Asta Funding, Inc. (NASDAQ: ASFI) (the “Company”), a diversified
financial services company, today announced results for the second
quarter ended March 31, 2019.
Three Months Ended March 31, 2019
Results
For the three months ended March 31, 2019, net
income was $1.8 million, or $0.27 per diluted share, as compared to
net income of $1.0 million, or $0.15 per diluted share for the
three months ended March 31, 2018.
Total income for the three months ended March
31, 2019 increased $0.1 million to $5.9 million, compared to $5.8
million for the three months ended March 31, 2018. Total revenue
included in the three months ended March 31, 2019 is approximately
$3.5 million in total revenue from finance income from the
distressed receivable business, as compared to $4.1 million for the
three months ended March 31, 2018. Also included in total revenues
for the three months ended March 31, 2019 is approximately $0.5
million from personal injury claims income, as compared to $0.5
million for the three months ended March 31, 2018. Disability fee
income for the three months ended March 31, 2019, was up by $0.2
million to $1.3 million as compared to $1.1 million for the three
months ended March 31, 2018.
General and administrative expenses remained
relatively consistent at $3.4 million for the three months ended
March 31, 2019, as compared to $3.3 million for the three months
ended March 31, 2018. During the three months ended March 31, 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 $(0.1) million for the three months
ended March 31, 2019, compared to earnings from an equity method
investment of $0.5 million for the three months ended March 31,
2018.
Six Months Ended March 31, 2019
Results
For the six months ended March 31, 2019, net
income was $3.0 million, or $0.46 per diluted share, as compared to
a net loss of $(1.6) million, or $(0.25) per diluted share for the
six months ended March 31, 2018.
Total income for the six months ended March 31,
2019 increased $0.5 million to $11.6 million, compared to $11.1
million for the six months ended March 31, 2018. Total revenue
included in the six months ended March 31, 2019 is approximately
$7.0 million in total revenue from finance income from the
distressed receivable business, as compared to $8.3 million for the
six months ended March 31, 2018. Also included in total revenues
for the six months ended March 31, 2019 is approximately $1.2
million from personal injury claims income, as compared to $0.6
million for the six months ended March 31, 2018. Disability fee
income for the six months ended March 31, 2019, was up by $0.5
million to $2.6 million as compared to $2.1 million for the six
months ended March 31, 2018.
General and administrative expenses remained
relatively consistent at $7.3 million for the six months ended
March 31, 2019, as compared to $7.5 million for the six months
ended March 31, 2018. During the six months ended March 31, 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 $(0.1) million for the six months ended
March 31, 2019, compared to earnings from an equity method
investment of $0.8 million for the six months ended March 31,
2018.
Balance Sheet Review
As of March 31, 2019 the Company had
approximately $50.1 million in cash and cash equivalents, and
securities, $87.5 million in stockholders' equity, and a net book
value per share of $13.09.
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 http://www.astafunding.com.
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 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
SUBSIDIARIESCondensed Consolidated
Balance Sheets
|
|
March 31, 2019(Unaudited) |
|
|
September 30, 2018 |
|
ASSETS |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
3,694,000 |
|
|
$ |
6,284,000 |
|
Available for sale debt
securities (at fair value) |
|
|
38,390,000 |
|
|
|
38,054,000 |
|
Investments in equity
securities (at fair value) |
|
|
7,989,000 |
|
|
|
— |
|
Consumer receivables acquired
for liquidation (at cost) |
|
|
2,626,000 |
|
|
|
3,749,000 |
|
Investment in personal injury
claims, net |
|
|
6,630,000 |
|
|
|
10,745,000 |
|
Due from third party
collection agencies and attorneys |
|
|
654,000 |
|
|
|
755,000 |
|
Accounts receivable, net |
|
|
382,000 |
|
|
|
— |
|
Prepaid and income taxes
receivable, net |
|
|
8,496,000 |
|
|
|
5,387,000 |
|
Furniture and equipment, net
