $22.0 million to $25.0 million and the interest rate floor was decreased from 4.75% to 4.1%. Other terms and conditions are materially unchanged (see Note J — Other Debt — CBC). |
The Company and its Significa33
The Company and its Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2014 | |
The Company | [1] The Company: Asta Funding, Inc., together with its wholly owned significant operating subsidiaries Palisades Collection LLC, Palisades Acquisition XVI, LLC (“Palisades XVI”), VATIV Recovery Solutions LLC (“VATIV”), ASFI Pegasus Holdings, LLC (“APH”), Fund Pegasus, LLC (“Fund Pegasus”), GAR Disability Advocates, LLC (“GAR Disability Advocates”) and other subsidiaries, not all wholly owned (collectively, the “Company”), has been engaged in the business of purchasing, managing for its own account and servicing distressed consumer receivables, including charged-off receivables, and semi-performing receivables, since 1994, as well as more recent business segments discussed below. The primary charged-off receivables are accounts that have been written-off by the originators and may have been previously serviced by collection agencies. Semi-performing receivables are accounts where the debtor is currently making partial or irregular monthly payments, but the accounts may have been written-off by the originators. Distressed consumer receivables are the unpaid debts of individuals to banks, finance companies and other credit providers. A large portion of the Company’s distressed consumer receivables are MasterCard ® ® The Company owns 80% of Pegasus Funding, LLC (“Pegasus”), which invests in funding personal injury claims and 80% of CBC Settlement Funding, LLC (“CBC”), which invests in structured settlements (see Note D: Acquisition of CBC). Pegasus provides funding for individuals in need of short term funds pending insurance settlements of their personal injury claims. The funds will be recouped when the underlying insurance settlements are paid. The long periods of time taken by insurance companies to settle and pay such claims resulting from lengthy litigation and the court process is fueling the demand for such funding. CBC provides liquidity to consumers by purchasing certain deferred payment streams including, but not limited to, structured settlements and annuities. CBC generates business from direct marketing as well as through wholesale purchases from brokers or other third parties. CBC has its principal office in Conshohocken, Pennsylvania. CBC primarily warehouses the receivables it originates and periodically resells or securitizes those assets on a pooled basis. The structured settlement marketplace is regulated by federal and state law, requiring that each transaction is reviewed and approved by court order. GAR Disability Advocates is a social security disability advocacy group, which obtains and represents individuals in their claims for social security disability and supplemental security income benefits from the Social Security Administration. The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and industry practices. |
Revision of Prior Period Financial Statements | [2] Revision of Prior Period Financial Statements: Our previously reported results for the first three quarters in fiscal year 2014 reported finance income on the interest method in accordance with FASB Accounting Standards Codification (“ASC”) 310-30, Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality We identified pre-tax errors in prior annual periods related to the application of the interest method for consumer receivables acquired for liquidation and accounted for under ASC 310-30. During those prior annual periods, the Company had determined the effective yield for its distressed consumer receivable portfolios by analyzing actual cash flows versus the amount of cash flows expected to be collected over the life of the loan as opposed to performing this analysis using the current cash flow variations (i.e., actual versus estimated cash flows within a particular quarter). As disclosed in the detail that follows, this misstatement resulted in an increase in finance receivables of approximately $6.4 million, with a decrease in deferred taxes of approximately $2.7 million and a resulting increase to retained earnings of approximately $3.7 million in this Form 10-K as of September 30, 2013. The effect on the fiscal year ended September 30, 2013 was a reduction of finance income of approximately $2.6 million with an associated tax benefit of approximately $0.3 million which resulted in net income attributable to Asta Funding, Inc. of $2.0 million or $0.15 per diluted share from $2.7 million or $0.21 per diluted share. The effect on the fiscal year ended September 30, 2012 was an increase of $0.2 million in finance income with an associated tax benefit of $0.1 million which resulted in net income attributable to Asta Funding, Inc. of $9.9 million or $0.69 per diluted share from $10.0 million or $0.70 per diluted share. The impact of the misstatements in the prior years’ financial statements was not material to any of those years, however, the cumulative effect of correcting all of the prior period misstatements in the current year would be material to our fiscal year 2014 consolidated financial statements. As such, consistent with the guidance in ASC Topic 250, we have accounted for these errors as a revision of prior period financial statements. In evaluating whether the previously issued financial statements were materially misstated, the Company applied SEC Staff Accounting Bulletin (SAB) No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements Under SAB No. 108, prior-year misstatements which, if corrected in the current year would be material, must be corrected by adjusting prior year financial statements, even though such correction previously was and continues to be immaterial to the prior-year financial statements. Correcting prior-year financial statements for such “immaterial misstatements” does not require previously filed reports to be amended. In accordance with accounting guidance presented in ASC 250-10 (SEC Staff Accounting Bulletin No. 99, Materiality), the Company assessed the materiality of the misstatements and concluded that they were not material to any of the Company’s previously issued annual financial statements. Due to the immaterial nature of the misstatement corrections, the cumulative adjustments required to correct the misstatements in the financial statements are reflected in the revised stockholders’ equity as an adjustment to the beginning balance of retained earnings. The cumulative effect of those adjustments increased previously reported retained earnings by approximately $4.5 million. These adjustments also cumulatively impacted the following balance sheet line items as of September 30, 2013: Consolidated Balance Sheet September 30, 2013 As Reported Adjustments As Revised ASSETS Cash and cash equivalents $ 35,179,000 $ — $ 35,179,000 Investments — available-for-sale 58,035,000 — 58,035,000 Restricted cash 968,000 — 968,000 Consumer receivables acquired for liquidation (at net realizable value) 57,900,000 6,354,000 64,254,000 Other investments, net 35,758,000 — 35,758,000 Due from third party collection agencies and attorneys 1,169,000 — 1,169,000 Prepaid and income taxes receivable 1,496,000 — 1,496,000 Furniture and equipment, net (net of accumulated depreciation of $4,136,000) 1,106,000 — 1,106,000 Deferred income taxes 10,443,000 (2,671,000 ) 7,772,000 Goodwill 1,410,000 — 1,410,000 Other assets 4,383,000 — 4,383,000 Total assets $ 207,847,000 $ 3,683,000 $ 211,530,000 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities Non-recourse debt $ 35,760,000 $ — $ 35,760,000 Other liabilities 2,486,000 — 2,486,000 Total liabilities 38,246,000 — 38,246,000 Commitments and contingencies STOCKHOLDERS’ EQUITY Preferred stock, $0.01 par value; authorized 5,000,000; issued and outstanding — none — — — Common stock, $.01 par value, authorized 30,000,000 shares; issued, 14,917,977, and outstanding, 12,974,239 149,000 — 149,000 Additional paid in capital 79,104,000 — 79,104,000 Retained earnings 109,011,000 3,683,000 112,694,000 Accumulated other comprehensive loss, net of income taxes (674,000 ) — (674,000 ) Treasury stock (at cost), 1,943,738 shares (17,805,000 ) — (17,805,000 ) Non-controlling interest (184,000 ) — (184,000 ) Total stockholders’ equity 169,601,000 3,683,000 173,284,000 Total liabilities and stockholders’ equity $ 207,847,000 $ 3,683,000 $ 211,530,000 Consolidated Statements of Income Year Ended September 30, 2013 As Reported Adjustments As Revised Revenues: Finance income, net $ 34,363,000 $ (2,601,000 ) $ 31,762,000 Personal injury claims income 6,438,000 — 6,438,000 Total revenues 40,801,000 (2,601,000 ) 38,200,000 Other income (includes $252,000 accumulated other comprehensive income reclassifications for unrealized net loss on available for sale securities). 1,611,000 — 1,611,000 42,412,000 (2,601,000 ) 39,811,000 Expenses: General and administrative expenses 24,212,000 — 24,212,000 Interest expense 1,300,000 — 1,300,000 Impairments of consumer receivables acquired for liquidation 12,592,000 (1,602,000 ) 10,990,000 38,104,000 (1,602,000 ) 36,502,000 Income before income tax 4,308,000 (999,000 ) 3,309,000 Income tax expense (includes tax benefit $100,000 of accumulated other comprehensive income reclassifications for unrealized net loss on available for sales securities) 1,164,000 (270,000 ) 894,000 Net income 3,144,000 (729,000 ) 2,415,000 Less: net income attributable to non-controlling interests 406,000 — 406,000 Net income attributable to Asta Funding, Inc. $ 2,738,000 $ (729,000 ) $ 2,009,000 Net income per share attributable to Asta Funding, Inc.: Basic $ 0.21 $ (0.05 ) $ 0.16 Diluted $ 0.21 $ (0.06 ) $ 0.15 Weighted average number of common shares outstanding: Basic 12,952,150 12,952,150 Diluted 13,216,051 — 13,216,051 Consolidated Statements of Income Year Ended September 30, 2012 As Reported Adjustments As Revised Revenues: Finance income, net $ 40,599,000 $ 204,000 $ 40,803,000 Personal injury claims income 1,647,000 — 1,647,000 Total revenues 42,246,000 204,000 42,450,000 Other income (includes $339,000 of accumulated other comprehensive income reclassifications for unrealized net gain on available for sale securities). 2,256,000 — 2,256,000 44,502,000 204,000 44,706,000 Expenses: General and administrative expenses 23,640,000 — 23,640,000 Interest expense 2,539,000 — 2,539,000 Impairments of consumer receivables acquired for liquidation 1,383,000 388,000 1,771,000 27,562,000 388,000 27,950,000 Income before income tax 16,940,000 (184,000 ) 16,756,000 Income tax expense (includes taxes $137,000 of accumulated other comprehensive income reclassifications for unrealized net gain on available for sales securities) 6,872,000 (75,000 ) 6,797,000 Net income 10,068,000 (109,000 ) 9,959,000 Less: net income attributable to non-controlling interests 31,000 — 31,000 Net income attributable to Asta Funding, Inc. $ 10,037,000 $ (109,000 ) $ 9,928,000 Net income per share attributable to Asta Funding, Inc.: Basic $ 0.71 $ 0.00 $ 0.71 Diluted $ 0.70 $ (0.01 ) $ 0.69 Weighted average number of common shares outstanding: Basic 14,077,650 — 14,077,650 Diluted 14,321,381 — 14,321,381 Consolidated Statements of Cash Flows Year Ended September 30, 2013 As Reported Adjustments As Revised Cash flows from operating activities: Net income $ 3,144,000 $ (729,000 ) $ 2,415,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 440,000 — 440,000 Deferred income taxes 326,000 (269,000 ) 57,000 Impairments of consumer receivables acquired for liquidation 12,592,000 (1,602,000 ) 10,990,000 Stock based compensation 1,956,000 — 1,956,000 Loss (gain) on sale of available-for-sale securities 252,000 — 252,000 Changes in: — Prepaid and income tax receivable 561,000 — 561,000 Due from third party collection agencies and attorneys 873,000 — 873,000 Other assets (631,000 ) — (631,000 ) Other liabilities (434,000 ) — (434,000 ) Net cash provided by operating activities 19,079,000 (2,600,000 ) 16,479,000 Cash flows from investing activities: Purchase of consumer receivables acquired for liquidation (3,340,000 ) — (3,340,000 ) Principal collected on consumer receivables acquired for liquidation 19,302,000 2,600,000 21,902,000 Principal collected on consume receivable accounts represented by account sales 433,000 — 433,000 Purchase of available-for-sale securities (34,171,000 ) — (34,171,000 ) Proceeds from sales of available-for-sale securities 33,076,000 — 33,076,000 Proceeds from maturities of certificates of deposit 42,682,000 — 42,682,000 Investments in personal injury claims — advances (30,963,000 ) — (30,963,000 ) Investments in personal injury claims — receipts 13,801,000 — 13,801,000 Capital expenditures (725,000 ) — (725,000 ) Net cash (used in) provided by investing activities 40,095,000 2,600,000 42,695,000 Cash flows from financing activities: Proceeds from exercise of stock options 125,000 — 125,000 Purchase of treasury stock (1,579,000 ) — (1,579,000 ) Change in restricted cash 120,000 — 120,000 Dividends paid (1,290,000 ) — (1,290,000 ) Distributions to non-controlling interest (621,000 ) — (621,000 ) Repayments of non-recourse debt — Bank of Montreal, net (25,703,000 ) — (25,703,000 ) Net cash used in financing activities (28,948,000 ) — (28,948,000 ) Net increase in cash and cash equivalents 30,226,000 — 30,226,000 Cash and cash equivalents at beginning of year 4,953,000 — 4,953,000 Cash and cash equivalents at end of year $ 35,179,000 $ — $ 35,179,000 Supplemental disclosure of cash flow information: Cash paid for: Interest $ 1,822,000 $ — $ 1,822,000 Consolidated Statements of Cash Flows Year Ended September 30, 2012 As Reported Adjustments As Revised Cash flows from operating activities: Net income $ 10,068,000 $ (109,000 ) $ 9,959,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 380,000 — 380,000 Deferred income taxes 3,393,000 (75,000 ) 3,318,000 Impairments of consumer receivables acquired for liquidation 1,383,000 388,000 1,771,000 Stock based compensation 1,623,000 — 1,623,000 Loss (gain) on sale of available-for-sale securities (339,000 ) — (339,000 ) Changes in: Prepaid and income tax receivable 1,281,000 — 1,281,000 Due from third party collection agencies and attorneys 42,000 — 42,000 Other assets (190,000 ) — (190,000 ) Other liabilities (247,000 ) — (247,000 ) Net cash provided by operating activities 17,394,000 204,000 17,598,000 Cash flows from investing activities: Purchase of consumer receivables acquired for liquidation (2,495,000 ) — (2,495,000 ) Principal collected on consumer receivables acquired for liquidation 29,353,000 (204,000 ) 29,149,000 Principal collected on consume receivable accounts represented by account sales 67,000 — 67,000 Purchase of available-for-sale securities (66,625,000 ) — (66,625,000 ) Proceeds from sales of available-for-sale securities 22,656,000 — 22,656,000 Purchase of certificates of deposit (45,121,000 ) — (45,121,000 ) Proceeds from maturities of certificates of deposit 11,499,000 — 11,499,000 Investments in personal injury claims — advances (22,549,000 ) — (22,549,000 ) Investments in personal injury claims — receipts 3,953,000 — 3,953,000 Capital expenditures (638,000 ) — (638,000 ) Net cash (used in) provided by investing activities (69,900,000 ) (204,000 ) (70,104,000 ) Cash flows from financing activities: Proceeds from exercise of stock options 610,000 — 610,000 Purchase of treasury stock (16,156,000 ) — (16,156,000 ) Change in restricted cash (57,000 ) — (57,000 ) Dividends paid (1,144,000 ) — (1,144,000 ) Repayments of non-recourse debt — Bank of Montreal, net (10,141,000 ) — (10,141,000 ) Net cash used in financing activities (26,888,000 ) — (26,888,000 ) Net (decrease) increase in cash and cash equivalents (79,394,000 ) — (79,394,000 ) Cash and cash equivalents at beginning of year 84,347,000 — 84,347,000 Cash and cash equivalents at end of year $ 4,953,000 $ — $ 4,953,000 Supplemental disclosure of cash flow information: Cash paid for: Interest $ 2,570,000 $ — $ 2,570,000 Income taxes $ 2,002,000 $ — $ 2,002,000 |
Liquidity | [3] Liquidity: The Company’s cash requirements have been and will continue to be significant. In the past, we have depended upon external financing to acquire consumer receivables, fund operating expenses, interest and income taxes. If approved, the payment of dividends is also a significant use of cash. We have depended solely on operating cash flow to fund the acquisition of portfolios, pay operating expenses, dividends, and taxes. Net collections decreased $13.9 million or 25.8% from $54.1 million in fiscal year 2013 to $40.2 million in fiscal year 2014. Although the Company’s collections decreased from the prior year, the Company believes its net cash collections over the next twelve months, coupled with its current liquid cash balances, will be sufficient to cover its operating expenses. |
