Asta Funding Reports Financial Results for Most Recent Quarter

Debt buyer Asta Funding, Inc. (NASDAQ: ASFI) Monday reported financial results for its first fiscal quarter of 2014, ended December 31, 2013. The company also announced an acquisition which closed on the last day of the year.

For the three months ended December 31, 2013, Asta reported net income of $2,389,000, or $0.18 per diluted share, as compared to net income of $2,588,000, or $0.20 per diluted share, for the comparable period of fiscal year 2013.

Total revenue was $10,237,000 in the quarter as compared to $10,552,000 for quarter ended December 31, 2012. For the three month period ended December 31, 2013 other income (included in total revenue) increased $1,260,000 to $3,322,000 from $2,062,000 reported in the three month period ended December 31, 2012. The increase is primarily due to the improved results of Pegasus Funding, LLC, a personal injury financing joint venture launched in early 2012.

Net cash collections of consumer receivables acquired for liquidation for the quarter totaled $10,204,000. Collections represented by account sales were not material in the first quarter. This compares to the prior year’s total net cash collections of $13,609,000, including $10,000 from collections represented by account sales. Asta invested approximately $4.5 million in personal injury cases during the first quarter of fiscal year 2014 as compared to $7.6 million in the first quarter of fiscal year 2013. Collection on the personal injury claims totaled $9.8 million in the first quarter of fiscal year 2014 as compared to $3.2 million during the first quarter of fiscal year 2013.

“We are pleased by the results of first quarter of fiscal year 2014 with continued strong liquidity and a solid balance sheet,” said Asta Chairman, President and CEO Gary Stern. “We continue with our progress in the personal injury space as revenue from Pegasus Funding, LLC more than doubled from the prior year. Nevertheless, we are not abandoning our core business as we continue to review all of our investment options in the distressed receivables market. However, in this challenging pricing environment, we are continuing to explore other financing markets that we can effectively service, and maximize returns to our shareholders.”

Asta also announced that the acquisition of an 80 percent interest in CBC Settlement Funding, LLC was consummated on December 31, 2013. CBC Settlement Funding, LLC purchases periodic payments under a structured settlement and annuity from individuals in exchange for a lump sum payment. CBC had an invested balance of $30.4 million in structured settlements at December 31, 2013.

Commenting on CBC, Stern said, “Structured settlements are an asset class that has tremendous growth potential for us and is a synergistic business that works well with our overall business model. We welcome Bill Skyrm, Esq. and James Goodman, the principals and co-founders of CBC Settlement Funding, LLC, to the management team and look forward to working with them well into the future to further grow CBC Settlement Funding.”