of accumulated depreciation of $1.9 million at March 31, 2019 and
$1.8 million at September 30, 2018 |
|
|
168,000 |
|
|
|
100,000 |
|
Equity method investment |
|
|
211,000 |
|
|
|
236,000 |
|
Note receivable |
|
|
3,831,000 |
|
|
|
4,313,000 |
|
Settlement receivable |
|
|
2,637,000 |
|
|
|
3,339,000 |
|
Deferred income taxes |
|
|
10,548,000 |
|
|
|
10,940,000 |
|
Goodwill |
|
|
1,410,000 |
|
|
|
1,410,000 |
|
Other assets |
|
|
1,452,000 |
|
|
|
1,003,000 |
|
Total assets |
|
$ |
89,118,000 |
|
|
$ |
86,315,000 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
1,597,000 |
|
|
$ |
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 andoutstanding — none |
|
|
— |
|
|
|
— |
|
Common stock, $.01 par value,
authorized 30,000,000 shares; issued 13,459,708 at March 31,
2019and September 30, 2018; and outstanding 6,685,415 at March 31,
2019 and September 30, 2018 |
|
|
135,000 |
|
|
|
135,000 |
|
Additional paid-in
capital |
|
|
68,558,000 |
|
|
|
68,551,000 |
|
Retained earnings |
|
|
85,652,000 |
|
|
|
82,441,000 |
|
Accumulated other
comprehensive income, net of taxes |
|
|
304,000 |
|
|
|
35,000 |
|
Treasury stock (at cost)
6,774,293 shares at March 31, 2019 and September 30, 2018 |
|
|
(67,128,000 |
) |
|
|
(67,128,000 |
) |
Total stockholders’ equity |
|
|
87,521,000 |
|
|
|
84,034,000 |
|
Total liabilities and
stockholders’ equity |
|
$ |
89,118,000 |
|
|
$ |
86,315,000 |
|
|
|
|
|
|
|
|
|
|
ASTA FUNDING, INC. AND
SUBSIDIARIESCondensed Consolidated
Statements of
Operations(Unaudited)
|
|
Three Months |
|
|
Three Months |
|
|
Six Months |
|
|
Six Months |
|
|
|
Ended |
|
|
Ended |
|
|
Ended |
|
|
Ended |
|
|
|
March 31, 2019 |
|
|
March 31, 2018 |
|
|
March 31, 2019 |
|
|
March 31, 2018 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income, net |
|
$ |
3,481,000 |
|
|
$ |
4,101,000 |
|
|
$ |
6,975,000 |
|
|
$ |
8,286,000 |
|
Personal injury claims
income |
|
|
456,000 |
|
|
|
469,000 |
|
|
|
1,169,000 |
|
|
|
610,000 |
|
Disability fee income |
|
|
1,296,000 |
|
|
|
1,149,000 |
|
|
|
2,557,000 |
|
|
|
2,060,000 |
|
Total revenues |
|
|
5,233,000 |
|
|
|
5,719,000 |
|
|
|
10,701,000 |
|
|
|
10,956,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on settlement |
|
|
323,000 |
|
|
|
— |
|
|
|
323,000 |
|
|
|
— |
|
Other income, net |
|
|
306,000 |
|
|
|
69,000 |
|
|
|
540,000 |
|
|
|
103,000 |
|
|
|
|
5,862,000 |
|
|
|
5,788,000 |
|
|
|
11,564,000 |
|
|
|
11,059,000 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative |
|
|
3,395,000 |
|
|
|
3,301,000 |
|
|
|
7,321,000 |
|
|
|
7,513,000 |
|
Loss on acquisition of minority
interest |
|
|
— |
|
|
|
1,420,000 |
|
|
|
— |
|
|
|
1,420,000 |
|
Loss (earnings) from equity
method investment |
|
|
56,000 |
|
|
|
(493,000 |
) |
|
|
86,000 |
|
|
|
(845,000 |
) |
|
|
|
3,451,000 |
|
|
|
4,228,000 |
|
|
|
7,407,000 |
|
|
|
8,088,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
before income tax |
|
|
2,411,000 |
|
|
|
1,560,000 |
|
|
|
4,157,000 |
|
|
|
2,971,000 |
|
Income tax expense |
|
|
638,000 |
|
|
|
540,000 |
|
|
|
1,109,000 |
|
|
|
4,540,000 |
|
Net income (loss) from
continuing operations |
|
|
1,773,000 |
|
|
|
1,020,000 |
|
|
|
3,048,000 |
|
|
|
(1,569,000 |
) |
Net loss from discontinued
operations, net of income tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(80,000 |
) |
Net income (loss) |
|
$ |
1,773,000 |
|
|
$ |
1,020,000 |
|
|
$ |
3,048,000 |
|
|
$ |
(1,649,000 |
) |
Net earnings (loss) per basic
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations |
|
$ |
0.27 |
|
|
$ |
0.15 |
|
|
$ |
0.46 |
|
|
$ |
(0.24 |
) |
Discontinued
operations |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.01 |
) |
|
|
$ |
0.27 |
|
|
$ |
0.15 |
|
|
$ |
0.46 |
|
|
$ |
(0.25 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per diluted
shares: |
|
$ |
0.27 |
|
|
$ |
0.15 |
|
|
$ |
0.46 |
|
|
$ |
(0.24 |
) |
Continuing
operations |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.01 |
) |
Discontinued
operations |
|
$ |
0.27 |
|
|
$ |
0.15 |
|
|
$ |
0.46 |
|
|
$ |
(0.25 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common
shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
6,685,415 |
|
|
|
6,655,855 |
|
|
|
6,685,415 |
|
|
|
6,639,659 |
|
Diluted |
|
|
6,685,827 |
|
|
|
6,659,354 |
|
|
|
6,685,775 |
|
|
|
6,639,659 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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