Principles of Consolidation | [4] Principles of consolidation: The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Palisades XVI is a variable interest entity (“VIE”). Asta Funding, Inc. is considered the primary beneficiary because it has the power to direct the significant activities of the VIE via its ownership and service contract. Palisades XVI holds the Great Seneca portfolio of $19.3 million as of September 30, 2014. See Note I — Debt, Non-Recourse Debt — Bank of Montreal Blue Bell Receivables I, LLC, Blue Bells Receivables II, LLC and Blue Bell Receivables III, LLC (the “Blue Bell Entities”) are VIEs. CBC is considered the primary beneficiary because it has the power to direct the significant activities of the VIEs via its ownership and service contract. It also has the rights to receive benefits from the collections that exceed the payments to the note holders. The Blue Bell Entities held structured settlements of $19.6 million and non-recourse notes payable of $12.7 million as of September 30, 2014. On November 26, 2014, CBC announced the completion of its fourth private placement, BBR IV, LLC, backed by structured settlement and fixed annuity payments (see Note V — Subsequent Events). |
Concentration of Credit Risk - Cash | [5] Concentration of Credit Risk — Cash: The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. Cash balances are maintained at various depository institutions and are insured by the Federal Deposit Insurance Corporation (“FDIC”). The Company had cash balances with eight banks that exceeded the balance insured by the FDIC by approximately $25.3 million at September 30, 2014. The Company does not believe it is exposed to any significant credit risk for cash. |
Available-for-Sale Investments | [6] Available-for-Sale Investments: Investments that the Company intends to hold for an indefinite period of time, but not necessarily to maturity, are classified as available-for-sale and are carried at fair value. Unrealized gains and losses on available-for-sale securities are determined using the specific-identification method. Declines in the fair value of individual available-for-sale securities below their respective costs that are other than temporary will result in write-downs of the individual securities to their fair value. Factors affecting the determination of whether an other-than-temporary impairment has occurred include: a downgrading of the security by a rating agency, a significant deterioration in the financial condition of the issuer, or that management would not have the ability to hold a security for a period of time sufficient to allow for any anticipated recovery in fair value. |
Income Recognition, Impairments and Accretable Yield Adjustments | [7] Income recognition, Impairments and Accretable yield adjustments: Income Recognition The Company accounts for its investment in consumer receivables acquired for liquidation using the interest method under the guidance of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 310, Receivables — Loans and Debt Securities Acquired with Deteriorated Credit Quality Once a static pool is established for a quarter, individual receivable accounts are not added to the pool (unless replaced by the seller) or removed from the pool (unless sold or returned to the seller). ASC 310 requires that the excess of the contractual cash flows over expected cash flows not be recognized as an adjustment of revenue or expense or on the balance sheet. ASC 310 initially freezes the internal rate of return (“IRR”), estimated when the accounts receivable are purchased, as the basis for subsequent impairment testing. Significant increases in actual, or expected future cash flows are recognized prospectively through an upward adjustment of the IRR over a portfolio’s remaining life. Any increase to the IRR then becomes the new benchmark for impairment testing. Under ASC 310, rather than lowering the estimated IRR if the collection estimates are not received or projected to be received, the carrying value of a pool would be written down to maintain the then current IRR. The Company switched to the cost recovery method of accounting as of October 1, 2013. See Note A(2) for more information. Finance income is recognized on cost recovery portfolios after the carrying value has been fully recovered through collections or amounts written down. The Company accounts for its investments in personal injury claims at an agreed upon interest rate, in anticipation of a future settlement. The interest purchased by Pegasus in each claim will consist of the right to receive from such claimant part of the proceeds or recoveries which such claimant receives by reason of a settlement, judgment or reward with respect to such claimant’s claim. Open case revenue is estimated, recognized and accrued at a rate based on the expected realization and underwriting guidelines and facts and circumstances for each individual case. These personal injury claims are non-recourse. When a case is closed and the cash is received for the advance provided to a claimant, revenue is recognized based upon the contractually agreed upon interest rate, and, if applicable, adjusted for any changes due to a settled amount and fees charged to the claimant. The funding of matrimonial actions is on a non-recourse basis. Revenue from matrimonial actions is recognized under the cost recovery method. CBC purchases periodic payments under structured settlements and annuity policies from individuals in exchange for a lump sum payment. The Company elected to carry structured settlements at fair value. Unearned income on structured settlements is recognized as interest income using the effective interest method over the life of the related settlement. Changes in fair value are recorded in unrealized gain (loss) in structured settlements in our statements of income. The Company recognizes revenue for GAR Disability Advocates when cases close and fees are collected. Impairments and accretable yield adjustments The Company accounts for its impairments in accordance with ASC 310, which provides guidance on how to account for differences between contractual and expected cash flows from an investor’s initial investment in loans or debt securities acquired in a transfer if those differences are attributable, at least in part, to credit quality. Increases in expected cash flows are recognized prospectively through an adjustment of the internal rate of return while decreases in expected cash flows are recognized as impairments. Impairments of approximately $19.5 million were recorded in the fiscal year ended September 30, 2014. An impairment of approximately $11.0 million was recorded in the fiscal year ended September 30, 2013 and approximately $1.8 million was recorded in fiscal year 2012. Finance income is not recognized on cost recovery method portfolios until the cost of the portfolio is fully recovered. Collection projections are performed on both interest method and cost recovery method portfolios. With regard to the cost recovery portfolios, if collection projections indicate the carrying value will not be recovered, an impairment is required. As the Company switched to the cost recovery method on its current inventory of consumer receivable portfolios, there were no accretable yield adjustments recorded in the fiscal year ended September 30, 2014. Accretable adjustments were $0.6 million in fiscal year 2013 and not material in fiscal year 2012. The recognition of income under ASC 310 is dependent on the Company having the ability to develop reasonable expectations of both the timing and amount of cash flows to be collected. In the event the Company cannot develop a reasonable expectation as to both the timing and amount of cash flows expected to be collected, ASC 310 permits the change to the cost recovery method. The Company will recognize income only after it has recovered its carrying value, The Company’s analysis of the timing and amount of cash flows to be generated by its portfolio purchases and investments are based on the following attributes: • the type of receivable, the location of the debtor and the number of collection agencies previously attempting to collect the receivables in the portfolio. The Company has found that there are better states to try to collect receivables and the Company factors in both better and worse states when establishing their initial cash flow expectations; • the average balance of the receivables influences our analysis in that lower average balance portfolios tend to be more collectible in the short-term and higher average balance portfolios are more appropriate for the Company’s lawsuit strategy and thus yield better results over the longer term. As the Company has significant experience with both types of balances, it can factor these variables into its initial expected cash flows; • the age of the receivables, the number of days since charge-off, any payments since charge-off, and the credit guidelines of the credit originator also represent factors taken into consideration in our estimation process. For example, older receivables might be more difficult and/or require more time and effort to collect; • past history and performance of similar assets acquired. As the Company purchases portfolios of like assets, it accumulates a significant historical data base on the tendencies of debtor repayments and factor this into its initial expected cash flows; • the Company’s ability to analyze accounts and resell accounts that meet its criteria; • jobs or property of the customers found within portfolios. With our business model, this is of particular importance. Customers with jobs or property are more likely to repay their obligation through the lawsuit strategy and, conversely, customers without jobs or property are less likely to repay their obligation. The Company believes that customers with jobs or property are more likely to repay because courts have mandated the debtor must pay the debt. Ultimately, the debtor with property will pay to clear title or release a lien. The Company also believes that these customers generally might take longer to repay and that is factored into its initial expected cash flows; and • credit standards of the issuer. The Company acquires accounts that have experienced deterioration of credit quality between origination and the date of its acquisition of the accounts. The amount invested in a portfolio of accounts reflects our determination that it is probable we will be unable to collect all amounts due according to the portfolio of accounts’ contractual terms. The Company considers the expected payments and estimates the amount and timing of undiscounted expected principal, interest and other cash flows for each acquired portfolio coupled with expected cash flows from accounts available for sale. The excess of this amount over the cost of the portfolio, representing the excess of the accounts’ cash flows expected to be collected over the amount paid, is accreted into income recognized on finance receivables accounted for on the interest method over the expected remaining life of the portfolio. The Company believes it has significant experience in acquiring certain distressed consumer receivable portfolios at a significant discount to the amount actually owed by underlying customers. The Company invests in these portfolios only after both qualitative and quantitative analyses of the underlying receivables are performed and a calculated purchase price is paid so that it believes its estimated cash flow offers an adequate return on acquisition costs after servicing expenses. Additionally, when considering larger portfolio purchases of accounts, or portfolios from issuers with whom the Company has limited experience, it has the added benefit of soliciting its third party collection agencies and attorneys for their input on liquidation rates and, at times, incorporates such input into the estimates it uses for its expected cash flows. |
Commissions and Fees | [8] Commissions and fees: Commissions and fees are the contractual commissions earned by third party collection agencies and attorneys, and direct costs associated with the collection effort- generally court costs. The Company expects to continue to purchase portfolios and utilize third party collection agencies and attorney networks. |
Furniture, Equipment and Leasehold Improvements | [9] Furniture, equipment and leasehold improvements: Furniture and equipment is stated at cost. Depreciation is provided using the straight-line method over the estimated useful lives of the assets (5 to 7 years). Amortization on leasehold improvements is provided by the straight line-method of the remaining life of the respective lease. An accelerated depreciation method is used for tax purposes. |
Income taxes | [10] Income taxes: Deferred federal and state taxes arise from (i) recognition of finance income collected for tax purposes, but not yet recognized for financial reporting; (ii) provision for impairments/credit losses, all resulting in timing differences between financial accounting and tax reporting; iii) amortization of leasehold improvements resulting in timing differences between financial accounting and tax reporting; iv) stock based compensation; and v) partnership investments. |
Net income Per Share | [11] Net income per share: Basic per share data is determined by dividing net income by the weighted average shares outstanding during the period. Diluted per share data is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued. The assumed proceeds from the exercise of dilutive options are calculated using the treasury stock method based on the average market price for the period. The following table presents the computation of basic and diluted per share data for the fiscal years ended September 30, 2014, 2013 and 2012: 2014 2013 (As Revised) 2012 (As Revised) Net Income Weighted Per Net Income Weighted Per Net Income Weighted Per Basic $ 5,901,000 12,981,076 $ 0.45 $ 2,009,000 12,952,150 $ 0.16 $ 9,928,000 14,077,650 $ 0.71 Dilutive effect of stock options 224,857 0.00 263,901 (0.01 ) 243,731 (0.02 ) Diluted $ 5,901,000 13,205,933 $ 0.45 $ 2,009,000 13,216,051 $ 0.15 $ 9,928,000 14,321,381 $ 0.69 At September 30, 2014, 960,559 options at a weighted average exercise price of $12.12 were not included in the diluted earnings per share calculation as they were anti-dilutive. At September 30, 2013, 606,332 options at a weighted average exercise price of $8.01 were not included in the diluted earnings per share calculation as they were anti-dilutive. At September 30, 2012, 1,210,396 options at a weighted average exercise price of $12.23 were not included in the diluted earnings per share calculation as they were anti-dilutive. |
Use of Estimates | [12] Use of estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. With respect to income recognition the Company takes into consideration the relative credit quality of the underlying receivables constituting the portfolio acquired, the strategy involved to maximize the collections thereof, the time required to implement the collection strategy as well as other factors to estimate the anticipated cash flows. Actual results could differ from those estimates including management’s estimates of future cash flows and the resultant allocation of collections between principal and interest resulting therefrom. Downward revisions to estimated cash flows will result in impairments. |
Stock-Based Compensation | [13] Stock-based compensation: The Company accounts for stock-based employee compensation under FASB ASC 718, Compensation — Stock Compensation |
Impact of Recently Issued Accounting Standards | [14] Impact of Recently Issued Accounting Standards: In May 2014, the FASB issued an update to ASC 606, “Revenue from Contracts with Customers,” that will supersede virtually all existing revenue guidance. Under this update, an entity is required to recognize revenue upon transfer of promised goods or services to customers, in an amount that reflects the entitled consideration received in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from the customer contracts. This update is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. We are currently evaluating the impact this update will have on our consolidated financial statements as well as the expected adoption method. In June 2014, the FASB issued ASU 2014-11, “Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures.” The amendments in this ASU require two accounting changes. First, the amendments in this ASU change the accounting for repurchase-to maturity transactions to secured borrowing accounting. Second, for repurchase financing arrangements, the amendments require separate accounting for a transfer of a financial asset executed contemporaneously with a repurchase agreement with the same counterparty, which will result in secured borrowing accounting for the repurchase agreement. This ASU also includes new disclosure requirements. The accounting changes in this Update are effective for public business entities for the first interim or annual period beginning after December 15, 2014. An entity is required to present changes in accounting for transactions outstanding on the effective date as a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. Earlier application for a public business entity is prohibited. The Company reviewed this ASU and determined that it did not have a material impact on its consolidated financial statements. In February 2015, the FASB issued ASU 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis,” which amends the consolidation requirements in ASC 810. This update is effective for public business entities for the first interim or annual period beginning after December 15, 2015. We are currently reviewing this ASU to determine if it will have an impact on our consolidated financial statements. |
