Asta Funding Announces Results for The Third Quarter Ended June 30, 2019
| ● | $2.3 million in net income for the quarter ended June 30, 2019 | |
| ● | Diluted EPS rose to $0.35 for the quarter ended June 30, 2019 | |
| ● | $61.2 million in cash & securities as of June 30, 2019 |
ENGLEWOOD CLIFFS, N.J., Aug. 13, 2019 (GLOBE NEWSWIRE) -- Asta Funding, Inc. (NASDAQ: ASFI) (the “Company”), a diversified financial services company, today announced results for the third quarter ended June 30, 2019.
Three Months Ended June 30, 2019 Results
For the three months ended June 30, 2019, net income was $2.3 million, or $0.35 per diluted share, as compared to net income of $2.0 million, or $0.29 per diluted share for the three months ended June 30, 2018.
Total income for the three months ended June 30, 2019 decreased $0.9 million to $6.4 million, compared to $7.3 million for the three months ended June 30, 2018. Total revenue included in the three months ended June 30, 2019 is approximately $3.7 million in total revenue from finance income from the distressed receivable business, as compared to $4.5 million for the three months ended June 30, 2018. Also included in total revenues for the three months ended June 30, 2019 is approximately $0.4 million from personal injury claims income, as compared to $1.6 million for the three months ended June 30, 2018. Disability fee income was $1.2 million for the three months ended June 30, 2019 and 2018. Other income increased $0.8 million to $0.9 million for the three months ended June 30, 2019, compared to $0.1 million for the three months ended June 30, 2018. The Company recognized a gain on settlement of $0.3 million for the three months ended June 30, 2019.
General and administrative expenses decreased $1.2 million to $3.0 million for the three months ended June 30, 2019, as compared to $4.2 million for the three months ended June 30, 2018.
Additionally, the Company had a loss from an equity method investment of $(5,000) for the three months ended June 30, 2019.
Nine Months Ended June 30, 2019 Results
For the nine months ended June 30, 2019, net income was $5.4 million, or $0.80 per diluted share, as compared to a net income of $0.3 million, or $0.05 per diluted share for the nine months ended June 30, 2018.
Total income for the nine months ended June 30, 2019 decreased $0.4 million to $18.0 million, compared to $18.4 million for the nine months ended June 30, 2018. Total revenue included in the nine months ended June 30, 2019 is approximately $10.7 million in total revenue from finance income from the distressed receivable business, as compared to $12.8 million for the nine months ended June 30, 2018. Also included in total revenues for the nine months ended June 30, 2019 is approximately $1.6 million from personal injury claims income, as compared to $2.2 million for the nine months ended June 30, 2018. Disability fee income was $3.7 million for the nine months ended June 30, 2019, as compared to $3.2 million for the nine months ended June 30, 2018. Other income increased $1.2 million to $1.4 million for the nine months ended June 30, 2019, compared to $0.2 million for the nine months ended June 30, 2018. The Company recognized a gain on settlement of $0.6 million for the nine months ended June 30, 2019.
General and administrative expenses decreased $1.4 million to $10.3 million for the nine months ended June 30, 2019, as compared to $11.7 million for the nine months ended June 30, 2018. During the nine months ended June 30, 2018, the Company recorded a loss of $(1.4) million on the acquisition of a minority interest.
Additionally, the Company had a loss from an equity method investment of $(91,000) for the nine months ended June 30, 2019, compared to earnings from an equity method investment of $0.8 million for the nine months ended June 30, 2018.
Balance Sheet Review
As of June 30, 2019, the Company had approximately $61.2 million in cash and cash equivalents, and securities, $89.2 million in stockholders' equity, and a net book value per share of $13.50.
About Asta Funding, Inc.
Asta Funding, Inc. (NASDAQ:ASFI), headquartered in Englewood Cliffs, New Jersey, is a diversified financial services company that assists consumers and serves investors through the strategic management of three complementary business segments: Personal Injury Claims, Consumer Debt and Disability Advocacy. Founded in 1994 as a sub-prime auto lender, Asta now manages business units that include or have included funding of personal injury claims; acquiring and managing international distressed consumer receivables; and benefits advocacy. For additional information, please visit our website at .
Cautionary Note Regarding Forward-Looking Statements
All statements in this news release other than statements of historical facts, including without limitation, statements regarding our future financial position, business strategy, budgets, projected revenues, projected costs, and plans and objectives of management for future operations, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expects,” “intends,” “plans,” “projects,” “estimates,” “anticipates,” or “believes” or the negative thereof, or any variation thereon, or similar terminology or expressions. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are not guarantees and are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Important factors which could materially affect our results and our future performance include, without limitation, the identified material weaknesses in our internal control over financial reporting and our ability to remediate those material weaknesses, our ability to purchase defaulted consumer receivables at appropriate prices, changes in government regulations that affect our ability to collect sufficient amounts on our defaulted consumer receivables, our ability to employ and retain qualified employees, changes in the credit or capital markets, changes in interest rates, deterioration in economic conditions, negative press regarding the debt collection industry which may have a negative impact on a debtor’s willingness to pay the debt we acquire, and statements of assumption underlying any of the foregoing, as well as other factors set forth under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended September 30, 2018, and other filings with the SEC. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the foregoing. Except as required by law, we assume no duty to update or revise any forward-looking statements.
Investor Contact:
Bruce R. Foster, CFO
Asta Funding, Inc.
