- Total Income $23.3 million for the Six Months, an increase of 10% over the prior year
- $75.2 Million investment in Structured Settlements and $35.1 Million investment in Personal Injury Claims
- Strong Balance Sheet, Strong Liquidity Position Continues
- $75.5 Million Cash & Securities as of March 31, 2016
ENGLEWOOD CLIFFS, N.J., May 10, 2016 (GLOBE NEWSWIRE) -- Asta Funding, Inc. (NASDAQ:ASFI) (the “Company”), a diversified financial services company, today announced results for the second quarter and the first six months of its 2016 fiscal year.
For the three months ended March 31, 2016, the Company reported a net loss attributable to Asta Funding, Inc. of $(1.8) million, or $(0.15) per diluted share, as compared to net income attributable to Asta Funding, Inc. of $0.3 million, or $0.03 per diluted share for the comparable period of fiscal year 2015. For the six months ended March 31, 2016, the Company reported a net loss attributable to Asta Funding, Inc. of $(25,000), or $(0.00) per diluted share, as compared to net income attributable to Asta Funding, Inc. of $0.7 million, or $0.05 per diluted share for the comparable period of fiscal year 2015.
For the three months ended March 31, 2016, the Company incurred a net loss of $(1.7) million as compared to net income of $0.5 million for the corresponding prior year period. For the six months ended March 31, 2016, net income was $0.6 million as compared to $0.8 million for the corresponding prior year period.
Total income for the three months ended March 31, 2016 was $10.9 million, and remained consistent as compared to $10.8 million for the same period in the prior year. Included in the second quarter of fiscal year 2016 is approximately $2.9 million in revenue from CBC Settlement Funding, LLC on structured settlements, as compared to $2.8 million from the same period of the prior year. Also included in total revenues in the three month period ended March 31, 2016 is approximately $1.8 million from Pegasus Funding, LLC, the joint venture in the personal injury finance industry, as compared to $1.9 million from the same period of the prior year. Finance income from the distressed receivable business was down by approximately $0.6 million to $4.9 million for the three month period ended March 31, 2016 as compared to $5.5 million for the three month period ended March 31, 2015. Disability fee income for the three months ended March 31, 2016 was up by $0.7 million to $0.9 million, as compared to $0.2 million for the three months ended March 31, 2015.
Total income for the six month period ended March 31, 2016 was $23.3 million as compared to $21.3 million for the six month period ended March 31, 2015. Total revenue included in the six months of fiscal year 2016 is approximately $5.9 million in revenue from CBC Settlement Funding, LLC on structured settlements, as compared to $5.0 million in the same period of the prior year. Also included in total revenues in the six month period ended March 31, 2016 is approximately $4.9 million from Pegasus Funding, LLC, as compared to $4.4 million in the same period of the prior year. Finance income from the distressed receivable business was down by approximately $0.4 million to $10.1 million for the six month period ended March 31, 2016 from $10.5 million in the six month period ended March 31, 2015. Disability fee income for the six months ended March 31, 2016 was up by $1.1 million to $1.5 million, as compared to $0.4 million for the six months ended March 31, 2015. At March 31, 2016 the Company had an invested balance of $75.2 million in structured settlements and $35.1 million in personal injury claims.
General and administrative expenses were $13.2 million for the three months ended March 31, 2016, as compared to $9.1 million for the three month period ended March 31, 2015. General and administrative expenses were $21.4 million during the six months ended March 31, 2016, as compared to $18.6 million for the six months ended March 31, 2015. These increases were primarily attributable to potential settlement costs of $2.0 million in connection with an expected legal settlement and a $1.0 million loss reserve related to a reduction in the carrying value of one of the Company’s investments, as well as increased operating costs for GAR Disability Advocates relative to the growth of the segment.
Interest expense was $0.8 million for the three months ended March 31, 2016 as compared to $0.6 million for the second fiscal quarter of 2015. Interest expense was $1.5 million for the six months ended March 31, 2016, as compared to $1.1 million for the same period a year ago. The increase in interest expense is related to the growth in our structured settlement business segment, CBC Settlement Funding, LLC. Our invested balance in structured settlements has increased 16% and 79% since September 30, 2015, and 2014, respectively.