Reclassifications | [15] Reclassifications: Certain items in the years ended September 30, 2013 and 2012 in the consolidated financial statements have been reclassified to conform to the current year’s presentation, primarily related to certain balance sheet and statement of income items. |
The Company and its Significa34
The Company and its Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2014 | |
Revision of Consolidated Balance Sheet | These adjustments also cumulatively impacted the following balance sheet line items as of September 30, 2013: Consolidated Balance Sheet September 30, 2013 As Reported Adjustments As Revised ASSETS Cash and cash equivalents $ 35,179,000 $ — $ 35,179,000 Investments — available-for-sale 58,035,000 — 58,035,000 Restricted cash 968,000 — 968,000 Consumer receivables acquired for liquidation (at net realizable value) 57,900,000 6,354,000 64,254,000 Other investments, net 35,758,000 — 35,758,000 Due from third party collection agencies and attorneys 1,169,000 — 1,169,000 Prepaid and income taxes receivable 1,496,000 — 1,496,000 Furniture and equipment, net (net of accumulated depreciation of $4,136,000) 1,106,000 — 1,106,000 Deferred income taxes 10,443,000 (2,671,000 ) 7,772,000 Goodwill 1,410,000 — 1,410,000 Other assets 4,383,000 — 4,383,000 Total assets $ 207,847,000 $ 3,683,000 $ 211,530,000 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities Non-recourse debt $ 35,760,000 $ — $ 35,760,000 Other liabilities 2,486,000 — 2,486,000 Total liabilities 38,246,000 — 38,246,000 Commitments and contingencies STOCKHOLDERS’ EQUITY Preferred stock, $0.01 par value; authorized 5,000,000; issued and outstanding — none — — — Common stock, $.01 par value, authorized 30,000,000 shares; issued, 14,917,977, and outstanding, 12,974,239 149,000 — 149,000 Additional paid in capital 79,104,000 — 79,104,000 Retained earnings 109,011,000 3,683,000 112,694,000 Accumulated other comprehensive loss, net of income taxes (674,000 ) — (674,000 ) Treasury stock (at cost), 1,943,738 shares (17,805,000 ) — (17,805,000 ) Non-controlling interest (184,000 ) — (184,000 ) Total stockholders’ equity 169,601,000 3,683,000 173,284,000 Total liabilities and stockholders’ equity $ 207,847,000 $ 3,683,000 $ 211,530,000 |
Revision of Consolidated Statements of Income | Consolidated Statements of Income Year Ended September 30, 2013 As Reported Adjustments As Revised Revenues: Finance income, net $ 34,363,000 $ (2,601,000 ) $ 31,762,000 Personal injury claims income 6,438,000 — 6,438,000 Total revenues 40,801,000 (2,601,000 ) 38,200,000 Other income (includes $252,000 accumulated other comprehensive income reclassifications for unrealized net loss on available for sale securities). 1,611,000 — 1,611,000 42,412,000 (2,601,000 ) 39,811,000 Expenses: General and administrative expenses 24,212,000 — 24,212,000 Interest expense 1,300,000 — 1,300,000 Impairments of consumer receivables acquired for liquidation 12,592,000 (1,602,000 ) 10,990,000 38,104,000 (1,602,000 ) 36,502,000 Income before income tax 4,308,000 (999,000 ) 3,309,000 Income tax expense (includes tax benefit $100,000 of accumulated other comprehensive income reclassifications for unrealized net loss on available for sales securities) 1,164,000 (270,000 ) 894,000 Net income 3,144,000 (729,000 ) 2,415,000 Less: net income attributable to non-controlling interests 406,000 — 406,000 Net income attributable to Asta Funding, Inc. $ 2,738,000 $ (729,000 ) $ 2,009,000 Net income per share attributable to Asta Funding, Inc.: Basic $ 0.21 $ (0.05 ) $ 0.16 Diluted $ 0.21 $ (0.06 ) $ 0.15 Weighted average number of common shares outstanding: Basic 12,952,150 12,952,150 Diluted 13,216,051 — 13,216,051 Consolidated Statements of Income Year Ended September 30, 2012 As Reported Adjustments As Revised Revenues: Finance income, net $ 40,599,000 $ 204,000 $ 40,803,000 Personal injury claims income 1,647,000 — 1,647,000 Total revenues 42,246,000 204,000 42,450,000 Other income (includes $339,000 of accumulated other comprehensive income reclassifications for unrealized net gain on available for sale securities). 2,256,000 — 2,256,000 44,502,000 204,000 44,706,000 Expenses: General and administrative expenses 23,640,000 — 23,640,000 Interest expense 2,539,000 — 2,539,000 Impairments of consumer receivables acquired for liquidation 1,383,000 388,000 1,771,000 27,562,000 388,000 27,950,000 Income before income tax 16,940,000 (184,000 ) 16,756,000 Income tax expense (includes taxes $137,000 of accumulated other comprehensive income reclassifications for unrealized net gain on available for sales securities) 6,872,000 (75,000 ) 6,797,000 Net income 10,068,000 (109,000 ) 9,959,000 Less: net income attributable to non-controlling interests 31,000 — 31,000 Net income attributable to Asta Funding, Inc. $ 10,037,000 $ (109,000 ) $ 9,928,000 Net income per share attributable to Asta Funding, Inc.: Basic $ 0.71 $ 0.00 $ 0.71 Diluted $ 0.70 $ (0.01 ) $ 0.69 Weighted average number of common shares outstanding: Basic 14,077,650 — 14,077,650 Diluted 14,321,381 — 14,321,381 |
Revision of Consolidated Statements of Cash Flows | Year Ended September 30, 2013 As Reported Adjustments As Revised Cash flows from operating activities: Net income $ 3,144,000 $ (729,000 ) $ 2,415,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 440,000 — 440,000 Deferred income taxes 326,000 (269,000 ) 57,000 Impairments of consumer receivables acquired for liquidation 12,592,000 (1,602,000 ) 10,990,000 Stock based compensation 1,956,000 — 1,956,000 Loss (gain) on sale of available-for-sale securities 252,000 — 252,000 Changes in: — Prepaid and income tax receivable 561,000 — 561,000 Due from third party collection agencies and attorneys 873,000 — 873,000 Other assets (631,000 ) — (631,000 ) Other liabilities (434,000 ) — (434,000 ) Net cash provided by operating activities 19,079,000 (2,600,000 ) 16,479,000 Cash flows from investing activities: Purchase of consumer receivables acquired for liquidation (3,340,000 ) — (3,340,000 ) Principal collected on consumer receivables acquired for liquidation 19,302,000 2,600,000 21,902,000 Principal collected on consume receivable accounts represented by account sales 433,000 — 433,000 Purchase of available-for-sale securities (34,171,000 ) — (34,171,000 ) Proceeds from sales of available-for-sale securities 33,076,000 — 33,076,000 Proceeds from maturities of certificates of deposit 42,682,000 — 42,682,000 Investments in personal injury claims — advances (30,963,000 ) — (30,963,000 ) Investments in personal injury claims — receipts 13,801,000 — 13,801,000 Capital expenditures (725,000 ) — (725,000 ) Net cash (used in) provided by investing activities 40,095,000 2,600,000 42,695,000 Cash flows from financing activities: Proceeds from exercise of stock options 125,000 — 125,000 Purchase of treasury stock (1,579,000 ) — (1,579,000 ) Change in restricted cash 120,000 — 120,000 Dividends paid (1,290,000 ) — (1,290,000 ) Distributions to non-controlling interest (621,000 ) — (621,000 ) Repayments of non-recourse debt — Bank of Montreal, net (25,703,000 ) — (25,703,000 ) Net cash used in financing activities (28,948,000 ) — (28,948,000 ) Net increase in cash and cash equivalents 30,226,000 — 30,226,000 Cash and cash equivalents at beginning of year 4,953,000 — 4,953,000 Cash and cash equivalents at end of year $ 35,179,000 $ — $ 35,179,000 Supplemental disclosure of cash flow information: Cash paid for: Interest $ 1,822,000 $ — $ 1,822,000 Consolidated Statements of Cash Flows Year Ended September 30, 2012 As Reported Adjustments As Revised Cash flows from operating activities: Net income $ 10,068,000 $ (109,000 ) $ 9,959,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 380,000 — 380,000 Deferred income taxes 3,393,000 (75,000 ) 3,318,000 Impairments of consumer receivables acquired for liquidation 1,383,000 388,000 1,771,000 Stock based compensation 1,623,000 — 1,623,000 Loss (gain) on sale of available-for-sale securities (339,000 ) — (339,000 ) Changes in: Prepaid and income tax receivable 1,281,000 — 1,281,000 Due from third party collection agencies and attorneys 42,000 — 42,000 Other assets (190,000 ) — (190,000 ) Other liabilities (247,000 ) — (247,000 ) Net cash provided by operating activities 17,394,000 204,000 17,598,000 Cash flows from investing activities: Purchase of consumer receivables acquired for liquidation (2,495,000 ) — (2,495,000 ) Principal collected on consumer receivables acquired for liquidation 29,353,000 (204,000 ) 29,149,000 Principal collected on consume receivable accounts represented by account sales 67,000 — 67,000 Purchase of available-for-sale securities (66,625,000 ) — (66,625,000 ) Proceeds from sales of available-for-sale securities 22,656,000 — 22,656,000 Purchase of certificates of deposit (45,121,000 ) — (45,121,000 ) Proceeds from maturities of certificates of deposit 11,499,000 — 11,499,000 Investments in personal injury claims — advances (22,549,000 ) — (22,549,000 ) Investments in personal injury claims — receipts 3,953,000 — 3,953,000 Capital expenditures (638,000 ) — (638,000 ) Net cash (used in) provided by investing activities (69,900,000 ) (204,000 ) (70,104,000 ) Cash flows from financing activities: Proceeds from exercise of stock options 610,000 — 610,000 Purchase of treasury stock (16,156,000 ) — (16,156,000 ) Change in restricted cash (57,000 ) — (57,000 ) Dividends paid (1,144,000 ) — (1,144,000 ) Repayments of non-recourse debt — Bank of Montreal, net (10,141,000 ) — (10,141,000 ) Net cash used in financing activities (26,888,000 ) — (26,888,000 ) Net (decrease) increase in cash and cash equivalents (79,394,000 ) — (79,394,000 ) Cash and cash equivalents at beginning of year 84,347,000 — 84,347,000 Cash and cash equivalents at end of year $ 4,953,000 $ — $ 4,953,000 Supplemental disclosure of cash flow information: Cash paid for: Interest $ 2,570,000 $ — $ 2,570,000 Income taxes $ 2,002,000 $ — $ 2,002,000 |
Computation of Basic and Diluted Per Share | The following table presents the computation of basic and diluted per share data for the fiscal years ended September 30, 2014, 2013 and 2012: 2014 2013 (As Revised) 2012 (As Revised) Net Income Weighted Per Net Income Weighted Per Net Income Weighted Per Basic $ 5,901,000 12,981,076 $ 0.45 $ 2,009,000 12,952,150 $ 0.16 $ 9,928,000 14,077,650 $ 0.71 Dilutive effect of stock options 224,857 0.00 263,901 (0.01 ) 243,731 (0.02 ) Diluted $ 5,901,000 13,205,933 $ 0.45 $ 2,009,000 13,216,051 $ 0.15 $ 9,928,000 14,321,381 $ 0.69 |
Available-for-Sale Investments
Available-for-Sale Investments (Tables) | 12 Months Ended |
Sep. 30, 2014 | |
Available-for-Sale | Mutual funds investments classified as available-for-sale at September 30, 2014 and 2013 consist of the following: Amortized Unrealized Unrealized Fair Value 2014 $ 66,559,000 $ 411,000 $ (171,000 ) $ 66,799,000 2013 $ 59,151,000 $ 27,000 $ (1,143,000 ) $ 58,035,000 |
Consumer Receivables Acquired36
Consumer Receivables Acquired For Liquidation (Tables) | 12 Months Ended |
Sep. 30, 2014 | |
Changes in Balance Sheet Account of Consumer Receivables Acquired for Liquidation | The following tables summarize the changes in the balance sheet account of consumer receivables acquired for liquidation during the following periods For the Year Ended September 30, 2014 Interest Method Cost Recovery Method Total Balance, beginning of period $ 8,071,000 $ 49,829,000 $ 57,900,000 Balance transferred to cost recovery — prior period adjustment (1,304,000 ) 1,304,000 — Adjustment for misapplication of the interest method to prior periods 6,354,000 — 6,354,000 Balance beginning of period, as restated 13,121,000 51,133,000 64,254,000 Reclassification of interest method portfolios to cost recovery method (13,121,000 ) 13,121,000 — Acquisition of receivable portfolios — 5,078,000 5,078,000 Net cash collections from collection of consumer receivables acquired for liquidation — (40,048,000 ) (40,048,000 ) Net cash collections represented by account sales of consumer receivables acquired for liquidation — (114,000 ) (114,000 ) Impairment — (19,591,000 ) (19,591,000 ) Finance income recognized — 19,865,000 19,865,000 Balance, end of period $ — $ 29,444,000 $ 29,444,000 Finance income as a percentage of collections 0 % 49.5 % 49.5 % For the Year Ended September 30, 2013 (As Revised) Interest Method Cost Recovery Method Total Balance, beginning of period $ 12,326,000 $ 74,561,000 $ 86,887,000 Balance transferred to cost recovery — prior period adjustment (2,692,000 ) 2,692,000 — Adjustment for misapplication of the interest method to prior periods 5,852,000 1,500,000 7,352,000 Balance beginning of period, as revised 15,486,000 78,753,000 94,239,000 Acquisition of receivable portfolios — 3,340,000 3,340,000 Net cash collections from collection of consumer receivables acquired for liquidation (27,860,000 ) (23,790,000 ) (51,650,000 ) Net cash collections represented by account sales of consumer receivables acquired for liquidation (979,000 ) (1,468,000 ) (2,447,000 ) Impairment (840,000 ) (10,150,000 ) (10,990,000 ) Finance income recognized(1) 27,314,000 4,448,000 31,762,000 Balance, end of period $ 13,121,000 $ 51,133,000 $ 64,254,000 Finance income as a percentage of collections 94.7 % 17.6 % 58.7 % (1) Includes $25.7 million derived from fully amortized portfolios. Finance income recognized from account sales amounted to $1.8 million. |
Changes in Accretable Yield | The accretable yield schedules for the fiscal years ended September 30, 2014 and 2013 are as follows: Year Ended Balance at beginning of period, October 1, 2013 $ 7,679,000 Transfer to cost recovery (7,679,000 ) Balance at end of period, September 30, 2014 $ 0 Year Ended Balance at beginning of period, October 1, 2012 $ 13,508,000 Income recognized on finance receivables, net (27,314,000 ) Reclassifications from non-accretable difference(1) 21,485,000 Balance at end of period, September 30, 2013 $ 7,679,000 (1) Includes portfolios that became zero based during the period, removal of zero basis portfolios from the accretable yield calculation and, other immaterial impairments and accretions based on the extension of certain collection curves. |
Collections on Gross Basis Less Commissions and Direct Costs | The following table summarizes collections received by the Company’s third-party collection agencies and attorneys, less commissions and direct costs for the years ended September 30, 2014, 2013 and 2012, respectively. For the Years Ended September 30, 2014 2013 2012 Gross collections(1) $ 67,913,000 $ 85,512,000 $ 108,487,000 Less: commissions and fees(2) 27,751,000 31,415,000 38,468,000 Net collections $ 40,162,000 $ 54,097,000 $ 70,019,000 (1) Gross collections include collections from third-party collection agencies and attorneys, collections from in-house efforts and collections represented by account sales. (2) Commissions and fees are the contractual commissions earned by third party collection agencies and attorneys, and direct costs associated with the collection effort, generally court costs. Includes a 3% fee charged by a servicer on gross collections in connection with the Portfolio Purchase. Such arrangement was consummated in December 2007. The fee is charged for asset location, skip tracing and ultimately suing debtors in connection with this portfolio purchase. |
Acquisition of CBC (Tables)
Acquisition of CBC (Tables) | 12 Months Ended |
Sep. 30, 2014 | |
Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes the fair value of the assets acquired and the liabilities assumed as of the December 31, 2013 acquisition date: Cash $ 351,000 Structured settlements 30,436,000 Other assets 11,000 Other liabilities (356,000 ) Other debt (see Note J: Other debt — CBC (including non-recourse notes payable amounting to $13.8 million) (25,863,000 ) Total identifiable net assets acquired 4,579,000 Goodwill (see Note H: Goodwill) 1,360,000 Purchase Price $ 5,939,000 |
Structured Settlements (Tables)
Structured Settlements (Tables) | 12 Months Ended |
Sep. 30, 2014 | |
Components of Structured Settlements | Structured settlements consist of the following as of September 30, 2014: Maturity value $ 64,852,000 Unearned income (22,773,000 ) Net carrying value $ 42,079,000 |
Structured Settlements | Encumbrances on structured settlements as of September 30, 2014 are: Notes payable secured by settlement receivables with principal and interest outstanding payable until June 2025(1) $ 2,521,000 Notes payable secured by settlement receivables with principal and interest outstanding payable until August 2026(1) 5,363,000 Notes payable secured by settlement receivables with principal and interest outstanding payable until April 2032(1) 4,828,000 $22,000,000 revolving line of credit(1) 19,583,000 Encumbered structured settlements 32,295,000 Structured settlements not encumbered 9,784,000 Total structured settlements $ 42,079,000 (1) See Note J — Other Debt — CBC |
Expected Cash Flows of Structured Settlements Based on Maturity Value | At September 30, 2014, the expected cash flows of structured settlements based on maturity value are as follows: September 30, 2015 $ 4,703,000 September 30, 2016 4,989,000 September 30, 2017 4,688,000 September 30, 2018 3,835,000 September 30, 2019 3,956,000 Thereafter 42,681,000 Total $ 64,852,000 |
Other Investments (Tables)
Other Investments (Tables) | 12 Months Ended |
Sep. 30, 2014 | |
