Asta Funding, Inc. (NASDAQ:ASFI) (the “Company”), a diversified
financial services company, today announced results for the third
quarter ended June 30, 2017.
"Our third quarter results are beginning to reflect the
investments we’ve made and continue to make in our business.
I am pleased with this quarter's results, and look forward to
continuing to execute on our strategic plan. I remain keenly
focused on sustainable growth and value creation for our
shareholders," said Gary M. Stern, Chairman and Chief Executive
Officer.
Mr. Stern continued, “We are confident our strategic investments
will continue to provide long-term growth and will best-position
the Company for continued success."
Fiscal Third Quarter 2017
Results
For the three months ended June 30, 2017, net
income attributable to Asta Funding, Inc. was $1.8 million, or
$0.27 per diluted share, as compared to net income attributable to
Asta Funding, Inc. of $3.2 million, or $0.26 per diluted share for
the three months ended June 30, 2016.
For the three months ended June 30, 2017, net
income was $2.6 million as compared to net income of $4.7
million for the three months ended June 30, 2016.
Total income for the three months ended June 30,
2017 decreased $4.1 million to $14.9 million, compared to $19.0
million for the three months ended June 30, 2016. Total revenue
included in the three months ended June 30, 2017 is approximately
$4.1 million in revenue from CBC Settlement Funding, LLC on
structured settlements, as compared to $3.2 million for the three
months ended June 30, 2016. Also included in total revenues for the
three months ended June 30, 2017 is approximately $5.6 million from
the personal injury claims segment, as compared to $9.8 million for
the three months ended June 30, 2016. Disability fee income for the
three months ended June 30, 2017, was down by $0.1 million to $1.1
million as compared to $1.2 million for the three months ended June
30, 2016.
Finance income from the distressed receivable
business was down by approximately $0.6 million to $4.0 million for
the three months ended June 30, 2017, as compared to $4.6 million
for the three months ended June 30, 2016.
General and administrative expenses were $9.3
million for the three months ended June 30, 2017, as compared to
$10.6 million for the three months ended June 30, 2016. The
decrease for the three months ended June 30, 2017 was primarily
attributable to a reduction in the Disability segment expenses
related to advertising and payroll costs.
Interest expense was $1.1 million for the three
months ended June 30, 2017 as compared to $0.8 million for the
three months ended June 30, 2016.
Year-to-Date Results
For the nine months ended June 30, 2017, net
loss attributable to Asta Funding, Inc. was $(5.4) million, or
$(0.57) per diluted share, as compared to net income attributable
to Asta Funding, Inc. of $3.2 million, or $0.26 per diluted share
for the nine months ended June 30, 2016.
For the nine months ended June 30, 2017, net
loss was $(4.7) million as compared to net income of $5.3
million for the nine months ended June 30, 2016.
Total income for the nine months ended June 30,
2017 was $31.6 million, as compared to $42.3 million for the nine
months ended June 30, 2016. Total revenue included for the nine
months ended June 30, 2017 is approximately $5.6 million in revenue
from CBC Settlement Funding, LLC on structured settlements, as
compared to $9.1 million for the nine months ended June 30, 2016.
Also included in total revenues for the nine months ended June 30,
2017 is approximately $10.0 million from the personal injury claims
segment, as compared to $14.8 million for the nine months ended
June 30, 2016. Disability fee income for the nine months ended June
30, 2017 was up by $1.3 million to $4.0 million, as compared to
$2.7 million for the nine months ended June 30, 2016.
Finance income from the distressed receivable
business was down by approximately $2.7 million to $12.0 million
for the nine months ended June 30, 2017 from $14.7 million for the
nine months ended June 30, 2016.
General and administrative expenses were $36.3
million for the nine months ended June 30, 2017, as compared to
$32.0 million for the nine months ended June 30, 2016. The increase
for the nine months ended June 30, 2017 was primarily attributable
to increase in professional fees of $2.5 million, primarily related
to the Mangrove matter, increase in bad debt expense of $3.5
million, and a loss on investment of $3.4 million, partially offset
by the reduction in litigation settlement costs of $2.1 million,
and advertising and payroll costs in the Disability segment of $2.7
million.
Interest expense was $3.0 million for the nine
months ended June 30, 2017, as compared to $2.3 million for the
nine months ended June 30, 2016. The increase in interest expense
is a result of the additional CBC debt incurred during the period
to expand the investment in structured settlements and the interest
related to the Bank Hapoalim line of credit.
Balance Sheet Review
As of June 30, 2017 the Company had
approximately $22.1 million in cash and cash equivalents and
available for sale investments, approximately $121.9 million in
stockholders' equity, and a net book value per share of $18.00. At
June 30, 2017, the Company had an invested balance of $89 million
in structured settlements and $27.5 million in personal injury
claims.