(201) 567-5648
ASTA FUNDING, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
| June 30, 2019 (Unaudited) | September 30, 2018 | |||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | 2,898,000 | $ | 6,284,000 | ||||
| Available for sale debt securities (at fair value) | 50,286,000 | 38,054,000 | ||||||
| Investments in equity securities (at fair value) | 8,032,000 | — | ||||||
| Consumer receivables acquired for liquidation (at cost) | 2,184,000 | 3,749,000 | ||||||
| Investment in personal injury claims, net | 5,909,000 | 10,745,000 | ||||||
| Due from third party collection agencies and attorneys | 813,000 | 755,000 | ||||||
| Accounts receivable, net | 235,000 | — | ||||||
| Prepaid and income taxes receivable, net | 4,456,000 | 5,387,000 | ||||||
| Furniture and equipment, net of accumulated depreciation of $1.9 million at June 30, 2019 and $1.8 million at September 30, 2018 | 145,000 | 100,000 | ||||||
| Equity method investment | 207,000 | 236,000 | ||||||
| Note receivable | — | 4,313,000 | ||||||
| Settlement receivable | 1,990,000 | 3,339,000 | ||||||
| Deferred income taxes | 10,360,000 | 10,940,000 | ||||||
| Goodwill | 1,410,000 | 1,410,000 | ||||||
| Other assets | 1,443,000 | 1,003,000 | ||||||
| Total assets | $ | 90,368,000 | $ | 86,315,000 | ||||
| LIABILITIES | ||||||||
| Accounts payable and accrued expenses | $ | 1,208,000 | $ | 2,281,000 | ||||
| Commitments and contingencies | ||||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Preferred stock, $.01 par value; authorized 5,000,000 shares; issued and outstanding — none | — | — | ||||||
| Preferred stock, Series A Junior Participating, $.01 par value; authorized 30,000 shares; issued and outstanding — none | — | — | ||||||
| Common stock, $.01 par value, authorized 30,000,000 shares; issued 13,459,708 at June 30, 2019 and September 30, 2018; and outstanding 6,605,915 at June 30, 2019 and 6,685,415 at September 30, 2018 | 135,000 | 135,000 | ||||||
| Additional paid-in capital | 68,558,000 | 68,551,000 | ||||||
| Retained earnings | 87,956,000 | 82,441,000 | ||||||
| Accumulated other comprehensive income, net of taxes | 199,000 | 35,000 | ||||||
| Treasury stock (at cost) 6,853,793 shares at June 30, 2019 and 6,774,293 at September 30, 2018 | (67,688,000 | ) | (67,128,000 | ) | ||||
| Total stockholders’ equity | 89,160,000 | 84,034,000 | ||||||
| Total liabilities and stockholders’ equity | $ | 90,368,000 | $ | 86,315,000 | ||||
ASTA FUNDING, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
| Three Months | Three Months | Nine Months | Nine Months | ||||||||||||||
| Ended | Ended | Ended | Ended | ||||||||||||||
| June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | ||||||||||||||
| Revenues: | |||||||||||||||||
| Finance income, net | $ | 3,684,000 | $ | 4,509,000 | $ | 10,659,000 | $ | 12,795,000 | |||||||||
| Personal injury claims income | 439,000 | 1,557,000 | 1,608,000 | 2,167,000 | |||||||||||||
| Disability fee income | 1,175,000 | 1,188,000 | 3,732,000 | 3,248,000 | |||||||||||||
| Total revenues | 5,298,000 | 7,254,000 | 15,999,000 | 18,210,000 | |||||||||||||
| Gain on settlement | 273,000 | — | 596,000 | — | |||||||||||||
| Other income, net | 855,000 | 76,000 | 1,395,000 | 179,000 | |||||||||||||
| 6,426,000 | 7,330,000 | 17,990,000 | 18,389,000 | ||||||||||||||
| Expenses: | |||||||||||||||||
| General and administrative | 2,980,000 | 4,201,000 | 10,301,000 | 11,712,000 | |||||||||||||
| Loss on acquisition of minority interest | — | — | — | 1,420,000 | |||||||||||||
| Interest | — | 17,000 | — | 19,000 | |||||||||||||
| Impairment | 100,000 | 100,000 | 100,000 | 100,000 | |||||||||||||
| Loss (earnings) from equity method investment | 5,000 | — | 91,000 | (845,000 | ) | ||||||||||||
| 3,085,000 | 4,318,000 | 10,492,000 | 12,406,000 | ||||||||||||||
| Income from continuing operations before income tax | 3,341,000 | 3,012,000 | 7,498,000 | 5,983,000 | |||||||||||||
| Income tax expense | 1,037,000 | 1,055,000 | 2,146,000 | 5,595,000 | |||||||||||||
| Net income from continuing operations | 2,304,000 | 1,957,000 | 5,352,000 | 388,000 | |||||||||||||
| Net loss from discontinued operations, net of income tax | — | — | — | (80,000 | ) | ||||||||||||
| Net income | $ | 2,304,000 | $ | 1,957,000 | $ | 5,352,000 | $ | 308,000 | |||||||||
| Net income (loss) per basic shares: | |||||||||||||||||
| Continuing operations | $ | 0.35 | $ | 0.29 | $ | 0.80 | $ | 0.06 | |||||||||
| Discontinued operations | — | — | — | (0.01 | ) | ||||||||||||
| $ | 0.35 | $ | 0.29 | $ | 0.80 | $ | 0.05 | ||||||||||
| Net income (loss) per diluted shares: | |||||||||||||||||
| Continuing operations | $ | 0.35 | $ | 0.29 | $ | 0.80 | $ | 0.06 | |||||||||
| Discontinued operations | — | — | — | (0.01 | ) | ||||||||||||
| $ | 0.35 | $ | 0.29 | $ | 0.80 | $ | 0.05 | ||||||||||
| Weighted average number of common shares outstanding: | |||||||||||||||||
| Basic | 6,666,012 | 6,685,415 | 6,678,947 | 6,654,911 | |||||||||||||
| Diluted | 6,666,231 | 6,685,628 | 6,679,260 | 6,657,840 | |||||||||||||