Reserves for Bad Debts | Pegasus records reserves for bad debts, which, at September 30, 2014, amounted to $2.5 million, as follows: Year Ended September 30, Balance at beginning of period $ 2,248,000 Provisions for losses 1,707,000 Write offs (1,481,000 ) Balance at end of period $ 2,474,000 |
Furniture and Equipment (Tables
Furniture and Equipment (Tables) | 12 Months Ended |
Sep. 30, 2014 | |
Furniture and Equipment | Furniture and equipment as of September 30, 2014 and 2013 consist of the following: 2014 2013 Furniture $ 323,000 $ 310,000 Equipment 3,622,000 3,622,000 Software 1,211,000 1,211,000 Leasehold improvements 99,000 99,000 5,255,000 5,242,000 Less accumulated depreciation 4,499,000 4,136,000 $ 756,000 $ 1,106,000 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Sep. 30, 2014 | |
Goodwill | The goodwill balances at September 30, 2014 and 2013 are as follows: 2014 2013 Balance at beginning of period $ 1,410,000 $ 1,410,000 Goodwill from acquisition (see Note D: Acquisition of CBC) 1,360,000 — Balance at end of period $ 2,770,000 $ 1,410,000 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2014 | |
Components of Other Debt from Acquisition | Other liabilities as of September 30, 2014 and 2013 are as follows: 2014 2013 Accounts payable and accrued expenses $ 3,126,000 $ 2,274,000 Other 461,000 212,000 Total other liabilities $ 3,587,000 $ 2,486,000 |
CBC | |
Components of Other Debt from Acquisition | The following table details the other debt at September 30, 2014: Interest Rate Balance Notes payable with varying monthly installments: Notes payable secured by settlement receivables with principal and interest outstanding payable until June 2025 8.75 % $ 2,521,000 Notes payable secured by settlement receivables with principal and interest outstanding payable until August 2026 7.25 % 5,363,000 Notes payable secured by settlement receivables with principal and interest outstanding payable until April 2032 7.125 % 4,828,000 Subtotal notes payable 12,712,000 $25,000,000 revolving line of credit expiring on March 1, 2017 4.75 % 19,583,000 Total debt — CBC $ 32,295,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2014 | |
Components of Provision for Income Taxes | The components of the provision for income taxes for the years ended September 30, 2014, 2013 and 2012 are as follows: 2014 2013 (As Revised) 2012 (As Revised) Current: Federal $ 4,148,000 $ 561,000 $ 3,437,000 Federal true up 18,000 — 42,000 4,166,000 561,000 3,479,000 Deferred: Federal (1,620,000 ) 212,000 1,738,000 State 2,067,000 121,000 1,580,000 447,000 333,000 3,318,000 Provision for income taxes $ 4,613,000 $ 894,000 $ 6,797,000 |
Corporate Federal Income Tax Returns Subject to Examination by IRS | The difference between the statutory federal income tax rate on the Company’s pre-tax income and the Company’s effective income tax rate is summarized for the years ended September 30, 2014, 2013 and 2012 as follows: 2013 2012 2014 (As Revised) (As Revised) Statutory federal income tax rate 34.0 % 34.0 % 34.0 % State income tax, net of federal benefit 4.5 6.1 6.1 State tax rate change 8.4 — — Permanent difference in municipal interest (3.3 ) (7.5 ) — Permanent difference other 0.2 (0.7 ) — Federal prior year provision to return difference 0.2 (2.1 ) 0.2 Other (2.2 ) (2.8 ) 0.3 Effective income tax rate 41.8 % 27.0 % 40.6 % |
Schedule of Net Deferred Tax Asset | The Company recognized a net deferred tax asset of $6,786,000 and $7,772,000 as of September 30, 2014 and 2013, respectively. The components are as follows: September 30, September 30, 2014 2013 Deferred and accrued revenue $ 7,000 $ (414,000 ) Impairments/bad debt reserves/Prior period adjustments 915,000 2,570,000 State tax net operating loss carryforward 9,958,000 9,524,000 Stock based compensation 2,814,000 2,133,000 Unrealized gain on structured settlements (930,000 ) — Depreciation, amortization and other (249,000 ) (312,000 ) Deferred income taxes 12,515,000 13,501,000 Deferred tax valuation allowance (5,729,000 ) (5,729,000 ) Deferred income taxes $ 6,786,000 $ 7,772,000 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Sep. 30, 2014 | |
Schedule of Future Minimum Lease Payments | The future minimum lease payments are as follows: Year Ending September 30, 2015 $ 739,000 2016 705,000 2017 425,000 2018 180,000 2019 185,000 Thereafter 63,000 $ 2,297,000 |
Stock Option Plans (Tables)
Stock Option Plans (Tables) | 12 Months Ended |
Sep. 30, 2014 | |
Weighted Average Assumptions Used in Option Pricing Model | The weighted average assumptions used in the option pricing model were as follows: Risk-free interest rate 0.06 % Expected term (years) 5.9 Expected volatility 35.3 % Dividend yield 0.00 % The weighted average assumptions used in the option pricing model were as follows: Risk-free interest rate 0.08 % Expected term (years) 6.5 Expected volatility 98.3 % Dividend yield 0.00 % The assumptions used in the option pricing model were as follows: Risk-free interest rate 0.10 % Expected term (years) 6.2 Expected volatility 99.7 % Dividend yield 0.92 % The assumptions used in the option pricing model were as follows: Risk-free interest rate 0.16 % Expected term (years) 6.0 Expected volatility 101.0 % Dividend yield 1.67 % The weighted average assumptions used in the option pricing model were as follows: Risk-free interest rate 0.08 % Expected term (years) 10.0 Expected volatility 103.9 % Dividend yield 1.03 % The weighted average assumptions used in the option pricing model were as follows: Risk-free interest rate 0.08 % Expected term (years) 10.0 Expected volatility 95.7 % Dividend yield 1.03 % |
Stock Option Transactions | The following table summarizes stock option transactions under the plans: Year Ended September 30, 2014 2013 2012 Shares Weighted Shares Weighted Shares Weighted Outstanding options at the beginning of year 1,622,771 $ 11.31 1,499,471 $ 11.27 1,294,271 $ 11.41 Options granted 161,700 8.48 210,000 9.36 360,000 7.87 Options cancelled (369,612 ) 12.33 (50,000 ) 7.77 (15,300 ) 6.00 Options exercised (11,600 ) 3.46 (36,700 ) 3.41 (139,500 ) 4.36 Outstanding options at the end of year 1,403,259 $ 10.78 1,622,771 $ 11.31 1,499,471 $ 11.27 Exercisable options at the end of year 888,587 $ 12.15 1,108,271 $ 12.62 1,000,904 $ 12.93 |
Summary of Outstanding Options | The following table summarizes information about the plans’ outstanding options as of September 30, 2014: Options Outstanding Options Exercisable Range of Exercise Price Number Weighted Weighted Number Weighted Exercise Price $ 2.8751 - $ 5.7500 7,200 4.6 $ 2.95 7,200 $ 2.95 $ 5.7501 - $ 8.6250 869,900 6.9 7.94 471,900 7.79 $ 8.6251 - $17.2500 175,000 8.3 9.40 58,328 9.39 $17.2501 - $20.1250 336,159 0.1 18.22 336,159 18.22 $25.8751 - $28.7500 15,000 2.2 28.75 15,000 28.75 1,403,259 5.4 $ 10.78 888,587 $ 12.15 |
Summary of Restricted Stock Transactions | The following table summarizes information about restricted stock transactions: Year Ended Weighted Year Ended Weighted Unvested at the beginning of period 102,321 $ 9.57 10,922 $ 7.63 Awards granted — 0.00 102,321 9.57 Vested (34,107 ) 9.57 (10,922 ) 7.63 Forfeited — 0.00 — 0.00 Unvested at the end of period 68,214 $ 9.57 102,321 $ 9.57 |
Fair Value of Financial Measu46
Fair Value of Financial Measurements and Disclosures (Tables) | 12 Months Ended |
Sep. 30, 2014 | |
Estimated Fair Value of Company's Financial Instruments | The estimated fair value of the Company’s financial instruments is summarized as follows: September 30, 2014 September 30, 2013 Carrying Fair Value Carrying Fair Value Financial assets Available-for-sale investments (Level 1) $ 66,799,000 $ 66,799,000 $ 58,035,000 $ 58,035,000 Consumer receivables acquired for liquidation (Level 3) 29,444,000 50,962,000 64,254,000 70,875,000 Structured settlements (Level 3) 42,079,000 42,079,000 — — Financial liabilities Non-Recourse Debt (Level 3) — — 35,760,000 27,000,000 Other debt — CBC, revolving line of credit (Level 3) 19,583,000 19,583,000 — — Other debt — CBC, non-recourse notes payable with varying installments (Level 3) 12,712,000 12,712,000 — — |
Quantitative Information about Level 3 Fair Value Measurements | The following table sets forth the Company’s quantitative information about its Level 3 fair value measurements as of September 30, 2014: Fair Value Valuation Unobservable Rate Structured settlements at fair value $ 42,079,000 Discounted Discount 5.5 % |
Changes in Structured Settlements at Fair Value Using Significant Unobservable Inputs (Level 3) | The changes in structured settlements at fair value using significant unobservable inputs (Level 3) during the year ended September 30, 2014 were as follows: Balance at September 30, 2013 $ 0 Acquisition of CBC (see Note 5) 30,436,000 Total gains included in earnings 2,840,000 Purchases 9,808,000 Sales — Interest accreted 2,282,000 Payments received (3,287,000 ) Total $ 42,079,000 The amount of total gains for the year included in earnings attributable to the change in unrealized gains (losses) relating to assets held at September 30, 2014 $ 2,840,000 |
Schedule of Realized and Unrealized Gains and Losses Included in Earnings in Accompanying Consolidated Statements of Income | Realized and unrealized gains and losses included in earnings in the accompanying consolidated statements of income for the year ended September 30, 2014 are reported in the following revenue categories: Total gains (losses) included in earnings in fiscal year 2014 $ 2,840,000 Change in unrealized gains (losses) relating to assets still held at September 30, 2014 $ 2,840,000 |
Summarized Quarterly Data (Un47
Summarized Quarterly Data (Unaudited) (Tables) | 12 Months Ended |
Sep. 30, 2014 | |
Summarized Quarterly Data (Unaudited) | Quarter First Second Third Quarter Fourth Full Year 2014 (As Restated)(1) Total revenue $ 7,427,000 $ 7,771,000 $ 8,259,000 $ 8,750,000 $ 32,207,000 Income before income taxes 2,194,000 126,000 7,680,000 1,042,000 11,042,000 Net income attributable to Asta Funding, Inc. 947,000 75,000 4,687,000 192,000 5,901,000 Basic net income per share attributable to Asta Funding, Inc. $ 0.07 $ 0.01 $ 0.36 $ 0.01 $ 0.45 Diluted net income per share attributable to Asta Funding, Inc. $ 0.07 $ 0.01 $ 0.35 $ 0.01 $ 0.45 2013 (As Revised) Total revenue $ 9,672,000 $ 9,030,000 $ 11,259,000 $ 8,239,000 $ 38,200,000 Income (loss) before income taxes 4,224,000 2,725,000 (5,612,000 ) 1,972,000 3,309,000 Net income (loss) attributable to Asta Funding, Inc. 2,488,000 1,599,000 (3,369,000 ) 1,291,000 2,009,000 Basic net income (loss) per share attributable to Asta Funding, Inc. $ 0.19 $ 0.12 $ (0.26 ) $ 0.10 $ 0.16 Diluted net income (loss) per share attributable to Asta Funding, Inc. $ 0.19 $ 0.12 $ (0.26 ) $ 0.10 $ 0.15 * Due to rounding the sum of quarterly totals for earnings per share may not add to the yearly total. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Sep. 30, 2014 | |
Segment Reporting | Certain non-allocated administrative costs, interest income, interest expense and various other non-operating income and expenses are reflected in Corporate. Corporate assets include cash and cash equivalents, available-for-sale securities, property and equipment, goodwill, deferred taxes and other assets. (Dollars in millions) Fiscal Consumer Personal Structured GAR Corporate Total Revenues 2014 $ 19.8 $ 7.2 $ 5.2 $ — $ — $ 32.2 2013 31.8 6.4 — — — 38.2 2012 40.8 1.6 — — — 42.4 Other income 2014 26.1 — — 0.4 1.4 27.9 2013 — — — — 1.6 1.6 2012 — — — — 2.3 2.3 Income before income taxes 2014 18.9 2.3 0.4 (2.7 ) (7.9 ) 11.0 2013 10.1 2.0 — (1.2 ) (7.6 ) 3.3 2012 23.1 0.1 — — (6.4 ) 16.8 Total assets 2014 30.5 34.0 38.5 1.0 113.1 217.1 2013 65.4 36.8 — 0.2 109.1 211.5 2012 96.3 21.5 — — 119.8 237.6 Capital expenditures 2014 — — — — — — 2013 — — — — 0.7 0.7 2012 — — — — 0.6 0.6 Depreciation 2014 — — — — 0.4 0.4 2013 — — — — 0.4 0.4 2012 — — — — 0.4 0.4 |
The Company and Its Significa49
The Company and Its Significant Accounting Policies - Additional Information (Detail) | Dec. 31, 2013 | Sep. 30, 2014USD ($)$ / shares | Jun. 30, 2014USD ($)$ / shares | [3] | Mar. 31, 2014USD ($)$ / shares | [3] | Dec. 31, 2013USD ($)$ / shares | [3] | Sep. 30, 2013USD ($)$ / shares | Jun. 30, 2013USD ($)$ / shares | Mar. 31, 2013USD ($)$ / shares | Dec. 31, 2012USD ($)$ / shares | Jun. 30, 2014 | Sep. 30, 2014USD ($)Bank$ / sharesshares | Sep. 30, 2013USD ($)$ / sharesshares | Sep. 30, 2012USD ($)$ / sharesshares | ||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||
Consumer receivables acquired for liquidation (at net realizable value) | $ 29,444,000 | $ 64,254,000 | [1] | $ 29,444,000 | $ 64,254,000 | [1] | ||||||||||||||
Deferred income taxes | 6,786,000 | 7,772,000 | [1] | 6,786,000 | 7,772,000 | [1] | ||||||||||||||
Retained earnings | 118,595,000 | 112,694,000 | [1] | 118,595,000 | 112,694,000 | [1] | ||||||||||||||
Finance income, net | 19,865,000 | 31,762,000 | [2] | $ 40,803,000 | ||||||||||||||||
Income tax benefit | (4,613,000) | (894,000) | (6,797,000) | |||||||||||||||||
Net income attributable to Asta Funding, Inc. | $ 192,000 | [3] | $ 4,687,000 | $ 75,000 | $ 947,000 | $ 1,291,000 | $ (3,369,000) | $ 1,599,000 | $ 2,488,000 | $ 5,901,000 | [3] | $ 2,009,000 | $ 9,928,000 | |||||||
Diluted | $ / shares | $ 0.01 | [3] | $ 0.35 | $ 0.01 | $ 0.07 | $ 0.10 | $ (0.26) | $ 0.12 | $ 0.19 | $ 0.45 | [3] | $ 0.15 | $ 0.69 | |||||||
Cumulative impact of prior period revisions | $ 4,521,000 | |||||||||||||||||||
Decrease in net collections | $ (13,900,000) | |||||||||||||||||||
Net collections | 40,162,000 | $ 54,097,000 | 70,019,000 | |||||||||||||||||
Asset impairment | $ 19,500,000 | 11,000,000 | 1,800,000 | |||||||||||||||||
Accretable adjustment | $ 600,000 | $ 0 | ||||||||||||||||||
Shares excluded from diluted earnings per share calculation | shares | 960,559 | 606,332 | 1,210,396 | |||||||||||||||||
Weighted average exercise price | $ / shares | $ 12.12 | $ 8.01 | $ 12.23 | |||||||||||||||||
Palisades XVI | Great Seneca | ||||||||||||||||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||
Portfolio holdings amount | $ 19,300,000 | $ 19,300,000 | ||||||||||||||||||
Blue Bell Entities | ||||||||||||||||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||
Structured settlement holding amount | 19,600,000 | 19,600,000 | ||||||||||||||||||
Non-recourse notes payable | 12,700,000 | $ 12,700,000 | ||||||||||||||||||
Minimum | ||||||||||||||||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||
Estimated useful lives of assets | 5 years | |||||||||||||||||||
Maximum | ||||||||||||||||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||
Estimated useful lives of assets | 7 years | |||||||||||||||||||
FDIC | ||||||||||||||||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||
Number of banks in which cash balances maintained | Bank | 8 | |||||||||||||||||||
Cash balance that exceed the balance insured by FDIC | $ 25,300,000 | $ 25,300,000 | ||||||||||||||||||
Restatement Adjustment | ||||||||||||||||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||
Consumer receivables acquired for liquidation (at net realizable value) | $ 6,400,000 | $ 6,400,000 | ||||||||||||||||||
Deferred income taxes | 2,700,000 | 2,700,000 | ||||||||||||||||||
Retained earnings | $ 3,700,000 | 3,700,000 | ||||||||||||||||||
Finance income, net | (2,600,000) | $ 200,000 | ||||||||||||||||||
Income tax benefit | 300,000 | 100,000 | ||||||||||||||||||
Net income attributable to Asta Funding, Inc. | $ 2,700,000 | $ 10,000,000 | ||||||||||||||||||
Diluted | $ / shares | $ 0.21 | $ 0.70 | ||||||||||||||||||
Decrease | ||||||||||||||||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||
Percentage decrease in net collections | 25.80% | |||||||||||||||||||
Pegasus | ||||||||||||||||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||
Ownership interest | 80.00% | 80.00% | ||||||||||||||||||
CBC | ||||||||||||||||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||||||||||||||||
Ownership interest | 80.00% | 80.00% | ||||||||||||||||||
[1] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements | |||||||||||||||||||
[2] | Includes $25.7 million derived from fully amortized portfolios. Finance income recognized from account sales amounted to $1.8 million. | |||||||||||||||||||
[3] | The first three quarters of fiscal year 2014 has been restated. |
Revision of Prior Period Adjust
Revision of Prior Period Adjustment on Consolidated Balance Sheet (Detail) - USD ($) | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | ||||
ASSETS | ||||||||
Cash and cash equivalents | $ 28,710,000 | $ 35,179,000 | [1] | $ 4,953,000 | [1] | $ 84,347,000 | [1] | |
Investments - available-for-sale | 66,799,000 | 58,035,000 | [1] | |||||
Restricted cash | [1] | 968,000 | ||||||
Consumer receivables acquired for liquidation (at net realizable value) | 29,444,000 | 64,254,000 | [1] | |||||
Other investments, net | 32,352,000 | 35,758,000 | [1] | |||||
Due from third party collection agencies and attorneys | 1,026,000 | 1,169,000 | [1] | |||||
Prepaid and income taxes receivable | 430,000 | 1,496,000 | [1] | |||||
Furniture and equipment, net (net of accumulated depreciation of $4,136,000) | 756,000 | 1,106,000 | [1] | |||||
Deferred income taxes | 6,786,000 | 7,772,000 | [1] | |||||
Goodwill | 2,770,000 | 1,410,000 | [1] | 1,410,000 | ||||
Other assets | 5,986,000 | 4,383,000 | [1] | |||||
Total assets | 217,138,000 | 211,530,000 | [1] | 237,600,000 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Non-recourse debt | [1] | 35,760,000 | ||||||
Other liabilities | 3,587,000 | 2,486,000 | [1] | |||||