Investor Call Information
A conference call for investors to hear and
discuss results for the third quarter ended June 30, 2017 will be
held on Wednesday, August 9, 2017 at 9:30 am EDT.
Toll-free dial-in number (U.S. and Canada):
(844) 281-7827 International dial-in number: (478)
219-0008
Conference ID #:67315513
Phone Replay:Toll-Free #: (800) 585-8367Toll #:
(404) 537-3406Conference ID #: 67315513Recording will be available
for replay two hours after the call's completion through 11:59 pm,
EDT on August 15, 2017.
About Asta
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 four complementary business
segments: Personal Injury Claims, Structured Settlements, Consumer
Debt and Disability Advocacy.
Founded in 1994 as a sub-prime auto lender, Asta now manages
business units that include funding of personal injury
claims through its 80 percent owned
subsidiary, Pegasus Funding LLC, and starting on January 2,
2017, through its wholly owned subsidiary, Simia Capital,
LLC; structured settlements through its wholly owned
subsidiary, CBC Settlement Funding LLC; acquiring
and managing international distressed consumer receivables
through its wholly owned subsidiary, Palisades Acquisitions
LLC; and benefits advocacy through its wholly owned
subsidiary, GAR Disability Advocates, LLC. For additional
information, please visit our website
at http://www.astafunding.com.
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, 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, 2016 and other filings with the Securities and
Exchange Commission . 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.
|
ASTA FUNDING, INC. AND
SUBSIDIARIESConsolidated Balance
Sheets(rounded to the nearest thousands, except share
data) |
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
June 30, 2017 |
|
|
September 30, 2016 |
|
ASSETS |
|
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
16,570,000 |
|
|
$ |
18,526,000 |
|
Restricted cash |
|
|
35,248,000 |
|
|
|
— |
|
Available for sale
investments (at fair value) |
|
|
5,500,000 |
|
|
|
56,764,000 |
|
Consumer receivables
acquired for liquidation (at net realizable value) |
|
|
9,118,000 |
|
|
|
13,671,000 |
|
Structured settlements
(at fair value) |
|
|
89,045,000 |
|
|
|
85,708,000 |
|
Investment in personal
injury claims |
|
|
27,538,000 |
|
|
|
48,289,000 |
|
Other investments,
net |
|
|
— |
|
|
|
3,590,000 |
|
Due from third party
collection agencies and attorneys |
|
|
1,367,000 |
|
|
|
1,005,000 |
|
Prepaid and income
taxes receivable |
|
|
4,836,000 |
|
|
|
880,000 |
|
Furniture and
equipment, net |
|
|
178,000 |
|
|
|
243,000 |
|
Deferred income
taxes |
|
|
18,940,000 |
|
|
|
15,530,000 |
|
Goodwill |
|
|
2,770,000 |
|
|
|
2,770,000 |
|
Other assets |
|
|
5,102,000 |
|
|
|
8,423,000 |
|
|
|
|
|
|
|
|
|
|
Total
assets |
|
$ |
216,212,000 |
|
|
$ |
255,399,000 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
Line of credit |
|
$ |
9,600,000 |
|
|
$ |
— |
|
Other debt – CBC
(including non-recourse notes payable of $72.1 million at June 30,
2017 and $57.3 million at September 30, 2016) |
|
|
76,435,000 |
|
|
|
67,435,000 |
|
Other liabilities |
|
|
8,272,000 |
|
|
|
5,974,000 |
|
Income taxes
payable |
|
|
— |
|
|
|
252,000 |
|
|
|
|
|
|
|
|
|
|
Total
liabilities |
|
|
94,307,000 |
|
|
|
73,661,000 |
|
|
|
|
|
|
|
|
|
|
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 13,398,108 at June 30,
2017 and 13,336,508 at September 30, 2016; and outstanding
6,623,815 at June 30, 2017 and 11,876,224 at September 30,
2016 |
|
|
134,000 |
|
|
|
133,000 |
|
Additional paid-in
capital |
|
|
67,467,000 |
|
|
|
67,026,000 |
|
Retained earnings |
|
|
122,669,000 |
|
|
|
128,063,000 |
|
Accumulated other
comprehensive income (loss) |
|
|
(968,000 |
) |
|
|
86,000 |
|
Treasury stock (at
cost) 6,774,293 shares at June 30, 2017 and 1,460,284 shares at
September 30, 2016 |