Net cash collections of consumer receivables acquired for liquidation for the quarter ended March 31, 2016 totaled $7.5 million. This compares to the prior year’s total net cash collections of $10.7 million. Net cash collections were $14.8 million in the six month period ended March 31, 2016, compared to $19.4 million in the prior year period. Net cash collections on the Great Seneca portfolio were $1.8 million in the second quarter of fiscal year 2016 as compared to $2.2 million in the second quarter of fiscal year 2015. Net cash collections on the Great Seneca Portfolio were $3.5 million during the six month period ended March 31, 2016 as compared to $4.5 million in the comparable period of the prior year. The carrying value of the Great Seneca portfolio at March 31, 2016 was $7.0 million, as compared to $14.8 million at March 31, 2015. We invested approximately $1.7 million in consumer receivable portfolios in the international sector in the second quarter of fiscal year 2016, as compared to $1.6 million in the three and six month period ended March 31, 2015. The Company invested approximately $5.6 million in personal injury cases during the second quarter of fiscal year 2016 as compared to $4.6 million in the second quarter of fiscal year 2015. Investments in personal injury claims in the six month period ended March 31, 2016 were $12.6 million as compared to $11.0 million in the comparable period of the prior year. The Company invested $4.1 million in structured settlements during the three month periods ended March 31, 2016 and 2015. Investments in structured settlements were $8.3 million in the six month period ended March 31, 2016 as compared to $7.2 million in the six month period ended March 31, 2015.
The Company repurchased 150,200 shares of Asta Funding, Inc. common stock during the three months ended March 31, 2016. Total repurchased shares since the inception of the most recent share buyback program is 1,186,000 at an average price of $8.51. The Company’s repurchase program was suspended effective March 22, 2016.
Gary Stern, Chairman, President and CEO of the Company commented, “We are encouraged by our continued growth in the structured settlement and personal injury business segments. Our wholly-owned subsidiary, GAR Disability Advocates, LLC continues to grow its revenue base, providing disability advocacy services throughout the United States. We will continue to support our growth initiatives with a strong balance sheet, solid cash flows and effective capital allocation intended to maximize shareholder value." Mr. Stern continued, “We are excited about the momentum of our initiatives, and remain optimistic about the underlying fundamentals of our business.”
A conference call to discuss the results of the second quarter of fiscal year 2016 will be held on Friday, May 13, 2016 at 9:00AM, EDT.
Conference Call Details
Toll-free dial-in number (U.S. and Canada):
(800) 668-4132
International dial-in number:
(224) 357-2196
Conference ID:
9511880
Phone Replay:
Toll-Free #: (800) 585-8367
Toll #: (404) 537-3406
Conference ID # 95118805
Recording will be available for replay two hours after the call's completion through 11:59 PM, EDT on 5/20/16.
About Asta
Based in Englewood Cliffs, NJ, Asta Funding, Inc., is engaged in several business segments in the financial services industry including structured settlements through our 100% owned subsidiary CBC Settlement Funding, LLC (www.cbcsettlementfunding.com.), funding of personal injury claims, through our 80% owned subsidiary Pegasus Funding, LLC, social security and disability benefit advocates, through our wholly owned subsidiary GAR Disability Advocates, LLC, and the business of managing for its own account the servicing of distressed consumer receivables with the concentration of acquiring consumer receivables in the international sector. For additional information, please visit our website at http://www.astafunding.com.
Forward-Looking Statements
All statements in this new 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 objective 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, 2015 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.
ASTA FUNDING, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
| Three Months | Three Months | Six Months | Six Months | |||||||||||||
| Ended | Ended (1) | Ended | Ended (1) | |||||||||||||
| March 31, 2016 | March 31, 2015 | March 31, 2016 | March 31, 2015 | |||||||||||||
| Revenues: | ||||||||||||||||
| Finance income, net | $ | 4,914,000 | $ | 5,495,000 | $ | 10,056,000 | $ | 10,532,000 | ||||||||
| Personal injury claims income | 1,846,000 | 1,867,000 | 4,931,000 | 4,355,000 | ||||||||||||
| Unrealized gain on structured settlements | 1,637,000 | 1,820,000 | 3,164,000 | 3,021,000 | ||||||||||||