Total liabilities | $ 35,882,000 | $ 38,246,000 | [1] | |||||
Commitments and contingencies | ||||||||
STOCKHOLDERS' EQUITY | ||||||||
Preferred stock, $0.01 par value; authorized 5,000,000; issued and outstanding - none | ||||||||
Common stock, $.01 par value, authorized 30,000,000 shares; issued, 14,917,977, and outstanding, 12,974,239 | $ 130,000 | $ 149,000 | [1] | |||||
Additional paid in capital | 63,102,000 | 79,104,000 | [1] | |||||
Retained earnings | 118,595,000 | 112,694,000 | [1] | |||||
Accumulated other comprehensive loss, net of income taxes | 142,000 | (674,000) | [1] | |||||
Treasury stock (at cost), 1,943,738 shares | [1] | (17,805,000) | ||||||
Non-controlling interest | (713,000) | (184,000) | [1] | |||||
Total stockholders' equity | 181,256,000 | 173,284,000 | [1] | 172,933,000 | [1] | 177,477,000 | ||
Total liabilities and stockholders' equity | $ 217,138,000 | 211,530,000 | [1] | |||||
As Reported | ||||||||
ASSETS | ||||||||
Cash and cash equivalents | 35,179,000 | $ 4,953,000 | 84,347,000 | |||||
Investments - available-for-sale | 58,035,000 | |||||||
Restricted cash | 968,000 | |||||||
Consumer receivables acquired for liquidation (at net realizable value) | 57,900,000 | |||||||
Other investments, net | 35,758,000 | |||||||
Due from third party collection agencies and attorneys | 1,169,000 | |||||||
Prepaid and income taxes receivable | 1,496,000 | |||||||
Furniture and equipment, net (net of accumulated depreciation of $4,136,000) | 1,106,000 | |||||||
Deferred income taxes | 10,443,000 | |||||||
Goodwill | 1,410,000 | |||||||
Other assets | 4,383,000 | |||||||
Total assets | 207,847,000 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Non-recourse debt | 35,760,000 | |||||||
Other liabilities | 2,486,000 | |||||||
Total liabilities | $ 38,246,000 | |||||||
Commitments and contingencies | ||||||||
STOCKHOLDERS' EQUITY | ||||||||
Preferred stock, $0.01 par value; authorized 5,000,000; issued and outstanding - none | ||||||||
Common stock, $.01 par value, authorized 30,000,000 shares; issued, 14,917,977, and outstanding, 12,974,239 | $ 149,000 | |||||||
Additional paid in capital | 79,104,000 | |||||||
Retained earnings | 109,011,000 | |||||||
Accumulated other comprehensive loss, net of income taxes | (674,000) | |||||||
Treasury stock (at cost), 1,943,738 shares | (17,805,000) | |||||||
Non-controlling interest | (184,000) | |||||||
Total stockholders' equity | 169,601,000 | $ 172,956,000 | ||||||
Total liabilities and stockholders' equity | 207,847,000 | |||||||
Adjustments | ||||||||
ASSETS | ||||||||
Consumer receivables acquired for liquidation (at net realizable value) | 6,354,000 | |||||||
Deferred income taxes | (2,671,000) | |||||||
Total assets | $ 3,683,000 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Commitments and contingencies | ||||||||
STOCKHOLDERS' EQUITY | ||||||||
Preferred stock, $0.01 par value; authorized 5,000,000; issued and outstanding - none | ||||||||
Retained earnings | $ 3,683,000 | |||||||
Total stockholders' equity | 3,683,000 | |||||||
Total liabilities and stockholders' equity | $ 3,683,000 | |||||||
[1] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
Revision of Prior Period Adju51
Revision of Prior Period Adjustment on Consolidated Balance Sheet (Parenthetical) (Detail) - USD ($) | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Furniture and equipment, accumulated depreciation | $ 4,499,000 | $ 4,136,000 | [1] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 | [1] | ||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | [1] | ||
Preferred stock, shares issued | 0 | 0 | [1] | ||
Preferred stock, shares outstanding | 0 | 0 | [1] | ||
Common stock, par value | $ 0.01 | $ 0.01 | [1] | ||
Common stock, shares authorized | 30,000,000 | 30,000,000 | [1] | ||
Common stock, shares issued | 12,985,839 | 14,917,977 | [1] | ||
Common stock, shares outstanding | 12,985,839 | 12,974,239 | [1] | ||
Treasury stock, shares | 0 | 1,943,738 | [1] | 1,772,038 | 8,900 |
As Reported | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Furniture and equipment, accumulated depreciation | $ 4,136,000 | ||||
Preferred stock, par value | $ 0.01 | ||||
Preferred stock, shares authorized | 5,000,000 | ||||
Preferred stock, shares issued | 0 | ||||
Preferred stock, shares outstanding | 0 | ||||
Common stock, par value | $ 0.01 | ||||
Common stock, shares authorized | 30,000,000 | ||||
Common stock, shares issued | 14,917,977 | ||||
Common stock, shares outstanding | 12,974,239 | ||||
Treasury stock, shares | 1,943,738 | ||||
[1] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
Revision of Prior Period Adju52
Revision of Prior Period Adjustment on Consolidated Statements of Income (Detail) - Entity [Domain] - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | [2] | Jun. 30, 2014 | [2] | Mar. 31, 2014 | [2] | Dec. 31, 2013 | [2] | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | ||||
Revenues: | ||||||||||||||||||
Finance income, net | $ 19,865,000 | $ 31,762,000 | [1] | $ 40,803,000 | ||||||||||||||
Personal injury claims income | 7,134,000 | 6,438,000 | 1,647,000 | |||||||||||||||
Total revenues | $ 8,750,000 | $ 8,259,000 | $ 7,771,000 | $ 7,427,000 | $ 8,239,000 | $ 11,259,000 | $ 9,030,000 | $ 9,672,000 | 32,207,000 | [2] | 38,200,000 | 42,450,000 | ||||||
Other income (includes $252,000 and $339,000 of accumulated other comprehensive income reclassifications for unrealized net loss on available for sale securities for the years ended 2013 and 2012 respectively). | 1,777,000 | 1,611,000 | 2,256,000 | |||||||||||||||
Revenue | 60,085,000 | 39,811,000 | 44,706,000 | |||||||||||||||
Expenses: | ||||||||||||||||||
General and administrative expenses | 28,192,000 | 24,212,000 | 23,640,000 | |||||||||||||||
Interest expense | 1,260,000 | 1,300,000 | 2,539,000 | |||||||||||||||
Impairments of consumer receivables acquired for liquidation | 19,591,000 | 10,990,000 | [3] | 1,771,000 | [3] | |||||||||||||
Total expenses | 49,043,000 | 36,502,000 | 27,950,000 | |||||||||||||||
Income before income tax | 1,042,000 | 7,680,000 | 126,000 | 2,194,000 | 1,972,000 | (5,612,000) | 2,725,000 | 4,224,000 | 11,042,000 | [2] | 3,309,000 | 16,756,000 | ||||||
Income tax expense (includes tax benefit $100,000 and $137,000 of accumulated other comprehensive income reclassifications for unrealized net loss on available for sales securities for the years ended 2013 and 2012 respectively) | 4,613,000 | 894,000 | 6,797,000 | |||||||||||||||
Net income | 6,429,000 | 2,415,000 | [3] | 9,959,000 | [3] | |||||||||||||
Less: net income attributable to non-controlling interests | 528,000 | 406,000 | 31,000 | |||||||||||||||
Net income attributable to Asta Funding, Inc. | $ 192,000 | $ 4,687,000 | $ 75,000 | $ 947,000 | $ 1,291,000 | $ (3,369,000) | $ 1,599,000 | $ 2,488,000 | $ 5,901,000 | [2] | $ 2,009,000 | $ 9,928,000 | ||||||
Net income per share attributable to Asta Funding, Inc.: | ||||||||||||||||||
Basic | $ 0.01 | $ 0.36 | $ 0.01 | $ 0.07 | $ 0.10 | $ (0.26) | $ 0.12 | $ 0.19 | $ 0.45 | [2] | $ 0.16 | $ 0.71 | ||||||
Diluted | $ 0.01 | $ 0.35 | $ 0.01 | $ 0.07 | $ 0.10 | $ (0.26) | $ 0.12 | $ 0.19 | $ 0.45 | [2] | $ 0.15 | $ 0.69 | ||||||
Weighted average number of common shares outstanding: | ||||||||||||||||||
Basic | 12,981,076 | 12,952,150 | 14,077,650 | |||||||||||||||
Diluted | 13,205,933 | 13,216,051 | 14,321,381 | |||||||||||||||
As Reported | ||||||||||||||||||
Revenues: | ||||||||||||||||||
Finance income, net | $ 34,363,000 | $ 40,599,000 | ||||||||||||||||
Personal injury claims income | 6,438,000 | 1,647,000 | ||||||||||||||||
Total revenues | 40,801,000 | 42,246,000 | ||||||||||||||||
Other income (includes $252,000 and $339,000 of accumulated other comprehensive income reclassifications for unrealized net loss on available for sale securities for the years ended 2013 and 2012 respectively). | 1,611,000 | 2,256,000 | ||||||||||||||||
Revenue | 42,412,000 | 44,502,000 | ||||||||||||||||
Expenses: | ||||||||||||||||||
General and administrative expenses | 24,212,000 | 23,640,000 | ||||||||||||||||
Interest expense | 1,300,000 | 2,539,000 | ||||||||||||||||
Impairments of consumer receivables acquired for liquidation | 12,592,000 | 1,383,000 | ||||||||||||||||
Total expenses | 38,104,000 | 27,562,000 | ||||||||||||||||
Income before income tax | 4,308,000 | 16,940,000 | ||||||||||||||||
Income tax expense (includes tax benefit $100,000 and $137,000 of accumulated other comprehensive income reclassifications for unrealized net loss on available for sales securities for the years ended 2013 and 2012 respectively) | 1,164,000 | 6,872,000 | ||||||||||||||||
Net income | 3,144,000 | 10,068,000 | ||||||||||||||||
Less: net income attributable to non-controlling interests | 406,000 | 31,000 | ||||||||||||||||
Net income attributable to Asta Funding, Inc. | $ 2,738,000 | $ 10,037,000 | ||||||||||||||||
Net income per share attributable to Asta Funding, Inc.: | ||||||||||||||||||
Basic | $ 0.21 | $ 0.71 | ||||||||||||||||
Diluted | $ 0.21 | $ 0.70 | ||||||||||||||||
Weighted average number of common shares outstanding: | ||||||||||||||||||
Basic | 12,952,150 | 14,077,650 | ||||||||||||||||
Diluted | 13,216,051 | 14,321,381 | ||||||||||||||||
Adjustments | ||||||||||||||||||
Revenues: | ||||||||||||||||||
Finance income, net | $ (2,601,000) | $ 204,000 | ||||||||||||||||
Total revenues | (2,601,000) | 204,000 | ||||||||||||||||
Revenue | (2,601,000) | 204,000 | ||||||||||||||||
Expenses: | ||||||||||||||||||
Impairments of consumer receivables acquired for liquidation | (1,602,000) | 388,000 | ||||||||||||||||
Total expenses | (1,602,000) | 388,000 | ||||||||||||||||
Income before income tax | (999,000) | (184,000) | ||||||||||||||||
Income tax expense (includes tax benefit $100,000 and $137,000 of accumulated other comprehensive income reclassifications for unrealized net loss on available for sales securities for the years ended 2013 and 2012 respectively) | (270,000) | (75,000) | ||||||||||||||||
Net income | (729,000) | (109,000) | ||||||||||||||||
Net income attributable to Asta Funding, Inc. | $ (729,000) | $ (109,000) | ||||||||||||||||
Net income per share attributable to Asta Funding, Inc.: | ||||||||||||||||||
Basic | $ (0.05) | $ 0 | ||||||||||||||||
Diluted | $ (0.06) | $ (0.01) | ||||||||||||||||
[1] | Includes $25.7 million derived from fully amortized portfolios. Finance income recognized from account sales amounted to $1.8 million. | |||||||||||||||||
[2] | The first three quarters of fiscal year 2014 has been restated. | |||||||||||||||||
[3] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
Revision of Prior Period Adju53
Revision of Prior Period Adjustment on Consolidated Statements of Income (Parenthetical) (Detail) - USD ($) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Reclassifications for unrealized net (losses) / gains on available for sale securities | $ (143,000) | $ (252,000) | $ 339,000 |
Income tax expense, tax benefit / (expense) | $ 59,000 | (100,000) | 137,000 |
As Reported | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Reclassifications for unrealized net (losses) / gains on available for sale securities | (252,000) | 339,000 | |
Income tax expense, tax benefit / (expense) | $ (100,000) | $ 137,000 |
Revision of Prior Period Adju54
Revision of Prior Period Adjustment on Consolidated Statements of Cash Flows (Detail) - USD ($) | 12 Months Ended | |||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | ||||
Cash flows from operating activities: | ||||||
Net income | $ 6,429,000 | $ 2,415,000 | [1] | $ 9,959,000 | [1] | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization | 363,000 | 440,000 | [1] | 380,000 | [1] | |
Deferred income taxes | 446,000 | 57,000 | [1] | 3,318,000 | [1] | |
Impairments of consumer receivables acquired for liquidation | 19,591,000 | 10,990,000 | [1] | 1,771,000 | [1] | |
Stock based compensation | 1,744,000 | 1,956,000 | [1] | 1,623,000 | [1] | |
Loss (gain) on sale of available-for-sale securities | 143,000 | 252,000 | [1] | (339,000) | [1] | |
Changes in: | ||||||
Prepaid and income tax receivable | 1,066,000 | 561,000 | [1] | 1,281,000 | [1] | |
Due from third party collection agencies and attorneys | 143,000 | 873,000 | [1] | 42,000 | [1] | |
Other assets | (1,592,000) | (631,000) | [1] | (190,000) | [1] | |
Other liabilities | 745,000 | (434,000) | [1] | (247,000) | [1] | |
Net cash (used in) provided by operating activities | (2,145,000) | 16,479,000 | [1] | 17,598,000 | [1] | |
Cash flows from investing activities: | ||||||
Purchase of consumer receivables acquired for liquidation | (5,079,000) | (3,340,000) | [1] | (2,495,000) | [1] | |
Principal collected on consumer receivables acquired for liquidation | 20,272,000 | 21,902,000 | [1] | 29,149,000 | [1] | |
Principal collected on consume receivable accounts represented by account sales | 26,000 | 433,000 | [1] | 67,000 | [1] | |
Purchase of available-for-sale securities | (20,111,000) | (34,171,000) | [1] | (66,625,000) | [1] | |
Proceeds from sales of available-for-sale securities | $ 12,560,000 | 33,076,000 | [1] | 22,656,000 | [1] | |
Purchase of certificates of deposit | (45,121,000) | [1] | ||||
Proceeds from maturities of certificates of deposit | 42,682,000 | [1] | 11,499,000 | [1] | ||
Investments in personal injury claims - advances | $ (22,218,000) | (30,963,000) | [1] | (22,549,000) | [1] | |
Investments in personal injury claims - receipts | 25,624,000 | 13,801,000 | [1] | 3,953,000 | [1] | |
Capital expenditures | (13,000) | (725,000) | [1] | (638,000) | [1] | |
Net cash (used in) provided by investing activities | (1,048,000) | 42,695,000 | [1] | (70,104,000) | [1] | |
Cash flows from financing activities: | ||||||
Proceeds from exercise of stock options | 40,000 | 125,000 | [1] | 610,000 | [1] | |
Purchase of treasury stock | [1] | (1,579,000) | (16,156,000) | |||
Change in restricted cash | 968,000 | 120,000 | [1] | (57,000) | [1] | |
Dividends paid | [1] | (1,290,000) | (1,144,000) | |||
Distributions to non-controlling interest | (1,057,000) | (621,000) | [1] | |||
Repayments of non-recourse debt - Bank of Montreal, net | (9,659,000) | (25,703,000) | [1] | (10,141,000) | [1] | |
Net cash used in financing activities | (3,276,000) | (28,948,000) | [1] | (26,888,000) | [1] | |
Net (decrease) increase in cash and cash equivalents | (6,469,000) | 30,226,000 | [1] | (79,394,000) | [1] | |
Cash and cash equivalents at beginning of year | [1] | 35,179,000 | 4,953,000 | 84,347,000 | ||
Cash and cash equivalents at end of year | 28,710,000 | 35,179,000 | [1] | 4,953,000 | [1] | |
Cash paid for: | ||||||
Interest | 1,004,000 | 1,822,000 | [1] | 2,570,000 | [1] | |
Income taxes | 3,100,000 | 2,002,000 | [1] | |||
As Reported | ||||||
Cash flows from operating activities: | ||||||
Net income | 3,144,000 | 10,068,000 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization | 440,000 | 380,000 | ||||
Deferred income taxes | 326,000 | 3,393,000 | ||||
Impairments of consumer receivables acquired for liquidation | 12,592,000 | 1,383,000 | ||||
Stock based compensation | 1,956,000 | 1,623,000 | ||||
Loss (gain) on sale of available-for-sale securities | 252,000 | (339,000) | ||||
Changes in: | ||||||
Prepaid and income tax receivable | 561,000 | 1,281,000 | ||||
Due from third party collection agencies and attorneys | 873,000 | 42,000 | ||||
Other assets | (631,000) | (190,000) | ||||
Other liabilities | (434,000) | (247,000) | ||||
Net cash (used in) provided by operating activities | 19,079,000 | 17,394,000 | ||||
Cash flows from investing activities: | ||||||
Purchase of consumer receivables acquired for liquidation | (3,340,000) | (2,495,000) | ||||
Principal collected on consumer receivables acquired for liquidation | 19,302,000 | 29,353,000 | ||||
Principal collected on consume receivable accounts represented by account sales | 433,000 | 67,000 | ||||
Purchase of available-for-sale securities | (34,171,000) | (66,625,000) | ||||
Proceeds from sales of available-for-sale securities | 33,076,000 | 22,656,000 | ||||
Purchase of certificates of deposit | (45,121,000) | |||||
Proceeds from maturities of certificates of deposit | 42,682,000 | 11,499,000 | ||||
Investments in personal injury claims - advances | (30,963,000) | (22,549,000) | ||||
Investments in personal injury claims - receipts | 13,801,000 | 3,953,000 | ||||
Capital expenditures | (725,000) | (638,000) | ||||
Net cash (used in) provided by investing activities | 40,095,000 | (69,900,000) | ||||
Cash flows from financing activities: | ||||||
Proceeds from exercise of stock options | 125,000 | 610,000 | ||||
Purchase of treasury stock | (1,579,000) | (16,156,000) | ||||
Change in restricted cash | 120,000 | (57,000) | ||||
Dividends paid | (1,290,000) | (1,144,000) | ||||
Distributions to non-controlling interest | (621,000) | |||||
Repayments of non-recourse debt - Bank of Montreal, net | (25,703,000) | (10,141,000) | ||||
Net cash used in financing activities | (28,948,000) | (26,888,000) | ||||
Net (decrease) increase in cash and cash equivalents | 30,226,000 | (79,394,000) | ||||
Cash and cash equivalents at beginning of year | $ 35,179,000 | 4,953,000 | 84,347,000 | |||
Cash and cash equivalents at end of year | 35,179,000 | 4,953,000 | ||||
Cash paid for: | ||||||
Interest | 1,822,000 | 2,570,000 | ||||
Income taxes | 2,002,000 | |||||
Adjustments | ||||||
Cash flows from operating activities: | ||||||