|
|
(67,128,000 |
) |
|
|
(12,925,000 |
) |
Non-controlling
interest |
|
|
(269,000 |
) |
|
|
(645,000 |
) |
|
|
|
|
|
|
|
|
|
Total
stockholders’ equity |
|
|
121,905,000 |
|
|
|
181,738,000 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders’ equity |
|
$ |
216,212,000 |
|
|
$ |
255,399,000 |
|
|
|
ASTA FUNDING, INC. AND
SUBSIDIARIESConsolidated Statements of
Operations(Unaudited)(rounded to the
nearest thousands, except share data) |
|
|
|
|
|
Three Months |
|
|
Three Months |
|
|
Nine Months |
|
|
Nine Months |
|
|
|
Ended |
|
|
Ended |
|
|
Ended |
|
|
Ended |
|
|
|
June 30, 2017 |
|
|
June 30, 2016 |
|
|
June 30, 2017 |
|
|
June 30, 2016 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income,
net |
|
$ |
3,980,000 |
|
|
$ |
4,612,000 |
|
|
$ |
11,999,000 |
|
|
$ |
14,668,000 |
|
Personal injury claims
income |
|
|
5,569,000 |
|
|
|
9,838,000 |
|
|
|
10,017,000 |
|
|
|
14,769,000 |
|
Unrealized gain on
structured settlements |
|
|
7,531,000 |
|
|
|
1,422,000 |
|
|
|
5,238,000 |
|
|
|
4,586,000 |
|
Interest income on
structured settlements |
|
|
1,923,000 |
|
|
|
1,765,000 |
|
|
|
5,765,000 |
|
|
|
4,473,000 |
|
Loss on sale of
structured settlements |
|
|
(5,353,000 |
) |
|
|
— |
|
|
|
(5,353,000 |
) |
|
|
— |
|
Disability fee
income |
|
|
1,134,000 |
|
|
|
1,169,000 |
|
|
|
3,990,000 |
|
|
|
2,700,000 |
|
Total revenues |
|
|
14,784,000 |
|
|
|
18,806,000 |
|
|
|
31,656,000 |
|
|
|
41,196,000 |
|
Other income (loss) -
includes ($18,000) and ($32,000) during the three month periods
ended June 30, 2017 and 2016, and ($1,011,000) and ($63,000) during
the nine month periods ended June 30, 2017 and 2016, respectively,
of accumulated other comprehensive loss reclassification for
securities sold |
|
|
98,000 |
|
|
|
215,000 |
|
|
|
(31,000 |
) |
|
|
1,108,000 |
|
|
|
|
14,882,000 |
|
|
|
19,021,000 |
|
|
|
31,625,000 |
|
|
|
42,304,000 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative |
|
|
9,349,000 |
|
|
|
10,591,000 |
|
|
|
36,327,000 |
|
|
|
32,039,000 |
|
Interest |
|
|
1,123,000 |
|
|
|
832,000 |
|
|
|
3,039,000 |
|
|
|
2,348,000 |
|
Impairment of consumer
receivables |
|
|
148,000 |
|
|
|
— |
|
|
|
148,000 |
|
|
|
124,000 |
|
|
|
|
10,620,000 |
|
|
|
11,423,000 |
|
|
|
39,514,000 |
|
|
|
34,511,000 |
|
Income (loss) before
income tax |
|
|
4,262,000 |
|
|
|
7,598,000 |
|
|
|
(7,889,000 |
) |
|
|
7,793,000 |
|
Income tax
(benefit)/expense - includes tax expense/(benefit) of $7,000 and
($13,000) during the three month periods ended June 30, 2017 and
2016 and $404,000 and ($24,000) during the nine month periods ended
June 30, 2017 and 2016, respectively, of accumulated other
comprehensive income reclassifications for unrealized net gains /
(losses) on available for sale securities |
|
|
1,700,000 |
|
|
|
2,853,000 |
|
|
|
(3,237,000 |
) |
|
|
2,461,000 |
|
Net income (loss) |
|
|
2,562,000 |
|
|
|
4,745,000 |
|
|
|
(4,652,000 |
) |
|
|
5,332,000 |
|
Less: net income
attributable to non-controlling interests |
|
|
730,000 |
|
|
|
1,549,000 |
|
|
|
742,000 |
|
|
|
2,161,000 |
|
Net income (loss)
attributable to Asta Funding, Inc. |
|
$ |
1,832,000 |
|
|
$ |
3,196,000 |
|
|
$ |
(5,394,000 |
) |
|
$ |
3,171,000 |
|
Net income (loss) per
share attributable to Asta Funding, Inc.: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.28 |
|
|
$ |
0.27 |
|
|
$ |
(0.57 |
) |
|
$ |
0.26 |
|
Diluted |
|
$ |
0.27 |
|
|
$ |
0.26 |
|
|
$ |
(0.57 |
) |
|
$ |
0.26 |
|
Weighted average number
of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
6,577,784 |
|
|
|
11,897,139 |
|
|
|
9,389,864 |
|
|
|
12,023,156 |
|
Diluted |
|
|
6,879,082 |
|
|
|
12,433,424 |
|
|
|
9,389,864 |
|
|
|
12,294,073 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor Contact:
Bruce R. Foster, CFO
Asta Funding, Inc.
(201) 567-5648
Asta Funding (NASDAQ:ASFI)
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