Asta Funding Reports Increase in Income for Fiscal Fourth Quarter and Full Year 2011

Debt buyer and collector Asta Funding, Inc. (Nasdaq: ASFI) reported financial results Wednesday for its fiscal fourth quarter and full year 2011 marked by increases in net income on lower revenues.

The Englewood Cliffs, N.J.-based ARM company said that net income for fiscal 2011, ended September 30, 2011, increased 236 percent to $10.5 million, or $0.71 per share. Revenues in the year declined 5.8 percent to $43.2 million. Included in total revenues for the fiscal year was a one-time charge of approximately $1.3 million due to a third party servicer invoicing the Asta for previously unbilled collection costs. Revenues for the year, excluding this one-time charge, were $44.4 million, down 3.1 percent from 2010.

An impairment charge of $721,000 was recorded during fiscal year 2011 as compared to $13,029,000 of impairment charges recorded during fiscal year 2010.

For the fourth fiscal quarter of 2011, also ended Sept. 30, 2011, Asta reported net income of $1.65 million, compared to a net loss of $5.3 million in the same period a year ago. The company reported a 14.8 percent decrease in revenues to $9.8 million for the fourth quarter. Included in total revenue for the quarter was the previously-mentioned one-time charge against revenues of approximately $1.3 million. Revenues for the quarter, excluding this charge, were $11 million, a decrease of 3.7 percent.

Fourth quarter net cash collections of receivables acquired for liquidation, including net cash collections represented by account sales, were $18 million – excluding the impact of the one-time charge – down 14.4 percent from the same period a year ago.

Asta said that it invested in debt portfolios with a face value of $1.7 million at a cost of $600,000 during the fourth quarter of 2011, compared to purchases of $113.4 million in face value at a cost of $4.7 million during the fourth quarter of 2010. The portfolio investments in the fourth quarter were in medical-related litigation receivables.

“We are pleased by the results of fiscal year and fourth quarter of 2011, with continued lower overhead costs, lower interest cost and the lowest level of impairments in five years,” said Gary Stern, Chairman, President and CEO.  “Our strong balance sheet puts us in an excellent position for funding potential investment opportunities without the immediate need for external financing. We continue to review all of our investment options in the distressed receivables market; however in this challenging pricing and collection environment we are continuing to explore other financing markets that we can effectively service and that have the potential to provide attractive returns. During the first quarter of fiscal year 2012, we have invested $3.8 million in the litigation funding business with a focus on investing in personal injury claims. We are working with an industry leader who sources and manages these types of investments. We look forward to growing the litigation funding business during fiscal year 2012.”

A conference call to discuss the results of the fiscal year 2011 and the fourth quarter of fiscal year 2011 will be held on Wednesday, December 14, 2011 at 4:00 PM, EST.

Toll-free dial-in number (U.S. and Canada): (800) 668-4132

International dials-in number: (224) 357-2196

Conference ID: 35863044

Phone Replay:
Toll-Free #: (855) 859-2056
Toll #: (404) 537-3406
Conference ID # 35863044
Recording will be available from: 12/14/2011 7:00 PM EST to 12/20/2011 11:59 PM EST