Net income | (729,000) | (109,000) | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Deferred income taxes | (269,000) | (75,000) | ||||
Impairments of consumer receivables acquired for liquidation | (1,602,000) | 388,000 | ||||
Changes in: | ||||||
Net cash (used in) provided by operating activities | (2,600,000) | 204,000 | ||||
Cash flows from investing activities: | ||||||
Principal collected on consumer receivables acquired for liquidation | 2,600,000 | (204,000) | ||||
Net cash (used in) provided by investing activities | $ 2,600,000 | $ (204,000) | ||||
[1] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
Computation of Basic and Dilute
Computation of Basic and Diluted Per Share Data (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||||||
Sep. 30, 2014 | [1] | Jun. 30, 2014 | [1] | Mar. 31, 2014 | [1] | Dec. 31, 2013 | [1] | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | ||
Schedule Of Computation Of Basic And Diluted Earnings Per Common Share [Line Items] | ||||||||||||||||
Basic, Net Income | $ 5,901,000 | $ 2,009,000 | $ 9,928,000 | |||||||||||||
Dilutive effect of stock options | 0 | 0 | 0 | |||||||||||||
Diluted, Net Income | $ 5,901,000 | $ 2,009,000 | $ 9,928,000 | |||||||||||||
Basic, Weighted Average Shares | 12,981,076 | 12,952,150 | 14,077,650 | |||||||||||||
Dilutive effect of stock options, Weighted Average Shares | 224,857 | 263,901 | 243,731 | |||||||||||||
Diluted, Weighted Average Shares | 13,205,933 | 13,216,051 | 14,321,381 | |||||||||||||
Basic, Per share amount | $ 0.01 | $ 0.36 | $ 0.01 | $ 0.07 | $ 0.10 | $ (0.26) | $ 0.12 | $ 0.19 | $ 0.45 | [1] | $ 0.16 | $ 0.71 | ||||
Dilutive effect of stock options, Per share amount | 0 | (0.01) | (0.02) | |||||||||||||
Diluted, Per share amount | $ 0.01 | $ 0.35 | $ 0.01 | $ 0.07 | $ 0.10 | $ (0.26) | $ 0.12 | $ 0.19 | $ 0.45 | [1] | $ 0.15 | $ 0.69 | ||||
[1] | The first three quarters of fiscal year 2014 has been restated. |
Available for Sale (Detail)
Available for Sale (Detail) - USD ($) | Sep. 30, 2014 | Sep. 30, 2013 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | $ 66,559,000 | $ 59,151,000 | |
Unrealized Gains | 411,000 | 27,000 | |
Unrealized Losses | (171,000) | (1,143,000) | |
Fair Value | $ 66,799,000 | $ 58,035,000 | [1] |
[1] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
Available-for-Sale Investment57
Available-for-Sale Investments - Additional Information (Detail) | 12 Months Ended | |
Sep. 30, 2014USD ($)Investment | Sep. 30, 2013USD ($)Investment | |
Investments [Line Items] | ||
Number of investments sold | 5 | 4 |
Realized gain (loss) of investment | $ | $ (143,000) | $ (252,000) |
Capital gains received | $ | $ 186,000 | |
Number of investments | 6 | 6 |
Number of unrealized loss position in investment | 4 | 5 |
Number of unrealized loss position existed for 12 months or more | 3 | |
Number of unrealized loss position existed for 12 months or less | 1 | |
Number of unrealized gain position in investment | 2 |
Changes in Balance Sheet Accoun
Changes in Balance Sheet Account of Consumer Receivables Acquired for Liquidation (Detail) - USD ($) | 12 Months Ended | |||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | ||||
Consumer Receivables Acquired For Liquidation [Line Items] | ||||||
Balance, beginning of period | $ 64,254,000 | $ 94,239,000 | ||||
Balance transferred to cost recovery - prior period adjustment | (5,500,000) | |||||
Acquisition of receivable portfolios | 5,078,000 | |||||
Net cash collections from collection of consumer receivables acquired for liquidation | (40,048,000) | (51,650,000) | ||||
Net cash collections represented by account sales of consumer receivables acquired for liquidation | (114,000) | (2,447,000) | ||||
Impairment | (19,591,000) | (10,990,000) | [1] | $ (1,771,000) | [1] | |
Finance income recognized | 19,865,000 | 31,762,000 | [2] | 40,803,000 | ||
Balance, end of period | $ 29,444,000 | $ 64,254,000 | 94,239,000 | |||
Finance income as a percentage of collections | 49.50% | 58.70% | ||||
Acquisition of receivable portfolios | $ 5,079,000 | $ 3,340,000 | [1] | 2,495,000 | [1] | |
As Reported | ||||||
Consumer Receivables Acquired For Liquidation [Line Items] | ||||||
Balance, beginning of period | 57,900,000 | 86,887,000 | ||||
Impairment | (12,592,000) | (1,383,000) | ||||
Finance income recognized | 34,363,000 | 40,599,000 | ||||
Balance, end of period | 57,900,000 | 86,887,000 | ||||
Acquisition of receivable portfolios | 3,340,000 | 2,495,000 | ||||
Adjustments | ||||||
Consumer Receivables Acquired For Liquidation [Line Items] | ||||||
Adjustment for misapplication of the interest method to prior periods | 6,354,000 | 7,352,000 | ||||
Impairment | 1,602,000 | (388,000) | ||||
Finance income recognized | (2,601,000) | 204,000 | ||||
Interest Method | ||||||
Consumer Receivables Acquired For Liquidation [Line Items] | ||||||
Balance, beginning of period | 13,121,000 | 15,486,000 | ||||
Reclassification of interest method portfolios to cost recovery method | $ (13,121,000) | |||||
Net cash collections from collection of consumer receivables acquired for liquidation | (27,860,000) | |||||
Net cash collections represented by account sales of consumer receivables acquired for liquidation | (979,000) | |||||
Impairment | (840,000) | |||||
Finance income recognized | [2] | 27,314,000 | ||||
Balance, end of period | $ 13,121,000 | 15,486,000 | ||||
Finance income as a percentage of collections | 0.00% | 94.70% | ||||
Interest Method | As Reported | ||||||
Consumer Receivables Acquired For Liquidation [Line Items] | ||||||
Balance, beginning of period | $ 8,071,000 | $ 12,326,000 | ||||
Balance, end of period | 8,071,000 | 12,326,000 | ||||
Interest Method | Adjustments | ||||||
Consumer Receivables Acquired For Liquidation [Line Items] | ||||||
Balance transferred to cost recovery - prior period adjustment | (1,304,000) | (2,692,000) | ||||
Adjustment for misapplication of the interest method to prior periods | 6,354,000 | 5,852,000 | ||||
Cost Recovery Method | ||||||
Consumer Receivables Acquired For Liquidation [Line Items] | ||||||
Balance, beginning of period | 51,133,000 | 78,753,000 | ||||
Reclassification of interest method portfolios to cost recovery method | 13,121,000 | |||||
Acquisition of receivable portfolios | 5,078,000 | |||||
Net cash collections from collection of consumer receivables acquired for liquidation | (40,048,000) | (23,790,000) | ||||
Net cash collections represented by account sales of consumer receivables acquired for liquidation | (114,000) | (1,468,000) | ||||
Impairment | (19,591,000) | (10,150,000) | ||||
Finance income recognized | 19,865,000 | 4,448,000 | [2] | |||
Balance, end of period | $ 29,444,000 | $ 51,133,000 | 78,753,000 | |||
Finance income as a percentage of collections | 49.50% | 17.60% | ||||
Acquisition of receivable portfolios | $ 3,340,000 | |||||
Cost Recovery Method | As Reported | ||||||
Consumer Receivables Acquired For Liquidation [Line Items] | ||||||
Balance, beginning of period | $ 49,829,000 | 74,561,000 | ||||
Balance, end of period | 49,829,000 | $ 74,561,000 | ||||
Cost Recovery Method | Adjustments | ||||||
Consumer Receivables Acquired For Liquidation [Line Items] | ||||||
Balance transferred to cost recovery - prior period adjustment | $ 1,304,000 | 2,692,000 | ||||
Adjustment for misapplication of the interest method to prior periods | $ 1,500,000 | |||||
[1] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements | |||||
[2] | Includes $25.7 million derived from fully amortized portfolios. Finance income recognized from account sales amounted to $1.8 million. |
Changes in Balance Sheet Acco59
Changes in Balance Sheet Account of Consumer Receivables Acquired for Liquidation (Parenthetical) (Detail) $ in Millions | 12 Months Ended |
Sep. 30, 2013USD ($) | |
Consumer Receivables Acquired For Liquidation [Line Items] | |
Fully amortized portfolios | $ 25.7 |
Finance income recognized | $ 1.8 |
Consumer Receivables Acquired60
Consumer Receivables Acquired for Liquidation - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Consumer Receivables Acquired For Liquidation [Line Items] | |||
Balance of interest transferred to cost recovery | $ 5.5 | ||
Face value of charged-off consumer receivables | 478.9 | $ 53.5 | |
Purchased cost of charged-off consumer receivables | 5.1 | 3.3 | |
Net collections on the interest method receivables | $ 0.1 | $ 1.8 | $ 0.1 |
Changes in Accretable Yield (De
Changes in Accretable Yield (Detail) - USD ($) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | ||
Consumer Receivables Acquired For Liquidation [Line Items] | |||
Balance at beginning of period | $ 7,679,000 | $ 13,508,000 | |
Income recognized on finance receivables, net | (27,314,000) | ||
Transfer to cost recovery | (7,679,000) | ||
Reclassifications from non-accretable difference | [1] | 21,485,000 | |
Balance at end of period | $ 0 | $ 7,679,000 | |
[1] | Includes portfolios that became zero based during the period, removal of zero basis portfolios from the accretable yield calculation and, other immaterial impairments and accretions based on the extension of certain collection curves. |
Collections on Gross Basis Less
Collections on Gross Basis Less Commissions and Direct Costs (Detail) - USD ($) | 12 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | ||
Consumer Receivables Acquired For Liquidation [Line Items] | ||||
Gross collections | [1] | $ 67,913,000 | $ 85,512,000 | $ 108,487,000 |
Commissions and fees | [2] | 27,751,000 | 31,415,000 | 38,468,000 |
Net collections | $ 40,162,000 | $ 54,097,000 | $ 70,019,000 | |
[1] | Gross collections include collections from third-party collection agencies and attorneys, collections from in-house efforts and collections represented by account sales. | |||
[2] | Commissions and fees are the contractual commissions earned by third party collection agencies and attorneys, and direct costs associated with the collection effort, generally court costs. Includes a 3% fee charged by a servicer on gross collections in connection with the Portfolio Purchase. Such arrangement was consummated in December 2007. The fee is charged for asset location, skip tracing and ultimately suing debtors in connection with this portfolio purchase. |
Collections on Gross Basis Le63
Collections on Gross Basis Less Commissions and Direct Costs (Parenthetical) (Detail) | 12 Months Ended |
Sep. 30, 2014 | |
Consumer Receivables Acquired For Liquidation [Line Items] | |
Fee charged on portfolio purchase | 3.00% |
Acquisition of CBC - Additional
Acquisition of CBC - Additional Information (Detail) - Entity [Domain] - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | Jun. 30, 2014 | [1] | Mar. 31, 2014 | [1] | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | ||||||
Business Acquisition [Line Items] | |||||||||||||||||||
Total revenue | $ 8,750,000 | [1] | $ 8,259,000 | $ 7,771,000 | $ 7,427,000 | [1] | $ 8,239,000 | $ 11,259,000 | $ 9,030,000 | $ 9,672,000 | $ 32,207,000 | [1] | $ 38,200,000 | $ 42,450,000 | |||||
Pro forma basis, total revenues | 33,842,000 | 42,544,000 | 47,098,000 | ||||||||||||||||
Net income attributable to Asta Funding, Inc. | 192,000 | [1] | $ 4,687,000 | $ 75,000 | 947,000 | [1] | 1,291,000 | $ (3,369,000) | $ 1,599,000 | $ 2,488,000 | 5,901,000 | [1] | 2,009,000 | 9,928,000 | |||||
Pro forma basis, net income attributable to Asta Funding, Inc | 5,943,000 | 2,378,000 | 11,114,000 | ||||||||||||||||
Settlement income earned | 5,200,000 | ||||||||||||||||||
Net invested balance in structured settlements | $ 42,079,000 | $ 30,436,000 | $ 0 | [2] | $ 42,079,000 | 42,079,000 | 0 | [2] | |||||||||||
Net income (loss) attributable to non-controlling interest | $ 528,000 | $ 406,000 | $ 31,000 | ||||||||||||||||
CBC | |||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||
Ownership interest acquired, percent | 80.00% | ||||||||||||||||||
Purchase price | $ 5,900,000 | ||||||||||||||||||
Financing to CBC | $ 5,000,000 | ||||||||||||||||||
Non-controlling ownership interest, percent | 20.00% | ||||||||||||||||||
Minimum distribution to be received by parent before distribution to noncontrolling Interests | $ 2,337,190 | ||||||||||||||||||
Fair value of non controlling interest | $ 0 | ||||||||||||||||||
Net income (loss) attributable to non-controlling interest | $ 70,000 | ||||||||||||||||||
[1] | The first three quarters of fiscal year 2014 has been restated. | ||||||||||||||||||
[2] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
Fair Value of Assets Acquired a
Fair Value of Assets Acquired and Liabilities Assumed (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | [1] | |
Business Acquisition [Line Items] | ||||
Cash | $ 351,000 | |||
Structured settlements | 30,436,000 | $ 42,079,000 | $ 0 | |
Other assets | 11,000 | |||
Other liabilities | (356,000) | |||
Other debt (see Note J: Other debt - CBC (including non-recourse notes payable amounting to $13.8 million) | (25,863,000) | |||
Total identifiable net assets acquired | 4,579,000 | |||
Goodwill (see Note H: Goodwill) | 1,360,000 | $ 1,360,000 | ||
Purchase Price | $ 5,939,000 | |||
[1] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
Fair Value of Assets Acquired66
Fair Value of Assets Acquired and Liabilities Assumed (Parenthetical) (Detail) - USD ($) $ in Millions | Sep. 30, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | ||
Non-recourse notes payable | $ 12.7 | $ 13.8 |
Components of Structured Settle
Components of Structured Settlements (Detail) - USD ($) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | [1] |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Maturity value | $ 64,852,000 | |||
Unearned income | (22,773,000) | |||
Net carrying value | $ 42,079,000 | $ 30,436,000 | $ 0 | |
[1] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
Structured Settlements (Detail)
Structured Settlements (Detail) - Structured Settlement | Sep. 30, 2014USD ($) | |
Debt Instrument [Line Items] | ||
$22,000,000 revolving line of credit | [1] | $ 19,583,000 |
Total structured settlements | 42,079,000 | |
Notes payable secured by settlement receivables with principal and interest outstanding payable until June 2025 | ||
Debt Instrument [Line Items] | ||
Notes payable secured by settlement receivables with all principal and interest outstanding payable, Fair value | [1] | 2,521,000 |
Notes payable secured by settlement receivables with principal and interest outstanding payable until August 2026 | ||
Debt Instrument [Line Items] | ||
Notes payable secured by settlement receivables with all principal and interest outstanding payable, Fair value | [1] | 5,363,000 |
Notes payable secured by settlement receivables with principal and interest outstanding payable until April 2032 | ||
Debt Instrument [Line Items] | ||
Notes payable secured by settlement receivables with all principal and interest outstanding payable, Fair value | [1] | 4,828,000 |
Structured Settlements Encumbered | ||
Debt Instrument [Line Items] | ||
Total structured settlements | 32,295,000 | |
Structured Settlements Not Encumbered | ||
Debt Instrument [Line Items] | ||
Total structured settlements | $ 9,784,000 | |
[1] | See Note J - Other Debt - CBC |
Structured Settlements (Parenth
Structured Settlements (Parenthetical) (Detail) - USD ($) | 12 Months Ended | ||
Sep. 30, 2014 | May. 02, 2014 | ||
Debt Instrument [Line Items] | |||
Line of credit, Current borrowing capacity | $ 20,000,000 | ||
Structured Settlement | |||
Debt Instrument [Line Items] | |||
Line of credit, Current borrowing capacity | $ 22,000,000 | ||
Notes payable secured by settlement receivables with principal and interest outstanding payable until June 2025 | Structured Settlement | |||
Debt Instrument [Line Items] | |||
Notes payable secured by settlement receivables with all principal and interest outstanding payable | [1] | 2025-06 | |
Notes payable secured by settlement receivables with principal and interest outstanding payable until August 2026 | Structured Settlement | |||
Debt Instrument [Line Items] | |||
Notes payable secured by settlement receivables with all principal and interest outstanding payable | [1] | 2026-08 | |
Notes payable secured by settlement receivables with principal and interest outstanding payable until April 2032 | Structured Settlement | |||
Debt Instrument [Line Items] | |||
Notes payable secured by settlement receivables with all principal and interest outstanding payable | [1] | 2032-04 | |
[1] | See Note J - Other Debt - CBC |
Expected Cash Flows of Structur
Expected Cash Flows of Structured Settlements Based on Maturity Value (Detail) | Sep. 30, 2014USD ($) |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
September 30, 2015 | $ 4,703,000 |
September 30, 2016 | 4,989,000 |
September 30, 2017 | 4,688,000 |
September 30, 2018 | 3,835,000 |
September 30, 2019 | 3,956,000 |
Thereafter | 42,681,000 |
Total | $ 64,852,000 |
Other Investments - Additional
Other Investments - Additional Information (Detail) - USD ($) | May. 18, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | May. 02, 2014 |
Other Investments [Line Items] | |||||
Net income (loss) attributable to non-controlling interest | $ 528,000 | $ 406,000 | $ 31,000 | ||
Revolving line of credit | $ 1,000,000 | ||||
Bearing interest at prime rate, with initial term | 24 months | ||||
outstanding loan balance | 1,500,000 | ||||
Company's investment in cases through BPCM, reserve established amount | 2,400,000 | ||||
Recognized revenue through BPCM | 0 | 34,000 | 165,000 | ||
Maximum line of credit facility | 1.5 | $ 30,000,000 | |||
