ENGLEWOOD CLIFFS, NJ – Asta Funding, Inc., (Nasdaq: ASFI), a leading consumer receivables asset management and liquidation company, today reported results for the three months and nine months ended June 30, 2003. The Company’s Board of Directors also declared an initial quarterly cash dividend of $0.05 per share. The dividend is payable November 1, 2003 to shareholders of record at the close of business on September 30, 2003.
Net income for the three months ended June 30, 2003, declined 6% to $2,540,000, or $0.55 per diluted share, compared to $2,716,000, or $0.61 per diluted share, in the same prior year period. Revenues for the three months ended June 30, 2003, were $9,208,000, an increase of 5% compared to revenues of $8,800,000 a year ago.
Net income for the nine months ended June 30, 2003 declined 5% to $7,281,000 or $1.62 per diluted share, from $7,646,000, or $1.72 per diluted share, for the same period a year earlier. Revenues for the nine months ended June 30, 2003 were $23,679,000, a decline of 14% compared to revenues for the nine months ended June 30, 2002 of $27,584,000.
Based on an increase in actual cash flows for the three months and nine months ended June 30, 2003, and projected cash flows on certain portfolios as compared to what the Company estimated at September 30, 2002, the Company revised the estimates of future collections on certain portfolios. Such change in accounting estimates has resulted in approximately a $3.9 million increase in finance income recognized for the nine months ended June 30, 2003.
The increase in third quarter revenues was primarily due to an increase in finance income earned on consumer receivables acquired for liquidation, which resulted from the sale of certain receivables during the three months ended June 30, 2003, as compared to no receivable sales in the same prior year period.
Gary Stern, President and CEO commented, “For the first six months of the current fiscal year those distressed consumer receivable portfolios that were available were priced at levels that we deemed unattractive and, as a result, we purchased very few portfolios. Our decision to refrain from purchasing portfolios earlier this year has been justified as, in recent months and after careful review, we have acquired several distressed consumer receivable portfolios that adhere to our disciplined purchasing policy. Since May, we have found that the availability of large distressed consumer receivable portfolios at attractive prices increased markedly and we have successfully acquired a number of distressed consumer receivable portfolios whose cumulative face value amount to over $2 billion. We continue to carefully review other potential distressed consumer portfolio acquisitions.”
Mr. Stern added, “At the end of June, the Company completed a public offering of 2,475,000 shares at $20.75 per share. The offering netted $47.8 million that will be used for further purchases of distressed consumer receivables, working capital and general corporate purposes. With the additional capital, Asta Funding will be less reliant on outside sources to fund our growth and, thereby, retain more of the potential profit for our shareholders.”
“With the proceeds of $47.8 million from our public offering, our available cash, after repayment of $18.3 million under our bank line of credit, increased to approximately $31million in early July 2003 compared to $14.9 million at March 31, 2003. With approximately $13.5 million in debt currently outstanding, Asta Funding is in the strongest financial position in its history. Our financial strength will permit the Company to acquire attractively priced portfolios in the future as they become available,” Mr. Stern stated.
“In addition, Mr. Stern concluded, “the announcement that the Board of Directors has declared the first dividend in the Company’s history demonstrates the confidence that the Board of Directors has in Asta Funding’s current and future business prospects. Our business is strong and given its growth prospects, we believe it is appropriate at this time to commence a regular quarterly dividend program.”
Asta Funding will conduct a teleconference today at 11:00 a.m. Eastern time. To participate please dial USA (877) 511-5818, International (706) 634-1462 about 5-10 minutes prior to 11:00 am EDT. Please refer to the Asta Funding earnings teleconference ID 2071782. A recording of the conference call will be available from 12:00 noon EDT August 11th through August 18th, by dialing USA/ Canada (800) 642-1687, International (706) 645-9291, conference ID 2071782.
Asta Funding, Inc.
Based in Englewood Cliffs, NJ, Asta Funding, Inc., is a leading consumer receivables asset management company that specializes in the purchase, liquidation and management of performing and non-performing consumer receivables. Asta generates revenues and earnings primarily through purchase and collection of performing and non-performing consumer receivables. For additional information, please visit our website at www.astafunding.com.