| Interest income on structured settlements | 1,301,000 | 1,016,000 | 2,708,000 | 1,958,000 | ||||||||||||
| Disability fee income | 872,000 | 200,000 | 1,531,000 | 359,000 | ||||||||||||
| Total revenues | 10,570,000 | 10,398,000 | 22,390,000 | 20,225,000 | ||||||||||||
| Other income - includes $0 during the three month periods ended March 31, 2016 and 2015, and ($31,000) and $39,000 during the six month periods ended March 31, 2016 and 2015, respectively, of accumulated other comprehensive income /(loss) reclassification for unrealized net gains / (losses) on available for sale securities | 378,000 | 396,000 | 893,000 | 1,031,000 | ||||||||||||
| 10,948,000 | 10,794,000 | 23,283,000 | 21,256,000 | |||||||||||||
| Expenses: | ||||||||||||||||
| General and administrative | 13,209,000 | 9,062,000 | 21,448,000 | 18,616,000 | ||||||||||||
| Interest | 788,000 | 589,000 | 1,516,000 | 1,078,000 | ||||||||||||
| Impairment of consumer receivables | 124,000 | — | 124,000 | — | ||||||||||||
| 14,121,000 | 9,651,000 | 23,088,000 | 19,694,000 | |||||||||||||
| (Loss) income before income tax | (3,173,000 | ) | 1,143,000 | 195,000 | 1,562,000 | |||||||||||
| Income tax (benefit) expense - includes tax expense (benefit) of $0 during the three month periods ended March 31, 2016 and 2015 and $11,000 and ($16,000) during the six month periods ended March 31, 2016 and 2015, respectively, of accumulated other comprehensive income reclassifications for unrealized net gains / (losses) on available for sale securities | (1,425,000 | ) | 648,000 | (392,000 | ) | 746,000 | ||||||||||
| Net (loss) income | (1,748,000 | ) | 495,000 | 587,000 | 816,000 | |||||||||||
| Less: net income attributable to non-controlling interests | 83,000 | 150,000 | 612,000 | 101,000 | ||||||||||||
| Net (loss) income attributable to Asta Funding, Inc. | $ | (1,831,000 | ) | $ | 345,000 | $ | (25,000 | ) | $ | 715,000 | ||||||
| Net (loss) income per share attributable to Asta Funding, Inc.: | ||||||||||||||||
| Basic | $ | (0.15 | ) | $ | 0.03 | $ | (0.00 | ) | $ | 0.05 | ||||||
| Diluted | $ | (0.15 | ) | $ | 0.03 | $ | (0.00 | ) | $ | 0.05 | ||||||
| Weighted average number of common shares outstanding: | ||||||||||||||||
| Basic | 12,076,120 | 13,060,839 | 12,115,987 | 13,036,938 | ||||||||||||
| Diluted | 12,076,120 | 13,314,032 | 12,115,987 | 13,310,961 | ||||||||||||
(1) Second quarter of fiscal year 2015 was revised to reflect the proper period of recognizing the unrealized foreign exchange loss on other investments.
ASTA FUNDING, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
| (Unaudited) | ||||||||
| March 31, 2016 | September 30, 2015 | |||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | 19,894,000 | $ | 24,315,000 | ||||
| Available for sale investments | 55,589,000 | 59,727,000 | ||||||
| Consumer receivables acquired for liquidation (at net realizable value) | 16,784,000 | 15,608,000 | ||||||
| Structured settlements | 75,190,000 | 64,635,000 | ||||||
| Investment in personal injury claims | 35,144,000 | 36,668,000 | ||||||
| Other investments, net | 3,417,000 | 4,239,000 | ||||||
| Due from third party collection agencies and attorneys | 1,050,000 | 1,422,000 | ||||||
| Prepaid and income taxes receivable | 6,575,000 | 6,744,000 | ||||||
| Furniture and equipment, net | 356,000 | 480,000 | ||||||
| Deferred income taxes | 13,187,000 | 12,279,000 | ||||||
| Goodwill | 2,770,000 | 2,770,000 | ||||||
| Other assets | 8,824,000 | 8,485,000 | ||||||
| Total assets | $ | 238,780,000 | $ | 237,372,000 | ||||
| LIABILITIES | ||||||||
| Other debt – CBC (including non-recourse notes payable of $45.4 million at March 31, 2016 and $47.0 million at September 30, 2015) | $ | 59,408,000 | $ | 51,611,000 | ||||
| Other liabilities | 5,963,000 | 4,441,000 | ||||||
| Total liabilities | 65,371,000 | 56,052,000 | ||||||
| Commitments and contingencies | ||||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Preferred stock, $.01 par value; authorized 5,000,000 shares; issued and outstanding — none | — | — | ||||||
| Common stock, $.01 par value, authorized 30,000,000 shares; issued 13,197,476 at March 31, 2016 and 13,061,673 at September 30, 2015; and outstanding 12,011,476 at March 31, 2016 and 12,859,873 at September 30, 2015 | 132,000 | 131,000 | ||||||
| Additional paid-in capital | 65,612,000 | 65,011,000 | ||||||
| Retained earnings | 120,586,000 | 120,611,000 | ||||||
| Accumulated other comprehensive income | (706,000 | ) | (1,685,000 | ) | ||||
| Treasury stock (at cost) 1,186,000 shares at March 31, 2016 and 201,800 shares at September 30, 2015 | (10,114,000 | ) | (1,751,000 | ) | ||||
| Non-controlling interest | (2,101,000 | ) | (997,000 | ) | ||||
| Total stockholders’ equity | 173,409,000 | 181,320,000 | ||||||
| Total liabilities and stockholders’ equity | $ | 238,780,000 | $ | 237,372,000 | ||||