Pegasus Legal Funding LLC | |||||
Other Investments [Line Items] | |||||
Earnings in interest and fees | 7,100,000 | 6,400,000 | 1,600,000 | ||
Company's investment in personal injury | 32,400,000 | 35,800,000 | |||
Net income (loss) attributable to non-controlling interest | 458,000 | 406,000 | $ 31,000 | ||
Reserves for bad debts | $ 2,474,000 | $ 2,248,000 |
Reserves for Bad Debts (Detail)
Reserves for Bad Debts (Detail) - Pegasus Legal Funding LLC | 12 Months Ended |
Sep. 30, 2014USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Balance at beginning of period | $ 2,248,000 |
Provisions for losses | 1,707,000 |
Write offs | (1,481,000) |
Balance at end of period | $ 2,474,000 |
Furniture and Equipment (Detail
Furniture and Equipment (Detail) - USD ($) | Sep. 30, 2014 | Sep. 30, 2013 | |
Property, Plant and Equipment [Line Items] | |||
Total | $ 5,255,000 | $ 5,242,000 | |
Less accumulated depreciation | 4,499,000 | 4,136,000 | [1] |
Furniture and equipment (net of accumulated depreciation of $4,499,000 at September 30, 2014 and $4,136,000 at September 30, 2013) | 756,000 | 1,106,000 | [1] |
Furniture | |||
Property, Plant and Equipment [Line Items] | |||
Total | 323,000 | 310,000 | |
Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total | 3,622,000 | 3,622,000 | |
Software | |||
Property, Plant and Equipment [Line Items] | |||
Total | 1,211,000 | 1,211,000 | |
Leasehold Improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total | $ 99,000 | $ 99,000 | |
[1] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
Furniture and Equipment - Addit
Furniture and Equipment - Additional Information (Detail) - USD ($) | 12 Months Ended | ||||
Sep. 30, 2014 | Sep. 30, 2013 | [1] | Sep. 30, 2012 | [1] | |
Property, Plant and Equipment [Line Items] | |||||
Depreciation expenses | $ 363,000 | $ 440,000 | $ 380,000 | ||
[1] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
Goodwill - Additional Informati
Goodwill - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Goodwill [Line Items] | ||
Impairment loss | $ 0 | $ 0 |
Goodwill (Detail)
Goodwill (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2013 | Sep. 30, 2014 | ||
Goodwill [Line Items] | |||
Beginning balance | [1] | $ 1,410,000 | $ 1,410,000 |
Goodwill from acquisition (see Note D: Acquisition of CBC) | $ 1,360,000 | 1,360,000 | |
Ending balance | $ 2,770,000 | ||
[1] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
Non-Recourse Debt - Additional
Non-Recourse Debt - Additional Information (Detail) - USD ($) | Jun. 03, 2014 | May. 02, 2014 | Aug. 07, 2013 | Mar. 31, 2007 | Jun. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | [1] | Sep. 30, 2012 | [1] |
Debt Instrument [Line Items] | ||||||||||
Receivables financing agreement, consecutive months | 3 years | |||||||||
Portfolio purchase | $ 300,000,000 | |||||||||
Percentage of ownership in Palisades XVI | 100.00% | |||||||||
Prepayment fund | $ 15,000,000 | |||||||||
BMO right to receive from future net collections | 30.00% | |||||||||
Final principal payment | $ 2,901,199 | |||||||||
Voluntary prepayment | 1,866,036 | |||||||||
Future collections from the Portfolio Purchase | $ 16,900,000 | |||||||||
Forgiveness of non-recourse debt | $ 26,100,000 | $ 26,101,000 | $ 0 | $ 0 | ||||||
Line of credit facility | $ 20,000,000 | |||||||||
Maximum line of credit facility | $ 30,000,000 | $ 1.5 | ||||||||
Line of credit facility, term | 3 years | |||||||||
Line of credit facility, interest description | LIBOR plus 275 basis points or prime | |||||||||
Line of credit facility, basis spread on LIBOR rate | 2.75% | |||||||||
Line of credit facility, covenant amount | $ 150,000,000 | |||||||||
Minimum | BMO | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Potential long-term liability | $ 0 | |||||||||
Maximum | BMO | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Potential long-term liability | $ 1,400,000 | |||||||||
Receivables Financing Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Receivables Financing Agreement | $ 227,000,000 | |||||||||
[1] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
Other Debt-CBC - Additional Inf
Other Debt-CBC - Additional Information (Detail) - USD ($) | Mar. 27, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | [1] | Sep. 30, 2012 | [1] | Sep. 29, 2014 | Jul. 15, 2014 | May. 02, 2014 |
Debt Instrument [Line Items] | ||||||||||
Assumed debt related to acquisition | $ 25,863,000 | |||||||||
Debt amount of settlement | $ 3,471,000 | $ 0 | $ 0 | |||||||
Line of credit, Current borrowing capacity | $ 20,000,000 | |||||||||
Other debt outstanding amount | 32,295,000 | $ 0 | ||||||||
Issuance of debt notes by Special Purpose Entities | 13,800,000 | 12,700,000 | ||||||||
CBC | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Assumed debt related to acquisition | 25,900,000 | |||||||||
Debt amount of settlement | 2,500,000 | |||||||||
Line of credit, Current borrowing capacity | $ 15,000,000 | $ 12,500,000 | $ 25,000,000 | |||||||
Revolving line of credit, interest rate | 4.75% | 5.50% | 4.75% | |||||||
Revolving line of credit, expiring date | Feb. 28, 2015 | Mar. 1, 2017 | ||||||||
Other debt outstanding amount | $ 32,295,000 | |||||||||
Amount from line of credit facility | 19,583,000 | |||||||||
Line of credit, available balance | 2,400,000 | |||||||||
Issuance of debt notes by Special Purpose Entities | $ 12,712,000 | |||||||||
Ownership interest acquired, percent | 80.00% | |||||||||
CBC | Seventh Amendment | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit, Current borrowing capacity | $ 20,000,000 | |||||||||
CBC | Eighth Amendment | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit, Current borrowing capacity | $ 22,000,000 | |||||||||
CBC | SPE | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Ownership interest acquired, percent | 100.00% | |||||||||
[1] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
Component of Other Debt from Ac
Component of Other Debt from Acquisition (Detail) - USD ($) | Mar. 27, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | [1] |
Debt Instrument [Line Items] | |||||
Notes payable secured by settlement receivables with all principal and interest outstanding payable | $ 13,800,000 | $ 12,700,000 | |||
Total debt - CBC | $ 32,295,000 | $ 0 | |||
CBC | |||||
Debt Instrument [Line Items] | |||||
Revolving line of credit, interest rate | 4.75% | 5.50% | 4.75% | ||
Notes payable secured by settlement receivables with all principal and interest outstanding payable | $ 12,712,000 | ||||
$25,000,000 revolving line of credit expiring on March 1, 2017 | 19,583,000 | ||||
Total debt - CBC | $ 32,295,000 | ||||
CBC | Notes payable secured by settlement receivables with principal and interest outstanding payable until June 2025 | |||||
Debt Instrument [Line Items] | |||||
Notes payable secured by settlement receivables with all principal and interest outstanding payable, interest rate | 8.75% | ||||
Notes payable secured by settlement receivables with all principal and interest outstanding payable | $ 2,521,000 | ||||
CBC | Notes payable secured by settlement receivables with principal and interest outstanding payable until August 2026 | |||||
Debt Instrument [Line Items] | |||||
Notes payable secured by settlement receivables with all principal and interest outstanding payable, interest rate | 7.25% | ||||
Notes payable secured by settlement receivables with all principal and interest outstanding payable | $ 5,363,000 | ||||
CBC | Notes payable secured by settlement receivables with principal and interest outstanding payable until April 2032 | |||||
Debt Instrument [Line Items] | |||||
Notes payable secured by settlement receivables with all principal and interest outstanding payable, interest rate | 7.125% | ||||
Notes payable secured by settlement receivables with all principal and interest outstanding payable | $ 4,828,000 | ||||
[1] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
Component of Other Debt from 80
Component of Other Debt from Acquisition (Parenthetical) (Detail) - USD ($) | Mar. 27, 2014 | Sep. 30, 2014 | May. 02, 2014 | Dec. 31, 2013 |
Debt Instrument [Line Items] | ||||
Line of credit, Current borrowing capacity | $ 20,000,000 | |||
CBC | ||||
Debt Instrument [Line Items] | ||||
Line of credit, Current borrowing capacity | $ 15,000,000 | $ 25,000,000 | $ 12,500,000 | |
Revolving line of credit, expiring date | Feb. 28, 2015 | Mar. 1, 2017 | ||
CBC | Notes payable secured by settlement receivables with principal and interest outstanding payable until June 2025 | ||||
Debt Instrument [Line Items] | ||||
Notes payable secured by settlement receivables with all principal and interest outstanding payable, maturity date | 2025-06 | |||
CBC | Notes payable secured by settlement receivables with principal and interest outstanding payable until August 2026 | ||||
Debt Instrument [Line Items] | ||||
Notes payable secured by settlement receivables with all principal and interest outstanding payable, maturity date | 2026-08 | |||
CBC | Notes payable secured by settlement receivables with principal and interest outstanding payable until April 2032 | ||||
Debt Instrument [Line Items] | ||||
Notes payable secured by settlement receivables with all principal and interest outstanding payable, maturity date | 2032-04 |
Other Liabilities (Detail)
Other Liabilities (Detail) - USD ($) | Sep. 30, 2014 | Sep. 30, 2013 | |
Accrued Expenses and Other Current Liabilities [Line Items] | |||
Accounts payable and accrued expenses | $ 3,126,000 | $ 2,274,000 | |
Other | 461,000 | 212,000 | |
Total other liabilities | $ 3,587,000 | $ 2,486,000 | [1] |
[1] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
Components of Provision for Inc
Components of Provision for Income Taxes (Detail) - USD ($) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Current: | |||
Federal | $ 4,148,000 | $ 561,000 | $ 3,437,000 |
Federal true up | 18,000 | 42,000 | |
Current Income Tax Expense Total | 4,166,000 | 561,000 | 3,479,000 |
Deferred: | |||
Federal | (1,620,000) | 212,000 | 1,738,000 |
State | 2,067,000 | 121,000 | 1,580,000 |
Deferred Income Tax Expense Total | 447,000 | 333,000 | 3,318,000 |
Provision for income taxes | $ 4,613,000 | $ 894,000 | $ 6,797,000 |
Corporate Federal Income Tax Re
Corporate Federal Income Tax Returns Subject to Examination by IRS (Detail) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Investments, Owned, Federal Income Tax Note [Line Items] | |||
Statutory federal income tax rate | 34.00% | 34.00% | 34.00% |
State income tax, net of federal benefit | 4.50% | 6.10% | 6.10% |
State tax rate change | 8.40% | ||
Permanent difference in municipal interest | (3.30%) | (7.50%) | |
Permanent difference other | 0.20% | (0.70%) | |
Federal prior year provision to return difference | 0.20% | (2.10%) | 0.20% |
Other | (2.20%) | (2.80%) | 0.30% |
Effective income tax rate | 41.80% | 27.00% | 40.60% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | ||
Income Tax [Line Items] | |||
Net deferred tax asset | $ 6,786,000 | $ 7,772,000 | [1] |
Deferred tax valuation allowance | $ 5,729,000 | $ 5,729,000 | |
Carryforward period for state Income tax | 20 years | ||
New Jersey Division of Taxation | |||
Income Tax [Line Items] | |||
Net operating loss carryforward balance | $ 110,600,000 | ||
IRS | |||
Income Tax [Line Items] | |||
Net operating loss carryforward balance | $ 0 | ||
Federal Income Tax | |||
Income Tax [Line Items] | |||
Income tax returns subject to examination in years | 3 years | ||
State and Local Jurisdiction | |||
Income Tax [Line Items] | |||
Income tax returns subject to examination in years | 4 years | ||
[1] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
Schedules of Net Deferred Tax A
Schedules of Net Deferred Tax Asset (Detail) - USD ($) | Sep. 30, 2014 | Sep. 30, 2013 | |
Summary Of Net Deferred Tax Assets [Line Items] | |||
Deferred and accrued revenue | $ 7,000 | $ (414,000) | |
Impairments/bad debt reserves/Prior period adjustments | 915,000 | 2,570,000 | |
State tax net operating loss carryforward | 9,958,000 | 9,524,000 | |
Stock based compensation | 2,814,000 | 2,133,000 | |
Unrealized gain on structured settlements | (930,000) | ||
Depreciation, amortization and other | (249,000) | (312,000) | |
Deferred income taxes | 12,515,000 | 13,501,000 | |
Deferred tax valuation allowance | (5,729,000) | (5,729,000) | |
Deferred income taxes | $ 6,786,000 | $ 7,772,000 | [1] |
[1] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Commitments Disclosure [Line Items] | |||
Rent expense | $ 617,000 | $ 554,000 | $ 413,000 |
Schedule of Future Minimum Leas
Schedule of Future Minimum Lease Payments (Detail) | Sep. 30, 2014USD ($) |
Leases Future Minimum Payments [Line Items] | |
2,015 | $ 739,000 |
2,016 | 705,000 |
2,017 | 425,000 |
2,018 | 180,000 |
2,019 | 185,000 |
Thereafter | 63,000 |
Operating Leases, Future Minimum Payments Due, Total | $ 2,297,000 |
Concentrations - Additional Inf
Concentrations - Additional Information (Detail) | 12 Months Ended |
Sep. 30, 2014 | |
Supplier Concentration Risk | |
Concentration Risk [Line Items] | |
Percentage of portfolios serviced by collection organizations | 37.00% |
Stock Option Plans - Additional
Stock Option Plans - Additional Information (Detail) | Dec. 22, 2011shares | Feb. 28, 2014shares | Dec. 31, 2013shares | Jun. 30, 2013shares | Dec. 31, 2012Personshares | Dec. 31, 2011Personshares | Dec. 31, 2012USD ($)Personshares | Sep. 30, 2014USD ($)InstallmentEmployeeshares | Sep. 30, 2013USD ($)shares | Sep. 30, 2012USD ($)shares | Dec. 13, 2011shares | Sep. 30, 2011shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Number of shares utilized | 5,000 | 156,700 | 160,000 | 360,000 | 161,700 | 210,000 | 360,000 | |||||||
Stock option awarded | 1,403,259 | 1,622,771 | 1,499,471 | 1,294,271 | ||||||||||
Number of installment period of stock options vested | 3 years | 3 years | 3 years | |||||||||||
Number of non-employee directors | Person | 6 | |||||||||||||
Number of shares vesting installments | Installment | 3 | |||||||||||||
Intrinsic value of the stock options outstanding | $ | $ 329,000 | |||||||||||||
Intrinsic value of the stock options exercisable | $ | 241,000 | |||||||||||||
Intrinsic value of the stock options exercised | $ | 57,000 | $ 213,000 | ||||||||||||
Fair value of options exercised | $ | 97,000 | 339,000 | ||||||||||||
Proceeds from exercise of stock options | $ | $ 40,000 | 125,000 | [1] | $ 610,000 | [1] | |||||||||
Weighted average remaining contractual life of exercisable options | 3 years 9 months 18 days | |||||||||||||
Fair value of the stock options, vested | $ | $ 740,000 | 1,254,000 | ||||||||||||
Fair value of the stock options, granted | $ | 1,372,000 | $ 1,966,000 | ||||||||||||
Awards granted during period | 102,321 | |||||||||||||
Stock-based employee compensation | $ | 1,744,000 | $ 1,956,000 | [1] | 1,623,000 | [1] | |||||||||
Officers | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Stock option awarded | 70,000 | 65,000 | 65,000 | |||||||||||
Number of officers awarded | Person | 3 | 3 | ||||||||||||
Non Officer Employees | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Number of shares utilized | 90,000 | 50,000 | ||||||||||||
Stock option awarded | 86,700 | 75,000 | 75,000 | |||||||||||
Employee | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Stock option awarded | 20,000 | 20,000 | ||||||||||||
Chief Executive Officer | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Stock option awarded | 150,000 | |||||||||||||
Chief Financial Officer General Counsel And Senior Vice President | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Stock option awarded | 30,000 | |||||||||||||
Non Employee Director | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Number of non-employee directors | Person | 5 | |||||||||||||
Stock options issued | 60,000 | |||||||||||||
Employee Stock Option | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Stock-based employee compensation | $ | 1,418,000 | 1,683,000 | 1,538,000 | |||||||||||
Unrecognized compensation cost | $ | $ 1,466,000 | |||||||||||||
Unrecognized compensation cost, weighted average remaining period for recognition | 1 year 7 months 6 days | |||||||||||||
Restricted stock | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Stock options issued | 102,321 | |||||||||||||
Stock-based employee compensation | $ | $ 326,000 | 273,000 | 85,000 | |||||||||||
Unrecognized compensation cost | $ | $ 397,000 | |||||||||||||
Unrecognized compensation cost, weighted average remaining period for recognition | 1 year 2 months 12 days | |||||||||||||
Awards granted during period | 0 | |||||||||||||
Fair value of restricted stock awards granted | $ | $ 979,000 | |||||||||||||
Fair value of awards, vested | $ | $ 326,000 | 83,000 | ||||||||||||
Stock Options And Restricted Stock | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Unrecognized compensation cost | $ | 1,843,000 | |||||||||||||
Stock-based employee compensation | $ | $ 1,744,000 | $ 1,956,000 | $ 1,623,000 | |||||||||||
Equity Compensation Plan | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Common Stock authorized | 1,000,000 | |||||||||||||
Stock option awarded stock issued | 0 | |||||||||||||
Stock Option Plan expiration date | Mar. 21, 2012 | |||||||||||||
Two Thousand And Two Plan | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Common Stock authorized | 1,000,000 | |||||||||||||
Stock option awarded stock issued | 0 | |||||||||||||
Stock Option Plan expiration date | Mar. 5, 2012 | |||||||||||||
Two Thousand And Twelve Plan | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Common Stock authorized | 2,000,000 | 2,000,000 | ||||||||||||
Number of shares utilized | 371,700 | |||||||||||||
Eligible employees | Employee | 53 | |||||||||||||
Number of restricted shares granted | 102,321 | |||||||||||||
Number of shares available | 1,566,279 | |||||||||||||
Number of shares cancelled | 40,300 | |||||||||||||
[1] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
Weighted Average Assumptions Us
Weighted Average Assumptions Used in Option Pricing Model (Detail) | Dec. 22, 2011 | Feb. 28, 2014 | Dec. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||||||
Risk-free interest rate | 0.08% | 0.06% | 0.08% | 0.10% | 0.16% | 0.08% |
Expected term (years) | 10 years | 5 years 10 months 24 days | 6 years 6 months | 6 years 2 months 12 days | 6 years | 10 years |
Expected volatility | 95.70% | 35.30% | 98.30% | 99.70% | 101.00% | 103.90% |
Dividend yield | 1.03% | 0.00% | 0.00% | 0.92% | 1.67% | 1.03% |
Stock Option Plans (Detail)
Stock Option Plans (Detail) - $ / shares | 1 Months Ended | 12 Months Ended | |||||
Feb. 28, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Outstanding options at the beginning of period, Shares | 1,622,771 | 1,499,471 | 1,294,271 | ||||
Options granted, Shares | 5,000 | 156,700 | 160,000 | 360,000 | 161,700 | 210,000 | 360,000 |
Options canceled, Shares | (369,612) | (50,000) | (15,300) | ||||
Options exercised, Shares | (11,600) | (36,700) | (139,500) | ||||
Outstanding options at the end of period, Shares | 1,403,259 | 1,622,771 | 1,499,471 | ||||
Exercisable options at the end of period, Shares | 888,587 | 1,108,271 | 1,000,904 | ||||
Outstanding options at the beginning of period, Weighted Average Exercise Price | $ 11.31 | $ 11.27 | $ 11.41 | ||||
Options granted, Weighted Average Exercise Price | 8.48 | 9.36 | 7.87 | ||||
Options canceled, Weighted Average Exercise Price | 12.33 | 7.77 | 6 | ||||
Options exercised, Weighted Average Exercise Price | 3.46 | 3.41 | 4.36 | ||||
Outstanding options at the end of period, Weighted Average Exercise Price | 10.78 | 11.31 | 11.27 | ||||
Exercisable options at the end of period, Weighted Average Exercise Price | $ 12.15 | $ 12.62 | $ 12.93 |
Summary of Outstanding Options
Summary of Outstanding Options (Detail) - $ / shares | 12 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Options Outstanding,Number Outstanding | 1,403,259 | 1,622,771 | 1,499,471 | 1,294,271 |
Options Outstanding, Weighted Average Remaining Contractual Life (in Years) | 5 years 4 months 24 days | |||
Options Outstanding, Weighted Average Exercise Price | $ 10.78 | $ 11.31 | $ 11.27 | $ 11.41 |
Options Exercisable, Number Exercisable | 888,587 | 1,108,271 | 1,000,904 | |
Options Exercisable, Weighted Average Exercise Price | $ 12.15 | $ 12.62 | $ 12.93 | |
$2.8751 - $ 5.7500 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise Price, Lower Range | 2.8751 | |||
Range of Exercise Price, Upper Range | $ 5.7500 | |||
Options Outstanding,Number Outstanding | 7,200 | |||
Options Outstanding, Weighted Average Remaining Contractual Life (in Years) | 4 years 7 months 6 days | |||
Options Outstanding, Weighted Average Exercise Price | $ 2.95 | |||
Options Exercisable, Number Exercisable | 7,200 | |||
Options Exercisable, Weighted Average Exercise Price | $ 2.95 | |||
$5.7501 - $8.6250 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise Price, Lower Range | 5.7501 | |||
Range of Exercise Price, Upper Range | $ 8.6250 | |||
Options Outstanding,Number Outstanding | 869,900 | |||
Options Outstanding, Weighted Average Remaining Contractual Life (in Years) | 6 years 10 months 24 days | |||
Options Outstanding, Weighted Average Exercise Price | $ 7.94 | |||
Options Exercisable, Number Exercisable | 471,900 | |||
Options Exercisable, Weighted Average Exercise Price | $ 7.79 | |||
$8.6251 - $17.2500 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise Price, Lower Range | 8.6251 | |||
Range of Exercise Price, Upper Range | $ 17.2500 | |||
Options Outstanding,Number Outstanding | 175,000 | |||
Options Outstanding, Weighted Average Remaining Contractual Life (in Years) | 8 years 3 months 18 days | |||
Options Outstanding, Weighted Average Exercise Price | $ 9.40 | |||
Options Exercisable, Number Exercisable | 58,328 | |||
Options Exercisable, Weighted Average Exercise Price | $ 9.39 | |||
$17.2501 - $20.1250 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise Price, Lower Range | 17.2501 | |||
Range of Exercise Price, Upper Range | $ 20.1250 | |||
Options Outstanding,Number Outstanding | 336,159 | |||
Options Outstanding, Weighted Average Remaining Contractual Life (in Years) | 1 month 6 days | |||
Options Outstanding, Weighted Average Exercise Price | $ 18.22 | |||
Options Exercisable, Number Exercisable | 336,159 | |||
Options Exercisable, Weighted Average Exercise Price | $ 18.22 | |||
$25.8751 - $28.7500 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise Price, Lower Range | 25.8751 | |||
Range of Exercise Price, Upper Range | $ 28.7500 | |||
Options Outstanding,Number Outstanding | 15,000 | |||
Options Outstanding, Weighted Average Remaining Contractual Life (in Years) | 2 years 2 months 12 days | |||
Options Outstanding, Weighted Average Exercise Price | $ 28.75 | |||
Options Exercisable, Number Exercisable | 15,000 | |||
Options Exercisable, Weighted Average Exercise Price | $ 28.75 |
Summary of Restricted Stock Tra
Summary of Restricted Stock Transactions (Detail) - $ / shares | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unvested at the beginning of period, Shares | 102,321 | 10,922 |
Awards granted, Shares | 102,321 | |
Vested, Shares | (34,107) | (10,922) |
Forfeited, Shares | 0 | 0 |
Unvested at the end of period, Shares | 68,214 | 102,321 |
Unvested at the beginning of period, Weighted Average Grant Date Fair Value | $ 9.57 | $ 7.63 |
Awards granted, Weighted Average Grant Date Fair Value | 0 | 9.57 |
Vested, Weighted Average Grant Date Fair Value | 9.57 | 7.63 |
Forfeited, Weighted Average Grant Date Fair Value | 0 | 0 |
Unvested at the end of period, Weighted Average Grant Date Fair Value | $ 9.57 | $ 9.57 |
Stockholder's Equity - Addition
Stockholder's Equity - Additional Information (Detail) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||
Dec. 31, 2012 | Jun. 30, 2012 | Jun. 30, 2011 | Sep. 30, 2013 | Mar. 11, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | Sep. 30, 2014 | Mar. 09, 2012 | |
Stockholders Equity Note [Line Items] | |||||||||
Dividend per share | $ 0.08 | $ 0.02 | |||||||
Cash dividends | $ 1,030,000 | $ 0 | $ 1,111,000 | ||||||
Dividend payment, date of record | Dec. 24, 2012 | ||||||||
Dividend, date of payment | Dec. 28, 2012 | Nov. 1, 2012 | |||||||
Dividends payable | $ 260,000 | ||||||||
Share repurchase program authorized amount | $ 0 | $ 20,000,000 | |||||||
Treasury stock, shares | 1,000,000 | 59,000 | 885,000 | 171,700 | 1,763,138 | ||||
Treasury stock, shares | $ 9,400,000 | $ 457,000 | $ 1,579,000 | $ 7,900,000 | $ 16,156,000 |
Retirement Plan - Additional In
Retirement Plan - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Retirement Plans [Line Items] | |||
Contributions by employees to retirement plan | $ 119,000 | $ 88,000 | $ 108,000 |
Fair Value of Financial Measu96
Fair Value of Financial Measurements (Detail) - USD ($) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | ||
Financial assets | |||||
Available-for-sale investments | $ 66,799,000 | $ 58,035,000 | [1] | ||
Structured settlements | 42,079,000 | $ 30,436,000 | 0 | [1] | |
Financial liabilities | |||||
Non-Recourse Debt (Level 3) | [1] | 35,760,000 | |||
Other debt - CBC, non-recourse notes payable with varying installments | 12,700,000 | $ 13,800,000 | |||
Carrying Amount | Level 1 | |||||
Financial assets | |||||
Available-for-sale investments | 66,799,000 | 58,035,000 | |||
Carrying Amount | Level 3 | |||||
Financial assets | |||||
Consumer receivables acquired for liquidation | 29,444,000 | 64,254,000 | |||
Structured settlements | 42,079,000 | ||||
Financial liabilities | |||||
Non-Recourse Debt (Level 3) | 35,760,000 | ||||
Other debt - CBC, revolving line of credit | 19,583,000 | ||||
Other debt - CBC, non-recourse notes payable with varying installments | 12,712,000 | ||||
Fair Value | Level 1 | |||||
Financial assets | |||||
Available-for-sale investments | 66,799,000 | 58,035,000 | |||
Fair Value | Level 3 | |||||
Financial assets | |||||
Consumer receivables acquired for liquidation | 50,962,000 | 70,875,000 | |||
Structured settlements | 42,079,000 | ||||
Financial liabilities | |||||
Non-Recourse Debt (Level 3) | $ 27,000,000 | ||||
Other debt - CBC, revolving line of credit | 19,583,000 | ||||
Other debt - CBC, non-recourse notes payable with varying installments | $ 12,712,000 | ||||
[1] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
Quantitative Information about
Quantitative Information about Level 3 Fair Value Measurements (Detail) - Sep. 30, 2014 - USD ($) | Total |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Fair Value | $ 42,079,000 |
Valuation Technique | Discounted cash flow |
Unobservable Input | Discount rate |
Rate | 5.50% |
Changes in Structured Settlemen
Changes in Structured Settlements at Fair Value using Significant Unobservable Inputs (Level 3) (Detail) - Sep. 30, 2014 - USD ($) | Total |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | |
Balance at beginning | $ 0 |
Acquisition of CBC | 30,436,000 |
Total gains included in earnings | 2,840,000 |
Purchases | 9,808,000 |
Sales | 0 |
Interest accreted | 2,282,000 |
Payments received | (3,287,000) |
Total | 42,079,000 |
The amount of total gains for the year included in earnings attributable to the change in unrealized gains (losses) relating to assets held at September 30, 2014 | $ 2,840,000 |
Schedule of Realized and Unreal
Schedule of Realized and Unrealized Gains and Losses Included in Earnings in Accompanying Consolidated Statements of Income (Detail) | 12 Months Ended |
Sep. 30, 2014USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |
Total gains (losses) included in earnings in fiscal year 2014 | $ 2,840,000 |
Change in unrealized gains (losses) relating to assets still held at September 30, 2014 | $ 2,840,000 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) | Dec. 12, 2011 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Related Party Transaction [Line Items] | ||||
Options transactions | 30,000 | |||
Louis Piccolo | ||||
Related Party Transaction [Line Items] | ||||
Consulting agreement period | 2 years | |||
Professional fee paid | $ 150,000 | $ 25,000 | $ 150,000 | $ 125,000 |
Bonus per new transaction | $ 25,000 |
Summarized Quarterly Data (Deta
Summarized Quarterly Data (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||||||
Sep. 30, 2014 | [1] | Jun. 30, 2014 | [1] | Mar. 31, 2014 | [1] | Dec. 31, 2013 | [1] | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | [1] | Sep. 30, 2013 | Sep. 30, 2012 | |
Selected Quarterly Financial Data [Line Items] | ||||||||||||||||
Total revenue | $ 8,750,000 | $ 8,259,000 | $ 7,771,000 | $ 7,427,000 | $ 8,239,000 | $ 11,259,000 | $ 9,030,000 | $ 9,672,000 | $ 32,207,000 | $ 38,200,000 | $ 42,450,000 | |||||
Income (loss) before income taxes | 1,042,000 | 7,680,000 | 126,000 | 2,194,000 | 1,972,000 | (5,612,000) | 2,725,000 | 4,224,000 | 11,042,000 | 3,309,000 | 16,756,000 | |||||
Net income (loss) attributable to Asta Funding, Inc. | $ 192,000 | $ 4,687,000 | $ 75,000 | $ 947,000 | $ 1,291,000 | $ (3,369,000) | $ 1,599,000 | $ 2,488,000 | $ 5,901,000 | $ 2,009,000 | $ 9,928,000 | |||||
Basic net income (loss) per share attributable to Asta Funding, Inc. | $ 0.01 | $ 0.36 | $ 0.01 | $ 0.07 | $ 0.10 | $ (0.26) | $ 0.12 | $ 0.19 | $ 0.45 | $ 0.16 | $ 0.71 | |||||
Diluted net income (loss) per share attributable to Asta Funding, Inc. | $ 0.01 | $ 0.35 | $ 0.01 | $ 0.07 | $ 0.10 | $ (0.26) | $ 0.12 | $ 0.19 | $ 0.45 | $ 0.15 | $ 0.69 | |||||
[1] | The first three quarters of fiscal year 2014 has been restated. |
Segment Reporting - Additional
Segment Reporting - Additional Information (Detail) | Dec. 31, 2013 | Jun. 30, 2014 | Sep. 30, 2014USD ($)Segment | Sep. 30, 2013USD ($) | Sep. 30, 2012USD ($) |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | Segment | 4 | ||||
Revenue | $ 60,085,000 | $ 39,811,000 | $ 44,706,000 | ||
Intersegment Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | $ 0 | ||||
Pegasus | |||||
Segment Reporting Information [Line Items] | |||||
Ownership interest | 80.00% | 80.00% | |||
CBC | |||||
Segment Reporting Information [Line Items] | |||||
Ownership interest | 80.00% | 80.00% |
Segment Reporting (Detail)
Segment Reporting (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Sep. 30, 2014 | Jun. 30, 2014 | [1] | Mar. 31, 2014 | [1] | Dec. 31, 2013 | [1] | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | ||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||
Revenues | $ 8,750,000 | [1] | $ 8,259,000 | $ 7,771,000 | $ 7,427,000 | $ 8,239,000 | $ 11,259,000 | $ 9,030,000 | $ 9,672,000 | $ 32,207,000 | [1] | $ 38,200,000 | $ 42,450,000 | ||||||
Other income | 27,900,000 | 1,600,000 | 2,300,000 | ||||||||||||||||
Income before income taxes | 1,042,000 | [1] | $ 7,680,000 | $ 126,000 | $ 2,194,000 | 1,972,000 | $ (5,612,000) | $ 2,725,000 | $ 4,224,000 | 11,042,000 | [1] | 3,309,000 | 16,756,000 | ||||||
Total assets | 217,138,000 | 211,530,000 | [2] | 217,138,000 | 211,530,000 | [2] | 237,600,000 | ||||||||||||
Capital expenditures | 13,000 | 725,000 | [2] | 638,000 | [2] | ||||||||||||||
Depreciation | 363,000 | 440,000 | [2] | 380,000 | [2] | ||||||||||||||
Operating Segments | Consumer Receivables | |||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||
Revenues | 19,800,000 | 31,800,000 | 40,800,000 | ||||||||||||||||
Other income | 26,100,000 | ||||||||||||||||||
Income before income taxes | 18,900,000 | 10,100,000 | 23,100,000 | ||||||||||||||||
Total assets | 30,500,000 | 65,400,000 | 30,500,000 | 65,400,000 | 96,300,000 | ||||||||||||||
Operating Segments | Personal Injury Claims | |||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||
Revenues | 7,200,000 | 6,400,000 | 1,600,000 | ||||||||||||||||
Income before income taxes | 2,300,000 | 2,000,000 | 100,000 | ||||||||||||||||
Total assets | 34,000,000 | 36,800,000 | 34,000,000 | 36,800,000 | 21,500,000 | ||||||||||||||
Operating Segments | Structured Settlements | |||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||
Revenues | 5,200,000 | ||||||||||||||||||
Income before income taxes | 400,000 | ||||||||||||||||||
Total assets | 38,500,000 | 38,500,000 | |||||||||||||||||
Operating Segments | GAR Disability Advocates | |||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||
Other income | 400,000 | ||||||||||||||||||
Income before income taxes | (2,700,000) | (1,200,000) | |||||||||||||||||
Total assets | 1,000,000 | 200,000 | 1,000,000 | 200,000 | |||||||||||||||
Corporate | |||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||
Other income | 1,400,000 | 1,600,000 | 2,300,000 | ||||||||||||||||
Income before income taxes | (7,900,000) | (7,600,000) | (6,400,000) | ||||||||||||||||
Total assets | $ 113,100,000 | $ 109,100,000 | 113,100,000 | 109,100,000 | 119,800,000 | ||||||||||||||
Capital expenditures | 700,000 | 600,000 | |||||||||||||||||
Depreciation | $ 400,000 | $ 400,000 | $ 400,000 | ||||||||||||||||
[1] | The first three quarters of fiscal year 2014 has been restated. | ||||||||||||||||||
[2] | For a discussion on the adjustments, see Note A2, Revision of Prior Period Financial Statements |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) | Mar. 11, 2015 | Oct. 09, 2014 | Mar. 27, 2014 | Jun. 30, 2012 | Jun. 30, 2011 | Dec. 31, 2013 | Sep. 30, 2014 | Mar. 11, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | Nov. 26, 2014 | May. 02, 2014 | May. 18, 2012 |
Subsequent Event [Line Items] | |||||||||||||
Debt instrument, issued | $ 1,000,000 | ||||||||||||
Purchase of treasury stock (in shares) | 1,000,000 | 59,000 | 885,000 | 171,700 | 1,763,138 | ||||||||
Line of credit, Current borrowing capacity | $ 20,000,000 | ||||||||||||
CBC | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Revolving line of credit, expiring date | Feb. 28, 2015 | Mar. 1, 2017 | |||||||||||
Line of credit, Current borrowing capacity | $ 15,000,000 | $ 12,500,000 | $ 25,000,000 | ||||||||||
Revolving line of credit, interest rate | 4.75% | 5.50% | 4.75% | ||||||||||
Subsequent Event | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Purchase of treasury stock (in shares) | 5,000,000 | ||||||||||||
Subsequent Event | CBC | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Revolving line of credit, expiring date | Mar. 1, 2017 | ||||||||||||
Line of credit, Current borrowing capacity | $ 25,000,000 | ||||||||||||
Revolving line of credit, interest rate | 4.10% | ||||||||||||
Subsequent Event | CBC | Secured Debt | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Debt instrument, issued | $ 20,800,000 | ||||||||||||
Debt instrument, fixed interest rate | 5.40% | ||||||||||||
Subsequent Event | CBC | Before 9th Amendment | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Revolving line of credit, expiring date | Feb. 28, 2015 | ||||||||||||
Line of credit, Current borrowing capacity | $ 22,000,000 | ||||||||||||
Revolving line of credit, interest rate | 4.75% |